Friday, 20 November 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 9 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 citizens of Australia respectfully showeth that: We consider the Federal Government's decision to have Telecom charge for the cost of ``Directory Assistance'' enquiries will greatly disadvantage, the sick elderly and the handicapped. Specifically, it will impose an unjustified financial burden on those with sight impediments and reading difficulties, such as the elderly. It will also disadvantage physically handicapped people and persons confined due to illness. Your petitioners most humbly pray that the Senate in Parliament assembled should urge the Government to: Reverse its decision to have Telecom charge for ``Directory Assistance'' enquiries. And your petitioners as in duty bound will ever pray. by Senator Reid (from 27 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth objection to the Metric system and request the Government to restore the Imperial system. And your petitioners as in duty bound will ever pray. by Senator Bjelke-Petersen (from 21 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows that: 1. They are concerned that in the Tuggeranong Valley area of the A.C.T., no non-government schools have Year 11 and 12 places. 2. They want the new Catholic secondary school to be built at Isabella Plains to go to Year 12. The petitioners request that the Senate in Parliament assembled ensure that adequate resources are provided by the Government to allow Year 11 and 12 places to be provided at the Catholic secondary school at Isabella Plains in accordance with the Government's commitment to a dual system of education and greater school retention to Year 12. And your petitioners as in duty bound will ever pray. by Senator Reid (from 105 citizens). To the Honourable the President and Senators of the Senate assembled in Parliament: This petition of certain residents of the Australian Capital Territory shows the attention of the House: to the erosion of City Hill for car park construction. Your petitioners therefore request that further destruction of parkland and recreational areas within the city cease. by Senator Jones (from eight citizens). To the Honourable the President and members of the Senate in Parliament assembled The petition of the undersigned respectfully brings to your attention: that there are individuals who have a conscientious objection to war because of their religious or general moral principles and that the Parliament of this country has already recognised the right of such individuals not to have to participate in military service in time of war and that all Australian taxpayers are required to contribute to military expenditure, regardless of their beliefs, through that part of their tax that is used for the Defence budget and that while we acknowledge the right of the Government to levy taxes and to decide on the expenditure of moneys so collected we cannot accept that those with a conscientious objection to war should be forced to contribute to military expenditure Your petitioners therefore pray that the Federal Government will acknowledge the right of those who have a conscientious objection to war to withhold their taxes from military allocations and enable the military related proportion of their taxes to be used for peaceful purposes only and, as we note that taxes are collected or disbursed for specific purposes (such as for Medicare), that the Commissioner of Taxation be directed that the military-related proportion of taxes collected from conscientious objectors to war be set aside in a separate fund, the Peace Tax Fund, to be used only for peaceful purposes to be determined by the Government. by Senator Sanders (from 533 citizens). Petitions received. Senator VALLENTINE(Western Australia) —I give notice that, on the next day of sitting, I shall move: (a) That the Senate notes with concern the decision of the Queensland Government to reopen the 12 underground cells in Brisbane Jail known as the `Black Hole', (b) notes, too, the statement by the Queensland Minister for Corrective and Administrative Services (Mr Neal) that the cells were being reopened partly because of concerns about black protests at World Expo '88, (c) expresses its outrage that the statement was made the day the Royal Commission into Aboriginal Deaths in Custody was launched, and the day that the Human Rights Commission Chairman, Justice Einfeld, had been told that he would not be allowed to visit the cells, and (d) calls on the Federal Government to take up the call made by the Queensland Council for Civil Liberties for it to intervene on the grounds that the cells contravene the International Covenant on Civil and Political Rights and that Expo '88 is intended to be an Australian exposition, not merely a Queensland exposition. Consideration resumed from 19 November. GROUP A Department of Industry, Technology and Commerce Proposed expenditure, $1,104,618,000 Senator LEWIS(Victoria)(9.04) —In discussing Appropriation Bill (No. 1) 1987-88 I wish to raise with the Minister for Industry, Technology and Commerce (Senator Button) the problems of the steel industry under the steel industry plan. The Committee will appreciate that with the sittings commencing at 9 o'clock on a Friday morning there are some difficulties. I understand that the Minister is unfortunately tied up at a meeting-I have no doubt that it is an important meeting, and I am not being critical of him either-- Senator Chaney —Why not? Senator Gareth Evans —He will be here in a minute. Senator Chaney —He set the time. Senator LEWIS —I understand he will be here in about five or 10 minutes. Senator Evans has set our sitting times. He gave notice of a motion, which has now been carried, that means that the Senate will be required to sit through until 10.30 p.m. on 18 December-- Senator Macklin —It has not been carried. Senator LEWIS —I am sorry, he put it on notice but it has not been carried. This chamber is trying to deal with the Government's legislation. I might say that the Government's legislation has been very slow in coming forward. It was only this week that we received a number of Bills to enable us to continue debate. As Senator Button is not present to answer some of the questions which we wish to raise in committee as to the steel industry plan, maybe Senator Evans can explain to the Committee what measures he sees are so important that the Government intends to keep this chamber sitting until 10.30 p.m. on 18 December. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(9.06) —I have enough problems on my plate at the moment without waxing indignant on that subject as well. As I indicated to the honourable senator, Senator Button will be delayed only a few minutes. I believe that he is on his way now. I am sure that Senator Lewis's capacity for stringing out an argument and getting his views on various matters on to the record is such that he ought to have no difficulty at all in accommodating what he wants to say in the next few minutes, before Senator Button arrives. He could go on to another topic. Senator LEWIS(Victoria)(9.07) —For those who might be listening to this broadcast, other than those sitting in the chamber, the situation is that Senator Button has at last come into the chamber and Senator Evans has acknowledged that he is having some difficulty with the steel plan. I welcome the Minister and wish him good morning. I acknowledge that he has been at a meeting-I have no doubt that it was an important meeting-and could not finish it in time to be in the chamber at 9 o'clock. I raise with the Minister the very important problems of the steel industry and, in particular, the problems at Port Kembla which were raised in Question Time yesterday. In effect, the Minister said that the Government is not prepared to do anything to resolve this problem. I remind the Minister of what he said in his Press release announcing the plan in August 1983. He said it: had as its objective the creation of a long term viable steel industry . . . He pointed out: To regain its internationally competitive position, the industry would have to reduce its relative production costs significantly . . . All interested parties, including the industry, the unions and the relevant State governments- I note `State governments'- have a role to play in achieving these reductions. I ask the Minister: Did not that steel plan have within it a dispute settling procedure? Is not the present situation that the unions at Port Kembla have simply refused to follow the dispute settling procedure? What, if anything, does the Government intend to do to ensure that the unions fulfil the task imposed upon them in carrying out the dispute settling procedures over the current problems at Port Kembla? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.09) —The question has a certain hypothetical quality about it because, thank goodness, there are no current problems at Port Kembla. Senator Lewis is very excited about what he perceives to be the collapse of the steel plan because of some industrial unrest at Port Kembla. I can understand that. He has had a hard row to hoe. There has to be something here that excites him. I should explain to him that the jurisdiction which deals with the steel industry at Port Kembla is the New South Wales Industrial Commission. There is no Federal jurisdiction in respect of the steel industry workers at Port Kembla. That is the legal position. The Commonwealth Government has a role through the Steel Industry Authority, which acts in an advisory and monitoring capacity. As Senator Lewis well knows-I know he wants to make his point again on air-on 28 October the Steel Industry Authority had a meeting with the unions and the companies involved at Port Kembla. As a result of that meeting, I think some work is going on to try to improve the dispute settling procedure. I am sure that everybody who is concerned about the future of the steel industry will want that to work. Senator Lewis gets really psyched up by the industrial disputation in the first six months of this year, accompanied as it was by a breakdown in equipment. Senator Michael Baume —What about last year? There was six months of trouble last year. Senator BUTTON —I understand your point, Senator Baume. You made it about eight times last night. Senator Michael Baume —Why do you ignore it today? It happens to be fact. Senator BUTTON —I am dealing with Senator Lewis, who understands precisely what I am talking about-that is, the thing that psyched him up. Senator Baume needs more to turn him on, so he goes back to the trouble last year. Senator Lewis was particularly psyched up about the Steel Industry Authority report. He has been quoting from it until he is black and blue in the face. That is what he is talking about. We should be of one mind on this issue. We hope that the Steel Industry Authority's recommendations about dispute settling procedures work. Senator Stone —It is clearly a steel industry non-authority. It has no authority. It doesn't take any notice of you. Senator BUTTON —Stop making silly remarks. Settle down, Senator; it is early in the morning. The Steel Industry Authority made those recommendations. I think they will be carried out and I think that is a very good thing. Senator CHANEY(Western Australia-Leader of the Opposition)(9.12) —I intervene in this debate because, whilst it is early in the morning and we had to wait a while for the Minister for Industry, Technology and Commerce (Senator Button), the Minister seems to be quite amusing about a matter which I think is an ongoing problem and one for which he ought to be prepared to show a little more concern and responsibility. After all, on 3 November Senator Walsh said to the Senate: I agree that it is deplorable that, after the company has met its obligations in terms of investment-indeed, in terms of quantity it has more than met its obligations under the plan-and the Government has met the obligations it accepted in 1983- I interpolate there that we have asked the Minister, who is at the table now, what amount of taxpayers' money had been put into the industry pursuant to the Government's obligations. He has undertaken to let us know. I will go back to what Senator Walsh had to say: the work force is actually letting the agreement down. I think that is very bad. If the people concerned are interested in keeping their jobs, they had better lift their game in comparison with what it was in the June quarter. That is what Senator Walsh had to say in the Senate a couple of weeks ago. The Opposition has raised this matter on a number of occasions. We have had no serious response from the Minister in an area where one of Australia's most significant industries is being put at risk by the actions of a portion of the trade union movement which was a party to a plan which this Government brought down in 1983. Senator Button is very ready to take the credit for these plans. I think he ought to be a little more ready to accept some responsibility for the obvious creaks that are developing within the steel plan at the moment. In December 1983 Senator Button told us that the plan was essential to reverse the decline in the industry's fortune; that it was a new approach to industry policy in Australia; that it had been developed as a co-operative, involving undertakings from all parties-the steel unions and the Commonwealth Government as well as the steel producers-and that the success of the plan would depend upon various undertakings being adhered to. Among the undertakings which were put forward and published by Senator Button-this was not something that was dreamed up by the Opposition-were undertakings by the trade unions to adhere to dispute settling procedures. One of the fundamental points which is accepted in the steel plan is that the co-operation of the work force is an essential element of success and is essential to achieving the high productivity which has to ensure adequate returns to an industry which is very capital intensive. As I understand it, at the moment the capital returns are somewhere around 8 per cent, which is not sufficient to justify the further investment which is required in this very important Australian industry-an industry in which Australia ought to be ahead of the world because of our extraordinarily valuable resources, our very high quality iron ore, our high quality coal, our technical competence and our capacity to meet the competition of the world, something which is pretty precious to this country and something about which I understand the Minister to be deeply concerned. We find in the whole of the publications an acceptance that this is absolutely fundamental. In successive annual reports produced by the Steel Industry Authority we find clear warnings to the Government that the plan is not succeeding. After an initial improvement we find that there is a slackening off of co-operation. We find in the report we were debating last year the following clear warning: If this pattern of industrial disputation continues, it does not augur well for the success of the industry over the remainder of the plan and, consequently, for the longer-term security of employment. We get some backing and filling because the Minister shakes his fist at Broken Hill Proprietary Co. Ltd yesterday and says that it should not be saying anything publicly about this matter and should not be conducting its industrial relations in a public way. We find reported in the Press today that Mr Jerry Ellis, the BHP Slab and Plate Products General Manager, is reported as saying: . . . Federated Ironworkers Association workers in the steel division at the Port Kembla works missed a record average of 13 days a year through sick leave. One can imagine that a manager would be concerned about that. One can imagine that a manager would, in accordance with the advice given publicly by Senator Button yesterday and widely reported, take up that matter with the work force. Having been admonished by the Minister yesterday, BHP has put the record straight today. Mr Ellis is reported as saying: We raised the issue with the FIA and they found that unacceptable and went on strike. Fine. The company did precisely what the Minister trumpeted yesterday it should be doing. What happened? The raising of the issue was apparently unacceptable to the union and it went on strike. Mr Ellis is then reported as saying: They ignored dispute settling procedures and if they continue to ignore established agreements we may well abandon the five-year steel plan and possibly cease any new investment in the Port Kembla steelworks. The position really is that we have a significant industry problem here, and I would like to suggest in this debate that, in a sense, the problem we are seeing in the steel industry is symptomatic of a much broader problem that we have with respect to the development of competitive industry in this country, and therefore it ought to be a matter of far greater concern than it would appear to be to the Minister at the moment. I think that the Minister would agree that if we are to have internationally competitive industries, it is not just a matter of getting the management and the work force to agree to a single quantum leap in productivity. The reality is that if Australian industry is going to compete, then we have to accept a continual chase of increased productivity on a permanent basis. In other words, one is not looking to move from a low level of productivity to some new plateau of productivity; one is looking to getting on to an escalator of continuing increases in productivity because that is what is being pursued in South America, in East Asia, in South Asia, in North America and in Europe. I am sure that the Minister is familiar with the fact that in regard to our manufacturing competitors there is not some static position but a continually improving position with continually improving productivity in those countries which are succeeding. It seems to me that the significance of the problems at Port Kembla is that they reflect a lack of understanding in a significant sector of the work force that this steel plan was not about some one-off improvement but about a new way of doing business. The Government had the support of the Opposition in 1983 or 1984-whenever it was the Government brought down the steel plan-for the concept that, yes, there should be some continued government involvement and support and, yes, there should be a commitment from both management and the unions to a new way of doing business. In successive reports from the Steel Industry Authority, whether they be the quarterly reports or the annual reports, the Government has been getting regular warnings that there has been a breakdown in the commitment of the work force to this absolutely vital plan, particularly in Port Kembla. After all, the Government was very ready to take the credit for the substantial improvement in industrial relations. As recently as the last few weeks we have had Government Ministers in here pointing with pride to the improvements in the level of industrial disputation and attributing that to the Government's way of doing business. In this industry they have brought before us successive reports, one of which, as I recall, showed a 600 per cent increase in industrial disputations. But we have a situation where the industrial disputation record is really very significantly bad. I will not go over all the quotes from the Steel Industrial Authority annual report of 1986-87, which is the most recent report we have before us, but it is made quite clear in that report that there has been a very great increase in the number of man hours lost at Port Kembla. It is 84 per cent higher than in the six months to November 1981, which was the previous worst period for industrial disputes. Senator Button has a charming way of washing his hands of responsibility in this matter, but he has an equally charming way of accepting the credit for things when they are going well. I say to the Minister that, quite clearly, an essential part of the plan for which he is responsible has broken down and has been crumbling away now for a period of years. It simply is not good enough for him to come in here and to blame other factors, whether it is the management or the technical factors, because the report itself deals with that. On page 3 the report states: While recognising the significance of capital investment to the long-term viability of the domestic steel industry, it is the management of the industry's labour resources that is of greatest immediate concern to the Authority. It would appear from Senator Button's statement yesterday that he believes that the management is not living up to its part. The Opposition would agree that the management has a significant role to play in ensuring the effective use of the work force. Perhaps Senator Button will clarify in this debate whether he is saying that the management of Broken Hill Proprietary Co. Ltd is fundamentally why we have got this enormous rise in industrial disputation at Port Kembla. Is he saying that this is fundamentally a management problem and not a trade union problem? It is my understanding that that is not the case. It is my understanding that what we have is a cell, a leadership group, within the ironworkers in Port Kembla who are utterly destructive in the attitudes they bring to bear on this essential industry. They are sufficiently capable leaders to be able to carry the bulk of the work force with them in this rise in industrial disputation. I understand there is a very significant problem in the work force itself. If that is the case, does the Government say, `Well, let the market forces sort it out. If the steel industry is not competitive and we can get only an 8 per cent or a 2 per cent return, or whatever, market forces will dictate that there will be no fresh investment and eventually our steel industry will fall behind and it will cease to operate'? I must say that the Government seems very confused on this matter. Does the Government say that the steel industry plan represents something which has a government commitment and which can be made to work and in which the Government has a role and an influence which are effective? I think we should try to get some clarity into this debate in the course of dealing with these estimates. The present situation cannot be described as even vaguely satisfactory. It is quite clear that there is a major industrial relations problem. We have had Minister after Minister and back- bencher after backbencher saying in this place that this Government knows how to handle industrial relations, and a continual reference to the fact that things are so good because of this Government's excellent management of these matters. Here is a vital area of fundamental importance to Australia where, because of a failure in industrial relations, we have had to import more at a time when our balance of payments are at a critically difficult level, where we have seen a loss of some of that vital import replacement, where we have seen a loss of exports and where we have seen, after a growth in productivity, a decline in productivity. The Minister tells us that we have had a bit of a rise again, but the sad fact is that we also have a resurgence of industrial relations problems. We know that, if the steel industry is to continue to improve, to become more competitive and to be a jewel in Australia's economic crown, there will have to be further structural adjustments in that industry. Australia is no different from the rest of the world. There will be a further reduction in the blue collar work force and a big increase in productivity per person employed because that is the only way that we can succeed. It seems to me that the Minister is washing his hands of responsibility in this matter. I believe that that is simply not good enough. I think we should get much clearer statements from him about the Government's analysis of who is to blame in the present circumstances and what, if anything, can be done to reverse the significant problems which are occurring in this vital Australian industry. Senator MICHAEL BAUME(New South Wales)(9.26) —Several aspects of this matter concern me-but what has particularly concerned me is the Minister's approach to it. We heard him again this morning denigrating suggestions by the Opposition that this was not something that suddenly emerged this year; that it was something that we were warned about in the report of the Steel Industry Authority last year. Last night I asked him why a particularly significant table which showed the man hours lost through industrial disputes per employee and per centre had been omitted from this year's report of the Steel Industry Authority. Senator Button was trying to pretend to this chamber and to the nation that everything was right with the steel industry last year and that the problems emerged only this year. Of course, this is utter bunkum and the Minister knows it. The table produced in the 1985-86 annual report showed that at Port Kembla industrial disputes meant a loss of man hours per employee of 10.9, which was a 211 per cent increase over the previous year. I know that a 211 per cent increase does not bother Senator Button and that, according to his statement this morning, it does not exist. That rate was for the six months to June 1986. In the six months to June this year that rate has been multiplied almost by three. Let us recognise that at Port Kembla in the period to June 1986 that 10.9 man hours lost through industrial disputes per employee was about four times the average for metal products, machinery and equipment manufacturers in Australia. We do not have the table this year-it has magically disappeared. I wonder what sort of pressure was brought to bear on the Authority by the unions to ensure that that sort of table did not appear. I look forward to hearing the Minister's response to my request last night for an explanation from the Steel Industry Authority as to why that table does not appear. But the fact is that, if the average was four times as bad at Port Kembla as it was for the metal products, machinery and equipment manufacturers in a year when Senator Button said that industrial relations were perfect and the steel plan was going well, what would it be like now? As the annual report for that year states, it is clearly evident that the number of man hours lost through industrial disputes per employee has increased significantly over the life of the steel industry plan. That seems to be absolutely intolerable. But it is equally intolerable for this Minister to pretend that, until this year, everything was wonderful. We see what has happened this year. A report in the Sydney Morning Herald of 30 May 1987 refers to the remarks of the General Manager of the Broken Hill Proprietary Co. Ltd Steel Slab and Plate Products Division, Mr Jerry Ellis. It states: Mr Ellis said the company had lost between $20 and $30 million because of the campaign and that it expected more losses because several clients were planning to sue it for failure to meet contracts. He went on: It will take at least a year or two to re-establish the confidence of our customers. That was the situation then. Have things improved now? On the surface there has been an improvement in industrial relations. But the reality is that the union movement in Port Kembla is now threatening BHP with industrial unrest over BHP's decision to reduce its work force by a further 2,600 people to make that industry competitive and capable of surviving in the real world. This threat of further industrial action is not fanciful; it is real. The intriguing thing is that BHP's decision to reduce its work force to 10,000 people would and does fit within the guidelines of the steel industry plan. There is no scope within that plan for union objections and claims that the employer has done something improper or something which was not envisaged in the steel industry plan. That steel industry plan, of course, aims at a level of productivity and BHP cannot achieve that level of productivity per employee with its current work force at a level of 12,600. The big question is whether this industry is to survive. Surely the jobs of the 10,000 people who would remain in that industry are far more important - they certainly are to the whole Illawarra community and Australia - than whether 2,600 people will lose their jobs, not necessarily by sacking. I understand that the plan is simply the normal one that BHP has used of early retirements, not replacing people, in general, who leave and encouraging people to leave before their retirement age. The reality is that this industry is at risk and there is a risk of continuing industrial unrest over this major concern. Senator Button just has to read the local newspapers in the Illawarra region to find whether there is any kind of union threat about industrial action if BHP continues with its plan to become economic, to enable it to survive. Of course that threat is there. But apart from that there have been continuing, nonsensical strikes. I read from today's Illawarra Mercury which, by the way, has an editorial called `Avoid this path to ruin', which I may refer to later in this debate. The Illawarra Mercury today reveals what is behind BHP's latest and immediate concern and why it has had to threaten that it may be forced to walk away from Port Kembla's steelworks if this pattern of industrial unrest continues. The paper reports: BHP lost patience with its Port Kembla steel-works labour force this week because a sudden stoppage by 40 ironworkers at the Number 5 blast furnace crippled steelmaking for 48 hours and cost the company $2 million. That is total ratbaggery at a time of crisis in the steel industry. The newspaper continues: It was the blast furnace stoppage and less disruptive ones in the past two weeks at the coke ovens and shipping department which prompted BHP Steel's Slab and Plate Products general manager Jerry Ellis yesterday to warn that unless industrial relations improved investment at the plant would cease and it would slowly wither. Mr Ellis cited the blast furnace stoppage as an indication some key ironworkers intended ignoring the dispute settling procedure agreed on between the company and unions four times-in the 38-hour week agreement, the Steel Industry Plan, an improved superannuation agreement and more recently after withdrawal of deregistration proceedings against the FIA and the Amalgamated Metal Workers Union. On four occasions the union pledged itself to adopt and accept appropriate settlement arrangements. The dispute settling procedures were agreed upon. Yet multimillion dollar devastations have been imposed upon the industry by unions which have refused to meet the arrangements. At the Press conference yesterday Mr Ellis said: It is the FIA's duty to its members and the community to enable the dispute settling procedure to be followed. If it is not, then it will be an indication the FIA has abandoned the steel industry plan and we may well seek to follow suit. This would involve halting investment in the plant. As a result the plant would become uncompetitive, lose markets and gradually cease operations. Mr Ellis explained in Wollongong yesterday that BHP Steel Chief Executive, John Prescott, had this level of strikes in mind when he spoke in Canberra this week of not being averse to recommending to the BHP Board that it walk away from Port Kembla. Today in Wollongong-Port Kembla steel unions will be meeting to discuss both Mr Prescott's and Mr Ellis's comments. I hope that at those meetings they recognise the threat that their actions have caused to the continued existence of this industry. I find it extraordinary, as does Senator Lewis, that in this environment, the unions having given commitments on four occasions and industrial unrest having occurred not simply since the beginning of this year but also last year-and there is a threat of more to come-this Minister walks away, saying, firstly, that he has no role and, secondly, that the company is somehow to be criticised for daring to make this matter public. Senator Button's contribution to this situation as a senior Minister of this Government has been appalling. He has not sought to bring his, what should be considerable, authority to this matter. The Government has put $100m of taxpayers' funds by way of bounty into the steel industry plan, the company has put $800m of shareholders' funds into the plan and the unions have put in their contribution-non-stop industrial unrest. Senator LEWIS(Victoria)(9.38) —Senator Button, in his flippant response to my opening remarks in this debate, accused me of getting excited about the industrial relations problems made clear by the annual report of the Steel Industry Authority to 30 June 1987. If Senator Button is not excited, annoyed and disturbed by the nature of the report he ought to give this game away. I have raised the matter on previous occasions, during debate on a matter of public importance and in a number of questions. I have indicated to the Government my concern about what is happening to the steel industry. For the six months ending 30 June 1987 productivity was less than it was when the steel plan was first introduced. It was down to 239 tonnes per person per annum. In comparison with our competitors overseas it is a ridiculous figure. We understand that in the United States at the moment a figure of 800 tonnes per person per annum is being achieved. If Senator Button is not disturbed by those figures then, frankly, I do not know what will disturb him. But that was not the point that I was trying to get at. That has been adequately dealt with by my colleagues Senator Chaney and Senator Baume and, I believe, adequately dealt with by me on previous occasions. My concern is what is happening now with the steel industry at Port Kembla. My criticism is of the Government. Let me go right back to the very beginning. I say to the Minister for Industry, Technology and Commerce (Senator Button) that when he organised the steel plan he organised it in a way whereby it was bound to fail because the parties to the agreement were Broken Hill Proprietary Co. Ltd (BHP), the Government and the Australian Council of Trade Unions (ACTU). The ACTU was acting on behalf of the unions. Let me quote from something which Mr Duffy said on 30 November 1983 in the other place when he was the Acting Minister Assisting the Minister for Industry, Technology and Commerce. He said: The unions' undertakings are in the areas of wages, productivity, improvements and dispute settlements. They are contained in an agreement between BHP and the Australian Council of Trade Unions acting on behalf of the steel unions. He went on to say: Agreement has also been reached to adhere strictly to the established grievance settlement procedures and for consultation to be held on changing work modes. That is a typical example of one of the things we have been criticising this Government for: big government, big business and big unions. This Government believes that that is the way in which to solve the nation's problems. Here is a perfect example of why it has not been the way in which to solve the nation's problems, because the truth of the matter is that the ACTU cannot deliver on behalf of the unions. The Government has delivered: it is spending the taxpayers' funds. BHP has delivered: it has invested, I think, $1.4 billion in the industry. But the ACTU cannot deliver. I would have thought that a member of the Australian Labor Party would understand that within the union movement power rises from the shop floor. It cannot be imposed from above. For the Government to think that it can enter into an arrangement with Mr Crean and Mr Kelty which will bind the union at the level of the shop floor at Port Kembla is an absolute nonsense. The Government should have realised that, if it was going to persuade BHP to invest this money in the steel industry and if it was going to spend the taxpayers' funds on this investment, then it needed to lock in the unions at the shop floor level, not up with Mr Crean and Mr Kelty, who can get into Mr Hawke's office and say all sorts of things but cannot deliver. That is my first and most important criticism of the Government on this steel plan. As I said before, my concern is the current crisis. At the moment, BHP has indicated that it must reduce the size of its work force very substantially, back to about 10,000 employees. I might say that so long as it is done on a voluntary and retirement basis then it is in accordance with the plan which the Minister arranged. Voluntary reductions are acceptable. At the shop floor level, the Port Kembla branch of the Federated Ironworkers Association of Australia is simply not prepared to accept those reductions. That is the crisis. That is what has to be resolved. What the Minister is saying is that he is not prepared to do anything about it. That is the point I am making. I understand the concern which we all must have about the productivity for the first six months of this year. But that is not the point I am making. I am talking about the current crisis. Let me say something additional about that current crisis. There is a major conflict within this Government about that crisis. Treasurer Keating went down to Port Kembla recently and big-noted himself down there with Mr Holmes a Court and others. He got himself national publicity and national headlines saying all sorts of things. Among the things he said was that he thoroughly agreed that BHP must prune its work force. I think that is probably a reasonable thing for the Treasurer to have said when looking at an industry facing the possibility of falling in a great heap-leaving us no industry. But what happens in the Government is that another Minister is totally opposed to that proposal. The Minister attempted to get publicity for himself and to big-note himself on the basis of being opposed to this proposal. I refer to the Minister for Administrative Services, Mr West. Apparently Minister West has written to Senator Button, saying in effect that BHP should be required to maintain its work force at 12,250. Not only did Minister West want that but he wanted BHP to invest another $165m in the industry. I want to know what the Government's attitude is. Does it support Mr Keating, or does it support Mr West? I ask the Minister to tell us the truth of the matter. What does the Government intend with regard to this crisis? Does it support a reduction of the work force? Will it try to hold BHP to maintaining a work force of 12,250, as Mr West wants? Will it require, or try to persuade, BHP to invest another $165m at Port Kembla-after BHP has already invested $1.4 billion there? They are the crucial issues which I am putting to the Minister. I cannot put them more forcefully than that. As I said, I acknowledge the problems up to 30 June of this year. But that is not the point that I am raising. What I want to know is: What is the Government going to do about the current conflict? Will we see another half-yearly report at the end of December of this year telling us that productivity has fallen even more? What the Opposition is interested in is productivity improvements in this nation. This nation is in crisis. It is facing a harsh economic climate in which our overseas competitors, our falling dollar value and our overseas debts will make us face up to reality. We want to know what this Government will do about this industry, which is crucial to this nation. Or will it allow this industry to collapse? Senator STONE(Queensland-Leader of the National Party of Australia)(9.49) —I want to make a few remarks on this subject also. In doing so I start not in Port Kembla, where most of the attention has been directed because of events there, particularly in recent days, but actually in Newcastle, which, of course, is where our steel industry, particularly until a few years ago, was thought to have its chief home. That, of course, has changed with change in technology and other things, to some of which I hope to refer. Let us have a look at Newcastle and its relationship with the steel industry. We have seen in Newcastle in the last few years a major decline in the relevance and role of the steel industry. It is, of course, still a major industry in Newcastle, but it is nothing like the industry that it was some years ago. The reasons for that are very clear and very straightforward. They have to do with the baleful influence upon that industry of the exercise of trade union power. That is the subject to which we ought to return time and again in this discussion. We should ask the Minister for Industry, Technology and Commerce (Senator Button) what his Government proposes to do about that problem which underlies this whole debate. The ruthless, careless, shortsighted and, in many cases, totally unfeeling exercise of trade union power in the steel industry in Newcastle began the rot in the steel industry in that very fine city some years ago. While we are on the subject of Newcastle and the exercise of trade union power, we might also look at the fate of the Newcastle State Dockyard, which at one time was one of the few dockyards in this country capable of handling large vessels, a dockyard which basically no longer exists. This is not only my opinion; it is also the opinion of Mr Norman Oakes, a former Under-Secretary or Comptroller of Accounts in New South Wales, who was appointed by the Government of New South Wales to report on the Newcastle State Dockyard. On the basis of his report, the present New South Wales Government finally faced the realities brought about by the exercise of trade union power in that area and closed the dockyard. We also saw some years ago the total disruption of the export coal industry at the port of Newcastle by the continuing disruption of the Newcastle coal loader operations. Week after week, month after month, the operations of companies in that city-trying to go about their proper business, trying to provide employment, trying to make a profit for their shareholders-were totally disrupted by the actions of trade union officials who were operating in such a way as to put their own members out of jobs. The coal loader, finally, by agreement with the New South Wales Government, had to be taken over by private enterprise before it could hope to begin to operate half sensibly-although it has certainly not been free of industrial disruption even since that time, as anybody who can remember the Wran navy stacked up outside Newcastle will vividly recall. Let us look at the result for Newcastle, which was once one of the most flourishing cities in Australia. I will not say that it has become a depressed area; that would not be true. Certainly, what one might call the spirit of Newcastle has been very much depressed by these events. It is no longer the optimistic city that it once was. A very similar process is going on in Port Kembla. There is a small body of trade union saboteurs-and I use that word advisedly-who are, indeed, saboteurs of their own trade union, which, in this case, is the Federated Ironworkers Association of Australia, a small body of extreme left wing ideologues who do not care for the future of their industry, their city and their own trade union, but who care only for the exercise of their own power for their own ideological ends. This is going on now in Port Kembla just as, in the past, similar things went on in Newcastle. The situation is similar to that which occurred five or six years ago in the Yallourn Valley in Victoria, when the trade unions were in charge. The then Victorian Government attempted to construct the Loy Yang power station, but by the time the project had been completed, its cost had risen to about 2 1/2 times that of the original estimate. Of course, the citizens of Victoria are paying, and for decades to come will continue to pay, the increased prices of power which that greatly increased cost of construction has loaded upon power production costs in Victoria. Let us turn to the steel plan. It is a plan which in the past Senator Button has been very pleased to take credit for. In the first couple of years of this plan, when productivity in the steel industry was rising-not dramatically, but it was rising, and certainly from very low levels-we found Senator Button very pleased to issue Press releases, to be photographed in the company of members of the board of Broken Hill Proprietary Co. Ltd (BHP), and generally to put himself forward as having been partly responsible for bringing about this rejuvenation or renaissance of the Australian steel industry. The truth of the matter is that that is all behind us. As other speakers have pointed out, the experience of the past 18 months-not the past 18 days-has been to cast a total pall over what were thought initally to be optimistic developments in this industry. In recent days, particularly, we do not find Senator Button coming forward to take the blame. It is very much a one-handed operation on the Minister's part. He has his hand out to take the credit but he has his hand behind his back when the blame is being handed out. The truth is that the steel plan has not merely become a disaster. The truth is that it always has been a disaster. Why do I say that? I say it for two reasons at least. Firstly, even if all had gone according to plan, even if there had been none of this disruption of the so-called plan by these militant trade union bosses in Port Kembla and elsewhere, the outcome would still not have been good enough. As Senator Lewis and other speakers have pointed out, even the initial projections of the plan for productivity increases to be attained would still have left BHP's productivity performance well behind that of its international competitors-even at the time the plan was formed, without any allowance being made for the continuing productivity increases going on in the rest of the world while the plan was in operation. The genesis of the plan seemed to be predicated on the belief that, while we were increasing our productivity, everyone else would be standing still. As Senator Button knows perfectly well-I know he does know this-of course, productivity has not been standing still in Korea or Taiwan-or even in Japan, which some people point to these days as having almost a mature steel industry, unlike, say, the steel industries in the newly emerging industrialising countries. A second reason why the steel industry plan has been a disaster is that it has been part of the whole process adopted by this Government from the time it first took office of not telling Australians the truth, of misleading Australians about the increasingly serious state of our economy. It has been part of the whole process of conning the Australian people, in this instance into believing that under this Government we could rely upon the trade union movement to act sensibly, to act co-operatively and to act in a manner which would assist the management of the economy. That has all been part of the myth of the accord. I have said many times that the greatest error that this Government has made throughout its whole term in office has been in its failure to tell the Australian people the truth about the serious situation of this country. The Government has told a good many untruths about the terrible situation it inherited and all that stuff, which we have grown sick of hearing in this place. But it has failed to bring home to the Australian people the seriousness of the situation with which they are faced. As a consequence, statements such as that made by the Treasurer (Mr Keating) in a rare moment of truthfulness in May last year to the effect that we are confronting a banana republic situation come as a great shock to the Australian people. The reason that statement came as a great shock was that they had in no way been prepared for the truth. Recently BHP began to talk seriously of abandoning the steel industry, and that has certainly come as a great shock to the Australian people; I am quite sure of that. One reason it has come as a great shock to the Australian people is that this Government, instead of seeking to bring home to the Australian people the seriousness of the situation confronting us in that industry, as in others, has thrown a great smokescreen over the industry by its continual rabbiting on about the great virtues of the steel industry plan. The truth is that the steel industry plan is, and always has been, so much industry policy junk. A week or two ago the Industries Assistance Commission, which previously had been muzzled by being under the strong influence of Senator Button and his departmental head, Dr David Charles, but which has now been let off the leash by being moved into the Treasurer's portfolio, produced an excellent annual report, the first for years, in which, among other things, it took the stick in a big way to all of this nonsense about industry policy which this Government has been going on with for so long now. The Commission has rightly condemned the nonsense that passes for industry policy in this country. It has pointed out that there is no such thing as a free lunch in this or any other area of economic policy and that, to the extent that this Government continues to hand out favours to particular bodies and industries which are so ill advised as to allow themselves to come under its sway, somebody else is paying. In most cases that somebody else is the Australian public. The Industries Assistance Commission has pointed out that junk similar to the steel industry plan is to be found littering the Minister's portfolio in areas such as the motor vehicle industry plan junk, the footwear, clothing and textiles plan junk, the heavy engineering manufacturing plan junk and, not least, what I have just been talking about, the steel industry plan junk. What does the Minister propose to do about the situation that he now has on his hands regarding BHP? The answer is that he proposes to blame BHP. I suggest that he will not get away with it, but I hope that in his reply to other speakers and me in this debate he will address himself to that issue rather than merely fall back into the kinds of flippancies with which he laced his remarks earlier this morning. Senator MICHAEL BAUME(New South Wales)(10.04) —In the last six months Port Kembla steelworks contributed 90 per cent of the man hours lost through industrial disputes within Broken Hill Proprietary Co. Ltd (BHP) but produced about only half the steel. Clearly something special is wrong at Port Kembla. While I noted what Senator Stone said about Newcastle, the Federated Ironworkers Association of Australia (FIA) in general, particularly its national leadership, is a responsible and sensible union which, I believe, acts within the framework of the arrangements it makes and is honourable in its dealings with government and employers. However, the Port Kembla branch is disruptive, is disloyal to its leadership and is a left wing element of what is normally a basically sensible union. That is why one must distinguish what has been going on in Port Kembla, where half the steel is made but where 90 per cent of industrial disputes and 90 per cent of days lost occur, from what has been going on with the rest of the union. I understand that Senators Button and Walsh and Mr Keating have indicated-two of them have said it in this place-that reducing the work force at Port Kembla to 10,000 and increasing productivity to 350 tonnes per year per man is within the guidelines, within the framework of the steel industry plan and that there is nothing objectionable about it. As the survival of the steel industry depends on the plan, surely it is a matter of immense moment. If that is the Government's view, I would like the Minister to give a response to an allegation by the left wing Wollongong Branch Secretary of the FIA, Mr Nando Lelli, who has claimed that BHP had given an undertaking that it would maintain a Port Kembla work force of 12,250 to May 1988 and beyond the life of the steel industry plan. I ask the Minister whether that is a fact. If it is a fact, did the Minister regard it as of no consequence when he said that it was within the steel industry plan that the number should be reduced to 10,000? If it is not a fact, will the Minister make a clear and unequivocal statement to the union that it should stop spreading around this kind of nonsense, if it is nonsense? That is what the dispute is now centring on in the Illawarra region, the dispute that the Minister likes to pretend ended a long time ago, saying that there are no problems, that everything has improved and that everything is wonderful. As I said earlier, this is the problem at Port Kembla. It is reported in the Illawarra Mercury today that Mr Lelli said that the company: complains now about us not meeting certain requirements but it cannot expect us to co-operate in a program to implement what it says must happen to the workforce. Here we have a clear threat from Mr Lelli. He said, `It cannot expect us to co-operate'. That presumably means that the company cannot expect union members to work, to abide by the agreements about dispute settling procedures. The Minister is faced with a clear challenge by the FIA Wollongong Branch Secretary, Mr Lelli, because there is a clear threat that the union will not co-operate. We saw that lack of co-operation last weekend at a cost to BHP in an industrial disputation of $2m to $3m. The report went on to say: Port Kembla FIA intended honouring its dispute settling agreement with BHP- that is a quaint expression; I think it is honoured more in the breach than in the observance- but- and there is always a big `but' in these situations- the company had created pressure on employees throughout the works by insisting on a new formula covering absenteeism, again without consulting the shop floor. That is the claim by Mr Lelli relating to recent stoppages. He said: This led to the stoppage at the blast furnace this week. What we want is a clear indication from the Government about whether it is on the side of industrial responsibility, of sticking by agreements, or whether it is prepared, as the Minister has done in the last couple of days, to somehow try to claim that the blame is with BHP. It is interesting to note what those whom one could call fairly independent commentators are saying on this issue in Wollongong. Last night, as an example, the Dean of Commerce at the University of Wollongong, John Steinke, said: . . . unless there is a change of attitude by the FIA leadership I doubt we will ever see another large investment in the steelworks. Just to give an indication of the way that the unions have behaved and the reasons why BHP has had to do what Senator Button has said is wrong-that is to deal with this in the media-I will show the problems that BHP has had in the past. It put an advertisement in the newspapers with a message to all employees over the workers compensation dispute back in May. I will not read all of the advertisement, but in part it said this: Yesterday . . . a group of mechanical maintenance employees at our Coal Washery went on strike over the workers' compensation issue. In doing so, they- defied an order of the Industrial Commission requiring an end to the campaign of strike action; and in the case of members of the Federated Ironworkers' Association (FIA), ignored a direction of the State Council of the FIA to end the strikes. Here we have a situation not only of dispute settling agreements being ignored, but of the defying of the Industrial Commission, that is the New South Wales body, and the union's executive. The advertisement continues: At the time they went on strike, plant was down for maintenance and the action was deliberately calculated to maximise the impact on our operations. So, when Senator Stone uses the word `sabotage' he is absolutely accurate. These are acts of sabotage aimed at damaging the industry on which this region depends, on which Australia's ba-lance of payments in large part depends, both for exports and import replacement, and on which all those ancillary industries in the Wollongong region, which the ironworkers themselves say involve about 30,000 employees, depend. Therefore, the economy of the whole region depends on this industry. The advertisement continues: In recent days, the Company has said that it would not accept these rolling sectional strikes and foreshadowed action against employees who participated. The Company did not take action at an earlier time as it was allowing the opportunity for the unions to consider their position. Following delegates' meetings last Friday, May 22, 1987, the Company was told that the campaign would continue. In these circumstances, the Company had no alternative but to take action. The Company had hoped that we would not reach this situation. However, the strikes have continued and the Company cannot tolerate the on-going disruption to our operations and the supply of steel to our customers. What is happening now is that that situation in May is clearly in the minds of both management and the employers, and should be in the minds of the Minister-I said minds because he is clearly schizophrenic on this matter. The reality is that we are facing a prospect of severe industrial turmoil over a measure that the company needs to carry out in order to survive, and that is the reduction of the work force to 10,000. The Illawarra Mercury today underlined the seriousness of the situation in its editorial. It said: Now we are careering down the road towards another confrontation which, if it occurs, will wreck the steel industry. I draw that to the attention of the Minister because he seems to think that everything is all right. He says that all this is in the past. It is not. We are facing this problem now-the rest of Australia is facing it, even if he is not. It is about time that he joined us in recognising the problem. The editorial went on: There seems to be a feeling around that BHP is bluffing, that it would never pull out of Port Kembla and the billions of dollars it has invested in its steel operations here. But the Slab and Plate Products general manager Jerry Ellis affirmed yesterday he was speaking for senior Steel Division management and the BHP Board in declaring investment at Port Kembla would cease unless industrial relations improved. If that happened, the plant would wither and die. This is the threat that we face. The Government must face up to this threat, which is underlined in a report this morning of what Mr Prescott, the Chief Executive of BHP's Steel International Group said. He is quoted as saying: So far as Port Kembla is concerned, that threat is in the form of its industrial relations record and we aren't prepared to make further investments there until we had overcome the problems . . . The report continues: He said the future viability and growth potential of Port Kembla was heavily tied to exports and reliable delivery was critical for this. So I ask the Minister the question that seems to be central to this debate: Are the unions telling the truth when they say that BHP gave an undertaking that it would maintain the Port Kembla work force at 12,250? Is the Minister aware of any such undertaking, and I ask him once again whether the reduction of the work force to 10,000 in order to make BHP viable and to provide a 350 tonnes per annum productivity level-if everyone went to work, of course-is really within the framework of the steel industry plan? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.15) —I shall comment first of all on some of the things Senator Michael Baume has said. It is all very well for him to quote an academic from the University of Wollongong. I agree totally with what the honourable senator said. He is very good at quoting from the Illawarra Mercury, and I am just getting a copy of a May issue in which I said precisely the same things, but in much stronger language. I said precisely the same things not only about the steel industry but also about the whole city of Wollongong. Investment in Wollongong will not take place with this sort of industrial disputation problem going on as it has been. I said that in May. So Senator Baume should not come in here today venting points raised in today's Illawarra Mercury; all those things are on record. I do not disagree with them. Senator Michael Baume —You are saying things have improved. Senator BUTTON —No, I am not saying things have improved. I will come to the issues in a minute. Several speakers have taken up a couple of points as a regular theme. For example, it was said quite bluntly by Senator Stone that I am seeking to blame the Broken Hill Proprietary Co. Ltd (BHP) for what has taken place recently. That is a total misreading of what I said. Senator Stone —We were just responding to your answer. Senator BUTTON —The honourable senator should not be too smart; let me tell him what I said. I said yesterday-and he can check the Hansard record if he wants to-that I did not think it was very good industrial relations practice to announce things in the newspapers. Only six weeks ago BHP announced in the newspaper its intention to reduce the work force at Port Kembla. Subsequently BHP has said it had really made a mistake about that, perhaps it should have done it in another way. Yesterday it was reported in the papers that Mr Prescott had come up here and told the Government that BHP would withdraw from steel making in Port Kembla if the industrial disputation situation did not improve. That is not true, as I said yesterday. He did not tell the Government that. In this morning's newspaper Mr Prescott is reported as having said that he had some conversation with somebody in a passage. That is not quite the same thing as telling the Government. I just happen to believe, irrespective of what other people think, that these problems are very serious and it is best to confront them in the work place. I can show BHP companies in this country that four years ago had industrial relations situations as bad as those being experienced at Port Kembla by BHP now, and they have completely changed all that by their capacity and effort to communicate with the work force. Clearly there has been a breakdown in those sorts of arrangements. Senator Baume asks me whether I am aware of what Mr Nando Lelli said in the Illawarra Mercury on such and such a date, and who said what to Mr Lelli. I have no idea at all. If one were to rely on the scuttle-butt that appears in newspapers about who said what to whom, we would not get very far. But those things are really at the margin of the major issues in this matter. On Friday, 28 May, in the Illawarra Mercury, I said: I am not particularly interested in the views of Mr Paul Matters. Currently I suppose he sees himself as being launched by this level of industrial disputation into a place of prominence in this country which he does not deserve and in my view he will not maintain. In the same newspaper I went on to point out that the situation was disastrous for investment in Wollongong and for the prospects for the whole town. While I am not seeking to blame BHP, I do not absolve both parties from blame in this matter. Inevitably, there are faults on both sides in the way these things are handled. I think I should point out to Opposition senators one or two other factual issues. The level of productivity increase in the steel industry in the last year or so has not been satisfactory at all. It is wrong of Senator Lewis to say that productivity in the steel industry is even now, with all of the troubles, back to what it was at the time the steel plan was put in place. At that time it was 185 tonnes or 190 tonnes per man. According to Senator Lewis, it is now 239 tonnes per man. It is not correct to say that integrated steel mills throughout the world have attained levels of productivity of 800 tonnes per man. That is bunkum. That is true of mini-mills; it is not true of integrated steel mills anywhere. I am not seeking to retreat from the point that the productivity is not all that it ought to be. Senator Stone —What is the productivity in real terms in Korea? Senator BUTTON —Probably about 400 tonnes. But the level of productivity varies greatly. I think the productivity in the United States integrated steel industry has not been really good at all. The figures that Senator Lewis is talking about relate to United States mini-mills, not integrated steel mills. The other matter of fact in Senator Lewis's remarks-perhaps this was said by Senator Baume-which I would correct is that investment by BHP has been considerably more than he said. Senator Lewis —I said $1.4 billion. Senator BUTTON —Yes, Senator Baume said $800m. I would like to turn to one or two of the more important issues. First of all, I agree with Senator Chaney when he says that productivity has to be continually on the agenda, that a continual escalation in productivity is being attained in other countries and has to be sought and attained here. I do not have any problem with that as a proposition. Secondly, I do not have any problem with the view that, in order to attain those levels of productivity over time, BHP will be concerned to reduce the work force. That was inherent in the beginnings of the steel plan and it is still quite apparent that this will have to happen. The steel plan addressed the issue of how that will be done, not whether it should be done or not. The issue that was addressed was how it should be done. I think one or two Opposition spokesmen have made that point. I have no knowledge of any undertakings given by BHP, apart from those facts. It was accepted that there would be a reduction in the work force over time and that that should be achieved in certain ways. In fact, the total reduction in the work force of the steel industry in Australia has been of the order of 17,000 jobs since 1982-82. That has been accomplished in part by a process of attrition and voluntary retirements. Let me say something about the question of whether there is an industrial problem at the moment which has to be addressed. I am quite correct in saying that Senator Lewis in his earlier speeches spent most of his time talking about the industrial relations problems revealed in the steel industry report. Subsequently, I think in his fourth speech, he got on to the issue of what he described as a current industrial relations problem. Senator Baume has also talked about this matter. By the way, it is quite wrong for Senator Chaney to come in here and say that BHP has attempted to resolve the industrial relations issues-I understand that he was referring to a current dispute over absenteeism-at the workface and not in the newspapers. That is not the issue; it is whether these matters are best dealt with on site or, as I say, by slanging matches in newspapers. Throughout the discussion there has been much by way of rhetorical question about what the Government proposes to do about the situation as it now exists. I said in earlier remarks that I thought the situation had settled down a bit from the period which was revealed in the Steel Industry Authority report. I went on to say that on 28 October a meeting was convened with the unions and BHP to try to resolve some of the issues anticipated as being likely causes of problems. I do not want to do anything to upset the possibility of those issues being resolved. It is easy for me to come in here and make inflammatory statements. Other Ministers have been accused of doing that. I do not propose to do that. I am optimistic that those issues can be resolved. If they cannot be, the course which BHP has, as a principal in this dispute, announced it will take, will inevitably follow; that is quite clear. But it will not follow, in my view, as a priority course of action. It would be much better if there could be some resolution of these issues and of how any necessary voluntary reductions in labour should be attained. It should be dealt with by discussion rather than by any process which is likely to follow if those discussions are not constructive and positive. A number of other points have been made. Senator Michael Baume queried, I thought with great disrespect to the Chairman of the Steel Industry Authority-has the honourable senator ever tried to put anything over him? He should have a go at it some time if he wants to-why total man hours lost through industrial disputes had not been recorded in the annual report. Figures for total man hours lost are available in both annual reports. They are not analysed per employee in the annual report but they are in each of the quarterly reports. I am sorry if that involves the honourable senator in additional work, but they are all there in the quarterly reports. That is the answer to his question. Senator Michael Baume —They are not tabled in this place, are they? Senator BUTTON —The quarterly reports? Senator Michael Baume —Yes. Senator BUTTON —Well, I think they have been. Senator Lewis —I have got one, but I don't know where I got it from. I might have got it from your office. Senator Michael Baume —No, they're not tabled in this place. Senator BUTTON —They are available. They are public documents. Whether they are tabled or not is a different matter. Senator Stone gave us a folksy history of Newcastle, which I do not disagree with. He could apply that little history to most industrialised towns of the smokestack era. Senator Stone —But the point of the history was to draw attention to the problem for your Government and your policy portfolio, particularly, of trade union power, and to point to the failure of your Government to deal with that properly. Senator BUTTON —The honourable senator was not here at the time, but I can remember being in this chamber when the level of disputation was twice what it is now. Senator Stone —The level of disputation is one issue, but it is by no means the really important issue. Senator BUTTON —Yes. I can remember being here at a time when the honourable senator was Secretary to the Treasury, when the level of unemployment in this country was close to 11 per cent and when, over three years we had annual increases in wages of 12, 14 and 15 per cent. I can remember the times when people such as the honourable senator were waving their big sticks and magic wands and saying that all this could be wished away, but it did not happen. This Government, by comparison, has had relatively good results on each of those measures. I know he has flexed his muscles as -- Senator Stone —Perfectly good results which keep on having us go backwards in the world! Senator BUTTON —Like at Peko Wallsend Ltd. Senator Stone —If you want to talk about Peko Wallsend, there is a company which, by its own efforts, doubled productivity. Senator BUTTON —Yes, and lost a Japanese market. Senator Stone —Nonsense! Senator BUTTON —It did indeed. Senator Stone —What absolute rubbish! Senator BUTTON —I was in Japan at the time. I know what the Japanese thought about your company. Senator Stone —How much are they shipping to Japan today, Senator? You should know that. Senator BUTTON —I know what they think about the honourable senator and Peko Wall- send in Japan. But I do not want to get into-- The CHAIRMAN —Order! The Minister's time has expired. Senator MICHAEL BAUME(New South Wales)(10.31) —I would like to thank the Minister for what, on the whole, has been a fairly rational response to the issues being raised. I particularly thank him for his clear and unequivocal statement that, contrary to what the unions are saying, he is unaware of any undertaking that Broken Hill Proprietary Co. Ltd (BHP) would keep the work force at 12,250 until beyond the life of the steel industry plan, or even, in fact, during it. If the Minister involved in this issue is unaware of any such undertaking, I wonder how seriously we can take union claims that there is such an undertaking. This is a tripartite arrangement in which, as I said before, the Government has $100m invested basically, by way of bounty, of taxpayers' money, the company has invested $800m and the unions have invested industrial unrest. It seems to me that if there were any suggestion of any agreement that there should be no further reduction in employment levels at BHP, surely the Minister in charge would have heard of it. I have sufficient respect for him not to regard him as incompetent in this area, because he certainly stands out in this Government as a competent Minister, unlike the rest. I believe it is very important that the Minister has said he has no knowledge of any such undertaking. I just mention to the Minister that he still has not acknowledged that he was in error earlier when he said that the matters of productivity problems and industrial unrest related really to the beginning of this year. That is what he was saying last night-and not now, and he cannot wriggle off that hook. I am glad to see that now he is acknowledging, perhaps not directly, that maybe there is some problem developing over the question of reduction of employment at Port Kembla, which is absolutely necessary for its survival. I should mention to the Minister that I did not at any stage say that international productivity levels are up around 800 tonnes per annum. On the contrary, I had interjected that there-- Senator Button —That was Senator Lewis who said that. Senator MICHAEL BAUME —I must say that I did not hear anyone say it, but it certainly was not me. I am only too well aware of the fact that the competitive level that BHP is looking at is around 400 tonnes and possibly up to as high as 500 tonnes. BHP must maintain that kind of productivity-around 350 tonnes instead of the 240-odd tonnes of earlier this year. But taking into account whatever will emerge in the period if the unions decide to use union muscle in this matter of the reduction in the number of employees as threatened over the coming months, who knows what it will be. The simple fact is this: The Minister, having now recognised that there is no such commitment, to his knowledge, and that the unions therefore do not have a sound case for threatening not to co-operate with the company, has a duty to act as an intermediary. I repeat that that is the threat from Mr Lelli. Whether or not the Minister has read it in the Illawarra Mercury yet, I presume his officials will advise him, even if belatedly, that there is a clear threat from the left wing branch of the Federated Ironworkers Association of Australia at Port Kembla that if BHP continues with its plans to make those works economic, there will be `a lack of co-operation' from the unions. We have seen what that lack of co-operation can lead to in terms of industrial unrest and falling productivity. I believe that the Minister has a duty to act as some kind of intermediary. He has, through the taxpayers of Australia, a large stake in this matter-not only the stake of $100m of bounty paid for by taxpayers but also a stake in what happens to our balance of payments in terms of exports and import replacements. Maybe, in the face of this problem, the Minister should deal with this privately, without going through the public domain. As he has said, the public domain may not represent the best way to deal with this sort of thing. All I want from him is some action. It can be public or private, depending on his judgment. In view of the investment in this business, the risk to Australia that is standing over us and the fact that the unions are threatening that they will not co-operate, despite their commitment to do so, surely it is up to the Minister to do something, privately or publicly. All I am asking from him is some kind of undertaking that he recognises the risks and that instead of wagging his little finger, he will actually do something. Senator STONE(Queensland-Leader of the National Party of Australia)(10.36) —I will not detain the Committee for long, but I must comment on one or two points which Senator Button made in his closing remarks. The Minister spoke of Peko-Wallsend Ltd being my company. I presume the Minister used that expression lightly. I was at the time a director of the company, but I resigned that directorship on 13 July this year. It is very important to nail, here and now, the total inaccuracy of what the Minister said. To be fair to the Minister, I note that his time expired at about the time he made these remarks. Perhaps if he had had a few more minutes he would have corrected his inaccuracies. I am prepared at least to assume that he would have done so. I say this about the episodes in relation to Peko-Wallsend and Robe River Iron Associates in August and December last year and January this year to which the Minister referred: The Minister's remarks arose out of my interjection that the problem which he had persistently failed to address in his response and which this Gov-ernment has persistently failed to address, was that of trade union power, which has grown-not diminished-under this Government. The relevance of that to the Peko-Wallsend, or more accurately the Robe River Iron Associates, episode in 1986-87 was that an outstanding company executive, Mr Charles Copeman, sought to address the problem. He did that because to have failed to do so would have consigned that great company to a lingering death. I remember very well that at the time the matter first arose at the end of 1985-86 the company's production was running at between 12 million and 13 million tonnes of iron ore per annum. That was from a company which had the capacity to produce 18 million tonnes per annum. Productivity was down and stoppages were endemic. We saw in that operation what we are now seeing in the steel industry at Port Kembla which has been the subject of our discussion. Those developments were carefully orchestrated by a small band of trade union thugs operating at Pannawonica and Wickham in the Pilbara, led by, among others-although he was not actually a member of the work force of the company in question-Mr Jack Marks, a notably malevolent member of the trade union movement in this country. However, we saw the courageous, forceful and persistent handling of that situation by Mr Charles Copeman and a devoted band of that company's executives. I might say that they acted in the face of the most malevolent criticism from members of Senator Button's Government. I do not accuse Senator Button of that at that time because I do not believe that he was of their number. However, those Ministers were led by none other than the Prime Minister (Mr Hawke), ably assisted by the then Minister for Trade, Mr John Dawkins, and by some Ministers in the Burke Government. Notwithstanding that, the company managed to achieve its objectives of a more productive, happier, cohesive, united, work force-and above all, a work force which could look forward to the continued existence of the company which provided their jobs. That leads me to the question of productivity, which is something about which the Minister persistently refused to talk. In the last three months of 1986-87, Robe River Iron Associates was producing, in terms of tonnes per man on that mine site and at the port, 97 per cent more than it produced in the comparable period of the previous year. I do not suggest that in this country productivity increases of 97 per cent are universally attainable by more appropriate industrial relations, better management and diminution or, if you like, destruction of the power of trade unions to prevent that happening, but I draw the Minister's attention to that episode and its result and suggest that we can learn a great deal from it. Far from getting up in this chamber and seeking to denigrate the efforts of the devoted band of people who turned that company round, and I am well aware that the Minister did not name Mr Copeman and I do not suggest that he wanted to do so, and thereby preserved a great company to the benefit of Australia, our exports and jobs-I think that some 1,200 people still work for the company-the Minister would do better to learn from the episode and perhaps bring home to some of his colleagues and trade union associates the benefits for Australia and its work force of learning from some of those lessons. The specific matter to which the Minister referred-I hope that I am not misquoting him-was that as a result of the efforts of the executive and management of Robe River Iron Associates somehow the company had blotted its copybook in Japan. The Minister was totally incorrect when he said that. Such blotting of copybooks in Japan as occurred at that time was brought about by the efforts of Mr Dawkins, Mr Parker, the Western Australian Minister, and one or two other well known individuals who sought actively to blacken the name of that company in Japan to bring pressure to bear on the company executive to back off from the extremely productive efforts it was making to save the company. Senator Cook —From continuing the lockout. Senator STONE —The lockouts were certainly brought about, as the honourable senator quite rightly implies, by the necessity to deal with the totally irrational, unreasonable and destructive efforts of Senator Cook's mates in the trade union movement in Western Australia. Senator Cook —They didn't close the doors. You closed the doors. Senator STONE —I will have an argument with Senator Cook before we are through. He takes no credit from the episode either, if I may say so. I will leave him aside and get back to the Minister. The truth of the matter is that every month now the company is exporting from Australia a much greater tonnage of iron ore than it did 12 to 18 months ago. It is exporting more to Japan than it was then-- Senator Button —You should not-- Senator STONE —Is the Minister withdrawing his earlier comments? Senator Button —I will say something in a moment. Senator STONE —I thank the Minister. I rest content with the Minister's correction of his earlier comments. With that I will leave him to his own reflections. Senator McLEAN(New South Wales)(10.45) —I rise for the first time as the Australian Democrats spokesperson on industrial relations. The CHAIRMAN —Order! If you wish to speak about industrial relations, that is-- Senator McLEAN —No, I am contributing to this debate. I am just acknowledging the fact that I am rising for the first time in this role. I may be new to the chamber and to the context of industrial relations and industrial disputation which seem to have been the main theme of this debate this morning. However, having grown up in the city of Newcastle, which was referred to in this debate earlier, I have developed a sense of what this play is all about. I would like to make and record some observations about the tone and manner of this discussion this morning, rather than specifically about its content. Certainly, Australia has not enjoyed a happy record in industrial relations. That has most definitely impacted badly on our international economic performance as a nation, both internally and externally. I think that most Australians bear some sense of resentment about the manner in which that aspect of our society is played out between the major players. Whilst I am aware of my relative ignorance, compared with the depth of experience that is shown in these matters, particularly on one side of the chamber, I have attended the four seminars that have been conducted on our behalf by the Parliamentary Library on these themes over the past four weeks. Sadly, I think only two senators attended those seminars, the content of which was extremely good. I feel that I have been greatly enlightened by them and they have helped my insight into the nature of this debate this morning. They have certainly focused my attention on the tone, manner and climate of the debate which, to my way of thinking, should be observed and noted by those who have been listening to it. There have been signs of enlightenment in Australia in the past 18 months about matters of industrial disputation and industrial relations. Although the past few days' occurrences at Port Kembla steelworks have focused attention-once again, very sharply-upon the significance of one particular industry and the sensitivity of the relationship between management and worker in that specific situation, I do not think that that should draw our attention away from the fact that there has been a trend towards enlightenment and an easing of relationships between the combatants over the past 18 months. In fact, that view was expressed in the Industrial Relations Bill which was placed before this chamber several months ago. But because the election came on to the horizon the Bill was unfortunately politicised intensively and finally withdrawn. Now we are uncertain about its future. In many respects that is sad because that Bill was an attempt to come to grips with the reasons for our history of poor industrial relations and the fact that it was politicised was extremely unfortunate. It was also unfortunate that another positive contribution in recent times, namely, the document Australia Reconstructed, which was a genuine attempt on the part of key players to make constructive suggestions about this whole aspect of Australian society, did not receive the positive attention and reaction which it deserved. Yesterday the Confederation of Australian Industry (CAI) responded very negatively to this document. In fact, it described it as `extremely dangerous'. I was forced to reply by issuing a Press release in which I appealed to the CAI to `give it a go' and to see the document in positive terms in exactly the same way as I would appeal to the conservative side of this chamber to think more constructively, not only about that document but also about the Industrial Relations Bill which was a genuine attempt on the part of the Government to try to move us forward. I am citing the general tone, manner and climate of this debate because I have reacted negatively to what I have seen in this chamber this morning. I believe that we have reverted to the old model of confrontation by throwing stale old arguments at one another across the chamber. I recall a statement by Sir Mark Oliphant when he opened the first national conference of the Australian Democrats. You might be aware, Mr Chairman, that he also chaired one of the foundation meetings of the Australian Democrats in the Melbourne Town Hall in 1977. In opening our first national conference he drew a potent analogy about our legislative chambers. He likened the situation to two gangs of bikies lining up against one another in some dark alley at night and reverting to tactics which were totally unthinking, fairly brutal and generally pretty destructive. It is sad if, in the process of debates such as these, we revert to the old combatant model when, in fact, constructive attempts have been made by the Government in the formulation of the new Industrial Relations Bill, which was before this chamber temporarily, and by the Australian Council of Trade Unions in the form of a document such as Australia Reconstructed to shift us to where other nations are-that is, into a more positive attitude towards this whole matter. I rose to make a contribution not about the content but about the manner of debate and to give notice that, as the spokesperson in this area, I will attempt to shift us away from that model and to do better than the two gangs of bikies analogy that was suggested to us by Sir Mark Oliphant. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.53) —I have two matters to raise. Senator Stone rightly pointed out that I was interrupted in what I was saying earlier. I take his point; I do not see any reason for disagreeing with it on the basis of the information I have in relation to improved productivity at the Robe River mine. The simple point I was seeking to make was that in a situation in which industrial disputation in the Pilbara has been at its lowest level for 20 years and in which productivity has generally been good, the Robe River incident was seen in Japan as a significant setback to what was regarded as a very important level of improvement. Senator Stone —At the time. Senator BUTTON —That is the only point I am seeking to make. Yes, Senator Stone, that was at the time; I agree with that. With regard to Senator Michael Baume's invitation to me to accuse Mr Nando Lelli of telling fibs, I say that Senator Baume is like Cyrano de Bergerac-I am aware of his presence and his intent long before he gets to it. The fact of the matter is that I do not know what officials of Broken Hill Proprietary Co. Ltd have or have not said to Mr Nando Lelli. I am not saying that he is telling fibs; I just do not know. I am not entering into that particular debate. Proposed expenditure agreed to. Department of the Prime Minister and Cabinet Proposed expenditure, $154,427,000 Senator BISHOP(New South Wales)(10.55) —I want to raise some matters dealt with in the Estimates Committee A examination of the Department of Prime Minister and Cabinet regarding, in particular, the Bicentennial re-enactment and celebrations. It was interesting for me to sit for the first time on an Estimates committee. Indeed, the first full day of the hearings was enjoyable because to be able to celebrate my birthday and to discuss at the same time the birthday of a nation seemed quite appropriate. The first item of some concern to me related to the First Fleet re-enactment, which is being privately sponsored as well as being sponsored by the Australian Bicentennial Authority (ABA) and receiving some contribution from the New South Wales State Government. It will arrive in time to sail into Sydney on 26 January, the important and historical date of the founding of the colony of New South Wales. The evidence given by the Chairman of the Bicentennial Authority disclosed that the First Fleet will not be able to re-enact the landing because of a decision made by the New South Wales Premier, Mr Unsworth, and the New South Wales State Government. It seems unacceptable to me to attempt to rewrite history. I admit that there can be some sensitivities in regard to the celebration of our Bicentenary, but it seems to me that neither the truth nor indeed the spirit of the celebration of the Bicentenary is in any way followed by trying to deny that the landing took place and that the very existence of this nation is as a result of the founding of the colony of New South Wales on the eastern coast of Australia by Governor Phillip. Mr Kirk said in his evidence that the ABA had a commitment of some $500,000 in the Fleet, which sailed from London and which indeed, having now left Mauritius, is sailing towards its final destination, and that he was concerned that the 11 ships reach their destination. He declined to become involved in the question of whether the re-enactment of the landing should take place, saying instead that he thought it proper that the State Government be allowed to make that decision. We are celebrating the Bicentenary as a national event. It represents the founding of the nation of Australia. It seems to me that it is in the national interest that we should see that landing take place and that we should not allow the fact that the Fleet has arrived to be subsumed by simply allowing it to sail out of the harbour later in the day with the flotilla of tall ships which, although they may be interesting to see, in fact are of no historical significance to Australia's Bicentennial at all. I am always concerned when we attempt to deal with a difficult situation by trying to deny that it happened. In our early history many people who had convict ancestry pretended that that was not so. As we matured as a nation, people began to see that those who had founded this country had merit, whether they were convicts or not. Therefore, it is part of our maturing as a nation that we have been able to say that our convict ancestry is a fact and that it has indeed contributed to the nature and the culture of our nation. It further seems to me that not allowing a re-enactment of the landing to take place is again a sign of immaturity-a sign that we are not prepared to say, `Yes, this is how we arrived in this country. This is how we established our country'. There are certain problems arising from that which we have to address. Yes, there are questions concerning the Aboriginals, who were here prior to our arrival. But that does not mean that the Unsworth Government is entitled to attempt to rewrite history. I compare the Unsworth Government's decision with one which was disclosed in an answer given to questions posed by Senator Short in the course of previous Estimates committee hearings. It was shown that a grant of some $53,000 had been made for a re-enactment of the voyage in a traditional vessel and landing of Macassans from Sulawesi. Indeed, this voyage was significant for the north of Australia and the Federal Government has seen fit to allocate money to allow that re-enactment of the voyage and lan-ding to take place. If one is going to award points for the historically truthful re-enactment of the establishment of our nation, perhaps the Darwin landing would score 10 points and the Sydney landing nil. Other matters of concern to me relating to the Bicentennial arose in the course of the Estimates hearings. I would now like to refer to matters regarding the appropriations for the Office of the Status of Women. Subsequent to the Estimates hearings, I asked in the Senate of Senator Ryan a question in regard to grants made to various bodies, including the Australian Council of Trade Unions (ACTU) Working Women's Centre. I drew the Senate's attention to the fact that grants of some $15,000 each had been made to bodies such as the Country Women's Association and the National Council of Women but that a grant of some $40,000 had been made to the ACTU Working Women's Centre. It was interesting that an 18 February Press release put out by the Minister Assisting the Prime Minister for the Status of Women (Senator Ryan) itemising Commonwealth grants to women's organisations duly included those $15,000 grants and lesser grants but that there was no mention of the $40,000 grant made at the same time to the ACTU Working Women's Centre. Senator Ryan subsequently answered a supplementary question relating to the size and membership of the various organisations. I found that information less than satisfactory to the degree that there was a claim that the ACTU Working Women's Centre represented in excess of one million women whereas the other bodies either did not know how many people they represented or gave a lesser figure. In a situation of de facto, as distinct from de jure, compulsory trade unionism in this country, it is unacceptable to claim that the group represents a membership in excess of one million people. In raising these matters and drawing attention to the importance of, firstly, the Bicentenary and, secondly, the manner in which grants which seem to have a political tinge are given, I wanted to make the point-and make it clearly-that, as we draw close to the celebration of our 200th birthday, it is important that we have a proper regard for history and that political considerations, particularly the fact that the Unsworth Government is facing defeat at the polls, should not be allowed to colour the manner in which we celebrate our birthday. Senator MICHAEL BAUME(New South Wales)(11.05) —New financial reporting standards were involved in the documents presented to Senate Estimates committees this year, the results of which we are now debating. Those new standards were alleged to be an improvement, to provide more information to enable a better examination of the process of government by the Senate, which, of course, is our duty. The reality is that that is bunkum. We have got less information. This Government has set out to cover things up in this material in what I believe to be a most disgraceful way. It imposes greater burdens on senators who have to ask public servants for details which had, in the past, been presented. Even more serious, it means that we do not get the printed responses to these questions, which are invariably taken on notice at the Senate Estimates committees, until just a few days before we have this debate, and we do not have the chance to follow up with questions about why on earth some extraordinary changes have taken place in expenditure. This is revealed to us only when we eventually get the written responses to the questions we have asked. To present to the Senate as an improvement a situation which involves a significant and serious diminution in information is, I believe, a disgrace. I want to protest as strongly as I can about it. I quote from the report to the Senate of Estimates Committee A: The Committee notes, however, that in some areas a considerable amount of essential information on some items of expenditure was not readily identifiable or explained in the tables. Examples of this were estimates of expenditure on official entertainment by the Department of the Prime Minister and Cabinet- no doubt we can understand the sensitivity in that area- details of its expenditure on visits by foreign dignitaries and the costs of maintaining official establishments. The significant point is that these were the very areas that I, as Chairman of the Waste Watch Committee, pursued this Government about last year. The people of Australia were very angry to find the details that I had presented to them of expenditure in this area, particularly, for example, the $30m on the America's Cup and how much money was being spent on other entertainment. As the report says, this lack of information applied particularly to the Department of the Prime Minister and Cabinet, the estimates of which are before us at the moment, but it applied equally to other bodies, such as the Commission for the Future, where there was no break-up of the administrative expenses at the Estimates Committee hearing. We did not know until we found it out in response to questions on notice, that there had been a 28 per cent increase to $167,500 in the use of consultants by the Commission for the Future. We did not know, and still do not know, just what the costs to us of the commissioners in the Commission of the Future have been. We have been told in a written response how much it costs per day. I had asked specifically, `Where can we find the expenses of the commissioners themselves?'. That means the total expenses for the year. For any bureaucrat to pretend that it does not mean that I think is a nonsense. I do not believe that the purposes of the Senate are being served by the new system nor, it seems in this instance in particular, by the refusal to acknowledge the burden of the questions we ask, which we are now forced to ask because of the absence of proper information in the basic material. I think it is absurd. In this context we can now understand why this information was not presented to us by the Department of the Prime Minister and Cabinet. I have no philosophical objection at all to the Department of the Prime Minister and Cabinet expending large amounts of money on hospitality in our bicentennial year. I have a massive philosophical objection to being denied, if you like, immediate access to that information by that information not being presented to the Estimates committees as part of the normal provision of detail of expenditure to which we have been accustomed in the past. I do not know why the Government feels some desperate necessity to cover up what it is going to spend during the Bicentennial. Let me outline the magnitude of the increases. I eventually got the response to my questions which were taken on notice. Heaven knows why the bureaucracy would not have known what they would be at the time of the Estimates committee hearings. I cannot understand why the Minister would not have recognised that, as there was this significant reduction in the information available to us, we would be seeking it, and why the questions could not have been answered at the time. Let us have a quick look at what was hidden behind a $3.5m increase in the provision for the Bicentennial. I have the facts here. For State occasions and official hospitality we are going to spend $4.9m on the guests of the Government. That is an increase from $2.6m the previous year. That is quite justifiable because we will have some very important guests here for the Bicentennial. Not to do so would, I think, be ridiculous, and to complain about it would, to a degree, be churlish. We have a Bicentennial only every 200 years, surprisingly! My concern is not at the expenditure, but at the attempt of the Government to keep the amounts involved hidden from us. We have a fivefold increase in the provision for what is described as hospitality, from $108,000 to $510,000-half a million dollars. For some interesting reason there is no expectation that there will be any state funerals next year. The allowance has gone from $33,000 to nil -- Senator Tate —The way you are going, there could be one. Senator MICHAEL BAUME —There might be some political funerals, and the Minister's looks pretty high on the list. The provision for presentations is up from $104,000 to $220,000 and the allocation for miscellaneous expenses is of very little consequence. Overall, it means that the allocations for state occasions and official hospitality have almost doubled, from $2.9m to $5.7m. When we add the expenditure on special purpose flights, which will increase from $5.2m to $6m, we see that something like $11.6m is to be spent by way of special costs on official hospitality and so on brought about by the Bicentennial. As I said, my concern is simply that this material should be available. I am also concerned that there was an attempt to cover up the costs of the favourite hobby of the Prime Minister (Mr Hawke); that is, expenditure on Kirribilli House and the Lodge. I know that the Prime Minister likes living as comfortably as possible, but I would have thought that, at this time of restraint, everyone, including politicians, accepted the need for restraint. However, the Prime Minister continues to show none whatsoever in relation to expenditure on the Lodge and Kirribilli House, his residences. I complained last year about the enormous expenditure on Kirribilli House. I understand that for several years there had been recommendations that the money be spent. I just wondered why half a million dollars had to be spent last year on restoration works on Kirribilli House. According to a public servant at the Senate inquiry last year, the work was declared urgent by the Prime Minister himself. Having spent the money on the urgent area, the Prime Minister is now proceeding to spend another quarter of a million dollars on the Kirribilli House main residence on redecorating the ground floor and possibly some first floor living areas. It may well be held that that has to be done because some of the official guests coming here will be accommodated in Kirribilli House. If that is so, fine. At least we could have had the courtesy of that information being presented to us. But I repeat to the Committee that information about this kind of expenditure was deliberately not included in the information presented for discussion to the Senate Estimates Committee. So we did not have the opportunity to cross-examine the bureaucracy about the nature of this expenditure, which is our duty at Senate Estimates committees. We did not have the opportunity because the Government deliberately set out to prevent us from having that information. I believe that to be an absolute disgrace. There is a 65 per cent increase in proposed expenditure on the maintenance and conservation of grounds, buildings and interiors at the Lodge. That shows immense restraint, does it not? There is an increase of only 65 per cent by the Prime Minister on his expenditures at the Lodge, which is $270,000. For some reason there is a 30 per cent increase-to $130,000-in the costs of maintaining the grounds. I would have liked to have had the opportunity to ask the public servants involved about the manner in which this $130,000 was to be spent. Why is there a 30 per cent increase? I ask the Minister now whether he will give us the courtesy of an answer to a question we were not given the opportunity to ask at Senate Estimates committees where it should properly have been asked. I also ask the Minister why $250,000 is to be spent on stage 3 of the restoration of Kirribilli House when, as I understand it, the work that the Prime Minister declared to be urgent last year, which is worth half a million dollars, has been completed? What is the urgency of spending another a quarter of a million dollars on the Prime Minister's residence at Kirribilli House at this time of national restraint? I have noted also that other expenditures have increased considerably on the Prime Minister's residences. For example, the new system of accounting has meant that guarding services, which were previously part of the expenditure of another department, are now being allocated, on a user pays basis, to the departments for which the guarding service takes place. I see that it will cost $430,000 for a half year for the guarding service at the Lodge because these changed arrangements will not take place until 1 January. In other words, there will be an annual cost of $830,000 to provide guarding services to the Lodge. Some people may say that that money is well spent but others may say it is ill spent. Senator Tate —What is your view? Senator MICHAEL BAUME —I will come to my view. At Kirribilli House, $346,000 will be spent for a half year or three-quarters of a million dollars for a full year. I would have hoped that, with suitable electronic surveillance, in other words modern technology, and combined efforts with local police forces, it would not have been necessary to spend $1 1/2m a year to guard the Lodge and Kirribilli House. I would have liked to have raised this issue at Senate Estimates committees and to have asked whether this was appropriate. I was not given the opportunity. The TEMPORARY CHAIRMAN(Senator Colston) —Order! The honourable senator's time has expired. Senator TATE(Tasmania-Minister for Justice)(11.20) —Senator Bishop raised some matters which I really do not think require a reply by me. They were more in the nature of describing her views as to the appropriateness of certain bicentennial projects being undertaken by jurisdictions over which the Federal Government has no control. But I think she has made her political point in that respect. The second point she raised was to do with grants to the Australian Council of Trade Unions Working Women's Centre. I think it has to be remembered that the annual grant, to which she referred, has been made available to that centre since 1978-79. It is a long-standing annual grant which obviously was sanctioned and, indeed, initiated, during the time of the previous Liberal Government and it is made to assist with the running costs and administrative expenses of the centre. As I understand it, the centre informs unions, academic bodies, government agencies and voluntary bodies of particular needs of working women and assists women with employment-related problems. It also concerns itself with the problems of migrant women and its multilingual newspaper, Women at Work, covers work- related issues of importance to women, such as child care, workers compensation and occupational health. I just make the point that it is a long-standing program and I do not think it is as a result of any initiative undertaken by Senator Susan Ryan. As I do not have the Hansard in front of me-I believe that the honourable senator asked her question at Question Time-I do not know whether I have covered the same material as she did. Nevertheless, that is the material I have at hand. Senator Michael Baume raised the general question of the presentation of Estimates. To some extent I will say-I might get rapped over the knuckles by Senator Walsh-that there were some misgivings in my mind, as I sat at my Estimates Committee A, about the new presentation. But I think we have to say in all honesty, and in defence of the members of the Public Service who compiled and presented those Estimates in a program budgeting form, that they were responding, as I recall it, to a request, an injunction, a recommendation of the then Senate Standing Committee on Finance and Government Operations. I think those officers have done their best to make a difficult transition to this new form. I found obscurity in places. But I think to go from that to a suggestion that there was a deliberate cover-up, which was the constantly recurring phrase in Senator Michael Baume's contribution, was unfortunate and cast an unnecessary reflection on the officers who tried their best to present these documents. One can share the honourable senator's misgivings and one hopes that some of the confusion and some of the unintended obscurity can be remedied before the next presentation. But I defend the actual efforts of the officers who appeared before the Estimates committees. In relation to some of the matters where Senator Michael Baume found such obscurity that he could not get answers-for example, the Commission for the Future-the Department of the Prime Minister and Cabinet does not cover that Commission anyway. So it may well be that the reason he was unable to find answers was that he was asking the wrong Estimates committee. Senator Michael Baume —I was using that as an example. That is a very silly response. Senator TATE —I understood the honourable senator to be saying that he could not receive information on the Commission for the Future. Senator Michael Baume —I used that as an example and I will deal with that matter now at length, thank you. Senator TATE —I was not meaning to mislead the honourable senator. I understood that the honourable senator was making that comment in the context of the estimates of the Department of the Prime Minister and Cabinet. Senator Michael Baume —No, you misunderstood. Senator TATE —If I misunderstood, naturally, I apologise. But I think the honourable senator has misrepresented the efforts of those who have gone into many hours and, no doubt, weeks of work in preparing these Estimates by accusing them and the Government of being deliberately involved in an intentional cover-up of the material that ought to be made available to honourable senators. It is our intention that all material should be made available. Indeed, as I have said, it is in response to the recommendations, the injunction, the imperative of the Finance and Government Operations Committee that the Estimates were presented in the general form in which honourable senators had to deal with them in these Estimates committees. Senator Baume complained that, at the time of the Estimates, he was unable to get a precise breakdown of how some $3.5m was to be spent on special events associated with the bicentenary celebrations. I understand-in fact I have the information in front of me-that that material was made available as soon as it could be compiled and it was sent to the Secretary of Senate Estimates Committee A on 5 November 1987 in response to several questions asked by that Committee. So the information is on the record and certainly is available to Senator Baume and other honourable senators who are interested. Senator Baume made a particular attack on expenditure on official residences of the Prime Minister. In relation to Kirribilli, what has to be understood is that it was not that the Prime Minister declared the work urgent in order to get expenditure undertaken, but that he gave a direction that only urgent work be undertaken. There is quite a difference. The urgency was judged not by him but by others. The Official Establishments Trust has long recognised that Kirribilli House is in urgent need of repairs to remedy severe structural deficiencies caused in the main by problems associated with rising and falling damp. In the process of doing any such work, the Trust has recommended that the House be restored in a style which is sympathetic to its age and historical appearance, bearing in mind that it is an item on the Register of the National Estate. The situation appears to have been as follows: the poor condition of the slate roof and inadequate existing external drainage have caused severe rising and falling damp. This has caused roofing, flooring and structural timbers to deteriorate to an extent where flooring in some areas, particularly the first floor, is considered to be dangerous. Because of damp problems, wall plaster, built-in furniture, and wall and floor coverings have deteriorated to an extent where replacement is necessary. Electrical and hydraulic services have also deteriorated because of age and water penetration. In the former case, it represents a potential hazard. It is on that basis that the expenditure was undertaken. I understand that the third stage of the restoration project commenced in 1985-86. The restoration, as I say, is being completed in a way which is sympathetic to the age and historical importance of Kirribilli House, as shown by its being on the National Estate Register. I emphasise that the Prime Minister did not declare the work urgent in order to grab some money out of the Treasury. He directed that only urgent work be undertaken. That essential and urgent work is in accordance with the assessment by the Official Establishments Trust. That structural problem being remedied, the furnishing and display of the areas that have been structurally restored is then done in an authentic style. The honourable senator brought up the question of security, particularly at the Lodge. I can assure the honourable senator-because at the moment I am working on security for the new Parliament House-that there are constraints which are recognised in respect of the financial parameters that we all have to keep in mind when allocating resources. But I do not think that any Australian would wish a situation to develop where the official residence of the Prime Minister-at which he is in almost continual residence, certainly during the parliamentary weeks and months of the year, and where his spouse and guests have their residence-would be in any way vulnerable or in some peril or jeopardy due to the lack of sufficient security. Security is ensured by a combination of the staff trained in the guarding function, electronic devices and other more discrete contributions by other agencies. Whilst the expenditure is not small, I assure the honourable senator that it undergoes scrutiny within the government expenditure review processes. It certainly has been justified within our processes. Senator MICHAEL BAUME(New South Wales)(11.29) —I want to persist with this matter. The Minister seems to fail to recognise the problem. My concern is that the changed arrangements, which he says are in response to a Senate committee, mean that we do not get the opportunity to cross-examine the bureaucracy, as we do in Senate Estimates hearings, on the details of the Estimates. The Minister said, `You got those details on 5 November'. The Senate Estimates Committee had ceased sitting by 5 November. We were not given the opportunity of asking questions. In other words, there is no virtue in the Minister saying, `You got them on 5 November'. Because of the way in which the bureaucracy interpreted the new arrangements we were denied the opportunity to ask questions about the specific areas which were of public sensitivity. It is extraordinary, frankly, that anyone would not have been aware that these were matters of public debate last year and, therefore, should have been included in any estimates. I find it remarkable that a man of the Minister's capacity should quite happily say, `It would obviously be unfair to expect the bureaucracy to put in this information. It was doing its best to follow the guidelines set by the Senate in asking that there be an improvement in the quality of information available'. The Senate was asked for an improvement, not a lessening, in the quality of information. So I find the Minister's comments to be utterly extraordinary. As I did not have the opportunity to ask questions of departmental officers at the Estimates hearings on the question of guarding-because this information on what was involved was not provided-I have no knowledge of whether this guarding cost is adequate. There is no way I am seeking to put the Prime Minister in physical jeopardy. I would seek to put him in political jeopardy as often as possible, particularly over some extraordinary expenditure items in these matters. All I want is the right to know, when I am looking at these accounting systems, what on earth is being spent on these matters, and not to have it covered up under the pretext, I might say, of meeting requirements of the Senate-which were to provide better information. I just say in passing that the people of Australia are entitled to know how much these guarding requirements cost us, when we consider that not only is the Prime Minister subject to guarding, but the Governor-General, very properly, is provided with significant guarding protection. Clearly the public is entitled to know how much that costs. The system is changed so the user-pays principle is applied. I think the Government has done the right thing on this issue. I always hope to give the Government credit when it is due and brickbats when it is not. It is appropriate that this takes place, provided the Government gives us the information-which it did not at Estimates time. The cost of guarding the Governor-General, on an annual basis, is about $1.6m; so the cost of guarding the Prime Minister and the Governor-General is over $3m. Senator Bishop —Plus fringe benefits. Senator MICHAEL BAUME —As Senator Bishop says, that is plus any fringe benefits. I just conclude by saying to the Minister that when I included in my comments, as an example, the fact that under this new system the Commission for the Future had provided us with no information of any substance, and that when I specifically asked for information I did not get any, that was the most blatant example, among all departments, of information not being presented to us and of our suffering a significant diminution in our capacity to examine, as we should, the detailed accounts of the operations of each government department. I have other matters I wish to raise on this Department but they are not related to this specific section. Senator TATE(Tasmania-Minister for Justice)(11.35) —There has been a deliberate distortion of my remarks. Either Senator Michael Baume did not hear them correctly or he has chosen to distort what I said. I made a very clear admission that, during the transition to the new form of presentation of the Estimates, which was undertaken in response to a recommendation and injunction of a Senate committee, obscurities crept in, although unintentionally. Both sides of the chamber have misgivings about the new form of presentation, but what I refuse to accept and have to rebut is the assertion by Senator Baume that this is a deliberate cover-up. It was never intended to be that, either by the officers concerned or by government direction. What Senator Baume has revealed, and what we are all conscious of, so it is not great insight on his part, is that there is a need for improvement and a need, perhaps, to recapture some of the more itemised and distinct areas of expenditure which were presented in a way with which we became very familiar over the years. Senator Baume continues his attack on expenditure on the protection, the guarding, of significant public figures such as the Prime Minister (Mr Hawke) and the Governor-General. I hope that on no occasion does their vulnerability to attack lead to somebody breaking through the security we erect around their residences and their persons when travelling. I am sure that Senator Baume, in his heart, does not want that to occur, either. We want value for money and we want to know exactly what expenditures are undertaken in that respect. Some anticipation of that perhaps ought to have been made by the officers concerned. They perhaps ought to have been ready on the day. I am sure that the reprimand is well taken, but taken by way of example, regarding the way in which the whole presentation of the Estimates, now that the transition is complete, needs to be tightened up to achieve the aims of the Senate committee which made the recommendation. Senator MICHAEL BAUME(New South Wales)(11.38) —I thank the Minister for Justice (Senator Tate) for his assurances that the obscurity was unintended. Because I have regard for his integrity I am certain that he would not seek to mislead me or this chamber. However, I regard it as monstrous for him to say that my comments on guarding reflected an attack on guarding. What he said was absolutely appalling. I stress to the Committee and to him that my criticism was not an attack on the cost of guarding either the Governor-General or the Prime Minister (Mr Hawke). If he looks at the Hansard he will see that. My concern was that we were not provided with the information to enable us to ask questions about the matter during the Senate Estimates committee hearings. When I introduced the Governor-General's name I was careful to say `quite properly'. I remind the Minister that in regard to the Prime Minister I said that while I would seek to attack his political position I certainly would not seek to attack his physical safety. The Minister can look at the Hansard and see how intolerable his suggestion is that I would seek to put the Prime Minister in some kind of jeopardy. That is very cheap politics and it comes very ill from a man of the Minister's general standing in this place. It is totally unacceptable to me. It would be a generous gesture and more in keeping with the Minister's style if he apologised. I am totally unsatisfied by the Minister's comment, when he read from the prepared material provided by the public servants advising him, that the Prime Minister had not declared urgent the work on Kirribilli House. Let us get to the bottom of this matter. The work was declared urgent in 1978 in a report. The report the Minister talks about by the committee that is in charge of looking after these things dates, as I recall, from either 1978 or 1979. According to that committee, the work has been urgent since then. But the person who declared it sufficiently urgent for work to proceed was the Prime Minister. To have this semantic nonsense that it was not declared urgent by the Prime Minister is so much bunkum that I can assume only that the Minister was not aware of the background when he read without demur or any condition whatsoever the briefing note which I believe is misleading and is aimed at misleading this place. The work, I repeat, was regarded as urgent in that report many years ago. The Prime Minister declared that this work which was urgent in 1978 should proceed-costing half a million dollars last year and a quarter of a million dollars this year-at this time of restraint. There may be a sound case for arguing that in the bicentennial year Kirribilli House should receive a great deal of attention because it will be occupied by visiting people and should be as presentable as possible. If that is the defence, that is fine. But let us not have this phoney defence that suddenly the work was declared urgent, when it was declared urgent 11 years ago, to my knowledge. As I understand it, the previous Prime Minister took the view that, even though the work was important and should proceed, it should not proceed until the economy was in a better state because it would set a bad example. I would like to see examples of `restraint' that have affected the Prime Minister. In every instance in regard to his accommodation he has shown no restraint whatsoever. Last year he spent $50,000 per room renovating the ground floor of the Lodge. This may be appropriate for the bicentennial year, as I have said, because he will have a lot of guests. But this pattern of behaviour requires some coherent defence. I was intrigued to hear the Minister say that the stage 3 restoration of the main residence at Kirribilli House began last year. If it began last year there was no expenditure last year because the accounts-which we eventually received after the Senate Estimates committee hearings had finished, so we could not ask any questions about it-showed nil against actual expenditure in 1986-87 on stage 3 of the restoration of Kirribilli House. But the accounts show expenditure of a quarter of a million dollars this year. So while I am grateful for some parts of the Minister's response, he has not been given, as I understand it, a full and correct brief on this matter by his advisers. Senator BISHOP(New South Wales)(11.43) —I am prompted to rise for a second time by Senator Tate's response to my remarks earlier but also by Senator Michael Baume having drawn attention to the Kirribilli House restoration. It is important to put on the record that it was disappointing that the report of the Australian Bicentennial Authority was made available only after the Estimates committees had completed their business and ceased to sit. If there is to be a meaningful discussion of the work of the Authority the report ought to be made available beforehand. Senator Baume's comments on the refurbishment of Kirribilli House and the expenditure of some $250,000 on decor prompted me to recall that a similar amount is being spent currently on a fit-out of a full floor of Morgan Grenfell House in Phillip Street, Sydney, for the comfort of the Prime Minister (Mr Hawke). That floor has a full-sized kitchen, entertaining and dining areas, bathroom facilities-which is always pleasing-an office suite for Mr Hawke and, despite a denial in the Estimates committee, I understand an office for Mrs Hawke as well. I have heard descriptions of the opulence of the fitting out of the floor for the Prime Minister's comfort involving some $250,000. The rest of Morgan Grenfell House is in part to be a replacement for the Chifley Square building. The public servants at present employed in the Chifley Square building do not wish to move from it or to see it redeveloped. They are currently taking a form of go slow or strike action or cutting services. The furniture at present in the Chifley Square building is being refurbished to be used in other offices-that is, aside from the rooms provided for the Prime Minister. This furniture will no longer be available for senators such as I who presently use it in Chifley Square. In case there is a note of sour grapes in this comment, I say that I am moving my office to Parramatta and that has always been my intent. We are still going through the agonies of accomplishing that. I am told that the furniture that is now available has chrome plated metal legs and some wood veneer finish which apparently is suitable for Parramatta but certainly not suitable for the offices in Morgan Grenfell House in Phillip Street where, I repeat, $250,000 is being spent to make sure that the Prime Minister is comfortable when he leaves that other place where $250,000 has been spent for his comfort, Kirribilli House. Much of the expenditure on Kirribilli House is on decor. When we were going through the estimates I thought it might have been appropriate to find out who the interior decorator was. The worry is that the combined expenditure has been pushed ahead and perhaps has increased because a deadline seems to be involved. I think it would not be expressing undue cynicism to say that the expectation that the Prime Minister had was to be comfortably ensconced in both domestic and office accommodation for the Bicentennial with the wonderful views that will be afforded him of the goings on on Sydney Harbour. I fervently hope we may yet still have a re-enactment of the First Fleet's arrival. All this expenditure is so that the facilities will be ready for the Bicentennial and, of course, the coming New South Wales State election. I think it is important that we realise that we are talking about not structural expenditure but decoration and refurbishment. Senator WALTERS(Tasmania)(11.48) —I ask the Minister: Is it true that an advertising agent has been engaged by the Government to promote or sell the proposed constitutional changes to the people of Australia? Senator TATE(Tasmania-Minister for Justice)(11.48) —The officers assisting me do not have an answer to that question. I suspect it might fall under a different portfolio: it might fall between the Attorney-General's Department, as the Attorney-General has the responsibility for the Constitutional Commission, and Mr Brown's portfolio, as I think he deals with advertising. But I am not confident of that. The officers here do not have an answer but I undertake to get one. Senator WALTERS(Tasmania)(11.49) —I thank the Minister. I attached it to the Bicentennial because of the Bicentennial year. Senator Tate —I do not think it is under the Constitutional Commission. Senator WALTERS —I will leave that until we come to the Attorney-General's Department. I will now go on to some other questions. Senator Tate —Senator Button will take over now. Senator WALTERS —Can the Minister tell me what is back masking? Does he know what back masking is? Senator Button —No. Senator WALTERS —Could the Minister inquire from the officers whether they are aware of what back masking is? Senator Button —The officers do not know. I think you will have to start again. Senator WALTERS —I am expecting the Minister to understand because there has been a fair bit of talk about it. Perhaps if I explain what I believe back masking is it will show the Minister what I am getting at. Evidently in some countries there is a known form of subliminal advertising whereby the method of back masking puts forward a message that overlays the actual advertising but is not apparent to the viewer. Has the Minister heard of that type of advertising? Senator Button —Yes. Senator WALTERS —That is the sort of advertising that the name `back masking' has been given to. It has been suggested that this advertising is occurring in Australia. Can the Minister tell me whether such advertising for the Bicentennial year has been found by the Department to have occurred? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.50) —I indicated that I understood what Senator Walters meant but the last part of the question makes me less confident that I understand what she means. Senator Walters began by asking whether I was aware of what is called subliminal advertising. The answer is yes. Of course, all advertising contains an element of that. It is no use Senator Walters waving her hand at me: that will not appear in Hansard. Senator Walters —You misunderstood. You only picked up part of what I said. Senator BUTTON —What I do not understand is how Senator Walters relates this to the estimates and the Australian Bicentennial Authority. If it is a function of any organisation in this community to deal with that issue, I suppose it would be the function of the Australian Broadcasting Tribunal. In that case, the question might appropriately be addressed to the Minister for Transport and Communications (Senator Gareth Evans) at the appropriate time. Senator WALTERS(Tasmania)(11.51) —My question is: Is it a particular type of subliminal advertising? Senator Button —Yes. Senator WALTERS —The question I asked was: Are the officers aware of the accusations that have been made that back masking is occurring in some Bicentennial advertising? Senator Button —The answer to the question is no. Senator WALTERS —They are not aware of the accusations that are floating around? Senator Button —No. Senator WALTERS —There have been letters to the Minister Assisting the Prime Minister for the Bicentenary (Senator Ryan) on this and because of that I wondered whether it was a correct assumption that if the Minister had had information about the accusations, the Department would have known. But the Department does not know, is that right? Senator Button —The letters would be appropriately directed to the Minister for Transport and Communications. Senator WALTERS —No, to the Minister Assisting the Prime Minister for the Bicentenary. Senator Button —I said the letters would be appropriately directed to the Minister for Transport and Communications because any authority over advertising is vested in the Australian Broadcasting Tribunal. Perhaps the letters were misdirected. Perhaps they could be sent to the Minister for Transport and Communications. Senator WALTERS —The point I am making, Mr Chairman, is that the Minister representing the Bicentennial Authority answered the correspondence. That is why I am now asking again whether the Department is aware. The Minister, Senator Ryan, has already answered this correspondence. I am asking: Is the Department aware of the accusations or did the Minister not refer it to the Department? Senator Button —I will have that investigated for Senator Walters and will get an answer to her. Senator WALTERS —The Minister for Industry, Technology and Commerce can see that I am in a difficult position because if the Department is aware, then there are subsequent questions I would like to ask. Has Senator Button any suggestions as to how I can ask these questions following the answer that he is likely to give me? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.55) —The present position is that the Department is not aware, but it will seek to investigate the first question which the honourable senator asked and find out whether it can arrive at a state of awareness. If it does that, it will answer the question which the honourable senator asked. If subsequent questions arise from that, perhaps Senator Walters could appropriately take them up in correspondence or, alternatively, at the Estimates committee hearings at the beginning of the bicentennial year. Senator WALTERS(Tasmania)(11.56) —That would be a little late. Seeing we have only about three minutes to go to Question Time, and presuming that there will be other questions for the Department of the Prime Minister and Cabinet from Senator Michael Baume in the next three minutes, will the Department have an opportunity to have an answer for me after lunch? Senator Button —No, that would not be possible. Senator WALTERS —I am sure that, if the Minister tried, anything would be possible. Senator MICHAEL BAUME(New South Wales)(11.57) —Prompted by the good senator's suggestion, I do have just one remaining question on this Department. It relates to the Australian Bicentennial Authority (ABA). I have now received a response to my question about how the administration costs were split up. We noted that this information was not available to Senate Estimates Committee A because of the new arrangements. I noted in that response that the per diem sitting fee for members of the Board of Directors of the Australian Bicentennial Authority is $224. That seems to be different from the pay attributable to members of other Commonwealth authorities engaged on a per diem basis. I thought I noted that the commissioners of the Commission for the Future, for example, were paid a per diem sitting fee of $139. In both instances the Board says that the amount is in keeping with the rates determined by the Remuneration Tribunal. I ask whether the Government recommended that the ABA directors should receive a much higher remuneration than, say, the commissioners of the Commission for the Future. If so, is this an indication of the Government's view of the relative worth of their endeavours? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.58) —The remuneration was fixed by the Remuneration Tribunal. I think the Tribunal takes no more particular notice of the Government than anybody else in fixing per diem remuneration. I do not mean that it takes no more notice of the Government than anybody else in the community, I mean that in arriving at its conclusion it gives equal weight to representations which are put to it. I do not know whether the Government made any representation on that matter at the time. It would have been several years ago, I suspect. But I will endeavour to obtain an answer to that question for the honourable senator. The CHAIRMAN —Order! It being 12 noon, under sessional order I shall report progress. The Chairman having reported accordingly- The PRESIDENT —Order! By arrangement, I propose that Question Time conclude just before 1 o'clock to enable Australian Broadcasting Corporation broadcasting commitments to be met. If Ministers have answers to questions asked earlier in the week, these answers may be given at 2 o'clock. Senator VANSTONE —I direct my question to the Minister for Transport and Communications. I refer to the Minister's tabling yesterday of the final report of the Review of Tender Procedures for the Coastwatch Contract, a report which reveals an incredible saga of incompetence and mismanagement at senior levels of the Public Service across several different departments and for which no Minister is prepared to accept responsibility. Is it a fact that the report reveals that there was no submission to Cabinet to approve forward funding until a mere three weeks before the contract was awarded? Is it further a fact that the report finds that advice from the Australian Government Solicitor was deficient? Finally, I ask whether it is a fact that, at the time of letting the contract to Mr Amann, his company had: an interest in one aircraft which was not licensed for commercial operations and he himself held a private pilot's licence only. I ask whether the Minister will confirm that the Government's only response to this bizarre series of events, which puts at risk the surveillance of Australia's northern coastline and which involved $17m of taxpayers' funds, has been to say: Relevant staff, including senior managers, will be counselled concerning the deficiencies noted in the report and appropriate training will be arranged. Why has the Government decided that there will be no disciplinary action taken against, or penalty imposed on, any of the many public servants who share responsibility for this debacle? Senator GARETH EVANS —I do not know why Senator Vanstone feels the need for a preview of the urgency motion she is about to move. Most of the matters she has raised will, of course, be debated later today. Could I just say in reponse to her question that, yes, of course the final Menzies report has revealed a number of evident deficiencies in public administration which lay behind the original awarding of the contract. Those deficiencies have been acknowledged in almost identical terms by me almost from the outset of this matter and certainly since we made it clear that we were terminating the contract and setting in train a full review of the processes which led to this whole matter taking place. So the Menzies report has done no more than confirm what I have already acknowledged, on the basis of my own previous investigation, to have been the case and which I have already explained on numerous occasions in this Parliament. In response to the specifics of Senator Vanstone's question, yes, it is the case that the approval for the forward funding was not sought from Cabinet until three weeks before the contract was awarded. The Menzies report has recommended that in future forward funding be sought before the tender process is in fact commenced. I indicated yesterday-I do so again now-that that recommendation, along with all the other recommendations of the Menzies report, is agreed to by me, and that will be the situation in the future. Secondly, yes, the report does indicate that the advice received as to the structure of the tender document was deficient in some respects as it came to us from the Attorney-General's Department. Those deficiencies have been noted and acknowledged and they will not recur, but the circumstances of them did not materially or significantly contribute to the difficulties that arose in relation to this particular contract. That has been made clear by Mr Menzies and I do not think I need to track over that in any more detail at this stage, although I will be happy to do so later in the day. As to the third part of the question, yes, the Menzies report did state what has been clear all along; that at the time of the awarding of the tender Amann Aviation Pty Ltd was only at best in possession of one aircraft. In fact, it was in possession of no aircraft of the type that was necessary for the conduct and performance of the contract. However, as I have made clear on previous occasions-and I do so again now-that in itself was no reason why the contract should not have been awarded to an organisation which was otherwise well equipped to get its act together in the time available to it to acquire the aircraft and the necessary aviation expertise to make the contract work, provided that organisation had managerial ability, access to lines of credit and access to reliable supply. They were the conditions that had to be satisfied if a contract such as this were to be effectively performed and the tender obligations met. In practice, those preconditions were not satisfied, and it is in that respect that the maladministration here lay. The Menzies report does no more in this respect than spell out exactly the points of that kind that I have been making from day one in this particular respect. So far as the question of disciplinary action is concerned in relation to those officers of various departments whose performance was less than optimal in this particular affair, the Menzies report has made its own judgment-it has done so with no axe of any kind to grind-that disciplinary action would not appear to be demanded by the circumstances. Senator Chaney —No, it is only the taxpayers, the people of Australia and the defence of Australia. Why worry? Senator GARETH EVANS —Senator Chaney, with all the moral rectitude that he brings to bear from his great height on these occasions, might believe that after-the-event punishment is a satisfactory course. The people involved in this affair have already been punished, in ways that are well known to Senator Messner and Senator Durack-and I do not propose to make them public in this place-in terms of the impact that this whole unhappy affair has had on their personal health and career prospects. I do not propose to embark upon a sordid, tawdry witch-hunt because of some sanctimony from a twerp like Senator Chaney on an occasion like this. I propose to respond, as I have throughout this matter, in a way which is measured and balanced, which reflects a proper sense of responsibility for due and effective public administration. To the extent that deficiencies have been identified, they have been acknowledged and rectified, or are in the process of being rectified. No more action could reasonably be demanded of any government and of any Minister. Senator JONES —My question is directed to the Minister for Transport and Communications. I refer to a Press report yesterday which read: Qantas, Singapore Airlines and Thai International have agreed to increase their scheduled flights to and from Australia . . . The Australian carrier has finally come to agreement with the two airlines after 12 months of negotiations . . . Can the Minister provide details of those agreements? Senator GARETH EVANS —Qantas Airways Ltd and Singapore Airlines Ltd, during talks which concluded in Sydney yesterday, agreed to recommend to their respective governments significant additional capacity and new route opportunities. The agreement provides for up to seven extra Boeing 747 flights a week. Five of these will be permitted to operate from 1 December-two by Singapore Airlines and three by Qantas. Each airline will be permitted to operate a further 747 weekly service from, at the latest, April 1989. The airlines will meet by April 1988 to determine whether, in light of traffic growth, these additional services should be brought forward to August next year. In addition to the increased capacity, and very importantly, the airlines have agreed to major changes to their route entitlements. Singapore Airlines will have the right to operate services to Cairns and Townsville and Qantas will have the right to an additional two points beyond Singapore, to be selected from a number of points in Asia. This agreement follows the successful discussions that Qantas concluded with Thai International Airways last week, which led to an agreement to operate up to five more 747 flights each week between Australia and Thailand. Three of these may commence in April 1988 and the additional two in April 1989. In addition, there are route entitlements associated with that agreement which will have a similar effect as far as the two airlines are concerned. I congratulate Qantas on the very considerable effort that has been put into achieving these very important understandings, which obviously provide major additional capacity for services to meet this rapidly growing market for air travel into Australia. The successful negotiations that I have referred to are part of the quite herculean effort that Qantas has been putting into improving capacity to Australia in both the short term and the long term. It has already been stated, and I do so again, that Qantas has made a massive effort to relieve short term pressures on the system at the moment by operating, with Government approval, more than 160 supplementary flights over the present summer peak period. That is quite a dramatic increase on the 50 such flights which operated during the corresponding period last year. On the longer term front, in addition to the agreements with Thai and Singapore to which I have just referred, other very substantial negotiations have been proceeding with airlines in a number of other countries which have either borne fruit in the recent past or are expected to in the near future. In particular, as far as Japan is concerned, over the last two years there has been a quite dramatic explosion in the number of services, which has expanded from six per week just two years ago to 19 per week at the moment, with another two coming up shortly in the New Year. I summarise by saying that, since the election of the Hawke Government in 1983, an additional 800,000 international airline seats have been introduced to the inbound aviation market to Australia through this bilateral negotiating process. By the middle of next year this figure will rise to over 1 1/4 million. That represents an increase in inbound capacity of about 36 per cent over that period. I am talking about permanent increases in capacity, not the temporary increases that flow with seasonal peaks, and the addition of supplementary flights of the kind to which I have referred. Senator MESSNER —My question is also addressed to the Minister for Transport and Communications. I note that the final report of the Menzies Review of Tender Procedures for the Coastwatch Contract has made 10 recommendations concerning future conduct of the tendering process of the Minister's Department. Given that this process, which developed into a fiasco which included several departments, is but one of many exercises carried out every year by the Commonwealth Public Service, I ask: has action been initiated to review tendering processes in all departments of the Public Service? If not, why not? What guarantee is there that other departments are not operating in a similarly defective way to that which occurred in the former Department of Transport over the coastwatch contract? Senator GARETH EVANS —There is no reason to suppose that there are any fundamental weaknesses in the tendering process as it operates elsewhere in the Public Service-certainly not in the major departments, Administrative Services and Defence, both of which were represented during the Menzies review process, which are the departments that engage in by far the greatest number of sophisticated and high value tenders. Senator Lewis —Give us a lecture on it. Senator GARETH EVANS —I will give Senator Lewis a few lectures but I will save them for outside this chamber, otherwise I might find myself engaged in unparliamentary behaviour. The point that particularly needs to be made about the Department of Transport, as it then was, finding itself running a complicated tender of this kind, is that it was not a scale of operation which that Department was accustomed to handling. It was used to handling comparatively minor order purchases, which tended to be packages of goods rather than services, and certainly not projects of this degree of complexity and difficulty. The particular administrative deficiencies that have been acknowledged by me from the outset and that have shown up and been confirmed in the Menzies report released yesterday, are deficiencies, essentially, of a minor league player in the tender and acquisition process finding itself with a major league game in front of it. In short, that was the problem. The processes of the Commonwealth as a whole, with the supply manuals and the very elaborate checking processes that are built into the Commonwealth's procedures elsewhere, were simply not familiar to-it has become perfectly apparent-the departmental officers who were engaged in dealing with this contract. Senator Lewis —Don't worry about the departmental officers. What about the Minister? Senator GARETH EVANS —I have not been asked about the Minister. If you want to get up, boofhead, and ask me a question about the Minister, I will be perfectly happy to answer it. The PRESIDENT —Order! Senator GARETH EVANS —I will withdraw without being asked, Mr President. I appreciate that that represented a lapse on my part which I will endeavour not to repeat, whatever the provocation. When I am asked questions about Ministers, I will answer accordingly. At the moment I am being asked only about bureaucratic processes, tendering processes. I have endeavoured to explain the reason for my confidence that problems of this kind are not endemic in the Public Service generally as well as being, of course, highly unlikely to recur in my own Department as a result of the lessons that have obviously been learnt from this exercise. Senator MESSNER —Mr President, I ask a supplementary question. Since the Minister invites me to ask about his own role in this matter, I note that on page 10 of the report on Amann Aviation Pty Ltd, Mr Menzies draws our attention to the fact that, in the final analysis, it falls to the decision-maker to decide what is an acceptable risk to the Commonwealth. Did the Minister decide on that issue in this case? Senator GARETH EVANS —The Minister did not decide on that issue in this case. That is made perfectly clear if one reads the report. There was not put to the Minister, or any of the Ministers who were acting in Mr Morris's stead when the particular series of decisions was made, any of the considerations that would have alerted them to the fact that there was some risk associated with the grant of this contract. All of that is fully spelt out. If the matters in issue had been put with any clarity or in any detail to Mr Morris or to Mr Scholes, who was acting on his behalf in his absence overseas at the relevant time, or to the further Minister-I think it was Mr Duffy-who finally took the matter through Cabinet, all of whom are identified and mentioned in the report, and if the Ministers had been briefed on some of the matters which did apparently cause concern in some breasts but not the relevant ones at the relevant time, of course they would have made some assessment themselves of the risk involved and made a decision accordingly. The circumstances are perfectly well known, perfectly clearly spelt out, and I do not think they require any more defence from me than is articulated in the Menzies report itself. Senator ZAKHAROV —My question is addressed to the Minister representing the Minister for Community Services and Health. Has the Minister's attention been drawn to an article which appeared in the Sydney Morning Herald yesterday headed ` ``Throw out drug children'' is videotape message'? This newspaper article implies that the primary focus of the videotape Don't Be The Last to Know, which has been produced by the Government as part of the drug offensive program, is to force drug addicted children out of their parental homes. Is this a fair or accurate account of this video? Is the Minister also aware that this video is to be screened in every State in Australia at 7.30 p.m. on Sunday, but not in Canberra? What is the reason for this exception? Senator TATE —I have received a brief from the Minister for Community Services and Health and I would like to acquaint the chamber with it. The Minister is aware of the article and is pleased to inform Senator Zakharov that throwing drug addicted children out of their parental homes is not in any way the primary focus of the film. In fact, the main message from the film is about the need for communication within the family, the need for parents and children to talk to each other and together deal with problems of drug abuse. Don't Be The Last To Know has been produced by the drug offensive in association with Film Australia and is narrated by Mike Willesee. The film concentrates on the experience of two young people who were drug dependent, one on alcohol and the other on heroin, the effects on them and their families and their ultimate success in overcoming their problems. They are true stories and real people. The film makes it clear that drug abuse is very often the symptom of a problem rather than the cause, and it encourages honest and open communication within the family setting to help young people to deal with the temptations and problems of drugs. The film explains that help is available not only for the individual with a drug abuse problem but also for the family and friends who may be swept up in that problem. In the two cases shown, the parents did ultimately eject their children from home and, by making them responsible for their own actions, forced them to confront their own drug problems and to deal with them. However, this was after a very long battle with their addictions, and the film very explicitly stresses that this may not be the right thing to do-that it will depend on the circumstances of the problem and the advice received. The Minister urges all Australian parents to watch Don't Be The Last To Know with their children-I emphasise `with their children'-when it premiers on the National 9 network in the top rating 60 Minutes time slot this Sunday night. This should ensure it a significant viewing audience throughout Australia and I commend Channel 9 for its decision to screen it at that time. As Senator Zakharov indicated, unfortunately the people of Canberra will be deprived of seeing it because, even though Capital 7 runs Willesee and 60 Minutes, it has so far refused to show the film. I urge it to quickly change its mind. Finally, the Video Industry Distributors Association of Australia deserves special credit for the vital community service role it is playing by distributing the film. Thanks to the video industry, Don't Be The Last To Know will be available free of charge to concerned families through the network of 3,000 video retail outlets throughout Australia. I understand that this is at a cost to the video industry of about $150,000 and that it is the first time that such a drug education film has been released through video outlets anywhere in the world. Copies of Don't Be The Last To Know will be circulated to all honourable members and senators and I urge them all to publicise its availability. I commend Don't Be The Last To Know to all Australian families. Senator McLEAN —My question is to the Minister representing the Minister for Veterans' Affairs. Is the Government considering abandoning its proposed changes to the criteria for defence service home loans? Is the Minister aware that a change from the present loan to a $10,000 non-repayable, non-taxable cash grant would considerably increase the financial burden on service men and women, especially veterans, who generally are older and therefore are forced to pay back loans at a higher rate? In order to put an end to the confusion and inconvenience experienced since the Budget by defence personnel and veterans in the process of negotiating to purchase a home, will the Government announce its intentions on this change as soon as possible? Senator REYNOLDS —I have been advised by Mr Humphreys that the Government has received a submission from the Returned Services League of Australia (RSL). In view of the importance the Government attaches to the defence veterans' conditions and the extremely tight timeframe within which a decision on the matter is to be made, the Government has appointed a businessman, Mr John Alan Uhrig, to head a group of senior officials from the Department of the Prime Minister and Cabinet, the Department of Veterans' Affairs, the Department of Defence and the Department of Finance, together with a representative of the RSL, to examine and report on this matter. The aim of the group is to look constructively at the Government's proposal, along with the variations that have been proposed by the RSL and other interested bodies, with a view to presenting an urgent report. It is intended that the report will be available in time for it to be considered by the Government, with a view to an announcement of a final decision before the end of the year. As to the precise effect of the change on older service men and women and veterans, it is not the Government's intention that the proposal disadvantage any eligible persons. Senator McLean will be aware that the $10,000 grant represents the lump sum equivalent of the interest subsidy which is currently paid by the Government on the average defence service home loan. It is based on an interest rate of 13.5 per cent over a typical term of 17 years. Let me quote from Senator Walters, whose advice on a number of matters is always important to reflect on. In the Senate Estimates committee on 29 October 1987 she said, `That sounds fair enough'. I reiterate that it is not the Government's intention to disadvantage any eligible person. An announcement will be made before the end of the year. Senator VALLENTINE —I direct my question to the Minister representing the Minister for Administrative Services. Is the Minister aware that on 23 October 1987 two officers of the Department of Administrative Services, Messrs Ross Temple and Colin Ekert, spoke with Peter Martin, owner of the land near Geraldton which the Government seeks to compulsorily seize for its spy base there, and indicated that the value of the project was of the order of $300m, not the $25m which has been officially stated? Were Messrs Temple and Ekert authorised to give this figure? If so, is the figure accurate? Is the Minister also aware that on 26 October 1987 a Mr Mark Appelt, an engineer with the Department of Housing and Construction, sought access to the Martin land and indicated in the process that $300m was a probable all-up cost if housing and so on were included? Was this figure cleared with Administrative Services before Appelt used it? Finally, I ask: What is the estimated project cost of the Geraldton spy base? Senator ROBERT RAY —Unfortunately, I do not have a quote from Senator Walters to assist me here, but I have some notes on the subject. The officers from the Department of Administrative Services who have spoken to land owners in the Geraldton area were certainly not authorised to give out any information about the total project cost of the new planned facility, nor do they have access to that information. This applies equally to those officers of the former Department of Housing and Construction. I wish to make it quite clear also that the land in the Geraldton area is not being compulsorily seized. Land will be acquired through the normal government land acquisition procedures. All costings have been properly and thoroughly reviewed by the security committee of Cabinet. The facility, as previously stated in the Parliament, will provide a substantial increase in Australia's independent intelligence gathering capabilities. The defence policy information paper tabled in March this year stresses that such a capability is fundamental to our national security and the Government will ensure that our needs for strategic intelligence of high quality will continue to be met. Our intelligence gathering capabilities will be staff operated and controlled by Australians. It is not the practice of governments to release the specific costs of those intelligence capabilities. Senator VALLENTINE —Mr President, I ask a supplementary question. I understood the Minister to say that it is not customary for the Government to outline the costs of such intelligence gathering operations. Is that the final word on this matter? The Government should be able to give final costings of the Geraldton project and I think they should be supplied to the landowners and the Parliament as soon as possible. Will this information not be forthcoming? Senator ROBERT RAY —I did not refer to global costs, in any event; I said `the specific costs'. I am advised by the Minister for Defence, Mr Beazley, that it is not his intention to release those specific costs. Senator BOSWELL —My question, which is directed to the Minister for Transport and Communications, concerns the extraordinary incompetence-incompetence which was denied heatedly by the Minister responsible for this matter at the time, Senator Gietzelt, in this place and in Estimates committee hearings-revealed by the Review of Tender Procedures for the Coastwatch Contract. Is it a fact that the review committee found that the general attitude of the Tender Assessment Committee, as explained by its Chairman, was `not consistent with Commonwealth policy as to assessing tenders of such magnitude and complexity'? What is the nature of the counselling and training to which the Chairman and other members of the Committee will be exposed? Senator GARETH EVANS —It is a fact, as I said in answer to an earlier question, that the understanding and appreciation of the departmental officers concerned of what was involved in the proper application of tender principles was not what it should have been. In particular, they failed to appreciate that it was not a matter of just giving the contract to the lowest cost conforming tenderer; that there had to be an absolutely rigorous evaluation of the capacity of that tenderer to deliver, particularly in the context not of an off-the-shelf tender performance but of the provision of services of a complex kind over a long period. There was a failure to appreciate the extent of the Commonwealth tendering rules, as contained in detailed manuals and procedural instructions that exist elsewhere within the system. There was not a full and complete understanding of the way in which those principles should be applied to a complex tender of this kind. The form that the counselling and training will take will obviously make certain in the first place that any of the officers who are engaged in these kinds of tender assessments in the future are totally and fully apprised of the ground rules, principles and procedures that should apply to contract proposals of this kind. Senator Chaney —That is not counselling; it is training. It has nothing to do with counselling. Senator GARETH EVANS —I am referring to the training that will be necessary for the future, if the honourable senator can get himself back down off his high horse for the second time this Question Time. The officers will be trained in the proper principles and procedures that apply to this proposal. There will also be a standing requirement of consultation with, in the case of major tender assessments, other departments and other senior officers elsewhere in the system who have greater familiarity or experience with these matters than has traditionally been the case in my Department. As to the counselling that will be given to those officers whose performance, as I said earlier, has been somewhat less than optimal in this respect, those who find it possible to resume their duties after the trauma to which they have been subjected by this affair-- Senator Chaney —Oh, the poor fellow. What absolutely pathetic behaviour. Senator GARETH EVANS —Senator Chaney can sneer, sigh and carry on. I will have a word with him later. He is oozing with sanctimony for the umpteenth time in his parliamentary career, and is doing so in a peculiarly unattractive fashion. I will tell him a little of the background that underlies this matter and we will see how much Christian compassion he can then bring to bear, rather than talking about it on occasions such as this. Senator Chaney —Have you ever thought of your responsibility to the country? Senator GARETH EVANS —I think of it all the time, and that is why I am standing here and why the honourable senator is in opposition and will remain so for as long as any of us is performing effectively in this place. There are a number of deficiencies at a number of different levels, deficiencies on the part of officers engaged in full time operational capacities and, clearly, deficiencies in supervision and oversight by more senior management. Obviously, those deficiencies will also be remedied by appropriate and systematic counselling, appropriate and systematic talking through and working through the lessons that can be learned from an exercise of this kind. Problems do occur in administrations from time to time. Senator Chaney, Senator Durack, Senator Messner and others may remember that some problems occurred on a massive scale during their administration, problems that cost this country hundreds of millions of dollars in irretrievably lost tax revenue. Absolutely nothing was lost to the country by this particular exercise. Not a day of coastwatch surveillance performance has been lost and not a dollar of Commonwealth money has gone down the drain as a result of this affair, unlike the hundreds of millions of dollars that are directly attributable not just to low order bureaucratic failures but to high order failures of ministerial oversight, government direction and government competence. That is what was lacking in Senator Chaney's day. He has learned nothing from the experience and as a result he will bear the fruits of that in the Australian electorate into the future. Senator BOSWELL —Mr President, I ask a supplementary question. Why did the people who were in charge of this Department-presumably they were on very high salaries-make the obvious mistakes that have been made when they were warned continually by honourable senators on this side of the chamber and at Estimate committee hearings six months before the disaster happened? Senator Collins —Because those officers probably pay as much attention to you as the rest of the electorate do, which is to say, none at all. Senator GARETH EVANS —I think Senator Collins has given the perfect supplementary response and I will leave it at that. Senator GILES —My question is directed to the Minister representing the Minister for Foreign Affairs and Trade. Have there been any recent Australian initiatives at the United Nations General Assembly in relation to a comprehensive test ban treaty? If so, what has been the response? Senator GARETH EVANS —Some dramatic initiatives have been taken by the Australian delegation at the United Nations and the response has been outstandingly successful. An Australia-New Zealand resolution calling for a comprehensive test ban treaty and practical work on associated issues was adopted by an overwhelming majority in the First Committee of the United Nations General Assembly on 13 November. The resolution gained the support of 122 nations and was opposed only by the United States and France. It attracted more support than other resolutions calling for the cessation of nuclear test explosions. It included a specific call for the development of an international seismic monitoring network that would be essential to the verification regime required for a comprehensive test ban treaty. An Australian resolution on the notification of details of nuclear tests to the Secretary-General was also adopted by a large majority. The Australian delegation has been displaying conspicuous and very effective leadership in the carrying forward of these crucially important issues of principle and practice as far as disarmament is concerned. Australia's leading influence in the international debate on disarmament issues was also reflected in the adoption by consensus in the First Committee on 12 November of an Australian initiative against the use of chemical weapons. The chemical weapons resolution calls on all states to observe the 1925 Geneva protocol banning the use of chemical and biological weapons. It requests the Secretary-General to investigate reports of use brought to his attention and to report his findings to member states. Prompt and impartial investigations of reports will, of course, enhance the authority of the Geneva protocol. The resolution also supports the negotiations currently under way in Geneva for a comprehensive chemical weapons convention. Particularly new ground broken by this resolution is the universal support for the Secretary-General's role. In the past this has been opposed by many countries, including the Soviet Union. Once again, the effectiveness of Australian diplomacy and leadership in this area and the credibility that the Australian Government has won in the last 4 1/2 years by its dedicated pursuit of disarmament issues through, in particular, the efforts of the Ambassador for Disarmament, Mr Butler, have borne fruit on this occasion in a way which should, I think, attract the support of all members of this chamber. Senator CHANEY —My question, which is directed to the Minister for Transport and Communications, who might more appropriately be called the Minister for mates and double standards, relates to the shoddy and ineffectual procedures followed by the Government with respect to the coastwatch tender and to the portrayal of the national interest that that represented. Does the Minister agree that the Minister responsible for the Department of Transport during most of the time the coastwatch contract was under discussion knew that his officers were working on the matter? If that is so, under the principle of ministerial responsibility, on which we have heard so much from the Minister in the past, why should Mr Morris not take full responsibility for the extraordinary bungling and incompetence revealed in the report of the Menzies Review of Tender Procedures for the Coastwatch Contract fiasco? Why should Mr Morris be excused for having failed to interest himself sufficiently in the tender renewal process, especially when the matter had reached very senior levels in his Department? Why should he escape the fact that he chose to ask none of the obvious and relevant questions that a serious Minister would ask? Senator GARETH EVANS —I think the last time in Westminster parliamentary history that a Minister resigned as a result not of any personal malfeasance or negligence on his behalf but merely that of maladministration within his own department was the Crichel Down affair in Great Britain. Senator Puplick will no doubt correct me if I am wrong on this subject. He is already purporting to but he is wrong about that example. The last example was, I think, over three decades ago in Great Britain. Subsequently, there have been periodic bits of grandstanding in the way of offers to resign which have been carefully orchestrated in advance to ensure that they will not be accepted but in terms of actual instances of Ministers accepting that extreme degree of responsibility that is no longer the accepted convention and it is acknowledged as such in both countries. I would welcome a supplementary question from Senator Chaney if he has any examples of Ministers in his own previous Government resigning on the grounds of the loss of several hundreds of millions of dollars through the bottom of the drawer tax scandal or, if he can think of any other illustrations where Ministers have responded to their responsibility to the public wheel, I would be delighted to hear from him. The truth of the matter is otherwise. It is only when there is some personal element of misbehaviour or negligence that the principle of individual ministerial responsibility is presently accepted. Senator Puplick ought to know about that because he contributed to a chapter to that effect in a Senate committee report I wrote with him some years ago. In the particular case of the Ministers involved in this matter, the truth is very well set out on pages 56 to 58 of the Menzies committee report which bears upon the particular involvement that Ministers had in the conduct of this matter as it came before them. It is most simply summarised, I suppose, in the third paragraph on page 58 where it is said: The very limited information on this aspect- that is to say the lack of expertise and the risks associated with that- provided to Ministers did not alert them to the dangers presented by the lack of expertise on the part of Amann and his staff and the absence of any existing organisation. The unreliability of the costings investigation was also not revealed. The truth of the matter is that none of the signals that might reasonably have been expected to have been communicated to the relevant Ministers were in fact communicated as a result of the combination of circumstances that are fully described in this report. Under those circumstances no Minister can be expected to assume the degree of personal responsibility for things that go wrong that Senator Chaney is claiming, with all the hypocrisy he can muster on these occasions, should be the case. That is simply not the way things have been done in memory in the Australian environment in the past and I am sure it will not be what will happen in the future either. There is absolutely nothing here that represented any lapse of judgment, quite apart from any worse form of negligence or misbehaviour on the part of any of the Ministers that were involved. Senator CHANEY —Mr President, I ask a supplementary question which relates to the Minister's reference to signals to Ministers. Does he deny that the signals of concern that were expressed in this chamber to Senator Gietzelt on a continual basis were treated with contempt by the Minister and totally rejected by him? Senator GARETH EVANS —I deny that absolutely. I also referred to the fact that those particular signals were, such as they were, signals that were given after the contract had been awarded-well after-and not at the time that we are talking about when the contract was granted in the first instance. Senator BEAHAN —I direct my question to the Minister for Finance. Has the Minister's attention been drawn to a speech made by Treasury Secretary Stone, now Senator Stone, on 19 November 1979 to the Australian Institute of Management? In that speech did Senator Stone lay down a series of what he described as unchallengeable propositions in relation to the management of the nation's current account in the 1980s which makes this question quite relevant? Do those unchallengeable propositions still underpin this Government's economic strategy and should those unchallengeable propositions also underpin Senator Stone's eventual run for the leadership of the Parliamentary National Party foreshadowed on the front page of the Sydney Morning Herald this morning? Senator WALSH —Yes, I have a copy of the speech delivered by the then Treasury Secretary on 19 November 1979. I would like to quote a few extracts from it. Of what was then known as the `Gregory thesis', which I will not explain but it was getting a lot of publicity at the time, he said: . . . the expectation of a strong growth of mineral exports on which they were based- `they' being the conclusions of Gregory- and an expectation I agree with. I want also to note that even in the brief time since those figures were current the outlook for energy exports has immeasurably strengthened. In short, in the decade ahead there seems every reason to believe that we are going to be very successful at exporting. That brings me to my first major point, which is this: The more successful in the decade ahead we prove to be at exporting, the more successful we are also going to have to be at importing. He then went on to say with characteristic modesty: It is important to understand that this conclusion does not rest upon my opinion or some other equally unreliable foundation, but upon a simple chain of logic. He also said: . . . Australia will need to sustain a deficit on the current account of its balance of payments through the 1980s . . . Towards the end of the speech he said, again with characteristic modesty: I am conscious that in developing this paper I have, in my effort to ensure the logical undeniability of the series of propositions it advances, almost necessarily been forced into complexities. Let me therefore try to draw out the chief points by now posing three simple questions: Since drawing on external capital means obtaining imports now on the basis of paying for them later with deferred exports, why, if we wish (or need) to acquire capital from abroad, would we either especially limit imports?-or still less, encourage exports? If however, we do wish to encourage exports-or if matters (eg, the international energy situation) should so develop as to ensure that exports increase anyway, why-since the purpose of exporting lies in acquiring the wherewithal to purchase imports-would we wish to limit imports? If however we do, for whatever reason, wish to limit imports, why would we wish to especially encourage exports? Anybody who had been listening to that would have noticed a certain incompatibility between the views that the then Treasury Secretary held in 1979 about a current account deficit and the views he appears to hold now. In other words, his economic pontifications rest upon a very flawed historical record, as indeed do his moral pontifications. Ultimately he should be judged against the background of a sleazy Queensland National Party machine which put him into Parliament. Senator DURACK —My question is directed to Senator Foreman in his capacity as Chairman of the Standing Committee on Infrastructure. Can Senator Foreman advise the Senate what progress his Committee has made on the reference given to it by the Senate on 24 September last concerning the coastwatch contract debacle? Is it the Committee's intention to conduct public hearings into this sorry affair? Senator FOREMAN —The Committee has met on three occasions and on the first occasion the Committee decided to await the second Menzies Review of Tender Procedures for the Coast-watch Contract. The Committee met this morning and decided to have a review of the Menzies report, and we hope that that hearing will start some time next week. Senator DURACK —I wish to ask a supplementary question arising out of that answer. I would like Senator Foreman to give the Senate an assurance that the Committee investigations will not be restricted to the excessively narrow terms of the Menzies committee, and will in fact follow the reference given by the Senate two months ago. Senator FOREMAN —I am sure that the Committee will take into consideration the directions that were given to it by the Senate some weeks ago and will also consider all aspects of the review and everything else that may be relevant to the inquiry. Senator BURNS —My question is directed to the Minister representing the Treasurer. Has the Minister's attention been drawn to the Australian Bureau of Statistics (ABS) retail sales statistics for September, which were released yesterday? Is it true that over the year to September, Queensland has been the worst performing State in terms of retail sales growth? Would Australia's overall macroeconomic performance be better if business and consumer confidence in Queensland were running at rates closer to the national average? Senator WALSH —The answer to the last part of the question is, of course, yes. I am sure that that will not surprise Senator Burns. The answer to the first part of the question is also yes. Indeed, over the last 12 months ending September 1987, retail sales growth, in terms of current prices in the new series published by the ABS, shows that the Australian average increase was 8.1 per cent. The highest was Western Australia with 9.7 per cent and the lowest of all was Queensland, with 6.9 per cent. The other States necessarily fell between 6.9 per cent and 9.7 per cent. Some might see those figures as not necessarily being bad news if they were an indication of a transfer of income from consumption to investment, which in the macroeconomic sense is something which Australia as a nation does need. When they are taken in conjunction with the appalling Queensland business investment statistics, published two weeks ago by the ABS, it seems much more likely that a different situation is present; that is, that the Bjelke-Petersen regime purports to encourage private enterprise and the private sector in general, but the reality is that the only people who get encouragement are some of its cronies. In conclusion, it should be noted that apparently some business activities have been thriving in Queensland recently and, given the publicity that has been given to them in recent times, and the compliant attitude of the authorities in Queensland, they should continue to do very well. Senator PUPLICK —My question is directed to the Minister for the Environment and the Arts. He will recall being responsible for inserting a number of advertisements in Queensland local newspapers under the heading, `What I have been trying to say about the World Heritage listing: the uninterrupted version'. The advertisement appears over Senator Richardson's personal signature, and I therefore assume that he is familiar with its text. He will also acknowledge the fact that he had to have this advert reprinted in order to exclude a photograph of a particular Australian citizen who objected to his photograph being included in the advert. Senator Richardson will recall that he says in the advert: When trees which have taken hundreds of years to grow are felled, or loggers' roads bulldozed through, the canopy is pierced by sunlight and a different kind of rainforest begins to grow. Plants which are not indigenous to the rainforest then take hold and, like weeds, take over. I ask Senator Richardson: Which species of plants? Senator RICHARDSON —I am happy to answer that question. I received in the mail a couple of days ago a present from a resident of Ravenshoe, and when a person in my position receives presents from a resident of Ravenshoe one wonders what sort of present one is receiving. Senator Robert Ray —Have you declared it? Senator RICHARDSON —No, I have not declared it, but I am doing so now. I cannot recall the exact Latin term that the gentleman used in referring to the plant, but he, being a local timber man, well and truly involved for much of his life in the forest, said that this was the first plant to regenerate after logging and he sent me a leaf because he wanted us to make it the emblem for the world heritage area. Senator Boswell —He wanted you to wrap yourself around it. Senator RICHARDSON —No, Senator Boswell, your problem is that you have been sitting on it for too long. The plant turns out to be called the gympie-gympie, which is a stinging plant which I am told has been known to cause fatalities. When one is stung by it, the pain can last for one to two years, and it takes 40 years for the leaf, when cut off the plant, to lose its potency. That is the first plant to come up and I might say that I am going to take a considerable interest in the legality of forwarding such a plant to me in those circumstances. I would be happy to provide Senator Puplick with a list of other plants in due course. Senator PUPLICK —I wish to ask a supplementary question. Since the stinging plant is indigenous to the rainforest and therefore cannot meet the test in Senator Richardson's advertisement about plants that are not indigenous to the rainforest, am I to presume from Senator Richardson's answer, having put into the newspapers this advertisement which is factually inaccurate, while appearing above his own signature, that once again he simply does not know what he is talking about from a scientific perspective? Senator RICHARDSON —I would be happy to provide a list to Senator Puplick. I discussed the matter with some scientists from the Commonwealth Scientific and Industrial Research Organisation, one of whom has worked in the rainforest for the last 37 years. He has a bit more knowledge than I have about it and, I might add, both he and I have a lot more knowledge about it than Senator Puplick. Senator BLACK —My question is addressed to the Minister for Justice. Has the Minister seen recent Press reports dealing with the efforts of the Australian Federal Police (AFP) and Interpol to locate a former Queensland police officer, Jack Herbert, now sought as a witness by the Fitzgerald Commission of Inquiry into Possible Illegal Activities and Associated Police Misconduct? What efforts are being made by Federal Police to locate Herbert so that he can be returned to Australia if charged with an extraditable offence? Senator TATE —Yes, I have seen some reports along the lines suggested in the question posed by Senator Black and in particular in the Brisbane Telegraph of 18 November where, in the course of an editorial concerning Mr Herbert, in which he is described as `a key witness'-that may be a fair description-it is said that the Queensland police and the Federal Police should also be involved in the hunt for his whereabouts. It has always been the case since the setting up of this inquiry under Mr Fitzgerald that any of the requests that the Commissioner has made of the Federal law enforcement agencies has been readily and, I believe, very competently supplied to him. I have encouraged that liaison and contact between our Federal law enforcement agencies, both the National Crime Authority and the Australian Federal Police, and Mr Fitzgerald concerning the meeting of his requests and the needs he has put to us. In fact, I have a letter from him thanking me for the support that has been extended. Insofar as the location of Mr Herbert is concerned, sometime prior to 25 September last the Fitzgerald inquiry requested, I think orally, whether the resources of the Australian Federal Police-I think it had in mind particularly our foreign liaison officers located around the world-could be utilised to trace the whereabouts of Mr Herbert. As Mr Herbert was believed to be or to have been involved in criminal offences against State laws, the AFP view was that such inquiries could be well placed through Interpol, and therefore on 25 September 1987 and since then, and at the request of Queensland police attached to the Fitzgerald inquiry, the Australian National Central Bureau of Interpol, which is located in Australian Federal Police buildings here in Canberra, initiated inquiries with other national central bureaux in an effort to locate Mr Herbert. At this moment those inquiries have failed to locate him. If, as may well be the case, some further upgrading of the effort to locate Mr Herbert is required, I am sure that that further and particular assistance by Federal law enforcement agencies will be forthcoming. Senator Black also asked about extradition of Mr Herbert. I have pointed out to the chamber before that if Mr Herbert is indeed overseas he can be extradited only by the Federal Government and not by any State government, and then only if there are pending court proceedings to do with the commission of criminal offences. He cannot be extradited simply to face a commission of inquiry. Of course, if charges are brought against Mr Herbert he could be extradited. In the meantime, we are extending all our resources and contacts overseas to locate him. Senator JENKINS —Is the Minister representing the Minister for Primary Industries and Energy aware that between January 1986 and August 1987 the Western Australian Department of Health prosecuted only one of 30 cases of breaches of the State's pesticide regulations, and that 12 women of child bearing age and 15 children were exposed to high organochlorine residue levels? In view of these figures, is the Australian meat industry still in danger from organochlorine pollution? Has any of the Australian meat exported to the United States and Japan, and subsequently condemned as unfit for human consumption because of unacceptable levels of chemical residues, been offered for sale on the Australian domestic market? Has any part of this condemned meat been re-exported to countries with less stringent health inspection control standards and, if so, which countries? What steps will the Commonwealth Government take to protect Australian consumers from Australian meats condemned overseas? Senator WALSH —I have to be brief because of the technical need to finish Question Time before 1 o'clock. According to the advice I have, the rate of violation concerning organochlorine contamination has been falling off sharply. Of the 190,000 samples taken since 25 May, only 0.27 per cent have shown any violation. No Australian meat described as being contaminated has been offered for sale on the Australian domestic market, nor has any Australian meat so described been re-exported. Sitting suspended from 12.59 to 2 p.m. Senator WALSH —On Wednesday of this week Senator Bjelke-Petersen asked me a question about the importation of gamba grass seed. I have a note from Mr Peter Morris on this which I will read. Gamba grass seed is not a prohibited species under the Quarantine Act and, consequently, may be imported without prior permission subject to inspection on arrival to ensure that it is free from serious exotic pest diseases, weeds and other prohibited matter such as soil. Samples for inspection are drawn in accordance with the strict standards of the International Seed Testing Association, as are the wide range of non-prohibited seeds imported into Australia under quarantine control. The risk of introducing foot and mouth disease on grass seed has been considered by Australian animal quarantine authorities and is considered to be virtually non-existent. But, in any case, I am informed that the original order has been cancelled by the importer for commercial reasons and this consignment will not now enter Australia. However, even though the specific case is no longer relevant, the question of quarantine is of ongoing importance. I am pleased to note that Senator Bjelke-Petersen is now very concerned about quarantine and is concerned about the proper application of the quarantine laws, belated though that concern is. Just over two years ago Senator Bjelke-Petersen signed false declarations on behalf of her husband and herself which stated-- Senator Boswell —Why do you have to descend to the gutter every time? Senator WALSH —Well, let it be noted for the record that Senator Boswell approves of the signing of false declarations by people who are bringing seeds into Australia which threaten the welfare of Australian agriculture. Senator Puplick —Mr Deputy President, I take a point of order. I put it to you that to accuse a member of this place of having signed a false declaration is clearly the sort of thing which is a grave reflection upon the honourable senator. Senator Walsh should not be allowed once again to indulge in this sort of gutter behaviour for which he has become notorious. He should be called to account by the Chair. The DEPUTY PRESIDENT —Order! Senator Walsh, the remark is out of order. It is a reflection on a senator and should be withdrawn. Senator WALSH —I withdraw `signed declarations stating that there were no seeds being brought into the country'. There were in fact seeds being brought into the country and Senator Bjelke-Petersen's husband had the effrontery to complain about it. Mr Deputy President, I table some half a dozen contemporary Press reports for the benefit of those who are interested in following it up. Senator Boswell —Mr Deputy President, I take a point of order. My point of order is that the Minister is misleading the Senate. If he took the trouble to find out what actually did happen in the case of Senator Bjelke-Petersen's husband, the Premier of Queensland, he would know that those seeds were carried in his case-- The DEPUTY PRESIDENT —Order! Senator Boswell, that is a debating point; it is not a point of order. Senator Boswell —It is a point of clarification. The DEPUTY PRESIDENT —You must produce a point of order. Senator Boswell —My point of order is that Senator Walsh has alleged that Senator Bjelke-Petersen's husband brought in prohibited seeds from outside Australia. In fact, the seeds came from his property. They were taken overseas inadvertently and brought back in the case. The DEPUTY PRESIDENT —Order! That is not a point of order. Other procedures are available to contradict or refute allegations that are made. A point of order is not one of them. Senator COLLINS(Northern Territory) —by leave-On behalf of the Senate Standing Committee on Regulations and Ordinances, I give notice that, 13 sitting days after today, I shall move: That the Principles made on 28 June 1987 under sub-section 40aa (7) of the National Health Act 1953 be disallowed. I seek leave to make a short statement. Leave granted. Senator COLLINS —These principles appear to vest in the Secretary to the Department of Community Services and Health numerous open-ended discretions which are part of the process of determining fees for nursing homes. The Committee wants to make sure that erroneous decisions which could affect the economic viability of a nursing home are subject to some appeal process. We have asked the Minister for Community Services and Health (Dr Blewett) for advice on this issue. Today is the last day on which the Committee can give what is intended to be a protective notice of motion to allow time to examine this issue. The DEPUTY PRESIDENT —I inform the Senate that the President has received the following letter, dated 20 November, from Senator Vanstone: 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 need for the Government to accept responsibility at both political and bureaucratic level for the gross mismanagement revealed by the Menzies Report into the Coastwatch contract fiasco, instead of the whitewash proposed by the Minister for Transport and Communications which provides no satisfaction to the taxpayers of Australia who have seen public funds and the security of the northern coastline put at risk by Ministerial and official incompetence.'' Yours sincerely AMANDA VANSTONE Senator for the State of South Australia Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator VANSTONE(South Australia)(2.05) —I move: ``That, in the opinion of the Senate, the following is a matter of urgency: The need for the Government to accept responsibility at both political and bureaucratic level for the gross mismanagement revealed by the Menzies Report into the Coastwatch contract fiasco, instead of the whitewash proposed by the Minister for Transport and Communications which provides no satisfaction to the taxpayers of Australia who have seen public funds and the security of the northern coastline put at risk by Ministerial and official incompetence.'' During Question Time today I understood the Minister for Transport and Communications (Senator Gareth Evans) to say that this matter, this fiasco, does not raise questions of ministerial responsibility. Unless I am unfairly paraphrasing him, he says that if there is no malfeasance or negligence, ministerial responsibility does not arise. I accept that there might be none of the former, but I do not accept that there is none of the latter. The Minister says there was not one day of surveillance lost and no dollars lost as a consequence of this bureaucratic bungling. I draw the Minister's attention to what would have been the cost of the first inquiry-the first Menzies report-the cost of the second inquiry, and the cost of the Senate Standing Committee on Infrastructure inquiry. If the cost of all those inquiries is simply par for the course, I draw the Minister's attention to the cost of the additional loading of the contract of Skywest Airlines Pty Ltd for an extension of the services while this bungle was being sorted out, an extension that had to be required because of the bungling and ineptitude of the then Department of Transport, an extension that was sought three or four times. Three or four times the previous contractor was asked to extend the contract because of the difficulties with the new contractor, Amann Aviation Pty Ltd. Eventually Skywest, as I understand it, successfully sought a loading on the contract to cope with the uncertainty. We are not talking about just a paper uncertainty; we are talking about real people wanting to know whether they have a job in the next month or the month thereafter, real people wanting to know about the future of their employment and suffering the stress associated therewith. It is perhaps not a dollar cost, but nonetheless it is an important one. I draw the Minister's attention to the impending legal action and the claim by Amann Aviation against the Government. I can make no assessment of what that cost is going to be, but if I were in the Minister's shoes I would not be so confident that this fiasco is not going to cost, or has not yet cost, this Government any dollars. If, however, Madam Acting Deputy President, you accept that there is no loss-I am sure you understand that the Opposition does not accept that-is the Minister saying therefore that there is no ministerial responsibility in this question? I want to put an analogy before the Senate, and I hope that that analogy adequately conveys my view. I take the example of a would-be murderer who intends to shoot to kill. He comes up to you, Madam Acting Deputy President, points the gun, shoots and misses. By the grace of God you escape death-sheer luck or perhaps ineptitude. Is the would-be murderer completely innocent? Do we say, `Oh, well, there has been no harm done. Off you go on your way. Have another shot next week.'? Of course we do not, because the murderer intended to kill. The victim was saved by sheer luck. The analogy I draw is of incompetent Ministers and incompetent administrators who, by the same stroke of luck or divine intervention, are saved from witnessing the real financial consequences of their incompetence, but that incompetence is nonetheless still there. This saga displays incompetence by Ministers and senior public servants, and all the Minister says is that public servants will be counselled. What the Opposition would like to know is: Who will counsel the Ministers involved? Senator Evans, was not the Minister at the time; I understand that. However, I seem to recall that as a consequence of some spy flights over Tasmania, he acquired a nickname that befits him well now. I think that it was `Biggles'. He potters around the issues in what his colleagues may see as an admirable attempt to protect them and the Public Service. But what the public and the Opposition see is a stubborn refusal of his Government to accept responsibility for a fiasco in administration. The Government cannot get out of that by claiming that the cost has been minimal. The fiasco in administration is there and the ineptitude is there. Menzies' final report outlines clearly numerous examples of gross incompetence. The Minister makes much of the report not recommending disciplinary action. I draw the Minister's attention to the terms of reference which, as I understand it, ask for changes that should be made to improve procedures. That is exactly what the report suggests. I do not see in the terms of reference a request that the committee consider what, if any, disciplinary action ought to be taken. I presume that that is not in the terms of reference because everyone understood in the beginning that that decision is for the Government to make-the Minister and the Prime Minister (Mr Hawke). The first finding was that no evidence of corruption or illegal conduct was found. I do not want to make a big deal of that recommendation, but I say simply that I and members of the public would be more comfortable with that finding if the report indicated evidence of inquiries that had been made to ascertain whether or not that was so. Or do we take the finding to mean simply that because the inquiry did not stumble upon such things, it assumed they were not there? The Opposition claims that the Government should have shown extra care in the awarding of this tender and that it should have done so because of the lack of experience of Amann Aviation. No one on this side says that a person should be deprived of the opportunity of gaining experience. That is not the point at all. The point we have made from day one is that an important, expensive contract was awarded to an inexperienced person in the industry and that that should have rung bells in the minds of the public servants concerned-that perhaps there were problems. I well recall the debate on this matter in May when Government members sought to portray my Opposition colleagues as being people who wanted to persecute newcomers to an industry. It was quite the opposite. All we wanted to do was to point out the care that should be taken when we give a large scale operation to a newcomer to an industry. I see that the Menzies committee agrees with us. The point is made at page 5 of the report that people awarding tenders should ensure that public money is spent effectively and economically. That is explained at page 8 as follows: . . . it is essential that officers acquire information as to price, quality and intending contractors' past and likely future performance sufficient to allow sound decisions to be made. That means that one has to make some assessment of the experience of the contractor to whom one intends to give the job. If the Minister had not understood that that is what page 8 of the Menzies report meant, he could have looked at paragraph 2.22 at page 9 which states: In assessing tenders for service contracts of the coastwatch type and thus preparing for the exercise of due economy in accordance with Finance Regulation 93, consideration and due weight needs to be given not only to the price offered, but also to the tenderer's capacity, bona fides and past performance. I will hammer that point because it seems, even in Question Time today, that the Minister still does not appreciate the point we are making. It was not that just because one does not have experience one could not get a contract; it was that lack of experience should put a tender board or tender assessment committee on clear notice. If the Minister turns to page 10, he will see that there is a difference between awarding a contract for goods and awarding a contract for services. The Menzies report states: This requires risk analysis of the offer-a rigorous evaluation of capacity, competence and capability of the tenderer, having regard to the technical, managerial and financial matters. The responsibility here falls to the decision-maker. The Minister has tried to tell us today that someone else made the decision-not the relevant Minister, but someone else. Surely the Minister is responsible for allowing someone else to make the decision. If the Minister still has not caught on, I draw his attention to page 33 of the report. It appears that while members of the Government have not accepted this point, the departmental working party did so. Under the heading `Observations and Comments', paragraph 2 says: The Departmental Working Party alerted the Tender Assessment Committee members to the need to take into account a company's capacity to perform for the life of the contract and that the selection of the cheapest option may not give this assurance. Yet long after this notice was given to the Tender Assessment Committee, we heard from Government Ministers and members that they were saving government money by awarding the contract to the lowest price tenderer. The Menzies report harps on this point because it obviously sees it as one of the central elements of ineptitude and bungling by the Government-that it did not understand the particular point it wanted to make. I again draw the Minister's attention to page 47 of the Menzies report which states: According to the records of the Department of Aviation, a finance company was registered as the owner of this aircraft . . . It further states: . . . Amann could not have engaged in any form of commercial aviation operation . . . that is, prior to being awarded this contract. Further on page 47 it states: He- that is, Amann- had put forward a proposed structure and organisation for that company- this was a shelf company acquired in January of this year- but, at that date, he had no organisation in place. It is unbelievable that the Government and the Tender Assessment Committee had all these opportunities to hear bells ringing to warn them to take extra care. On page 48 we see the attitude of the Tender Assessment Committee Chairman which, as I understand it, is roughly the Minister's attitude. The Chairman said: . . . there is nothing to indicate that he- that is, Amann- will not be able to do it . . . That begs the question of whether the Tender Assessment Committee, the Minister and senior public servants involved bothered to look for anything that would indicate that he would not be able to do it. It is simply not good enough just to say, `This is a new person in the business but I will not hold that against him'. The Government should be saying, `I won't hold that against him but how will he acquire the experience, expertise and managerial competence to enable him to simply proceed with this contract?'. If I understand the Minister's answers in Question Time, that is what he is saying to us today. He is saying that, because nothing jumps out as a problem, a $17m contract can be awarded-jump right in, throw caution to the wind, do not make the relevant inquiries that a Minister ought to make and all will be well. If it proves to be a massive fiasco and bungle, the Government can claim that it has not lost any money, despite the fact that there has been a significant expense outlaid in sorting out just how big this bungle really is. Finally, the conclusion drawn by the committee that brings together all these points that I have been making is on page 49, listed as paragraph 4. The committee says-and these are not my words: Given that the T.A.C. knew of Amann's lack of experience, absence of organization and having no aircraft for use under the contract, the T.A.C., if it were minded, in spite of these matters, to consider seriously his tender- I emphasise the words `if it were minded, in spite of these matters, to consider seriously his tender'- should have submitted his costings to a particularly rigorous and competent examination. In the event this was not done. Is the Minister telling us that, because that kind of incompetence has been engaged in, no one is responsible? This is outrageous. There are many more examples. In the limited time remaining to me I will draw the attention of honourable senators to some of them. It is quite clear from this report that the Department, I think it was the Department of Transport, knew in early 1985 of the difficulties that would be encountered in reletting the coast- watch contract. Yet it was August 1986, nearly two years later, before it was proceeding to develop tender documents. That in itself should have put one of the Ministers responsible at the time on notice that things were not working properly or efficiently, that things were not being done as they should. The report shows further that the Tender Assessment Committee squashed into three months an evaluation that normally takes six months. It squashed the period for the evaluation of a contract worth $17m into just half the normal time. As if that were not enough, the three months that the Committee did allow for a job that would normally take six months was to be undertaken over the Christmas break so most of the suitable staff were not available. But there has been more incompetence and more bungling. The Menzies report makes it quite clear that the Australian Government Solicitor (AGS) gave quite deficient advice about the tender documents to the relevant departments. In particular, if the Minister cares to turn his attention to page 27 of the report he will see the following: However, it could not be said to be clearly a responsibility of the A.G.S., as circumstances then stood, to point out such a matter which should have been recognised by the client Department. It is not clearly the responsibility of the Government Solicitor, but the implication is that perhaps the AGS ought to have bothered. In any event, as this report says, if the Government Solicitor is cleared from responsibility for not having pointed out the very important aspect of having progressive start-up dates included in the contract, the need for that should most certainly have been recognised by the client department. The Minister cannot have it both ways. If the Government Solicitor is to be cleared, we have to blame the client department which did not see the need through its own eyes. If the Minister turns to page 52 of the report he will see more examples of bungling. I say for those who have not run their eyes over the 60-page report that this paragraph is particularly damning. It states: The Notice of Acceptance- that is, of the tender- did not include in the letters incorporated in the contract a letter dated 12 January 1987 from Amann which offered progressive start-up dates for different bases. In other words, the Department was offered progressive start-up dates. It was given the opportunity of including them in the contract but simply ignored it. Again on page 52 of the report, the Committee stated: The A.G.S. should have drawn to the attention of D.O.T. the possible course of incorporating as terms of the contract the progressive start-up dates offered in Amann's letter of 12 January . . . Incidentally, a couple of the letters were lost, which might account for a further aspect of the bungling. There has been further bungling. The departmental estimates of costs, what the tenders would be, apparently were significantly higher than those supplied by the successful tenderer. Now, for example, if I were expecting to buy a kilogram of apples for $4 and someone offered them for $2, I would pick up the apples and have a pretty good look at them. I would have thought that the Department would have undertaken that kind of simple observation. Senator Messner —Perhaps the Minister should have done it too. Senator VANSTONE —Certainly, the Department should have undertaken that investigation as a consequence of instructions from the Minister. There has been further bungling. The Department accepted a number of tenders that, strictly speaking, could have been regarded as informal. Those tenders were faxed to it at the last minute. I would not buy a dog from someone who offered me a contract at the last minute before I closed tenders, let alone let out a $17m contract for the surveillance of the northern coastline of this country. It is absolutely unbelievable that that is what the Department did. The details are clearly laid out on pages 30 and 31 of the report. The Department apparently ignored discrepancies in various financial statements supplied by Amann. Far from being on notice that these people were inexperienced and ought to be watched more carefully, the Department was actually given discrepant financial statements and did not appear to take too much notice of that. It accepted blindly, where the contractor had managerial deficiencies, his offer, as a way of getting over that, to hire people in. Does that mean that, if I want to set up an entertainment company, I can become an Edgley tomorrow because, where I do not have the experience, I can give an undertaking to hire it in? It is patently ludicrous for a department so incompetently to accept this. There was inadequate recording of the Department's views and record keeping. The request to change aircraft, agreed by the Menzies report, was a very lightly considered request and may have provided the opportunity for the Government to get out of this. The Government was aware that the principal was on shoddy ground-in the Governments words, `unaware of the dimensions of the task'-and still publicly, in Estimates hearings and in the Senate from the beginning of this matter being raised, spoke confidently about the contractor's capacity to carry out this task. That is what Senator Evans has to do. He has to tell us why, when the Government has been on notice so long, it has consistently presented to this chamber a scenario that all was well, that nothing was wrong and the coastwatch contract would be properly carried out by Amann Aviation. I defy him to do it successfully because he will not be able to. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(2.26) —The awarding of the coastwatch contract to Amann Aviation Pty Ltd and the handling of that whole affair was unquestionably an administrative exercise that went wrong. It did not go disastrously wrong in the sense that lives were lost or anyone was injured as a result. It did not go disastrously wrong in the sense that hundreds of millions of dollars were lost from the public accounts, as occurred with the bottom of the drawer tax disaster perpetrated by Senator Durack, Mr Howard and others in the previous Government. It did not go wrong even in the sense that there was any loss of continuity in coastal surveillance of our northern coastline. Not a single day's flying was lost as a result of any of the things that did go administratively wrong in this whole affair. It did certainly go wrong in the sense that an organisation which was the lowest conforming tenderer was, nonetheless, clearly ill-equipped to do the job, despite some heroic efforts on its behalf to meet the deadline to match the performance criteria and was an organisation that had to have its contract terminated. That, in turn, has led to a very significant investment of time, energy and resources to establishing a continuing interim arrangement and, of course, to setting in train a new tender process. The fact that something did go wrong administratively has never been denied by me. I have been publicly quite explicit on the subject since it became apparent that the contract was clearly not going to be met. Up until then in my case, as with the previous spokesmen in this chamber and as indeed was the case with Mr Morris, a degree of discretion had to be exercised in the way the matter was handled publicly because of the intricacies of the operation of the law of contract and the very real difficulty that stood in the way whatever the mounting fears there may have been that the contract would not be met and the very real fears that existed as to the legal impossibility of terminating that contract before the due date. There has been no attempt by anyone, certainly not by me, to cover this matter up in any way. At the time of the termination of the contract I gave a very full explanation as to the entire set of circumstances, supported by a very full internal report by the Associate Secretary of my Department, Mr Beale, who I had tasked for that particular purpose. At the same time, I set in train a full external review of the whole affair in order that we might derive the appropriate lessons from it and it is that review that is the subject of these Opposition fulminations today, the review that resulted in the interim report put down very swiftly at the beginning of October with its recommendations about the future conduct of the tender process and the final report which has just been put down now, in mid-November, just a few weeks later again which deals, of course, with the circumstances of what actually happened and the lessons that can be learned from it so far as the quality of administrative performance and the future are concerned. I am very interested to see that there has been no attack or assault on the integrity or bona fides of that particular group that I put together for this purpose, nor should there be. Mr Andrew Menzies, OBE, the chairman of it, is one of the most competent, distinguished and universally respected public servants that it has been my privilege to know. I know that Senator Durack would certainly confirm that from his personal experience as Attorney-General. We have Mr Stan Perry, Assistant Secretary from the Department of Administrative Services Purchasing Policy Branch and an acknowledged expert in contracting matters, and Mr Barry Slingo, an Assistant Secretary in the Department of Defence, presently acting as manager of defence contracts in the regional office in Victoria with both engineering qualifications and outstanding personal experience and reputation in this whole tendering area. So a highly qualified and credible group has been put together and I accept in every respect the findings and the recommendations that it has made about the way in which we should act in the future as far as these matters are concerned. The findings are extensive. I will not track over them as Senator Vanstone has done, with lots of sound and appropriate fury, as we might have expected on this occasion. I do not disagree with her characterisation of the things that went wrong. I suppose that they can be summarised quite briskly by saying, as I did pretty much in these terms at the time of initially explaining why the contract was not being pursued, that there were cumulative inadequacies in the tender evaluation arising from an incomplete understanding of contractual policy, misunderstandings between departments and pressure to meet shortened deadlines during a period of staff absences and disruption. All those things are true and the criticism that flows from that, both in general terms and as to chapter and verse in a number of instances, I believe are thoroughly justified and I do not seek in any way to resile from that. The particular point that I make relates to the performance of the Ministers involved in this affair because necessarily any response to a matter of this kind raises questions of ministerial responsibility. They have been at the forefront of the assault-if it can be so regarded-mounted today, both in Question Time and in the speech we have just heard from Senator Vanstone, and they are matters which quite naturally come to mind in dealing with circumstances of this kind. But to the extent that there may have been any ground for concern from late March onwards so far as the knowledge of particular Ministers was concerned-there was such a ground from late March when, as the report makes clear, the report of the regional director in New South Wales came to the attention of Minister Morris and he reacted accordingly, as did everyone else, with some concern-the point about all the knowledge that existed at that stage was that it was after the contract was awarded rather than before. As I have constantly made the point-and there is nothing in the Menzies Review of Tender Procedures for the Coastwatch Contract report to countermand it-whatever the degree of concern that might have existed after the contract was awarded, it was not concern that could be realised in terms of action taken to terminate the contract simply because the legal grounds were not there to do so. That such legal grounds were not there I acknowledge certainly may have had something to do with the way in which the contract was formulated with its absence of phase-in times and hurdle points along the way that could have triggered remedial action. That did not happen. The fact that it was not possible for such remedial action to be taken reflects another failing in this whole administrative process and one that will be corrected for the future. But to the extent that criticisms have been made of ministerial inaction after the awarding of the contract, for the reasons I have just indicated there cannot possibly be any foundation for any such claim and I do not think any such claim is really seriously made. Most of the claims go back to the circumstances as they existed before the final granting of the contract on 12 March this year. In respect of those circumstances, the report-which is not challenged as to the bona fides of its authors and is not challenged as to any chapter and verse in it-is very full indeed in describing the state of knowledge of the relevant Ministers at this time, in describing the kind of information they had before them and in describing the impossibility, as a result of the paucity of information before them, of their being in a reasonable position to respond adversely to the situation as they found it. Two particular circumstances were the subject of very full discussion on pages 56 to 59 of this report. The first was the circumstances leading up to the endorsement by Cabinet on 2 March of the submission providing authority for the funding of the contract. The second set of circumstances lies behind the submission to the Acting Minister, which was endorsed by him on 9 March, actually finally approving the contract. So far as the former set of circumstances is concerned, the report makes it clear that the Minister at the time was simply not alerted to a concern which existed within the Department of Aviation suggesting that there was an element of risk `albeit small that Mr Amann will experience difficulties in obtaining the necessary air service licence'. That language which appeared in a co-ordinating comment from the Department of Aviation was not, through a chain of circumstances which are here fully described, drawn to Minister Morris's attention before he went overseas; it was not drawn to the attention of the Acting Minister, Mr Scholes, in the minute that ended up on his desk; and it was not drawn to the attention of Mr Duffy, who acted for Mr Scholes in the Cabinet because Mr Scholes was ill on the day in question. So the one piece of information that could have alerted any of these Ministers to the existence of a risk factor, an element of possible anxiety, simply was not there. Similarly, when it came to the formal endorsement of the contract and the submission that was put to Acting Minister Scholes and endorsed by him on 9 March, there was nothing in any of the documentation put to the Minister by his Department, acting on the advice of the Tender Assessment Committee constructed specifically for that purpose-to do these things at arm's length-which could possibly have alerted him to that situation. I read again the relevant passage from page 59 of the Menzies report: The submission to the Minister should have disclosed that Amann had limited experience in the aviation industry, he did not have an organisation in existence and, while he stated that he had made arrangements to acquire the necessary aircraft from overseas, he did not at that date own any of the required aircraft. The information in fact provided including the information provided to the Minister a few days earlier in relation to the Cabinet Submission was insufficient to alert the Minister to any of these matters nor, of course, to the unreliability of the costings investigation. So that is the situation so far as the Ministers are concerned. All that one is left with is some sort of extremely generalised assertion that the Minister of the day should have been somehow aware that there was a series of failings and inadequacies in the way in which the tender from Amann had been evaluated; that he should have drawn all sorts of adverse conclusions based simply on such knowledge, very limited as it was, about the very small scale of this organisation and should have acted somehow to stop the whole previously running independent evaluation process going ahead. There is simply no basis for any such assertion, if it is to be made-and it was not made with any clarity by Senator Vanstone-and if that is what the Opposition believes. As a result, there cannot possibly be any ground for an assertion of individual ministerial failing, so far as the time leading up to the granting of the contract is concerned. I have already dealt with the circumstances of the time after the granting of the contract. The whole question of individual ministerial responsibility has been the subject of an enormous amount of humbug perpetrated by parties in opposition over the years. Senator Durack —Like you in opposition. Senator Stone —Come on, we don't want humbug in this instance. Senator Walters —What a short memory some people have. Senator GARETH EVANS —If Senator Walters, Senator Durack and Senator Stone are responding to my suggestion of humbuggery by claiming that something of an untoward kind has happened when the Australian Labor Party has been in opposition, I am prepared to take that on board on the basis that they accept that these days there is no foundation whatsoever for any claim for resignation on the ground of individual ministerial responsibility. They cannot have it both ways. I do not propose to have it both ways. I have not had it both ways since we have been in government. I have had a very single-minded view of what individual ministerial responsibility means. That is endorsed by what was said by Mr Reid, another distinguished public servant, when he reported on this matter in the following terms in 1983 in his Review of Commonwealth Administration: At the outset, we shall try to dispose of one myth. When ministerial responsibility is discussed in Australia, many assert that in the United Kingdom ministers automatically, regularly, or often resign where there are acts of maladministration by their departments, allegedly amounting to a convention of resignation. This is a fallacy. As Appendix 8 demonstrates, this has never really been a convention in the UK. Indeed, we have not been able to identify (in well over 100 years) a single case that can properly and confidently be claimed as a resignation for that reason. It is interesting that even the 1954 Crichel Down case, involving the resignation of Sir John Dugdale, which I have always regarded as an example of just that instance, is not so regarded by Mr Reid on the basis of the analysis he makes of that case. He goes on to say: Ministers-in Australia as well as the United Kingdom-have of course profferred resignations for a wide range of reasons, such as personal actions or indiscretions, misleading of the Parliament, policy failures, policy differences with colleagues, and so on. But they raise quite different issues from the handling of cases of maladministration by a department. That is true. Senator Durack —That makes you a humbug. Senator GARETH EVANS —I do not wish to hear any more humbug from Senator Durack, given his failure to resign after the extraordinary and grotesque exercise in maladministration by him as Attorney-General in association with Mr Howard as Treasurer in regard to the bottom of the harbour tax cases. To hear any suggestions from either of those gentlemen that there is something wrong with the propositions I am espousing today amounts to breathtaking hypocrisy. I am glad that they have now been silenced on the subject. I move to the question of the appropriate administrative response to the administrative failings that have here been described. I have made it clear that there can be no question, in principle or on the basis of the facts before us, of any ministerial responsibility being taken to the extent of some discipline being imposed on Ministers, for reasons I have just expressed. But the question arises as to what action should be taken in relation to the departmental officials concerned. I make the point, only in passing, that there is no explicit recommendation on the subject of disciplinary action so far as the Menzies report is concerned. Perhaps that is not surprising as the terms of reference were inexplicit, as Senator Vanstone said, on that subject. But I certainly regard it as my responsibility to look at the question of disciplinary action in the light of the report and in the light of my understanding of all the events. I have looked at that question very carefully. I have reached a view which I have indicated publicly and which I will restate now. It is true that the report is critical, in particular, of the performance of the present Director of Supply and Services on a number of dimensions relating to his conduct of the tender processes. The report also concludes that senior management of the then Department did not exercise sufficient supervision of the matter and were aware of the limits of the Director's expertise and should have raised the question of whether the services of a specialist financial investigator should have been obtained. I simply make the point now that I am satisfied, after reading the report and taking advice on this matter from other areas within my Department, that the Director of Supply and Services did not lack personal effort or diligence in his handling of this matter. Rather, what he lacked was experience and professional development in the complexities of administering a major contract. Accordingly, it has not been recommended to me that any disciplinary action be taken against him and I have taken the strong view that disciplinary action, for that reason and a number of other reasons which I will not go into now, would be inappropriate in all the circumstances of this case. Nonetheless, if and when he recovers from the very serious illness which he presently has and which was the subject of some very untoward guffaws from the Opposition in Question Time today, he will be counselled in accordance with the recommendations of the report. Arrangements will be made for appropriate skill development training in the event that he happens to be involved in contract assessments of this type in the future. Similarly, the senior managers, such of them as are still there in line positions in the Department, that had broad responsibility for the contract will be strongly counselled-I emphasise `strongly'-on their responsibility to assess carefully the skills of the officers who are assigned to carrying out these sorts of contract tasks. Arrangements will be made for their supplementation as necessary and to closely track and supervise the processes. The Associate Secretary of my Department, Mr Beale, who is a newcomer to the Department and was not involved in any way in these matters at the time, will personally interview each of the key officers whose performance was questioned under the contract. It will not be a punitive process. It will be aimed at coolly exploring the facts with each officer, and the reasons for any failures and how those are best addressed, leading, we hope, to agreement on a personal development program if appropriate. These are highly sensitive personnel matters. It would be inappropriate to go further into individual circumstances or to huff and puff and rage about disciplinary action and so on of the kind that we heard, not so much from Senator Vanstone, I acknowledge, in her speech, but certainly in Question Time today. I repeat: I make no bones at all about accepting that this was a very significant administrative foul-up. There is no other way of describing it. It is explicable by reference to a major league matter, as I said in Question Time, perhaps being dealt with in a way that it should not have been by minor league players. The Department essentially was inexperienced in handling major contract matters, particularly those for the supply of services. From the things that went wrong we have learned a great deal, as I hope all government administrations learn from such things. In those circumstances, I do not believe that this motion is remotely justified. The ACTING DEPUTY PRESIDENT(Senator Powell) —Order! The Minister's time has expired. Senator DURACK(Western Australia) —Madam Acting Deputy President, I claim to have been misrepresented and seek leave to make a personal explanation. Leave granted. Senator DURACK —I claim to have been misrepresented by statements made by Senator Evans in the speech that he just made and also in answer to some questions during Question Time this afternoon in relation to the loss of taxpayers' money from the coastwatch contract bungle. He claimed that there was no such loss and compared the situation very favourably with his view of the loss of what be claimed to be hundreds of millions of dollars in the so-called bottom of the harbour bungle that occurred during the Fraser Government's time. He claimed the responsibility for that loss of money had to be borne by the then Treasurer, Mr Howard, and me as the then Attorney-General. The position is that there was a serious bungle by an officer of the Crown Solicitor's Office in Western Australia during my administration of the Attorney-General's Department. Even Senator Evans acknowledged that at the time I knew nothing about the matter, nor did Mr Howard. When that matter was brought to my attention, and then by me to Mr Howard's and the Fraser Government's attention, action was taken very promptly to recover moneys that might have been lost in that case-which, incidentally, involved a criminal trial from which no money would have been recovered whatsoever; Senator Evans seems to have overlooked that-and special legislation was passed to recover moneys that may well have been lost in countless other similar cases over a number of years. As the Commissioner of Taxation has acknowledged in successive reports, the moneys that were allegedly lost-they probably were not truly lost-at the time under the bottom of the harbour schemes have been virtually fully recovered and there has not been any lost. So Senator Evans has made that gross misrepresentation twice today, once recently in the course of his speech. I might add further in relation to the question of disciplinary action, which Senator Evans has just mentioned, that as a result of these matters being brought to my attention, disciplinary action was taken at the time-it was insisted on by me-against certain officers. As a result, one officer was sacked, another officer was demoted and another officer paid the ultimate penalty of being transferred from Perth to Canberra. Senator KNOWLES(Western Australia)(2.49) —Of course, I support the urgency motion moved by the Opposition which I will not read in full but which reads in part: The need for the Government to accept responsibility at both political and bureaucratic level for the gross mismanagement . . . in . . . the Coastwatch contract fiasco . . . I was rather relieved today to see Senator Evans, probably for the first time, acknowledge that there had been deficiencies in the awarding of this contract. However, I was concerned when he commenced his address to the Senate by saying that there was nothing really drastic about the effects of the fiasco. What he was saying in essence was that people have to die before the Government will listen to anything. The sad reality of this is that through the inadequacies of the Department of Transport and Communications people could have died because what he was putting at risk and what his former ministerial colleagues were putting at risk was the surveillance of the northern coastline of this country. If foot and mouth disease had entered this country, if we had had drug runners, gun runners or whatever operating as a result, it could have ended with people dying. I was absolutely astonished that Senator Evans also said that there was no loss of continuity. There was no loss of continuity by very, very good luck, rather than good management. It was purely and simply because Skywest Airlines Pty Ltd had undertaken to extend its contract on an ad hoc basis to bail the Government out. Senator Evans's statement is a gross understatement of the situation. Senator Evans also said that there was no attempt by anyone to cover up. I am afraid that that is where Senator Evans really ran aground in his rather honest assessment of the current situation. I refer back to the Hansard of 13 May, when the Minister then responsible in this chamber, Senator Gietzelt, said: I cannot for the life of me understand how any person can claim that this is a matter of urgency-- This, as I said, was when we were debating the coastwatch situation way back on 13 May. He went on to say: and of such importance as to justify spending two hours debating the acceptance by the Government of a contract dealing with the surveillance of our coastline. Senator Gietzelt, the Minister then responsible in this chamber, did not see it as an important issue. That in itself was a disgrace. He went on to say, on that particular day, that what we-that is, the Opposition-were trying to do was: to upset a legitimate and properly conducted public tender process . . . We have seen from the Menzies report on the Review of Tender Procedures for the Coastwatch Contract that it has been anything but that. He also said that he was simply trying to `save the public dollar'. Surely the Government and all its Ministers have a responsibility to make sure that in saving a public dollar the country and particularly its coastline are not put at risk. Senator Gietzelt claimed that the whole debate was nonsense. Once again, the word `nonsense' comes from his speech to the Parliament that day. Once again I quote Senator Gietzelt's words: There is a need for protection of our country from agricultural diseases, illegal immigration, illegal fishing, drug running and . . . other matters . . . Yet he did not consider that the fiasco that was obviously apparent at that stage was important enough to take on board. Senator Gietzelt could not even answer questions in the Senate on this matter. He said, `I do not have a brief on this'. That was about three, four or five weeks after questioning had actually started; yet he had not considered the matter important enough even to have a brief on it. He went on to say: . . . it is the cheapest and most dubious of all tactics to suggest that the Government has acted improperly. What we were saying is that there were deficiencies in the Department, there were deficiencies in the administration by the Minister, and yet he was prepared to whitewash the whole thing and put it to bed as such. Later on that day we heard from Senator Reynolds, who has now been miraculously promoted as a Minister in this place. In respect of comments from Senator Vanstone, Senator Reynolds had the audacity to say-I quote from her speech that day: I wonder why Senator Vanstone is so concerned about this particular issue. I doubt if there is very much northern coastline surveillance needed from the leafy suburbs of Adelaide. How outrageous it is for Senator Reynolds-now meant to be a Minister of the Crown and a senator for Queensland, which has a very large coastline-to say that another senator, Senator Vanstone, should not be concerned about coastal surveillance purely and simply because she comes from South Australia. That is absolutely ridiculous. Senator Reynolds went on to say in her outrageous speech that day: The aircraft will have the same surveillance capability as the present aircraft. . . At that stage she was referring to the change of aircraft that Amann had sought. That was not so. As we found out when the planes eventually arrived in Australia, they were not equipped as they were meant to be: they did not have the long range fuel tanks; they did not have bubble windows; they did not have dropping facilities; and they were not here when the Government told us they would be. Senator Reynolds also went on to say that the whole debate that day was trivial. We do not believe that it was trivial that day and we do not believe that it is trivial now. What we need to consider is the fact that the Government and its Ministers are responsible and should stand condemned for the total incompetence in handling this entire coastwatch contract. Their incompetence is now simply a matter of fact, and we all know that. The blatantly false information supplied to the Parliament, the Senate in particular, is an absolute disgrace. I will give a further example. Senator Gietzelt, who, as I said before, was then the Minister responsible in this place, as far back as 18 March, in answer to a question by Senator Durack, said that proper tendering procedures had been carried out. That is an absolute joke because, according to the Menzies report, which we have now seen, that is clearly not so. But Senator Gietzelt would not have known what time of day it was, let alone whether the correct tendering procedures had taken place. Senator Vanstone —Where is he today? Senator KNOWLES —Where is he today? He sat here for a couple of minutes while Senator Vanstone was talking. That was it; he shot through. He was not interested at the time; he is not interested now; and he could not care less about the surveillance of the coastline. On 30 March, Senator Tate told the Senate that he understood there would be a staged takeover, base by base. There was clearly no such arrangement. It is all very well for the Government to say that it was cutting costs by accepting the lowest tender, but why cut the surveillance throat in the process? Why put at risk the whole security of the northern Australian coastline? Any government is obliged to choose the most technically competent tenderer as well as the cheapest. This Government did not do so on this occasion. Senator Gietzelt's inadequacy in handling the issue-I will go so far as to say-was almost unequalled in disgrace. On 4 May, in answer to one of my questions on this matter, he just said, `No brief, no brief'. This was said on 4 May, yet this matter had been debated since March. How incompetent can one get? The Government's incompetence has resulted in individuals suffering huge losses, both financial and personal. In no way have we ever tried to attack Amann Aviation Pty Ltd or support another tenderer. We have simply said, `Let us have the most competent operator that we can possibly have'. Quite frankly, I feel very sorry that Amann, through the Government's inadequacies and mismanagement, has in fact suffered the losses that it has recently suffered. Of course, we have not heard anything about compensation. We just hear the Minister continue saying, `There have been no additional costs'. How can there be no additional costs when the Skywest contract has been extended? I know for a fact that the Skywest contract did have a surcharge and a penalty rate on it. Yet we have repeatedly heard the Minister say, `There was no such penalty'. We know that the cost of the inquiries is enormous. We know that the cost of Senate committees sitting is enormous as well. Skywest has in fact said in a letter to the Minister that it had applied for escalation of the rates under its current contract and would continue to do so through to the deadline that it had at this stage. We must look at some of the losses and the effects of this in the total system. On page 11, the Menzies report states: It is essential that, before accepting confirmation of the tendered price, the responsible contracts officer be satisfied that the tenderer fully appreciated the obligation to comply strictly with the required specification and is aware of the conditions that apply should default occur. Obviously, the Department did not know and the Minister did not know. Of course, Senator Evans admitted today what is also in the Menzies report-that we had the Minister represented by a Minister who was represented at a Cabinet meeting by a Minister who was not even briefed. That was the basis on which the decision was made. Mr Morris was then the Minister and Mr Scholes was unable to represent him because of illness, so Mr Duffy represented him. The Minister representing the Minister representing the Minister then did not have any oral briefing but found it okay to make a decision. It is absolutely unbelievable to think that a government can award a $17m contract without any formal briefing. The Department of Transport tender document was deficient in a number of areas. The Menzies report says that maybe those deficiencies were not sufficient to cause real problems. But when we go through the list of deficiencies it is obvious that they would have made it very difficult for tenderers to fill out the form accurately and for the decisions to be made accurately. The Department of Transport lost even more time during the tender process because of the involvement of so many departments trying to argue about requirements. There were so many basic faults in the tender document; the list just goes on and on. At the end of the report there are 16 findings on how this thing was mucked up right from the word go. It refers to the Department's handling of experienced staff who were already on Skywest's payroll. Their representations were ignored and Senator Evans has not even had the courtesy to reply to the representations from those staff that he received in his office. I found it quite amazing that today Senator Vallentine got up and talked about the coastwatch contract. She did not take any interest in that in respect of her State before, but she has come to life today. The Minister responsible should be sacked; there is no doubt about that. Senator Gietzelt has already gone out of the window, and I suppose that is the best thing that could have happened to the Parliament. The problem is that this was a case of gross mismanagement by the Government. Ministers, including Senator Evans, would not respond to questions that were raised in this place. That has been an absolute disgrace to the Parliament and to the people of Australia. The attitude taken by this Government on such an important issue has been less than careful. We must remember that so much has gone into this Menzies report. I hope, in line with a question asked by Senator Durack today of Senator Foreman, as Chairman of the Senate Standing Committee on Infrastructure, which is looking into this matter, that the Committee will abide by the guidelines set down by the Senate for investigating this matter. They have to be far wider than those laid down for the Menzies inquiry. I am sure that we will find many more skeletons falling out of the cupboard before the day's end. Senator COLLINS(Northern Territory)(3.02) —I must say that I commend Senator Lewis. Being able to sleep through a speech by Senator Knowles at a range of three feet is quite an achievement, in my view. Senator Knowles —He just works a bit harder than you do; that is all. Senator COLLINS —I doubt that, although I can certainly understand how he feels. I think we are all feeling a bit like that. I will not detain the Senate for long on this matter, for two reasons: first, because we have been through this debate before and, secondly, because the matter has been brought before the Senate Standing Committee on Infrastructure, of which I am a member, and I dare say we will be hearing a great deal about it there. I must say that, as a new and very inexperienced senator, I was very curious to hear at Question Time in the Senate this morning the extraordinary ignorance of an experienced senator such as Senator Durack about how Senate committees operate. He asked whether the Committee would operate under the terms of reference provided by the Senate, or whether it would operate under some other terms of reference that the Government may impose upon it. Senator Durack became extremely agitated during this debate when he defended himself in a personal explanation, in respect of a matter that occurred during his administration, by saying, `We moved very promptly to recover the moneys lost'. I raise that to touch upon something that the Minister for Transport and Communications (Senator Gareth Evans) has already said in his contribution to the debate-that, whilst the report of the Menzies Review of Tender Procedures for the Coastwatch Contract undoubtedly reveals a dreadful case of bureaucratic bungling, and there is no question that-- Senator Vanstone —Who is responsible for that? Senator COLLINS —I will get to that in a minute. There is no question that that has been the case. The fact is that very little money has been lost. Senator Knowles —How much? You cannot tell us, can you? Senator COLLINS —I repeat: the fact is that very little money has been lost. How many times would the honourable senator like me to say that? Coastal surveillance-contrary to what is stated in this urgency motion-was not put at risk. Senator Vanstone —Oh, yes, it was. Senator COLLINS —Oh, no, it was not and the reason I know that is that I had a very close involvement in this matter in another capacity in the Northern Territory. I was extremely interested in Amann Aviation Pty Ltd, Skywest Airlines Pty Ltd, Air North Pty Ltd and various other companies for quite a different reason. Of course, bureaucratic bungling is not confined to the Federal Administration. As I mentioned in a previous debate-what one loses on the swings one picks up on the roundabouts-Skywest was responsible for picking up an extremely lucrative tender as a result of bungling in the Northern Territory. That contract was the aerial medical contract which was lost to Air North by a classic piece of bureaucratic bungling which severely embarrassed the Northern Territory Administration. So, to answer the interjection, what one loses on the swings one picks up on the roundabouts because Skywest was the beneficiary of that bungling which, interestingly enough, occurred within the same timeframe as the matter we are now debating. What the final report says is basically what the interim report said and that is that this has been a very sad situation. It has been a classic piece of bungling. There is no question that now the matter has been flushed out and placed under the full light of day lessons will be learned. I do not have the slightest doubt that lessons have been learned and that procedures will be implemented. Perhaps some benefit will flow to the public administration of this country. When I closely examined this matter in the Northern Territory, when I spoke to the people who were then running the contract, I assure honourable senators opposite that there was no shortage of operators waiting to get contracts such as this one. Surveillance was never discontinued; it was never at risk. In passing I touch on the security of the coastline which I mentioned earlier when debating this matter. Great misconceptions are attached to what flights along the northern coast of Australia are for and what they accomplish. For some reason many people are under the impression that they somehow involve principally our national security and defence. Of course they do nothing of the sort. Coastal surveillance is principally a quarantine arrangement. Anyone who has had any close association with how this surveillance operates and has watched it in action could be quickly disabused of the fact that Australia's national security is at risk. I mention that matter simply because that misapprehension about the purpose of these flights comes up again and again. There is no question the national security of this country being at risk at any time for the simple reason that national security is not, and never has been, the purpose of coastal surveillance flights. The reality is, apart from the fiction the Opposition would like to create on this matter, that flights were never discontinued or placed at risk. Therefore it is mainly a question of examining-material is now available in the public arena-the matters touched on by the report. I will not waste the time of the Senate in doing so. We have more than enough business to deal with by the end of this year without sitting any more days than are now scheduled. The details of this report have been gone over by, I think, three speakers in this debate and the honourable senator who moved the motion. The findings that have been made by those investigating the matter have, as I have said, been largely in accordance with the information that was contained in the interim report and discussed at length in the Senate. Two major findings, Nos 4 and 6, are relevant to the serious bungles and are contained on pages 70 and 71 of the report. Finding No. 4 lists the major deficiencies of the Amann company. I will read finding (6) to the Senate because I think it is important in relation to the catcalls, interjections and cries for blood which came from those opposite this morning and which Senator Gareth Evans and I found distasteful. Finding (6) states: (6) An attempt was made by the Director, Supply and Services Section of D.O.T., who was a member of the T.A.C., to carry out such an investigation and indeed the Director reported the result of his investigation to be satisfactory. However, while the reasons for the failure cannot now be ascertained (because of the absence of the Director on sick leave), it is now clear that the investigation failed to bring to notice errors and other deficiencies in the financial statements submitted in support of this tender. This report quite clearly and correctly points out that despite the catalogue of problems-I add that they were not confined to the Department of Transport; the report makes that clear too-that occurred during this contract, the two key things that went wrong in respect of remedying the problems were contained in the two findings (4) and (6). Those two sections are important and reference to them is important because one must then turn to finding (12) on page 73, which states: (12) Information put before Ministers in relation to the Cabinet Submission seeking funds authorization and the submission seeking authority under regulation 48 (c) of the Finance Regulations to enter into the contract with Amann did not reveal either the facts set out in (4) or the unreliability of the financial investigation described in (6). They were absolutely crucial omissions. The Minister has already touched upon the myth and nonsense that surrounds the so-called doctrine of the Westminster system of responsibility. It is a matter that has reared its head again and again. I was a member of the Northern Territory Parliament where I have made the point before that the conservative Chief Minister of the time instituted various reforms to the Public Service administration in the Territory. They were the sorts of reforms, in fact, recommended by Nugget Coombs to the Commonwealth, which we supported. During the debates on those matters this whole furphy of the so-called Westminster system which does not operate even in Westminster, as the Minister has said quite clearly, was raised. This of course gets to the very curious wording of this motion. I was intrigued by those words. It mentions the need for the Government to accept responsibility at both political and bureaucratic level. I did not realise that the question of responsibility extended downwards from the Government into the Public Service as well as upwards. It is a new concept for me. There were always two institutions as far as I was aware and they were the Government and the Public Service and that is the way it should be. The question of Ministers being expected to resign over some piece of administration which does not directly involve them in impropriety or incompetence is now so much a question of flogging a dead horse that I am surprised it is even raised in an Australian parliament these days. Senator Knowles —Whose responsibility is it if it is not the Minister's? Senator COLLINS —To answer that interjection: I would have thought that one would only have to read very carefully the report we are currently debating. I must say with great respect to the people who put this report together that it nails down very accurately who was responsible. It is a public document. Senator Knowles —Who is responsible? Senator COLLINS —I refer again to the crucial aspects of this matter. It is not a particularly edifying matter as I am the first to admit with some degree of heat and anger, as someone who is interested in competent administration. If the honourable senator would refer to findings (4), (6) and (12) she will come part way to answering that question. Someone spoke this morning about people refusing to accept responsibility. As I have said, I have been in the Senate only a short time but there have been previous debates in this chamber on this same matter and we are going over the same ground again today. I have clearly heard the Minister in this chamber very frankly acknowledge the responsibility of the Government in respect of this matter. Who could presume to do anything else in the face of the findings of this report? As far as discipline is concerned, clearly, a number of people are principally responsible for the maladministration and bureaucratic mistakes that were made in this matter. There is no need for me to repeat that because it is clearly documented in the report. I am not quite sure, as a result of the catcalls, interjections and statements that were made in Question Time today, what people could expect from the Opposition in government or how far the Opposition expects the Government to go. What does the Opposition want? Does it want a public hanging on the steps of Parliament House? Does it want the right hand of people who signed documents cut off? I am satisfied with the explanation given in this chamber this afternoon by the Minister as to what has been done to rectify, as they need to be rectified, the mistakes that were made in this matter. The report itself focuses on one key failure from which a great many others led, but that matter was not pursued by the report as much as it should have been-and the explanation for that, as Senator Knowles must know, is contained in the document also. I agree that a certain lack of sensitivity and compassion was demonstrated on the other side. The reality is that the matters have been put right and that the Minister has acted promptly and responsibly and has accepted responsibility for what has gone wrong. The interest of the Senate has been served, through the reference made to the Senate Standing Committee on Infrastructure. I say for the benefit of Senator Durack that the Infrastructure Committee will act on the terms of reference provided by resolution of the Senate and no other piece of paper. The details of the Menzies investigation and the deliberations of the Senate Committee may, and I believe will, result in a great improvement in public administration in this country in the future. Senator VALLENTINE(Western Australia)(3.17) —The mismanagement of the contract for the coastwatch surveillance is a classic example of the way in which this Government's defence and securities priorities are askew. This and previous governments' priorities seem to lie in spending taxpayers' money on buying expensive, high-tech equipment from the United States, like the FA18, to meet a non-existent threat. In turn this causes our neighbours to buy similar expensive planes. What we should be doing instead is making light aircraft here in Australia to patrol our coastlines looking for real threats to our security-illegal immigration, drug smuggling, private arms dealing to people like the white settlers in Kanaky or New Caledonia, the poaching of maritime resources and the dangers of bringing in infected or contaminated agricultural products or plants. I note that even someone with the nom de plume of `Cyclops' has written an article in the journal of the Australian Naval Institute for August this year criticising the FA18 purchase if the real threat is from small boatloads of guerrillas. What is needed are the now discarded Navy Trackers and Skyhawks which would have been not only adequate but cheaper by a factor of 10 times at least. I would go further and suggest that instead of spending $30m apiece on the FA18s we should develop a strategy of defensive defence and build light aircraft in Australia for coastal patrols, preferably to come under the coastguard service. The cost of one FA18 is almost double the cost of the entire coastwatch service over a three-year program. The current confusion over the coastwatch program appears to have been caused by the Government's refusal to budget adequately for this service and the low priority it gives to this kind of security, preferring to tailor our defence purchases to the needs of the United States and to pay millions of dollars for exercises and patrols in the North Pacific, well outside our zone of interest, as defined by the White Paper. I am even more perplexed by the demands of some people in the defence community and their supporters here in this Parliament who want to buy nuclear submarines, and who, if they agree with Peter Young's latest column in the Australian this week, would invest in three aircraft carriers for the Royal Australian Navy. I often wonder how they propose to pay for these items and what effect they would have on our balance of payments. The current Government-and presumably its predecessor, if it accepted the findings of the 1981 Katter report entitled Threats to Australia's Security-considers that there is no invasion threat to Australia in the foreseeable future and that no country apart from the United States and the Soviet Union could successfully invade Australia anyway. So why do we have to spend over $4 billion in the United States on the FA18 program instead of making planes here in Australia to patrol our coasts to deal with day to day threats? The coastwatch patrol fulfils a vital day to day function that we have skimped on for many years because of our national obsession with the threat from the north while ignoring the kinds of threats to our security with which the coastwatch patrol is supposed to deal. It is this distortion of priorities that lies behind the confusion over this contract and I hope that this perspective will not be lost sight of when we deal with this motion which is essentially an exercise to embarrass the Government. Senator SANDERS(Tasmania)(3.21) —The Australian Democrats will support this urgency motion concerning the coastwatch contract. We feel that this shonky Government deserves to have its wrists slapped because yet again it has tried to operate on the cheap. It does not really know what it is doing in this tendering process. I will expand on that. This time the Government got its hand caught in the cookie jar over its handling of the Amann Aviation Pty Ltd tender. A number of honourable senators have referred to the final report of the Review of Tender Procedures for the Coastwatch Contract. I do not want to belabour this point, but on page 49, under the heading `Conclusions', the report states: Given that the TAC knew of Amann's lack of experience, absence of organization and having no aircraft for use under the contract, the TAC, if it were minded, in spite of these matters, to consider seriously his tender, should have submitted his costings to a particularly rigorous and competent examination. In the event this was not done. It is stated on page 70, in the findings section of the report: No evidence was found indicating corruption or other illegal conduct by any officer of the Commonwealth. There was just bureaucratic stupidity. I will not repeat what Senator Collins has said, on this section, but I do point out that the Department of Aviation came under some scrutiny, and well it might have. The report says, on page 73: There was confusion between DOT and DOA- the Department of Transport and the Department of Aviation- as to the role of the representative of the latter Department on the TAC. This caused the Chairman of the TAC to assume that this representative would provide input or advice on any matter within the general responsibility of the latter Department- that is, the Department of Aviation- whereas the representative's instructions from his Department were to confine his role to advice on technical matters such as compliance with legislation administered by his Department. Such confusion would not have arisen if the roles of representatives had been appropriately defined in advance. I urge the Minister for Transport and Communications, Senator Gareth Evans, who is in the chamber, to heed those words about the Department of Aviation, now part of the Department of Transport and Communications-which is his responsibility. I refer to a document entitled No Port in a Storm. It is a report by the House of Representatives Standing Committee on Expenditure on the Darling Harbour fiasco-and the words `Darling Harbour fiasco' are in the title of the document. I think the Committee received 700 written submissions, instituted by Dick Smith, from pilots and operators in Australia, and the conclusion it came to was that the Department of Aviation was indeed in a shambles as far as its operations and internal communications were concerned. The Committee's first recommendation states: . . . that the administrative arrangements be reviewed by the Department of Aviation within the framework of its existing administrative structure. An incident having occurred in the gallery- The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! The visitors will be removed from the gallery. Senator SANDERS —I think this interruption, although unparliamentary, illustrates the depth of feeling in the Aboriginal community over the deaths in Australian prison cells. I think this is a problem that we should be addressing. Senator Chaney —Against a bloody dreadful Government, too. Senator SANDERS —As Senator Chaney says, against a bloody dreadful Government. I do not know whether that is parliamentary language, but what we saw shows the depth of feeling in the country which should be listened to. Let me return to the rather mundane situation at hand. Perhaps this matter is not mundane; perhaps it relates to what we have just seen. The disinterest by the Government in the amount of taxpayers' money that has been spent in the tendering process is similar to the disinterest that the Government shows in the welfare of the Aboriginal people. I was pointing out that the then Department of Aviation had its own communications problems internally and with other organisations. In the case of Amann Aviation, the Department was found to be derelict in this respect. This is not the first time that we have had this type of fiasco in the processes of dealing with government products, government property and government money. The Age of 23 October 1987 contained an article on the C130 Hercules aircraft. The headline to the article reads, `Life Aid aircraft at centre of federal fraud inquiry' and it states: The RAAF Hercules aircraft presented by the Prime Minister, Mr Hawke, to Bob Geldof's Life Aid for Africa campaign is at the centre of a Federal Police fraud investigation. The Minister for Administrative Services, Mr West, told Parliament yesterday that the police were investigating alleged theft and fraud arising from the refurbishing and leasing of the aircraft, which was presented to the Red Cross for famine relief in Ethiopia in 1986. The article goes on to list a number of difficulties. The police were investigating the theft of spare parts and fraud against the Australian Development Assistance Bureau. The inquiry extended to a series of failed attempts by the Department of Administrative Services to sell the Royal Australian Air Force's (RAAF) fleet of 12 mothballed Hercules, plus the disappearance of spare parts. This is a long story which we have discussed before. I have brought it up here because of the similarity between this saga, which has gone on for years, and the Amann saga. Apparently the Government learned absolutely nothing from the non-sale of the C130s. An article in the Times on Sunday of 18 October 1987 under the heading `Canberra sacks second Hercules agent' states: The Federal Government has sacked the exclusive agent handling the sale of its multi-million-dollar fleet of mothballed RAAF Hercules transport planes. Military Aircraft Sales (MAS), which had the sole right to find buyers for the aircraft, has been told that the contract has been terminated by the Minister for Administrative Services . . . The reason given was that the company failed to sell any planes and failed to pay $5 million it allegedly owed the Government. The article continues: Mr Van Loen- the principal of Military Aircraft Sales- said last week that despite Mr West's termination of the MAS contract, his company was continuing to try to sell the planes and was very close to getting a deal for the planes. All that was required was the approval of the US Government, which retains a veto over the sale of US made military equipment. He blamed the Department of Administrative Services for the delays in getting these so-called end-user approvals. `They don't know how to do business,' he said. `They don't follow practical procedures. `We have spent $1.5m getting ready for this, including $800,000 of our own money. We will go bust if the sales do not go through. I have been falsely accused by the Government . . . total incompetence within the Government is what is involved. I do not hold a case for Military Aircraft Sales, which may have its own difficulties, but, certainly, the Government was no help in this. I have a transcript of the entire Four Corners program of 22 June 1987 which honourable senators may have seen. I will read the synopsis by Andrew Olle, the presenter. He said: Tonight's story is a scandal, indeed the Federal Government announced on Friday, following a newspaper preview of Peter Couchman's report, that there will be a federal police inquiry into the matter. That smart response stands in stark contrast to the bureaucratic bungling we're about to unfold. Peter Couchman said: What followed was a bureaucratic bungle that cost millions of dollars and it raises serious questions about the competence of Australian Governments to handle big business contracts. At the end, Peter Couchman said: We've only told part of the story. Somewhere in the bureaucracy there are people who know what really happened and they're not telling. The bureaucracy protects itself but there's a lot to answer for. It's incredible that John Ford was able to get eleven extensions of his contract and that the government was prepared to go on doing business with him. It's incredible that Peter Hocking and Ken Oliver were able to carry on that business and for so long. It's incredible that no tenders were called for such valuable contracts and that performance was never monitored. The history of Australian Government contracting hasn't been a proud one but what we've seen shows a level of incompetence and mismanagement that's unbelievable and a terrible waste of public funds. Surely it's time to take a hard look at the whole system. The Hercules affair, if nothing else, shows that there's something awfully wrong. Has the Government taken a hard look at the system as a result of all that? Of course it has not. If it had, the whole Amann fiasco would not have blown up. Another thing bothers me about this whole thing, and that is the type of operation that Australia is trying to run in terms of surveillance. Surveillance in most countries is not put out to the cheapest tenderer. Coastal surveillance in most countries is done by the government of that country itself. I believe that coastal surveillance should be conducted by the military and I believe that it should use aircraft which are suitable for the task. There is one aircraft which is eminently suitable in a number of ways to the task of coastal surveillance, and that is the Canadair CL215. This aircraft is made in Canada. It could be made here. It could be made under licence at the Government Aircraft Factories at Fishermens Bend and it could provide jobs in Australia. This aircraft has a total endurance of 13.5 hours. It can stay in the air for half a day. It can search for six hours, 740 kilometres from its base. It can search for 2 1/2 hours 1,120 kilometres from its base. And it is not limited to surveillance only. It is a seaplane. It is an amphibian actually, and it can land on water. If it spots something suspicious, it can land and do something about it; or it can rescue people. It is certainly a lot more economical to run than the helicopters which are often used for this purpose. It cruises at 241 kilometres per hour in a search mode, and in a passenger capacity it can carry up to 26 passengers. It is a multi-purpose aircraft. This is another very attractive aspect of the CL215, because, as honourable senators well know, we have a bushfire problem in Australia. Much of our bush is near water-near the ocean, large lakes or rivers. The CL215 has a capacity to scoop up six tonnes of water while skimming the surface of a water body. It does not have to set down in the water. It can do this in waves up to two metres high. Incidentally, it can land in waves up to four metres high. It is a very versatile aircraft. Whilst some may say that the purchase price of some $12m is high, in its multi-purpose role it would in fact be quite economical. Water bombing as a means of bushfire control is proven around the world. It is certainly very good in subduing a small fire that has just started or in protecting lives or property around habitation areas. It is in use in many parts of the world. It would be a tremendous asset to Australia in its multi-purpose role, whether fire fighting, carrying passengers, in search and rescue, and/or coastal surveillance. We have covered a number of issues, including governmental bungling and bureaucratic bungling. I hope that both the Government and the bureaucrats have learnt their lesson. I do not know whether my hope is justified, but I think we should demand that the Government make some wise decisions on coastal surveillance and on fire control. I would urge it very strongly to look at the CL215, and I hope it does. If the Government makes some wise decisions, in the future Australia will certainly benefit and that will be a refreshing change. Question resolved in the affirmative. Consideration resumed. GROUP A Department of the Prime Minister and Cabinet Proposed expenditure $154,427,000-agreed to. Department of Industrial Relations Proposed expenditure, $69,873,000 Senator MICHAEL BAUME(New South Wales)(3.36) —The fact that we are considering the estimates for the Department of Industrial Relations at this stage has meant that one of my colleagues, Senator Short, has been caught short, so to speak. He wishes to raise many issues as a result of his question which was provided as attachment B to the report of Estimates Committee A. The question he had asked during the Senate Estimates Committee hearing was: Has the Department or any of its statutory authorities made available or approved any additional grants not included in answers to questions at the May 1987 Senate Estimate hearing, to any trade unions or community groups in 1986-87 and so far this financial year? If so, in each case: (a) What is the name of the trade union or community group which received the funds? (b) What was the amount of the grant? (c) What was the purpose of the grant? (d) Under what program was the grant made? (e) Was there any contribution by the trade union or community group towards the project and what amounts were involved? This is an interesting matter because Senator Short and I, among other senators and members, have been concerned about the extent to which government funds have been directed towards people in manners that appear to be very political. I am not saying that that is so in each instance, but it is important for the public to be continually aware of the extent to which government funds are being provided to the union movement for one reason or another. Obviously, some areas of trade union activity are properly funded by the Government. For example, the Trade Union Training Authority (TUTA), whose new Canberra premises were officially opened earlier this week, is one such organisation. I believe it is important to continue the sensible arrangement whereby trade union members increase their understanding of and skill in using the procedures which are open to them and the manner in which they should conduct their relations with employers. I think that the Government is doing the right thing in that respect. It was one of the initiatives of the Whitlam Government which I supported. In fact, it was also supported by the Fraser Government, which continued the funding for the organisation. It seems to me that greater knowledge on the part of members of the trade union movement leads to greater responsibility. To that extent, there is benefit all around. While some benefits come from TUTA and while I am pleased that funding for that kind of organisation should have proceeded under both governments and is now proceeding under the Hawke Government, I still think it vital that there be proper scrutiny of all governmental expenditures relating to the funding of the trade union movement. We must remember that the Australian Labor Party is allegedly the political wing of the labour movement. Thus, any large expenditures by the Labor Party in government on the trade union movement should naturally be subject to the closest possible scrutiny. There should be no suggestion that this information should not be readily available. That is why I regretted that the information requested by Senator Short, which I would have thought the Department would have expected at the time of the Estimates committees, was not provided while those committees were sitting. We did not get this information until well after the committees ceased sitting and, therefore, were not given the opportunity in the Estimates hearings to ask questions about those particular grants, to pursue their merits or otherwise. The answers have since been provided in the report of Senate Estimates Committee A, albeit well after that Committee ceased meeting. I am not certain about the merits of these grants. No doubt Senator Short, who originally asked the question, would have liked the opportunity to pursue the matter with the public servants involved. This is just another example of an unsatisfactory situation emerging in Senate Estimates committees, where we are not given the opportunity to ask appropriate questions, as has been the practice in the past, without matters such as this being taken on notice. When the answers come back we cannot find out more about them. For example, I would have liked to find out whether the Federated Ironworkers Association, which received a grant of $45,000, received that grant under industrial democracy agreements, and whether it went to the responsible part of the union-the Sydney and Newcastle based elements of it-or to the Port Kembla branch, which has no interest in industrial democracy or democracy of any kind. It certainly has no interest in the steel industry, as we canvassed at some length this morning. It is interesting to note the information we have received on grants to various unions bodies such as the Victorian Trades Hall Council, $35,000; the Joint Union Advisory Committee (JUAC), $35,000; the Western Australian Trades and Labour Council, $35,000; the Trade Union Community Research Centre Incorporated of Tasmania, $40,000; the Building Workers Industrial Union of Australia, $37,000; and the trade union postal courses scheme, $32,000. I understand that many trade unions have enormous assets, as I read a report last year outlining the wealth of many of them. From the information provided, I have no idea what proportion this cost subsidisation-in most cases provided by the Federal Government-represents of the total cost of these programs. We are not told this except in the case of the Joint Union Advisory Committee, with the State Energy Commission of Western Australia, where we see that the $35,000 provided by the Federal Government is to be supported by $200,000 from the State Energy Commission of Western Australia to support the JUAC activities during 1987-88. There we have a total of about $235,000 of Australian taxpayers' money being spent on the employment of an industrial democracy officer to facilitate the development of consultative mechanisms within the State Electricity Commission of Western Australia. Quite frankly, it would be appropriate if we had had the opportunity to ask exactly how this very large amount of money was to be spent. We were denied that opportunity as a result of this information not being readily available while the Senate Estimates committees were sitting. The TEMPORARY CHAIRMAN(Senator Colston) —Order! It being 3.45 p.m., under sessional order I put the question: That the Temporary Chairman do now leave the chair and report to the Senate. Question resolved in the affirmative. The Chairman having reported accordingly- The PRESIDENT —Order! It being 3.45 p.m., under sessional order I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 3.45 p.m. The following papers were tabled: Automatic Data Processing Equipment Bounty Act-Return, for year 1986-87. Bounty (Agricultural Tractors) Act-Return, for year 1986-87. Bounty (Agricultural Tractors and Equipment) Act-Return, for year 1986-87. Bounty (Bed Sheeting) Act-Return, for year 1986-87. Bounty (Berry Fruits) Act-Return, for year 1986-87. Bounty (Books) Act-Returns (2), for year 1986-87. Bounty (Commercial Motor Vehicles) Act-Return, for year 1986-87. Bounty (Computers) Act-Return, for year 1986-87. Bounty (High Alloy Steel Products) Act-Return, for year 1986-87. Bounty (Injection-Moulding Equipment) Act- Return, for year 1986-87. Bounty (Metal Working Machines and Robots) Act-Return, for year 1986-87. Bounty (Metal Working Machine Tools) Act- Return, for year 1986-87. Bounty (Paper) Act-Return, for year 1986-87. Bounty (Penicillin) Act-Return, for year 1986-87. Bounty (Printed Fabrics) Act-Return, for year 1986-87. Bounty (Ships) Act-Return, for year 1986-87. Bounty (Ship Repair) Act-Return, for year 1986-87. Bounty (Steel Mill Products) Act-Return, for year 1986-87. Bounty (Textile Yarns) Act-Return, for year 1986-87. Bounty (Tractor Cabs) Act-Return, for year 1986-87. Fertilisers Subsidy Act-Return, for year 1986-87. Nitrogenous Fertilizers Subsidy Act-Return, for year 1986-87. Phosphate Fertilizers Subsidy Act-Return, for year 1986-87. Subsidy (Grain Harvesters and Equipment) Act-Return, for year 1986-87. Subsidy (Cultivation Machines and Equipment) Act-Return, for year 1986-87. The following answer to a question was circulated: (Question No. 54) Senator Cooney asked the Minister Assisting the Minister for Community Services and Health, upon notice, on 29 September 1987: (1) Does the Government intend to make enquiries into the extent of South African ownership of the two pharmaceutical companies, Alphapharm Pty Ltd and Protea Pharmaceuticals. (2) Is legislation being considered whereby all overseas companies will be required to give proof of ownership before being allowed to operate in Australia. (3) Does the Government intend to make enquiries into the extent of South African ownership, through the enterprises of Mr David Tabatznik, in Australian nursing homes and private hospitals. Senator Ryan —The Minister for Community Services and Health has provided the following answer to the honourable senator's question: (1) The extent of South African ownership of Alphapharm Pty Ltd was considered on 28 February 1987 by the Inter-Departmental Committee (IDC) on South African Sanctions, which is chaired by the Department of Foreign Affairs and Trade. The IDC noted that `on the evidence available, Alphapharm is not a South African majority owned company; however, that if doubts persist on this matter, that Alphapharm be asked to provide a statutory declaration.' David Leonard Duchen, a director of Alphapharm Pty Ltd, made a Statutory Declaration on 16 March 1987 stating that 51 per cent of the issued and fully-paid up share capital of the company is beneficially owned by either Australian companies or individuals who are citizens of the Commonwealth of Australia. No further enquiries on this matter are thought necessary at present. However, if the honourable senator has documentation suggesting that the extent of South African ownership of Protea Pharmaceuticals should be examined, or that the extent of South African ownership of Alphapharm Pty Ltd should be re-examined, I shall arrange for it to be considered by the IDC. (2) The Government does not believe that it is necessary to legislate to compel overseas companies to provide proof of ownership before operating in Australia. In the administration of the Government's foreign investment policy, the establishment of new businesses in most sectors of the economy is only examinable if the total investment is to exceed $10 million. Experience has shown that foreign corporations readily provide details of ownership structures to the Government for the purposes of assessing proposals, wherever that is necessary. Moreover, the Government already has powers available to it under the Foreign Takeovers Act 1975 to require corporations to provide information in circumstances where a substantial interest is being acquired by foreign interests in an Australian business or where the Treasurer has reason to believe that a person is capable of giving information relating to matters that are relevant to his powers under the Act. Formal use of these powers has rarely been contemplated and additional legislative requirements are not seen to be necessary. (3) Information available is not sufficient to identify actual persons who own nursing homes. Enquiries made reveal that Mr Tabatznik is not known as an owner of a nursing home. To conduct a detailed search would require a search of Companies Office records in each State. This action would not appear to be warranted at this stage.