Wednesday, 4 November 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-induced penalty to be out of all proportion to the short-term `extraordinary circumstances of the economy' given as the reason for the discounting. Your petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Government to: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 October 1986 to 1 July 1987 so that pensions are restored to the 9 October 1986 level as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners as in duty bound will ever pray. by Senator Burns (from 25 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the proposed national ID Card and numbering system threatens the privacy of law-abiding Australians opening the door to computer matching of personal information, will cause inconvenience to rural people in particular, and will result in massive compliance costs for private business. That the Joint Parliamentary Select Committee Report of 1986 showed that the Australia Card will not be effective in combating taxation and social security fraud and illegal immigration, as its cost savings are based on faulty estimates. That accordingly the Senate and Parliament should reject the Australia Card Bill. And your petitioners as in duty bound will ever pray. by Senator Knowles (from 114 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. This cut has reduced the base for future adjustments. The Government has promised to restore the base as soon as economic circumstances permit. Having regard to the state of the economy as portrayed by members of the Government in recent months and the interaction between Social Security pensions and the above mentioned adjustment, your Petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Government to restore the pension base for the calculation of future adjustments and that the restoration be effected in conjunction with the Social Security adjustments in November 1987. And your petitioners as in duty bound will ever pray. by Senator Hamer (from 16 citizens). Petitions received. Senator CHANEY(Western Australia-Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) condemns the government for its inadequate and inflexible response to the dramatic developments on world share markets and their consequences for the Australian economy; and (b) calls on it to revise budget and labour market strategies to halt the slide in Australia's economic performance and the continuing decline in living standards. Senator VALLENTINE(Western Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the call by the Western Australian Minister for Minerals and Energy, David Parker, for Australian Labor Party (ALP) policy to be changed to allow uranium mining in Western Australia; (b) further notes with concern that the area of specific interest is the Rudall River National Park where CRA has discovered uranium deposits; (c) expresses fears at the effect that mining here would have on the Aboriginal Communities at Punmu and Pangurr who have chosen to disassociate themselves from European society and the evils of alcohol and see mining activities as a threat to the way of life they have chosen; (d) is alarmed by the effect that large-scale mining would have on this unique area which is the only national park in Australia that encompasses an entire seasonal river system in the arid zone, and that mineral and mining exploration in such areas contravenes the government's own endorsed definition of a national park; (e) affirms the current government position as expressed by Senator Gareth Evans that there is no proposal to alter the ALP policy of not allowing the further mining of uranium although ideally it would not allow any uranium mining at all; and (f) calls on the government to oppose Mr Parker's attempts to change ALP policy on this issue which he intends to bring up at next year's ALP national conference. Senator VANSTONE(South Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes with disgust reports that a Belgian Naval Officer, Lieutenant van Eycken, ordered his men to use as target practice dolphins escorting the mine sweeper Breydel; (b) notes with satisfaction reports that the said lieutenant has been sent home and that action has been taken to ensure such incidents are not repeated; and (c) wishes the Belgian Government more success with their Middle East peace keeping contribution in the future. Senator WALTERS(Tasmania) —I give notice that, on the next day of sitting, I shall move: That, in view of Section 92 of the Constitution which provides for free and equal trade between the States, the Senate- (a) notes with concern a report attributed to the Centre for Regional Economic Analysis (CREA) published in the Burnie Advocate of 28 October 1987; (b) notes that the CREA report finds that Tasmania suffers a `tax' disadvantage of about 33 per cent with interstate competitors because of freight costs across Bass Strait; and (c) notes that this freight disadvantage has a detrimental effect on employment and investment in Tasmania because the existing Tasmanian Freight Compensation Scheme does not fully compensate Tasmania for this disadvantage; and (d) calls on the Government to take immediate steps to introduce such measures as necessary to provide Tasmania with true competitiveness in trade, employment and investment with the rest of Australia. Senator CHANEY(Western Australia-Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move: That the Senate affirms the urgent need for revision of the Government's Budget and labour market strategies to halt the slide in Australia's economic performance and the continuing decline in living standards. Senator REYNOLDS(Queensland-Minister for Local Government) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. Australian Industry Development Corporation-Annual report 1986-87-together with the Auditor-General's report-pursuant to section 37 of the Australian Industry Development Corporation Act 1970. 2. Corporate Affairs Commission-annual report 1986-87. 3. Australian Wine and Brandy Corporation-annual report 1986-87-together with the Auditor-General's report-pursuant to section 38 of the Australian Wine and Brandy Corporation Act 1980. 4. Australian Agricultural Council-resolutions of the 12th meeting (Special)-Canberra, 5 June 1987. 5. Australian Agricultural Council-resolutions of the 127th meeting-Sydney, 14 August 1987. 6. Snowy Mountains Council-annual report 1986-87. 7. Australian Capital Territory Surveyors Board-annual report 1986-87. 8. Australian Capital Territory Architects Board-annual report 1986-87. 9. Albury-Wodonga Development Corporation-annual report 1986-87-together with the Auditor-General's report-pursuant to section 32 of the Albury-Wodonga Development Act 1973. 10. Papua New Guinea Superannuation Scheme-annual report 1986-87-pursuant to section 21 of the Papua New Guinea (Staff Assistance) Act 1973. Consideration resumed from 3 November. TAXATION LAWS AMENDMENT BILL (No. 3) 1987 Senator WATSON(Tasmania)(10.06) —I wish to take the opportunity of thanking the Minister for Finance (Senator Walsh) and officers of the Australian Taxation Office for their consideration last evening in agreeing to respond to a difficult amendment in respect of section 46e of the Income Tax Assessment Act. Although one agrees that the thrust of the amendments is sound but complicated, one must acknowledge that some of the tax consequences that could flow from some of these amendments for some taxpayers could be unfair. Therefore, we must issue a warning that those who embark on schemes in this area of asset revaluation and disposal do so very much at their peril. In regard to a second issue relating to sections 108 and 109 of the Act, the ability of the Commissioner of Taxation to decide the legitimacy of transactions, including inter-corporate loans, is not a unique exercise of the Taxation Commissioner's powers. In fact, there are many situations outlined in the Income Tax Assessment Act requiring the Commissioner's discretion. In some cases this is appropriate. However, in recent years we have seen a widening of this discretion that is quite extraordinary. When the Commissioner's discretionary powers first emerged in the Act, in most cases they were exercised usually for the benefit of the taxpayer. For example, section 46 rebates for private companies required the exercise of the Commissioner's discretion to allow that further 50 per cent rebate in respect of private company dividends. However, nowadays what has emerged works very much against ordinary taxpayers. Nowadays the emphasis has changed and the discretionary powers appear to be largely directed against the taxpayer and in favour of the Commissioner. Yesterday evening when this Committee was deliberating on the Taxation Laws Amendment Bill (No. 3) 1987 I referred to the deletion of sections 108 and 109 and their replacement with stronger provisions. These new amendments seek to overcome a possible remote loophole due to a conflict in the use of the words `income' in sections 108 and 109 and `profits' in section 44. There are some people in the accounting profession who are somewhat concerned about the open-ended nature of the Commissioner's discretion in regard to sections 108 and 109. Secondly, the new amendments may create greater problems for the Taxation Office than they solve. Therefore, I ask whether the Taxation Commissioner could issue a ruling in the area of discretionary powers so far as the new ambit of sections 108 and 109 is concerned. Does the Taxation Commissioner acknowledge that some of these new amendments, although designed to close certain loopholes because of the conflict of wording between profits and income in the relevant sections, open up the potential for new technical loopholes that could be used by astute tax avoiders simply because profits may have been declared to be earned when in effect they have not been earned? We acknowledge, of course, that the Taxation Commissioner has this extraordinary power under section 44. Will he have to rely on this power even more as a result of these changes? Now that the Minister is in the chamber-I thank him for his presence-I await his response because of his extensive knowledge in this area. Senator COULTER(South Australia)(10.11) —I move: Page 10, after clause 9, insert the following clause: ``Losses and outgoings ``9a. Section 51 of the Principal Act is amended by adding at the end the following sub-section: `(8) A deduction is not allowable under subsection (1) in respect of expenditure for the purpose of the advertising or promotion of- (a) tobacco, substances containing tobacco, synthetic tobacco or any substance intended or designed for smoking; (b) cigarettes, cigars or other items intended or designed to be used for smoking; or (c) smoking pipes or any other accessories, items or devices intended or designed to be used principally for or in association with smoking.'.''. This amendment to the Taxation Laws Amendment Bill (No. 3) 1987 which was circulated during the second reading stage is an insertion after clause 9 of the Bill and deals with the matter of tax deductibility of tobacco advertising. While I have canvassed a number of the matters which are of importance to that amendment, I would like to cover several of them again and emphasise their relevance to this particular piece of legislation. In terms of the costs to Australia, the consumption of tobacco and tobacco products causes 23,000 deaths every year. Without doubt, it is the most important cause of drug related deaths. The Government paper, part of its drug initiative last year, clearly identified that 80 per cent of drug related deaths were related to the consumption of tobacco and tobacco products. Only 10 per cent were related to alcohol and only a couple of per cent to hard drugs. So the figure of 23,000 deaths per year is very significant. It is equivalent to 66 deaths every day. Senator Watson —I rise on a point of order. I believe that Senator Coulter is speaking on an issue related to sales tax. I understand that we are debating the Taxation Laws Amendment Bill (No. 3). Is it in order to debate this other section which we have not yet come to? The CHAIRMAN —Senator Coulter is moving proposed new clause 9a. It is within the ambit of the Bill and he is entitled to move it. The question of whether the Committee wishes to accept it is up to the Committee to decide. Senator COULTER —I am very pleased that Senator Watson interjected, because it gives me an opportunity to correct a misunderstanding. The amendment removes the tax deductibility from the advertising of tobacco products. It has nothing to do with sales tax, as Senator Watson implied, and it is appropriate at this point in the discussion of the Bill. Senator Watson —We are debating section 46e at the moment. Senator COULTER —No, we are debating proposed new clause 9a which has been circulated. The costs of consumption of tobacco products also weigh very heavily in the financial balance sheets of this country. The estimate of the cost of smoking related illness to business-and much emphasis has been put by both the Government and the Opposition on the need to make Australian business more competitive-is $940m per year in sick leave and decreased productivity. The social health and medical costs are roughly $1,000m per year, which is divided up as $400m in hospital costs, $250m in costs related to deaths and a further $350m in the social costs of lost wages and lost productivity. Undoubtedly we are dealing with an industry, the advertising of which costs this country very dearly. The tobacco industry has claimed at various times that the advertising of tobacco products does not, in fact, lead to increased consumption. It has cited figures-I believe erroneously- which indicate that the decrease in the advertising of tobacco products has been accompanied by an increase in the consumption of tobacco. I do not think the figures bear that out. But if we take its figures at face value and accept its assumption, we would have to conclude that the advertising of tobacco represents an enormous loss of productive capability in this country in that Australia spends between $100m and $150m a year on advertising something which is apparently quite unnecessary. The industry could get on quite well without it. So even on the industry's own basis, there is no need for that advertising to continue. The Committee will remember that several weeks ago I asked Senator Walsh a question relating to tobacco advertising along the lines that the advertising of tobacco is a tax deductibility, that the cost of advertising comes out of the gross income of a tobacco company before tax, whereas any other public interest group in the community which chooses to advertise the adverse consequences of tobacco would not get tax deductibility. It would have to collect money from people's incomes on which tax had been paid. So there is a very significant difference in equity between those who would promote the consumption of a proven extremely dangerous product and those who would seek to advertise the hazards of consuming that product. The amendment seeks to bring into balance, fairness and equity the relationship between those two forces in the community. I recall that Senator Walsh, in his reply, drew attention to the fact that this is not a unique occurrence, that there have been a number of other occasions on which the tax deductibility of advertising has been used in a disadvantageous and unfair way. If I recall correctly, Senator Walsh's example related to the sugar cane farmers and the National Party of Australia in Queensland during the recent election campaign. One could also instance the mining industry in Western Australia in relation to Aboriginal land rights and the very extensive tax deductible advertising campaign that was used by the Australian Mining Industry Council to defeat fair and just land rights legislation that was proposed by the Western Australian Government. The Committee will have noticed that the Victorian Government, a Labor government, has recently moved to ban certain forms of tobacco advertising and to increase the tax on tobacco. Revenue gained from this source will be used to support sport and the arts. Similar moves have been suggested in Western Australia and South Australia. It would seem appropriate that the Federal Government should support this proposed amendment which is in line with a healthy society and equity. Finally, I point out that the amendment, as it is related to a taxation Bill, does not seek to ban tobacco advertising. It merely seeks to remove the tax deductibility from tobacco advertising and to make tobacco companies pay for that advertising out of net income, not gross income, which would bring them exactly into line with anybody else in the community who wished to advertise the disadvantages of smoking or the consumption of tobacco products. Senator MICHAEL BAUME(New South Wales)(10.20) —The Opposition will not support the amendment moved by the Australian Democrats. As Senator Coulter said, the amendment does not seek to ban cigarette advertising. In other words, the Australian Democrats are seeking to do through the back door something that they are not prepared to encourage the chamber to do through the front door. The Australian Democrats claim that this amendment would only make the situation fair because non-profit making organisations that place advertisements opposing the sale of cigarettes are not entitled to claim that expense as a tax deduction because they are not profit making. I suggest that if they want to receive that benefit they should become profit making. The reality is that costs incurred by one company, one organisation or one class of people, which are costs properly incurred in the earning of profit, cannot be distinguished from other costs on these kinds of moral grounds, unless cigarette advertising itself is banned. If cigarette advertising is as improper and as disgraceful as the Australian Democrats say-I emphasise the word `if'-it should be banned. It is improper and disgraceful to seek to use the tax laws to impose a moral position on the Australian people. It is to that purpose that the Australian Democrats, as is their custom, are using quite improper procedures and trying to justify the use of those improper procedures by saying that their actions are in a good cause. Whether or not their cause is good should be decided by the Australian people and determined by their elected members. It is certainly not proper to use the tax legislation, a back door method, to single out in a discriminatory way one particular set of manufacturers because their product does not suit a section of the community. If the case of the Australian Democrats is so strong-again I emphasise the word `if'-cigarette advertising itself should be banned. I wish to deal again with the thrust of the other-- The CHAIRMAN —Order! The Bill is being taken as a whole; but Senator Coulter has moved an amendment that seeks to insert a new clause 9a. Until that amendment is disposed of, that is the matter before the Chair. As soon as it is disposed of, the remainder of the Bill will be open for consideration. Senator WALSH(Western Australia-Minister for Finance)(10.23) —I wish to respond to the matter raised by Senator Watson; but, since we are dealing only with proposed new clause 9a, I shall confine my remarks to that. The Government will not accept the amendment moved by the Australian Democrats. A similar, if not identical, amendment was moved last year. Senator Michael Baume made the valid point that to adopt the amendment would be to ignore the underlying principle in section 51, which is to allow expenditure incurred necessarily in the earning of income to be deducted from gross income in order to arrive at the net income for taxation purposes. Whatever merit the underlying medical argument that has been put forward may have, I do not think this is the appropriate way in which to address the matter, as it is completely at odds with the underlying principle in that section. Senator COULTER(South Australia)(10.24) —I was rather surprised to hear Senator Walsh make the remarks he did, in particular in view of the fact that he has acknowledged that this particular facility of tax deductibility has been used in socially disadvantageous ways. If I interpreted correctly his reply to a question several weeks ago, he implied that this provision was disadvantageous to the Australian Labor Party during the last election campaign. I have given an example of the way in which it has been disadvantageous to Aborigines. The point is not merely the commercial point of the tax deductibility of a business expense. It is a far more fundamental and important consideration, one of equity and justice, namely, the ability to put alternative points of view to the community equally and fairly so that those who may or may not smoke can make a judgment based on that equality of information. At present massive amounts of money are spent by the tobacco industry on advertising, roughly between $100m and $150m per year, but the amount which is spent and which can be spent, because of the inequity of this law, by those who oppose tobacco consumption is minuscule. Increasingly, we are seeing young people, particularly young girls, taking up smoking. Whilst information is available on the effects smoking has on health, for information to be truly free it needs a patron. There is no adequate patron for the opposite point of view, namely, that tobacco is hazardous to health. I am rather surprised that both the Government and the Opposition place a mere financial consideration above the considerations of social justice and equity and of the health of 23,000 Australians per year. Frankly if that is the position the Government and the Opposition are taking I am disgusted. Question put: That the amendment (Senator Coulter's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 9 Noes . . . . . . . . . . . 58 —— Majority . . . . . . . . . 49 —— Coulter, J. R. Macklin, M. J. (Teller)Haines, J. Powell, J. F.Harradine, B. Sanders, N. K.Jenkins, J. A. Vallentine, J.McLean, P. A. Alston, R. K. R. Knowles, S. C. (Teller)Archer, B. R. Lewis, A. W. R.Aulich, T. McGauran, J. J.Baume, Michael McKiernan, J. P.Bishop, B. K. Maguire, G. R.Black, J. R. Messner, A. J.Bolkus, N. Morris, J. J.Boswell, R. L. D. Newman, J. M.Brownhill, D. G. C. Panizza, J. H.Burns, B. R. Parer, W. R.Calvert, P. H. Patterson, K. C. L.Chaney, F. M. Puplick, C. J. G.Chapman, H. G. P. Ray, RobertChilds, B. K. Reid, M. E.Coates, J. Reynolds, M. E.Collins, R. L. Richardson, G. F.Colston, M. A. Ryan, S. M.Cooney, B. Schacht, C. C.Crichton-Browne, N. A. Sheil, G.Crowley, R. A. Short, J. R.Devereux, J. R. Sibraa, K. W.Devlin, R. Stone, J. O.Durack, P. D. Tambling, G. E. J.Foreman, D. J. Tate, M. 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. Senator MICHAEL BAUME(New South Wales)(10.35) —Clause 37 of the Taxation Laws Amendment Bill (No. 3) 1987 sets the rate for provisional tax for the coming financial year. The extraordinary thing about this rate is that it is 11 per cent. In other words there is an assumption, in setting the Budget figures, that there is to be an 11 per cent increase in the incomes of people who pay provisional tax in the following year. That is an extraordinary assumption, particularly in view of the fact that the inflation rate in the Budget Papers is 6.5 per cent, yet the increase in incomes is supposed to be 11 per cent for the purposes of budgeting. That means a 4.5 per cent real increase in the incomes. This is extraordinary, particularly in the circumstances of the stock market fall, which will clearly have a significant impact on provisional taxpayers, because provisional tax is paid by those with investment income and people who do not pay pay as you earn (PAYE) tax. Clause 37, which sets this rate, is a clear example of where the Budget is at risk-and the Budget achievement is at serious risk. We have in the Budget Papers an expectation that non-PAYE income will increase by 10.2 per cent. Of course that income is also at risk following the fall in the stock market, as there is no doubt that there is not an investor in Australia who would not have suffered at least a paper loss. If those people have been involved in share trading, there is no doubt that they will crystallise their losses in order to have a tax deduction. They may well repurchase that stock, but the reality is that anyone who has suffered a severe loss in the stock market over the last few weeks will be unlikely, if he is a trader, to ride that out if he can crystallise the loss and therefore wipe out his tax liability for the current year. Even without that kind of activity, there is no doubt that the prospects for the non-PAYE taxpayers of Australia this year are nowhere near as buoyant as this clause assumes by setting 11 per cent as the expectation rate for the increase in incomes of provisional taxpayers for provisional tax purposes. This raises once again the serious question of the genuineness of the prospect of achievement of the balanced Budget, which we have been told is of such great significance and is such a wonderful achievement. There is no doubt in my mind that unless there is a massive burst of inflation, above the 6.5 per cent that the Government based its assumptions on, these objectives will not be reached. Of course, it is possible that there will be a massive burst of inflation because the 10 per cent devaluation of the Australian dollar in the last week or so will considerably add to Australia's cost structure, and it will in fact damage the Australian economy, although it may provide some assistance to exporters. But when we recognise that a reduction in the value of the Australian dollar will only add dramatically to the cost of imports, and that imports will be absolutely necessary if there is to be any increase in investment in new plant and equipment in Australia-and it is investment on which Australia's economic future depends-so the cost of investment in new plant and equipment will naturally increase, and inflation will increase. Our prospects of structural change, which this Government talks about but does little to bring about, will be diminished and the prospects of the achievement of any kind of real recovery will be diminished. In that instance there is absolutely no chance whatsoever, it seems to me, that provisional taxpayers will face in real terms, when it comes to pass, an 11 per cent increase in their incomes overall throughout Australia. I regard this clause, which further undermines the integrity of the Budget-this has already been massively undermined as has been the capacity of the Government to deliver what it promised under this Budget-as absolute nonsense. I am pleased to see that one part of the clause recognises that the insidious capital gains tax should not include income for the purpose of assessing what the uplift factor should be for provisional tax for the following year. That, of course, is a reasonable measure. I am grateful that the Government has recognised yet another of the ludicrous consequences of the capital gains tax. We have seen non-stop amendments to the tax law to fix up the mess created by the capital gains tax. This legislation is another part of that. My complaint is that the capital gains tax creates so many of these ludicrous problems. It is self-evident that the great majority of the amendments that we are having to deal with at the moment in this legislation emerge from the introduction of a capital gains tax which, as I mentioned in the second reading debate, is part of a campaign against the accumulation of capital. As a result of being against the accumulation of capital, it is against the capacity of Australia to invest in new plant and equipment to get us out of the economic disaster that we are now in. According to leading commentators this morning, including a spokesman from the Commonwealth Bank of Australia, we face the risk of even greater disaster, particularly if the current world market crises precipitate any sort of problem in commodity prices. We should listen when respected organisations such as the Commonwealth Bank warn of such a serious risk to our economic future and say that the stock market fall around the world does not simply affect stock markets but affects world economies. It certainly affects the Australian economy. As Senator Stone pointed out on an Australian Broadcasting Corporation program this morning, two of the prerequisites that Senator Walsh had earlier mentioned for Australia having to take some action to change its approach are a massive outflow in capital from Australia and a fall in the Australian dollar. That appears to be happening now. It is nonsense for Senator Walsh to pretend that there has not been any kind of outflow. The CHAIRMAN —Order! Senator Baume, you are getting a long way away from the clauses of the taxation legislation. You must look to those. You cannot engage in a general discussion on the economy except insofar as the economy affects the taxation laws. Senator MICHAEL BAUME —The reality is that this Bill specifically says that there will be an 11 per cent increase, for provisional tax purposes, in the incomes of people who do not pay pay as you earn tax. I am demonstrating that that 11 per cent figure is arrant nonsense and that the Government now knows that. At this point the Government is still proceeding-when it knows that figure is nonsense-with this amendment which would result in an 11 per cent increase in the earnings of people who pay provisional tax. I am saying that that is arrant nonsense and I am establishing very clearly the reasons why it is arrant nonsense and why it is dishonest of the Government to proceed with a Bill which simply cannot achieve its objectives and which the Government and certainly Senator Walsh recognise by now should be changed. This is one of the changes that should and must be made to the Government's economic strategy. The Government has to recognise that there is a real crisis, that it is not just a matter of a few people losing some money on the stock market. It is a crisis which affects tax collections in Australia and which this Bill clearly sets in a wrong framework. As I have pointed out, it is a crisis which will affect the whole of our economy and therefore it will affect even those people who are not investors in the stock market. I regard the Government's continuation with this clause of the Taxation Laws Amendment Bill (No. 3) as another example of its refusal to face reality. It has to make some effective changes to its strategy and it has to acknowledge that the basis on which this Budget was set no longer applies. I am not saying that the Government should display some panic response; all I am saying is that it should face reality and the reality at this stage appears to be that there will not be an 11 per cent increase in provisional tax collections. I make it clear that the Opposition shares Senator Watson's concern about the matters he has raised today, particularly the question of discretion. We dealt with that matter yesterday and I was grateful that last night the Minister said that he would look into the problems with which we were concerned about proposed amendments to section 14zka of the Taxation Administration Act 1953. I am grateful that the Minister said that he would refer this question to the Treasurer (Mr Keating) because, as you will recall, Mr Chairman, the way this section is now arranged it seems to suggest that under section 207 the power to waive additional tax which is given to the Commissioner should be directed in those instances where the delay and the accumulation of penalty tax as a result of that delay have been due to the actions of the Commissioner rather than to any devious activity or deliberate stalling by the taxpayer. Last night the Minister said, `But you have to pay this penalty tax only if you are guilty, if you have been found to have avoided paying your tax'. That misses the point of the question, which relates very simply to whether that penalty should be increased because of the lack of action, for whatever reason, by the Commissioner. I am grateful that the Minister is at least referring that question to the Treasurer. I want to make it clear that following the defeat of our amendments last night, there is no doubt that there is an unacceptable retrospective element in this Bill. However, we will not be opposing it on that account because, obviously, more important issues need correction. For example the capital gains tax is related to provisional tax. Senator Watson —Put up an amendment. Senator MICHAEL BAUME —Regrettably, our amendments were defeated by the Australian Democrats supporting the Government, which is most unfortunate because there is no doubt-- The CHAIRMAN —Order! The honourable senator's time has expired. Senator WATSON(Tasmania)(10.50) —The clause before the Committee provides for the 1987-88 provisional tax to be calculated on the basis of 1986-87 taxable income increased by 11 per cent and by applying the 1987-88 rates of tax and the Medicare levy. My colleague Senator Michael Baume has given us an economic speech indicating that some of those forecasts are perhaps illusory. Given that the Budget figures indicate that inflation will be down to 6 per cent by the end of the June 1988, what is the rationale for the Government's assessment that taxable incomes will be lifted by 11 per cent for those subject to provisional tax, given that wage increases will be significantly below the 11 per cent figure? Therefore, prima facie I submit that it would appear that the provisional income tax earner is being required to pay an excessive amount by way of provisional tax this year when neither the Government's projections nor the economic circumstances of the business community would support this figure. How did the Government arrive at this figure? The CHAIRMAN —I should make it clear that there is no particular clause before the Chair. The Committee is considering the Bill as a whole. Senator WALSH(Western Australia-Minister for Finance)(10.52) —In regard to the point raised by Senator Watson and also by Senator Michael Baume, I now realise that the Government made a serious mistake in programming this Bill for today. It should have been programmed for tomorrow, when there would have been less verbosity. Provisional taxpayers, almost by definition, are separate from wage and salary earners. Therefore, the estimated increase in the level of wages does not have any one to one relevance, if any relevance at all, to the level of income subject to provisional tax. I shall confirm the position with my officials, but my recollection, having been involved in the revenue committee over the past four or five years, is that the Commissioner of Taxation gives the Treasurer an estimate of what the Commissioner believes the level of income subject to provisional tax will be, and annually a figure is written in. There have been figures of 10 per cent and 11 per cent in previous years when we have been in government-there may have been some higher or lower, but that is the estimate. If, as Senator Baume asserts, the actual figure will be lower than the Commissioner estimates-and, to say the least, one should acknowledge that the Commissioner is likely to be a better judge of that than Senator Baume-any individual has the right to exercise the option to vary the provisional tax at which the individual has been assessed. As for the other matters raised by Senator Watson last night concerning clause 15 in the Bill and the proposed new sections 108 and 109, Senator Watson asked that the Government request the Commissioner to issue guidelines as to the manner in which the Commissioner will exercise his powers under the revised section 108 to determine whether or not a loan represents a disguised distribution of profits, particularly as regards legitimate intercorporate loans. There are a number of decisions of appellate bodies which give an indication of the manner in which the Commissioner should exercise his powers and, on the surface, it would seem unlikely that legitimate intercorporate loans would be put at risk. In any event, the Commissioner's powers of discretion under sections 108 and 109 are subject to review by appellate tribunals. Nevertheless, the matter will be taken up with the Commissioner with a view to examining whether appropriate guidelines can be issued. Senator Watson asked for an explanation of the way in which the provisions of proposed new section 46e contained in the draft Bill released on 4 June and the provisions in the Bill that is now before the Committee would apply where a shareholder of a company which is short of working capital has with other shareholders been issued with bonus shares paid out of an asset revaluation reserve, and another shareholder sells shares in the company concerned. On the basis of those facts set out in that way by Senator Watson, I am advised that the provisions contained in the draft Bill released on 4 June would not have applied to deny the shareholder entitlement to the section 46 rebate because the shareholder had not disposed of shares in the company which paid the bonus shares. I am also advised that the provisions in the Bill before us today will not apply in the circumstances described by Senator Watson and repeated by me because the dividend consisting of the bonus shares has not been paid as part of or as a result of the scheme to avoid tax on the gain which would otherwise arise on the disposal of an asset. The point I was trying to make last night is that the proposed section 46e which is in this Bill, unlike the earlier draft provisions, can apply only where a shareholder-that is, a company-has received a dividend as part of the scheme to avoid tax. The provisions will not apply to a shareholder-again, the shareholder being the company in this context-unless a rebate has been allowed on a dividend paid to the shareholder as a result of or as part of a scheme to avoid tax. The Ernst and Whinney letter, which was quoted from yesterday, conveniently ignored that point. Senator WATSON(Tasmania)(10.56) —The response of the Minister for Finance (Senator Walsh) indicated that this is, indeed, a difficult section for interpretation. I think my colleague Senator Michael Baume raised the issue of the difference between the 4 June section 46e and the revised section 46e. My question was directed to the original Act compared with the new section 46e. So perhaps the Minister could take that issue on notice. My question was actually directed to the current status quo-these were the words that I used-and that is the original Bill which has been enacted for some time, as compared with the amendments before the Committee. That will take some time to resolve. I ask a further question of the Minister. As a result of the changes to section 108 and section 109, is it just the excessive element-the amount that is deemed to be excessive-that is treated as a dividend or does it mean that the whole of the loan qualifies as an excessive distribution and, as such, will be treated as a dividend? Senator WALSH(Western Australia-Minister for Finance)(10.57) —I am advised that whatever portion of such a loan, up to 100 per cent. I presume, that the Commissioner of Taxation judges is excessive would be subject to such treatment. Of course, as I said earlier, the Taxation Commissioner's discretions would be subject to appeal. Senator MICHAEL BAUME(New South Wales)(10.58) —The response of the Minister for Finance (Senator Walsh) about the 11 per cent increase in provisional tax is absolutely incredible. He said that the Commissioner of Taxation would be a better judge than I of whether 11 per cent was a reasonable figure by which to increase people's notional incomes for the purposes of provisional tax. The Commissioner of Taxation may have been a better judge in June or whenever it was that these Budget papers were prepared. I remind the Minister that since this Budget was brought down there has been a world crisis. He is bringing into this chamber a figure relating to a very substantial amount of tax revenue. Non-pay as you earn (PAYE) total revenue is budgeted to be $8,000m this year. The Government does not reveal what proportion of that amount is provisional tax. The fact is that it is a substantial part of revenue collections. The times have changed. My concern was not simply that individual taxpayers would be hit with this; in fact it was exactly to the contrary. I was saying that there was no way this money would be raised. The Minister said, `Oh, but individuals have the power to vary it, if the revenue is not what the Commissioner says it is going to be'. That is exactly so. They have the power to vary it and they will vary it. The Government will not get the money that it claims it will get. That was the whole point of my concern-that this Bill is setting a figure which is unlikely to be achieved in the event of the changes that have taken place in the Australian economy. Why can the Minister not face up to that? He would not answer Senator Stone this morning when he asked whether there had been any outflow of dollars, of foreign investment, from Australia because the Minister, like the Treasurer (Mr Keating) and the Prime Minister (Mr Hawke), is trying to avoid the reality that we are facing a totally different economic environment. Here we are today debating a Bill which provides for a provisional tax rate that the Minister says was set by the Commissioner of Taxation. The Minister says that the Commissioner knows more than we do. The reality is that times have changed. The only people who have not changed, who have not recognised that there is an economic crisis, who are still in cloud-cuckoo-land, are the Minister, Senator Walsh, in this place, and, of course, the Treasurer and the Prime Minister in the other place. We are talking about non-PAYE tax collections, of which provisional tax is a component, which have been a major element in the unexpected increases in revenue in recent times. Last year there was a 30.9 per cent increase in the non-PAYE collections and that was largely because of stock market booms. At a time when we had a soaring stock market in Australia, we had a 39 per cent increase in non-PAYE collections. This year there has been a crash in the stock market and we could see enormous losses which would wipe out the tax liability of many Australians. Yet this Government has not recognised, in the Bill or across the whole spectrum of Australian economic management, the need for it to make some effective and proper changes to show Australians that it knows what it is doing. Certainly, the Government does not know what it is doing in this Bill. It has unreal expectations which bear no relationship to the present situation. The only justification we have of the proposed changes is the Minister saying, `Oh well, the Commissioner knows more than you do about what the rate will be'. Will the Minister, in recognition of the changed environment, now ask the Taxation Commissioner whether the amount should be varied rather than simply relying on the individual taxpayers to vary it; and, if it should in the opinion of the Tax Commissioner be varied, what will be the impact on the Budget that was brought down recently, and what will be, as a consequence, the impact on the deficit which the Government crowed about but which now clearly appears to be in doubt? If in fact there is no cause for concern, there is no reason for the Minister not to ask the Tax Commissioner whether that figure should be reassessed. If the Minister refuses to ask the Commissioner whether it should it be reassessed, we can only presume that the Minister continues to have something to hide. Of course, that relates to the Government's determination not to appear to be responding to the economic crisis in any tough way prior to the New South Wales elections if that action would in any way diminish the chances of Mr Unsworth to reverse the massive trend against him in New South Wales and to hold on to power in that innately corrupt State. The reality is that the Minister will not refer this matter to the Commissioner for a reassessment, and we all know why. We all know that this Government is still whistling in the dark and is pretending that its strategy is in place. It is about time it faced up to reality and it is not doing so in this Bill. Bill agreed to. (Quorum formed) INCOME TAX AMENDMENT BILL (No. 2) 1987 The Bill. Senator MICHAEL BAUME(New South Wales)(11.06) —I move: That the House of Representatives be requested to make the following amendment: Page 2, clause 4, leave out ``and for all subsequent financial years'', insert ``, the financial year that commenced on 1 July 1987 and, until the Parliament otherwise provides, the financial year commencing on 1 July 1988''. The purpose of the amendment is to ensure that the tax rates are scrutinised annually and that they do not stand in perpetuity unless changed by the Government. The tax rates must be scrutinised annually so that their impact can be revealed to the Australian people. I stress the need for such scrutiny in the context of the incredible way in which the Australian people have been misled about tax rates in recent times. In the debate on the previous Bill-the Taxation Laws Amendment Bill (No. 3)-I mentioned that personal income tax collections had increased substantially. This year's Budget shows an increase of 9.2 per cent in the level of income tax to be paid by Australians. That is an extra $4.2 billion. That extra tax revenue will be collected by a government that continually says that it has cut taxes. Clearly tax rates need to be examined every year in public in this chamber. Failure to introduce such a piece of legislation annually clearly limits the Parliament's opportunity to debate the sort of crisis that we now face and its impact on tax collections, and therefore on the Budget, the deficit and our economic future. This year's tax collections are based on an estimated inflation rate of 6.5 per cent. As I said when speaking to the previous Bill, one assumes that a 10 per cent devaluation of the Australian dollar would add to the inflation rate. One just does not know the exact implications for Australia of maintaining the present tax rates. It is an absolutely vital and essential part of our process that an annual review take place of the consequences of the tax rates and that an opportunity be provided to debate those consequences by the introduction annually of an Income Tax Amendment Bill. Senator Walsh —Of course, you realise that your amendment has nothing to do with rates. It is the imposition of tax. Senator MICHAEL BAUME —I remind the Minister that this is the Income Tax Amendment Bill (No. 2). It is improper for the Government to seek to prevent that sort of parliamentary scrutiny of the consequences of its income tax rates. I dealt with this matter at some length in my speech in the second reading debate. The Government is behaving disgracefully in relation to this matter. I have great pleasure in moving the amendment, as it would ensure that every year the Parliament was given the opportunity to examine thoroughly the tax rates. This Bill increases the company tax rate to 49 per cent, which is the same rate the Government plans to have as the top personal income tax rate. This is an extraordinary decision because at the moment there is supposed to be a total review of corporate tax with the purpose of reducing the overall corporate tax rate and certainly wiping out some of the concessions which, it has been argued, provide great opportunity and great scope for tax avoidance. It is claimed that many companies pay far less than 46 per cent, the current rate, and so provide an unreasonable burden on other companies. If it is the Government's intention to reduce the corporate tax rate as a result of this inquiry-if it is not the Government's intention there is not much point in having an inquiry-how phoney it is to increase the tax rate for corporations now to 49 per cent. Senator Robert Ray —Have you heard of imputation? Senator MICHAEL BAUME —Yes, I have heard of imputation. It is alleged that this will offset the cost of imputation. Apparently, this whole issue will be fixed up by the sort of inquiry this Government has had. There is no doubt that for public relations purposes it will look better for the Government ultimately to reduce the corporate tax rate, instead of from the present level of 46 per cent, from the new rate of 49 per cent. It will be a bigger PR coup. That is what this is all about-increasing the corporate tax rate so that it will look better when the Government ultimately reduces it. People will have forgotten that the Government increased the rate from 46 to 49 per cent. If the intention is to make the corporate and personal tax rates the same, why does the Government not reduce the top rate of personal tax to 46 per cent and make them both 46 per cent? After all, we have been saying consistently that we need a massive increase in incentive for Australians to invest in new plant and equipment to get ourselves out of the economic crisis we are now in. We are not provided with an opportunity to discuss the rates of tax and their consequences on an annual basis. One of the major functions of the Parliament is to examine such issues. Because these taxes raise such an enormous proportion of revenue, it is only right and proper that they be subjected to the greatest possible level of parliamentary supervision and surveillance. I strongly recommend my amendment to the Senate. Senator WALSH(Western Australia-Minister for Finance)(11.13) —We have just heard from the would-be Opposition tax expert. He has paraded his ignorance again as spectacularly as he did in Tasmania during the election campaign. He kept referring to rates. The amendment he has moved has nothing to do with the Bill that sets the tax rate. The amendment that he has moved is to the Bill which imposes a Commonwealth income tax. Senator Baume does not have the option, under his amendment, of scrutinising the rate every year. If his amendment is adopted he will have the option of imposing or not imposing an income tax at all. To somebody who was associated with the Opposition's alternative Budget during the election campaign I suppose that it is immaterial whether one has an income tax or not. After all, income tax accounts for only about $40 billion, just over half of total Commonwealth revenue. I suppose that to a Liberal Party accountant it does not really matter whether one has $40 billion or not. After all, a $2 1/2 billion error in that Party's accounts does not matter, so I do not suppose that a $40 billion error matters either. But the Government, of course, cannot afford to adopt that sort of attitude. I wonder whether Senator Baume is actually so ill-informed that he thinks he is moving an amendment to a Bill which has anything to do with income tax rates. Let me say again: what he is doing is moving an amendment to a Bill which determines whether there is income tax or not-not the rate at which that income tax will be applied. By the way, when the Commonwealth income tax was first introduced in 1915 as a wartime measure it was seen as only a temporary impost and for that reason it was imposed under an annual piece of legislation. That practice has carried on for the next 70-odd years for no really valid reason whatsoever, since nobody, with the possible exception of a Liberal Party numbers man, would believe that there would not be a Commonwealth income tax. So for 70-odd years there was annual legislation to impose an income tax, even though the rationale for it disappeared 70-odd years ago. The Government, being a rational government, has introduced a Bill which would make the imposition of an income tax standing instead of annual legislation. But Senator Michael Baume, on behalf of the Opposition, has moved this amendment. The Australian Democrats were going to move one-I presume Senator Haines will not proceed with it now-which would have had the same intent but which was not drafted in the conventional way. Therefore, technically the amendment which Senator Baume has moved-technically, that is, in terms of the drafting of it-is better than that of the Democrats' amendment. I understand that the Democrats will support Senator Baume's amendment. At the risk of inviting Senator Baume to fill in another 15 minutes of broadcast time, I just wish that somebody would put up one valid reason for this amendment, because certainly none has been put up yet. It is the sort of amendment that one would expect from a senator who feels the need to compensate for his own inferiority; that is, from a senator, for example, who had been kicked out of the House of Representatives. Senator HAINES(South Australia-Leader of the Australian Democrats)(11.18) —I would like to get some clarification from the Minister on that answer. I understood him to say that the Income Tax Amendment Bill (No. 2) does not set rates; it only gives the Government the right to impose income tax. If that is the case, I suggest that the Minister cast his eye, even in a cursory fashion, over the second reading speech that was made in another place by the Minister for Employment Services and Youth Affairs and Minister Assisting the Treasurer (Mr Holding). After moving that the Bill be now read a second time, that Minister said: This Bill will amend the Income Tax Act 1986 to formally impose the rates of income tax payable by individuals and trustees generally for the 1987-88 and all subsequent financial years. It will also impose the rates for 1987-88 and subsequent years payable by companies, registered organisations and unit trusts treated as companies on incomes for 1986-87 and subsequent years. In addition, it will impose rates of tax on superannuation funds, ineligible approved deposit funds and certain other trusts. The rates to be imposed by the measures in this Bill are those declared in the Income Tax Act 1986. Senator Walsh —That's right-declared in separate legislation, which is standing legislation. Senator HAINES —Well, I just go back to the first of the explanatory paragraphs in the Minister's second reading speech in the other place: This Bill will amend the Income Tax Act 1986 to formally impose the rates . . . I do not think that I am being nit-picking when I argue that that in fact runs across what the Minister for Finance (Senator Walsh) said; namely, that this Bill does not set rates, it only gives the Government the right to impose income tax. But, in any event, I would point out to the Minister that only on rare occasions indeed does a second reading speech touch specifically and only on the title of the Bill. When we are discussing any tax Bill it is the habit of honourable senators and, I would presume, members in another place, to range far and wide on tax and, indeed, on occasions, economic matters of current political and community interest. One of the arguments that we are making here is that to give this sort of legislation and, for that matter, the next Bill, the Medicare Levy Amendment Bill, standing status instead of annual status is, in fact, to deprive this Parliament of the opportunity of challenging the Government from time to time on a range of taxation, Medicare and other related economic matters, and prevent it from doing it on an annual basis, restricting its opportunities to those years in which the Government is going to make some change to the rates and needs to amend the Income Tax Act accordingly. So it is not simply a matter of what this Bill sets out to do-there are semantic differences between the Minister's opinion in this place and that expressed by the Minister in another place, and by Senator Michael Baume for that matter a moment ago-it is a matter of the rights that honourable senators have to raise issues of importance to all of us and to the community generally. Senator MICHAEL BAUME(New South Wales)(11.21) —The normal arrogance and personal abuse of the Minister for Finance (Senator Walsh) when he is wrong has been repeated today. Whenever he is incapable of responding coherently and properly with facts, he continually reverts to personal abuse, to offensive arrogance and to a style which ill becomes him in a chamber of this significance and on an issue of this seriousness. It is ludicrous that this Minister cannot respond and deal with the issue in the serious manner in which Senator Haines has dealt with it, and I believe in which the Opposition has dealt with it. There is no doubt, and the Minister cannot avoid this fact, that the Income Tax Amendment Bill (No. 2) seeks formally to impose the tax payable on the basis of the new rate scales announced in the September 1985 tax package. As I have said, the Government called it a reform package, but heaven knows why because it is simply a change. The explanatory memorandum-and I thank Senator Haines for pointing out what the Treasurer (Mr Keating) had said in another place-says that this will formally impose the `tax payable for the 1987-88 and all subsequent financial years' at the rates, as the Minister said, of tax declared by the Income Tax Rates Act 1986, by individuals and trustees generally, companies and registered organisations. In other words, it formally increases company tax. Why should we not have the opportunity in this chamber of debating whether or not company tax rates should be increased? Why should we not have the opportunity of debating the formal increase, the formal change or the formal maintenance of existing tax rates and their consequences? Why does the Minister want to silence us in this way and limit the opportunities in this chamber of exposing the extent to which this Government has sought to mislead the Australian people on tax, and pretend that it is cutting tax when it is increasing it this year by something like 10.2 per cent for non-pay as you earn taxpayers, and I think 9.2 per cent overall-a hefty increase in tax. Of course, it is natural that this Minister would not want to provide plenty of opportunities for a debate of that kind. As Senator Haines said, this Bill provides the opportunity for a broad ranging debate in the chamber, and, heaven knows, there are few enough opportunities now. This Minister wants to reduce those opportunities. If he is determined to take that course of action, I suppose other methods could be used. There could be continual first reading debates in this chamber, when people could range widely. There are tactics that the Opposition could, if pushed, use to ensure that its rights are maintained. But why should we have to put up with this Minister acting in this way, surrounded and encumbered as usual with his sneering and personal abuse, because he does not want to deal properly with the issues? Senator Haines's points were very sound. If we give way to the blustering, bullying nonsense from Senator Walsh, this chamber will be diminished-and I think that that is his intention. It is disgraceful that he should have responded in the way he did. Clearly Senator Walsh and the Government are setting out to deprive the chosen representatives of the Australian people of the opportunity to have the fullest possible debate on the consequences of tax and the tax rates set by the Income Tax (Rates) Act and of having the sort of free-ranging debate that Senator Haines has pointed out is a consequence of our consideration of this annual Bill. Let me remind the chamber that Senator Walsh has admitted that this is the way in which tax legislation has always been dealt with. The Government is seeking to amend a practice which has suited this chamber for years and years. Senator Walsh says that he wants to hear a good reason why my amendment, which seeks to restore that situation, should be carried. We want to hear a coherent and honest reason why the convention of years should be changed at the whim of this Government when, really, all this change does is diminish the opportunity for us, as senators, and for members of the House of Representatives, to scrutinise the consequences of the Government's economic policies, particularly its tax settings. Senator Walsh condemns himself. Whenever he descends to personal abuse, we know that he has nothing better to say. Question put: That the request (Senator Michael Baume's) be agreed to. The Committee divided. (The Temporary Chairman-Senator Peter Baume) Ayes . . . . . . . . . . . 37 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 10 —— Alston, R. K. R. MacGibbon, D. J.Archer, B. R. McLean, P. A.Baume, Michael Macklin, M. J.Baume, Peter Messner, A. J.Bishop, B. K. Newman, J. M.Boswell, R. L. D. Panizza, J. H.Brownhill, D. G. C. Parer, W. R.Calvert, P. H. Patterson, K. C. L.Chapman, H. G. P. Powell, J. F.Coulter, J. R. Reid, M. E.Crichton-Browne, N. A. Sanders, N. K.Durack, P. D. Sheil, G.Haines, J. Short, J. R.Harradine, B. Stone, J. O.Hill, R. Tambling, G. E. J. (Teller)Jenkins, J. A. Vanstone, A. E.Knowles, S. C. Walters, M. S.Lewis, A. W. R. Watson, J. O. W.McGauran, J. J. Aulich, T. Giles, P. J.Black, J. R. Jones, G. N.Bolkus, N. McKiernan, J. P. (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. Richardson, G. F.Cooney, B. Ryan, S. M.Crowley, R. A. Schacht, C. C.Devereux, J. R. Tate, M. C.Devlin, R. Walsh, P. A.Foreman, D. J. Zakharov, A. O.Gietzelt, A. T. Teague, B. C. Cook, P. F. S.Bjelke-Petersen, F. I. Beahan, M. E.Puplick, C. J. G. Evans, GarethChaney, F. M. Sibraa, K. W.Hamer, D. J. Button, J. N. Question so resolved in the affirmative. Bill agreed to with a request. MEDICARE LEVY AMENDMENT BILL 1987 The Bill. Senator MICHAEL BAUME(New South Wales)(11.35) —I move: That the House of Representatives be requested to make the following amendment: Page 2, Schedule, amendment of subsection 11 (1), leave out ``and for all subsequent financial years'', insert ``the financial year that commenced on 1 July 1987 and, until the Parliament otherwise provides, the financial year commencing on 1 July 1988''. This amendment has the same impact as the amendment that was just passed to the Income Tax Amendment Bill (No. 2) 1987. This measure will require annual supervision of the imposition of the rate-I repeat this for the benefit of the Minister for Finance, who has comprehension difficulties-to be set under the Medicare Levy Act. The Medicare Levy Amendment Bill will amend the Medicare Levy Act 1986 to declare and to impose a basic rate of Medicare levy of 1.25 per cent for 1987-88 and subsequent income years, which was part of the Budget announcement. Our concern is with the words `and subsequent income years'. We believe it right and proper that this rate be subject to annual scrutiny by the Parliament. Once again we think it improper that the Government should seek to diminish the Parliament's opportunities of discussing such a major issue. It is a major issue. Medicare levy collections are estimated in the Budget at $2,065m in 1987-88, which is 20.4 per cent higher than they were last year. There will be a 20.4 per cent increase in Medicare collections, and this is explained in the Budget Papers, which reveal that about half of the increase is attributable to the full year effect of the rise in rate from one per cent to 1 1/4 per cent which took place in December last year. That rate rise was despite the promise by the Prime Minister (Mr Hawke) at the previous election that there would be no rise in the Medicare levy. Of course we know all about the Prime Minister's promises. The remainder of the amount of the medicare levy collection is the expected increase in incomes of Australian taxpayers. It is absolutely vital that every year this Parliament has the opportunity to see whether it is getting value for money out of Medicare. This Government and no doubt the Minister for Finance are very keen to ensure that the opportunities for seeing whether we are getting value for money out of Medicare are limited. They are certainly diminished by not allowing an annual review of the Medicare rate which would be the consequence of the Government's Bill. That is why we are amending it in the way we are. It is self-evident that we are not getting value for money out of the Medicare levy because it has almost nothing to do with the cost of Medicare which, in total, is probably something like three or four times the size of the Medicare levy. We can see what has happened recently to Medicare. On 1 August we saw major changes relating to after hours visits and consulting physicians which were having a disastrous impact particularly on asthmatics, sufferers from Parkinson's disease and diabetes and people who have permanent problems of that order. Occupants of private hospitals have seen how they are no longer getting value from Medicare. They are not getting value from the levy because there has been a dramatic reduction in what they get from paying the levy and from paying the taxes which fund Medicare as to at least two-thirds of its real cost. There is no doubt that there is a discriminatory element in what happens under Medicare at present. If one has treatment from a doctor in a private hospital, one is not entitled to the same rebate as if one had exactly the same treatment from a doctor in other circumstances. This kind of change should be subject to the sort of surveillance and debate that will come from the annual requirement which has existed in the past that the Medicare levy rate be subject to parliamentary scrutiny. An extraordinary situation has developed in this area. Last week's issue of the Bulletin magazine ran an article `The Crisis in the Surgery: Why your GP is considering militant action'. Many people would suggest that if general practitioners are forced because of changed circumstances emerging from Medicare to take that kind of action, people would not be getting value for money from their Medicare levy. They are certainly not getting value for money out of Medicare. These are totally intertwined. There is no doubt that such matters must be subject to scrutiny by this Parliament. There should be no diminution by this Government, no attempt even at diminishing, of parliamentary scrutiny particularly in such a contentious matter as Medicare where there are so many concerns, so much evidence of delays in people getting hospital beds, with recent evidence, particularly in New South Wales, of people dying in hospital queues. This matter cannot be given enough public scrutiny. I get sick of hearing Labor senators spending their time attacking doctors and their gross incomes rather than looking at their net incomes. As the Bulletin clearly points out, the economic situation particularly of general practitioners is becoming disastrous under Medicare. Senator McKiernan —Some of them. Senator MICHAEL BAUME —There is a concession from the other side-`some of them'. That is a partial concession to reality and I am grateful for that interjection. At least some members of the Australian Labor Party recognise that the general practitioner is being seriously hammered by this Government and that the future of that section of the profession may be at risk. Are Australians getting value for money out of their Medicare levy when in many instances the providers of health care may be forced to diminish the services they give because of this Government's incompetence in handling Medicare, because of its excessive involvement with the philosophic basis rather than the reality of what is required for patients? We must have the right each year to examine this levy, to speak to it, to see whether we are getting value for money. With about a 20 per cent increase in the cost of the levy this year, in the revenue being reefed out of the pockets of Australians for this extraordinary philosophic commitment by this Government, it is self-evident that Australians are not getting value for money. It is vital that our capacity to reveal that to the Australian people should not be diminished in the way this Government seeks to do. Senator WALTERS(Tasmania)(11.45) —I support Senator Michael Baume's amendment to the Medicare Levy Amendment Bill. There have been so many occasions when the then Department of Health officers have made tremendous mistakes in the advice they have given this Government in the area of Medicare. Mr Temporary Chairman, you will know, because you were a member of the Estimates committee at the time, that the Government has had to back down on some of the advice which it has been given. I presume that that advice came from the Department's officers. You questioned Dr De Souza as to whether the care of patients was adequate under the Governments new decision. The Government has said that physicians should be permitted only one consultation and two follow-ups per patient. In questioning Dr De Souza you asked whether it was in the best interests of the patient that the physician should be asked to hand on to a general practitioner a patient suffering from a certain illness-you listed 20-odd illnesses-after just one consultation and two follow-ups. On each occasion the witness said no, it was not in the best interests of the patient. At that committee meeting we pointed out that that was just the tip of the iceberg. There were four or five more pages of similar illnesses that could have been dealt with had the Special Minister of State and Minister Assisting the Minister for Community Services and Health (Senator Ryan) wanted to continue the line of questioning. The Minister said that the Government realised it had made a great mistake and that the Department was negotiating with the physicians on this issue. I was surprised when one of the second secretaries said that the committee should understand that the policy was not an attempt to alter the practice of physicians: It was just an attempt to lower the income of the physicians; it was an attempt to say to the physicians, `Once you have seen the patient on three separate occasions, you should no longer charge that patient what an independent tribunal considers a fair and equitable fee'. They were being told that the fee should be downgraded because the cost of Medicare has blown out of all proportion and the Government is having its troubles with its socialistic new toy. Therefore, it was being said that the physicians should bear the brunt and charge a lower fee than the independent tribunal suggests. Could one imagine the Government taking such a step when dealing with the unions? Could one imagine the Government saying to any union that it takes under its wing that it should accept a lower wage than a tribunal suggests? Such a suggestion is absurd. That is not the only area to be considered. In so many other areas the Government has had to rethink its position. I refer to its decision on treatment of warts, which has already been mentioned. There was an arbitrary, across the board decision that there will no longer be any special provision for the treatment of warts. Again, the Government had to back down because it had not done its job properly; the Department had not given the Government proper advice. Certain types of warts require serious treatment because they are a precursor to cancer. We now have a situation in which the Government is saying that it will not have this annual review. That will save it all the embarrassment under the sun because the Senate will not be able to debate these items any longer. We have a situation in which the Government has said, `We have been embarrassed enough by the Department's ill advice; we have been embarrassed enough by our lack of consultation. Not only will we save face by not allowing the public to become aware of it, but also we will stop all debate in the Senate'. For that reason I support the amendment. Senator WALSH(Western Australia-Minister for Finance)(11.51) —I understand that the Australian Democrats will support the amendment. There is no justification for this amendment and the Government does not accept it. I want to put that on the record because I will not call for a division. Request agreed to. The TEMPORARY CHAIRMAN(Senator Peter Baume) —The question is that the Medicare Levy Amendment Bill 1987 be agreed to with a request. Senator WALTERS(Tasmania)(11.52) —In Question Time yesterday I asked Senator Walsh about health spending figures. He told me he would find out the correct year for the figures he gave earlier in the debate on this Bill when he said: Total spending on a proportion of gross domestic product (GDP) in Australia has declined in recent years, albeit marginally. It currently stands at around 7 1/2 per cent of GDP. Yesterday I asked Senator Walsh if he could tell me where he got those figures. As far as the Australian Bureau of Statistics was aware, he must have been referring to the year 1984-85 because that was the last year that figures were available to the Bureau and to the public. Senator Walsh replied that his information came from a study done by a joint interdepartmental committee of the Department of the Treasury, the Department of Finance and the Department of Community Services and Health. He thought that it might also have included the Health Insurance Commission. He said: I am not sure what financial year it was. I think it was 1986-87, or it might have been 1985-86. As the Minister used the word `current', I asked him to check and find out what year that was. Senator Walsh —I haven't got it yet. I have to get the report back from the Department. Senator WALTERS —As the Minister will be aware, that report is not available to the public. So he is asking us to accept as gospel information that is confidential to him and not available to the public. It is not available to the Australian Bureau of Statistics, but the Minister assures me that it is current, even though he does not know whether it is for 1985-86 or 1986-87. It is because the Minister used the word `current' in his reply to my comments, that I again ask him to tell us whether he misled the Senate or, indeed, whether his information is accurate? Senator Walsh —What? Senator WALTERS —The Minister says `What?'. I wish he would listen. He is the Minister in the chamber and I am asking him a question. All I asked was whether he would please get the information for me and let me know whether what he told us is accurate and whether the figures are current or old. He said he did not know. Senator Walsh —I told you I have not got the report back from the Department yet. Senator Michael Baume —But will you get it? Senator Walsh —Yes, I will get it and I can assure you it will be much more accurate than a Patrick Partners prospectus. Senator WALTERS —That is all I wish to say. Bill agreed to with a request. Taxation Laws Amendment Bill (No. 3) 1987 reported without amendment and Income Tax Amendment Bill (No. 2) 1987 and Medicare Levy Amendment Bill 1987 reported with requests. Adoption of Report Motion (by Senator Walsh) proposed: That the report be adopted. Senator WATSON(Tasmania)(11.56) —The Senate has before it three Bills relating to taxation. These Bills have been debated cognately over the past several days. The amendments proposed in the Taxation Laws Amendment Bill (No. 3) 1987 actually covered a very wide range of issues relating to income tax. On more than one occasion during the committee stages of this debate, the debate ranged very widely. In fact, the Chairman at the time mentioned that there was no one clause before the Committee. This interpretation was quite correct. The consequence of this procedure was that the debate ranged widely and honourable senators were unable to focus on one particular issue at a time and get an answer to each of the issues. I suggest that if we wish to expedite the passage of legislation, firstly, by debating Bills cognately and, secondly, by not laboriously going through each clause line by line, some direction be given to Chairmen to try to resolve one issue at a time sequentially to allow a proper debate and a proper response. We apologise to the Australian Taxation Office officers who inevitably got caught up in this and were unable to give the responses that were required by the Committee at the time. We thank them for their responses and we look forward to their further responses. This is a consequence of not allowing an orderly sequential debate which covers issues one clause at a time, particularly where that clause is contentious or difficult to interpret. I seek your direction, Madam Acting Deputy President, to ensure that, in future when issues are debated, we look at the Bill as a whole and do not take it line by line, when we at least deal with one issue at a time. The ACTING DEPUTY PRESIDENT(Senator Zakharov) —I am advised that Bills are taken clause by clause unless it is otherwise moved and in this case that did not happen. It is up to the Senate if it wishes that procedure to be adopted. Question resolved in the affirmative. Taxation Laws Amendment Bill (No. 3) 1987 (on motion by Senator Walsh) read a third time. Senator CHILDS(New South Wales) —I seek leave to make a personal explanation. Leave granted. Senator CHILDS —Yesterday in an urgency motion relating to Broken Hill Proprietary Co. Ltd (BHP), Senator Lewis took exception to a statement I made during the debate. He felt that I had suggested that he and other members of the Opposition had put forward the motion in order to have some effect on the price of BHP shares. I took a point of order at the time to indicate that I had not said that. I might add that I have the highest respect for Senator Lewis's integrity. However, I would like to clarify the matter by saying that I have no hesitation in withdrawing any suggestion that any Opposition senator was acting at the direction of Mr Elliott in any way whatsoever, or to affect the price of BHP shares. Consideration resumed from 29 October. The Bill. Senator MACKLIN(Queensland)(12.01) —I move: Page 7, Schedule 3, at end of the Schedule add the following new item: ``2. After item 123 in the First Schedule, the following item is inserted: `123AA. (1) Goods, not covered by any other item in this Schedule, for use as special aids, and not for sale for that purpose, by persons who are disabled or physically or mentally handicapped, in such cases or circumstances, and subject to such conditions, as are prescribed Nos. 1 to 9 `(2) Parts for goods covered by sub-item (1) Nos. 1 to 9' ''. This amendment, which was first discussed in 1984-honourable senators will be familiar with it-refers to an item that I do not think has been satisfactorily dealt with. It relates to the problem of supplying goods to the disabled. The taxation law, as it currently stands, says that goods which are specifically developed or produced for disabled people are tax exempt under the schedule. I am not referring to all goods because I think every government has dealt with this matter in a very compassionate and reasonable way. However, I am referring to a different set of goods-materials that can be used by the disabled but also can be used in a general way by anybody in the community. I have given the example of a computer, which is probably the easiest one to grasp. Computers are on the general list and attract sales tax. A constituent who had a disabled son first brought this problem to my attention. The son was born with his hands attached to his shoulders. This is a particularly disabling problem, especially for a child who attends a normal school. As honourable senators would be aware, if possible children with disabilities attend ordinary schools and I support this arrangement very strongly. In this circumstance, the father in some general discussions with a number of people-some of whom I know-came up with the idea of dividing the keyboard into two and having it mounted so the child could use the keyboard with his own hands. The computer, which has a capacity to display graphics, was put into a package so that he could take it to school to do his drawings and write along with the other children in grade one. A problem arose because the cost of the redesigned computer was not tax deductible. The family was not very well off. After some discussions, private companies provided the equipment at cost, hence overcoming the problem of sales tax, and the modifications were done by a number of professionals free of charge. That is a very graphic example of the types of things that could occur right across the board. I have tried to draft the amendment in such a way as not to leave it open to abuse. Hence, at the end of the amendment I have added the words `and subject to such conditions, as are prescribed'. My intention there is to have this matter dealt with in the same way as we deal with a number of other items in the taxation schedule. For example, people are required to go through certain screening processes in respect of some items in the schedule. Items 114b, 115, 115a and 115b lay down requirements to be met before a person can receive a rebate for sales tax. In this situation, I envisage that a medical practitioner, a physiotherapist, or a person of that order, could certify that a particular piece of equipment is specifically useful for a person with a physical or mental disability. The certification would have to be initiated by a person who is disabled. Hence, it is not just an across the board exercise. It would be carefully positioned with regard to those items. At the end of the day, if we look at what has happened in the example I raised, we will see that the level of abuse has been absolutely minimal. I think we are talking about an exercise which could be very beneficial to people who are disabled. I think my amendment would assist the disabled. I realise the Government's difficulties with taxation. I am not unmindful of the need to raise taxes. In fact, I feel quite happy that my party is able to move such amendments. We have supported the Government in a whole range of additional tax measures such as the fringe benefits tax, capital gains tax, and the like. But it would be useful for us to look again at our tax laws to see whether some specific assistance might be able to be given to community groups which find it difficult to lead ordinary lives. Senator Haines —The Government gives assistance to Mr Holmes a Court through the tax system. Senator MACKLIN —Senator Haines quite rightly points out that we give assistance through the tax system to many people, such as Holmes a Court, who are well able to look after themselves. When I raised this matter previously, the Government said that it would take it into consideration. I did not press the item. However, nothing seems to have been done for the last four years that this item has been around. I thought it was advisable to reintroduce the amendment to see whether we could prod the Government into considering this matter. I am interested to hear from the Minister for Finance (Senator Walsh) what happened as a result of the last exercise we did on this and what the conclusions were. It may be that the Government has discovered that there are problems of which I am unaware and I would be very interested to hear about them. I suspect, however, that the matter may have disappeared down a hole, as things do when the Government is busy with so many other matters. I feel that it is necessary to put this matter back on the agenda to see whether it can be approached in a more constructive way than was the case when I last raised it. Senator WALSH(Western Australia-Minister for Finance)(12.09) —I did not know until five or seven minutes ago that this amendment was coming up-nor did the officials and nor, to the best of my knowledge, did the Treasurer (Mr Keating). Under those circumstances, the Government cannot accept the amendment because-and this is only a possibility-it may open up loopholes for all sorts of things. This is something on which I clearly need to get technical advice. The Government will not be accepting the amendment. I suggest that Senator Macklin takes up the matter with the Treasurer whenever he feels like it after this legislation has been dealt with. Senator MICHAEL BAUME(New South Wales)(12.10) —The Opposition shares the concern of the Australian Democrats for the handicapped. Like the Minister for Finance (Senator Walsh), we were not aware that the Australian Democrats intended to move this amendment. Obviously, there are questions of substance to be answered by the Government. I join with the Australian Democrats in asking what was the result of any review that was established as a consequence of the Australian Democrats moving a similar amendment last year. One could pose the question: What is the best method of providing assistance to the handicapped? Is the best method the provision of sales tax concessions, or would such concessions benefit a wealthy person to the disadvantage of, say, someone not so wealthy? There are some people who are reasonably well off, though handicapped. In the absence of knowledge of any inquiries the Government has made, I think it may be appropriate to report progress so that the matter can be discussed at a later time on the basis of knowledge. Progress reported. Debate resumed from 29 October, on motion by Senator Gareth Evans: That the Bill be now read a second time. (Quorum formed) Senator CHANEY(Western Australia-Leader of the Opposition (12.13) —The Senate is debating the Migration Amendment Bill 1987. Senator Short will lead for the Opposition on this legislation. I take the opportunity to mention a couple of points about which we have been concerned because of the lack of detail in the Bill. The Government has brought forward legislation in this area and other areas without including all the detail and leaving a great deal to be filled in later by way of regulation. The Opposition has been dissatisfied with that approach. On this occasion, as on other occasions, we will be expressing that dissatisfaction. I think my colleague Senator Short is now ready to lead for the Opposition; so I will step aside in his favour. Senator SHORT(Victoria)(12.14) —I thank the Leader of the Opposition (Senator Chaney) for his graciousness in allowing me time to get ready to speak. That I was not ready is the fault of the Government in not calling for a division on the amendment moved during consideration of the previous Bill. We are now debating the Migration Amendment Bill 1987. The Bill has several purposes. Basically, it proposes four changes to the Migration Act. Firstly, it seeks to impose a fee for reconsideration of certain immigration decisions; secondly, it sets out to ensure that a request for an entry permit or visa is valid only if the prescribed fee and form are lodged; thirdly, it seeks to impose an immigration clearance fee-that is the euphemistic term; in fact, it is a new tax-on passengers on international flights seeking to enter Australia after 1 January 1988; and, fourthly, it seeks to introduce an alternative penalty mechanism for breaches of the principal Act in various respects. Principally, the Bill is about tax changes. The Opposition will not be voting against the Bill as a whole because it is part of the Government's Budget package. However, we have some strong concerns about and criticisms of the Bill. The Bill raises many concerns about the fundamental direction and administration of government policy. I put that in the context not just of migration policy but of policy generally. The first point I make about the Bill is that it breaks yet another promise of this Government; it dishonours a commitment that was given in May this year and repeated right through until the election and, indeed, until the Budget was presented on 14 September. That commitment was that the Government would not increase any existing taxes or raise any new taxes. It is quite clear from this Bill, and there have been other examples, that the Government did not even intend to honour that commitment. On 28 May-I think, the day after the election was called-the Treasurer (Mr Keating), in talking about the Budget, said: On the receipts side let me confirm that there will be no tax increases in the 1987-88 Budget. The following day he said: The Government has made it quite plain that it does not intend to introduce new taxes or increase taxes in the Budget. The Prime Minister (Mr Hawke), in launching the Australian Labor Party's policy for the July 1987 election, said on 23 June: In the completed Budget in September there will be no new taxes and no tax increases. On Budget night, in his Budget Speech, the Treasurer repeated the myth when he said: Turning to the revenue side, I repeat that we have adhered to our election commitment not to increase taxes or introduce new taxes. Those statements quite simply are not true. This Bill gives two lies to that proposition. First, it seeks to impose a new tax in the form of a $5 fee-- Senator Reynolds —Fee? Senator SHORT —It is a so-called fee; I am using the Minister's word. In fact, it is a tax to be imposed on passengers flying into Australia on international airlines. Secondly, the Bill seeks to impose another charge. One could argue about the euphemistic use of that word and about the definition of `taxes', `charges' and `fees'. They are all government impositions and therefore would commonly be regarded by people as taxes. The Bill seeks to impose a charge of $240 on people who wish to have reconsidered certain migration rulings that have been made against them. I shall return to some of those points later in my remarks. I move: At end of motion, add: `, but the Senate is of the opinion that the imposition of a fee of $5 on Australian citizens returning to their own country by international air travel is an obnoxious attack on the fundamental right of Australians to enter their own country'. Last night I gave a contingent notice of motion that the Opposition would move to have consideration of this Bill in committee postponed until the Senate had been presented with the draft regulations which are to be made pursuant to the Bill and which, in many respects, are the core of the legislation. Without the regulations the $5 fee would not be imposable nor would the $240 charge for reconsideration. It is quite wrong for the Government to expect the Parliament to pass this Bill without the Parliament having the opportunity to consider these key regulations because they underpin the Bill. Yet that is precisely what the Government has been planning to do. I understand from our Whip, Senator Reid, that the Government may now be planning to adjourn the debate after the conclusion of the second reading debate before the Bill goes into committee. If that is so, I assume that it is so because of the contingency motion I have moved on behalf of the Opposition in this place last night which, I understand, the Australian Democrats broadly supported. If that is the case, I welcome the Government's acceptance of our argument. But I will be seeking an assurance from the Government that we will not go into the committee stage of the debate until we have seen the proposed regulations and had an opportunity to consider them adequately. Several fundamental weaknesses of this Government are highlighted by its method of handling this Bill. Let me list them. They are very important, not just in relation to the consideration of this Bill but in relation to the consideration of Government legislation generally. Firstly, the Bill demonstrates the almost inherent tendency for this Government to legislate from the hip or, perhaps, from the lip. The method of going about this Migration Amendment Bill has been extraordinarily untidy. The timing has been astray. The very fact that the Government introduced the Bill without having finalised the regulations is an indication of that. But there are other indications. The Government has established the FitzGerald Committee to Advise on Australia's Immigration Policies. It will inquire into a very wide range of immigration policies and procedures. The findings of the Committee will be very relevant, as the Minister for Immigration, Local Government and Ethnic Affairs, Mr Young, said, to the general question of consideration of appeals against migration decisions and the like. There has been no attempt by the Government to co-relate this Bill with the FitzGerald inquiry which will report in the first half, or thereabouts, of next year. The Administrative Review Council report on migration matters and procedures last year had some pertinent things to say relevant to this Bill. Again, they do not appear to have been picked up. So the first concern we have is the tendency, the penchant, of this Government to legislate in a very untidy fashion and in a quite unco-ordinated way. The second weakness of this Government which this Bill highlights is its arrogance to Parliament. The Government's treatment of Parliament is, to put the most generous blush on it, cavalier. But it is much more than cavalier. It shows a total disregard for parliamentary proprieties. The Government seems to see Parliament as a mere rubber stamp or a cypher for the Executive. That is not only wrong in principle, it is undemocratic and it is extraordinarily dangerous because it bypasses most of the normal procedures and constitutional arrangements we have always lived by in terms of the consideration of legislation affecting every citizen of Australia. This Bill is the latest in a long line of examples of such treatment. We saw it in only the last week or so in the Government's handling of the Occupational Superannuation Standards Bill. A major Bill was introduced without the Government having any intention of showing the Senate, before the Bill was passed, the regulations which contained the very standards the Bill was supposed to be about. The Migration Amendment Bill we are now debating-at least until the last few hours; it may have changed in the last few hours-has been similarly approached. The third concern I have about the Government's treatment of legislation relates to my second point; it is the increasing tendency of this Government to bypass Parliament's constitutional role in enacting legislation which affects the life of every Australian. This Government is becoming increasingly a government of regulation rather than a government of legislation. There is a world of difference between the two. Government by legislation enables the Parliament and its elected representatives to consider fully, properly and appropriately the Government's proposals for the conduct of government and for legislation which affects, in some shape or form, the life of every Australian. On the other hand, government by regulation bypasses most of that process. The Government argues-it argued in the case of the Occupational Superannuation Standards Bill-that it is not a government by regulation and that it is not bypassing Parliament because the regulations can be disallowed in the Parliament. That is a totally inadequate response to the concern about government by regulation because, although the Parliament can disallow regulations, it is a very inflexible procedure. The Parliament either accepts them or rejects them. There is no scope for the modification of regulations, nor is there any scope for proper and deliberative debate about them. Government by regulation, which this Government has embarked on at a breakneck speed ought to be of great concern. Fourthly, we have seen an increasing tendency by this Government to be a government by Press release. Many of the Government's policy announcements are now made outside the Parliament by Press release. Legislation is subsequently brought into this place to legitimise the announcements made in the Press release. But often, when the legislation comes into the Parliament, it is different from the details that were set out in the Press release. Again I refer to the Occupational Superannuation Standards Bill of a couple of weeks ago. In the last session of the last Parliament we had several important tax Bills. The legislation was very different from the Press releases announcing changes to the taxation laws. They are always backdated in application to the date of the Press release even if the legislation differs from it. That, of course, is nothing more than blatant retrospectivity. That is a principle which we on this side of the House have said time and again is not only obnoxious but also bad government. Fifthly, I am extremely concerned about the seemingly inexorable growth in this country of administrative law whereby more and more of the real decision-making processes are being taken over by the legal profession, the members of which are not elected representatives of the people. In that context I can do no better than to quote my colleague in the other place the honourable member for Dundas, Mr Ruddock, who said in the debate on this Migration Amendment Bill in the House of Representatives on 28 October: The role of the Parliament and of the Minister are being usurped in this Bill and in a wide range of other legislation. We are going down the same track as we did in the family law area, where decisions about the way in which people's rights should be dealt with are made not by elected people representing the community but by judicial officers. Talking about family law, he said: Important decisions about custody are determined ultimately not by the guide-posts set by this Parliament but by the courts. Judicial officers, unelected people, are exercising discretions. And we wonder why we have problems in the family law area. He went on to point out, very rightly, that this is precisely what is happening in the immigration area, where we have seen a tremendous growth in administrative law. Indeed, this Bill that we are debating today outlines a new approach and expands the appeals process. The courts will be usurping the function of this Parliament in dealing with appeals. When one takes all these factors into account, it is quite clear why the Opposition has considerable reservations of principle about the Migration Amendment Bill and why the Australian people, and not just those directly affected by this Bill, should have considerable reservations, too. I want in a moment to turn more specifically to some of the details of the Bill. But before doing so I want to raise a matter which, although not included in this Bill, is very relevant to our overall migration policy and to some of the points of principle that I have been discussing. I refer to the reports that the Government will hand over control of the business migration program to the private sector-reports which Senator Reynolds, who I notice is here today, appeared to confirm in response to my question to her on this matter in the Senate yesterday. I will quote just one of the reports to which I referred and questioned the Minister about in the Senate yesterday. It is from the Australian of yesterday's date and it states: The Federal Government is planning to hand over administration of the $1.2 billion-a-year business migration program to the private sector. No indication was given as to how that move could be effected in a way which would do other than encourage speculators, in the form of immigration advisers, coming into the area. No indication was given of how the legitimate migration consultants could be protected or indeed how the reputation of legitimate business migrants could be protected. This is an absolute minefield, in my view. The Opposition is extremely concerned about it. We will, of course, have to wait on the detail to cast a final assessment on it, but unless extraordinary safeguards are built in, the Government is, in my view, putting a dynamite bomb into the midst of immigration policy in this country. Whilst I am a supporter of a much greater involvement of the private sector in doing things nowadays done by government, I cannot think of a less appropriate role for the private sector than that of making decisions on the immigration applications of business migrants to Australia. I am sure that we will hear a lot more about that subject. I turn now to several of the specific provisions of the Bill. In doing so, I want to make it clear that, while we are critical of several aspects of the Bill, we support the overall intent of the Bill to broaden and at the same time speed up the review process. Over recent years there has been an enormous build-up in delays of unheard appeals. There has been an absolute explosion in them. In the last 18 months or so the number of appeals on the waiting list has increased, according to Mr Young, the Minister for Immigration, Local Government and Ethnic Affairs in the other House, from 6,000 to 26,000. So in that case the borderline or marginal appeals-the important ones; the ones likely to have a decision affected by the appeal process-were being delayed by up to 18 months. I understand that in 1985-86 there were 3,688 unresolved cases. In 1986-87 that had grown to the staggering figure of 10,866 cases. So we are not in any way objecting to the intent of the Bill to change that situation. Indeed, we support it. What we question is whether this Bill will really tackle these problems effectively and meaningfully. There are three particular aspects on which I wish to comment. Two of these concerns relate to clause 7 of the Bill. They are, firstly, the delegation of legislative power contained in that clause and, secondly, the imposition of a fee to be set initially at $5 on all passengers on international flights to Australia as from 1 January 1988, including, as I stressed before, Australian citizens returning to Australia after visits abroad. My third specific concern relates to clause 9 of the Bill. Clause 9 provides for the making of regulations for the reconsideration or review of certain migration decisions on payment of a fee, as I said, to be set initially at $240. So far as the first of these three points is concerned-that is, the delegation of legislative power-I think it is very important indeed that the Senate take note of the report of its own Standing Committee for the Scrutiny of Bills on this matter dated 21 October. Let me just quote from that report. Commenting on the fact that arrangements for the collection of the $5 fee and its amount would be prescribed by regulations, the Scrutiny of Bills Committee said: Whilst the proposed amount of the fee ($5) may be regarded as no more than recovery of costs, the Committee in the past consistently objected to imposition of fees, which may be regarded as a form of taxation- I stress that comment for the benefit of Senator Reynolds. This is the unanimous all-party report of the Scrutiny of Bills Committee. It said that the imposition of fees: may be regarded as a form of taxation, by regulation, without a limit set by legislation. The Committee has argued that the Parliament should not lightly delegate its taxing powers. The Committee has taken the view that a ceiling amount on such a fee should be prescribed in legislation. Accordingly, the Scrutiny of Bills Committee drew the attention of honourable senators to clause 7 of the Bill. It said: . . . in that by enabling the setting of a fee by regulation without an upper limit, the Bill may be considered to be an inappropriate delegation of legislation power. That is a very damning comment by one of the most highly respected, informed and authoritative committees of the Senate. Another point I wish to raise concerns both the principle and the imposition of the $5 fee on travellers and the method of its imposition. It is a tax. As I said before, it represents another broken promise by the Government. It is interesting to note that the Hawke Government was the first Government to introduce a fee for people to become Australian citizens. Now it has broken another record. It has added a further infamous string to its bow by becoming the first Australian Government to impose a tax on Australians returning to their own country. In my view, and in the view of the Opposition, that is simply obnoxious. Senator Reynolds —What about your departure tax? Senator SHORT —That is not to come in. That is a departure tax, it is not an entry tax. As I said, the principle of the new $5 tax and its introduction, via the delegation of legislative power, are objectionable. But so too is the method of its imposition. According to the Bill and to the explanatory memorandum, the tax is to be: collectible by the international airline operator who brought the passenger to Australia. The operator will be responsible for the payment of the fee to the Commonwealth. The explanatory memorandum goes on to say: Arrangements relating to the collection of the fee and its payment to the Commonwealth will be able to be prescribed in regulations. The fee is initially intended to be $5. I point out to the Senate that there are two significant words there. The first word is `initially'. There is no guarantee that it will stay at $5, and the one thing we can be absolutely certain of is that it will not stay there, it will escalate at an enormous rate. The second word in the explanatory memorandum which I found very interesting is that the fee is initially `intended' to be $5. This fee will not operate until 1 January. I wonder what it will be when it comes in on 1 January. The concept of an actual fee at all came out of the blue on Budget night. I understand that there had been no discussion with the industry about this matter despite the fact that, as I said, the fee is not coming in until 1 January. There should have been ample time to discuss the matter and to try to work it out with the industry, at least to work out the mechanics of it. As I said, there was no consultation with the industry. I am now told that since the Budget, the industry is being consulted right, left and centre, while the Government is trying to work out how the fee can be collected. There are some enormous problems there. The shadow Minister for Tourism raised some of these in the House of Representatives on 28 October. I will not go in to them in detail at the moment, as time precludes that, but they are matters of great concern. But I refer honourable senators to page 1574 of the House of Representatives Hansard of 28 October, as it makes very interesting reading indeed. Finally, the third point I wish to raise is the provision for the review of certain immigration appeals that is contained in clause 9 of the Bill, which prescribes regulations which will enable all of this to work. I understand and welcome the proposition that we will not be considering the Bill beyond the second reading stage until we have seen those regulations, so I will refrain from making further comment until that time. Sitting suspended from 12.44 to 2 p.m. Senator CHANEY —My question is directed to the Leader of the Government in the Senate who, I understand, has just arrived back from his bed. Is it a fact that over the past few weeks values on Australian stock exchanges have fallen about 44 per cent while in Tokyo, London and New York the slide has been 17 per cent, 33 per cent and 32 per cent respectively? Is Australia's great battering attributable to the fact, as suggested by an economist quoted in yesterday's Wall Street Journal, `that Australia is wearing the thinnest economics veneer' and that investors have decided that this country is the most vulnerable to a world slow-down because of its big current account deficit and heavy reliance on commodity exports? Senator BUTTON —I believe that the figures which Senator Chaney quoted are correct. They were selective quotations in terms of the percentage fall on the share market. For example, the Hong Kong exchange fell by 42.4 per cent compared with the Australian figure of 36.4 per cent. I do not know whether that is of particular relevance because I am not sure about the relevance of the question. There is a wide discrepancy of views as to why those differences in stock market activity have occurred. Senator Chaney quoted from yesterday's Wall Street Journal. It was only a week after the stock market crash in the United States and Australia but the Wall Street Journal, in a comment, went out of its way to make the point that the United States had a lot to learn from policies which had been implemented in Australia over a period by the Australian Government. That comment was made by way of advice to the United States Government. I am not proposing to speculate on the reasons for what took place in Australia as distinct from the other countries to which Senator Chaney referred. Let me say that the view has been expressed by a number of people that Australia has been too reliant on raw materials and commodities, in terms of export earnings, and that this economy is still vulnerable to international prices in commodities. That may well have been a factor. But what weight is to be given to that in the overall context, I am not able to say. Senator COLSTON —I ask the Minister for Home Affairs whether he advised last week that the electoral lists used in the Federal election earlier this year are available under the provisions of freedom of information legislation. If so, can he advise what organisations have requested some or all of the lists, what they paid for the information and whether what they paid was sufficient to cover the Commonwealth's costs in terms of material and labour? Senator ROBERT RAY —As most honourable senators will be aware, the A to Z certified lists were prepared for use in the last Federal election on 11 July. These certified lists are available under the Freedom of Information Act on the basis of payment of a $30 application fee and 10c per page. In appropriate cases, freight or postage is also payable. These charges are sufficient to cover the Commonwealth's costs in meeting such a request. The following organisations have requested some or all of the certified lists: Reader's Digest, $5,221.20, all divisions-I will not interpolate anything there-the AMP Society paid $111.50 for the lists of the divisions of Canberra and Fraser; and Mr Peter Burns who, I assume could be a solicitor, paid $36.25 for the lists of the divisions of Warringah and Mackellar. I suggest that sitting members there take note. In addition, the Sydney real estate agents, Stewart Upton Real Estate, St Ives, made a request for the 11 July certified lists but they have not specified the division or divisions they require and have not yet paid the $30 application fee. To date, these have been the only requests made, under the freedom of information legislation, for access to certified lists. No doubt there will be some more. I would think the Government will not be printing rolls again for at least another 18 to 20 months. Senator STONE —Is the Minister representing the Treasurer aware that, according to the weekly report of the Reserve Bank of Australia to the Treasurer on the foreign exchange markets for the week ended last Friday, 30 October, `the Bank made large sales of foreign currency in the middle of the week'? Is the Minister also aware, from the same source, that compared with the turnover in our foreign exchange markets, both spot and forward, averaging about $20 billion a day in the previous week, daily turnover last Thursday, 29 October, was a record $37 billion? Is he still convinced that these levels of activity derive solely from Australian importers purchasing forward the foreign exchange they will need in the months ahead for their imports? Even in the unlikely event that the Minister is-or, indeed, ever was-aware, has it yet been brought to his attention that such external payments leads and lags are also classified by the Australian Statistician, for obvious reasons, as capital outflow? Senator WALSH —We have had a cheap and nasty start to this revision of history. It does not surprise me that people like Senator Stone want to revise history because, after all, it was Senator Stone who advised Potter Partners in August 1985-just as the biggest bull run in history on the stock exchange was about to take off-that it should unload its share portfolio. The Treasurer said the other day that anybody who takes Senator Stone's advice on financial or economic matters deserves all he gets. The revision of history is Senator Stone's quite false assertion that I said that currency transactions were all attributable to traders-importers and exporters. Of course, I said no such thing. Indeed, the absolute statement was made by Senator Stone, who said that if the Reserve Bank is buying Australian dollars-or, to look at it the other way, selling foreign currencies-obviously somebody is selling dollars. That is true. Senator Stone, however, then went on to say that the only original cause of those transactions is people withdrawing capital from the country. That blithely ignores the fact that people are always buying and selling Australian dollars, simply to facilitate international trade. It has nothing to do with capital movements. I must say that I am still astounded that Senator Stone refuses to acknowledge any qualitative distinction between the buying and selling of currency to facilitate international trade and the withdrawal of hot money from the country or the sale of assets in Australia by foreigners. I do not know why-well, I suppose I do know why-Senator Stone does not know to whom the Reserve Bank has been selling currency. He has admitted that, I think. He does not know whether it is overseas residents who have been purchasers of foreign exchange or, if they have been, the degree to which they have done so. That begs the question: Why is Senator Stone continually trying to talk down the dollar? One can discern a political motive for doing it. However, it is absolutely impossible to discern any responsible economic motive. In keeping with the custom or behaviour pattern he established many years ago, when he does not have information he tries to substitute posturing and dogmatic assertion. Senator COLLINS —My question is directed to the Minister for Finance and concerns the Minister's heavy responsibility in seeking out means for reducing government expenditures which are consistent with both social justice and economic efficiency. The question is in three parts: firstly, has the Minister seen a copy of Mr Howard's list of proposed expenditure cuts which he promised to the Australian Broadcasting Corporation (ABC) on 26 October? Secondly, has the Minister assessed the equity and economic efficiency characteristics of the items on that list? Thirdly, has the Minister received and examined expenditure cut proposals from any other member of the Opposition's front bench? Senator WALSH —I certainly have not seen Mr Howard's list of specific expenditure cutting proposals that he promised the ABC last week. That does not necessarily mean that the ABC has not received it but I would certainly be amazed if it has. If I were provided with such a list I would certainly be more than happy to do a personal assessment, and ask for a departmental assessment of it. I could not say for certain that I have not received any proposals for cutting expenditure from the Opposition-I have received a number of propositions for increasing it-because I have not checked through all of the files to see what tangible recent proposals might have been put up by, or on behalf of, Opposition members. However, this morning, I found one tangible proposal which relates to Commonwealth payments to local government, a topic about which a number of Opposition senators have displayed interest in the last few days. I have a cutting from the Sydney Morning Herald of 19 August 1986-just over one year ago; immediately before last year's Budget, I think at the time when Senator Stone was a Sydney Morning Herald columnist. Senator Stone was developing an argument that there should be substantial cuts in government expenditure. He said this of local government: Particularly since the Commonwealth Government has no good reason to be involved in local authority finances, those bodies also cannot be immune from the national cutback. Instead of the proposed 2 per cent real increase in Commonwealth payments to them this year, cutting those payments in half would save almost $300 million this year, spread widely across the country. If Senator Stone would like to indicate that he still holds the view that the Government should cut $300m of local government funding, the Government would look at the proposal. We are willing to consider anything. I think Senator Reynolds would also be interested in the proposal and would probably seek comments from local government authorities, in particular local government authorities in Queensland, as to what they thought about it. Senator HAINES —My question is directed to the Minister representing the Treasurer. I refer the Minister to reports following the stock market crash that the Treasurer has requested that the National Companies and Securities Commission (NCSC) interpret its regulations with greater flexibility. Is the Minister concerned that such action by the NCSC could make it easier and cheaper for companies to succeed in takeovers which could reduce company tax revenue by billions of dollars? In particular, would the Government be happy for the NCSC to waive the provisions which prevent anyone making a takeover announcement, for example for Broken Hill Proprietary Co. Ltd (BHP), from offering less for shares in the target company than he has paid in the last four months? Finally, is the Minister aware that a successful BHP takeover which uses the negative gearing loophole could deny the Treasury all, or part, of the $600m that BHP currently pays in company tax? Senator WALSH —I do not know anything about this matter. I have been told that there were some Press reports of it but I did not even see them much less get any official advice from the Treasurer. So I will have to refer that question to the Treasurer for a reply. Senator HAINES —Mr President, I ask a supplementary question. Could the Minister get that answer to me as expeditiously as possible? Senator WALSH —I do not expect that I will be able to get an answer today but I will see whether I can get it for tomorrow. Senator COONEY —I ask the Minister for Justice: Are any prisoners in Australian gaols as a result of prosecutions carried out by Commonwealth authorities? If so, how many and of what sex are they and in which gaols and in which sections of those gaols are they imprisoned? Are any in gaols built by the Commonwealth? Senator TATE —In answer to Senator Cooney, who was kind enough to give me very short notice of this question, I have been able to put together some figures which may be of help to him in a preliminary way. He asked, firstly, whether there are any prisoners in Australian gaols as a result of prosecutions carried out by Commonwealth authorities. The answer is yes. As to the numbers and what sex the prisoners are, the answer is as follows: as at 1 September 1987 there were 452 Federal offenders. In New South Wales there were 201, of whom 181 were male and 20 female; in Victoria 84, of whom 74 were male and 10 female; in Queensland 54, of whom 48 were male and 6 female; in South Australia 37, and the 37 were male; in Western Australia 71, of home 63 were male and eight female; in Tasmania there was one male; in the Northern Territory there were three males; and in the Australian Capital Territory there was one male. Senator Cooney will be interested to know that 62 Australian Capital Territory prisoners-59 males and 3 females-were detained in New South Wales institutions on 1 September 1987. No statistics are available on the numbers of joint offenders. Senator Cooney further asked how many were held in maximum security prisons on 3 November 1987. I regret that I have been unable, in the short time available, to obtain that information. I will do so as soon as possible, perhaps by the end of Question Time but certainly by Question Time tomorrow. Senator Cooney asked whether any prisons were built by the Commonwealth, and the answer to that question is no. He further asked who is responsible for the classification of Federal offenders. Federal offenders are held in State prisons by virtue of section 120 of the Constitution. The State authorities are responsible for the classification of Federal offenders. Senator SHORT —Does the Minister representing the Treasurer agree that rising prices on international commodity markets during the past six months or so have reflected expectations of rising inflation? Does he agree that the Australian dollar is widely regarded internationally as a commodity currency and that this has been a major factor underpinning the strengthening of the Australian dollar during that time? Does he also agree that in the light of recent financial market developments the outlook for international commodity markets is now towards deflation rather than inflation? If so, what conclusions does he draw from that as to the outlook for any currency widely regarded internationally as a commodity currency? What implications does he see for the Australian economy? Senator WALSH —This is another step in the sustained campaign by the Opposition to try to talk down the dollar. It is the sort of economic sabotage that Andrew Peacock indulged in in February 1983. Of course the Opposition would love to see an economic collapse in Australia because it knows that unless it can get its act together much better than it has so far it will not have a snowball's chance in hell of winning government. So I can understand the political motive for trying to spread this doom and gloom, trying to talk down the value of the dollar, investment and so on. I was asked whether I believed that recent improvements in commodity prices are due to rising inflationary expectations around the world. People can believe whatever they want to believe and indeed some people can then assert it as unchallengeable truth. I have a copy of a speech-I will not bother to quote from it now but I will at some other time-which contains a number of such assertions of unchallengeable truths. Frankly, I do not know what caused the recent improvements in commodity prices. One would have to pry inside the minds of the people who buy the commodities to find that out. It is generally true for commodities that stocks have been running down, and in those circumstances it would not be all surprising if there were an increase in price. I noticed that in today's Australian Financial Review Michael Stutchbury's article refers to Andy Stoeckel, the former Director of the Bureau of Agricultural Economics, saying that one should not be surprised if commodity prices rise by 30 per cent before the end of 1988. I do not know why Dr Stoeckel said that or how sound his assessment is, any more than Senator Short could know what was in the mind of commodity buyers that persuaded them to pay higher prices in the last few months than they had paid in the previous year or two. Senator FOREMAN —I address my question to the Minister for Transport and Communications. I refer to media stories about increased revenue for Aussat Pty Ltd. These stories suggest a vastly increased revenue for the use of Aussat during this year, although the project still makes a loss. Can the Minister state what loss this year will come from Aussat and how that compares with the previous year? Also, what facilities does Aussat bring to particularly remote Australians? Senator GARETH EVANS —The pre-tax loss for Aussat for 1986-87 was $34.9m. The net loss, taking into account for the first time a future income tax benefit, was $17.8m. The magnitude of those losses has caused some Press comment and generated some political interest. In response to that situation, a number of points should be made. The year 1986-87 was Aussat's first full year of commercial satellite operations. The use of transponder services increased by 40 per cent during the year, and at year end over 80 per cent of available in-orbit capacity had been sold, the majority under long term contracts, providing a sound base for continued growth of the satellite system. Revenue for the year was $73.7m, some 2 1/2 times the revenue of the previous year. Sales revenue was sufficient to fund all cash operating expenditures and interest payments, and that is an important step towards full commercial operation. In terms of its product life cycle, the company is still in its infancy. It is unreasonable to expect the company, in a highly capital intensive industry, as this one is, to generate profits at this stage, given that it has been operating for only two years. Aussat is broadly on target in its long term financial planning. As for the kinds of things which Aussat is doing, and which we want it to go on doing, for people living in remote parts of Australia the list, as honourable senators should know, is pretty substantial. There is the Australian Broadcasting Corporation homestead and community broadcasting satellite service; the remote commercial television service, which is operational in Western Australia and imminent in central Australia and which is the subject of ongoing discussions for consideration of options for the north-east and south-east of Australia; Telecom Australia's Itevra service, which provides communications to customers in remote areas; and the State specific government communications network, Q-Net, in Queensland. There are also specialised networks in the provision of data and other communication links for remote mining and construction sites. Other services that Aussat provides include the distribution by the Special Broadcasting Service of its television programs to reach most capital cities and a large number of provincial and regional areas; the national satellite based commercial radio news gathering and distribution network, Macsat, run by Macquarie Broadcasting Holdings Ltd; and the distribution of news agency, information and other data services run by Australian Associated Press. There is the establishment of a range of private video, voice and data services for a wide range of governmental and corporate sector users. There is the distribution to hotels and clubs of video entertainment and information services on a subscription basis, and there is the Starnet corporate data service. Therefore, I think it can be said that Aussat obviously is providing a range of communication services of a great deal of value covering the domestic, commercial and industrial needs of the Australian population. Senator LEWIS —My question is directed to the Leader of the Government in the Senate-wearing his Hawaiian suntan, I see-in that capacity as well as in his capacity as Minister for Industry, Technology and Commerce and Minister representing the Minister for Industrial Relations. The Minister will be aware of the concern expressed by the Steel Industry Authority about the doubling of time lost through industrial disputes last financial year and what the Authority has described as `the alarming downturn' in productivity. Does the Minister agree with Senator Walsh that, while both the company and the Government have met their obligations under the steel plan, the work force is, to quote Senator Walsh, `actually letting the agreement down'? Is it a fact, as reported in today's Australian Financial Review, that many of Australia's competitors have already achieved productivity rates of 500 tonnes per worker per year compared with the 245 tonnes achieved in Australia in the June quarter of 1986-87? What prospect is there of the Australian industry increasing its competitiveness if unions carry out their threats to resort to strike action in the event of further work force reductions following expiry of the steel plan? Senator BUTTON —I deal first with the observation part of Senator Lewis's question, which came at the beginning-his reference to my Hawaiian suntan. I assure him that that is incorrect. The last place I visited on my overseas trip was London, and there was not much suntan to be had there. When I became Minister for Industry, Technology and Commerce, if I proposed an overseas trip it was always suggested to me that I spend four days in Tahiti on the way back. I asked my Department why it was always suggested that I should spend four days in Tahiti and I was told, `That is what Ministers in the Fraser Government always used to do'. That came out of the computer, I was told. I am grateful to Senator Lewis for mentioning that matter as a starting point. In regard to the situation of the steel industry, I thought that Senator Lewis said all that he wanted to say on this issue yesterday. I substantially agree with Senator Walsh because what Senator Lewis was talking about yesterday and what Senator Walsh was talking about was the report of the Steel Industry Authority dealing essentially with the first quarter of this year. Senator Chaney —The annual report. Senator BUTTON —It was the annual report, but the industrial relations point made by the Steel Industry Authority related to the first quarter of this year. That was a very bad period in the history of the steel industry about which I made a number of comments at the time, and from which I do not retreat. Senator Lewis —And which I quoted. Senator BUTTON —If Senator Lewis quoted me, I am grateful. He is starting to develop a sense of perspective at last. On that issue I agree with Senator Walsh. In confronting the issues of the steel industry now and in the future, let me say that the company anticipates a vastly improved level of production in the coming months, which is very welcome. Senator Lewis also drew attention to comparative figures with the Japanese steel industry, I suspect, although he did not mention the country, where a particularly high rate of tonnes per year of production has been obtained. As I recall the figures for Japan, they relate to Nippon Steel where there has been a 40 per cent reduction in the work force. Similar figures might well be quoted in respect of United States Steel, which has improved its productivity with a reduction in its work force from 100,000 to 20,000 in the last five years. As to how these issues might be accommodated in the future, I would point out that the Steel Industry Authority, which is the appropriate body to do this in my view, met both unions and representatives of the companies last week and sought a resolution of a number of these issues for the future. From such reports as I have had it appears that there was a willingness to address those issues and try to reach a new form of agreement on industrial relations in the steel industry. The problems which occurred in the first half of this year were related not just to industrial relations but also to the introduction of new plant by Broken Hill Proprietary Co. Ltd and some difficulties that were encountered with the introduction of that plant. The important question for the future is whether agreement can be reached on the way in which reductions in the work force can be accommodated and the industrial relations situation improved. As I said, I believe that the Steel Industry Authority made substantial progress with discussions on that matter last week and I do not wish to prejudice any outcome of those discussions by making inflammatory or other comments which I might well be tempted to make. On this occasion I will resist the temptation. Senator MORRIS —Has the Special Minister of State seen comments by the shadow Attorney-General about the Government's planned display of the Australian Constitution? Does the Minister agree with the shadow Attorney-General's comments that the exhibition is nothing but `a travelling circus'? Senator RYAN —I did see the comments by the shadow Attorney-General and I was surprised that he spoke about this very exciting, major event for the Bicentenary in such disparaging terms. To refer to it as `a travelling circus' is quite inappropriate. I will tell honourable senators some of the details of this travelling exhibition, but I point out that the reason why it is travelling is to enable people in regional and outback Australia to participate in the Bicentenary. Senator Tate —And in Tasmania. Senator RYAN —Indeed, in Tasmania, as my colleague Senator Tate points out. I would have thought that a person who was in coalition with the Party that used to claim to represent country people would have been particularly enthusiastic about the fact that this exhibition will travel. In fact, it will be the greatest road show ever to tour Australia. It will visit 34 towns and cities across all States and Territories and the itinerary was chosen particularly to maximise the number of people in rural Australia who will have access to that exhibition. The exhibition will be opened by the Prime Minister on 1 January 1988 in Wodonga and will close in Sydney in December 1988. It is planned as an exhibition about Australia for Australians. It is a unique show which will focus on our history, our heritage, our culture, our community, our achievements and our future. It will celebrate the contributions of all Australians-the Aborigines, those who arrived with the First Fleet and more recent arrivals. It is very well constructed in terms of service to rural and regional Australia because at each venue the local community will have an input to the exhibition, focusing on the history, arts, achievements and interests of that community. Therefore, it will not just be something that is being brought to the community; it is something which the rural communities can contribute to and participate in in a very creative fashion. The exhibition is a model of government and private sector co-operation in planning bicentennial activities. The Commonwealth Government will contribute $19m and Broken Hill Proprietary Co. Ltd has made the most generous sponsorship of $6m. Valuable assistance is also being provided by other Australian companies. Honourable senators can see that the shadow Attorney-General is very misguided indeed, very negligent of the interests of country people and badly informed about the scope and nature of what will be, for many Australians, particularly those living outside the metropolitan areas, the highlight of our 200th anniversary. Senator CRICHTON-BROWNE —My question is addressed to the Minister for Industry, Technology and Commerce, who will be aware of the much talked of need for the United States of America to significantly reduce its massive deficit, and quite properly so. However, inasmuch as a major part of Australia's export earnings depend very heavily upon world commodity prices, what does he believe would be the short or immediate effect upon the Australian economy of a contraction of the American economy due to the share market collapse, when compounded by a significant and serious attempt by the Americans to reduce that deficit which, in itself, must further contract the American economy in the short term leading to a slackening of Japanese exports to America, which will shunt into a reduced demand for Australia's commodities? Inasmuch as the Australian dollar has fallen by 10 per cent against the basket of currencies since September, does he believe that our level of inflation is likely to be greater than that previously predicted by the Treasurer? Senator BUTTON —Senator Crichton-Browne's question has a sense of deja vu about it because I happened to run into him in a London hotel on Friday of last week-not in the bar, I hasten to add-when he asked me much the same sorts of questions. At the time I did not apprehend that this was a rehearsal for Question Time in the Senate, but I must tell Senator Crichton-Browne that while he was absent the day before yesterday there was a quite savage attack on a member called Brown for his overseas trips. At first I thought honourable senators were talking about Senator Crichton-Browne, but it appears that it is some other member! All I can say about the first part of the question is that a number of United States commentators have been drawing attention to the fact that a savage reduction in the size of the United States domestic deficit might compound the consequences of the share market fall in the United States which has, presumably, had a significant effect on small investors and so on. If the expenditure cuts associated with a large reduction in the deficit were not carefully targeted, they might have the effect of compounding adverse consequences for that section of the community. That is a matter which I have no doubt the United States Administration will be discussing with Congress presently as it tries to reach a resolution to the question of how the Budget deficit might best be reduced. Senator Crichton-Browne also asked me about the reaction that these matters were likely to produce in the United States in terms of the United States trade deficit, particularly with Japan. There seem to be two schools of thought about that in the United States. There are those who argue for a reduction in the domestic deficit and a more rigorous economic policy. They see the share market fall as being a suitable vehicle to enhance their argument. Then there are those who support the current trade Bill before Congress and who say that the share market fall necessitates further action on the protective front to stop Japanese and other imports from coming into the United States market. It would be foolish for me to speculate as to how that argument will resolve itself in the American context. With regard to the last part of Senator Crichton-Browne's question, the answer at this stage of my awareness of the topic is no. Senator CRICHTON-BROWNE —I ask a supplementary question. I again ask the latter part of the first part of my question. Does the Minister accept that the Americans are not given to concerning themselves with our economy when they are looking at their own? Therefore, with the compounding of the fall in the share market and the way in which it will contract the American economy, does he accept that if there is a significant reduction in the American deficit it will lead to a reduction in commodity prices which will affect Australia very significantly in the short term? Senator BUTTON —I think that is an extremely difficult question to answer. Any answer would be highly speculative. In answer to an earlier question, I said that there will undoubtedly be some apprehension that world wide changes in share markets could lead to a downturn in commodity prices. That is certainly a view which has been expressed in some areas. I cannot take it beyond that. Senator BOLKUS —My question is directed to the Minister for the Environment and the Arts. Is it a fact that the Norfolk Island population of boobook owls is represented by a sole surviving female and that there is an urgent need to re-establish owls on the island? Is the Minister in a position to report on efforts to persuade New Zealand boobook owls imported to Norfolk Island to enter into a procreative liaison-or to mate-with that island's sole surviving owl? Senator RICHARDSON —This important question should not be the subject of hilarity. I think all honourable senators will be aware that the National Parks and Wildlife Service, after extensive studies, discovered last year that the population of boobook owls on Norfolk Island is down to one and that this owl is a lone female. In order to rectify this problem and to make our lone female a little happier, it was determined to import two New Zealanders. One might wonder why the importation of New Zealanders would make anyone happy. Nonetheless, this was attempted and two New Zealand male owls were deposited on the island. Since that time it has become obvious to me that this has aroused the population of Norfolk Island. According to correspondence I have received, not only those with a professional interest but also interested volunteers are, in fact, crawling all over the bush of Norfolk Island trying to determine whether an event of substance has taken place. Our hope is that after a whirlwind courtship there might be unmistakable signs that a traditional happy event will take place. So far I have to report that it has been noticed that most of the activity appears to be oral. Lest I be accused of language unbecoming, might I say that most of it has been vocal. Very often, of course, New Zealanders are all talk and on this occasion there has been much calling. It is, of course, the answering that we are most interested in and, while we have no doubt that some of the calls are of a propositioning nature, we are not yet certain that these amorous intentions have been replied to. As another comment on the character of New Zealanders, one of the birds has shown excessive signs of enthusiasm. It has been responding to the calls of a local rooster. It is to be hoped that this enthusiasm is not misdirected in the coming weeks. While I would always commend enthusiasm of this sort, I hope that it could in the end be directed to the female that is spending so much time alone. I know that with all of those people who are crawling all over the bush of Norfolk Island, searching for signs of this happy event, I will be able to report to the Senate further. So far all I can say is that the New Zealanders have contributed nothing but noise. Senator PETER BAUME —I direct my question to the Leader of the Government in the Senate. I remind Senator Button that he has in the past offered the view that the Australian dollar was overvalued. In the light of the rapid fall in the Australian dollar to about 91 yen and of the trade weighted index to about 51, will the Minister now indicate whether he adheres to his earlier view that the Australian dollar is overvalued? Senator BUTTON —A month or so ago I was quoted as having expressed some views about the Australian dollar, in particular views which were expressed by exporters both of primary products and of manufactured goods. Those views were all expressed publicly at the time. As a result of what I was supposed to have said, the Opposition raised a matter of public importance in the Senate and asked a series of questions. I thought the Opposition would have said all it had to say on that occasion. Senator Stone —Was that when the Treasurer said, `Don't take any notice of him'? Senator BUTTON —The honourable senator will learn in time. I am answering the question asked by Senator Peter Baume. I appreciate the giant size of Senator Stone's intellect, but I am sure that Senator Baume is capable of asking his own questions. I have no view about the value of the Australian dollar which is expressed in the market-price of the Australian dollar. I have already been asked questions today about what I feel might have affected the market changes. I have declined to answer those questions, except to say that there have been a number of speculations about it to which I have pointed and I have nothing to add to those speculations. Senator GILES —I draw the attention of the Minister for Transport and Communications to the editorial in today's Australian Financial Review, which claims that the Government is unduly protective of Qantas Airways Ltd and that this has caused a shortage of seats for international travellers to Australia. Can the Minister comment on the accuracy of these claims? Senator GARETH EVANS —Knowing as I do the passions of people in this place whenever anything to do with the subject of overseas travel is raised, I wish to make a number of points in response to that editorial. I will go just to the general issues rather than to specific, alleged factual matters because it will take too long to deal with all the misconceptions and distortions which are contained in the editorial. First, let me say something about the short term capacity situation. That situation is, as the editorial points out, quite unprecedented in terms of the level of demand for inwards travel and the sudden increase in recent months. As I have said previously, peaks are usually experienced at this time of year, but this year they are severely pronounced. This is not a problem that only Australia is facing. I think we all ought to appreciate that. The Asian region in general is experiencing the same level of increased demand as Australia. The Orient Airlines Association has just released figures which show that demand for travel from Europe into Asia-particularly Hong Kong, Singapore and Bangkok-is increasing at some 13 to 15 per cent over the previous year, the same rates of growth that Australia is experiencing. As part of its response to the increase in demand, Qantas has been liaising, as I previously said, with Asian carriers on seat availability both between Europe and Asia and intra-Asia. The experience there is the same: full flights extending right through the onset of the European winter, extending beyond the normal peak into January. In terms of what we are doing about it, in addition to the 137 supplementary flights which have already been announced, Qantas will be leasing a 747 aircraft for six weeks from mid-December to early February with an option to extend to the end of April. Subject to the necessary technical clearances, I intend to approve that proposal as soon as I have received the formal application. As a result of the extra aircraft, plus further schedule planning by Qantas, Qantas will be operating more than 20 extra flights in addition to the 137 that have already been announced over the holiday period. Many of these extra 20 will be to London but they will also be to Singapore, Hong Kong, Kuala Lumpur and Manila. The Department has approved 55 supplementary flights by foreign carriers for the same period with a further 15 under consideration. We will give swift consideration to any further applications that might be received. In this context, I am sure that honourable senators will have read reports in the Press, which appear to be accurate, that a number of foreign carriers are interested in operating supplementaries-certainly, we would not stop them for a moment if they did-but they are prevented from doing so because of aircraft unavailability, or because they have made the commercial decision that higher returns can be made by deploying capacity elsewhere. The other issue in the editorial about which I would like to say something, because it has been the subject of a great deal of misunderstanding, is the claim that the present situation can be blamed on the bilateral negotiating process. That sort of claim cannot be sustained and it demonstrates a lack of the most rudimentary knowledge about international aviation. International aviation is regulated through a system of bilateral air service agreements between governments. There are over 1,500 such agreements in place worldwide. They in turn cover something like 700,000 city pair combinations. No government can operate unilaterally in international aviation, or in a way which ignores the reality and significance of those agreements. It is not a matter of any regulatory ideology or protective ideology on the part of the Australian Government; it is simply the reality of international aviation relations. Under most of these agreements, and certainly those to which Australia is a party, the designated airlines of both parties are afforded equality of opportunity to operate the agreed services, which opportunities may or may not be taken up. This does not mean that any carrier is guaranteed 50 per cent of the market as has been suggested in a number of quarters recently. `Quality of opportunity' is not the same thing as saying `guaranteed market share'. There is a fundamental difference. Aviation in this respect is no different from any other bilateral trading activity. Agreement is possible only when both sides are prepared to come to an arrangement that is satisfactory to their own interests. There is a great deal more that I would be happy to say on the subject. Senator Tate —Say more. Senator GARETH EVANS —My colleague invites me to say more. Let me tell the Senate about the way in which, under the-- Senator Chaney —I raise a point of order. The Minister, with great jocularity, is abusing Question Time by making a statement. If he has a lengthy statement, he should seek leave to incorporate it in Hansard or deal with it at some other time. Clearly he has answered the question and is now proceeding to make a statement. The PRESIDENT —Order! No point of order is involved Senator GARETH EVANS —I have some figures which would be of interest to the vast travelling public as represented in the chamber. I am prepared to incorporate the remainder of the answer in Hansard should it suit the convenience-not that I am usually in the business of suiting the convenience of Senator Chaney-of the Senate. I seek leave accordingly. Leave granted. The document read as follows- Since the First Hawke Government an additional 800,000 international airline seats have been introduced to the inbound aviation market to Australia through the bilateral negotiating process. By the middle of next year this figure will raise to over 1.25 million. This represents an increase of over 36% in inbound capacity. This figure represents the permanent increase in capacity and does not include additional capacity introduced to meet seasonal peaks throughout the year. A persistent allegation is made in respect of the levels of capacity being agreed in the Australia/Japan market. Since 1983-84 an additional 100,000 seats have been introduced to the inbound market from Japan. This will increase to over 160,000 by the middle of next year. This will mean an increase of over 160%. At the same time a second Japanese carrier, All Nippon, has commenced services on the route. A major problem being faced by all carriers, including Qantas is a worldwide shortage of aircraft and crews. The underlying problem is not the bilateral negotiating process but rather a reflection of the fact that the incredible growth in inbound tourism has essentially dried up the pool of available capacity. Australia is not alone in experiencing huge growth in passenger movements at this time, airlines faced with scarce resources will make commercial decisions on the most profitable routes on which to allocate capacity and we have been experiencing the consequences of some of those decisions. Senator VANSTONE —My question is directed to the Minister Assisting the Prime Minister for the Status of Women and for the Bicentenary. I draw the Minister's attention to the evidence of Mr MacMahon, First Assistant Secretary (Benefits Delivery), Department of Social Security, to Estimates Committee F where, in listing the questions one might ask in establishing the existence of a de facto relationship, he included, obviously among others, the following: Are their living styles such that he has assumed the responsibility of the male of the household and she has assumed the responsibilities of the woman and is doing washing and ironing for him. Does the Government accept such narrow stereotyping of women? If not, will the Minister in her capacity as Minister Assisting the Prime Minister for the Status of Women take up this outdated stereotype with the Minister for Social Security and ask him to ensure that his Department practises what the Government and the Minister preach? Senator RYAN —Obviously I am not aware of any comments or examples that might have been given before Estimates Committee F since I am not a member of that Committee. My colleague Senator Walsh suggested that there might be other duties that wives perform, such as driving their husbands home from parties. But I do not know whether the officer from the Department of Social Security was interested in that aspect. I presume there is some statutory basis on which to establish what becomes a de facto relationship for the purpose of the payment of certain benefits. I am not familiar with the guidelines that the Department of Social Security is using. I do not seem to be getting any assistance from Senator Tate in that respect, either. I think the best course of action is for me to take this matter up with Mr Howe and ask him in what way de facto relationships are established. Senator VANSTONE —I ask a supplementary question. I remind the Minister that she is the Minister Assisting the Prime Minister for the Status of Women and, as such, is expected to have a view as to whether this is a satisfactory stereotyping of women. Is it a stereotyping of women that the Government, through her, accepts? If she does not accept that stereotype, will she take the matter up with the Minister? The Minister answered the last part of my question when she said that she will take it up with the Minister. Do I infer from that fairly that she does not approve of this stereotyping of women? Senator RYAN —I do not know whether the officer who made those comments before Senate Estimates Committee F was in fact reflecting Government approved guidelines or whether he was acting off his own bat and giving examples that came to his mind. Senator Vanstone —Do you approve of that? Senator RYAN —It is not within my responsibility to define what constitutes a de facto relationship. Senator Vanstone —What about the washing and ironing? Senator RYAN —I do not know who does that officer's washing and ironing. I know who does my washing and ironing. I do not know who does Senator Vanstone's washing and ironing. I do not know who does Mr Howe's washing and ironing. Senator Tate —I know who does mine. Senator RYAN —Senator Tate tells me that he does his own washing and ironing. So it can be seen that that sort of stereotyping is certainly not practised by Government Ministers and it ought not to be included in guidelines. However, I shall have to check to see whether it is. Senator McKIERNAN —My question is directed to Senator Walsh in his capacity as Minister representing the Treasurer. Has the Minister seen the 1986-87 estimates of the Australian Bureau of Statistics on new private capital expenditure which were released today? I ask the Minister whether he has examined these statistics and whether he can report to the Senate on which States exhibited the highest performance in the area of new private capital expenditure. Will the Minister also tell the Senate which State performed the worst? Senator WALSH —I have seen the most recent bulletin of the Australian Bureau of Statistics. It was released today, as a matter of fact, and it shows on the cover that it was embargoed until 11.30 a.m. It reveals that Western Australia had the highest rate of increase in new private capital expenditure, at an extremely large 32 per cent. I am sure Senator McKiernan would have great difficulty in guessing that the lowest rate was recorded in Queensland at 6 per cent! Senator Ryan —How much? Senator WALSH —It was 6 per cent, compared with 32 per cent in Western Australia. Obviously the percentages for the other States range between those two extremes. For example, the Victorian figure was a very healthy 23 per cent; New South Wales, 18 per cent; South Australia, 13 per cent; and I think Tasmania was about 13 per cent or 14 per cent. What emerges most importantly is that three of the Labor States produced a figure on or above the national average, but Western Australia had the highest figure-it was at a very high level-and Queensland the lowest. It is often said, with a good deal of truth, that there are fundamental structural similarities in the economies of Queensland and Western Australia in that they are both heavily dependent on mining. In recent years the mining industry, with the possible exception of gold, has been somewhat depressed. However, Western Australia has managed to rise above that situation and Queensland has not. It seems that only one sector of the Queensland economy has been performing spectacularly in recent times. If the Fitzgerald inquiry continues to perform as effectively as it seems to be performing at present, that sector might be under threat, too. Senator HAMER —My question is addressed to Senator Ryan in her capacity as Minister Assisting the Minister for Community Services and Health. Is the Minister aware of the new campaign in Victoria, supported by all political parties, to try to reduce the number of young people who take up smoking? Is that program designed to prevent the advertising of cigarettes in places where such advertisements are likely to influence young people, such as in cinemas and on billboards? Is it part of the program that cigarette addicts pay into a fund money which will provide alternative sponsorship of events which in the past have relied on funds from tobacco purveyors? Will the Government take action to make this a national campaign, especially to cover newspapers and magazines, in view of the very great damage to national health, and to the national economy, resulting from tobacco addiction? Senator RYAN —The Government is certainly aware of the extensive damage that the smoking habit causes to health. Indeed, the statistics that are published regularly through the Department of Community Services and Health on smoking related deaths are extraordinarily high-much higher than those for other drug related causes of death. So, I have no argument with Senator Hamer's suggestion that smoking is related to very serious health problems in our community. I am not aware of the details of the Victorian campaign but, fortuitously, on Friday I will be chairing my first conference of all State and Federal Ministers who have responsibilities in the area of drug prevention. That conference will provide the various States with the opportunity to bring forward the campaigns they are conducting at a State level and to discuss the extent to which other States may wish to participate in those campaigns or even in a Commonwealth co-ordinated campaign. No doubt the Victorian Ministers attending that conference will raise the matter of their campaign, and there will then be an opportunity to consider the way in which the Commonwealth would respond and perhaps assist and support such a campaign. Senator HAMER —I ask a supplementary question. I make it clear to the Minister that I was not talking about merely a co-ordinating campaign; I was talking about the Federal Government doing things that the State governments cannot do, in particular to control newspaper and magazine advertising. What is the position of the Government on that? Senator RYAN —At this stage the Government is seeking to ensure self-regulation and the observance of voluntary codes in advertising content. Certainly the question of cigarette advertising is a controversial one, but at this stage the Commonwealth Government does not have in mind introducing legislation in that regard. What we have in mind are ongoing discussions with the industry which will reduce the extent to which these advertisements appear and, it is hoped, the extent to which young people are encouraged to take up this very unhealthy habit. Senator JENKINS —My question is addressed to the Minister representing the Minister for the Arts, Sport, the Environment, Tourism and Territories. Is it true that an appointment has been made to the position of Deputy Fire Commissioner of the Australian Capital Territory Fire Brigade, a position which carries a salary of $50,000 plus, inclusive of allowances? Has the person appointed been seconded from the Melbourne Metropolitan Fire Brigade or has he recently taken early retirement from that brigade and accepted a superannuation payout of around $300,000? If he has retired from the Melbourne brigade, will he, in his new position, become eligible for further superannuation rights at public expense? Is it true that the Minister's predecessors have promised to develop the Australian Capital Territory Fire Brigade as a full career service and have stated that current serving officers have the capacity to fill any senior management positions? How does the Minister justify this appointment in the light of unequivocal commitments made to members of the Australian Capital Territory Fire Brigade on a career service and the obvious undesirability of one person double dipping in the area of superannuation at public expense? Senator RICHARDSON —It is true that Mr Kevin Tait is to be appointed as Deputy Fire Commissioner of the Australian Capital Territory Fire Brigade for four years. He will be appointed at Senior Executive Service level one, which involves an annual salary of $49,389, plus an expense of office allowance of $750 per annum. Mr Tait has not been seconded but is retiring from the Melbourne Metropolitan Fire Brigade on 7 December 1987 and will be joining the Australian Capital Territory Fire Brigade shortly thereafter. He is a long serving member of the Melbourne Metropolitan Fire Brigade. I presume that he will receive the normal retirement benefits associated with his position. He will have the option of taking up contributions to the Commonwealth superannuation fund in the normal way, with the usual provision for those who will be occupying short term appointments. Senator McKiernan —So he should. Senator Chaney —You say, `So he should'. That is Senator Stone's argument. Senator RICHARDSON —I am not going to draw parallels with Senator Stone. I will leave that to Senator Walsh. A previous Minister for Territories, Mr Uren, advised members of the Australian Capital Territory Fire Brigade in 1984 that he intended to create a position of Deputy Commissioner and that it would be filled from inside the brigade. However, in 1986, the then Minister, Mr Scholes, instituted a subsequent inquiry into promotion within the fire brigade. The inquiry proposed promotion on the basis of relative efficiency. It also proposed the infusion of a senior officer from outside the brigade in the short term whilst management skills were further developed within the brigade. Mr Scholes made it clear to the branch of the Federate Firefighters Union that the position would be advertised nationally and would be filled on a merit basis. Applications were received from inside and outside the brigade. A selection panel comprising the Fire Commissioner, a senior public servant and a senior officer from the South Australian Fire Brigade subsequently recommended to the Minister that Mr Tait be appointed. The union was invited to have a member on the selection panel and declined. I am advised that Mr Tait is a highly skilled officer with an extensive fire fighting background and fire management skills. I am sure that he will make a significant contribution to the brigade. Senator TATE(Tasmania-Minister for Justice) —by leave-I give notice that, on the next day of sitting, I will move: That the following Bill be introduced: a Bill for an Act to amend various Acts in relation to crime, the trial of certain offences, the confiscation of proceeds of crime and the transfer of prisoners, and for related purposes. Senator WALSH(Western Australia-Minister for Finance) —Pursuant to section 45 of the Industries Assistance Commission Act 1973, I present the annual report of the Industries Assistance Commission for 1986-87 and a statement of what action has been taken in respect of each report made to the Minister by the Commission during that year or a preceding year. Further details of action taken on individual reports can be found in table 11a, pages 222 to 225, of the Commission's annual report. Senator WALSH(Western Australia-Minister for Finance) —I present the Government's policy information paper concerning policy guidelines for Commonwealth statutory authorities and government business enterprises and seek leave to make a statement on the paper. Leave granted. Senator WALSH —The policy information paper entitled `Guidelines for Statutory Authorities and Government Business Enterprises', which I now table, represents a further major step in the overhaul of Commonwealth public sector administration which was a commitment of the Hawke Labor Government in its 1983 statement `Labor and Quality of Government'. These reforms are consistent with and follow wide-ranging reforms to other parts of the machinery of Commonwealth administration, implementing streamlined, performance oriented management practices based on devolution of responsibility-`letting the managers manage'-with appropriate accountability for results. In particular, the guidelines for statutory authorities and government business enterprises establish processes for better defining and expressing the objectives which enterprises serve and against which their performance will be evaluated, as well as acknowledging the need to reduce the extent of Government controls over their operations. The reforms indicate the Government's commitment to achieving the highest levels of operational and financial efficiency in Commonwealth business enterprises. This commitment flows from recognition that as a group these enterprises constitute an important business sector providing a significant proportion of the infrastructure on which the rest of the Australian economy depends. Efficiency in resource allocation and use by these enterprises is imperative, given that they employ about 3 per cent of the Australian work force, which is about 50 per cent of Commonwealth civilian employees, and their annual fixed investments constitute about 5 per cent of national gross fixed capital expenditure, which is more than three-quarters of the Commonwealth total. Through the Government, all Australians have a significant investment in these enterprises. As at the end of June 1986, the book value of the Commonwealth's holdings of loan and equity capital in its 16 largest enterprises totalled an estimated $12.3 or some $2,500 for each Australian household. Given the scale of this investment and the central role of these enterprises, the degree to which their efficiency can be enhanced by objective measures will have a major bearing on the success of the Government's program to improve Australia's international competitiveness. This is one more way in which the Government is moving to protect average living standards after the reduction in national income which resulted from the decline in Australia's terms of trade. If Australia is to maximise its productive potential, the Government needs to ensure that public investment in business enterprises earns an adequate rate of return, if necessary after allowance on an objective basis for the cost of meeting any `community service obligations' or other non-commercial objectives required by the Government. Unless there is continuing attention to bottom line performance there will be pressure for misallocation of resources. These guidelines cover measures to improve the efficiency and accountability of government organisations by administrative means. They do not address other measures which may advance the same goal in some cases, such as the issues of their ownership or competition in the areas in which they operate. The Prime Minister (Mr Hawke) has announced that the Government will encourage broad-ranging debate on these matters. This is because as a Government we recognise that Australia needs now, as never before, to maximise the efficiency with which economic and social objectives are achieved. Unfortunately, objectivity in the public debate on achieving efficiency in these Commonwealth business enterprises has often been blurred by the intrusion of ideology. Assumptions that an enterprise will deliver services more efficiently if it is privately owned, or that private ownership is synonymous with competition, have no more validity than an assumption that because an enterprise is publicly owned its resources are necessarily being deployed in a manner which will maximise the public benefit. In determining policy in relation to government business enterprises it is useful to clarify the issue by separating what might be called `natural monopolies' from the others. Telecom Australia is an obvious example of an enterprise which fits into this category. The scope of such a monopoly will always be blurred at the margin where it faces competition from substitute services and these substitute services may be available from public or private sector sources. To the extent that public ownership has made it possible to conceal through uniform pricing the costs of delivering services, for example to isolated communities, there is an economically inefficient allocation of resources but greater equity. However, the economic inefficiency should not, as is often suggested during public debate on these issues, be attributed to the fact that Telecom is publicly owned. Telephone services cannot be produced economically in an isolated community nor can the cost of such services be fully recovered from the recipients. An attempt to recover the full cost of such services to isolated communities would necessarily result in prices higher than the market will bear. The consequences of that would be continuously increasing average costs and therefore prices in response to continuously falling demand, and continuously falling demand in response to continuously increasing average costs and therefore prices. Eventually all services would be terminated outside those major population centres where average costs are within a range which the market will bear. Losses on services to these areas are currently covered by cross subsidies at a cost to Telecom of some $500m per year. The Opposition has suggested that the solution to this problem is to privatise Telecom. The fact is that a profit maximising private firm would provide virtually no services except those within and between the major cities. The rest of the business is innately unprofitable. Few Australians would accept a system which provided no telephones to about a third of the population and 95 per cent of the country. The Opposition's solution to that problem is to suggest that a private company or companies could be subsidised from the Budget to provide these innately unprofitable services. That is a possibility but it destroys any case for privatisation based on the assumption that the profit motive would induce a lower cost, more efficient service. Clearly, a privately-owned company with its costs underwritten from the Budget has no profit-related interest in efficiency or cost minimisation. If costs plus a margin are underwritten from the Budget there would in fact be an incentive not to seek efficiency. The Government's approach to this problem is to retain organisations like Telecom in public ownership and to look at what might be done to improve their efficiency. In particular, the Government aims, through these guidelines, to impose financial discipline on its business enterprises, having regard to the need for enterprises like Telecom to accept what I would call community service obligations. With such obligations it is not reasonable to expect Telecom to meet a target rate of return equivalent to a market rate, but it should meet such a rate after the community service obligation has been netted out. The Hawke Labor Government is committed, through these guidelines, to maximising the public benefit by efficient operation of Commonwealth business enterprises. They are the product of extensive consultation following the tabling of the policy discussion paper Statutory Authorities and Government Business Enterprises on 10 June 1986. At that time I indicated that a period of three months would be allowed for public discussion and comment on the proposed guidelines outlined in the paper. The policy discussion paper was given wide public circulation and the period for submission of public comments was extended to the end of October 1986 to accommodate groups unable to meet the original deadline. Some 70 written submissions were made by Commonwealth departments, authorities, enterprises, unions, consumer and employer groups and other organisations. To assist discussion and comment on the paper in the Commonwealth public sector a round of consultations was held between my Department and interested authorities and enterprises and associated Commonwealth departments during September and October 1986. During this period my Department also held meetings with interested non-government organisations. Reaction to the proposed basic guidelines for statutory authorities outlined in chapter 2 of the Green Paper was almost universally supportive. This was not unexpected given that they were essentially a codification of current practices. The general tenor of the comments received was that these guidelines would be both comprehensive and flexible enough to accommodate the wide variety of circumstances facing the many different Commonwealth statutory authorities. The Government believes that these guidelines provide a suitable policy framework for the establishment of new authorities and the review, as appropriate, of arrangements for existing authorities. The basic guidelines focus most closely on Budget dependent statutory authorities. A number of issues specific to government business enterprises are dealt with in separate guidelines but unless there is a statement to the contrary the basic guidelines have general application. The proposed specific guidelines for government business enterprises, notwithstanding almost universal support for the underlying objectives, generated some public controversy. The key areas of concern were in the areas of strategic or corporate planning and financial targets. Most enterprises accepted the need for strategic planning and the submission of appropriate information about their forward plans to the responsible Minister. However, there was widespread opposition to the proposal that these plans be subject to ministerial approval. In relation to financial targets, there was general acceptance of the view that a satisfactory rate of return should be earned on assets employed in government business enterprises and that enterprise boards and managements should be accountable for performance in this regard. However, there was concern that the financial return on assets should not be the sole criterion of performance, and that there should be proper regard to the cost of meeting community service obligations or other non-commercial objectives required by the Government. There was strong support from enterprises for the relaxation of many of the direct controls over their activities, and it was observed that the proposed guidelines were not specific in terms of either the controls to be relaxed or the timetable for their removal. It was clear from the comments received on the proposed guidelines for government business enterprises that the enterprises differ markedly from each other in their history, spheres of activity and operational objectives. As a consequence, determining common principles governing their activities is difficult. Nevertheless, the Government reaffirms its view that common principles, carefully drawn, will have a positive impact on the efficiency and accountability of the enterprises as a group, leading to significant gains for the public. The public are not only the consumers of the products and services of the enterprises but also their financiers through the provision of public debt and equity capital as well as retained earnings. The guidelines, which have been substantially redrawn after consultation, will be implemented on an enterprise by enterprise basis, allowing for the different features present in each case. We are now convinced that this individually oriented approach will achieve better results than drawing up a detailed White Paper on the subject as had previously been envisaged. This follows a change of emphasis since the policy discussion paper was released. The Government has taken the view that, while the responsibility must be exercised within an appropriate framework of consultative arrangements with other Ministers, the onus for achieving improvements in the performance of government business enterprises rests primarily with the boards of individual enterprises and their responsible portfolio Ministers. The aim of the Government's reforms is to provide incentive, enhance efficiency and improve public accountability. It is intended that these objectives be achieved through a package which combines removal of unnecessary central controls which detract from enterprise performance with greater emphasis on bottom-line per- formance. Government attention will be focused on strategic issues which are properly a matter for ministerial responsibility. For enterprises which have been established as companies the guidelines will be applied in a way which recognises constraints imposed by companies legislation and the enterprise's memorandum and articles of association. Under the guidelines each enterprise will be expected to provide its responsible Minister with a strategic corporate plan covering periods of around three to five years ahead. There will not be a requirement for ministerial approval of the plans, but the responsible Minister will be able, if necessary, to suggest to the enterprise board that a preferred strategy of the corporate plan be reconsidered to better reflect relevant government policies. Adequate arrangements for the flow of relevant information to other Ministers with key co-ordinating responsibilities is also essential for well informed, sound decisions on public enterprise matters. For example, the Treasurer generally has responsibility for approving off-Budget borrowings by enterprises, which is necessary for control of the overall public sector borrowing requirement, while the Minister for Finance determines the terms and conditions of Budget advances along with the approval of financial leasing proposals, forward obligation limits-in some cases-and other transactions impacting on the Budget. Some key aspects of enterprise activities-such as the approval of major new investment programs or sales of assets, dividend payments, limits on borrowing programs and equity injections or repayments-in practice need the joint approval of several Ministers. Appropriate financial targets for enterprises constitute the linchpin of the Government's reform package. The precise structure of the target will depend on the nature of the enterprise concerned but, unless there are compelling reasons to the contrary, will take the form of a specified rate of return on the enterprise's assets, funds employed or capital. For some enterprises the target may be set for periods of several years rather than annually, although annual reporting of performance will be required. Targets will be agreed with the responsible portfolio Minister having regard to the impact on profitability of any `community service obligations' or non- commercial objectives required by the Government as well as market circumstances. The introduction of financial targets will require the development of appropriate accounting and reporting practices. My Department will pursue these through further development of the Government's guidelines for the form and standard of financial statements of Commonwealth undertakings. The Government will closely monitor the implementation of this new policy framework for the operation of its statutory authorities and business enterprises. While some fine tuning may be necessary, the Government believes that the guidelines provide a suitably coherent, consistent and flexible approach to the oversight of authorities and enterprises. This is intended to ensure that these bodies operate with maximum efficiency and effectiveness and reach higher standards of performance. The new arrangements will benefit the Australian community, complementing the other initiatives the Government has taken to improve the competitiveness of the Australian economy and the wide-ranging reforms to the machinery of Commonwealth public administration which have been instituted since coming to office in 1983. I move: That the Senate take note of the paper and the statement. Senator STONE(Queensland-Leader of the National Party of Australia)(3.22) —I have had a copy of the statement made by the Minister for Finance (Senator Walsh) since about a quarter to one today. Under normal circumstances it might be thought to be a somewhat demanding task to rise now in the Senate and address the Minister's statement after the rather short notice given, as we all have had other commitments in the interim. But I have to say that I cannot plead along those lines to the Senate because, having read the statement and, indeed, having heard the Minister also read it, I think one's first reaction is to say: `Is this it? Is this really it?'. The Government after all has been telling us for almost the past four years, as part of its usual Braggadocio approach to these and most matters, that it is about to or has been about to, bring down another one of its renowned reforms of public administration in this country, including in this case reform of the approach to management and control of statutory authorities and government business enterprises. That all began, as I said, very shortly after the Government first came to office, about four years ago. After a rather lengthy delay we had, as long ago as June of last year, which is almost 18 months ago, what was hailed at that time by the Government as the first fruits, the first rather unripe fruits, of that long process of deliberation, in the form of a policy discussion paper on statutory authorities and government business enterprises. Sixteen months after that-an unusually long gestation period, even for this Government-we have today got the Minister's statement. I have to say, through you, Mr Acting Deputy President, to the Minister that quite frankly I find it difficult to determine what the paper is really attempting to achieve. If the Government is serious about privatisation, and I will come to that in a moment, as a means of achieving greater efficiency-after all, I think it would be acknowledged by the Minister at least as a theoretical possibility of achieving greater efficiency in the public authority sector, and certainly we were led to believe that by a whole series of comments from the Prime Minister (Mr Hawke), particularly since the last election-one would have to say that this paper is totally irrelevant. I was going to say `virtually', but I corrected myself. Paragraph 8 of the printed copy of the paper states that these guidelines: do not address other measures which may advance the same goal- that is, to improve the efficiency and account- ability of government organisations- in some cases, such as the issues of their ownership or competition in the areas in which they operate. The Government is putting on Hamlet without the Prince of Denmark or, in this case, without the two Princes of Denmark, if one can envisage such a circumstance. Neither privatisation nor increased competition is addressed in this paper as a means of improving the efficiency of operation of this large body of public authorities which, as the Minister in one of the somewhat pedestrian but, no doubt, still accurate statements in the paper, quite accurately, tells us comprise about 50 per cent of Commonwealth civilian employees and employ about 3 per cent of the Australian work force. Their annual fixed investments comprise about 5 per cent of national gross fixed capital expenditure; in other words, more than three-quarters of the Commonwealth's total of such capital expenditure. I think one can deduce from that statement that, quite contrary to what the paper so blatantly seeks to mislead us by stating, in fact the paper is not about improving the efficiency of the public authority of the statutory corporation sector; it is simply about giving some kind of totally formal discharge of these expectations which the Government, and Senator Walsh in particular in his capacity as Minister for Finance-he has had the carriage of this matter throughout-has led us to believe would be brought about at long last by this great denouement in which he would be telling us how the Government was actually going to do something in this area. Let us take the statement in the order in which the Minister himself took it. I have already cited some of the figures that the Minister referred to and some of the other figures in paragraph 5 of his statement, in which he mentions that through the Government all Australians have a significant investment in these enterprises. That is perfectly true; we do. But I think we would have to say that we do not see as much return on that investment as most of us would like to see. That is what the debate is or should be all about, if it were not for the fact that the Government today has run away from it and totally abdicated its responsibilities in this matter. In paragraph 5 of the paper the Minister says that at the end of June last year: the book value of the Commonwealth's holdings of loan and equity capital in its sixteen largest enterprises totalled an estimated $12.3 billion. He goes on in the following paragraph to make this palpably empty-I will not say palpably stupid as that is a phrase often on the Minister's lips-claim that the proposals which he is bringing before us today, which do not amount to the proverbial row of beans, represent `one more way in which the Government is moving to protect average living standards after the reduction in national income which resulted from the decline in Australia's terms of trade'. It is another one of those `it is not our fault' claims, to which this Government is so perennially prone. The paper goes on to say, again accurately: If Australia is to maximise its productive potential the Government needs to ensure that public investment in business enterprises earns an adequate rate of return- the meaning of the word `adequate' is, I think, nowhere explained or drawn out- if necessary after allowance on an objective basis for the cost of meeting any `community service obligations' . . . That, again, is unexceptionable, subject, as I say, to a total lack of explanation of what is meant by the word `adequate'. It is almost at that point that one finds the line of argument petering out, running into the sands. We find the Minister descending into his normal pattern of argument from which he appears to be unable to desist-even in written statements, let alone his oral performances in this chamber which bring so much discredit upon it in the normal course. In paragraph 9, the Minister gets to that kind of argument when he says: Unfortunately objectivity in the public debate on achieving efficiency in these Commonwealth business enterprises has often been blurred by the intrusion of ideology. `Ideology' is a word that is often found on this Minister's lips. Let us look at the example which the Minister proceeds to adduce of the so-called ideology, which, I assume, he is attributing to the Opposition. Senator Walsh —Not only. Senator STONE —I am glad to hear the Minister say that he is attributing the ideology not only to the Opposition. Perhaps there are some members of his own Party to whom he might be prepared to attribute a little ideology in these matters. I may return to that point. Let us take the Minister's example, which flows on from the statement, about what constitutes ideology in this area. After a slightly rambling and, I think, far from complete discussion of natural monopolies, the Minister came to his point, which is Telecom Australia. I can understand why Telecom is very much on the mind of the Minister at the present time. As we know from the copious leaks streaming out of the Caucus and various back bench committees of the Government, that has been very much on the minds of those bodies for some time. I am glad that the Minister for the Environment and the Arts, Senator Richardson, is entering the chamber for once, to participate in this debate and confirm what I have been saying. I am grateful to the Minister. Let us, as an example, look at Telecom. The statement of the Minister for Finance has this to say about the example of Telecom as a national monopoly: To the extent that public ownership has made it possible to conceal through uniform pricing the costs of delivering services, for example to isolated communities, there is an economically inefficient allocation of resources but greater equity. However, the economic inefficiency should not, as is often suggested during public debate on these issues, be attributed to the fact that Telecom is publicly owned. This characteristically straw-man argument on the part of the Minister is just that-a straw man. If the Minister is referring to arguments coming from this side of the chamber, I cannot ever recall any such arguments-quite the contrary. The Minister points out later in his remarks that losses on services to these isolated communities currently are covered by cross-subsidies at a cost to Telecom of some $500m a year. He then says-and this is the point I really wish to nail as one of the more outrageous misstatements of the Minister from whom outrageous misstatements are commonplace-- Senator Newman —The Minister for outrageous statements. Senator STONE —He is the Minister for outrageous statements, as Senator Newman very properly suggests. Paragraph 14 begins with this outrageous statement: The Opposition has suggested that the solution to this problem- that is, the fact that losses on services to isolated communities currently are covered by cross-subsidies at a cost to Telecom of some $500m a year- is to `privatise' Telecom. Two sentences later, the Minister said: Few Australians would accept a system which provided no telephones to about a third of the population and 95% of the country. I would like the Minister, who has now left the chamber, or his substitute Minister, if he feels disposed to accept the challenge, to tell me or anybody else on this side of the chamber from where those statements are drawn. What justification is there for them? Are we to become accustomed not merely to misleading statements, but to outright lies appearing in government documents? Is that to be the standard of debate and governmental statements from now on? I should not say `from now on' because perhaps there was more of it in the past when I was not here. Senator Messner —Since 1983. Senator STONE —Since 1983, as Senator Messner reminds me. To add to this misrepresentation, the Minister goes on to suggest: The Opposition's solution to that problem is to suggest that a private company or companies should be subsidised from the Budget to provide these innately unprofitable services. That is a possibility but it destroys any case for privatisation . . . Perhaps I should desist from this line of argument in as much as there is no basis for the statement and it is, to some extent, a waste of the Senate's time to continue to rebut it. Therefore, I will return to something more productive than rebutting misrepresentations from the Minister for Finance. As I have said in this chamber on two separate occasions already in the short time I have been here, if one spent one's time in this place responding to misrepresentations from Senator Walsh, the time of the Senate would be occupied with nothing else. I come to a most interesting comment, having left that peak of mendacity. In paragraph 19 of the paper, the game is given completely away. Having argued at various points in the statement that this document represents the culmination of four years of hard work by the Government to produce a solution to the problem of achieving greater efficiency in statutory corporations and government business enterprises, paragraph 19 says: Reaction to the proposed basic guidelines- that is, the ones originally proposed and of which these are a much watered-down version- for statutory authorities outlined in Chapter 2 of the Green Paper was almost universally supportive. This was not unexpected given that they were essentially a codification of current practices. That is to say, the Government was writing down, codifying, what was already being done. That was, even in the Green Paper, the basis on which the Government approached the matter and yet which it sought to portray to this chamber and the Australian people as a major reform of our public sector. What a total joke. What a pathetic attempt to hoodwink the public on what the Government really has been about. If it was a joke even in the case of the Green Paper, what we have today is merely a milk and water version of the original joke. It is true that there was some opposition to one section of the Green Paper proposals. I point out that that was conceded by the Minister in his statement. In paragraph 21 he acknowledges: . . . there was widespread opposition to the proposal that these plans- that is, the strategic and corporate plans which it was proposed that statutory corporations would be required to provide to the Government- be subject to Ministerial `approval'. There was, indeed. In paragraph 25, the Minister acknowledges: The guidelines, which have been substantially redrawn after consultation, will be implemented on an enterprise-by-enterprise basis . . . That is bureaucratic language for saying, `We will continue the same process of ad hockery as in the past'. I do not necessarily want to suggest that that is a bad thing. As the paper quite properly points out, most business enterprises are different from each other. Therefore, it is inevitable that there will need to be a degree of individuality in the approach properly taken to them. The only thing is that this quite pragmatic and common sense conclusion has been obvious for the past four years during which time we have been told on many occasions that the Government would reform the system and produce an overall corset of some kind into which authorities would need to be compressed. What has also happened has been acknowledged only obliquely in paragraph 25 of the paper, which states: The guidelines, which have been substantially redrawn after consultation, will be implemented on an enterprise-by-enterprise basis. Paragraph 26 states: This follows a change of emphasis since the Policy Discussion Paper was released. One of those changes of emphasis-it is a most significant change-is as stated in that paragraph: . . . the onus for achieving improvements in the performance of government business enterprises rests primarily with the boards of individual enterprises and their responsible portfolio Ministers. That is an oblique way of saying that Senator Walsh got rolled in the Cabinet room. Ministers who are responsible for bodies such as Telecom, the Commonwealth Banking Corporation, Australian National and the Australian National Line simply refused to be told that in future Senator Walsh would run this segment of their portfolio. Therefore, the Minister has had to beat what might kindly be termed a strategic retreat. However, I have to say that both the nature and the pace of that retreat have been very much amended and accelerated by very recent events. Let me take a few of the more interesting reports on this whole question which have come into the public domain in the last fortnight or so. These reports have been emerging in the context of the increasingly heated debate which has been occurring within the parliamentary Australian Labor Party, the Caucus and its back bench committees on the whole question of privatisation. The Times on Sunday of 18 October headlined an article by Mr Geoff Kitney, its chief political correspondent, `Cabinet ministers challenge Hawke on privatisation plans'. The article stated: Two senior Federal Cabinet Ministers have put forward proposals aimed at heading off Government plans to sell or part-sell publicly owned enterprises such as Australian Airlines . . . This as we all know has been very much on the mind of Senator Gareth Evans. Indeed, it underlay his recent decision to bring into this chamber a proposal to terminate the two airlines agreement. The article continued: The move represents an unprecedented direct challenge from within the Cabinet- not just within the back bench- to the major policy objectives of Prime Minister Bob Hawke and Treasurer Paul Keating. A great deal more is stated along the same lines. However, I will not address my remarks exclusively to that newspaper which is not always of record-the Times on Sunday. Let me take another newspaper, the Sydney Morning Herald, of 19 October which ran an article headed `Left to wage war on PM's sell-off' by Steve Burrell who, at one time I think, spent a brief time in the Treasury-he fleetingly passed through that organisation. He is now one of the Sydney Morning Herald's chief financial economic writers and certainly could not, by any stretch of the imagination, be said to be unfriendly to the Government, judging by the nature of his columns on most occasions. Mr Burrell stated: A senior unionist yesterday threw down the gauntlet to the Prime Minister on privatisation, saying the union movement was prepared to take mass industrial action to block any sell-off of public enterprises. In this country a senior union official is telling us that, however inadequate the elected government of the country may be, it will still not be in charge and the union movement will make sure that it is not, if it proposes to do anything it does not regard as appropriate. Ironically enough the man in question was Mr George Campbell, the assistant national secretary of the Amalgamated Metals Foundry and Shipwrights Union. Mr Campbell was the man who the Treasurer (Mr Keating) attacked at the Labor Party biennial conference in Hobart about 15 or 16 months ago for having, as the Treasurer elegantly put it in the sort of rather striking phrase which he sometimes manages to utter, in 1981-82 produced the smash in the metal trades industries and who, as a consequence, in Mr Keating's graphic words, had 100,000 dead men around his neck. This paragon of the trade union movement, according to a Minister of the Crown, is quoted on 19 October as having said: . . . the wide cross-factional opposition in the Labor Party to privatisation would mean ``acrimonious defeat'' for Mr Hawke at the party's National Conference next year if he pushed the issue. We all know the kind of push Mr Hawke is capable of when he decides that the numbers are against him. The push at that stage is in the opposite direction, and that is what we are seeing. This morning when the Whips gathered we were told out of the blue that the Minister would make a ministerial statement. I will not say it was a long awaited ministerial statement because although it has been long awaited nobody has been holding his breath to receive it. Why? It is because the Government has quite soundly, from a tactical point of view, taken the view that the sooner it cuts its losses in this area and gets out of it the better and that is what Senator Walsh has been busily doing this afternoon. He will be cutting the Government's losses on privatisation and in this whole area. Mr Campbell stated: We are not going to allow in this country a situation where the decisions about our future are not made in Parliament House but in the boardrooms of the major corporations . . . That is Mr Campbell's graphic way of putting it. What he means is that he will not allow this Government to sell off any government assets. That is what he is saying. In the Age newspaper of the same date is a report by Mr Russell Barton who reported similar events in much the same terms. On this occasion Mr Campbell was reported as saying; He would not `telegraph' the Left's tactics but conceded that it had not ruled out- and I use his words- `some form of mass action both in the public and private sectors'. Mr Campbell said that the deal with the government of the day, if it should be so recreant to its duties to the trade union bosses, was that it would actually make some decisions in the interests of the Australian people. A great deal more of those kinds of statements is in Press clippings of about that time and, indeed, more recently. More recently the battle has moved into the Caucus room. On 21 October the Australian newspaper carried an article by Mr Donald Greenlees who wrote: The battle lines over privatisation of government-owned assets will be drawn next week- that is, the week following 21 October- in Federal Caucus with a move by Centre Left and Left MPs- I take the opportunity of noting in passing that Senator Walsh is a member of the Centre Left faction in the Labor Party- to isolate the Prime Minister, Mr Hawke, and senior ministers. Centre Left faction leader, Senator Peter Cook, yesterday signalled an attempt by MPs to force ministers into drafting reports on how government assets such as Australian Airlines and the Commonwealth Bank can be retained in full public ownership. That is all very interesting but it has nothing very much to do with the major reform of our statutory corporations; it has nothing much to do with improving the efficiency with which these corporations operate; it has nothing much to do-in fact, quite the contrary, it has nothing at all to do-with improving the rate of return on the public assets of over $12 billion which these bodies represent. It has nothing to do with the objectives in the statement which the Minister has presented this afternoon and certainly has nothing to do with the original claims-I would almost say boast-which this Government, and this Minister in particular and his predecessor, Mr Dawkins, as Minister for Finance, set out over four years ago. Senator HAINES(South Australia-Leader of the Australian Democrats)(3.50) —The Australian Democrats welcome the statement of the Minister for Finance (Senator Walsh) and the policy guidelines for Commonwealth statutory authorities and government business enterprises which was introduced along with the statement. As Senator Stone noted, introduction of such a paper is somewhat overdue. The Green Paper from which this emanated has been, as the Australian Financial Review put it a few weeks ago, in the pipeline since 1983. It seems that this differs significantly in some areas from proposals that were floating around as recently as earlier this month. It was originally thought that this matter would go through Cabinet only after some trade-offs in the area of flexibility and so on had been included. I refer to flexibility in areas such as salaries, industrial relations, borrowings, capital purchases, land acquisitions, sales and so on. It would appear from a relatively cursory reading of this paper, as I have been able to spend even less time upon it than Senator Stone did, that the area of staffing, for example, has finished up being one in which statutory authorities will be required to staff under the Public Service Act, unless there are strong reasons for doing otherwise, rather than have, as I understand it, the more unfettered capacity to hire and fire which was originally proposed. It may well be that recent events on the stock exchanges around the world have cooled people off from this rather unfettered private sector mode of behaviour, and that it will not be imposed on statutory authorities and other government instrumentalities. The Government appears also to have come to terms with the fact that some services by statutory authorities carry a public good requirement, although some Opposition senators do not believe that they should. In other words, the Government has argued that it is a requirement that authorities take into account the fact that they are providing services to people at a cross-subsidised rate so that some people in the community can get services which they would not otherwise have. I was a little disturbed in the debate on the Primary Industry Bank Repeal Bill to hear an Opposition senator dispute the need for people in isolated areas to be given cross-subsidisation. The Minister points out in the paper: In determining policy in relation to government business enterprises it is useful to clarify the issue by separating the `natural monopolies' from the others. Telecom Australia is given as an example of an enterprise which fits into the category of natural monopoly. The statement points out: The scope of such a monopoly will always be blurred at the margin where it faces competition from substitute services and these substitute services may be available from public or private sector sources. To the extent that public ownership has made it possible to conceal through uniform pricing the costs of delivering services, for example to isolated communities, there is an economically inefficient allocation of resources but greater equity . . . Telephone services cannot be produced economically in an isolated community nor can the cost of such services be fully recovered from the recipients. This is worth remembering, bearing in mind a comment made by Senator Alston during the debate on the Primary Industry Bank Repeal Bill. He said: The blind notion that somehow everyone ought to have a telephone today will be translated into the equally blind notion that tomorrow everyone should have a television set. He went on to say: If people choose to live in country areas, it does not axiomatically follow that they should be entitled to all of the services that are perhaps taken for granted in some country areas. To the extent that they are necessary for the public good, there may well be a case for government subsidy. Otherwise, I- that is, Senator Alston- would have thought that the choice should be a private one, not a public one. I do not know whether Senator Alston has ever lived in an isolated area in this country, but if he has he has not learned any lessons from it. Certainly he does not appear to have a great deal of sympathy for people who, having sacrificed a great deal to contribute an equally great deal to this country's economy, naturally feel that they should not be discriminated against when in receipt of services such as telephones, and other forms of communication such as television sets. Given the importance of electronic communications in this country at present, I would have thought that even Senator Alston would not regard the provision of decent television reception to isolated areas as a luxury, the cost of which should be borne by the recipient, the user, rather than by the community as a whole. I would like a few Opposition senators to rethink their attitude to this sort of cross-subsidisation. The Government, as is apparent from this paper, has also not fallen for the Liberal Party of Australia equivalent of the Animal Farm catchcry, `Two legs bad, four legs good'-in other words, that it is bad if it is provided by the public sector, and automatically good if provided by the private sector. Again, the paper makes some reference to this in pointing out: Assumptions that an enterprise will deliver services more efficiently if it is privately owned or that private ownership is synonymous with competition have no more validity than an assumption that because an enterprise is publicly owned its resources are necessarily being deployed in a manner which will maximise the public benefit. It goes on to point out that the Opposition has suggested that the solution is to privatise, amongst other things, Telecom. The fact is that a profit maximising private firm would provide virtually no services, except those within and between the major cities. It is about time that the Opposition parties learned from the example in Britain. When British Telecom was sold off what occurred was simply an increase in cost to the consumer with no concomitant increase in the services that were provided. A monopoly is a monopoly, whether private or public, and there is no guarantee that service provision to the users will be any better if provided privately than publicly, nor that the costs necessarily will be kept down. Although Senator Stone resiled from arguing with the proposition that was put in paragraph 15 of the paper, I think that it is incumbent on the Opposition parties to come up with some sort of conclusive proof that a private company or companies will provide a better service than public ones or, furthermore, to justify the argument that a private company or companies which cannot provide services to all at the same price could be subsidised from the Budget to provide these innately unprofitable services. This raises the question of how private private enterprise is, or even how enterprising private enterprise is, if it has to be bailed out of its unprofitable areas to provide the services. We cannot argue on the one hand that a company is private if it puts out its hand to the Government for some sort of subsidy or offset when the going gets tough. It is a little like the Opposition's attitude to regulation and deregulation. Opposition members want those regulations that help them make a vast amount of money, but want deregulation where it suits them as well. Businesses and private enterprises generally like governments to introduce regulations that protect them in some way, but they want to be left with a free rein in all other areas. The fact is that life is just not like that. One cannot pick and choose in that way and retain any sort of credibility. I am pleased to note that the Government appears to have backed away from its deregulate and privatise mode that was evident during the time between the election and the stock market crash. I repeat that we welcome the Minister's statement. On the surface at least it seems to be a reasonable alternative to the privatisation mania of the New Right and the cost to the public purse of an inefficient, poorly structured, government protected Public Service. Earlier, Senator Stone asked: `Is this all there is?'. As far as I am concerned, it is enough at least for the time being. Instituting massive upheaval and total reform in an area such as this is hardly likely to result in the most efficient outcomes. I think it is probably better that the Government proceed slowly rather than willy-nilly in the way that might have emanated from the proposals in the earlier Green Paper. Obviously, we will all have to look more closely at the contents of the guidelines and at the effects of the proposed changes on a case by case basis. To do anything else would be to resile from the responsibility that we have as members of parliament. We will need to check, for example, that the moves proposed in the guidelines do not result in price increases of essential services-for example, an unjustifiable or excessive increase in the price of telephone calls and stamps. We in the Australian Democrats will be keeping a fairly weather eye to ensure that these guidelines are not simply part of a softening up process for full scale privatisation. This paper appears to have taken a fairly middle of the road course. It has given increased independence without removing public scrutiny and public accountability. I think this is fairly effectively summarised in paragraph 27, which was mentioned by Senator Stone, in that the Government is being careful to be moderate in what it is doing. Paragraph 27 argues that the Government's aims in these reforms are to provide incentives, to enhance efficiency and to improve public accountability. Its intention is to provide a package that: combines removal of unnecessary central controls which detract from enterprise performance with greater emphasis on bottom-line performance. I would have thought that, as far as the public sector is concerned, that is something that everybody would have wished. The `public good' element is retained-the capacity to provide services across the board, not a user pays basis but on a cross-subsidised basis-along with a commitment to increased efficiency and more extensive provision of the services that we have all come to expect and accept from the public sector. Senator ALSTON(Victoria)(4.04) —I find this document, Policy Guidelines for Commonwealth Statutory Authorities and Government Business Enterprises, to be both deeply disappointing and highly tendentious in content. It purports to be a document that sets out policy guidelines for Commonwealth statutory authorities and government business enterprises. Indeed, after a labour of some 2 1/2 years-or perhaps 18 months since the last Green Paper-we have received very little for those efforts. If one looks at the justification for the nature of the guidelines, paragraph 8 states that they cover measures to improve the efficiency and accountability of government organisations by administrative means and they do not address other issues which may advance the same goal in some cases, such as the issues of their ownership or competition in the areas in which they operate. If ownership and competition are not issues that are crucial to the efficiency of the operation of government enterprises, I do not know what are. We have heard a lot of nonsense in this debate and recent debates about there being no inherent advantage in private sector activities. Indeed, the document tries to run this canard once again-that somehow assumptions that an enterprise will deliver services more efficiently if it is privately owned have no more validity than an assumption that because an enterprise is publicly owned its resources are necessarily being employed in a manner which will maximise the public benefit. That whole line of debate has been blown out of the water in recent times by the Prime Minister (Mr Hawke)-a very recent convert to the notion of efficiency by means of total or partial privatisation. But nonetheless he has put down two questions. In all his jumping backwards and forwards on this issue, his most recent statement is to the effect that there is a need to justify public ownership of activities to the extent that if they can be performed better in the private sector, they should be. If that is not a presumption in favour of the private sector, I do not know what is. That is not just in terms of the financial constraints that operate upon a lot of Public Service operations; one only needs to look at the whole gamut of bureaucratic controls that currently operate. That is why I find this document so deeply disappointing-it does not come to grips with such current limitations as the requirement for the remuneration of board members and senior executives of many government business enterprises being determined by the Remuneration Tribunal. In fact, it continues the practice and almost boasts that industrial relations arrangements will remain subject to government oversight and co-ordination. It does not lift any of the restrictions on the ability of business enterprises to adopt commercial superannuation arrangements. It standardises audit and accounting requirements, but does not ease them to any extent. Again, it retains the ministerial oversight and the requirement for ministerial approval of borrowings. It does nothing to ease up the Loan Council limitations. It perpetuates controls over enterprises such as Australia Post by the Prices Surveillance Authority. It retains the requirement for the Department of Administrative Services to give approval for acquisition of land and for leasing of property. Again, it retains such administrative controls making enterprises subject to such Acts as the Administrative Decisions (Judicial Review) Act, the Ombudsman Act, the Freedom of Information Act and the whole range of ways in which the Administrative Appeals Tribunal has special jurisdiction over public trading enterprises that simply do not apply in the private sector. Finally, the workers compensation arrangements are excessively generous. The Minister for Finance (Senator Walsh) is fighting a very strong battle at this moment to try to do away with common law rights to impose lump sum limitations on the excessively generous scheme that operates at present. It would even seem that he is contemplating going down the Victorian WorkCare road where there was a disastrously naive belief that somehow a greater emphasis on rehabilitation would ensure a reduction in the number of claims and a greater degree of efficiency. The end result is that within a period of some 18 months we have seen a blowout to $2.4 billion in the losses of that government operation. I would have thought it was quite clear that that was a classic example of how a government trading enterprise could be presumed to be more inefficient than having multi-insurer arrangements. I have no doubt that even Senator Walsh will come around to that way of thinking in the not too distant future. But there are very many ways in which public trading enterprises suffer from crippling limitations that reduce their efficiency. While this paper starts out by saying that it will not deal with ownership or competition as issues, it then proceeds to an almost passionate defence of some of the anti-competitive and public arrangements that preclude any real opening up of the public sector to efficiency concepts. The notion, for instance, in paragraph 7, that one can treat Telecom Australia as a natural monopoly is a disgraceful distortion of economic reality. The idea of a natural monopoly is one where economies of scale are available to such an extent that if one other enterprise entered that arena, neither could operate as efficiently as one. That concept can apply to a very limited extent. It operates to a very limited extent, if at all, in the telecommunications area which has been overtaken by the technological revolution. Telecom may well have some vestiges of natural monopoly on the local network and perhaps even on the long distance network and it may well be that there is a very sensible justification for retaining the monopoly over the common carrier network, but that has absolutely nothing to do with opening up the first phone monopoly. It has nothing to do with the customer premise equipment and it has nothing to do with value added services. I find it extraordinary that the Government can put down such a superficial dismissal of the justification for exposing Telecom to some areas of competition. I am not arguing that Telecom should be wholly privatised. I do not for a moment suggest that that is inevitably the way in which it should go. It is very interesting to note that the Prime Minister, in saying that Telecom and Australia Post would be sacrosanct when it came to privatisation, went on to say that he was not arguing that they should be immune to competition in various other sectors. It is perfectly clear that if the Walshes, the Dawkinses and the Keatings of this world get their way there will be substantial competition introduced into a whole range of public sector activities. I regard that as a very healthy development in the Australian community which will provide services to consumers at a much more efficient level. It is tragic to try to misconstrue, as the Australian Democrats do, any sensible assessment of the realities of cost to rural and remote areas. It is one thing to make an explicit political decision and a commitment to the subsidisation of those services; it is another somehow not to want to know about the real cost of those activities. If it is costing on average something like $15,000 for remote telephone connections-and in some instances the marginal cost is up to $40,000-the public deserves to know about that. The cost should be transparent and a sensible, political judgment should be made about whether that is the most effective use of a government subsidy. I find it deeply disappointing and verging on the dishonest that this paper should pretend that somehow the only way in which we can fund a subsidy is by a direct government grant. That is the notion that is put forward in paragraph 15. I well recall the Economic Planning Advisory Council discussion paper canvassing a range of possibilities, not the least of which was a levy that could be imposed across that sector. A whole range of competitors in the telecommunications industry could be levied and those funds could be used to contribute towards the cost of that subsidy. If we seriously want to maintain the level of first phone connections-and 91 per cent of the population already have them-or extend the number throughout Australia, as Telecom is currently committed to doing over the next four or five years, we could do so at government expense by adopting such an arrangement. We could do it in such a way that the burden would be borne by existing users of telephones and not by the whole of the community as is currently the case with the cost being paid for out of Consolidated Revenue. I regard the idea that somehow the only alternative is to provide a subsidy from the Budget as a gross distortion of economic reality. It is an example of why this paper is so seriously and fundamentally flawed. It is deeply regrettable that the paper should be some sort of defence mechanism against the tide of privatisation, that it should be misleading the public to such an extent that it does not recognise the real virtues of competition and enterprise that should be very much at the top of the agenda. The reality is that a huge war is going on in Caucus. Over the last few days Senator Cook has been trying to have debated a motion to put serious restraints on the sale of public assets. Consideration of that motion has been deferred, ostensibly because the Prime Minister is crook. We have seen the Victorian administrative committee of the Australian Labor Party back away from its original hard line. Yet only this morning we saw an abject cave-in by the Minister for Transport and Communications (Senator Gareth Evans), who was previously a very enthusiastic advocate of privatisation. Of course, the blow torch has got to him and now he has told the committee to go away and rethink. He does not want to accept the tentative advice he has been given that there should be massive deregulation of the industry. That is not put forward on any ideological binge, as this paper would somehow suggest. Ideology is always what is said by one's opponents; the argument one uses for oneself is sweet reason. The Prime Minister and Senator Walsh are past masters at throwing that sort of dirt around. I regard the use of the word `ideology' as no more than an abusive code word to disguise the fact that Senator Walsh and Co. are not winning the debate at present. It is a tragedy that the sensible discussion on these issues has to be confused in such a way. We do not subscribe to blind ideology; we believe in efficiency and competition. We believe that that will be in the best interests of Australians. Those who use the term `ideology' are intellectually bankrupt and are playing the man and not the ball. I would have thought that we should have gone long past that approach. Given the time constraints, the last thing I want to say is that it is a fantasy land notion to suggest that somehow this paper provides one more way in which the Government is moving to protect average living standards. It is an amazing red herring. It has nothing to do with the price of fish. It is quite clear that it is just the ordinary genuflection towards some sort of motherhood statement about responding to the need for protecting average living standards. But that has nothing to do with the notion of efficiency. The fact that the stock market has fallen through the floor, that all the fundamental economic indicators are in the opposite direction, and that this Government is very much on the back foot, should not have to be the basis for introducing a paper of this sort which is now called an information paper. It should be an enduringly valid statement that is appropriate irrespective of the economic climate. This paper should have been addressing efficiency and competition instead of somehow pretending to define them away in the first instance and then embarking upon this totally dishonest defence of Telecom and other agencies. It is not Telecom's fault; I think there are many enlightened senior executives in Telecom who very much appreciate the pressing need for real competition, who do see the virtues of at least partial privatisation as a means of enabling Australia to get into the international arena to take up many of those export advantages that are crying out to be taken advantage of. It is tragic that the Government, for sheer political motives, is caving in to pressure from the unions and others and is building these artificial walls around enterprises that themselves appreciate the need for competition. I am disappointed in the paper. I had hoped that there would have been a lot more in it about notions of efficiency. Sadly, that will have to wait for a change of government. Senator WATSON(Tasmania)(4.18) —The Senate is debating a policy information paper entitled Policy Guidelines for Commonwealth Statutory Authorities and Government Business Enterprises. This paper very closely follows the framework which was actually set in June 1986 in a discussion paper entitled Statutory Authorities and Government Enterprises. One wonders about the rationale for introducing today a paper which contains such vague and often incoherent terms. I want to draw attention to four major deficiencies that I see in this paper. Firstly, the document represents little more than a restatement of current accounting and control practices. Earlier in this debate my colleague Senator Stone perhaps put it a little more succinctly when he said that it represented a codification of those sorts of practices. Secondly, the paper fails to acknowledge the work and the contribution of a number of important committees of this Parliament. I refer just to two that I believe have played a significant role in upgrading the accounting standards in this area. One is the Senate Standing Committee on Finance and Government Operations and the other is the Joint Committee of Public Accounts. The third deficiency in the report is that it is full of what I might term motherhood-type statements. I support that contention by quoting item 6 in section 1 of the report: Given the scale of this investment and the central role of these enterprises, the degree to which their efficiency can be enhanced by objective measures will have a major bearing on the success of the Government's program to improve Australia's international competitiveness. That is fine in that it talks about the Government's program, but that is just a motherhood statement. Item 7 reads: If Australia is to maximise its productive potential the Government needs to ensure that public investment in business enterprises earns an adequate rate of return . . . We have heard these sorts of statements so often that they are becoming rather bland. Unless they are supported by positive initiatives, they are not worth very much. In other words, they are just window-dressing to try to create in the public arena an image that the Government is trying to do the right thing. Fourthly, although the Government points to the desirability of government authorities actually having to set targets, the Minister himself is guilty of not setting down a timetable for the implementation of targets. This whole document shows the hypocrisy of the Government. The document concludes by talking about the need to set targets and standards. Yet, the Minister walks away from his own responsibility, from his own recommendations. The document specifically states that the Government will monitor the situation over a period to see whether appropriate targets can be set. So, no specific timetable has been set. The Government is quite hypocritical in what it says in this document. It is ironic that, although the Government in this paper makes the pretence of improving accountability, its actions suggest the reverse. I shall give the Senate three simple cases. Firstly, the Government, the Executive, is reducing the resources available to the Commonwealth Auditor-General; at the same time it is giving the Auditor-General extra responsibilities. So, the Auditor-General, who is responsible to this Parliament for reporting on efficiency, effectiveness, stewardship, et cetera-what I might refer to as control mechanisms, accountability mechanisms-is having his ability to report accurately diminished by the fact that the Government is reducing the resources of this important officer of the Parliament. Secondly, I refer to the staff reduction that the Government has imposed on the Joint Committee of Public Accounts. In fact, the Government has reduced the resources of that Committee to one-third of the staff placements that existed previously. If the Government were really interested in improving accountability, improving the reporting to the Parliament of significant features relating to departments and statutory authorities, it would reverse that decision. Earlier the Government recognised the importance of the Public Accounts Committee when it heaped additional responsibilities on it. At the same time it has sought to diminish the worth of that Committee by taking away its staff resources, to the extent that it now has only one-third of those which previously were available. Yet, that Committee is expected to perform the same work. Thirdly, the Government is failing to maintain adequate internal audit resources within the various departments. The Government gives the impression that the recommendations and suggestions in this paper are quite new. I wish to quote from a Public Accounts Committee report of 21 October 1982. That report indicates the ongoing nature of that Committee's work and the fact that the previous Liberal Government has made many advances in this area for which the present Labor Government is now claiming credit. That report of the Public Accounts Committee reads; The increased need for accountability of the public service is evident from such legislative innovations as the Freedom of Information Act, the Administrative Appeals Tribunal, the Administrative Decisions (Judicial Review) Act, and other means of protecting the rights of the public and making the administration of government policy more accountable. Parliament has also recognised this new level of responsibility by calling for senior public servants to give an account of their management of public policy before committees of the Parliament. By means of the document presented today the Government has put into writing its pretence of how much it is doing, when in fact its words are empty. In fact, the Government has plagiarised reports of other committees. A careful reading of this document reveals that lines or parts of lines have been lifted from other committee reports. Yet, no acknowledgment is made of the contribution that those committees have made in that regard. I welcome the Government's commitment to move towards the setting of targets. For some time I have been engaged in a personal crusade to get the Government to do that. Few modern companies that are operating successfully in the private sector do not have specific performance targets that they must meet each year. The Government is very general in what it says. It says that investment return targets are desirable. It must be a little more specific than that. The Government is very good at setting out its objectives and in stating what is required, but it is very short on ensuring that specific performance targets are set each year by each of these bodies. Although it has indicated the desirability of moving and its intention to move in this area, it lacks the determination to set down a timetable for itself to ensure that each of these statutory authorities conforms with that recommendation. Debate (on motion by Senator Knowles) adjourned. The ACTING DEPUTY PRESIDENT(Senator Zakharov) —I inform the Senate that, at 8.30 a.m. today, two senators submitted letters in accordance with standing order 64, namely, Senator Powell proposing a matter of urgency and Senator Messner proposing a matter of public importance. To decide which letter should be submitted to the Senate, the President determined the matter by ballot. In accordance with the result of that ballot, I now read Senator Powell's letter: 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: The necessity for Australians to adopt a new land use ethic based on care and respect for the land and, because most approaches to the crucial issue of land degradation in the past have been limited and largely unsuccessful, the need for the Government to give the highest priority to efforts aimed at conserving one of Australia's most valuable resources, the soil'. Yours sincerely, JANET POWELL (Senator for Victoria) Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator POWELL(Victoria)(4.28) —I move: That, in the opinion of the Senate, the following is a matter of urgency: The necessity for Australians to adopt a new land use ethic based on care and respect for the land and, because most approaches to the crucial issue of land degradation in the past have been limited and largely unsuccessful, the need for the Government to give the highest priority to efforts aimed at conserving one of Australia's most valuable resources, the soil. If Dorothea Mackellar were to be writing her famous poem My Country now rather than earlier this century, she might have written: I love a sunburnt country, A land of sweeping plains, Of rugged mountain ranges, And erosion when it rains. For once the Senate is debating an urgency motion which is indeed urgent. In March this year the Sydney Morning Herald carried a substantial article written by Bob Beale, its science reporter. He noted that scientists and environmentalists are sounding alarm bells at the many signs of physical stress and genetic depletion apparent in those sweeping plains and rugged mountain ranges so praised by Dorothea Mackellar in My Country. The Australian Democrats have brought on this matter of urgency today confident of the support of the whole chamber. Land degradation in all its forms demands that governments give urgent attention to initiating comprehensive and long term strategies to remedy the massive problem facing Australia now and in the future. We want to place before the Australian people our belief in the necessity for all Australians to adopt a new land use ethic based on care and respect for the land. Shortly after the recent Federal election, two senior Federal parliamentarians from the majority parties, Senator Graham Richardson, Minister for the Environment and the Arts, and Senator Chris Puplick, shadow Minister for the Environment, both publicly stated their belief that soil degradation is the most important environmental issue facing Australia. When I read these statements in the Press I wrote to both honourable senators offering the support of the Australian Democrats for their views. I would like to quote extracts from their replies. The Minister, Senator Richardson, said: I consider land degradation, including soil erosion, soil structure decline and dry land and irrigation salinity as a long term and serious environmental problem affecting a large proportion of the Australian continent. The problems are to a large extent the result of a variety of inappropriate land management practices, including overstocking, excessive vegetation clearing, overcultivation and unsuitable irrigation techniques. I will be seeking early discussions with Mr Kerin regarding the situation and possible means of collaboration between our portfolios to strengthen current activities and initiate new activities to address the problem. I welcomed that response from the Minister. The shadow Minister, Senator Puplick, said: Thank you for your note regarding my reported comments on soil land degradation and related matters such as water quality issues. I shall look forward to trying to develop a genuinely tripartisan or multipartisan approach to this vital question in the years ahead, although we have very little time left to get to grips with such a vital issue. The Democrats agree with that. Hence this urgency motion. The sentiments in these letters were heartening. They reflect a long line of similar concerns expressed within the Parliament over many decades. I would like to quote from a few of the many statements by members of all parties. In 1937, Labor Prime Minister Scullin said: It will be nothing short of a crime if we continue to permit the destruction of forests and the erosion of the soil. Later, Robert Menzies, the then Attorney-General and later to be a long term Prime Minister of this country, agreed that soil conservation was `of great national importance and will not be overlooked'. More recently, in a debate on the Soil Conservation (Financial Assistance) Bill in 1985, pertinent statements were made by members of all parties, many of whom are still sitting members. Mr Chynoweth, the honourable member for Dunkley in Victoria, said: Since the arrival of the First Fleet the soils of Australia have been dramatically changed. We have removed vast numbers of trees. We have placed upon them animals which are not native to our country. This has altered the whole ecosystem. The share of rainfall that runs off the land swells the stream flow which in turn increases soil loss. It also decreases evaporation which alters the area's hydrological cycle. It can also lead to the desertification of areas which are on the fringes of deserts. This is happening now in Australia. Mr Kerin, now the Minister for Primary Industries and Energy, in that same debate said: Erosion, salinity and tree decline are afflicting over half of all agricultural land and poisoning waterways in this country. Senator Brownhill, of the National Party of Australia, said: A collaborative soil conservation study of 1975-77 showed that 52 per cent of the land in use in Australia needs some form of treatment for land or vegetation degradation. This area amounts to more than one-third of the entire land mass of Australia, a rather horrific figure to think of. Senator Colin Mason, a recently retired Australian Democrat senator, said: Dr Brian Roberts estimates that the top soil on the Darling Downs is disappearing at the rate of one centimetre a year. At this rate the Darling Downs will be useless for most sorts of crop production within 30 years. Mr Hawker, the Liberal member for Wannon in Victoria, said: The Standing Committee on Soil Conservation carried out a study in 1969 and 1970 which concluded that at the then current rates of soil conservation expenditure it would take about 100 years to achieve control of soil erosion in the non-arid areas of Australia even if no further soil erosion problems arose. The estimated cost of works at that time was $350m. Mr Andrew, the Liberal member for Wakefield in South Australia, said: Everyone agrees that soil conservation is essential, that it is, in fact, basic to society's survival. While the problem of land degradation in all its manifestations is serious for Australia, we should also consider it in the world perspective. I have taken some figures from an excellent video called The State of the Planet which was filmed in Britain in the early 1980s and in which representatives from many countries placed before the governments of the world their concerns about continuing ecological degradation. The land surface of the planet covers some 135 million square kilometres but, of this total land area, not available for agricultural production is 6 per cent because it is frozen, 10 per cent because it is too wet, 22 per cent because there is hardly any soil, 23 per cent which is too salty and 28 per cent which is too dry. Therefore, there remains 11 per cent designated as prime agricultural land. During the 1970s we exacerbated the problem. We have built and paved over 27,000 square miles of agricultural land-an area twice the size of Holland. By the year 2000 we will probably lose twice that area again. It is not only development and urbanisation which reduce the extent of the world's prime agricultural land. Erosion, desertification, salinity, the clearing of native vegetation, uncontrolled grazing and overgrazing of stock, damaging farming practices, to mention just a few, all contribute to the loss of soil-our prime agricultural resource. It takes 100 to 400 years to build 10 millimetres of top soil and 3,000 to 12,000 years to build enough soil to make the land productive. It is time that governments and the people recognised that soil is, in essence, a non-renewable resource. Returning to the situation in Australia, let us consider the enormity of the problem, a problem which, as I said, has been recognised across party lines for decades. In Western Australia we are losing our soil at the rate of an area the size of Rottnest Island every four weeks from salinity alone. Wind erosion causes even greater losses. Again in Western Australia, it is reported in a joint Australian Government-United Nations environment program document entitled `Dry Lands Dilemma: A solution to the Problem' that losses in agricultural profits caused by land degradation amount to $94m a year. In the same report it is demonstrated that in South Australia salinity has been responsible for annual losses of $40m a year and, in Victoria, $15m. In July of this year a New South Wales Soil Conservation Service conference was told that farmers in the Murray-Darling Basin, an area that covers 80 per cent of the State, faced losses of $110m this year and huge future losses if land degradation continued. In the words of the Acting Commissioner, Mr Warren Watkins: The present loss of soil to erosion borders on a national tragedy. Soil conservation experts say that, if this problem is not countered by educating farmers, the food bowl could well become the dust bowl, with disastrous consequences for farms. In Victoria a report by Julian Cribb in May of this year stated: In fewer than 40 years, if remedial measures are not taken, 400,000 hectares of Victoria's richest farmlands will be a blasted moonscape of salty desolation. The first farms in the fertile Goulburn Valley have already been rendered lifeless by rising saline ground water. As one who has lived in that region for many years, I have seen the demoralisation that can occur when people are involved in an industry which suffers this kind of degradation. Just this week a report from the Upper Yarra Valley and Dandenong Ranges Authority and the Board of Works in Victoria stated that the banks of the Upper Yarra River are so seriously eroded in some sections that valuable farmlands could be washed away. The report states that adjacent land has been so seriously degraded that more than 90 per cent of the natural vegetation cover has been removed from privately owned areas of the catchment. The Upper Yarra Valley is an area of economic and environmental significance for Victoria, providing living space for 120,000 people and water for industrial, agricultural and human consumption for 2.5 million people who live in Melbourne. There is a litany of statistics and warnings. A recent article in the Times on Sunday by Geoff Strong outlines a great many more of them. For every tonne of wheat produced the hidden price can be between three and 16 tonnes of topsoil. The Dean of Applied Science at the Darling Downs Institute of Advanced Education warns that if land degradation continues at its present rate Australia will face a diminishing agricultural yield leading to enormous socio-economic problems. The trend towards bigger, more mechanised farms has made the problem worse. In the time I have today-which, of course, is 20 minutes maximum-I must point out that what I am saying is not even half of the story. The statistics, the studies and the reports are all too numerous to quote in that sort of time. So, in the face of all of the concern which has been expressed by the range of political parties and by experts in the field, the question is: What are we doing to remedy these problems? There are, of course, many projects-government projects, community projects and farm based projects. For example, there is the national soil conservation program, which is under the purview of the Federal Department of Primary Industries and Energy. There is the national tree program, Greening Australia, under the Federal Department of the Arts, Sport, the Environment, Tourism and Territories. There are various State government soil conservation projects and there are local community projects, and in particular there is the development at local level of soil conservation districts. However, there are problems. The Federal Government's 1986-87 Budget allocation to the national soil conservation program was around $5.5m, roughly the same as it gave for landscaping the new Parliament House so near to here. In fact, looking at the figures for the funding of the national soil conservation program in the time that it has been operating since 1983, the average is just under $4m per annum. The former Prime Minister, Mr Fraser, despite having named soil conservation as Australia's most pressing environmental problem just prior to the 1983 Federal election, had just a few months before axed funds for the national soil conservation program. What can be done? What is needed? I alluded earlier to the Australian Democrats' belief that the Australian people need to be made more aware of the seriousness and urgency of the problem. We need a new land ethic, one based on care and respect for the land, one that encourages in people an enduring and strongly held ethical commitment to soil stewardship by doing the right thing for soil conservation. This was the message which was given in July of this year by the Assistant Secretary of Natural Resources and Environment of the United States Department of Agriculture, one that I think Australians should listen to. Such a land ethic must also be incorporated in appropriate legislation, and that is where government comes in. We must face the fact that some of our approaches to soil conservation have not been appropriate. I refer to a paper presented last year to the National Environmental Law Association of Australia by John Bradsen of the University of Adelaide's law school. In that paper he sets out what he believes to be inappropriate future approaches to soil conservation and suggests new approaches. He says that `United States and British experience shows that any legislation, State or Federal, which is not obligatory has not been effective. Reliance on common law-for example, where degradation on one property line damages another-has also led to ineffectiveness. There is no evidence to show that private agricultural land has suffered less degradation than leasehold land. Therefore the view that the owners of the land look after it better than any lessees is in fact a fallacy'. I am informed by Mr Bradsen that, as a result of his paper and further work, a report on soil conservation legislation is currently being studied by the Department of Primary Industries and Energy which it is anticipated, and it is hoped by the Australian Democrats, will be released shortly and become part of the future public debate on this matter. We welcome that. Some of the other suggestions which we would like to make-which need to be addressed if governments and the community are to adopt the best approaches in dealing with this complex problem-include, firstly, the initiation as soon as possible of a comprehensive survey to determine the capability of all land in Australia and the extent to which that capability is currently being exceeded. I quote from the national soil conservation program paper tabled in November 1984 in which the writers of that report said: Over much of Australia's farming areas land use has long exceeded long-term land capability. We also need the involvement of the Commonwealth to a far greater extent than at present in co-ordinating and guiding research in the national interest from a position of leadership. I quote Mr Kerin when he said in the 1985 debate: It has long been a belief of mine that the Commonwealth has an important role to play in actively encouraging and co-ordinating the conservation of our land resources. I remind Mr Kerin of his comment then. We also need the development in this leadership role by the Commonwealth of uniform national standards to be used as a model for future State and Federal legislation. We urgently need the establishment by the Commonwealth of a national soil conservation databank to collect the land resource information which has already been procured within the States and through other sources so that it can be consolidated into a national land inventory. The Federal Government must give urgent consideration to investigating the feasibility of establishing conservation reserves, a scheme contained in the 1985 United States Food and Security Act, which is designed to assist farmers in implementing ecological farm management practices in order to reduce soil erosion. The Australian Democrats take the view that governments, both State and Federal, must promote, encourage and support the transition to more sustainable agricultural practices which enhance this most important non-renewable agricultural resource, the soil. We would be very concerned if in this whole debate the view of the agricultural economists were to hold sway. We are conscious that that is a danger, particularly at this time when the economic rationalists seem to hold so much sway in so many of the public debates. The argument outlined in the report of the House of Representatives Standing Committee on Environment and Conservation goes something like this: Soil conservation should be perceived as a possible means of achieving the underlying policy objective of maximising community welfare rather than an objective in its own right. The Australian Democrats reject that view. We believe that we must come to understand the soil as a non-renewable resource and we must make every possible effort to see that it is conserved and that, for all the best economic reasons, Australia continues to be a major agricultural producer as a result. Senator BLACK(Queensland)(4.48) —I wish initially to offer an apology for Senator Richardson. Because of unexpected delays in the Senate business this afternoon he has been obliged to leave. He has presented me with some of his notes which I hope I can do justice to. The typed sections are okay; the parts in Senator Richardson's handwriting are a little more difficult. By way of opening remark, I wish to illustrate the importance that the Government places on this particular issue. We are aware of the awesome statistics that are available, particularly in respect of erosion by wind and water. Such erosion will remove during the next 12 months 20 billion tonnes of soil from fertile land throughout the world. We will also see 25 million hectares degraded through flooding, salinity or structural degradation worldwide. Again, one could gather some idea of the significance of this issue by realising that if we lose one millimetre of dirt over a one-hectare area that means losing 10 tonnes of topsoil. So it is a tremendously significant issue and one very close to the hearts of the rural producers of Australia. I believe it is also an issue that all parties in the Parliament can agree is vital to the future of this country. I think we can move some way towards achieving consensus on some of the measures that are required. The Government considers land degradation to be the most serious environmental problem in Australia, as it is also in a number of developing countries. The Minister for the Environment and the Arts (Senator Richardson) has gone on the public record as citing soil degradation as Australia's most important environmental issue. Land degradation, including water and wind soil erosion and salting, has been identified as a long term and potentially most serious problem which, in 1977, affected an estimated 51 per cent of land currently in rural use. The problem, and the costs of controlling it, have increased since the 1977 Commonwealth-State collaborative soil conservation study. The problems are the result of a variety of inappropriate land management practices, including overstocking, excessive vegetation clearance, overcultivation and unsuitable irrigation techniques. At the government level, States and Territories are primarily responsible for implementing measures to achieve soil conservation. The Commonwealth contributes by tackling various aspects of the problem within its constitutional powers. As we are aware, these are somewhat controversial at times. At the outset I need to make the point that solving our land degradation problems does not lie completely with governments. I fully endorse Senator Powell's call for the adoption of the land use ethic, as the main responsibility lies here with individual landholders. I understand that in recent years there has been a marked increase in farmer awareness and sensitivity to land degradation, and the farming community as a whole is now attempting to do a lot more to combat soil erosion within the constraints posed by their economic circumstances. The role for governments here is to provide support for the rural community through fostering new technology and soil conservation techniques, through research, advisory services and appropriate fiscal support. The Government also has an important role in fostering general public awareness of the problem and in fostering the adoption of a land use ethic. As I have said, the Government agrees that land degradation is a most serious environmental problem and it has initiated a number of appropriate measures. I will deal briefly with these. Firstly, in 1984 the Government endorsed the national conservation strategy for Australia. The strategy identifies principles and priority national actions to be taken in addressing environmental problems, including soil degradation. It has provided an umbrella framework for the development of the national soil conservation strategy and the national forest strategy for Australia, prepared by the Australian Forestry Council. The Prime Minister (Mr Hawke), in his recent election policy statement, indicated that the Government would further develop environmental protection and understanding within the framework of this strategy. In 1983 the Government also initiated the national soil conservation program. The Soil Conservation (Financial Assistance) Act 1985 provides a statutory basis for Commonwealth co-operation with the States in the expansion of soil conservation activities. The objectives of the national soil conservation program are: that all lands in Australia are to be used within their capability; land use and management decisions must be based on a catchment-regional land planning concept; all land users and levels of government must meet their respective responsibilities in achieving soil conservation; effective co-operation and co-ordination must occur between all sectors of the community, disciplines and agencies involved in the use and management of land and water resources; and the whole community must accept a land conservation ethic. An amount of $6m has been allocated to the program in the 1987-88 Budget. This is a 9 per cent increase in the previous year's allocations, and brings the total funding since 1983 to $21m. The aim of the national tree program, for which the Department of the Arts, Sport, the Environment, Tourism and Territories is responsible, is to conserve and establish trees and associated vegetation for the community and for private benefit throughout Australia. The key objectives are: to increase selectively tree cover in rural areas; to promote co-ordinated action by individuals, governments and the community generally to conserve, plant and regenerate trees; and to develop public awareness of the value of our trees. Under this program the Commonwealth provides funds for demonstration projects and a national information program. The national tree program plays an important role in combating land degradation. I would like to cite a few examples of some of the more interesting projects now being done under the national tree planting program. We have a national information program in conjunction with the States and the Territories and many non-government organisations. We have established over 1,000 projects throughout Australia, which demonstrate the benefits and the uses of trees. The Government has established a national tree database, called Tredat, to monitor progress with tree projects throughout Australia. This has been done in collaboration with the Commonwealth Scientific and Industrial Research Organisation and the Queensland Department of Forestry. The Government has provided support for the Greening Australia project, which is a non-government organisation providing a focus for the activities of the numerous community tree groups. A major focus of the national tree program is encouragement for local co-ordinated projects. Examples of such projects include Project Branchout in northern Victoria, where landholders and community groups have undertaken major tree planting on farms and public reserves in co-operation with State agencies and local government. Over the past few years several hundred thousand trees have been established using voluntary labour and the various employment creation programs. This type of co-ordinated project has been repeated in many regions, including the Yass River Valley, the Riverina and the Hunter Valley in New South Wales, Fassifern and Lockyer Valleys in Queensland, the midlands of Tasmania and Lake Toolibin in Western Australia. Other major project initiatives supported through the national tree program, and involving local communities, include the provision of shade, fruit and nut trees at Aboriginal outstations in central Australia, the rehabilitation of abandoned mining areas in north-east Tasmania and the establishment of green belts to suppress lead contaminated dust at Port Pirie. In 1983 the Government removed full tax deductibility for land clearing costs. This provision had previously encouraged the removal of vegetation cover. Vegetation loss is an important factor in contributing to land degradation. The Government has also introduced important taxation provisions for the control of land degradation. Expenditures for the control of land degradation are subject to immediate tax write-off, and this applies to expenditure of a capital nature incurred in operations directed at combating land degradation. The Government is also working with the States in a number of significant areas. The Commonwealth, New South Wales, Victorian and South Australian governments agreed in 1985 to establish the Murray-Darling Ministerial Council to enable those States to develop a co-operative approach to the better management of the basin. The goals of the Council include: Control of existing land degradation, the prevention of further land degradation, and where possible the rehabilitation of land resources, to ensure the sustainable utilisation of these resources. Land degradation has imposed considerable costs in the basin. The estimated value of the annual yield losses due to land degradation is about $215m. There are other costs. For example, about 45,000 hectares of agricultural land has been lost to dry land salinity in Victoria. To overcome the degradation of resources in the basin, the Council made an historic agreement to establish the Murray-Darling Basin Commission. In addition to the agreement to establish the Commission, the Council is now drawing up strategies for the management of the basin, which take into account environmental matters such as planning, water resources, agriculture, soil conservation, recreation and tourism. A major benchmark study, entitled `Murray-Darling Basin Environmental Resources Study' has been completed. The Commonwealth works closely with the States and Territories through the Australian Soil Conservation Council. The Commonwealth is represented on the Council by the Minister for Resources, Mr Peter Morris. The Council and its supporting officials' committees have been involved in some important activities relative to this debate. The Council is now preparing a draft national soil conservation strategy. The purpose of the strategy is to provide nationally agreed policies and priority actions for the prevention and control of land degradation. The draft strategy is expected to be released soon for public comment. One of the priority actions is a promotional campaign on a land conservation ethic. Through the Council mechanism, a proposal is now being prepared for a survey of community awareness on soil conservation. In 1985, the Senate Standing Committee on Science, Technology and the Environment tabled its report on land use policy in Australia. One of the recommendations the Committee made was that the Australian Environment Council (AEC) establish a standing committee on land use to draft a national land use policy statement. In a decision earlier this year on the Senate Committee report, the Government decided that the relevant Ministers would seek to establish, through the AEC, the Council of Nature Conservation Ministers (CONCOM) and the Planning Ministers Conference, a working group, to develop co-operative arrangements between the Commonwealth, the States and the Northern Territory Government with respect to rural and urban land use strategies and policies. The Acting Prime Minister (Mr Lionel Bowen) recently wrote to the Premiers and the Chief Minister on this matter. The Minister will be taking the matter forward at meetings of the AEC and CONCOM next week. The Government looks forward to the co-operation of the States and the Northern Territory on this most important matter. While I hope we now have some degree of bipartisan support in this place on the importance of soil degradation and measures required, I should contrast the activity of the Hawke Labor Government on land degradation with that of the previous Fraser Government. We are approaching land degradation on a range of fronts. In contrast, the Lynch razor gang, under the Fraser Government, abolished the existing soil conservation program. However, I am glad that all parties now recognise the importance of this issue. The Government will be progressing on a number of fronts. However, there can be no doubt that governments can do more, specifically in a number of areas; firstly, in terms of public awareness in fostering a land ethic; secondly, in terms of advisory services and research; thirdly, possible fiscal measures; and, fourthly, targeting particular high priority areas such as the Murray-Darling basin. I am pleased to advise the Senate that the Minister will be holding discussions in the near future with his colleagues to see what further initiatives the Government can take in this area. Senator BROWNHILL(New South Wales)(5.02) —It gives me a great deal of pleasure to participate in this most important urgency debate that calls on the Government to give the highest priority to efforts aimed at conserving one of Australia's most precious resources, the soil. I venture, however, to suggest that the soil is not one of Australia's most valuable resources; it is the most valuable resource. It may be trite to point out that without soil we would not have our crops or livestock industries, we could not provide food for the Australian population and, increasingly, people throughout the world, we would not enjoy the standard of living we have today and we would have little to sell the world. Australia is a unique continent in that we are regarded as an agricultural nation when our soils generally are shallow, unstable and of low fertility. Only 10 per cent of our land could be regarded as deep, arable soil. Yet, agriculture extends over two thirds of our total land mass. Obviously, this is the nub of the problem. By necessity, over 200 years successive generations have ploughed, cropped, grazed and generally gambled with much of our country to produce food for our population and the population of the world. On the eve of 200 years of settlement, we are faced with a massive problem. Whole regions of land which were once able to support cropping and grazing and were productive are no longer available for us or future generations to use. They are gone. The soil structure has either broken down so irretrievably that there is a desert, or it has become so saline that nothing will grow. This has happened over 200 years- and it is still happening. If this continues, we will have nothing to leave our children and grandchildren. Sadly, the problem is not just restricted to Australia. Across the world, by the end of the century, a massive 35 per cent of once-productive farm land will have been turned into dessert. This is not a natural phenomenon. It is man made and we all stand condemned for it. The problem is not one of which we are unaware. An assessment of soil conservation needs was undertaken some 10 years ago between 1975 and 1977 in a collaborative study between the States and the Commonwealth. I know that Senator Powell referred to this in her speech. That assessment showed that 52 per cent of the land in rural use in Australia needs some form of treatment for land or vegetation degradation. This degraded area amounts to more than one-third of the entire land mass. Over 5 million square kilometres are used for agricultural and pastoral purposes. Of this total area in use, over 23 per cent, or 1.8 million square kilometres, needs treatment with land management practices only, while 29 per cent, or 1.48 million square kilometres, needs conservation work of various kinds, almost invariably in conjunction with appropriate management practices. Arid zones, where rainfall is too low or two unreliable to support regular dryland cropping, exist over 70 per cent of Australia and the majority of that Land is used for grazing. Sadly, degradation has occurred on 55 per cent of that arid zone. Degradation covers an area some 27 times the size of Tasmania-and I know we all laugh occasionally at Tasmania. While most of the degradation is loss of vegetation, increasingly it also involves soil erosion and salinity. The same thing is occurring in the non-arid and extensive cropping zones. In the non-arid zone, where grazing is undertaken, a third of the land needs attention to prevent further degradation. To highlight how this problem also affects the city dweller, it is important to point out that the non-arid grazing land category includes the catchment areas and water supplies of many eastern cities and towns. It also includes land that was once sown with crops, but is now so badly affected by salinity that only limited grazing can occur. The story is repeated in the cropping areas, of which one-third need attention. The problem, of course, is not just soil erosion but also salinity. Salinity problems are occurring in south-western Western Australia. I am quite sure that the problems in this most productive area will be raised later in this debate. Salinity problems are also occurring in some of the irrigation areas in South Australia, Victoria and southern New South Wales. We are also faced with dry land salting problems. We are faced with a problem of massive proportions-a problem that has been known about for some time. Yet, successive governments, State and Federal, have done little to acknowledge the seriousness of it. As a recent article in the National Farmer, written by Bruce Mills, stated: Vast areas of Australia's pastoral lands are fast being engulfed by desert, huge areas in the Murray-Darling River basin are turning to salted wastelands while millions upon millions of tonnes of topsoil are being eroded off our best farmlands each year. It's all been said before in various forms; scientists have trotted out statistics and warnings; politicians have nodded and agreed that something must be done and plenty of inter-governmental committees and task forces have been set up to look into possible solutions. One such committee set up by the previous coalition Government was the national conservation strategy task force, which held a national seminar in 1981 to look at land degradation and other conservation matters. That was a Liberal-National Party initiative on soil conservation. That body has since published a national conservation strategy for Australia. The paper included, among other recommendations, the need to increase awareness of the problem and to provide incentives-that this Government does not give-to land users, including encouragement of tree planting, soil conservation measures and strengthening of farm advisory services and extension services. One would expect that over the past four years, and particularly now that such an environmental zealot as Senator Richardson is at the helm-unfortunately he could not be here this afternoon-this Government would really have gone to town on the problems of soil conservation. But this is not the case. If we turn to this year's Budget Papers we see that a mere three lines on such an important issue are devoted to soil conservation-three lines out of literally hundreds of lines. The three lines read: $6.0m (up $0.6m) is provided for the National Soil Conservation program which provides financial assistance primarily to the States for soil conservation and related research and extension activities. How pathetic that is. So to combat this national crisis the Federal Government has provided a pathetic $6m. To put that in perspective, it is only $1m more than the $5m being spent on landscaping the new Parliament House. In other words, beautifying a few hectares on top of the hill will cost almost as much as the entire soil conservation budget for Australia. As I said, how pathetic and completely out of balance that is. Where are this Government's priorities on soil conservation? As the National Farmer summed it up, it really is a joke. If the matter were not so serious I presume that it would be a joke. The previous year's budget was no better. In 1985-86 the Federal Labor Government gave $5.5m; the previous year the Government started the national soil conservation program with $4.5m but that same year the then Minister for Sport, Recreation and Tourism, Mr John Brown-Senator Richardson's boss in the other place-gave away $7.5m of taxpayers' money to Sydney's Parramatta sports club for a new rugby league stadium. In the same year the Government gave Sydney's new Maritime Museum $18m, three times more than was allocated to soil conservation. The various States are doing little better. It is unlikely that the combined State contribution would be more than $100m. Yet the Australian Agricultural Council has estimated the cost of carrying out what it calls essential soil degradation control at $2.5 billion. So, in round figures, the Federal Government's allocation was approximately 1/450th of that required for essential works, to say nothing of the less critical works. Dr Geoffrey Beckmann, recently retired from the Commonwealth Scientific and Industrial Research Organisation after many years spent studying the engineering structure of landscapes, says that the attitude of the Federal Government to soil conservation is a disgrace, and how correct he is. He has predicted serious consequences for the nation unless there is a complete revamping of policies and a massive injection of funds for conservation works. He stated: We are sitting on the edge of a disaster. If we do not watch what is happening, the life blood of the soil will be washed away to the sea as a result of the inaction of this Government. In 1975 the total cost of essential works was estimated at $675m or 1.1 per cent of our gross domestic product. Estimates then suggested that half of Australia's land was in need of work to halt water and wind erosion if it were to remain productive. Since then literally millions of tonnes of soil have been blown away or washed out to sea to be lost forever by this country. The coalition Government acknowledged the importance of encouraging farmers to care for their soil and it allowed full write-off in the year of expenditure for on-farm water and soil conservation measures. We introduced a $640m bicentennial water resources program which has since been abolished to the discredit of this Government. However, as I said earlier, I do not believe that any government has done enough. I am very interested, and have been vitally interested for a long time having started competitions in different places, on the subject of soil conservation. Before I wind up my remarks, I compliment the Soil Conservation Service of New South Wales and the job it is doing with the meagre funds that it receives. In particular I refer to Mr Bob Juno, the new Commissioner of the Soil Conservation Service of New South Wales. I have raised the issue of soil conservation numerous times in this place. Earlier this session I raised it in a notice of motion; I raised it again in an Estimates committee hearing and an officer of the Department of Primary Industries and Energy suggested that both Federal and State governments were not spending sufficient funds on it. Of even greater concern was advice that there had been no update on the 1977 studies to which I referred earlier in my speech. In other words. there has been no update on that work and with only three lines devoted to the matter in the Budget, I guess we will not get much more from the Minister for Primary Industries and Energy (Mr Kerin) or this Government. This Government can wax lyrical about rainforests; the Minister can make numerous trips to rainforest areas in Queensland; he can talk warmly of his conversion to greenieism but on the subject of soil conservation he is pathetically silent. I do not say that rainforests are not important; they are. However, soil is being neglected; it is being ignored by this Government. A video entitled Wheat Today: What Tomorrow? has just been released and I recommend to Senator Richardson that he view it soon so that he can do something about the problem. The Australian Bicentennial Authority was not going to recognise soil conservation in our bicentennial year but I am happy to say that it will now do something in conjunction with the New South Wales Farmers Association, the Soil Conservation Service of New South Wales and the State Department of Agriculture. I am pleased that this matter has been brought to the attention of the Senate but I must confess that it seems a little ironic, perhaps even hypocritical, for the Australian Democrats to be expressing concern at the loss of productive land. For it is the Australian Democrats who, if they had their way, would have all farmers arrested and all their land taken from them and locked away as a museum. It is the same Australian Democrats who oppose intensive animal production but can provide no alternatives for feeding, at an affordable price, our population. It is the same Australian Democrats who want an extension of World Heritage listing areas to other parts of Australia which, no doubt, will threaten present agricultural production. However, their spokesperson on primary industry matters, Senator Powell, does have an interest in, and knowledge of, agriculture. I believe that she is genuinely concerned, as I am, at the inaction of this Government on issues such as soil conservation, erosion, salinity and desertification. The Labor Government stands condemned for its inertia. Senator JENKINS(Western Australia)(5.17) —I am pleased to have the opportunity to support Senator Powell's urgency motion. From previous remarks from both sides of the chamber it appears that we agree on this matter of urgency, which is: The necessity for Australians to adopt a new land use ethic based on care and respect for the land and, because most approaches to the crucial issue of land degradation in the past have been limited and largely unsuccessful, the need for the Government to give the highest priority to efforts aimed at conserving one of Australia's most valuable resources, the soil. I intend primarily to address the situation in my State of Western Australia, and I do this for two reasons: firstly, because Western Australia, because of its size, contains almost half of the land area and therefore almost half of the soil of Australia and, secondly, as a State which stretches from the tropical north of the continent down to the temperate south, Western Australia illustrates the full range of climatic and soil types found in Australia and also the full range of soil problems and degradations of the soil which Senator Powell's motion addresses. I must say in answer to Senator Brownhill that this motion is in full accord with the policy of the Australian Democrats. I draw to the attention of the Senate a report entitled Western Australian Environmental Review 1986 which was published in September 1987. This report was written by two people-R. G. Chittleborough and F. M. Keating. The explanation of the publishing date being one year after the date of the completion of the report is in the notes on the unauthorised publication. It states: The following review was originally written for the Department of Conservation and Environment, in December 1986. It was, however, never published for general public consumption-due in part perhaps to the sensitivity of some of the observations made. This situation played a substantial part in the subsequent resignation from the department of the principal author, Dr Grahame Chittleborough. The review has great value in providing an understanding of the current West Australian natural environment, and the nature and magnitude of the problems facing it. The review should be public property. Consequently, a group of concerned citizens has decided to reproduce the report, on behalf of the authors, as a public service. A number of people were stunned when the Western Australian Government put out a very glossy, short report which did not go into the details that are in this report. The authors of this report were very pleased to have access to the full report as published. I recommend the report to the Senate because, although it deals with the situation in Western Australia, everything listed is pertinent to the whole of Australia. In considering soil we have to be aware that we are dealing with one of the essential life support elements of human life. If we do not preserve and protect our soils, we will certainly starve. If we in this generation are not to starve, then our children or grandchildren will be placed in extreme jeopardy because large areas of the world are in danger of losing the capacity to be self-sufficient in food production. In Australia we already export an enormous amount of food to other countries, and it is likely that in future with the burgeoning of world population we will be called upon to export even more to feed people across the seas. But we will not be able to respond to this call if we do not preserve our own soils. We also have to be aware in this debate that, as with most forms of environmental damage, soil degradation, once it has occurred, can be either impossible or extremely difficult to remedy and can cause enormous problems lasting for generations, if not for centuries. It is one of the many areas in which prevention is enormously preferable to cure after the damage has been done. That is the state in which we now find ourselves to a great extent-we must now attempt to start to cure the damage that has already been done. We have to be aware, and we in Western Australia must be particularly aware, that we live in a desert. The climate over much of our State is essentially a desert type climate. In deserts, soils and vegetation are extraordinarily vulnerable. Part of our problem is that most of the European peoples who came here were used to European type climates and agricultures and were unaware of the fragility of the soil in this desert environment. So they treated the environment and the soil here as they had that in Europe. They also introduced alien agricultural forms to this continent. We also need to be aware that agriculture and our trading patterns involve us in progressively removing the fertility of our soils. In small, subsistence based sustainable agricultural communities just about everything comes from the soil and everything is returned to the soil in one way or another. So, as has been mentioned by other speakers, agriculture is a cyclical activity. But large scale Western agriculture robs the soil of its fertility and leads to steady degradation. Every shipload of wheat and beef that leaves Australia is a shipload of Australian soil fertility which is leaving this country for ever and is lost to future generations. It is true that some of this fertility can be restored by the use of fertilisers imported from overseas, but fertilisers themselves have their own problems. The danger is that greater and greater amounts of them are needed to sustain the yields that we have from our agriculture. It is already apparent in Western Australia that considerable areas of land which have been cleared for agricultural use for cereal crops will be going out of production because crops are no longer economic. The ultimate possible disaster is full scale desertification. We know from history that the northern part of the continent of Africa and other areas around the Mediterranean until relatively recent times were fertile areas. We have all read in the Bible about the cedars of Lebanon. Those wooded areas are no longer there; those trees were cut down. I was surprised to discover that a lot of those wooded areas were cut down comparatively recently, in fact after the steam engine was invented, to feed those machines. When people let loose their goats to feed on the vegetation that was left after the trees had been cut down the final degradation and desertification in those areas occurred. We know that the Sahara Desert is creeping inexorably southwards and that one of the factors contributing to that situation is the impact of human activity. We have all seen on our television screens the awful pictures of what is happening in areas of Africa such as Ethiopia because the land there has been degraded to such an extent. We all have some understanding of what the possibilities of desertification can mean to us here in Australia. In attempts to maintain profitability, farmers in Western Australia have been advised to consolidate their holdings and to adopt more mechanised techniques, but this is not saving the farmers in Western Australia. A number of them have already gone bankrupt or are on the brink of bankruptcy, rural populations are declining and small businesses in country towns are being affected. It appears that the only solution to aid the situation is that advocated by Barrie Oldfield. Many of us were able to see Barrie Oldfield's video Wheat Today: What Tomorrow?. In that video Barrie Oldfield described what can be done to save the situation. It is supreme irony that the Aboriginal people who occupied Australia for 40,000 years before European people came here had a much deeper wisdom about the land and its soils. It is an irony that we are about to celebrate 200 years of the impact of a new society on Australia and the Australian environment. The Aboriginal people have been here at least 200 times the number of years that our society has been here, yet we have probably done at least 2,000 times the amount of damage to the soil in Australia. In Western Australia wind erosion is one of the major threats to our soils. It is strongly associated with introduced methods of practising agriculture which involves the clearing of vast areas of native vegetation and the cultivation of alien and purely seasonal species, which then leave the soil exposed to the wind. This was described very well in Barrie Oldfield's video. He also described very well how water erosion is a major threat to our soils. This is a particular danger in the northern, summer rainfall region, but it is also true that where one gets sudden downpours-and this was illustrated very well on the video-soil that has been cleared cannot absorb the rainfall, and so the rain simply runs off, taking a lot of the soil with it. Another problem is the compaction of soils caused by the continual use of very heavy agricultural machinery. The result of this is that most of the rain that does fall runs over the surface instead of penetrating it. There is also the salinity problem, salt in the soil, which means that it is extremely difficult if not impossible to grow crops in the soil. I would like to give some of the costs involved because costs are significant. The annual loss to wind erosion is estimated at $38m; water erosion, $19m; and salinity, $26m. Only about 30 per cent of 17 million hectares of land in Western Australia cleared for agriculture can now be regarded as stable. The remaining 70 per cent is affected by some form of soil degradation. I quote from page 3 of the report Western Australian Environmental Review 1986: Overall, Western Australia has accumulated an environmental debt which will have to be met by the community if we are to restore sustainability. Those involved in using or managing the environment, whether public or private, are generally aware of the causes of the problems. However, until community awareness recognises the need for further remedial action only the symptoms can be addressed. There is much scope for increased involvement of the community in planning a sustainable future, and for strengthening an environmental ethic by which individuals recognise their responsibility for stewardship of our environment; an ethic which sees conservation and development as mutually dependent activities within the system of which we are a part. I commend Senator Powell's urgency motion to the Senate and I hope that on this occasion all parties here will support it. Senator COONEY(Victoria)(5.31) —This is a matter of urgency that has been brought on by the Australian Democrats. Clearly, they have a great concern for the preservation of our soil. They are to be praised for that. Indeed, it is good to see that they are following a trend started by this Government. I shall give some evidence of that. First of all, I refer to the evidence in the report of the Senate Standing Committee on Science, Technology and the Environment which, when the report was prepared, was chaired by Senator Gerry Jones, a very eminent senator from Queensland. In that report he discussed the need for soil preservation and, with other members of the Committee, he commented on the need to pay attention to that area. The Government has done just that. In 1985 the Soil Conservation (Financial Assistance) Act was passed. The second reading speech was given in the House of Representatives by Mr Kerin, the then Minister for Primary Industry, who is now the Minister for Primary Industries and Energy. He is a man who has devoted much time and attention to the question of soil conservation. Senator Brownhill, who was not his usual gracious self, rather ungraciously put down the Government by saying that it compared very badly with the previous Government. I shall quote from the speech that Mr Kerin made when he introduced that legislation at 4.33 p.m. on 20 March 1985. He said: Before concluding this speech, I would like to emphasise the Commonwealth's commitment to soil conservation and the place of this Bill within that overall commitment. Historically, the Commonwealth Government's involvement in soil conservation has been on an in and out basis. The previous Government- I am sure that Mr Kerin said this with some sadness- opted out of soil conservation completely so that at the time the present Government took office there was no involvement at all. The Minister, when he introduced that Bill, was able to illustrate this Government's commitment to soil conservation. He was able to say that when the Hawke Labor Government came in it faced a situation in which the previous coalition Government had opted out of soil conservation completely. Senator Maguire —That is why more and more people in the country are voting for us. Senator COONEY —That is right. Mr Kerin went on: This Government turned around that disastrous decision and established the national soil conservation program. The national soil conservation program, as I have explained, has the overall aim of ensuring that the use of our land resources takes place on a sustainable basis. A little later he said-again no doubt with some regret: The previous Government justified its dilatory attitude to soil conservation on the grounds that because the direct constitutional responsibility for land use rests with the States, the Commonwealth need not become involved. However, it is now obvious that the magnitude of the land degradation problem is such that a national perspective must be obtained with the Federal Government providing a means of co-ordinating this perspective, as well as making its own direct contribution to soil conservation. So it was this Government that understood that the problem of the degradation of the soil was a national issue and moved early in its life to do something about it. So the Government welcomes the Democrats following the trend that it has started. We do not doubt they will support the Government in its determined efforts in the future. We thank Senator Powell for her urgency motion. By way of illustration of what the Government is doing in this whole area of soil conservation and water conservation, in the House of Representatives on this very day a Bill has been introduced-the River Murray Waters Amendment Bill 1987-which deals with the question of the waters of the River Murray basin. Item 4 of the explanatory memorandum to that Bill states: The new Commission- which is to be established under the River Murray Waters Amendment Bill 1987- is to encompass the statutory responsibility provided for under the River Murray Waters Agreement 1982 and to undertake an advisory role to the Council on water, land and environment matters in the Basin not covered in that Agreement. The Commission will replace the River Murray Commission and will comprise two Commissioners from each Government who, between them, will represent water, land and environmental interests. That is an illustration that has inspired Senator Powell to bring this motion on today. We thank her for it. No doubt she will be supporting the initiative that the Government has taken in this area, illustrated by the Soil Conservation (Financial Assistance) Act of 1985 and further by the legislation which is presently before the Parliament-the River Murray Waters Amendment Bill 1987. I turn now to the Soil Conservation (Financial Assistance) Act 1985. A section of that Act talks about the Soil Conservation Advisory Committee, which was set up under the Act and which had to make an annual report. It has done so. I have a copy of that report before me now which is dated 1985-1986. The report was prepared by people other than politicians, including people of very great eminence in this field such as Professor John Burton, the Foundation Professor of National Resources, University of New England; Dr Brian Roberts, the Dean of the School of Applied Science, Darling Downs Institute of Advanced Education; and others. That report makes it quite clear that the initiatives taken by this Government have started to bite and have started to achieve the sorts of things that Senator Powell and the Democrats talked about here today. Page 3 of that report states: The broad aim of the National Soil Conservation Program is to develop and implement national policies for the rehabilitation and sustainable utilisation of the nation's soil and land resources. The program has five major goals: that all lands in Australia be used within their capability; that soil conservation activity and land use decisions be based on whole catchment/regional land management planning concepts; that all land users and levels of government meet their respective responsibilities in achieving soil conservation; that effective co-operation and co-ordination occur between all sectors of the community, disciplines and agencies involved in the use and management of land and water resources; and that the whole community adopt a land conservation ethic. That is what is set out in the report of the Committee which was set up by this Government. From page 14 onwards is a list of the grants made through this Commonwealth Government to various bodies interested in and dedicated to soil conservation. The expenditure set out on page 15, for example, shows the amount spent in each State, the Northern Territory and the Australian Capital Territory. When I look at this Government's record over the years I note with some pride that it can hold up its head in the light of the achievements it has made in the soil conservation area. The motion before the Senate states: The necessity for Australia to adopt a new land use ethic based on care and respect for the land, because most approaches to the crucial issue of land degradation in the past have been limited and largely unsuccessful, the need for the Government to give the highest priority to efforts aimed at conserving one of Australia's most valuable resources, the soil. We have done what this motion urges should be done. We have set up procedures, in contrast to what was done by the last Government. We have set up structures and we have set up approaches to help soil conservation. More importantly, in terms of this motion, we have established a new land use ethic based on care and respect for the land. Mr Kerin, the Minister for Primary Industries and Energy, set out in his second reading speech to the vital Bill I have already referred to, the five matters that appeared in the report of the Soil Conservation Advisory Committee, thus establishing an attitude which should be pursued by all those interested in conservation and soil preservation. Senator Brownhill implied that this Government is concerned about rainforests but not about soil. The concept must be seen as a whole. Not only is the soil important but also are the rainforests. We have to, as it were, love this country and have respect for it not only in terms of the soil but also in terms of its forests, rivers and mountains-in terms of the whole situation in which we find ourselves. The ecology of the country cannot be isolated as has been attempted. The whole issue has to be looked at as a unit. That is what this Government has done. Again and again we have mentioned in this chamber the Franklin Dam which this Government preserved, the forests which we are attempting to preserve at present and our efforts in protecting the environment. That helps to establish this ethic; it helps to make people conscious of the need to preserve a very fragile environment. I can only agree with that and point out what the Government has done. In conclusion, I might list again some of the things this Government has done since it has come to power. It has established the national soil conservation program, the aim of which was to halt and repair the land degradation which, unfortunately, the previous Government left to the States to do. It is a national problem and we have to think nationally. It is no good thinking in terms of what the States can or should do. It is a national responsibility. Senator Maguire —They claim to represent the farmers. Senator COONEY —Yes, the Opposition claims to represent the farmers. Unfortunately, it does not do anything towards soil conservation. I hope that by the end of this debate it will be more nationally minded. The Government has provided $15m for land rehabilitation since it was elected in 1983. It has removed taxation incentives for land clearing, and that is important. Taxation incentives used to be given to encourage farmers to clear the land. But that is not the way to preserve the soil. The Government has created the Murray-Darling Basin Ministerial Council to address the broad issues of the basin. As I said before, legislation which relates to this area is being introduced into the House of Representatives today. The Government has also established national reafforestation programs for which it will be providing initially $15m over three years. Over all, the Government has a philosophy of conservation, and of preserving the land, the forests and the waterways. In light of this motion and in light of the debate today, the Government can be very proud of its achievements since coming to office. Senator PANIZZA(Western Australia)(5.45) —The first point I want to make concerns Australia's most valuable resource, the soil. There is probably no one in this chamber who understands better this aspect than I do. For the last 20 years I was in charge of one of the top three wheat growing organisations in Western Australia, a position I valued very much because it has been in the family for at least 60 years. I hope it will be in the family for another 100 years. The Australian Democrats have brought on this matter of urgency as though soil conservation is something new. Part of the motion states: The necessity for Australians to adopt a new land use ethic based on care and respect . . . Later in my speech I will tell the Senate what is going on in Western Australia to bring the land that has been degraded back to its original condition. Senator Jenkins told us about the problems in Western Australia. It is a pity that she did not remain in the Senate to hear my comments about what is going on in Western Australia. It is ironic that the Democrats have brought on this motion because most of them have stuck to the cities. This is the case in Western Australia, anyhow. The only time they have ever gone into the south-west of that State was to stand in front of bulldozers in the forest country. I spent quite a bit of time in the 1950s developing our properties with bulldozers. When I see the Democrats come along with such a motion, I am very sorry-and I say this tongue in cheek-that my bulldozer driving days are over. Do the Democrats discount programs that are already in place? Do they want everything that is in place thrown out of the window to make room for their new-found scheme? I know that there are problems with the soil in Western Australia that stem from the indiscriminate clearing of some land that was not suitable for agriculture. The post-War one million acre a year clearing program in the 1950s has helped to feed starving people in many countries and has contributed to the standard of living that we enjoy today. Having cleared the land and having realised that our soil was degraded, programs to improve the soil have been put into action. Capital works have been put in place to repair the past damage. Of the 72 proposed soil conservation districts, more than half are operational. Advisory committees have been established. W. I. Salt has showed Australia how to control water run-offs. These committees are working in conjunction with the Western Australian Department of Agriculture and the Department of Conservation and Land Management which encourage and co-ordinate landholders to adopt proven farm practices which have already reversed the degradation process. The first modern district advisory committee was appointed in 1983 under a land and soil conservation Act introduced by a conservative government in Western Australia in 1945 and amended by a Western Australian Liberal government. I am not going to start a slanging match with Senator Cooney who was scoring points in respect of what the Government has and has not done. It is a pity that he did not remain in the chamber to hear what other speakers have to say. The major emphasis in Western Australia has been on the control of new clearing. A total ban was introduced on clearing for about 12 months. After 12 months, clearing can be done only by submitting plans, by having an inspection carried out and then, by gaining permission with attached conditions. Levy banks have been constructed to control water run-off. As I have already said, an extensive system of levy banks has been in existence for many years. Farmers have also been assiduous in their use of ploughing equipment and the time at which they plough. Not too many years ago farmers were advised to use the direct drill method. The use of that method almost caused some farmers to go out of business because of the resultant downturn in production. So now farmers assiduously use modern day chemicals that do not build up in the soil. By that means soil degradation that may otherwise have resulted from ploughing has been kept under control. I do not agree one iota with the comments of Senator Jenkins about the use of heavy machines. The heavier the machine, the wider the cutting implement, and as a result the machine travels over the ground less often. The Wellington Weir area in the south-west land division is facing salinity problems. Those problems are being overcome by the work carried out by the Western Australian Department of Agriculture under the present State Government and past governments. With the upsurge in gold mining in the past few years, mining activity has probably been the biggest cause of land degradation. At one time a person wishing to work a mine did not have to submit plans as such mines came under the old system of control. A miner with an ongoing lease-some of the leases were granted back in the 1890s and thereafter-had his lease renewed. In the areas in which the new laws applied, miners had to submit an application to renew their leases. My experience in local government tells me that we cannot now expect those miners to submit plans and work to them. When I was in local government we were able to make the miners do what we wanted because if they did not we could be unco-operative when they wanted roads extended and that sort of thing. I am happy to report that the mines that come under the control of the old system are now working well. Anyone who wants to establish a new mine must first submit plans, and he must work to those plans under supervision, otherwise he will lose his lease. We have the backing of the Western Australian Government and its soil conservation authority in taking that action. I am happy to report that that system is working well as it has resulted in such problems as blowing dust being overcome. Probably the biggest bugbear of the modern day prospector over the past four or five years has been the advent of prospecting with a D9. The old-time prospectors simply used to sample the top of the soil. Now a big D9 is used and drilling occurs. Under the new system that activity is being controlled. Much has been said about Alcoa's alumina exploration in the south-west of the State. However, Alcoa has probably led Australia in the area of revegetation. In fact, about three or four years ago it put in charge of that program Dr Barry Carbon, a top scientist with the Commonwealth Scientific and Industrial Research Organisation (CSIRO). As well as establishing Alcoa's revegetation program, he established a program under which Alcoa sells trees to the rest of the State. In fact, that company probably gives away a heap of trees. Those trees have been planted and are doing very well. Incidentally, in case honourable senators do not consider Dr Barry Carbon to be a top authority in this field, the Western Australian Labor Government has appointed him head of its environmental authority. The Australian Democrats said that a tree planting program is operating successfully in each State. Alcoa is leading a group of companies and academic research groups in developing a tree propagation program which could attract $40m a year in export markets. They are in the process of developing a fast growing tree to put on the export market. Six thousand of these trees have already been distributed in Western Australia. This joint venture comprising the CSIRO, Murdoch University and Alcoa is co-operating with departments of soil conservation in Victoria, New South Wales and Queensland. I have here the full details of the current soil conservation program. New programs are being initiated all over Western Australia. I do not know whether Senator Jenkins has crossed the Darling Ranges, but that task should not be embarked upon by the faint-hearted. The documentation shows that programs are being undertaken from Derby in the north-west of the State to Esperance and Hopetoun in the south-west. On those farms that have been overcleared, the farmers are allowing strips of natural bush to grow and act as windbreaks in order to halt soil degradation by wind. That process has been very successful. I have tried it on my own property, and it certainly works. Whether honourable senators believe it or not, land will regenerate. Anyone who wishes to argue that point should examine the strip of land on which the old narrow gauge line ran between Perth and Kalgoorlie. The last train ran on that line in 1968 or 1970. Today it would not be possible to tell that there had been a railway line there except for some of the old tracks and sleepers that have been left there. That shows that if we want an area of land to regenerate, it will do so. Agricultural activity can be maintained with the assiduous use of chemicals and proper ploughing. In the short time that I have been a member of this chamber, I have heard the Australian Democrats say that farmers should use no chemicals. Certain chemicals have been approved by departments of agriculture throughout Australia, and no doubt they are monitoring their use. It is a pie in the sky notion that a farmer can continue to grow clean crops that will give him sufficient return to keep his farm operating and to feed this nation without using chemicals. That is not possible because over the years there is a build up of weeds. We on this side of the chamber certainly support a continuation of the system of balanced conservation. We have no beef about that system. It is ongoing in Western Australia, and I wish to see its continuation. To support my arguments about the west, I shall read to the Senate an article that appeared in the West Australian newspaper on 3 November 1987. It is headed `Conservation work gains ACF's praise'. The Australian Conservation Foundation (ACF) has not been prone to praise our efforts over the years. The article reads: The Western Australia Agriculture Department and . . . pastoralists have received a pat on the back from the Australian Conservation Foundation. The ACF's commendation is in recognition of efforts to battle conservation problems in Western Australia . . . ACF Western Australia project officer . . . said he was impressed by the attitudes and practical efforts shown by . . . pastoralists in confronting existing land degradation problems. The soil conservation budget could use more assistance. The figure of $6m has already been mentioned in the Budget. It is not a large sum when compared with the amount that has been spent on the new Parliament House garden. I urge the Government to give consideration to increasing that amount. I am not asking the Government to increase the whole conservation budget. I am asking the Government to consider its priorities when it allocates next year's budget figures for soil conservation. Soil conservation is very important. Certainly in Western Australia we want to keep it going. Senator COLLINS(Northern Territory)(6.00) —It would be tempting to say, in the light of many other motions of this nature, that opposing this motion would be like opposing motherhood, but there is a clear philosophical difference between the views of honourable senators on this side of the chamber and the views of honourable senators on the other side on this matter. The key point of the motion is a plea to the Commonwealth Government to look after the soil of this country. I will touch on that later. Like other speakers before me, I am very pleased that this motion has been brought on. The record of this Government since it was elected in 1983 is impressive by any measure and in stark contrast to the record of our predecessors which was a record of no involvement whatsoever in this area. Theirs was a deliberate policy. Our predecessors' view of the constitutional arrangements of this country was that the Commonwealth had absolutely no responsibility in this area and the States were left to play the role. This debate highlights what I believe is the middle course that should be adopted by any sensible government running this country, that is, a recognition in this day and age that Australia is a nation and that, while respecting the constitutional position of the States, there are clear areas of national interest which override parochial State interests. Soil conservation is one of the classic areas where State parochial control is likely to achieve a much worse result for the nation as a whole because of local, community, political and, in particular, financial pressures by developers on State governments. To some extent these pressures can be overriden by Commonwealth governments which can take a broader view of the matter. The problem is certainly serious. In one year half a tonne of soil for every human being on this earth is lost forever. Senator Panizza invited someone to take issue with the fact, according to him, that soil can regenerate. Soil can regenerate in the same way that oil can be replaced-over hundreds of millions of years. The kind of regeneration Senator Panizza is talking about is not regeneration at all. It is the restoration of degraded land which simply removes a moonscape eyesore. Soil does not regenerate. It is like brain tissue, unfortunately. It does not have the capacity to regenerate. All one can do is to convert gravel pits into parking lots, as they have done in Kakadu National Park, for example, or into water storage areas or swimming dams. One can grade them over and grass them, but it is nonsense even to suggest that one can replace soil which has been taken away from the surface and washed out to sea. It cannot be done, except, as I have said, over hundreds of millions of years. As I have said, every year half a tonne of soil is lost forever for every person upon this earth. This year alone, wind and water will remove 20 billion tonnes of soil from fertile land worldwide. Twenty-five hectares will be degraded through flooding, salinity or structural degradation worldwide. For Senator Panizza's information, each centimetre lost from farming soil in this country-I have the same farming background as Senator Panizza and Senator Walsh-reduces crop yields by up to 20 per cent. Losing just one millimetre of soil over a one-hectare area means losing 10 tonnes of topsoil. That soil does not regenerate, except over a very long period, as I have said. All one can do is try to make it look better. In the part of the country I come from actions have been carried out in the past by developers that are nothing short of criminal. Tipperary is a classic example. I was involved in that. I was working for the Soil Conservation Service of the Northern Territory Department of Primary Industry. It is a bit hard when one is tootling along with a D6 bulldozer trying to put up levee banks and also following half a dozen D9s with a chain in between them, fell clearing 12,000 acres of land a year, going straight across the country, over watercourses, rivers-the whole lot. Tipperary was an environmental disaster. Twelve thousand acres of land were cleared in the first year of sorghum production at Tipperary. This occurred in the Top End of the Northern Territory. The soil erosion that occurred in the first wet season was enough to break one's heart. All we have been able to do since then has been to try to repair the damage. But I am afraid that in my lifetime and in the lifetime of Senator Panizza we will not be able to regenerate that soil. It is a real problem. The challenge is to find land use systems, if it is at all possible, that are more economic than the present systems and that do not lead to the same degradation. In many areas of Australia-Senator Panizza will acknowledge this-that is very difficult, if not impossible. In the Northern Territory one of our most serious erosion problems is the overgrazing of pastoral land, particularly in drought times. Most of the land, certainly from where I sit, is not able to be used for any other economic purpose. The only thing one can do is to shut it down, which has happened in some areas, and not use it. One of the problems in this area, as I said before, is that the States are constitutionally responsible, in the main, for land use. It is a constitutional responsibility they jealously guard. In terms of the leadership given by the Federal Government, the response we have had from the States has been very heartening. It is not due simply to the fact that we happen to have four State Labor governments. The response from the conservative States has been just as encouraging because of the leadership and the injections of substantial sums of Federal money into the operations of the national soil conservation program. Some $15m has been expended under that program in co-operation with the States since it was established in 1983. It was established in an absolute vacuum. It was the deliberate, calculated and stated policy of the previous administration that soil conservation was not a role for the Federal Government to play and was entirely the constitutional responsibility of the States. Considerable money has been spent in this area. Something like $60m is currently spent by the States and the Federal Government because of the leadership role this Federal Government has adopted. Just as is the case with cigarette smoking, the community, because of the attention that has now been paid to this problem, is becoming more and more aware that the problem exists and is becoming more and more sensitive to it. One needs only to pick up a handful of rural publications-I subscribe to a great many of them-or listen to rural news broadcasts. In almost every publication in the rural media one will find articles, letters from farmers, people on the land and scientists about the problems of land degradation and the necessity for people to give some cognisance to it. That is a very recent nationwide phenomenon. There has been a dramatic increase in community concern about this matter. In the Northern Territory we suffer from an extremely harsh and unforgiving climate. I mentioned an outstanding example of the criminal degradation of land-Tipperary. In the Northern Territory we have a small cropping industry and a very large pastoral industry. We suffer from the Australian syndrome of floods and droughts. We also tend to suffer from the very serious problem of overgrazing. As a result of overgrazing we get a complete decline in vegetation, particularly around stock watering points. Over the last couple of years, greatly improved management, due to scientific input into the siting of stock watering points and stocking rates, has resulted in a very welcome lessening of land degradation in the Northern Territory due to overstocking and drought. A study conducted by the Northern Territory Department of Primary Industry in 1980 showed that, under previous stock management, an overgrazed and hence non-vegetated area yielded 1.9 tonnes per hectare of suspended sediments over 11 storm events, whereas a vegetated catchment yielded 9 kilos of soil per hectare in suspended sediments over the same number of storms. They are fairly dramatic and convincing figures. It is pretty hard to regenerate that extent of soil loss which occurred through just 11 storms. Of course, everyone knows the extent of rainfall-60 inches per annum-in the Top End of the Northern Territory. An unpublished report prepared by the Northern Territory Conservation Commission indicated that 50 per cent of all crop lands in the Northern Territory experienced soil loss in excess of 5 tonnes per hectare per year-non-recoverable-with losses as high as 102 tonnes per hectare per year in small areas where the problem was particularly bad. As I said before, the Federal Government responded to this national problem in 1983 by establishing the national soil conservation program. In respect of addressing the very wording of the motion we are debating, it would be useful to point out what the aims of that program are. I quote from the aims as laid out by the Soil Conservation Advisory Committee that administers that program: that all lands in Australia be used within their capability: that land use decisions be based on a whole catchment/regional land management planning concepts; that all lands users and levels of government meet their respective responsibilities in achieving soil conservation; that effective co-operation and co-ordination occur between all sectors of the community, disciplines and agencies involved in the use and management of land and water resources; I stress the final aim, which is: that the whole community adopt a land conservation ethic. Indeed that is what this motion calls upon the Commonwealth Government to do. I just point out to the people who have moved the motion-I am sure they are aware of it-that this Government has been doing precisely that from the very first day it was elected, in stark contrast to the complete lack of any initiative at all on the part of our predecessors who have, of course, participated in this debate this afternoon. In a relatively short period of time-indeed, it is only 1987-there has in fact been, because of that injection of considerable sums of Federal money and the attention given to that problem, reciprocal-- Senator Brownhill —That is only peanuts compared to the money that has been spent on other things that aren't anywhere near as important. Senator COLLINS —I would say that the honourable senator's credentials for even participating in this debate, in terms of the Party to which he belongs, are very thin indeed. As I said before, the record of the honourable senator's Party is disgraceful. The reason it is disgraceful, of course, is that under the seven years of Fraser government there was an enunciated policy of federalism. This policy held that land use was the sole responsibility of the States. I would like to get some arguments on this point because it would be difficult to find an area more jealously guarded by the States than that of land use. I would point out that the example I have just given of Tipperary occurred before there was self-government in the Northern Territory and before soil conservation legislation, which provided for orders that could stop that kind of development, was even in place. I must say that the Northern Territory Government's record of imposing stop orders has in fact been fairly satisfactory, because orders such as that have been imposed over the years to prevent that kind of foolish development. But the record of this Government is that it established that soil conservation program when first elected; continuing commitments were given to that program during the last election campaign; and continuing funding can be found for it in the current Budget. As I have said, $15m has been provided since 1983. This Government has removed taxation incentives for land clearing. It has broadened taxation provisions to give a 100 per cent write-off for expenditure on land degradation in the year of expenditure. It has created the Murray-Darling Ministerial Council to address the broad issues of the Murray-Darling basin problems. It has established the National Drought Consultative Committee for comprehensively reviewing drought policy, recognising that much land degradation, as I have said before, takes place during droughts. I do not think that any honourable senator should oppose this motion. But I would just like to point out that, as I said before, if the senators of the National Party of Australia and the Liberal Party of Australia join with us in supporting this motion, I will be particularly pleased, because that will indicate a significant and welcome shift in policy from the previous attitude of both those parties. Senator CHAPMAN(South Australia)(6.15) —Notwithstanding the incorrect grammar of this urgency motion moved by the Australian Democrats, its central point certainly warrants the strong support of this chamber. That central point refers to: . . . the need for the Government to give the highest priority to efforts aimed at conserving one of Australia's most valuable resources, the soil. I welcome the belated interest of the Democrats in the issue of soil conservation. However, one may question a peripheral point of this motion which demands a new land use ethic. The Democrats, in this attitude, and also in their belated interest, are paralleling the Australian Conservation Foundation (ACF). In speaking for the Democrats earlier today Senator Jenkins claimed that every tonne of wheat which is exported from Australia exports soil fertility. Her venom with regard to the issue of soil conservation should have been directed at the Government, not at hapless farmers. By good farming practice, soil fertility is regenerated. It is not exported, as Senator Jenkins would have us believe. The fact is that most modern day farmers are environmentally responsible. If they are not the soil becomes further degraded and farm profitability will collapse. That is why good farmers are good environmentalists. Dr Charlie Carter, the head of the University of New South Wales Fowlers Gap Arid Zone Research Station, confirms this. Present day land management can still be improved, but this is not the main problem with regard to soil conservation. The real damage was done by past generations which were ignorant of the fragility of Australian soil compared with European soils and did not know how to deal with it. Not enough is being done currently to restore land which has suffered erosion caused in the past by grazing too large flocks over big areas with only a few main waterholes. Today smaller flocks graze over comparatively small paddocks with their own waterholes. It should be understood that about 50 per cent of current problems come from feral and native animals, including rabbits, kangaroos, goats, donkeys and camels, which are flourishing in arid zones under present land management that provides permanent waterholes. Farmers have a vested interested in conserving the land and perpetual leases give them more incentive to do so than fixed term leases. Most farmers regard their land as a heritage and want to pass it on in a better condition to their children. This is confirmed by a farm poll undertaken by the National Farmer magazine in 1985. This poll set out to find what forms of degradation landholders thought were most apparent on their land and also land of their district. It also set out to find what soil damage was costing farmers, what farmers were doing about the problem and what obstacles existed at that time. Water erosion turned out to be the main form of degradation in the eastern parts of Australia, while wind damage was more significant further west. Tree decline topped the list in the temperate south. Farmers who noted degradation in their districts also generally acknowledged its presence on their own property. More than three-quarters of the farmers who noted water erosion in their districts also acknowledged it on their own land. For wind erosion and tree decline comparative proportions were around two-thirds. Of farmers who acknowledge water erosion on their properties, 53 per cent said they were suffering production losses of less than $5 per hectare as a result. But around 20 per cent put the figure at between $5 and $20 a hectare, and a small but significant 4 per cent said that production was being slashed by more than $100 per hectare. A surprisingly high 31 per cent said that they were willing to spend between $5 and $20 per hectare to fight water erosion and 11 per cent said that they would be willing to spend between $20 and $50 per hectare. So some farmers, contrary to what some might have us believe, are indeed willing to spend even more than they reckon they are losing to repair the soil. Half of the farmers suffering the effects of wind erosion estimated their production losses at less than $5 per hectare, with around 20 per cent putting it at between $5 and $20 a hectare. Of those affected, again, 29 per cent said they would spend up to $5 a hectare to prevent the soil blowing, and 21 per cent said they would spend between $5 and $20 a hectare. So let that also lay to rest the notion that some would have us believe that there exists on the part of farmers a lack of concern with regard to soil erosion. However, there were stumbling blocks to farmers being able to tackle this problem. The main stumbling block was a lack of finance. Farmers who had acknowledged water erosion on their properties, provided a typical sample. Twenty one per cent said that the available control measures were too costly; 30 per cent said there was inadequate finance available; and 13 per cent said they were not in a position to borrow money to do the work. More than 60 per cent overall signified financial constraints as the main problem in their being able to devote attention to soil conservation. In the midst of the current rural crisis it is understandable that many farmers are unable to find money to plough back into soil reclamation. However, farmers in my own State of South Australia are co-operating in the restoration and conservation of the land. They are voluntarily undertaking repair work and transforming former wasteland into a productive asset. South Australian farmers have embraced the Greening Australia concept better than those in any other State. Indeed, Greening Australia has commended South Australian rural people for providing more co-operation than any other group in any other State. This is further evidence of the success of modern South Australian farmers in soil conservation. That is acknowledged by their expertise in dry land farming. South Australian farmers are exporting their soil technology and dry land farming techniques to the Middle East and, more recently, to China. As I said earlier, the belated interest of the Democrats to this most important issue of soil conservation is very much welcomed, and it is very much distinct from their earlier interests in more trendy conservation issues akin to the approach of the Australian Conservation Foundation. Senator Macklin —You obviously haven't read our policy. We had it in 10 years ago. Senator CHAPMAN —We have not heard much about it, Senator Macklin. The Australian Conservation Foundation was also conspicuous by its absence during the long haul to get soil conservation on the national agenda. Only when high profile national campaigns seemed about to begin, and some money began to flow, did the ACF start to show more than a nominal interest. The ACF recorded its priorities and long term goals for the next 20 years in its annual report for 1983-84, when its former Director, Geoff Mosley, officially stated: Undoubtedly the main issue to attract the Foundation's attention- was- . . . peace and disarmament and the related topic of opposition to uranium mining and export. That sounds a bit like the Democrats to me. In a test of our credulity, Mosley further claimed: Any solution- to soil erosion- will require a global anti-nuclear movement . . . Needless to say practical soil conservationists argue that there are more direct ways of tackling soil erosion in Australia than by first building a global anti-nuclear movement. The Australian Conservation Foundation's dishonest approach to the issue of soil conservation reached its peak when it mounted a campaign based on the removal of the mountain cattlemen's so-called dirty horses, cattle and dogs from the high plains in Victoria and their replacement with alpine National Park Service walking tracks. This issue is too serious to be a plaything of left wing propagandists. The two greatest environmental crises facing Australia today are soil degradation and water resources. Yet we find these issues barely mentioned in the media and barely mentioned by the most vociferous and media conscious of our environmental lobby groups. So these issues remain unknown to most Australians. They have, as I said, a low priority on the militant environmentalists' list of issues. That is well exemplified by to the leadership of the Australian Conservation Foundation. Australia is the world's driest inhabited continent. Figures vary as to the cost of soil degradation and salinity in lost agricultural production each year. Earlier studies suggest that this loss was about $600m per annum, but the most recent long term study, by the Soil Conservation Service of New South Wales, suggests an annual loss of production of $2 billion, and that is the equivalent of our annual wheat exports. Of the five million square kilometres of Australia, which are used for agricultural and pastoral purposes, it has been estimated that about 1.2 million square kilometres require remedial measures. The costs of this vital activity could well be in excess of $2,500m, but the Government appears to have done little to address this issue. A few specific examples indicate the costs in my own State of South Australia of land degradation. Victoria's salinity costs South Australia between $5m and $10m a year. The costs of lost production of butterfat and lucerne in the lower Murray are about $4m a year. Indeed the total cost to South Australia of salinity is $40m per annum. This highlights the special problems caused to soils in South Australia by the inadequate management of the Murray-Darling basin. The Murray-Darling Basin Commission is decades overdue, but it must prove itself effective when in operation. In large measure the salinity problem of the Murray River is caused in its upper reaches. By the time the water reaches the South Australian border, it is little more than a cesspool as a result of unrestricted and unsupervised use in the river's upper reaches. Of course this is exacerbated by some leaching effects in South Australia, due to the absence of trees, which allows surface water to mix with subterranean water, making it all salty and causing that leaching effect. This is but one example reinforcing the need for a national tree planting program. Across Australia as a whole 81.6 per cent of arid zone grazing land requires soil conservation treatment, and in the non-arid zone, 13 per cent of grazing land, 31.5 per cent of extensive cropping land and 15 per cent of intensive cropping land requires treatment. It is to the great credit of the Fraser Government that it recognised this problem and commenced remedial action. But the sad fact is that the present Labor Government has not built on the national strategy for soil conservation established by the Fraser Government. It has preferred to devote attention and financial resources to trendy boutique environmental issues, to win electoral support from small vocal groups, rather than devote attention and adequate resources to the important national issue of soil conservation. There is plenty of evidence of the low priority that the Australian Labor Party gives to soil conservation. In the current Budget the Government has allocated a meagre $6m to the national soil conservation program, and further only $814,000 to the national tree program. This compares with the $200m it allocated to Tasmania to halt the building of the proposed Franklin Dam, the proposed $50m in compensation for World Heritage listing of the Queensland rainforests, $8m this year for the Great Barrier Reef Marine Park, and $17m for the Australian National Parks and Wildlife Service. Of course, all of these are important areas of conservation, but they do not match the significance of soil conservation as a national issue. The $6m allocated to soil conservation this year matches only the funding of the Office of the Supervising Scientist, that blatant and frivolous waste of taxpayer's money identified earlier this year by the coalition Waste Watch Committee. This Office is supposed to monitor the Alligator Rivers Region as to the effects of uranium mining, but it has become a bureaucracy engorging taxpayers' funds, maintaining expensive offices in Sydney, researching obscure projects beyond its charter, and providing junkets to exotic locations around the world for its staff, as well as duplicating work already done by a host of other agencies. The ACTING DEPUTY PRESIDENT(Senator Zakharov) —Order! The time for the debate has expired. Senator HAINES(South Australia-Leader of the Australian Democrats) —by leave-The time for debate in fact expired before the opportunity for the vote on this motion could be taken. I do have a contingent notice on the Notice Paper that I could use, but I would prefer to do this in a somewhat more civilised manner- Senator Tambling —Come on, don't threaten us, Janine. Senator HAINES —No. I am simply saying that the general support for this motion around the chamber has been extremely heartening, and it would be silly to use the sort of aggressive method of a contingent notice, when all I need to do is seek leave, and I duly seek leave to move that the question be now put. Leave granted. Senator HAINES —I move: That the question be now put. Question resolved in the affirmative. Original question resolved in the affirmative. Senator LEWIS(Victoria)(6.30) —I move: That the Senate take note of the paper. It is well-known Liberal-National Party policy that the Australian Industry Development Corporation (AIDC) should be privatised. The 1987 annual report of this Corporation gives clear evidence as to why that policy should be fulfilled. I urge the Government to adopt Liberal-National Party policy in this regard and proceed to privatise the AIDC. I will give three fairly simple reasons why it should do this. Firstly, on page 15 of the annual report we see that the AIDC, which already has $2.5 billion worth of total assets, is seeking additional funds to fulfil its role. Last year, it received about $12.5m. It is now seeking further capital but it recognises the difficulties which a government these days has in making funds available to such a corporation. The AIDC has made recommendations to the Government. In its report it said: . . . a number of techniques to raise private capital from the market to supplement Government capital in supporting some or all of AIDC's functions and activities. Recommendations have been made to the Government in this respect. But we are not allowed to know what the recommendations are. They have not been included in the report. The fact that the AIDC needs additional capital and it has to go to the private sector for that capital is the first reason I give as to why the Corporation would be better off in the private sector. If one looks at what the AIDC has been doing, one sees that it is doubtful that it is doing anything that private companies would not do. The Corporation's stated objectives include: . . . to promote Australian industry and Australian ownership in industry. During the year, the Corporation provided a United States dollar revolving credit facility to News Corporation Ltd. I cannot see that we need a government-owned corporation to provide that sort of credit facility. The Corporation now is also a 25 per cent shareholder in the Australian Submarine Corporation. Again, that, quite frankly, is something that the private sector could be doing. A government statutory corporation does not need to make that sort of investment. The second point is that the AIDC has a return of less than 1 per cent on assets. That return has declined over the past five years. According to page 5 of the report, the after-tax return on total assets has declined from a high of 1.6 per cent in 1983 to 0.9 per cent in 1986-87. With total assets of $2.5 billion, to be returning so small an amount means that there may be great difficulties in privatising the Corporation because it may be very difficult to find anyone who would be prepared to buy it. I point out that the steel division of the Broken Hill Proprietary Co. Ltd has a return on assets of over 4 per cent for 1986-87. This is regarded around the industry generally as a very poor return. Yet the AIDC's return on assets is less than 1 per cent. I am running out of time, but my third point is to draw attention to the tax performance of the AIDC. I have heard the Australian Democrats from time to time, and in particular their leader, Senator Haines, criticise public companies for paying small amounts of tax. Let me just draw attention to the fact that last year the tax paid by the AIDC was only $4,000. It is very interesting to see the AIDC's creative accounting techniques. Its profit for 1985-86 before tax was $9.8m and its profit after tax was $19.1m. So before tax it had a lesser net profit than after tax. I seek leave to continue my remarks. Leave granted; debate adjourned. Senator BROWNHILL(New South Wales)(6.36) —by leave-I move: That the Senate take note of the papers. The resolutions of the 127th meeting of the Australian Agricultural Council in Sydney on 14 August 1987 in respect of chemical residues in primary products are very pertinent to the rural community. I note that on one page of the report the Council says that the report of the United States Department of Agriculture review team is not yet available. It is interesting that about 1,000 to 2,000 samples of United States beef are taken every year compared with 4,000 tests on Australian beef imports to the United States. Obviously, the authorities there are testing our beef much more thoroughly than they test their own. The other interesting matter addressed in the report is the funding for the pesticide recall program. It is noted that Victoria currently is paying for the DDT stocks which have been surrendered. Also, Western Australia has requested Commonwealth matching funding for a buy-back program. This is something with which I, and I think all members of the beef industry, would agree. Queensland thought that the Commonwealth should fund the whole lot. But I honestly believe that the Commonwealth should be putting in funding on a dollar for dollar basis for the testing and the buy-back of chemicals which were used in good faith by the rural community in the first instance. These chemicals were approved by the government of the day. I believe that the Government should be playing a part in something that it okayed in the first instance. If Australia does the right thing about the chemical residue problem-the industry is doing the right thing and it only needs the Government to take a bigger and better stand-we will end up with the cleanest food in the world. We will not have nuclear fall-out problems as much of Europe has with its food, nor will we have pollution problems with our food, as do a lot of European and other countries. The Council has said that the industry should be responsible for funding the intensified sampling, that the industry should do the sampling in domestic plants and that no compensation should be available to farmers for quarantine if violation levels are reached. The Council says that is not appropriate. I believe that because the Government played a part in okaying the chemicals for use, and because they were used in good faith by the people in the industry, the Government should be playing its part in helping the industry out on an issue which, when it is cleared up, will be of advantage to our export industries. Senator CALVERT(Tasmania)(6.39) —Like my colleague from the National Party of Australia, I would like to comment on the two papers, particularly on the first concerning the resolutions of the 126th special meeting of the Australian Agricultural Council which relate to chemical residues. When I first came to this place I asked a question on this subject. In answering Senator Walsh said that it was either a boring question or a boring answer; it was one or the other. I can assure honourable senators that the matter certainly is not boring. It has been treated with a great deal of urgency by the Australian Agricultural Council and I take note of some of the comments it made. In particular I commend the Standing Committee on Chemical Residues in Primary Products on its very prompt action in setting up three task forces, namely, the legislation task force, the sampling task force and the trace-back identification task force. Those task forces have large participation from all types of farming and other agricultural organisations across Australia. It is also pleasing to note that the working party of chief entomologists convened by Queensland has been instructed by the Standing Committee to complete, as a matter of urgency, its review of the feasibility of eliminating organochlorine insecticide use in agriculture. The working party has been preparing a co-ordinated plan for the withdrawal of all organochlorines with the target date for total withdrawal being 1990. That is quite a big task and that Committee is to be congratulated on tackling such a large issue. It is interesting to note that the Australian Agricultural Council commended the Australian Quarantine and Inspection Service and the industry for the initiatives they have taken in speedily addressing this issue. I will comment briefly on the 127th meeting of the Australian Agricultural Council. One aspect in which I am interested-my colleague from the National Party of Australia Senator Brownhill has just left the chamber-is the volume loading of stock. On page 35 of the report the Council notes the Australian Meat and Livestock Industry Policy Council report on the impact of State regulations on the efficiency or road transport of livestock and meat. I must be sounding like a Queenslander, but Queensland is the only State that seems to be having any success at all with the volume loading regulations for livestock. This is a matter of concern to people involved in agriculture and road transport and it is also being looked at very seriously by the animal welfare movement. If honourable senators care to look at the Australian Meat and Livestock Industry Policy Council report on the impact of State regulations on the efficiency of road transport of livestock and meat they will find two main recommendations. The first is that uniform and reciprocal regulations should be introduced in all States to permit volumetric loading of livestock transports with current Queensland dimension limits and safety requirements to apply. The second important recommendation was that the industry and States other than Queensland considered meeting any additional cost of road maintenance attributable to the introduction of volumetric loading and livestock transport. That is a very important matter for the rural industry and anybody involved with animals. I urge the Senate to take notice of the recommendations made by that meeting. Senator POWELL(Victoria)(6.44) —Madam Acting Deputy President, you had called the next paper, which would be the resolutions of the 126th special meeting of the Australian Agricultural Council. I wish to address my remarks to that paper on the assumption that you will subsequently call the 127th meeting paper to which I will also address some remarks. The ACTING DEPUTY PRESIDENT(Senator Zakharov) —The two papers are being taken together by leave. Senator POWELL —Thank you, Madam Acting Deputy President. I think it is a shame that a representative of the National Party of Australia should have taken the action which now restricts comments on two particularly important papers to half the time that might otherwise have been available. It is a matter for positive comment that the Australian Agricultural Council held an urgent meeting at the time of the chemical residue crisis. I note from the report that the residue levels for DDT, dieldrin and cryomazine had been found to be above both United States and Australian tolerance levels. I also note from the report that the Council agreed to accelerate and to co-ordinate the implementation of a national ban on the sale and remaining uses of DDT. Lest I again be accused this afternoon of being a Johnny-come-lately on this matter, I make it clear that as far as DDT, dieldrin and a number of other chemicals are concerned, the Australian Democrats have for many years been calling for Australia to step in line with other enlightened countries and to institute these bans. The Council also agreed to establish an extension task force to develop and to implement as quickly as possible a program aimed at the proper usage of agricultural and veterinary chemicals. Of course this is an advance but the Australian Democrats believe that this issue needs to be taken further. If extension services can provide that service, we believe that they must provide information on alternatives within agriculture. The record shows that today's new chemical becomes tomorrow's problem all too often, but certainly not in every case. While we may want to eliminate some chemicals for particular reasons at a particular time, I and the Australian Democrats have no confidence that the total banning of chemicals is the answer. We believe that governments have been lax in seeking out information on alternatives, and there is a wealth of information overseas. The Australian Democrats have put to the responsible Minister that what Australia needs is an integrated pest management unit. Such a unit would be based on a sound understanding of the crop, its pests and their natural enemies, competitors in the environment and alternative hosts and includes biological control and balanced crop rotations. In the United States such a unit was established within the office of pesticides programs. In a number of European countries there are publicly funded organic biological farming activities which have trained field officers assisting farmers as well as a number of research farms, institutes and universities which are devoted to organic and biological agriculture. The Australian Democrats believe that the establishment of such a unit ought to be a priority issue and would include the following in its tasks. It would gather together information already existing in Australia and overseas on alternative methods of pest and disease control. Following the establishment of such a database appropriate information and alternatives would be prepared and distributed to farmers via the State departments of agriculture and other farming bodies upon which they rely so much for their information on how to improve their productivity. In co-operation with State departments of agriculture and farming bodies, a unit such as this should initiate and encourage practical measures for farmers who are using, or wish to use, alternative measures-for example, sponsoring field days on properties where alternatives are used economically and effectively. Apart from the environmental and health problems associated with chemical abuse and overuse, the costs and increasing resistance of insects to chemicals are an additional burden facing farmers and one which we believe government has a responsibility to alleviate through giving advice on a range of alternatives. It is this sort of suggestion that we have put to the Ministers. Senator ARCHER(Tasmania)(6.49) —I will also speak on the Australian Agricultural Council resolutions of the 126th and 127th meetings. In the limited time available to me I would like to speak on two issues of a minor nature. Page 45 of the report of the 127th meeting states that an organisation is being set up under ministerial direction and will comprise key industry people involved in the production, packaging and export of horticultural products, plus appropriate government representatives. The Council would provide a forum to represent the interests of the State councils, industries and governments in the development of horticultural export growth. I am not speaking about the Horticultural Growers Council but a body called the Australian Horticultural Export Council. The resolution says: . . . the Australian Horticultural Export Council would be complementary to the proposed Australian Horticultural Research and Development Corporation, the Horticultural Marketing Corporation and the Horticultural Policy Council. It sounds to me as if it is all very much the same thing. I wish that this could be sorted before we go further down the track of providing three more bodies as proposed. I have not heard about this matter previously. I do not know whether other honourable senators are aware of it, but I draw attention to this matter before a whole group of parallel bodies is formed. In regard to resolution 57 one finds that as at the date of the meeting on the question of plant variety rights-an issue that is vital to Australia's progress if we are to build up a better export market and get into better products-the appointment of the PVR Registrar was to be `finalised shortly'. One also sees that the `appointments to the PVR Advisory Committee were also expected to be made soon'. That was on 14 August this year when the legislation was passed on 25 February-that is six months. In the last half hour I have been trying to ascertain whether anything happened in the next two months, but at this stage I have not been able to confirm that what was to happen `soon' or `shortly' has yet taken place. I wish to comment on the two big issues in those meetings, the subject of milk and that of chemical residues. The matter relating to milk is extremely serious because milk is a product of every State and a reasonable amount of goodwill and common sense is essential if we are to make a transition from the traditional method of milk management and milk marketing to what will come about. It does not help at all to have an odd individual here or there racing off and trying to produce a revolution. We will not achieve the best results in that way. In regard to the subject of chemical residues, having read of the actions that have been taken and the program that has been set, I believe that everybody in Australia can be satisfied that an excellent program was laid down and was carried out intelligently. I trust that we will be able to induce as much urgency as possible and can see how to lift the barriers between Australia and other countries-and most of all that we get on with a system involving simplicity of testing. Clearly the present testing program cannot be continued in view of the cost, the time involved, the question of remoteness, and the storage of carcasses in the meantime, which are all problems that must be overcome. I trust that this body is working on these issues. Debate (on motion by Senator Jenkins) adjourned. Senator COONEY(Victoria) —I present the thirteenth report of 1987 of the Standing Committee for the Scrutiny of Bills, concerning the Administrative Decisions (Judicial Review) Amendment Bill 1987, the Migration Amendment Bill 1987 and the Australian Tourist Commission Bill 1987. Ordered that the report be printed. Senator COONEY —On behalf of the Committee, I lay on the table Scrutiny of Bills Alert Digest No. 14, dated 4 November. Bill received from the House of Representatives. Motion (by Senator Ryan) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator RYAN(Australian Capital Territory-Special Minister of State)(6.55) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The Hawke Labor Government was elected in 1983 with a firm commitment to the availability of adequate and affordable housing for all Australians. In 1984 we introduced the New Housing Assistance Bill which honoured our commitment to revamp public housing policy and assistance in Australia. This was an important piece of social legislation. Affordable and secure housing is essential for the well-being of all Australians. The 1984 Commonwealth-State Housing Agreement, authorised by the Housing Assistance Act, was negotiated by Federal and State governments in 1983-84 to operate for 10 years from 1 July 1984. It included a number of initiatives, one of which was that the agreement be evaluated triennially. At the Housing Ministers Conference in April 1986 Federal and State housing Ministers agreed to a timetable and a procedure for the first triennial evaluation of the agreement. At that meeting Ministers agreed that a steering committee of Commonwealth and State officials would be established to oversee the evaluation in accordance with the agreed terms of reference. The terms of reference stated that the first triennial evaluation would examine the effectiveness and efficiency of rental and home purchase assistance programs, against the principles set out in the agreement. Ministers also agreed that non-government organisations be invited to provide submissions on the operation of the agreement. The triennial evaluation concluded that public housing programs under the Commonwealth-State Housing Agreement are generally efficient, effective and well targeted. The evaluation also concluded that the objectives and principles introduced in the 1984 agreement remain valid, but that in particular areas of the provision of home purchase and rental assistance, minor amendments could further improve effectiveness and efficiency. Two changes are to be made to the Housing Assistance Act through this Bill. The first is to provide for the continuation of the Government's commitment to provide a guarantee of a high level of base funding for the next triennium. Funding to the States and the Northern Territory for housing will be guaranteed at a base level of $700m for 1988-89 and 1989-90. This is $200m more than the record base funding provided in the first triennium and 3 1/2 times the base level provided for in the previous Government's 1981 agreement. The current year's funding is to be made available through Appropriation Act (No. 2) 1987-88. The financial impact of this Bill is therefore a cost to the Commonwealth of $700m in 1988-89 and 1989-90. As part of the $700m guaranteed for 1988-89 and 1989-90 the local government and community housing program will receive $11m and the crisis accommodation program will receive $14m. The Government will also allow all States to nominate up to 100 per cent of the loan component of their State government borrowing program for public housing in 1987-88. These funds are available at the highly concessional interest rate of 4.5 per cent repayable over 53 years. This funding, which is provided in a year of very considerable Budget restraint, reflects the high priority accorded by the Federal Government to the alleviation of housing related poverty. The second change to the Housing Assistance Act arising out of the evaluation of the agreement relates to section 11 of that Act, which deals with the Minister's authority to reallocate specific housing assistance grants from one State to another. This section is to be amended to allow the Federal Minister responsible for administering the agreement to redirect funds to other States or for the funds to be retained by the Commonwealth. This could occur in the event of a State failing to comply with the provisions of the agreement relating to specific purpose programs or the guidelines for those programs. This change is being introduced to ensure that States adhere to the agreed procedures for consultation in respect of Aboriginal housing and other special purpose programs and that in these programs, which are fully funded by the Federal Government, Federal priorities are implemented. Following the outcome of the triennial evaluation, amendments were also made to the Commonwealth-State Housing Agreement, and I propose to outline briefly these changes for the information of honourable senators. I seek to table the amended agreement. The amendments in this agreement have been negotiated and agreed with the State and Northern Territory Housing Ministers. The agreement has been tightened up in the area of State matching contributions to ensure that States meet their financial responsibilities for public housing. The agreement will also be amended to ensure that all State matching contributions for home purchase assistance, and Loan Council nominated funds used for home purchase assistance, will be channelled through the home purchase assistance account. This will ensure that all funds provided to the States under the Commonwealth-State Housing Agreement and Loan Council arrangements continue to be used for the purposes of the agreement. The agreement will permit surpluses generated from home purchase assistance operations to be used for general rental assistance. It will also specify that not less than 50 per cent of total funds are to be directed to public rental assistance in recognition of the need to increase the supply of affordable rental housing. The approved use of funds will also be widened. This amendment will permit funds provided under the agreement to be used for more innovative purposes such as joint ventures, secondary mortgage market trusts and rental housing trusts. This move will encourage States to enter into innovative financial arrangements and attract private sector finance into public housing provision. Home purchase assistance provisions will also be amended to require that reviews of income of recipients be conducted annually or at intervals agreed to by the Minister. This will ensure that subsidies are not provided to those who are not in need and will maximise the amount of funds available for further loans. If income is not reviewed annually then loan repayments are to be adjusted annually in accordance with the consumer price index or other agreed index. The sales policy for public rental housing will be refined to ensure that rental stock is not depleted and that sales will cover the costs of providing replacement dwellings. This policy will provide that public rental housing constructed or purchased within the previous five years cannot be sold to an individual purchaser at less than replacement cost. This Government will also ensure that young single people are not excluded by a particular State from access to public housing. These changes to public housing arrangements will ensure that the 1984 Commonwealth-State Housing Agreement remains effective in assisting many thousands of Australian households each year to obtain adequate housing at a price they can afford. In addition to our public housing efforts this Government has made significant achievement in other areas of housing assistance. The first home owners scheme has been widely heralded as the most effective scheme ever to assist home buyers obtain their first home. The eligibility limits were increased in March this year, with extra assistance going to families. Since its inception, this scheme has helped over 255,000 first home buyers into their own home. It continues to be the most effective home purchase assistance program ever introduced by a Federal Government. This Government has not ignored the private rental market. The recent decision on negative gearing will flow through into increased rental supply and put a brake on rent increases. We will also provide direct assistance through the new family allowance package. Low income families renting privately who are receiving the family allowance supplement, parents on unemployment benefit, and pensioners will now receive up to $15 a week rent assistance. It is the first time that any Federal Government has provided rent assistance to working families on low incomes. This is a significant breakthrough. This Government's sound economic policies will continue to place downward pressure on home loan interest rates. The Budget has been followed by an immediate drop in housing loan interest rates. Rates have now come down by a full percentage point over the last three months. Another initiative co-ordinated by the Federal Government was that from 1 July 1987 the funding arrangements for public housing in the Australian Capital Territory would be aligned with the States and the Northern Territory under the Commonwealth-State Housing Agreement. This decision is welcomed because it will ensure consistency and equity of treatment between residents in the ACT and those living elsewhere in Australia. The Government recognises that the massive housing problems facing low income earners cannot be overcome in one or two years. This is why the agreement is placed in a 10-year framework. We have entered into a long term commitment to those in housing need. The improvements made to the arrangements following the first evaluation will enhance significantly the effectiveness of the Commonwealth-State Housing Agreement over the remaining seven years. I commend the Bill to the Senate and I present the explanatory memorandum to the Bill. Debate (on motion by Senator Tambling) adjourned. Debate resumed. Senator JENKINS(Western Australia)(7.57) —The Migration Amendment Bill seeks to amend the Migration Act 1958. As the Act is already nearly 30 years old, obviously it has already been amended a number of times over the years, which is necessary with legislation of this age in order to bring its provisions up to date and to correct anomalies as they arise with the passage of time. This amendment Bill is relatively small. I shall deal with its clauses in order. Clauses 3, 4 and 5 are aimed at correcting an anomaly identified in a recent Federal Court decision which casts doubts on the requirement that the prescribed fee be paid at the time the application is lodged. These clauses are sensible and mean that officers no longer have to decide whether a letter be the formal application or not, and all applications have to be lodged on the correct form with the correct fee. Clause 6 of the Bill provides an increase in penalty for a master, owner, agent, charterer or operator of a vessel who brings a person to Australia without documentation, that is, without a visa or return endorsement. Clause 7 of the Bill is explained in the explanatory memorandum as follows: This clause inserts a new section . . . which provides that passengers . . . seeking to enter Australia are liable to pay a prescribed fee to assist in recovering the costs of immigration clearance . . . and that a passenger's fee is to be collected . . . by the international air operator who brought the passenger to Australia. The clause poses a number of problems. First and foremost, this is a form of taxation, although it is described as a fee. Secondly, it is a tax that is set by regulation; in other words, it is recommended that the tax should be $5 at the moment, but it could be changed by regulation without an upper limit. The third problem is the method of collection of the tax-that is, by the air operators. I should like to quote what the Senate Standing Committee for the Scrutiny of Bills had to say about clause 7 when it looked at this Bill: Clause 7 . . . may be regarded as a `Henry VIII' clause to the extent that it would permit the amount of a prescribed fee, which would require passengers on international flights seeking to enter Australia after 1 January 1988 to pay a fee for the services relating to their immigration. Arrangements for the collection of the fee, and its amount, will be prescribed by regulation. Whilst the proposed amount of the fee ($5) may be regarded as no more than recovery of costs, the committee in the past consistently objected to imposition of fees, which may be regarded as a form of taxation, by regulation without a limit set by legislation. The Committee has argued that the Parliament should not lightly delegate its taxing powers. The Committee has taken the view that a ceiling amount on such a fee should be prescribed in legislation. The Committee accordingly draws the attention of senators to clause 7 of the Bill in that by enabling the setting of a fee by regulation without an upper limit, the Bill may be considered to be an inappropriate delegation of legislation power. This is a tax which came into the Budget when, in fact, we had been assured that the Government would not put any further taxes in this Budget. I will quote from the speech of Mrs Sullivan in the House of Representatives, which appears on page 1623 of the Hansard for 28 October 1987. Mrs Sullivan stated: The Treasurer, on 28 May, said: On the receipt side let me confirm that there will be no tax increases in the 1987-88 Budget. On 29 May the Treasurer said: The Government has made it quite plain that it does not intend to introduces new taxes or increase new taxes in the Budget. On 23 June, when launching the ALP campaign policy, the Prime Minister said: In the completed Budget in September there will be no new taxes and no tax increases. The Treasurer, in his Budget Speech on 15 September, said: Turning to the revenue side, I repeat that we have adhered to our election commitment not to increase taxes or introduce new taxes. There is no doubt about it. This so-called $5 fee is, in fact, a tax. The Democrats cannot support this clause in the Migration Amendment Bill. We cannot support the introduction of a fee which is, in reality, a tax which can be set by regulation. The regulations are not available yet. This is why we fully support Senator Short's motion that the committee stage of this Bill should not be discussed until the regulations are to hand. There is also the problem of the collection of this $5 fee. When discussing this Migration Amendment Bill in the other place, the Minister for Immigration, Local Government and Ethnic Affairs, Mr Young, was quoted by an Opposition member as having said `A lot of our experience in the immigration field is trial and error'. I would suggest that this clause should not be tried; in fact it is already an error before it really gets off the ground. I would like to discuss the method of collecting the fee by the airlines-that is, by Qantas Airways Ltd and other international airlines which would be involved. Although this fee appears in the Migration Amendment Bill, it will be payable not only by migrants coming to Australia but also by tourists coming to Australia simply as visitors and, of course, by every single Australian who leaves the country and who wishes to return. In his second reading speech, the Minister said of this amendment: . . . it was announced in the Budget package that passengers over 12 years of age arriving on international flights and who require immigration clearance on arrival will, from 1 January 1988, be required to pay a $5 immigration clearance fee. The fee is to be collected by international airline operators who bring the passengers to Australia. In turn, the operators will pay the fees collectable by them to the Commonwealth. Later in the speech the Minister also stated: Consultation with the airline operators is taking place to ensure that the legislation and mechanisms to impose the charge will impose as small an administrative burden as necessary on the airlines. I am not exactly sure what format those consultations have taken. They certainly could not have taken place before the Budget was brought down because matters of this kind are not discussed before the Budget. But I do know that on 30 October 1987 a telex was sent to a number of Ministers and shadow Ministers, including Minister Young. This telex is from the Secretary of the Board of Airline Representatives of Australia (BARA), Lucio Cardone. Part of it reads: Dear Minister, We would like to bring to your attention the strong views expressed by the airlines at our first meeting with your Department on 15th September 1987 concerning the imposition of a $5.00 immigration clearance fee on all arriving adult passengers which is to be collected at the airlines' expense. The members of BARA protest in the strongest terms against the proposed introduction of an immigration clearance quote fee unquote on the following grounds . . . The first five grounds given by this Board are that the fee would be extremely damaging to tourism. The sixth ground is: The introduction of the proposed fee appears to contravene previously stated Government policy that there would be no new taxes in the life of this Government. It is apparent that the use of the word ``fee'' has been carefully selected to disguise what is in effect a new tax. Finally it states: For the foregoing reasons the BARA strongly requests that the introduction of this fee/tax is not proceeded with. It is for this and other reasons already stated that the Democrats simply cannot support the introduction of this $5 fee or tax. I know that the Opposition will also put forward an amendment deploring the fact that this fee will be charged to returning Australians. But we feel that we must take the matter further and absolutely oppose this clause. I really think that the airlines have a problem. I suppose they will discuss it, as a board, but how are airlines such as Qantas, British Airways, Singapore Airlines Ltd, Air New Zealand Ltd, Air India or Cathay Pacific Airways Ltd actually going to collect this fee? What will happen to passengers who stop over in places such as Singapore or Hong Kong on their way back to Australia? Where will the fee be collected? I think this is going to be a real problem in logistics and is simply not worth the $5 fee that the Government hopes to gain. Of course, the airlines have until 1 January to decide exactly how they will do it, but as I said before, I think this will pose a problem. Clause 8 of the Bill is a minor amendment to section 57 of the original Act and deals with deportation orders. It simply eases the verification of identity of the operator of a vessel. Clause 9 of the Bill introduces a $240 fee for the review of migration decisions. Before I discuss this clause, I would like to read an extract from a speech which was delivered in May this year at the faculty of law at the Australian National University. The title of the paper is The Impact of the New Administrative on Migrants. The paper was written by Ms Mary Crock, legal officer, Ecumenical Migration Centre, Richmond, Victoria. It states: In immigration, the bureaucratic dilemma between administrative control on the one hand, and justice to the individual on the other is more marked than in perhaps any other jurisdiction. The reasons for the dilemma lie partly in the nature of the migration process itself, which burdens the bureaucracy with the task of regulating the composition of our society. Of equal importance is the persisting belief that migrants are people who are privileged to be in Australia. `Privileged' precludes the notion of `rights'. The old philosophy of governmental supremacy is firmly enshrined in the Migration Act 1958. The Act confers on the Minister and his Department virtually unfettered power to determine who is to enter or remain in the country. Until very recently this left little room for the assertion of individual rights. However, attitudes change with time . . . In a free and democratic society, a system cannot be efficiently controlled if it is perceived to be unjust. Particularly is this so when the system deeply affects the lives of those subject to control. When this amendment Bill was discussed in the other place Government speakers explained that the whole point of imposing a fee of $240 for the review of the migration decisions was to deter more people from appealing. Senator Short referred to the problem of the tremendous backlog that has been caused by the number of appeals. In June 1986, 3,688 applications were waiting to be considered. By June 1987, just one year later, 10,886 applications had not been finalised. In other words, that number of people were waiting for a review of their applications. Since 16 September, the day after the Budget was brought down, a $240 fee has been imposed on all applications for review on the basis that this Bill and this clause will pass through both Houses of Parliament. Obviously, the backlog of applications is a great problem. It is also a human problem in that 10,866 people are waiting to know whether or not they can migrate to or stay in Australia. In many cases those people are already here. They are waiting to know whether their status can be changed so that they can remain in Australia. The Government has increased the number of people on the review panels from 32 to 157. It has also increased the number of staff who service those panels and I commend the Government for that. As I understand the position, applications for permanent residency must be reviewed under the provisions that existed when the applications were made. There has been quite a lot of controversy over the membership of the panels. I asked to see a list of the new members of the panels and I thank the staff in Minister Young's office who made this list available to me. I am pleased to see that the quality of the people has improved insofar as they appear to be more suitably qualified to look at the applications. They are people who understand, or who are more likely to understand, what is involved in the migration process. They have some understanding of administration and fully understand the likely legal aspects. In addition, with the increased number of members, the review panels are now able to sit in all the mainland States. That no doubt will speed up the process. The $240 fee will be payable only by people who apply after 15 September. As Government members stated in the debate, the fee has been imposed so that not so many people will apply to have their applications reviewed and so, presumably, the backlog will not increase dramatically as it has over the past year. I put it to the Government that this is not a logical way to tackle that problem. People have to have 70 points in order to be approved for migration. Many people who appeal against decisions have a very low number of points, but they are still eligible to appeal. Of course, people who are close to the 70 points also appeal. Although the $240 fee may deter some people with a low number of points from appealing, it is more likely to deter people who simply cannot afford the fee. In many cases we are looking at people who already have spent a great deal of money on their applications because, as everybody knows, various fees are payable at all stages of application for migration. This fee is a very discriminatory fee. It is the sort of fee that kicks people when they are down. Although I have praised the Government for increasing the number and quality of people on the panels, these panels in themselves are not really a satisfactory form of review. I draw the Government's attention to two reports: one is the 1985-86 annual report of the Administrative Review Council which came out in 1986; the second report is the Administrative Review Council's Review of Migration Decisions, report No. 25, which came out in 1986. The immigration review panels are criticised quite severely in the Council's second report, which states: Immigration Review Panels are non-statutory bodies which have the function of reviewing on the merits of certain classes of migration decisions made at departmental level and of making recommendations to the Minister as to the final determinations . . . I will refer briefly to some of the criticisms listed in the report. Paragraph 71 on page 25 states: Representatives of the ethnic communities who provided information and comment to the Council expressed the following views concerning the operation of the IRP system . . . The system is criticised for being an internal review. The report criticised the inappropriate membership, which I have dealt with. It criticised the fact that the panels met only in Sydney, Melbourne and later Canberra. It also criticised the lengthy delays, which we hope will now be corrected, and the fact that the review panels exercise a recommendatory power only. The report stated: The Department has not abided by its undertaking to provide training sessions for ethnic community representatives to enable them to fulfil the role that it intended for them in respect of counselling and assisting applicants; The quality of the Department's statement of reasons is poor; The IRPs have not disseminated information to ethnic community representatives about the basis for their recommendations and those representatives consequently have no knowledge of the considerations which the panel regards as important in determining particular categories of cases . . . It also states: Clearly, from the viewpoint of ethnic community representatives, the IRP system is not satisfactory. The Government is asking potential migrants, potential Australian citizens, to pay $240 for a system that is, in fact, not satisfactory. I suggest that the Government would be well advised to try to upgrade that system rather than start charging people for something that is not satisfactory. It would be better not to permit people who obviously have no chance of getting anywhere close to the 70 points to have their cases reviewed and to let those who are reasonably close to the 70 points to have their cases reviewed without the $240 fee. The Government has compared these review panels with various tribunals, but they cannot be compared with, for example, social services and veterans review systems. Those systems have properly constituted tribunals and, I might add, they do not impose a fee. There has been a lot of pressure from ethnic community groups for parity with the first level review in other jurisdictions, such as social security and veterans' affairs. In fact, they have recommended the introduction of this two-tier structure under which simpler cases can be determined by a panel or under an adjudicator system and other cases looked at by a properly constituted tribunal. As has already been mentioned, it appears from a report in yesterday's Australian that the Government is advocating a very different method of screening potential migrants. This process really has a delicacy which perhaps the Government has not fully appreciated. Yesterday Senator Reynolds said that the Government would be making its announcement tomorrow, and we all certainly look forward to it. However, this is a strange time to make such an announcement, when the Fitzgerald Committee to Advise on Australia's Immigration Policies is expected to bring down the results of its inquiry at the end of March. As has been stated in advertisements about the inquiry, this inquiry on immigration is being carried out because it is essential that in our immigration policies we should be able to select in Australia's best interests from among the huge numbers who apply. It is not appropriate to have this double system. It could be transferred to the private sector and kept quite apart from other systems. The Government must remember that in dealing with immigration it is dealing with real people and their lives. It is not always the business person who makes the most successful migrant. We must exercise great caution in this respect. Potential migrants who apply to come to Australia may be uncertain about settling in a new country. Such persons may wish to come here for economic or political reasons. Once they are here they must make the best of it and must put their fullest stake and be committed to their new country. Such persons can be quite different from those who want to come here simply because a lot of money can be made here. In fact, today's newspapers have brought to the fore that it is well known that some people who come here as business migrants do not plough their earnings back into Australia but send them back to their country of origin where they may be put to a number of uses. I ask the Government to be very careful in pursuing this particular path. I emphasise that the Australian Democrats cannot support clause 9 (a) of the Bill. We cannot support the imposition of a $240 fee which is to be paid for a service in an unsatisfactory system. The details of how this fee will be applied will be the subject of regulations that are not yet available. The Australian Democrats await those regulations with eagerness. We are pleased that this Bill will not go to the committee stage until the regulations are available. I shall now sum up the problems that will be encountered with the imposition of this $240 fee. The appellants will have no right to appear before an immigration review panel and no right to be heard. In fact, most of the applications must be submitted in writing, and this will pose great problems to people who are not very fluent in English. They will have to rely on other people to fill in the forms for them. It may be that they will have to rely on interpreters and translators to help them fill in the forms. In other words, they will not be able to speak up for themselves, and that is contrary to the basic principles on which our legal system is based. If they are in an overseas country it will not be possible for them to lodge an application. In some cases those who are sponsoring them here in Australia could do that for them. But certainly if they are here in Australia there should be no reason why they should not be able to speak up for themselves. Members of the immigration review panels are appointed by the Minister and they operate under guidelines laid down by the Minister. Their function is an advisory one. The Minister need pay no attention to their recommendations. There is an enormous backlog of applications. The review panels are very poorly regarded by the ethnic communities and social workers and other professionals who work in the migration area. So, essentially, this provision fails to address any of the underlying problems and it seeks to impose a substantial fee in respect of what is widely regarded as an unsatisfactory product. For those reasons, the Australian Democrats will oppose clauses 7 and 9 (a) of the Migration Amendment Bill. Debate (on motion by Senator Reynolds) adjourned. Motion (by Senator Reynolds) proposed: That the Senate do now adjourn. Senator BURNS(Queensland)(7.26) —I wish in this adjournment debate to pay tribute to the trade union movement and its members, a group of people who are of tremendous importance in this community and who have displayed a keen sense of humanity and caring for others in that community. I wish also to acknowledge their more enlightened approach to the role they play in our contemporary society. Those matters of themselves would be sufficient to require me to take part in this adjournment debate, but there is the added matter of the continued union bashing of Senator Chaney and Senator Michael Baume, to mention only two. I should not forget Senator Stone, who also seems to delight in that pursuit. Those people know very little about the trade union movement, but they seem to think that that makes them experts. The person who really takes the cake is one Vince Lester, the Queensland Minister for Employment, Small Business and Industrial Affairs. Mr Lester was recently reported as describing as a scandal the reduction in job classification in the metal industry and said that it would lead to centralisation of union power in Melbourne and Sydney. He is reported further as saying: The State Government will oppose this totally, and all thinking and responsible Queensland unionists, who don't want to see their rights vanish, should do the same . . . He is reported further to have said: There are 326 unions in Australia- obviously someone told him that- including 69 Queensland, representing more than three million workers. How can one or two much larger bodies ever hope to give their members the same levels of service that the smaller, more personal groups can? If I send him a copy of this speech, he will know the answer to that question. His knowledge of these matters is hopeless. I have in front of me a document headed `Future Strategies for the Trade Union Movement'. Page 12 of that document deals with the restructuring of the trade union movement and the bringing into being of a number of large industrial unions. It is proposed that the number of unions be 17. The trade union movement and the highest body that looks after the interests of trade unionists say that there should be 17 unions, by Mr Lester is telling everybody that there will be two or three. That only confirms in my mind the opinion that he speaks from ignorance again and again. Let us compare the union bashing engaged in by honourable senators opposite with the current Government position as expressed by Ralph Willis in a speech he delivered to the Australian Council of Trade Unions (ACTU). He said: What we have learned is that the labour movement, through the co-operation of the trade union movement with a Labor Government, can be an extremely constructive force for national advancement. He was not concerned simply about the direction of the trade union movement but about national advancement. He went on to deal with the Government's attitude to union amalgamation. He said: The Government position is that it is determined to implement a substantial package of industrial law reform in the first session of Parliament next year. That legislation will differ from the industrial relations Bill at least in certain important respects. In recent discussion with the parties, for instance, it has become clear that there is a willingness on all sides to support more extensive change to the amalgamation provisions than those proposed in the Bill. So Minister Willis sees amalgamation as being a good thing, provided it delivers the sort of outcome which the trade union movement says it will and which most reasonable people in the community believe it will. That attitude is in strong contrast to the Opposition's attitude and the attitude of Mr Lester from Queensland. Let us consider the campaign by the trade union movement to convince people in the Government and in the community of the need to look outwards at other countries as to how their trade unions operate. That is a constructive approach. We should not view it in a questioning way, maintaining that, because in the past trade unionists might have been unreasonable in their approach to matters on which they took industrial action, perhaps disadvantaging people in the community, they are terrible villains for all time and that we should question and resist anything they say. Rather we should consider what this approach means for the whole community. The document entitled Australia Reconstructed states: Under Strategic Unionism, trade unions recognise that wealth creation is as important as its distribution, and view the two issues as inseparable. The trade unions are not saying that they have to get it all, that they do not care how the economy operates. They are saying that they believe that there should be wealth creation and that they should be part of that. They want to make sure that they get a reasonable share for their members who, after all, make up 55 per cent of the work force of this country. They also service many others who pay nothing to the trade union movement but who receive many benefits as a result of its activity. The document goes on to talk about and quote the labour organisation in Sweden. It states: The reason we need democracy in working life. The right to be able to influence conditions for one's own life and work is self-evident. It does not need any justification other than that of human dignity . . . Employers have usually tended to meet workers demands for power with the argument of effectiveness. Nowadays it should be clear to all that more power for workers is likely to be a means of increasing effectiveness and productivity rather than otherwise . . . This freedom of action should be used, not for creating Stock Exchange big shots, but for growth and employment. The document then goes on to talk about the way the trade union movement structure operates in Europe and should operate in Australia. It puts the lie to the claim that bureaucrats and unthinking, mindless people make up the leadership of various trade unions. The document states: The structure of the trade union movements in the countries visited by the Mission has influenced the policies they have pursued. Austria, West Germany, Norway and Sweden are characterised by a set of common features: central co-ordination; strong local union and workplace organisation and vitality (this is particularly the case in Norway and Sweden); predominantly industry-based unions; and a small number of larger unions. The document goes on: The success of the trade unions in the consensus countries is due as much to central co-ordination as it is to strong local union and to workplace organisation. The two are not contradictory. Notwithstanding highly centralised bargaining and involvement in tripartite policy formulations, Scandinavian unions are strongly organised at the local level. The point was emphatically made in the report on the LO organisation in Sweden which was discussed at the 1981 Congress. It has been translated as follows: If one were to accept the idea that the union movement is merely an institution for defending its members' rights according to laws, agreements and guarantees won by a small group of central officials, then it is working well at the present time. But this is a view that the movement itself has never accepted . . . Unionism is and must be a movement that seeks to change working life from the bottom up, which takes up arms against commercialism and passivity, which sets out to democratise society and the economy and make work itself valuable and meaningful. This mission can never be accomplished by a little group of well-trained activists and functionaries by themselves. (Higgins 1985, p.349). These words put an absolute lie to the claim about bureaucracy and the trade union movement and the lack of opportunity for people in the trade union movement at the rank and file level to make a contribution. A lot has been said about the question of amalgamation. Amalgamation is a very important aspect of the development of the trade union movement to service and look after the interests of its members and also to make a contribution to society. Some comments were made about the Amalgamated Metal Workers Union. Unlike Senator Stone and Senator Chaney, I speak from experience as for many years I was an official of the Amalgamated Metal Workers Union. Let us, for the record, have a look at the way it works. It has a membership of 166,000. It has a Federal Council and Federal conferences. New South Wales has 59,500 members; Victoria, 47,500; Queensland, 22,000; Western Australia, 17,000; South Australia, 11,500; and Tasmania, 4,500. At the Federal conferences of the union, where decisions are made, there are 24 members from New South Wales, 19 from Victoria, 12 from Queensland, 8 from Western Australia, 7 from South Australia and 3 from Tasmania. The union has a very specific rule that the majority of people in the policy-making body have to be rank and file members who come from the job to the conference. The union has a State structure which is fairly similar. It is a totally and thoroughly democratic organisation. If any honourable senator wanted to suggest that it was not, I am sure that the Metal Workers Union would be only too pleased to compare its democratic process and structure with that of the Senate. Both start from the same basis: the electorate decides who the officials will be. In the case of the Senate there is compulsory voting; with the trade unions it is voluntary. The union does not accept, however, that once elected the officials are able to go away and make their own policies and be bureaucratic, like us in the Senate. That is a right given to us by the Constitution and the law of this country. Almost every day certain policy matters in different areas and at different levels come up and have to be decided by the rank and file of the union. They have the capacity to prevent absolutely their officials from going in a certain direction. That capacity is available to them every day of every week of every month. We do not have that capacity in the Senate. We can go to the polls and make all sorts of promises as parties and as individuals, but we can then turn our backs on those policies and promises and remain in office for the duration of our time. It is true that we have to come up for examination and judgment at the end of that time but nobody has the legal authority to change our situation. We are bound by the Constitution and certain legal decisions through the common law over the years. But the trade union movement is much more democratic, much more exposed and much more conscious of what its constituents do and have to say. Let us examine what results from this terrible concept of bringing unions together in large bodies. Mr Lester says that we could not handle it, that we would have head offices in Sydney and in Melbourne and that it would be bureaucratic and horrific for the members. Let us take, for instance, a typical union of a constructive and progressive nature, the Amalgamated Metal Workers Union. It has a provision, for instance, for 4 per cent of its total budget to go into education. It has full time education officers in each State. These people do not educate and train people how to organise strikes. Many of them are quite ingenious in the way they do that; they have their own native ability to do those sorts of things, but they generally get put in that position by someone else seeking to disadvantage their members. They are trained in how to work within the system-how to understand what the Conciliation and Arbitration Act provides, what their rights are, what the rights of particular employers are and how to negotiate from a position of some equality. They are told that the employer has to listen to them and their argument and make a decision as to whether he is prepared to agree to their proposals either partly or totally, and they are told that that should be done without any disruption. Indeed, many unions negotiate propositions that do not go to the question of dispute solving but to the question of dispute prevention-before it even happens. But it is a bit difficult when we have a position of the employer having a right to sack somebody out of hand while employees are supposed not to go on strike. Many of the proposals we put up suggest that the employer, even though he may have a legitimate right to dismiss somebody-because nobody is perfect and everyone has to answer to certain standards of behaviour-might consult the trade unions and indicate to them what he is about to do and the reasons for it. In many cases that has been done by enlightened employers and there has been no dispute. The trade union movement also gets involved in all sorts of specialist committees-committees within its organisation, government committees, tripartite committees-all directed in a constructive way in the area of training in particular callings. More recently they have come up with some very interesting and very constructive proposals which look at getting rid of the archaic attitude that holds that somebody who is trained as a motor mechanic or fitter should remain in that job for the rest of his life. They have looked at questions of career paths so that people can have broad training and can move into other areas of skills which will be important and useful in the community. They have done that in many cases in advance of any of the employer organisations. But I must say that there is a general attitude of co-operation as far as that is concerned. This does not show an attitude of `We don't care; we want our piece of the cake and we don't care what happens as long as we get it'. That is not the the position; it does not happen. The trade union movement in recent years-I refer again to Australia Reconstructed-has set out in some detail a whole number of approaches to improve the efficiency of industry in this country and the benefits that will flow to it and to the whole community as a result. One thing that trade unions are not going to do, and I suggest neither should they be expected to do, is to change different work methods and give guarantees of no disputations over a period, regardless of what may occur as a result of bad management practices or maybe something that is done off the cuff by an employer to create a situation that should never occur. The fact is that trade unions can contribute heavily to improving efficiency in changing the whole approach of the work place and then find, because management is backward and comprised of dunces, that everything they have done has been in vain. The trade union movement is saying: `We will do our bit. We co-operate with the Labor Government, which is an enlightened bunch of people who understand the contribution we have to make and want us to make it, but who in turn will make agreements with us and see that those contributions are translated into benefits for the trade union movement membership and for the community in general. We will not give ourselves up on the altar of expediency and maximisation of profit. We want job security and a share in the wealth created'. Many people in this chamber and outside in the community, including the employers, realise that and can grasp hold of it and make use of it. If they do not, it will be against the interests of the community, and I think the community should understand that. People should be judged on whether they understand that and whether they are sincere enough to care about the future of this country or not. I leave that judgment to the people of this community who will read my speech in great numbers and be most interested in the detail that is included. Senator RYAN(Australian Capital Territory-Special Minister of State)(7.46) —I thank Senator Burns for his very informed and very passionate defence of trade unionism and the constructive role trade unions are playing in their relationships with government in attending to economic problems. I am sure, as he said, many people in the community will read his speech with great interest and benefit from it. Question resolved in the affirmative. Senate adjourned at 7.46 p.m. The following papers were tabled: Export Inspection Charges Collection Act-Regulations-Statutory Rules 1987 No. 253. Export Inspection (Establishment Registration Charge) Act-Regulations-Statutory Rules 1987 No. 250. Export Inspection (Quantity Charge) Act-Regulations-Statutory Rules 1987 No. 251. Export Inspection (Service Charge) Act-Regulations-Statutory Rules 1987 No. 252. Live-stock Slaughter (Export Inspection Charge) Act-Regulations-Statutory Rules 1987 No. 249. States Grants (Tertiary Education Assistance) Act 1984-Direction-No. 29, dated 18 October 1987.