Monday, 7 December 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Ryan (from 1,362 citizens). To the Honourable the President and members of the Senate in Parliament assembled The petition of the undersigned citizens of Australia respectfully showeth: (1) that we are totally opposed to the introduction of the Australia Card (2) that this national identity system will be intrusive, will not appreciably combat tax or social security fraud, is authoritarian and alien to the Australian way of life Your petitioners most humbly pray that the Senate, in Parliament assembled, should: urge the Government to institute a national referendum on the Australia Card Bill before the proposal is re-submitted to Parliament And your petitioners as in duty bound will ever pray. by Senator Ryan (from 89 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned citizens respectfully requests that the Australia Card Legislation be rejected because the proposed system: 1. has been demonstrated to have no capacity to stop tax evasion, Social Security fraud, illegal immigration or to recoup the revenue lost through abuse of these systems as was claimed. 2. will impose a large financial impact on Australian citizens, and has been demonstrated by the Parliament's own Joint Committee to be not cost effective. 3. has been shown to have the capacity to actually aid and abet both illegal immigration and organised crime. 4. is designed to cause a great intrusion and disruption to the normal day to day activities of all citizens. 5. does not contain the very necessary barriers to invasion of privacy, and loss of personal liberties. 6. will in both the words of the Government and the HIC be enlarged to encompass far greater uses, and the compilation of much more information on the data base. And your petitioners humbly pray that in the light of the obvious and proven inability of the proposed Australia Card to achieve its stated objectives that the Government explain the reason why it is persisting in reintroducing this legislation. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 17 citizens). To the Honourable the President and members of the Senate in Parliament assembled: the humble petition of the undersigned citizens of Australia respectfully showeth; That we the undersigned, having great concern because of the threat to personal freedom posed by the introduction of the Australia Card, call on the Government to withdraw the enabling legislation on the following grounds; 1. Expert opinion does not agree ``that a National identification system for all Australians'' would ``combat tax evasion and welfare fraud''. 2. Once established at enormous cost to the taxpayer, the system would be here to stay. 3. The potential for the invasion of individual privacy by persons unknown to the private citizen is so great as to be unacceptable to us. Your petitioners therefore humbly pray that your Honourable House will protect this society by rejecting the Bill outright. And your petitioners as in duty bound, will ever pray. by Senator Ryan (from 27 citizens). To the President and members of the Senate in Parliament Assembled: The petition of the undersigned citizens of Australia respectfully showeth: That we believe that the Australia Card Bill is unacceptable to a free and democratic people. Your petitioners most humbly pray that the Senate, in Parliament assembled, should: Reject any legislation which seeks to implement the intrusive Australia Card proposal. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 198 citizens). To the President and members of the Senate in Parliament assembled; The petition of the undersigned citizens of Australia respectfully showeth: That we believe there to be cheaper, more efficient means of combating social security and taxation fraud than those contained in the Australia Card Bill. Your petitioners most humbly pray that the Senate, in Parliament assembled, should: Consider these alternatives and reject any legislation which seeks to implement the intrusive and expensive Australia Card proposal. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 348 citizens). To the Honourable the President and members of the Senate in Parliament assembled: We the undersigned, (i) are greatly disturbed by the dangers to health posed by passive smoking, and evidence of which is being documented daily by medical authorities around the world; (ii) note that environmental tobacco smoke has been identified as the major pollutant in aeroplane cabins, and that its direct threat to health is recognised in the special leave provisions for flight attendants specifically on grounds of upper respiratory infections; (iii) appreciate the government's undertaking to legislate for smoke-free travel on aeroplanes, but are dismayed at the apparent reluctance to follow up the Minister for Aviation's December announcement with action; and (iv) call upon the government to make smoke-free aeroplane travel a reality without further delay, and to ensure that smoke-free areas which cannot be contaminated by recycled pollutants, are available at all aerodromes. And your petitioners as in duty bound will ever pray. by Senators McLean (from 60 citizens) and Ryan (from 900 citizens). To the Honourable the President and members of the Senate of the Commonwealth Parliament assembled. The petition of these residents of the Commonwealth of Australia. Respectfully showeth that the Australian Broadcasting Corporation provides the citizens of the Commonwealth of Australia with the only nation-wide, independent radio and television service. that the independence of the Australian Broadcasting Corporation must be preserved in the interests of the citizens of the Commonwealth of Australia. that the introduction of commercial sponsorship or any form of advertising material from commercial sources, would destroy the independence of the Corporation. Your petitioners therefore humbly pray that the Honourable Senators will oppose the introduction of any form of sponsorship or advertising material from commercial sources into the programmes of the Australian Broadcasting Corporation. And your petitioners as in duty bound will ever pray. by Senator Gareth Evans (from 116 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned expresses concern that some scientists in Australia are intent on undertaking destructive experimentation on human embryos. This subject was examined exhaustively by the 1985-86 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the Senate and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlaw destructive experiments on human embryos. And your petitioners as in duty bound will ever pray. by Senator Jones (from 144 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows that: There is widespread concern at the increasing breakdown of public order in the A.C.T. This breakdown is shown by the recent increase in reports of violent assault-one of which concerned the tragic death of a young man at a school fete. The involvement of groups of youths in some of these assaults causes particular concern. Such behaviour is affected by the ready availability, to young people, of alcohol and video and films which depict extreme violence. Your petitioners therefore ask the Parliament to: Make unlawful the creation of a public nuisance by loitering. Ensure the enforcement of laws which prohibit the public consumption of alcohol by under-age persons, and Legislate to restrict the production, distribution and sale of material which depicts extreme violence. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 150 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned Citizens of Australia respectfully showeth that: 1. The decision by the Australian Broadcasting Corporation not to televise the Jack High Bowling Tournament in 1988 is cause for distress to the 500,000 bowlers and many non bowlers who, for years, have enjoyed this interesting programme for television. 2. The unilateral decision was taken after verbal assurances had been given that the 1988 event would be televised. This action is deplored and we feel should be reversed by the parliament in the interests of your many constituents. by Senator Chaney (from 1,753 citizens). Senator RYAN(Australian Capital Territory-Special Minister of State) —by leave-I present to the Senate two petitions, not in conformity with Standing Orders, similar in wording, from 39 and 153 petitioners respectively, praying that the Australia Card Bill be rejected. Senator Ryan, We, the undersigned, your constituents, wish to express our deep concern over the proposed introduction of the Australia Card. We strongly urge you, our senator, to make representation that will cause the withdrawal of the legislation, or otherwise for you to cast your vote against it. 10th September, 1987. We, the undersigned, would like to voice our protest at the proposed legislation for the Australia Card. This petition of Australian citizens shows:- 1. We reject in principle the need for a national I.D. card on the basis that it will be a gross violation of civil liberties and personal freedoms. 2. We support proper measures by government to stamp out tax avoidance. We equally believe, that the introduction of a national system of identification and sensitive data storage, is a massive intrusion into the privacy of those least likely to be involved in tax avoidance practices, and equally less likely to be effective against those who are. 3. We reject the notion that the government, on the basis of it's recent re-election, can claim a mandate for the proposed legislation. The Australia Card was not a debated pre-election policy issue and we categorically state that it does not reflect our will. We therefore request that you vote to reject this legislation. Yours humbly, Petitions received. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I give notice that, on the next day of sitting, I shall move: That, unless otherwise ordered, the Orders of the Senate relating to the times of meeting of the Senate and the routine of business be varied to provide that the Senate meet on Wednesday, 9 December, from 10.00 a.m. to 12.30 p.m. and from 2.15 p.m. to 7.30 p.m. and that Question Time be held at 2.15 p.m. on that day. I seek leave to make a short statement of explanation. Leave granted. Senator GARETH EVANS —As honourable senators will by now be aware, there is a parliamentary lunch for the Prime Minister of Papua New Guinea, Mr Wingti, on Wednesday. In order to avoid the protocol disasters of the lunch for the King of Belgium, when the Senate bells rang throughout the duration of His Majesty's speech, it is desired, even at the expense of a small intrusion into parliamentary business time, to extend the hour for the lunch accordingly. Senator COLLINS(Northern Territory) —I give notice that, 12 sitting days after today, I shall move: That the Navigation Orders as contained in Order No. 8 of 1987 made under the Navigation (Orders) Regulations and made under the Navigation Act 1912, be disallowed. I seek leave to make a short statement. Leave granted. Senator COLLINS —This is the last day on which I can give a notice to protect the position of the Senate Standing Committee on Regulations and Ordinances while it considers two outstanding legal issues under these orders. I seek leave to incorporate in Hansard a brief statement about the concerns of the Committee. Leave granted. The statement read as follows- Navigation Orders No. 8 of 1987 Paragraph 2.2 of Appendix 1 confers on the Director a discretion to exempt from payment of certain examinations fees persons who, before 22 August 1982, had paid $120 or more. The Committee has queried with the Minister for Transport and Communications the purpose of such a discretion and the rights of persons who may have overpaid fees. The Orders also provide in paragraph 1 of Appendix 2 for certain fees to be fixed by the Commonwealth Interdepartmental Committee on Fees and Allowances. The Committee has queried with the Minister whether this is a lawful subdelegation of determinative power within the scope of the Order-making powers of the Act and the Regulations. Senator POWELL(Victoria) —I give notice that, on the next day of sitting, I shall move: That the Export Control (Fees) Orders as amended (Amendment), being Export Control Orders No. 17 of 1987 and made under the Export Control Act 1982, be disallowed. Senator POWELL(Victoria) —I give notice that, on the next day of sitting, I shall move: That new orders 12a, 12b and 12c and Section V of the Schedule contained in the Export Control (Fees) Orders as amended (Amendment), being Export Control Orders No. 17 of 1987 and made under the Export Control Act 1982, be disallowed. Senator VALLENTINE(Western Australia) -I give notice that, on the next day of sitting, I shall move: That the Senate- (a) applauds the agreement being signed this week by the United States and the Soviet Union which will result in the removal of Intermediate Range missiles from Europe and Soviet SS-20 missiles from Asia; (b) congratulates the European peace movement for its hard work over many years in putting pressure on the United States and the Soviet Union to remove the Cruise, Pershing 2 and SS-20 missiles from their continent; (c) recognises the opportunity the INF Agreement gives for further real disarmament agreements, particularly those involving a reduction in the number of heavy land-based ICBMs as well as short range theatre weapons in Europe; (d) notes that while the cruise missiles are being removed from Europe, the same kind of missiles will be arriving in Australia this month on board the USS Missouri which can carry up to 32 Sea Launched Cruise Missiles of exactly the same kind deployed at Greenham Common and other US bases in Europe; and (e) urges the Government to follow up the successful INF agreement by urging the regional powers involved around the North Pacific to start talks on security and arms control in order to prevent further escalation of the nuclear arms race in the Pacific region. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate: (a) notes the reported statements of Senator Peter Walsh that a large proportion of senators had `either been kicked out of the House of Representatives or never did have any serious chance of being elected to it' and that `some of them tried to compensate for their essential mediocrity with self-indulgent orgies of repetition and recitations of trivia'; (b) further notes that a Mr Peter Walsh was an unsuccessful candidate for the House of Representatives seat of Moore in the elections of 1969 and 1972, when he achieved a little more than one-third of the primary vote; (c) further notes that Senator Walsh has consistently indulged himself with orgies of repetition, as evidenced, for example, by his attacks on Canberra doctors which he has repeated at least once during approximately 40 Question Times this year; (d) recognises that, on Senator Walsh's own criteria, the Senate would be a far better chamber without him and without his recitations of trivia from his bottom drawer labelled `Dirt', and suggests that he improve the standing and effectiveness of the Senate by resigning from it forthwith. Senator McLEAN(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the following Bill be introduced-a Bill for an Act to amend the Petroleum Retail Marketing Sites Act 1980. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. Economic Planning Advisory Council-Annual report 1986-87-Pursuant to sub-section 27 (3) of the Economic Planning Advisory Council Act 1983. 2. Australian Institute of Multicultural Affairs-Final operations report and financial statement-1 July to 31 December 1986-together with the Auditor-General's report-pursuant to section 10 of the Australian Institute of Multicultural Affairs Repeal Act 1986. 3. Participation and equity program-Report 1985-Pursuant to section 33 of the States Grants (Education Assistance-Participation and Equity) Act 1983 4. Department of Primary Industry-Annual report 1986-87-Pursuant to sub-section 25 (8) of the Public Service Act 1922. 5. Australia and Pacific Cooperation-Second report by the National Pacific Cooperation Committee. 6. Film Censorship Board and Films Board of Review-Reports on activities 1986. 7. Tobacco Research Council-Annual report 1986-87-Pursuant to sub-section 30 (5) of the Rural Industries Research Act 1985. 8. Department of Social Security-Annual report 1986-87-Pursuant to sub-section 25 (8) of the Public Service Act 1922. 9. Repatriation Commission and Department of Veterans' Affairs-Annual reports 1986-87-Pursuant to section 215 of the Veterans' Entitlements Act 1986 and sub-section 25 (8) of the Public Service Act 1922. Senator LEWIS —My question is directed to the Minister for Industry, Technology and Commerce. I refer the Minister to comments in interviews reported in the Times on Sunday of 29 November and in today's Australian, in which he admits to doubts as to whether the seven-year span of the textiles, clothing and footwear (TCF) industries plan is too long. Is the Government giving serious consideration to changing the TCF plan before it even starts? If so, in what respects? If not, does the Minister agree that his thinking aloud or, as the Australian today described it, `his disarming habit of anticipating, and agreeing with, most of the criticisms made of the past performance of his industry policy', will contribute only to industry uncertainty? Senator BUTTON —I certainly agree that, as a result of a number of factors which have impinged on sectoral plans of one kind or another, some of those plans are too long. I am asked specifically about the textiles, clothing and footwear industries plan. I think seven years is a very long period to project into the future a regime of assistance for this industry. Of course the Industries Assistance Commission recommended that there be such a seven-year plan post-1988 and, in the context of the debate which took place arising from the IAC report, the notion of a seven-year plan was accepted by the Government, as indeed it was by I think all parties, including the Opposition. The reason for that, I suppose, was that the IAC report laid down a sort of bench-mark period which all sides in the debate tended to adopt, including the Government. Nonetheless, I say that that is a very long period for an adjustment process to take effect. I have been asked whether I am giving serious consideration to changing the plan. First of all, if I were, I certainly would not spell out the details of any consideration one might have about that in answer to a question in the Senate. If there were to be any changes to the textiles, clothing and footwear plan, one thing is quite clear: those changes would have an element of continuity which goes to the essence of the plan maintained by the Government. I do not know what the last part of Senator Lewis's question was but I do not think it was to the point, which was trying to find out from me whether there are any specific changes to the textiles, clothing and footwear plan before the Government at the moment. The answer to that is no. Senator LEWIS —Mr President, I ask a supplementary question. Does the Minister not appreciate that there are business people out there in the world who are committing themselves to many millions of dollars of expenditure on the basis of something which the Government announced last year and which was agreed to last year? Not only is the Government speculating in the newspapers but also the Minister has speculated in his answer to my question today about the possibility of changing this plan. Does he want me to repeat that? Senator BUTTON —I understand that. Senator AULICH —My question is directed to the Minister for Finance and relates to the call by Mr Nobby Clark, the Managing Director of the National Australia Bank and Chairman of the Business Council of Australia's task force on the role of the Government, for the States to produce figures on their budgets using a common accounting framework. First, is the Minister aware that Mr Les McCarrey of the Institute of Public Affairs has publicly endorsed Mr Clark's call and has supported the argument that this would facilitate the setting of Commonwealth Government budgetary policy? Secondly, can the Minister indicate whether he has received any communication from the Queensland Government indicating that that State intends to respond positively to these calls for improved government accounting and accounting disclosure practices? Senator WALSH —On Tuesday of the week before last, that is, 13 days ago, I answered a similar question regarding Mr Clark's earlier comments and stated that the Commonwealth Government strongly supported the call for more adequate and accurate disclosure of financial information by State governments. I have noted that Mr McCarrey also supported that call. Mr McCarrey, for those who have not heard of him, is the Director of the States' Policy Unit of the Institute of Public Affairs, an organisation of which Senator Stone, in one of his previous incarnations, was officially described, I think, as a senior fellow. Bearing that in mind, I was rather surprised to read that Mr McCarrey had said: . . . I totally endorse Mr Clark's call for the Commonwealth and the States to compile and publish net PSBR estimates for the whole public sector on a uniform basis. At present only one State, South Australia, provides estimates for the State public sector based on the ABS methodology as part of the budget process. Victoria provides estimates for the budget sector only which is of little value given that major spending authorities such as SEC are off-budget. New South Wales has most of the information in its otherwise excellent set of budget papers and I am sure would have little difficulty in pulling it together. As I said, I was rather surprised to read that Mr McCarrey had said that because Mr McCarrey, in one of his previous incarnations, was the Under-Secretary, I think the term is- Senator Stone —Under-Treasurer. Senator WALSH —He was the Under-Treasurer in Western Australia and in that capacity presided for many years over Charles Court's Budget outcomes, which always came in with a surplus of half a million dollars, or thereabouts, which Sir Charles Court used to describe as good housekeeping. It was, of course, no such thing. It was the outcome of the shuffling of money in and out of hollow logs and trust accounts, as anybody with the slightest comprehension of the difficulty of estimating with any precision government revenue or expenditure or the balance between the two would well know. These claims by Sir Charles Court as Premier year after year, with a surplus of half a million dollars or less, which he described as good housekeeping, occurred during the period when Mr McCarrey was Under-Treasurer. He did not appear to have any objections to that sort of shonky accountancy in that time. I was asked whether I had received any communication from the Queensland Government on that matter. The answer is that I have not received any communication from the Queensland Government. It is of course a matter of notoriety that of all the State governments the Queensland Government shows the least public financial accountability for its transactions, to the point indeed where it does not even have a public accounts committee. To the best of my knowledge, there is no firm proposal from the new Premier, and the allegedly new regime, that they will have a public accounts committee. I commend this issue to Senator Stone as one which he might take up, he having been critical two weeks ago of the Commonwealth Government's alleged failure to provide the Auditor-General with sufficient resources and money. I commend this matter of Queensland negligence in this area-negligence or worse-as a matter which he might take up as a Queensland member of the National Party. It is also of course one of the matters that fall directly in his shadow portfolio responsibility-that is, insofar as the Department of Finance has the primary responsibility within the Commonwealth Administration for presenting government accounts. So in his dual capacity as the shadow spokesman for finance and the most senior parliamentary representative of the National Party in Queensland, if not the Party machine in that State, it is something that he might well take up with his Queensland colleagues. Senator STONE —I address my question to the Minister for Finance. I refer to the front page article in today's Australian Financial Review reporting a strongly worded call by the Deputy Governor of the Reserve Bank of Australia for the Government to undertake policy shifts to speed up economic adjustment in Australia in the face of a continuing deterioration in domestic and international economic prospects. I ask the Minister to confirm the reports referred to in that article that the next round of economic forecasting by the Government's Joint Economic Forecasting Group (JEFG) has been brought forward a month to 22 December, and that his Department is pressing for early and substantial policy adjustments, in particular by way of expenditure cuts. Is this a belated recognition by the Government of the inevitability of economic policy adjustment by Australia in the wake of the world financial market crash, and in particular of the need for a mini-Budget early in the new year? Senator WALSH —I am not sure whether I got all Senator Stone's questions down. The first referred to the article itself. I was rather too busy this morning doing other things to read all the article. I did, however, have a quick scan through it. I am not therefore able to confirm its essential accuracy or otherwise. I was also asked about the Joint Economic Forecasting Group and whether a report was coming through on 22 December or whether JEFG plans to produce a report by 22 December. The answer is: not to my knowledge. Senator Stone —That it would meet by that date. Senator WALSH —That it would meet by 22 December? That might be so. But to the best of my knowledge, the JEFG report will be presented to the Government towards the end of January. I do not think there is any precise date scheduled for that. If Senator Stone is interested in economic information, and particularly the outlook for future Commonwealth Budgets, I inform him that either this week or next week-this week if time permits-the Government will be publishing the Estimates of forward expenditure. There will be in those Estimates a graph illustrating the real growth in the Forward Estimates of government expenditure going back to the 1980 or 1981 Budget. That graph will show very clearly the consistent pulling down of forward Estimates expenditure growth almost every year since the 1982 Budget. Those people who are familiar with these matters will realise that the shape of the curve is influenced by the scale on both axes of such a graph. This graph will show very clearly that up until 1982, Estimates of forward expenditure, which are derived from settled government policies and ongoing legislation, were climbing at an extremely rapid rate. Every year since then, these Forward Estimates have been progressively reduced-if not in every year, then certainly in every year but one. In this year's Budget the actual expenditure growth in real terms is negative for the first time and Senator Stone should compare this graph with the sorts of Forward Estimates curves that he looked at when he was Secretary to the Treasury when Mr Howard was Treasurer. The Forward Estimates curves which will be published this week or next week should meet with Senator Stone's unqualified approval. Senator STONE —I ask a supplementary question. I thank the Minister for his answer, in particular for the Forward Estimates document which he hopes to bring down either this week or early next week. Will the Minister agree that on the basis of this tremendous progress that this Government has made, and to which he referred in his reply, of hauling back the Forward Estimates each year, nevertheless something seems to have gone amiss insofar as the balance of payments deficit still remains at 4 per cent of gross domestic product (GDP)-and that is even on the Government's estimate-that the external debt is still climbing and that the Deputy Governor of the Reserve Bank is calling for a faster pace of adjustment? Senator WALSH —In relation to the last comment, I do not know whether the Deputy Governor of the Reserve Bank has been accurately reported in the Australian Financial Review. I thought I covered that point in my earlier answer. As to the external account or the current account deficit being estimated at being around 4 per cent of GDP this financial year, that is correct. It was the most recently revised figure; I think it was 5.8 per cent of GDP in the last full year of the Fraser-Howard Government. If the Fraser-Howard Government had been facing the terms of trade which this Government faces in this financial year, then the current account deficit as a proportion of GDP would have been of the order of 10 per cent rather than 6 per cent. Senator BEAHAN —I ask the Minister representing the Treasurer whether he has seen the claim by David Clark in today's Australian Financial Review: OECD statistics show that the proportion of total Australian tax revenue collected by taxes on wages and profits is the fourth highest of the OECD countries? Can the Minister indicate whether the Organisation for Economic Co-operation and Development (OECD) statistics do, in fact, support Mr Clark's claim? Senator WALSH —I have seen the article and David Clark seems to be referring to the OECD figures-and this is the OECD's classification-of taxes on income and profits as a percentage of total taxation. It is true that under that classification, Australia was the fourth highest in 1984 and third highest in 1985. However, Mr Clark's article refers not just to taxes on income and profits, but also to-and these were his own words-taxes on wages. If one is trying to assess the relative incidence of taxes on wages, it seems logically inescapable that payroll tax should also be included. A more important source of distortion which is not taken into account in the particular classification which David Clark seems to be relying on is the separate social security contributions levied on wages in most western European countries and in a number of other countries. In other words, if one adds to what we in Australia call income tax, which includes social security contributions, the tax on wages collected as a social security contribution and the payroll tax in other countries, we find that for 1985, which I believe is the most recent year for which figures are available, Australia is in fact seventeenth out of the table of 23 OECD countries in the proportion of revenue derived from taxes on wages, income and profits. The only countries in that table of 23 which have a lower proportion than Australia are Canada, Greece, the Irish Republic, Portugal, Turkey and the United Kingdom. In other words, on a comparable basis of taxes on incomes, wages and profits as a proportion of total revenue, Australia is about seventeenth in the OECD table, not third or fourth. I seek leave to have incorporated in Hansard the table which shows that. It is handwritten but quite legible. Leave granted. The table read as follows- OECD Figures. Taxes on income and profits and taxes on payroll plus social security contributions as percentage of total taxation (1985) Australia...59.9 Austria...63.9 Belgium...73.8 Canada...57.6* Denmark...61.4 Finland...60.1 France...62.8 W. Germany...71.3 Greece...54.0* Ireland...51.7* Italy...72.1 Japan...76.0 Luxemburg...70.5 Netherlands...70.4 New Zealand...69.7 Norway...60.1 Portugal...54.4* Spain...69.5 Sweden...71.1 Switzerland...72.9 Turkey...50.4* U.K....56.5* U.S.A....72.2 Australia 17th out of 23 Senator WALSH —Moreover, to get a really comprehensive assessment, another adjustment which ought to be made is that in most of the 23 countries in that OECD table total taxation is a higher proportion of gross domestic product (GDP) than it is in Australia. Therefore, if income tax-taxes on wages, profits and incomes-for Australia is measured as a proportion of GDP, Australia's ranking on that table is even lower; I believe it is nineteenth instead of seventeenth. Senator HAINES —My question is also directed to the Minister for Finance. Is the Minister aware of an article in the Australian Financial Review of last Friday citing figures from the Bank for International Settlements indicating that around 40 per cent of lending to Australia by foreign banks has a maturity of less than one year? Does he agree with Professor Warren Hogan of the University of Sydney that this could lead to refinancing problems if bankers demand a higher premium to continue lending to Australian companies and government authorities? Further, does the Minister share Professor Hogan's concern about the use of foreign borrowings for consumption rather than for expansion of productive capacity? In view of this debt problem, does the Government intend to go on allowing foreign borrowings by private companies to be negatively geared? Finally, can the Minister say what loss to revenue occurred in the last financial year because companies were able to write off the interest payments on these foreign borrowings against their company's profits, thereby reducing their tax liability? Senator WALSH —I am not sure that I got all of those questions down. I did see the article and, if it is correct, as Professor Hogan states, that 40 per cent of the overseas borrowings by Australian banks have a maturity of less than one year-I do not know whether it is correct; I have not had that checked out-it follows inescapably, of course, that those loans will have to be refinanced in some way, either repaid or rolled over, within that one-year period. I was asked whether I am concerned about borrowings for consumption instead of borrowings for production or for investment. I am concerned about that. Indeed, I have stated so publicly on probably half a dozen occasions within the last couple of months. One of the adjustments that needs to be made in Australia is that the domestic savings, as a proportion of national income, need to be increased if our economic problems are to be overcome. I turn to the other part of Senator Haines's question. We have been through all this before. Naturally, I do not agree with the conclusions which she reaches. She appears to be, yet again, misidentifying the cause of our current account deficit. While it is true that consumption as a result of equity holders in Australian companies selling their shares at a high price and then blowing some of the proceeds on luxury imports, foreign tours or whatever can have some influence at the margin, the cause of the overseas borrowing is the current account deficit itself. If any nation consistently runs a current account deficit, that means one of two things: either its foreign reserves are run down-and they can be run down for only a limited period-or it must borrow overseas. Senator Stone —Or sell assets. Senator WALSH —Well, that is a variant of running down reserves. Although Senator Stone apparently does not agree, I, for example, do not see any important conceptual difference between having the Australian Government or any Australian having a deposit with a Japanese bank, denominated in yen, and the Australian Government owning a couple of acres of land in Tokyo which it can sell off at a very attractive price. I do not see any important conceptual difference between the two; Senator Stone apparently does. If banks were not borrowing to bridge that current account deficit and if we were not to run down overseas reserves or assets-since Senator Stone prefers assets to be included as well-somebody else must borrow it. I suppose the bottom line is that if nobody else does it, governments must. A paper prepared by the Treasury and released by the Treasurer-I think it was last year but it may have been at the beginning of this year-dealt with the question of interest payments. I point out that, to the degree that Senator Haines's final comment is correct-that is, that interest payments on borrowings by companies can be offset against current year taxable income-that applies whether the money that the company borrows is borrowed domestically or externally. Senator DEVEREUX —I ask the Minister for Local Government: What planning is scheduled to assist the Huon channel region to look for new opportunities to broaden its current dependence on a fairly narrow agricultural base? Senator REYNOLDS —I thank Senator Devereux for his question. I was in Tasmania recently-- Senator Tate —A very successful visit. Senator REYNOLDS —I thank the Minister. I was able to announce that the country centres project will take off in the Huon area early in 1988. Fifty thousand dollars has been allocated for the Huon region so that new opportunities to assist the region can be identified. The economic situation in the Huon is that the region has traditionally been dependent on agriculture, especially the apple industry. I well remember its dependence on the apple industry. Honourable senators may be interested to know that I spent several holidays in the Huon as a child, and at that time I went picking and packing apples. So I am very well aware of just how important the apple industry has been. However, there have been some difficulties in that sector in recent years and it is very important that new opportunities be found. Oyster and scallop harvesting are also traditional activities in the region. Australian Paper Manufacturers Ltd has also considered reopening or transferring to another company its pulp mill at Port Huon. The importance of the country centres program-not just for the Huon region but indeed for the 11 regions that have already operated country centres projects-is that it brings together local government, chambers of commerce, regional development bureaus and a number of other organisations to identify the strengths and weaknesses of those regions and, through so doing, many new opportunities are identified for each region. I am confident that the Commonwealth's support of the Huon region, through its $50,000 country centres project grant, will help the identification of new opportunities for the Huon region. I am sure that Senator Devereux will keep me well informed of its progress. Senator CHANEY —My question is directed to the Minister for Transport and Communications. I refer the Minister to the extremely disturbing report by Alan Ramsey in the Sydney Morning Herald of last Saturday about the fragility of the freedom of the Press and, in particular, to a conversation between the Prime Minister and the Chairman of the Australian Broadcasting Corporation (ABC), Mr Bob Somervaille, relating to a Four Corners program on Sir Peter Abeles. It is alleged in that article that the Prime Minister said that he was upset to learn that the program was being made and said something like, `We don't fund the ABC to do stories on Peter Abeles'. I ask: Does the Minister accept that his responsibility for the ABC extends to protecting the Corporation from being made the political plaything of the Labor Government? Has the description of him by journalists as the `Minister for mates' reminded him that he has a responsibility to the public interest rather than to the friends of the Labor Government? I further ask: Has the Minister investigated the matters reported on by Mr Ramsey? If not, why not? If he investigated, was the Sir Peter Abeles program the subject of any discussion between the Prime Minister and Mr Somervaille? Does the Minister agree that neither he nor the Prime Minister should be trying to influence the ABC in the way reported upon by Mr Ramsey? Senator GARETH EVANS —Of course it is the case that neither I nor the Prime Minister should be trying to influence the programming content of ABC programs, whether it be in relation to Four Corners or any other program. It is not the case that I or the Prime Minister, to my certain knowledge, have sought in any way to influence the content of the ABC Four Corners program on Sir Peter Abeles or, to my knowledge, any other program. It is the case that concern has been expressed about the desirability of a high quality being maintained in ABC programming, with any allegation that is made or any program that is produced justifying whatever conclusions it may draw or any imputations it may lead to on the basis of evidence or other things which would amount to a proper description of the program as a quality one. There can be no question whatsoever of any interference with the editorial independence and integrity of the ABC. It is a statutory authority established at arm's length from the Government with a deliberately created charter that ensures that the arm's length relationship is maintained. To my certain knowledge, that relationship not only is fully understood, as one would expect, by the Government, but also is fully respected at all times. Here, as elsewhere, I am afraid, Mr Ramsey's enthusiasms have allowed him to be somewhat carried away, presumably on the basis of information he has received which simply is not justified by the facts as I know them. Senator CHANEY —Mr President, I ask a supplementary question. I ask the Minister to tell the Senate the basis of the `certain knowledge' that he has expressed twice in his answer. I asked him specifically whether he had investigated the allegations. I ask him now to please explain the basis of the certain knowledge, which seems to me to be a very high claim, unless he has been in the Prime Minister's pocket continually over the past 4 1/2 years. Senator GARETH EVANS —Mr President, I find that last reference a contemptible one and I ask that it be withdrawn. The PRESIDENT —Order! I do not think that there was anything unparliamentary in the remarks. Senator GARETH EVANS —To make an allegation that somebody is in someone else's pocket, whoever's pocket it may be, is fair game and I appreciate that, Mr President. I take that on board and I will make the appropriate judgments about some other members of parliament as the occasion arises. For the moment, let me say that my certain knowledge of the matters to which I referred derives from the fact that I was present in the Prime Minister's suite at the time the conversation in question took place. Senator WOOD —In the light of recent statements by the Minister for Defence that Australian naval personnel were being sent to the Gulf to protect Australian flag shipping, can the Minister representing the Minister for Defence inform the Senate how many Australian flag ships operate in the Gulf, how often, and by whom they are protected? Can the Minister also inform the Senate where the naval personnel will be stationed and under whose command? Senator ROBERT RAY —I am not aware that the Minister for Defence has anywhere stated publicly that he is sending anyone to the Gulf. If Senator Wood had read most of the Press reports on the subject, I believe that he would know that at no stage has Mr Beazley stated that Royal Australian Navy personnel were being sent to the Gulf; nor, of course, would it be proper for Mr Beazley to make such a statement. Any such decision, of course, would be made after a submission to Cabinet. My understanding is that, to this time, there has been no discussion of that matter in that body. That is not to say that the subject will not be considered at some stage. The honourable senator has asked for other information that I am happy to provide regarding Australian flag vessels operating to and from the Gulf. Five Australian merchant ships go to the Gulf regularly, and on average there are 12 visits a year. In addition, about 12 Australian fishing vessels operate in the Gulf area under joint venture arrangements. There were also 221 ships carrying Australian cargo in the Gulf in the first half of 1987, demonstrating the international character of shipping and the level of activity in the Gulf serving Australian interests. Australia has made no request for protection for its shipping; nevertheless, support has been provided by the British naval presence. For instance, the BP Achiever has been escorted by Royal Navy vessels on the grounds that the British have a majority ownership of BP. Other shipping has received information or informal protection under the `buddy system' whereby vessels schedule their sailing times to coincide with Royal Navy convoys or Royal Navy patrols. Otherwise, countries with warships in the area recognise only an obligation to protect their own flag vessels. The Government's consideration of the issues will be conducted on the basis of Australia's national interests. These include, firstly, our trade of $2.5 billion with Gulf countries; secondly, our commitment as a major trading nation to the principles of freedom of navigation and the safety of merchant shipping; and, finally, our policy of neutrality and strict even-handedness in our dealings with both Iran and Iraq. Senator MICHAEL BAUME —Will the Leader of the Government in the Senate use whatever influence he has to ensure that the failed House of Representatives candidate Senator Peter Walsh ceases to use the Senate to indulge in what Senator Walsh himself on Friday described as `self-indulgent orgies of repetition and recitations of trivia', which have dominated his contributions to the Senate, particularly during Question Time, over the past 4 1/2 years? Will the Minister dissociate himself and the Government from Senator Walsh's criticism of the Senate? Senator BUTTON —I find the description of Senator Walsh as a failed House of Representatives candidate, like everything else Senator Michael Baume says, totally out of date. Senator Walsh is recognised throughout this country as a highly successful Minister for Finance and a highly successful senator. That is more than could ever be said of Senator Michael Baume, who certainly fills the criteria of being a failed member of the House of Representatives, a failed senator and a failed shadow Minister for health. Insofar as Senator Walsh sometimes indulges in repetition in this chamber, that is normally at Question Time, and the repetition is absolutely necessary because it seems that, after months and months or indeed years of repetition of important economic facts and issues, still the Opposition does not understand. If anything, Senator Walsh is to be encouraged because hope springs eternal in the human heart. It may be that some day the Opposition will understand and learn. So to that extent my colleague Senator Walsh is to be encouraged. If from time to time Senator Walsh engages in behaviour which might be regarded as mildly aberrant, as do all honourable senators-- Senator Richardson —Speak for yourself. Senator BUTTON —Senator Richardson is another example-I would, of course, exert what influence I have in order to persuade Senator Walsh that he should concentrate more on intelligent repetition of the points which he frequently makes at Question Time. We will do all we can to see that that happens. Senator MICHAEL BAUME —Mr President, I ask a supplementary question. I regret the evident inability of the Government to exercise any effective influence over Senator Walsh. However, I again ask Senator Button: Will he disassociate the Government, and particularly Government senators, from Senator Walsh's endorsement of the Treasurer's description of the Senate as the swill of Australian politics? Senator BUTTON —The Treasurer is quite capable of speaking for himself on these matters. The purview of the Treasury portfolio is wide and I think that the Treasurer is quite entitled to speak on such matters. Insofar as Senator Walsh made some comments which might be regarded as derogatory of the behaviour of certain senators, if the cap fits, people such as the honourable senator will have to wear it. Senator FOREMAN —My question is addressed to the Minister for Finance. No doubt the Minister is aware of recent Press reports regarding the Opposition's plans to cut up to $7 billion from assistance programs to the unemployed, the sick and single parents as part of its far reaching Budget agenda for the 1990s. Other areas reported to be on the Opposition's hit list to achieve spending cuts of around $11 billion over the medium term include health, with cuts to Medicare; education with the introduction of tertiary fees; culture; and recreation. Will the Minister inform the Senate whether the Government intends to follow the course of action allegedly planned by the Opposition and will he give the reasons for the Government accepting or rejecting such a plan? Senator WALSH —I do not think I can say that the Government rejects or accepts something called a plan because there is no Opposition plan of which I am aware; what there is is a lot of windy rhetoric. We have become accustomed to a lot of windy rhetoric from the Opposition going back to the time when it was in government. I am sure that Senator Stone would remember this very well: in May 1981 a statement was made by the then Treasurer, Mr Howard. Prior to this May statement in 1981 there had been a buildup of months and months of hype about how the razor gang was going to take the axe to excessive government spending. The razor gang met for several months beating up expectations in the Press about this major statement and change of direction that was about to be made. When the details were finally released what Mr Howard, the then Treasurer, proposed was a cut of some $360m off the Forward Estimates of expenditure for the succeeding years, most of which never happened because John Howard did not have the intestinal fortitude to proceed with those very limited cuts. There are two possible responses to the most recent windy rhetoric from Mr Howard. One is that none of it should be taken any more seriously than the 1981 record would justify and the other is that he actually means it. Even if he did mean it it would be subject to veto from various other pressure groups that hang around the Opposition. The people who hold the real power in the Opposition do not include the Opposition Leader. John Elliott, the Queensland branch of the National Party of Australia and a number of other extra-parliamentary groups are the people who hold the real power in the Opposition-not John Howard. But if it is to be taken seriously at all, he did talk about reducing government expenditure to the same proportion of gross domestic product (GDP) that prevailed in the late 1960s. That would require a reduction of close to 3 per cent in expenditure as a proportion of GDP, or around $11 billion. He has been reported in some cases as having advocated expenditure cuts of $13 billion. I am not sure what the basis for that is. The cutting of government expenditure by $11 billion, leaving aside such essentially cosmetic or even fraudulent measures as the re-labelling of health service delivery-for example, shifting that off the Commonwealth Budget, on to the private budget ultimately, without doubt, at higher cost-would obviously require very large cuts in the sorts of programs that Senator Foreman referred to in the question; that is, to education, to pensions, to invalid pensions, to the supporting parent's benefit, to age pensions, and so on. In response to the last part of the question-that is: will the Government take the Opposition's proposals seriously?-if the Opposition had any specific proposal, I would certainly be willing to look at it; and I think that would be true for the Government as a whole. More than a month ago, in response to a question on the Australian Broadcasting Corporation's (ABC) AM program, Mr Howard said that if he was given another interview he would give a detailed list of where expenditure should be cut. The very next day I asked whether I could also have a copy of that list. He has not delivered it to the ABC and he has not delivered it to me. If he will deliver it to the ABC, I expect that it will become a public document. If he will deliver it to me, I will certainly be willing to look at it. But I would not hold my breath, and I would not recommend that Senator Foreman hold his breath either, while waiting for that list. Senator TEAGUE —My question is directed to the Minister representing the Minister for Foreign Affairs and Trade. Why has the Australian Government consistently underestimated Soviet Star Wars research, despite the fact that the Soviet Union is spending more than $2 billion this year on strategic defence initiative (SDI) research and has been engaged for at least 20 years on developing strategic defence capabilities? Why has the Australian Government reserved its unconvincing criticism only for the strategic defence initiative of our ally the United States, despite Mr Hayden's acceptance that SDI is morally superior to the current offensive deterrent? I ask whether the Australian Government will now realistically review its policy position in the light of Mr Gorbachev's admission for the first time last week that: The Soviet Union is doing all the United States is doing . . . we are engaged in research, basic research which relates to these aspects which are covered by (SDI) in the United States. Senator GARETH EVANS —A lot of people, including Mr Hayden, have said that SDI is morally superior to offensive expenditure on nuclear weapons, and of course that is obviously the case. The big question mark about SDI is whether or not it can ever work and whether the expenditure of scores of billions of dollars or perhaps hundreds of billions of dollars over the years by either of the two super-powers can ever result in an increase in the stability of the international deterrent environment or whether rather, as has been argued so credibly by so many critics of SDI, including the Australian Government, that to embark upon programs of this kind is not to generate greater stability but rather the converse, particularly against a background of a huge uncertainty universally as to whether SDI as an ultimately technologically successful defensive system can ever work. It is against that background that there has been so much opposition to SDI. It has never been claimed by this Government that the Soviet Union is not itself engaged in research that could conceivably fit that description. Whether the expenditure figure that Senator Teague has mentioned bears any resemblance to reality is something I would be interested to know, and certainly I would be interested to know his sources on that. It is hardly surprising in the context of the forthcoming ongoing round of negotiations between the Soviet and the United States that Soviet spokesmen are making the best of whatever research effort they may have put into it, obviously as an negotiating tactic, to demonstrate that the United States cannot have it all its own way, that it will result, as everyone has always said, in necessary expenditure by the Soviet Union of a retaliatory or competitive kind and that that particular escalating cycle has started. One would hardly expect the Soviet to be saying anything else, whatever the condition or degree of evolution of its research in this area. But as I say, nobody on the Government's side has been naive enough for a moment to believe that there has not been some research on the Soviet side which can broadly be so described. The question is how much and whether or not it serves any useful purpose for either of the super-powers to embark upon another massively expensive squandering of resources in the pursuit of a will-o'-the-wisp. That is the background against which the whole SDI debate has been conducted-not with much help or input, I might add, from the Opposition side. Senator TEAGUE —Mr President, I ask a supplementary question. The Minister admits to some Soviet research into SDI. He continues, as does the Government, to underestimate the strategic importance of the extent of the capabilities which the Soviet Union is developing. I ask: In the light of the current evidence and the statement of Mr Gorbachev, will the Australian Government reassess its policy on this matter? Senator GARETH EVANS —All I can do is ask the Minister for Foreign Affairs and Trade and the Minister for Defence whether they want to respond any further to Senator Teague's question. There is nothing more that I can usefully add on the subject. Senator VALLENTINE —My question is addressed to the Leader of the Government in the Senate and Minister representing the Prime Minister. In light of allegations made on the Australian Broadcasting Corporation Four Corners program on 30 November that anabolic steroids find their way into Australia at Perth via United States sailors because the sailors are not subject to Customs checks, does the Government intend to instigate thorough searches of all personnel disembarking from the USS Missouri and other support vessels with it which are due in Fremantle later this week? Why are visiting sailors not subject to Customs clearance checks? Are they tested for sexually transmitted diseases, especially the acquired immune deficiency syndrome, and, if not, why not? Does the Government not consider that it has a primary responsibility for the health of Australians by ensuring that they are not subjected to unnecessary risks by allowing thousands of sailors at a time entry without checks for either illicit drugs or sexually transmitted diseases? Will the relevant Ministers be meeting to discuss proposed actions on these matters because of increasing community concerns? Senator BUTTON —I think the relevant Ministers will not be meeting to discuss this matter, but I will endeavour to obtain an answer to Senator Vallentine's question as soon as possible. Senator Vallentine will appreciate that her question embraces a number of portfolios. I would like, however, to congratulate her on the question because, as I recall, all the previous questions she has asked here have related to nuclear hazard. I am glad to see that now she is broadening the scope of her activity to embrace moral hazard and sexual hazard as well. I will attempt to obtain an answer as quickly as possible. Senator VANSTONE —I refer the Minister Assisting the Prime Minister for the Status of Women to the National Women's Consultative Council record of meeting held on 2 and 3 July 1987 and, in particular, to that section dealing with resolutions passed at the meeting. I draw the Minister's attention to the paragraph at the conclusion of the resolutions, which reads: A number of other motions which were critical of the outcomes of the May Economic Statement were proposed. Following debate between members it was agreed that while it was important to advise the Government of Council's concerns on these matters it was- then there is a sentence stating that it is economically unrealistic to expect cuts not to be made- inappropriate to be publicly critical of the Government so close to the election. It was agreed that members concerns on these particular issues should be raised in confidence with the Minister Assisting by the Convenor at their next meeting. As a consequence of that, I ask: What were the concerns raised with the Minister by the convenor which were apparently so sensitive and significant that they needed to be disclosed behind closed doors? Will the Minister provide the Senate with details of which representatives proposed motions which were dealt with in this way, and the substance of each such motion? Is the Minister prepared to assure the Senate that no public servant or Labor Party representative brought any pressure to bear on the meeting to have these matters hushed up? Lastly, given the apparent desire to protect the Government from electorally unpopular comment, can the Minister assure Australian women that the National Women's Consultative Council, without fear or favour, does represent the views of Australian women to the Government? Senator RYAN —It is obvious that the National Women's Consultative Council is quite willing to make the Opposition aware of its deliberations by providing Senator Vanstone with a record of meeting. That is a very good demonstration that the Council conducts its own affairs. Senator Vanstone is showing a disappointing lack of confidence in the capacities of the women who currently make up the Council. I remind her that the Council is made up of nominees from a range of national women's organisations of very diverse character, but all of which have in common the desire to improve the status of women. There are special interest groups, ethnic interest groups, business and professional women's associations, the Country Women's Association, the National Council of Women, the Women's Electoral Lobby and so on. It is a very wide-ranging Council, representing a major part of the women's movement in Australia. For Senator Vanstone to suggest that somehow it is a puppet of the Government or is intimidated by public servants is to make a quite insulting implication. The Council conducts its own affairs. The Council decides which matters it will raise with me or with the Prime Minister and it proceeds to do that. I propose to refer Senator Vanstone's question to the National Women's Consultative Council and allow it to respond to her suggestions and implications as it sees fit. Senator VANSTONE —Mr President, I ask a supplementary question. There is a portion of the question that the Minister cannot refer to the Council, because it asks her to give an unqualified assurance that no pressure was brought to bear. Additionally, I suggest that the latter part of my question cannot be referred to the National Women's Consultative Council. To ask the Council whether it is representing the views of Australian women without fear or favour is like asking the fisherman to measure the fish. I am asking the Minister to give her view to the Senate as to whether that is what happens. In addition, I point out that it was not the National Women's Consultative Council that provided me with the record; it was the Office of the Status of Women, at my request. Senator RYAN —I repeat that the National Women's Consultative Council's affairs are for the Council to determine. I certainly would not make available to Senator Vanstone or anybody else details of conversations it had with me, unless it chose those matters to be made available. Of course, I consider that that Council conducts its business without fear or favour, but the Council itself may wish to respond to Senator Vanstone's suggestion that it does not. Senator MAGUIRE —My question is directed to the Minister representing the Treasurer. Has the Minister's attention been drawn to a recent report in the Australian Financial Review headlined `Food Importers in Strife'? Is the Minister concerned about the level of food imports within the Australian balance of trade? Is the level of specific food imports an indicator of the success of the Government's economic policies? Senator WALSH —I did see the report in question, which appeared some time ago, in the Australian Financial Review of 25 November. According to the report-and I have no particular reason to doubt its accuracy-up to 20 local food importing enterprises have gone out of business, and remaining importers are predicting sales slumps of up to 20 per cent next year because a weak Australian dollar has lifted the price of imported goods. If the report is correct, it is a very good practical demonstration that the price mechanism or the J-curve, as the Treasurer calls it, is working and working very effectively. Food-almost all types of food-is one area in which Australia is very well endowed with natural resources with other comparative advantages which make us or ought to make us a very competitive supplier of food not only on the domestic market but also on the export market. If the devaluation of the Australian dollar has had the effect of pushing out of the local market some of the fringe food imports and replacing them with domestic products because of price changes, consequential on the devaluation of the Australian dollar, that is a very good thing. Finally, I refer back to the report upon which the original question was based. I think it is worth noting-and this is not a direct quotation, it is a report-that: The national sales manager of the Unilac Company, Mr David Wilson, said the low exchange rate and other economic factors had forced his company to bow out of food importation and concentrate on distributing local food and dairy products. If that is really happening, any rational person should say that that is a good thing and it is in the nation's economic interest that it should happen. Senator JENKINS —I draw the attention of the Minister representing the Minister for the Arts, Sport, the Environment, Tourism and Territories to an article in the Canberra Times of 28 November by education correspondent Jeannie Zakharov headed `Legal authority in doubt'. What legal advice has the Minister received regarding the legality or illegality of his action in purporting to dismiss the Council of the Australian Capital Territory Schools Authority in September of this year? What legal advice has the Minister received regarding decisions taken since then by the Chief Education Officer? From what source was such legal advice received? Will the Minister be presenting a Bill to this Parliament seeking to legitimise retrospectively decisions made by the Chief Education Officer? If not, what steps will the Minister be taking to remedy the situation? Senator RICHARDSON —I thank Senator Jenkins for giving some late notice of this question. The Government announced substantial changes to the Australian Capital Territory (ACT) education planning arrangements in the 1987-88 Budget. These are aimed at ensuring better co-ordination and efficient management. The Chief Education Officer is to be solely responsible for the management of the ACT schools system and he will be establishing an advisory body to assist him. Those arrangements will require amendments to the ACT Schools Authority Ordinance, which the Minister for Employment, Education and Training will be making before the end of this year. The Schools Authority has not been abolished and the powers of the Chief Education Officer are unaffected. The PRESIDENT —I have received a letter from Senator Hill proposing that a matter of public importance be submitted to the Senate for discussion, namely: The Government's record of neglect and its failure to pursue sound and consistent policies within the South Pacific region with a consequent loss to Australia of respect and influence. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator HILL(South Australia)(3.08) —I would suggest that this is a matter of very great importance and something that the Senate should certainly be debating today. It is my view that history will record two great failures of this Hawke Government. One, of course, relates to its economic policy-a debate that is well documented and that we advance in this chamber almost daily. It will be remembered as the time of the collapse of the dollar, when the balance of payments deficit skyrocketed and when Australia moved to what Mr Keating described as a banana republic or Third World status. As I indicated, that is a debate we pursue often. I also want to suggest that the other area for which this Government will be remembered-not fondly by historians-relates to its foreign policy and particularly its policy in relation to this region. Its term will be remembered as the period during which Australia lost its natural leadership and a great deal of its respect and capacity to influence events within our region, the South Pacific. It appears to be a most appropriate time to look at this very serious subject in the light of Mr Hawke having just returned from yet another grandstanding visit, this time to the Union of Soviet Socialist Republics, apparently, on the basis of evidence that we have, largely to enhance further his already very great ego. I put to honourable senators how the visit was described, very aptly, by Sally Loane in yesterday's Times on Sunday. She talked about the visit and what came out of the visit and she quoted Mr Hawke as saying that his meeting with Mr Gorbachev was `rewarding and stimulating'. She said: Clearly impressed by the Soviet leader, he used superlatives to describe him. ``He is an engaging human being. There is a warmth. In his conversation there is a vibrance and enthusiasm and quickness of understanding . . . and an attractive preparedness to recognise past weaknesses of position,'' Mr Hawke said. ``I am confident that we have established a cordial, constructive relationship of mutual respect for one another.''. What Mr Hawke is really interested in is getting powerful people in the world to endorse him. Sally Loane recognised Mr Hawke's assured arrogance when she quoted him as saying of Gorbachev: He is an intelligent man, and so am I, and we understood the inter-relationships between the issues we were discussing. I do not know what that means. But, clearly, Mr Hawke very successfully fed his ego on this trip to the Soviet Union. But what was offered to Australia as a result of the visit is highly questionable. What Mr Hawke's staff seem to want to emphasise about the visit is the period of hours that he spent engaged in talks with Mr Gorbachev. They have boasted that in fact Mr Gorbachev held him in audience for only 2 1/2 hours less than he spoke to Margaret Thatcher. That is the boast that comes out of the offices of the staff of Mr Hawke. But what comes of the visit for Australia's benefit? It is not surprising that Mr Gorbachev should embrace our Prime Minister, Mr Hawke, in audience when he went there largely at his own invitation, remembering, of course, that Mr Hawke asked to be invited. He went there and, in doing so, invited the Soviet Union to become part of our economic and diplomatic community in the South Pacific, and assured it of the very important role that it could play. In other words, he went straight down the line of the policy Mr Gorbachev advanced in his Vladivostok speech of a year or two ago. Mr Gorbachev wanted the Soviet Union in this region, to establish, first, its much greater diplomatic presence and then its economic presence which follows. Of course, as we all know with super-powers, what ultimately comes is a military presence to protect the interests-particularly the economic interests-that are developed. That is the way with super-powers. What has been so pleasing in this region is that we have been able to avoid that situation. It has not been a region of super-power conflict. We had not invited the other super-power, the Soviet Union, into the region in the way that Mr Hawke is now doing. So it is not surprising that he was embraced by Mr Gorbachev and told that he was a fine fellow when Mr Gorbachev got everything he wanted. I must mention in passing what I believe to be the unsavoury release, in that it was expressed by the Press in terms of a reward, of five or six refuseniks as a result of the visit. I find it entirely offensive to deal with human persons in that way, and perhaps even more offensive when one looks at it in context and realises that there are now only approximately 600 Soviet citizens being released to Israel whereas, in 1974, the figure was about 2,000. There is very little that Mr Hawke has to boast about in the release of those individuals. This visit, like so many other visits of this Prime Minister, shows a mistake in priorities. This view was very well put in the latest Weekend Australian by yet another of the accompanying journalists, Mr Paul Kelly. He wrote at length about interesting aspects of the visit, but then got to the bottom line when he said: The real worry about foreign policy lies in Hawke-Hayden priorities. It is an axiom that we have a global policy. Well and good. But is globalism an excuse or substitute for defining priorities? I will not quote Mr Kelly in full, but he also said: Meanwhile, just look around our region. In a number of areas Australian policy seems somewhat uncertain. Australian-Indonesian relations are poor . . . Our ties with Papua New Guinea have slipped in recent years . . . Australia has failed to establish the economic relationship with ASEAN that was hoped for 10 years ago. There is confusion within the Government about how we should exercise political/military leadership in the South Pacific. That is the point I particularly wish to make: so much for strutting the world stage, the super-power stage, attempting to be part of the big league, but what is being lost as a consequence of that? What is being lost is a concern with what should be our priorities-the priorities of our own region. This has come about in part because of Mr Hawke's insatiable ego and in part because of the rivalry between him and Mr Hayden. It is Mr Hawke who has visited the Soviet Union. It was Mr Hayden who as soon as he got into office immediately set about to solve the Indo-Chinese problem, not by working through it with our friends in the Association of South East Asian Nations (ASEAN) but by attempting to do it in a unilateral way, resulting simply in a deep distrust that still has not been overcome. This has followed from a lack of respect on our part for the sensitivities of our ASEAN friends, the front line states. So it is not only Mr Hawke who has adopted this approach; it has been Mr Hayden as well. To put this matter in context, I remind the Senate that when this Government came to power it said that in foreign policy its first priority was to be the region, the South Pacific. As soon as the Government came to office and stated that-which was commendable-it immediately broke its own rule and headed off on to the world stage to try to make its mark in areas of super-power rivalry where it thought it might receive greater commendation from the powerful. Why was the South Pacific neglected? No doubt it was because, to Hawke and Hayden, it was small fry. The big players had neglected it, as we know. In some ways that should please us. Mr Hawke and Mr Hayden took the view: `Why should we, Australia, concentrate our endeavours where our efforts would not be rewarded with international status? Besides, it has been a traditionally stable area'. They believed that events could look after themselves. History will recall these assessments as great errors of judgment. It was to be a period of rapid change in the Pacific. Our neglect and disregard have, as I indicated in opening this address, cost us the capacity now to intervene. Honourable senators could not wish for a better example of how in practice this Government has put into effect its priorities than the fact that the Minister for Foreign Affairs and Trade (Mr Hayden) did not even visit the Pacific in his first three years in office. Now the Minister for Defence (Mr Beazley) has just finished his first official visit to Pacific states such as Papua New Guinea-one could very well argue that that should have been his first visit-Vanuatu, the Solomon Islands and Kiribati. It was not until the Soviets had negotiated a fishing agreement with Kiribati and subsequently with Vanuatu that the vulnerability of these minute economies to influence from the powerful was suddenly apparent to this Government. It was not until young men from New Caledonia and Vanuatu were being trained in Libya that the Government suddenly appreciated that the small and impoverished economies of the Pacific, with small paramilitary or police forces, were terribly vulnerable to an internal security threat. It was not until democracy in Fiji was snuffed out at the point of a gun that this Government suddenly realised that institutions for securing internal stability in post-colonial Pacific states were highly fragile. But the horse had bolted. We did not even have the intelligence or the diplomatic capacity to predict the chance of a military uprising in Fiji. In some places of the world, that might be excusable. One might ask, `Why did the United States not predict it?'. The important thing is that in places like Fiji, the United States, our allies, rely upon us to provide this information. Traditionally, this has been our area of responsibility, but in this situation we let down not only ourselves but also those with whom we are in alliance. When democracy was snuffed out, the Australian Government had no idea what to do. Apparently, even the military option was canvassed, but I am pleased to say that sounder heads prevailed. Goodness only knows what the Australian military would have done if it had got to Fiji when, within a few hours of the coup, the problem was not simply a military problem but also a political one. Whilst our diplomats were confident that traditional links and friendships would enable them to facilitate a settlement in typical traditional ways through the Queen, through the Commonwealth and through traditional liaisons such as those, it did not work because Fiji and Fijians saw themselves differently. But of course the Australian Government did not realise that. Then there was the humiliation of the second coup when the Australian Prime Minister (Mr Hawke) and the Acting Minister for Foreign Affairs and Trade, the Minister for Transport and Communications (Senator Gareth Evans) reassured the Australian Parliament that progress towards normality was pleasing. That was then followed by the unhelpful grandstanding of the Prime Minister at the Commonwealth Heads of Government Meeting. The Australian Government still has little idea of how to respond to the problems in Fiji. It has suffered the embarrassment of the union movement taking foreign policy into its own hands. The Australian Government is receiving reports of human rights abuses, but it is unable or unwilling to substantiate the facts surrounding those reports. It is certainly not prepared to advise this Parliament as to whether the allegations are true or false. The Australian Government now sees overtures to the Fijian authorities from South Korea concerning arms, and Fiji's receiving support from both Indonesia and Malaysia from a trade point of view. This Government simply does not know how to respond. It ought to know the cost, both internally and to regional stability, of a complete collapse of the Fijian economy. No doubt this Government now wishes it had made a little more effort to understand the growing frustrations and the ethnic aspirations that were fanned by a greater consciousness of ethnic solidarity rather than the historical allegiances to which I referred earlier, together with the changes in the Fijian military that arose from its many years' service in the Middle East. I do not have to remind the Senate of the significant part that the military plays in determining political outcomes in the Middle East. All this was overlooked. It seems to be obvious that this Government was both blind and, perhaps more importantly, uninterested. No doubt the Government now sees the incredible short-sightedness of unilaterally further cutting aid to Papua New Guinea last year, shortly after aid reductions had been bilaterally agreed. Sir Julius Chan, the Deputy Prime Minister of Papua New Guinea, said of that action at a conference in the United States last year. . . . we would not have believed it of Australia. All this for a measly few million dollars. But the sum is not so important. What is important to Papua New Guinea is that it had already negotiated a reduction in aid and had been prepared to accept that, but within a few months this Government unilaterally reneged and reduced it further. As a result, it has lost respect and its capacity to influence at a time when Papua New Guinea more than ever needs reliable friends. Papua New Guinea is negotiating a new role with the United States of America, which will now provide defence advisers. Obviously, Papua New Guinea no longer has the same confidence in Australia as it once had. No doubt similar feelings were expressed last year when the Australian Government also reduced aid to Vanuatu, Tonga, Tuvalu, Kiribati and the Cook Islands. Certainly, this Government is now trying to rescue its position with respect to Papua New Guinea by Mr Beazley's trip and negotiating a joint declaration of principles, but I suggest that the damage has already been done. Greater trade opportunities would probably help the Pacific states more than any other single option, yet we export to the South Pacific Forum states more than twice the amount of our imports-$283 compared with $123m. The supposed `liberalising measures' that were introduced by this Government have yielded little benefit. It goes further than simply engendering the frustration and disappointment on the part of island states toward Australia; it has provided opportunities for others to get into the Pacific and to provide greater influence in positions that we once held. Of course, not surprising, those opportunities are being seized by the East Asian states-the Japanese, whose aid, I remind honourable senators, is often tied to Japanese goods and services; the Taiwanese, who are developing interests; and the People's Republic of China, which is now expanding its influence. The linkages established by Australian companies over a long period, which traditionally have been very important to this country, are now being eroded. Windows of opportunity abound for those seeking to expand their influence in the Pacific, and we are providing those windows. Part of the problem, I suggest, has been our attitude of paternalism. That has shown up even in our defence co-operation project. We said that we would develop, in conjunction with the South Pacific states, a Pacific patrol boat fleet to patrol their exclusive economic zones. Of course, that was a commendable idea, but then we developed boats of an inappropriate design for patrolling open sea distances and too slow to catch poachers. We knew better! The idea was supposed to be that we work together but, patronisingly, we told those states how it should be done. We then failed to understand that the small Pacific states could not afford to operate the boats, so Kiribati and Tuvalu withdrew from the project. Paternalism has caused us to fail to come to grips with the Melanesian spearhead group. The fact that Melanesian states that traditionally saw Australia in a bilateral context now caucus before South Pacific Forum meetings is something that this Government has failed to cope with. It has pushed Australia to certain positions, for example, championing the independence cause of the Kanaks in New Caledonia. I support the interests of the Kanaks in New Caledonia, even though they are a minority, but it has forced us to go the whole line, with the result that we now have a relationship with France whereby we cannot even get into the debate, whereas the role of Australia in relation to the Kanaks in New Caledonia should have been, as it should have been in so many other areas, one of bringing the parties closer together so that they could work out their own solution. One could go on if time permitted, and no doubt my colleagues will, to look at how this Government, in so few years, has lost for Australia its importance in the region, its respect and its ability to influence events not only for the benefit of the small Pacific Island states but also in relation to Australia's long term interests and benefits. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(3.28) —Australian attitudes to the South Pacific when we came into government in 1983 were undoubtedly still characterised by a strong sense of continuing colonial complacency. The South Pacific was perceived to be a Western lake but, in the space of just a few years and as part of the region's accelerating evolution and development, there has been a brand new assertion in that area and, in some important cases, I guess, a reassertion of the values and interests of the countries of the region. I suppose that events in Fiji were the most dramatic evidence of some of the extreme forms that such assertions can take, but the rate of change that has occurred in the South Pacific in recent years simply has not been recognised widely, even now. Despite all the fulminations we have just heard from Senator Hill, there is no particular evidence that the Opposition has recognised the extent to which the game has been changing. One only has to recall the extraordinarily naive, clumsy and insensitive performance of the former Opposition foreign affairs spokesman, Mr Neil Brown, when in Fiji at the time of the first May coup, to have evidence of the proposition I have just asserted. The Government, by contrast, can claim to have been not only extremely nimble in responding to these various events but also well enough prepared to provide leadership and interpretation to other Western powers. I will justify that statement in a moment by referring to a number of different areas: strategic considerations, regional nuclear concerns, aid or development assistance, defence and trade matters. Perhaps I should begin by outlining some of the ways in which we have been prepared to play a continuing role. In the first place, in government our response to the region has involved a marked upgrading in the number and, in particular, the variety of ministerial visits that have been made to the region. I make a particular point of this in the light of Senator Hill's criticism, which is simply ill informed. Not only has the Prime Minister (Mr Hawke) been to the region twice for South Pacific Forum meetings, not only has Mr Hayden been the only Australian Foreign Minister to have undertaken a really comprehensive tour of Pacific island countries-he went to eight countries in May this year and has participated in Forum meetings-but also as recently as last month Mr Beazley visited five countries; Papua New Guinea, Vanuatu, the Solomon Islands, Tuvalu and Kiribati. Several times I visited Papua New Guinea and participated in a Forum ministerial meeting on New Caledonia in the region. Other visits have taken place by Senator Gietzelt, Mr Willis, Senator Ryan and Mr Lionel Bowen over the period we have been in government. The traffic has not been one way. There has been a pattern of increasing visits, of both a formal and an informal kind by island leaders to Australia. For example, in just the last few weeks all but one of the following people have visited Australia at their own private initiative: President Tabai of Kiribati, Deputy Prime Minister Tupuola Efi of Western Samoa, Ratu Sir Kamasese Mara, the Deputy Prime Minister of the Solomon Islands, Sir Peter Kenilorea, three members of the Rabuka Administration-Messrs Bole, foreign affairs spokesman; Bose, economic spokesman; and Pickering, the tourism and energy spokesman-and Prime Minister Robati of the Cook Islands. They have all made substantial visits here and they all reflect the continuing role that they see Australia having in this region. In addition, during our period of government we have not only maintained but also strengthened our diplomatic representation in the area. We have accredited representation to the Federated States of Micronesia and the Marshall Islands and we have put additional personnel in Port Moresby, Apia, Suva and Vila. We are represented in all the independent South Pacific countries-nine of them by resident representatives and five by non-resident representatives-and we also have representatives in Honolulu and Noumea. Australian representatives, without exception, are highly qualified, competent and well respected by their host governments. I should further say by way of general introduction that planning of activities in relation to the South Pacific has been a constant and ongoing feature of the Government's perception of its role in the area. In early 1986 we undertook a review of Australia's South Pacific policy options. In the context of a major policy speech on 21 May 1986 at the University of the South Pacific in Suva, Mr Hayden articulated Australia's approaches to the region. A detailed submission on the South Pacific was prepared for the Joint Committee on Foreign Affairs and Defence inquiry into the South Pacific, an exercise which is now being supplemented by a further update. In the context of the departmental consideration of the Dibb Review of Australia's Defence Capabilities and the subsequent defence White Paper, there has been a major assessment of regional security implications for our relationships in the South Pacific region. There have been fundamental reviews of Australian policy towards Papua New Guinea in the context of the joint declaration of principles to be signed this week in Canberra in a very important ceremony. For example, just recently there was a heads of mission meeting which had as its main focus the development of a new strategy for Australia and the region in today's rapidly changing conditions. I mention all these matters because the picture that has been painted by Senator Hill is one of general indifference to the region, an absence of ministerial focus, concern or physical presence, an absence of diplomatic involvement in the region, an absence of strategic thinking, planning or doing anything out of the way, anything different from the way in which successive previous administrations just assumed that the South Pacific was an unchanging region or sea of tranquillity. That is manifestly not the case for a whole variety of reasons, some of which have been articulated by Senator Hill. He at least knows more of what he is talking about than do most of his counterparts in the Opposition, which is no doubt why he continues to languish on the back bench. There has been full recognition by the Government of the nature of the changes that are occurring in the region and we have done innumerable things to respond accordingly. Let me turn to the broad policy considerations, the broad sweep of issues, that I foreshadowed previously, beginning with strategic considerations. In 1983 a very thorough review of the ANZUS Treaty checked and confirmed its utility to us. This was the first and essential ingredient in a stocktake of our approach to the region, its welfare and the condition of our policy towards it. It created the policy climate for the Government in responding to challenges to the Treaty arising from the port visits dispute in New Zealand and this enabled us to respond with the confidence which minimised the repercussions in the region and permitted the interim solution of the problem at the 1986 San Francisco meeting between Australia and United States Ministers. Similarly, we were well positions as a result of that exercise to respond to Mr Gorbachev's Vladivostok speech and to follow it through at the Shevardnadze visit in March of this year by securing, at that very high level, Soviet assurance that its activities would be confined to those normal to the diplomatic and commercial spheres. These responses were, we believe, apt and well managed responses to important changes in super-power attitudes toward the region. There are other such responses. Take, for example, the specifically regional nuclear concerns which have formed so prominent a part in our policy making over the last few years. Early in the period of our Government there was an urgent need for leadership to be shown in responding to rapidly growing concerns in the Pacific about nuclear arms, nuclear testing and nuclear dumping. The detailed development and articulation of policies in the area of peaceful use of nuclear energy and the area of arms control and disarmament positioned the Australian Government to meet that need and to supply the leadership that was required. The Australian initiative, which then resulted in the Treaty of Rarotonga, was a remarkable accomplishment in this region in a period of substantive work of little over a year. Combined with the Convention of the Protection of the Natural Resources and Environment of the South Pacific Region and very important new flexibility in Japan's position about which the Government, including the Prime Minister, made representations, the Treaty of Rarotonga met major Pacific island country concerns about dumping. The Treaty was also remarkable in achieving an outcome at that time when all of the newly independent Forum countries were satisfied to leave the contentious issue of port visits to sovereign decision rather than adopting a particular policy position. Without Australian leadership in this respect the New Zealand precedent would undoubtedly have been much more powerful and would have produced quite a significant change in the strategic environment of the region. The Treaty of Rarotonga also addressed strongly held regional concerns about nuclear testing by France at Mururoa, and the Government's credentials on this matter have been fully recognised throughout the region because of Australia's leadership role in the search for a comprehensive test ban treaty, a leadership role which continues to get the very active support of all the Pacific island countries, the United Nations and other multilateral forums. I turn to the area of aid or development assistance. In 1982 the level of Australian aid to the South Pacific was just $38m per annum. At the 1982 Rotorua South Pacific Forum meeting the then Government-I acknowledge the role that was played in the final year of its term-announced a pledge to the region of a $300m indicative planning figure to be provided as development assistance over a five-year period. This commitment was subsequently confirmed by the present Labor Government. During the five-year currency of that plan, which expires in June 1988, it is expected that approximately $312m in total will have been spent in meeting this pledge. Other aid expenditures not counted towards meeting this pledge will mean that our total aid expenditure during the five-year period will be of the order of $360m. In an interview on Radio Australia last month Mr Hayden stated: We . . . are, aggregatively, for the region, the biggest aid donor and for almost all of the countries, the biggest aid donor, and this is going to continue. He said that he did not think that the general nature of our approach would change. Other specific contributions have been made, such as $8m into the trust fund for the Government of Tuvalu, other funds going to cyclone reconstruction activities in the Solomon Islands and Fiji and various bilateral activities pursuant to the $300m pledge implementation, which I have already mentioned. Turning now to defence in a more specifically bilateral context as distinct from the larger strategic one, which I have already mentioned, consistent with the treatment of the South Pacific in the Government's defence review, the Australian defence co-operation program with the Pacific island countries has been exclusively reviewed and extensively reshaped and now provides, in particular, an important response to the island countries' maritime requirements through the Pacific boat program, the first boat having been handed over to Papua New Guinea in May of this year. The function of the patrol boat is usefully supplemented by the extension of aerial maritime reconnaissance, which is of very great importance to the Pacific island countries in the control of their fishing zones and resources. This development of the defence co-operation program involved a significant addition of defence aid resources to the Pacific and perhaps more importantly in terms of that respect for Australia, which the Opposition's matter of public importance bleats about, it involves a recognition of the high priority needs in the perceptions of the island states themselves. There has been no loss of respect, no loss of influence, in the sense in which they are referred to in Senator Hill's matter of public importance, and that is amply demonstrated in every one of those areas I have mentioned, including finally the subject of trade. In response to concerns that were expressed at the 1984 Regional Committee on Trade, and subsequently at the South Pacific Forum, Australia undertook a major review of the South Pacific Regional Trade and Economic Co-operation Agreement (SPARTECA). All exports of Forum island countries, other than those to which Australian sectoral policies apply, now enter Australia on a duty free unrestricted basis. Australia and New Zealand have agreed substantially to meet the request put forward at the 1984 Regional Committee on Trade for changes to the SPARTECA rule of origin provision. In the case of apparel, it has been decided to extend the special import quota arrangement, at the existing level, until the end of 1988. Post-1988 arrangements for the whole of the Australian textile, clothing and footwear import market are presently the subject of an inquiry by the Industries Assistance Commission, and the IAC has been directed specifically to address the problems of the island countries and Papua New Guinea in any recommendations that are put to the Australian Government. So in all the areas that I have very briefly summarised-strategic considerations, regional, nuclear concerns, development assistance, defence and trade-the Government has a very strong 4 1/2 year record of innovation, of sympathetic response and of leadership in the South Pacific. Of course, the evolutionary process which is occurring in the South Pacific, and to which I referred at the outset, will make continuing demands on Australian policy, and there are many very difficult and very sensitive foreign policy issues that will continue to be thrown up as a result of unfolding and often rapidly emerging events in the region. We of course need to be responsive to those concerns and to those events. The process of negotiation that has been in train now for some months with Papua New Guinea and that is culminating in the signature this week of the joint declaration of principles to guide the relationship between the two countries, is designed to provide a whole new framework for the equitable management of the maturing bilateral relationship. To make the sorts of throwaway lines that Senator Hill offered a little while ago about the aid question as it arose last year, and to suggest by implication that as a result our relationship with Papua New Guinea is in a sad and sorry state, is to offer a complete caricature of the reality, as will, I believe, be amply demonstrated by the events of this week as they unfold reflecting, as they do, a very amicable, very constructive, very thoughtful and very mature working through of the new implications of our relationship with our most immediate neighbour, and one for whom we feel a particular respect and affection born of the historic ties between us. The upheaval in Fiji, which Mr Brown made such a ham-fisted response to when it first happened in May, does point to a delayed rejection, at least in part, by native Fijians of the colonial imposed constitution in favour of greater protection of traditional Fijian rights. That has created a situation causing, understandably, the utmost concern to the Indian ethnic composition of the population of that country, and this has caused utmost concern among Fiji's regional neighbours and, indeed, the reverberations have extended around the world. The Government's handling of this very difficult situation has been something that has been amply debated before in this place. All I will say is that Senator Hill's matter of public importance and his references to Fiji seem peculiarly ill-timed, coming as they do just a day or so after we have had the announcement by Brigadier-as he now is-Rabuka of the decision to stand down as interim head of the Government of Fiji, appointing by decree Ratu Sir Penaia Ganilau as President and, with Ratu Sir Penaia in his turn appointing Ratu Sir Kamisese Mara as Prime Minister, both of them pledging that a new constitution will project indigenous Fijian interests. Of course the proof of the pudding will be in the eating, and initial government responses to these events over the last couple of days have at best indicated cautious optimism about what we all hope will be the case. We certainly do hope that those developments will foreshadow the return of democratic parliamentary government under a constitution acceptable to all the peoples of Fiji. It remains to be seen whether that will happen, but to the extent that there is last some sign of the wheel turning again-there have been, of course, false alarms previously-that is an occasion for encouragement and not the kind of grudging churlishness that we have had from Senator Hill in his grudgingly churlish contribution to this particular debate today. On the subject of New Caledonia, of course difficulties will continue to be thrown up so long as the French Government pursues its desire of recent times not to recognise fully the rights of the indigenous people, at the same time as safeguarding the rights of all the other long term residents and so long as the French Government goes on resisting the kind of peaceful orderly transition to self-determination on United Nations principles and multi-racial independence which we, along with so many countries of the region, have been anxious to see happen. The position that we have taken, which has been one entirely in sympathy with the position of the Forum countries and the regional countries throughout the Pacific, has not been a position which has been a comfortable one, so far as Australia's relationship with France is concerned. If Australia were as insensitive to the region as Senator Hill has suggested, if we had so little respect, so little affection and so little confidence flowing back towards us a result of this, that state of affairs would not, of course, have been pursued by us. The ACTING DEPUTY PRESIDENT(Senator Morris) —Order! The Minister's time has expired. Senator MACKLIN(Queensland)(3.48) —The matter of public importance put forward by Senator Hill today is: The Government's record of neglect and its failure to pursue sound and consistent policies within the South Pacific region with a consequent loss to Australia of respect and influence. The actual topic does not necessarily refer to any particular policies. Presumably the policies referred to, and which Senator Hill raised, are those of foreign affairs and possibly trade. Of course there are a range of other policies with which Australia is involved in the South Pacific. For example, it has a fairly extensive involvement in development projects and educational projects. Since Australia became a federation, over 80 years ago, it has certainly sought to develop and involve itself in the Pacific. I do not think anybody in this place would want us to do otherwise. Australia's interests are very much in the South Pacific and it is not at all difficult to identify them and to understand our role here. After all, our population of about 17 million is four times that of New Zealand or Papua New Guinea, 23 times that of Fiji and 115 times that of Vanuatu. Australia provides about twice as much aid to the region as New Zealand does, apart from what it provides to Papua New Guinea, and seven times as much aid to this region as the United States of America does. Australia also carries out more trade with the region that any other country, even though our trade in the region is only about 2 per cent of our global trade. Australia has very real interests in the area and has every right, therefore, to indicate its disapproval of developments which it sees as inimical to Australia's interests, to suggest alternatives and to demonstrate, where appropriate, its capacity and intention to pursue its interests if those suggestions are disregarded. There are certainly many aspects of Australia's performance in the South Pacific which would support Senator Hill's assertion, although I am not sure whether I would embrace all the points he raised. Many of them could be seen as paternalistic. The Australian Government certainly botched the whole exercise with regard to aid to Papua New Guinea. Having had quite extensive discussions with the Government of that country, it then unilaterally pulled out of them, giving hardly any notice to the Papua New Guinea Government, and without even the Minister for Foreign Affairs and Trade (Mr Hayden) explaining; it was left to Senator Gareth Evans, who has now left the chamber, to pick up the ball and run with it. What the countries of the South Pacific are looking for is not aid but trade. Aid will end up beggaring them. Trade will give them the ability to develop their economies and societies in the way that they see fit, not in the way that Australia or any of the other aid donors in the area see fit. When one is talking about aid one cannot neglect the operation in the region of a number of countries which have no particular desire to support or help the region develop but which merely pursue their own defence interests. One such country that comes rapidly to mind is France, which sees the region as an area where it is able to conduct its nuclear tests, continuing its own particular form of colonialism. It currently wanders around the Pacific area handing out cheques to anybody who will stand still. That exercise has nothing to do with the development of the countries of the region and, fortunately, it is seen in that way by most countries of the region. They are happy to take the cheques and treat France in the way they have treated France in the past-with very little respect. France considers that this is not its region and that it does not have to develop a position here, whereas all the countries in the region do. The politics of aid in the South Pacific are probably as controversial as the politics of aid in other parts of the world. With the instability in the region caused by the coup d'etat in Fiji, the politics of aid are likely to heat up considerably in the next few years. It is, therefore, in Australia's interests to maintain our aid at its previous level and increase, if possible, aid which is not handed out with strings attached but which is the type of aid sought by various countries in our region-not aid initiated by us. In addition, we should look more and more towards developing trade with Pacific island countries. I will give some examples which show that we have a long way to go. In 1986-87 we sold the South Pacific nations $1.092 billion worth of goods and bought in return $280m worth of goods. That is an extraordinary situation. The only way that those countries are able to make up that enormous deficit in their terms of trade with us is by relying on Australian aid. The two items are interlinked. Another factor raised by Senator Hill and linked quite intimately to this issue is Australia's immigration policy with regard to the South Pacific countries. A major item in the Budgets of many South Pacific countries is the money which is repatriated by their nationals who live and work in Australia. The immigration question is linked to the economic question in this region probably more than anywhere else in the world. A consistent and developing immigration policy has to take into account those trade, aid and economic measures. There is a vacuum. There is a place for a coherent, rational and consistent policy, but it must include not simply Australia's foreign relations aspect but all policy aspects ranging as wide as education, immigration and trade. The other problem-Senator Hill referred to it-is that much of the foreign policy debate with regard to the South Pacific is necessarily couched in terms of the East-West relationship. Oddly enough, what I have just been referring to are really the North-South problems, as they are called in economic terms. But almost every one of the development questions, the North-South questions, gets translated in the South Pacific context into an East-West exercise. Senator Hill, in his speech, paid a fair amount of attention to this aspect, that is, the intrusion of other powers into the South Pacific, the role of the Soviet Union and the United States in the South Pacific, not only now but in future, and the role of France in the South Pacific, which I have already referred to, with regard to its nuclear testing program. These issues have been heightened in recent times by the suggested exercises and the development of military relationships between the United States and Papua New Guinea, particularly with regard to the Papua New Guinea-West Irian border; the continuing unsettled situation in the Philippines, which might be seen to be somewhat outside the South Pacific region but which cannot be ignored; our role with regard to Indonesia; and Indonesia's role and position with regard to the South Pacific. Undoubtedly Indonesia will, in the very short term, be playing a much more expanded role in the South Pacific than it has played up to now. If in a short debate such as this one were trying to draw the golden thread, as it were, which runs through Australia's relationships with such a diversity of countries, one would end up taking a very paternalistic role. In many ways our relationship with each of these countries is a bilateral, not a multilateral, relationship. Whilst we talk about the South Pacific as a blanket term, as though there is Australia and the South Pacific and Australia can have a one to one relationship with South Pacific countries, the fact is that in the text 10 years or so Australia will probably continue in much the same vein as it has continued in the past 10 years, that is, seeking to develop warm and friendly bilateral relations with each of the countries. These bilateral relationships will involve different aspects with each of the countries. In the case of Nauru it may involve whether we will return to the devastation which Australia, along with Britain and New Zealand, managed to cause that tiny country, probably leaving it in the next year or two without any viable economic options. In the case of Papua New Guinea, Australia may have a role on the border with Indonesia. With regard to Vanuatu, we should have come into the airport construction exercise in a much more vigorous and upfront way. And so it goes on. Hopefully with each of those countries we shall have some type of developing bilateral relationship, but it will depend on whether Australia can come to grips with some of its own problems. I refer to our own trade problems, the solving of which will mean that we shall be able to offer those countries more generous trade access to our markets. That is the foundation of any reasonable development, particularly with the smaller South Pacific countries, and determines whether our role in the South Pacific, and how we are currently linked with the United States, is beneficial to the South Pacific. New Zealand has made a stance in regard to nuclear powered or nuclear armed warships. That was going to make this part of the world fall in. It is interesting now, some time on, that that has been able to be accommodated in the international relations structures. I believe that a better situation in regard to New Zealand and the United States is very much in the offing now. These things finally have to be accepted and lived with. One of the roles which Australia cannot play in the South Pacific, which too often in the past we have sought to play, is as surrogate to the United States. The interests of the South Pacific are Australia's interests because we live in the South Pacific. The United States interests in this region are to see this area in strategic terms, and in America's strategic terms overall. I believe that in the final analysis Australia's contribution to the development of friendly relations between the countries of the South Pacific will be seen in terms of what we are able to do in developing what one hopes will be a free trade zone in this part of the world. It will not be in terms of developing the South Pacific as an island of influence for United States military strategic planning. Senator MacGIBBON(Queensland)(4.02) —The Senate this afternoon is debating as a matter of public importance the Government's record of neglect and its failure to pursue sound and consistent policies within the South Pacific region with a consequent loss to Australia of respect and influence. There is no doubt that as a consequence of the Government's neglect and incompetence in the field of foreign affairs, Australia has become not only this weak sister in the South Pacific region, but also a country of no relevance whatever in the affairs of the small island nation states in that region. Australia, with its population size, its economic strength and its military capabilities, has been for a very long time the dominant power in the South Pacific region. I submit that it is a position that we have filled with distinction. The history of Australia in the South Pacific region has earned us in the past a position of trust, friendship and, above all, respect from the citizens who live in that region. That gave us a position of influence. We were in a sense a big frog in a little puddle, though one uses the little puddle analogy advisedly because there are some very large distances involved in the South Pacific region. But all that has changed. Australia is dismissed as being of no consequence at all by the nations of South East Asia. I must say, having travelled around those countries now over a considerable time, I am dismayed as an Australian to find the contempt, almost, in which the nations of South East Asia hold Australia, particularly in a military sense. This is purely a consequence of the unco-ordinated policies of indifference followed by this Government. Just as we have suffered this fate in South East Asia, the same fate now has befallen us in the South Pacific region. This is a consequence of this Government having no overall policy. This Government has never taken the trouble to understand what is going on in the communities of the South Pacific nations, what their hopes and fears are, and what they need in the way of help from the nations around them. The Government has never considered what Australia's interests are in that region. There has never been a co-ordinated plan put together, despite the existence of some well-informed and capable people in our Department of Foreign Affairs and Trade who have intimate knowledge of the South Pacific region. There has never been a cohesive, long range plan put together by the Hawke Labor Government. That Government does not know what objectives it wants to attain for this country this year or in five or 10 years time. The consequence is that, at best, we muddle through and, at worst, we get overtaken by circumstances-circumstances which, with a little thought and planning, we could have gone some way towards influencing, if not diverting. We enter into agreements with those countries to give them help on occasions and then, without warning, we break those agreements when we cut our aid program. But, above all, when the crises occur-such as the great crisis in Fiji where a democratically elected Government was overthrown in a coup-we fail to demonstrate any leadership at all. Like it or not, we are the dominant power in the South Pacific region-or we were-and the element of leadership in that role is inescapable. If we fail to demonstrate leadership, we surrender that status of having power and influence in the region. After a long period of stability, the South Pacific has undergone a number of major changes-economically, politically, socially and psychologically. It is a region that is characterised by a large number of very small island states with vast distances between them. Therefore, there is a requirement for adequate communications and transport systems, which are expensive and often beyond the technology or the economic base of the countries requiring them. All these countries have increasing populations. Those populations are educated to some degree, and do know what is going on in the outside world. They have films and television and see the standard of living enjoyed in the rest of the world, and they want to share in that standard of living. But they have limited natural resources and do not have the capacity to earn, through trading with other countries, the means to support the lifestyle to which they aspire. There is a very great need for Australia, a need that we have recognised in the past, to help them to develop. As Senator Macklin said, there is a need to give them aid not for some self-defeating, short term purpose, but in an intelligently structured way to enable them to look after themselves, to grow and to better themselves. Some of the changes in this region are reflected in both a military and a political sense. The most dramatic change has been the change in New Zealand under the Lange Government. This old ally of Australia changed its defence posture dramatically when it broke the ANZUS agreement. Australia, as a partner of New Zealand for many years, had a legitimate case to put to New Zealand, and on the platforms around the world, that New Zealand was doing the wrong thing in adopting its unilateralist pacifist path. This not only puts New Zealand's security at risk, but also puts Australia's security at risk and compromises to some degree the security not only of the South Pacific but of the South East Asian region. But again we had a leadership vacuum. There was not one word out of the Hawke Government about what New Zealand was doing. We had years and years of inactivity. Then last month we had the visit by the Prime Minister, Mr Hawke, to New Zealand, where he committed an act of great dishonesty. He glossed over and failed to recognise the importance of the changed foreign relations policy of New Zealand. With great dishonesty he said that it was a sign of the maturity between our two countries that we could have these enormous differences which, really, at the end of the day, made no difference to the warmth of the relationship between us. That is absolute nonsense. Either we hold strongly that the security of Australia and the region is important and we do what we can to support it, or we do not. We cannot go on with a body such as the New Zealand Government which sets out on a premeditated path to break that down. We have proceeded with a completely unco-ordinated plan with respect to Fiji. We are part of the Western democratic group of nations. We believe that the desirable way for countries to govern themselves is through a democratic parliamentary system. Fiji had one of the few such systems in the South Pacific. It is an important country-a country which is really a hub, a trading centre, in its part of the world. Its government was ejected as a consequence of a coup and Australia had no policy at all to cope with this. We had no intelligence that this would happen the first time, we had even less intelligence that it would happen a second time. No wonder the United States of America is upset about what is going on and is taking active steps to do its own intelligence collection in a region where formerly it was quite happy to rely on the quality of Australia's intelligence. We are now in a position where we apparently have no influence at all in Fiji. While it is not one of the great trading powers of the world, it is a significant trading power in the Pacific. That trade was largely with Australia and was of benefit to our citizens. We had a favourable trade balance with Fiji. Recently we have seen the Indonesians move in and set up trade commissions there. We have seen Fiji shift away to other fields-particularly the military fields. Had Australia had a policy and a good intelligence service-which it should have had in a small open community such as Fiji-I would argue that we could well have intervened before the coup in Fiji. With the good relationships that we formerly enjoyed, particularly with the military who took over, we could well have persuaded them that there was a much better and more correct course to follow than the two coups that have taken place. But the only policy the Australian Government had was one of supine collusion with the trade union movement. It was the Keltys and the Creans of this world who decided what Australia would do when our interests were at stake in Fiji. In Vanuatu, one of our close neighbours, we have again failed to have any influence on events. We have gone on almost in a comic opera way about perceived threats from the Libyans in that region. We have seen the Vanuatu Government attempt to get support from the Libyans for the extension of an airfield for which it has a legitimate need. This is something that we could have probably supplied through our aid program. Of course, this year we have seen the links between Vanuatu and the Soviets, with a $1.5m fishing agreement being set up. In New Caledonia we have followed a policy which is diametrically opposed to our policy in Fiji. In Fiji-insofar as we argued a case-we argued the case for the majority Indian community to be represented in the government of that country. In New Caledonia we are arguing that a minority indigenous community should somehow or other be granted control and that the country should have independence. The relationship with Vanuatu, to some degree to New Caledonia and to the South Pacific region as a whole, is perverted by the problems that this Government has in developing a policy with France. I am on record-in speeches within this country and overseas and in writings in journals that have been published overseas-as condemning the French for nuclear testing. There is no doubt where I stand on that, but it happens to be a fact of life that I am not going to talk the French out of nuclear testing and neither is the Australian Government. At the end of the day we have far more in common with the French and we can do far more good for the nations of the South Pacific by working in concert with the French than by opposing them and thereby not being able to be consulted in the discussions on New Caledonia and other places where we could play a part in the development of political affairs in the region. Time draws on and I do not have time to talk about the emergence of the Melanesian bloc, Papua New Guinea, the Solomons and Vanuatu. Senator Hill touched on that and again we do not seem to be able to build any bridges with this developing group in the Pacific. I think the announcement over the weekend that the Americans have been asked by the Papua New Guinea Government to act as military advisers sent a shiver down the spines of all Australians to whom I talked. The significance of that is not that the Americans are a threat to us but that they see Australia as an irrelevance. The Americans are looking ahead to a time when they may have difficulty in the Philippines, and they are developing an alliance in the South Pacific region which excludes Australia and puts us beyond it. We have done nothing to develop economic links with the Association of South East Asian Nations groups to which the South Pacific countries look beyond Australia. As I said, we are suffering from the lack of a sensitive, intelligent and well researched policy which looks at the long term needs of both Australia and the region. Senator VALLENTINE(Western Australia)(4.17) —I believe that Australia's main fault in the South Pacific has been a persistent refusal to accept that the main tensions are within a North-South framework and not an East-West one. This, coupled with a lack of familiarity with the region, has led to a series of embarrassments in the last couple of years and is likely to lead to more if Australia persists in viewing the region through spectacles fashioned in Moscow and Washington instead of in Melanesia, Micronesia and Polynesia. Symptomatic of the disregard was the fact that not until last year did the Minister for Foreign Affairs and Trade (Mr Hayden) embark on a tour of the region, with the Prime Minister (Mr Hawke) and the Minister for Defence (Mr Beazley) going even later. Compare this with David Lange's familiarity with the region and its leaders. Australia has always been more preoccupied with Asia than the Pacific, and even now persists in seeing the region as an area of potential super-power rivalry rather than addressing issues of economic security pertaining to the islands' real needs. It was instructive to read on 14 November this year the comments of Mr Bill McKinnon, Australia's High Commissioner to New Zealand, after the two-day meeting in Canberra of the Heads of Missions in the Pacific. He commented that the worst fears of super-power rivalry in the Pacific had not been realised and that Soviet influence had not extended as far as had been feared following the Soviets' fishing agreement with Kiribati. A number of organisations who have worked in the Pacific pointed this out in 1985, but the Government preferred to listen to echoes of the Cold War. These ancient warriors, locked into bloc thinking, saw the Russians entering an area that until then, they thought, they had kept them out of. As a result, we were treated to scare headlines and articles about Soviet spying and Soviet efforts to secure port facilities that would be a foothold for the military, which said that if it was not the Soviets; it was their surrogates-Cuba, Libya and Vietnam. No one took any notice of the Prime Minister of Kiribati, who pointed out the hypocrisy of criticising his country's agreement with the Soviet Union-worth 15 per cent of his country's total income-when New Zealand had an agreement that even allowed shore access for the Soviets, and when Australian farmers would be in an even worse mess without wheat sales to the Soviet Union. Now that the Prime Minister is back from Moscow we read about more trade between Australia and the Soviet Union but, apparently, a desperately poor country with only 65,000 people was not to be allowed to make similar agreements and Vanuatu, with 145,000 people, got the same bullying treatment. The great hysteria over Libya seems to have abated but there was never any recognition of the fact that an independent country such as Vanuatu was entitled to have diplomatic relations with any country it wished-just as Australia does. The Libyan People's Bureau in Australia was closed only when the Government's hypocrisy proved overwhelming, not for any security reasons. We could not tell other countries not to have a Libyan People's Bureau when we had one here in Canberra; so it had to go. Again, taking our cue from Washington, the Government has constantly refused to acknowledge the violence and intimidation going on in the Republic of Belau, part of the United Nations trust territory of Micronesia, administered by the United States since 1947. The people of Belau suffered badly during the war between imperial Japan and the United States just over 40 years ago. They quite deliberately wrote into their constitution that they did not want any military bases in Belau after it became independent. The United States has simply refused to accept the result of nine referenda since 1979 because it wants to use Belau for military purposes. Belau's misfortune is that it lies in a vital geostrategic position for the United States. Although nuclear weapons are totally unnecessary for the defence of Belau and its 14,000 people, the United States views Belau as part of its global game plan. It is also viewed as a potential fall-back position if the United States ever has to withdraw from its bases in the Philippines. Not surprisingly, Henry Kissinger said of Micronesia in 1973: There are only 90,000 people out there, who gives a damn. That comment was echoed by Senator Evans here on 16 September in response to my question on Belau following the murder of Mr Bings Bedor. Perhaps Senator Evans does not realise that most of the countries of the Pacific have very few people. It is precisely because of attitudes like his that this motion is being discussed here today. The Government simply does not seem to care about a vast area with few people unless the Russians are coming. Fortunately, a number of key United States Congress people have realised that the vote in Belau in August was not an act of free choice and have sent letters to the relevant department in Washington, DC, saying that they cannot accept the results. It seems that US Congress people have more spirit than the Minister for Foreign Affairs and the people in the Department of Foreign Affairs who are writing letters about Belau to those Australian citizens concerned about the violence there. As for the defence of freedom and democracy, which we hear so much about as a justification for keeping the Russians out of the Pacific, perhaps we should take note of what a Belauan senator said-that the United States had taught them democracy and then refused to let them practise it. There are those who have argued that a 73 per cent vote in favour of changing the constitution is enough. But the constitution states that it cannot be changed unless 75 per cent vote for it. That is the key issue which the United States continues to disregard. Again, this ignores the comment of Bernie Keldermans from Belau, who said that it was the Western democracies which had taught them that one does not change constitutions lightly. Considering the attempts to change our own Constitution during the Bicentennial, I think we should agree. I remind the Senate that a mark of civilisation is the way in which we regard a small country and a small people, as the honourable member for Streeton, Tony Lamb, reminded some of us at the rally for East Timor held outside Parliament House at lunchtime today. The lack of consideration and the lack of interest in Belau and East Timor indicate just what the honourable member referred to-unless, of course, the country concerned is approached by the Soviet Union or Libya; then, suddenly, everybody gets very interested. In Belau the Chief Justice had to resign because of intimidation, the Speaker was threatened, members of parliament were threatened, women plaintiffs in a legal case were threatened and houses were firebombed-in other words, incidents which, if they had happened here in Canberra, would have been considered intolerable. Yet such is this country's lack of concern about the South Pacific that all the representative of the Minister for Foreign Affairs in this chamber can do is make a joke about it. I find that quite deplorable. I commend the Government's stand on Kanaky and its support for the South Pacific Forum in getting New Caledonia inscribed on the decolonisation list at the United Nations, although I am concerned that any contact the FLNKS chooses to make to gain support is still judged through East-West eyes. If the people of Kanaky cannot get support from France and the United States, which are supposed to believe in freedom and self-determination, who are we to tell them whom they should seek help from? I am also concerned that the Government's support for the FLNKS may be weakening in the face of French intransigence and tacit US support for France, again because it views France as an ally in the East-West context somewhere on the other side of the world without taking into account the demands by the indigenous people for their own self-determination. I must also comment on what Senator MacGibbon had to say a while ago about the hypocrisy of the Australian Government's stand when he compared the Australian Government's attitudes towards Fiji and New Caledonia. In New Caledonia the indigenous people are in the minority only because of an enforced and quite deliberate policy of emigration of French nationals to the region with the express purpose of making the local people, the indigenous people, a minority. It is a very different situation from that in Fiji. I also commend the Government's repeated criticism of France for its nuclear test program at Mururoa Atoll since 1966, although I must point out that it was our neighbours in Melanesia who had to highlight the hypocrisy of condemning the tests while at the same time selling uranium to the country responsible for the tests, some of which uranium could quite easily end up at the test site because there is no real way of separating the yellowcake from different sellers once it gets into the nuclear fuel cycle. However, we should maintain our strong opposition to the French testing program in the South Pacific. As an immediate step, the Government should ban all sales of uranium to that country-reinstitute the ban that it was so proud of back in 1984. Finally, we have to consider the situation in Fiji. It was quite lamentable that our Embassy in Suva took no notice of the Labour Party in Fiji between the time of its formation and the election which it won earlier this year. We chose instead to hobnob with the Alliance Party of Ratu Mara, who has now been nominated as Prime Minister by the military junta which overthrew the democratically elected government of Dr Bavadra. I hope that we will learn from this situation that our diplomats will need to keep in touch with opposition groups instead of disregarding them. It is obvious that our diplomats feel more comfortable with conservative parties which are totally loyal to the United States. As a consequence of that we did not know what was going on in Fiji. I think we should have known in advance what was brewing there. It was a coup 10 years in the making. There is plenty of evidence of outside interference which drummed up the racial argument as an excuse for getting rid of the new Labour Government in Fiji. I cannot understand why Australian diplomats were not aware of that. The key to Australia's relationship in the South Pacific is to seek partnerships with the various countries based on understanding that the region's prime security needs are economic rather than military. I agree with the comments of Senator Macklin earlier that we should be increasing foreign aid to our neighbouring countries in the South Pacific based on self-help projects of their initiation, not aid with strings attached. Of course, we should be reducing the amount of military aid that we give to any country in the Asia-Pacific region. The issues are North-South rather than East-West. If Australia could see the Pacific through Pacific eyes, instead of taking an indirect view via Washington and Moscow, it might not be so subject to the kind of censure that it is undergoing here today. Senator BURNS(Queensland)(4.28) —A matter of urgency such as this appears to give the impression that the past National-Liberal Party Government had good policies and that they were better than the ones currently being pursued. I categorically state that my examination of politics over a long period has not shown that to be so. It is not so much that the previous Government's policies were atrocious; they did not exist. The previous Government showed no concern at all for the ordinary people living in South Pacific countries. Australia holds a place of pride in the South Pacific area. As a developed and democratic country, we have a responsibility to assist developing nations in several areas: financial, physical, defence, joint project development and leadership in seeking a peaceful, secure Pacific area, recognising the rights of and the independence of each nation, but mindful of the need to co-operate to assist each other for the common good. Australia has played a very constructive and co-operative role in convincing Japan, for instance, to stop dumping nuclear waste in the Pacific islands, which is very important in terms of the contamination of the fisheries which are very important to the life cycle of people in those nations. The Labor Government has always strongly supported independence for the indigenous people in the area. One has only to look at history to see that the Whitlam Government from 1972 to 1975 played a tremendous role in accelerating the coming of the opportunity for Papua New Guinea to become an independent nation. Many years before becoming Prime Minister, Gough Whitlam, as Leader of the Opposition, was able to increase the recognition of Australia's importance in the world of nations. At that time the Liberal Prime Minister was not able to do that. In fact, he had no desire to do it. He had us living in isolation apart from some of the Anglo-Saxon countries and the United States of America. His desire to have a few powerful friends seemed to be all-consuming. Senator Macklin suggested that there was a need to look at trade and not aid. I think both matters are very important indeed. When looking at the question of aid one must consider what can be offered and how that offering can be used in the best interests of the people in a particular country. Certainly these offerings should not be used in the interests of the government or of administering agencies; they should be used in the interests of the people in the particular country. Much aid money is wasted. Australia has given aid over many years. It has already been pointed out that Australia gives about twice as much aid as New Zealand gives in the area. I believe that our aid should not be given without strings. I see no problem with suggesting ways in which it should be spent and with offering not only financial aid but also physical involvement to see that that aid money is properly spent in the interests of the recipients. I suggest this not in terms of being paternalistic, but rather in terms of determining what their requirements are, what they need, and applying our particular expertise in order to achieve the ends which they seek. Obviously we need to help to develop infrastructure. It is not a question of just food aid, although that is important when it is needed. We need to develop the infrastructure of these countries so that they can become truly independent and stand on their own two feet-at least to the extent that most trading nations can. In this respect, I accept, of course, what is well known to all of us: that no nation is an island unto itself and that trade-import and export-has to occur. I believe also that when we consider aid packages we need to have consideration for Australian industry. We need to provide people with manufactured goods that come from our own country. We should supply jobs for our country while providing value added goods to recipient countries. I see no gain and no purpose in providing millions of dollars for people to spend in, say, West Germany on machinery that could well be made in Australia. I think it is fairly barren and narrow to talk about the relationship between one country and another only in terms of the government level. We could have two totally bureaucratic governments which do not concern themselves with what the people are able to achieve or their way of life and whether it is democratic and fulfilling. I believe it is important that contacts be made at all levels between countries. I point out that the trade unions in Australia, because they are in a fairly developed state-certainly not developed to the extent of having the types of powers that those opposite suggest at times- are in a position to assist trade unions in other countries. They are doing that. They are developing a policy of assistance which deals with education and helping people look at what is possible-but always on the basis of the principles of fairness and equity. Michael Kinnane, who is an educationalist in Queensland, has the responsibility of looking after a particular educational facility for the trade unions in the South Pacific. I think that is very important. We in the Australian Labor Party believe that the democratic way in which the trade unions operate is admirable. I point also to the way that they have co-operated with this Government to produce, probably for the first time in history, a reduction in real wages. For the first time, with this Government, there was a collective approach to seeking to develop industry. For the first time that I can recall-and for the first time according to my reading of history-we have been able to have a true productivity bargaining situation, where people have given up certain things for a wage increase which involves no cost to the employers. The sorts of principles inherent in that enlightened view-the view of building and creating wealth to share in the community-are what we are seeking to share with the people in the South Pacific. It is not always possible for these countries to go along the road that we do, because of the fact that they are only at the stage of becoming developed. We also are seeking to develop their ideas on how the democratic forums can be utilised so that they can be drawn into the wider debate in the whole region of the South Pacific. In respect of the Federal Government's involvement in Fiji, I certainly hope that the Opposition is not following the advice of Senator Puplick, who, I understand, said in an interview concerning the Gulf war: if somebody shot Saddam Hussein the war could be over within a week. I hope that is not the policy of the Opposition; it certainly is not the policy of the Labor Party. When looking at the position of Fiji one necessarily has to look at a little bit of history-and this does not take long. The situation in that country of the different races-the indigenous race, the Indian race and, to a lesser extent, others-was created because of the colonial situation overseen by the United Kingdom. I refer not only to the government to government situation but also to CSR Ltd, a capitalist giant, a company which created sugar plantations and sugar mills. CSR brought in indentured labour from India and created the problems we now see. It is not just something that happened yesterday. The development of differences of opinion has been going on over many years. For the first time a partly Labor government was elected in Fiji. It was quite determined to make the country more democratic and give people the opportunity to express views and have some power further down the line. It wanted to be totally and clearly honest in its approach. All of a sudden a number of hooded men appeared in the Parliament and, using the barrel of a gun, they removed the Government. The thing that astounded me is that a representative of this Opposition immediately came out and supported that action. That is the position: the Opposition favours the taking over of a democratic parliament at the barrel of a gun. Well, that was the position until he was, I understand, taken to task by Mr Howard, the Leader of the Opposition. What a daunting prospect. What was Australia to do in this situation? Was it to send in several gunboats, drop in a few loads of parachutists and take over the country? We did not do that, but we certainly did whatever we could to indicate our attitude that Fiji should return to democracy and that the bringing about of that was a role for the people of Fiji. The trade union movement took the view, as a result of discussions with trade unionists from Fiji, that certain bans should be placed upon it. Great capital was made in the Parliament by suggesting that the trade union movement was taking over foreign policy from the Government. Nothing could be further from the truth. But a principle that we in Australia should all support and protect is that trade unions should have the right to withdraw their labour if they feel that something is going on in another country that is absolutely contrary to what they believe is right and correct. The Government, in its wisdom or otherwise, decided that it would not adopt the approach of sanctions. But it still sought in every other way to bring about a proper conclusion to the dispute in Fiji. The suggestion that it does not have any status and standing in the South Pacific countries is so much rubbish. Mr Hawke was suggested as the leader of a group of people which it was hoped would be received by Rabuka to discuss the matter and reach some sort of conclusion. We are concerned about the situation and we will do everything within our ability. Senator MacGibbon is quite remarkable in the way that he assesses things and responds. He suggested that Bob Hawke was dishonest and that he glossed over the difference between ourselves and New Zealand. There is no doubt that a large minority of people in this country holds that there should be no visits of nuclear armed or nuclear fuelled ships to these shores. There is no doubt about that. But this Government has a different view, and at least it recognises the sovereignty of New Zealand and its right to hold a different view. I think that it was totally honest and thorough of Bob Hawke to make the point that, although there can be differences in a particular area or areas, at least there are many other areas, on which Australia and New Zealand can agree and can go together hand in hand playing a constructive role in the South Pacific, not only for the benefit of their own people but also for the benefit of all nations in the South Pacific. Senator MacGibbon also made a point about the lack of accurate intelligence regarding Fiji. I do not know that we have changed the team very much. I think that there are some people opposite who were there at the time when the Liberal and Country parties were in power. I have never been a great admirer of the Australian Security Intelligence Organisation and its people, either. Of course, Senator MacGibbon said that we had no further influence on France. I feel that we should be totally opposed, as the Opposition has already indicated, to nuclear testing in the Pacific, and we have stated that very clearly. If saying that we are being critical of France and if maintaining our position of encouraging and supporting the indigenous people in the community to have independence means that France will be placed in a position where it is not prepared to accept our influence, so be it. I would not want to see our Government suddenly say that it is all right to test nuclear weapons in the South Pacific and to use police and the military to suppress the Kanaks in New Caledonia, as long as Australia remains a friend of France. As far as I am concerned, we have taken a principled position in that regard and should continue to do so. We should support independence for that country. In doing that, I think we have the support and recognition of the governments and, more importantly, the people of those countries in the South Pacific, because we are being a positive force in the South Pacific for the future good of that area and for building a better and safer South Pacific where the opportunity for people to increase their standard of living and, more importantly, the opportunity for a nuclear-free South Pacific can be developed. In that situation, rich or poor, they will not die from the effects of radioactivity, or be blown up by atomic bombs. The ACTING DEPUTY PRESIDENT(Senator Peter Baume) —Order! The honourable senator's time has expired. Senator HAMER(Victoria)(4.44) —The Senate is debating a matter of public importance proposed by Senator Robert Hill in the following terms: The Government's record of neglect and its failure to pursue sound and consistent policies within the South Pacific region with a consequent loss to Australia of respect and influence. I must say that everything I have heard in this debate would sustain the accuracy and fairness of that assessment of what this Government has done. In the South Pacific we are dealing with a very unusual and a very sensitive area and the Government's handling of it has been very inept. We must look at the nature of this region that we are talking about. When the Second World War ended, five colonial powers-Australia, France, New Zealand, the United Kingdom and the United States of America-were administering the Pacific island dependencies. Today, all the islands are independent, with the exception of American Samoa, the French territories of French Polynesia, Wallis and Futuna, the Pitcairn dependency administered by Britain, Tokelau, which is a New Zealand territory, and Nieu and the Cook Island, which are self-governing but associated with New Zealand. The independent South Pacific states range from Papua New Guinea, with 3.5 million people, and Fiji, with 700,000, to states like Nauru, with around 8,000 citizens and a land mass of 26 square kilometres. In total, the Pacific states, islands and atolls, including the American trust territories, cover roughly 22 million square kilometres, of which 97 per cent is ocean. Unemployment on the islands is high and subsistence agriculture is the norm. However, Nauru has grown rich on phosphates, while Papua New Guinea possesses high copper deposits. On the other hand, many of the islands possess nothing beyond meagre copra production to sustain them. With rapidly growing populations, many of the islands face problems of urban unemployment, particularly among youth, and of massive brain drains of newly qualified graduates to Australia, New Zealand and Fiji. The Cook Islands, Tonga, Tuvalu and the Samoas are ethnic Polynesian. In small, remote Nauru, the Micronesian, Melanesian and Polynesian strains are mixed, with Polynesian predominating. In Papua New Guinea, West New Guinea, New Caledonia, the Solomon Islands and Vanuatu, the people are Melanesian. Fiji lies in the Melanesian area, but indigenous Fijians are a mixture of Polynesian and Melanesian. Fiji's Indian population, which is the majority of the population, are former indentured cane labourers. This is a very complex area and in such an area Australia is a major power but, because of its former colonial history, that power has to be used with great tact. President Theodore Roosevelt once said, `Talk softly, but carry a big stick'. We seem to talk loudly and carry a very feeble stick. We have to think about their interests and also our legitimate interests. With the possible exception of Nauru, they are all poor countries and they wish to live in peace. Of course, what they want is aid-but trade more than aid. In recent years our policies have not been very helpful in either of those areas. What are our interests? We do not want to see super-power rivalry in the South Pacific. We do not want to see revolutions in countries that are underdeveloped, small in population and small in resources. We do not want to see this going on across our trade routes that link us with the American continent. What are the threats that might disturb what used to be described as the idyllic South Pacific? There can be internal threats-for instance, in Fiji and New Caledonia. In Fiji the ethnic population is outnumbered by the Indian population, and we all know what has been happening there. The same situation applies in New Caledonia, where the ethnic Kanaks are outnumbered by the immigrants, but the Labor Government's policy has been diametrically opposed in those two countries-typical of the confusion it has followed. In Fiji, insofar as one can make any sense of this Government's policy, it seems to be supporting majority democratic rule. In New Caledonia it is doing the opposite; it appears to be supporting minority indigenous rule. This is typical of the confusion as to what we stand for and what we are trying to achieve which is damaging our whole standing in the South Pacific. Those are the internal threats of racial intolerance and racial division in countries such as Fiji and New Caledonia. There are also external threats. Of these, by far the most serious is the move into the South Pacific by the Soviet Union. That can be explained in many ways. The Soviets have developed fishing agreements. One would have thought that it was perfectly legitimate for them to develop fishing agreements with Kiribati and Vanuatu if that were their sole purpose but, on their past performance in other areas, one would have to be very naive to think that was their purpose. They are using such agreements as a means to project their power into an area to cause disruption to the Western powers and perhaps spinoff benefits for themselves. The interests of the local people are the last things that would cross their mind. Our Prime Minister (Mr Hawke) has said publicly, `We would welcome more political and economic involvement by the Soviet Union in the Asian-Pacific region'. That is what he said-he appeared to retract it a bit later-but I think we want to be very cautious as to the motives of the Soviet Union in the South Pacific. I do not think that they are designed in any way for the benefit of the people of the South Pacific or for the improvement of relations in the area between the Western powers and the inhabitants of the South Pacific, I think we ought to look at them with the deepest suspicion. What is worrying is the enormous buildup of the power, particularly the naval power, of the Soviet Union in the Pacific. The Soviets are in no way militarily equipped to have a head-on confrontation with the United States Pacific fleet, but that is not necessary; that is the most unlikely thing that could happen. That would be part of a world conflict. Why, then, are they building up their power-which they are doing in a very impressive way? The Soviets' Pacific fleet is now the biggest of their four fleets, numbering 836 ships; 32 modern ballistic missile submarines; and 90 hunter-killer submarines. It includes the only two Soviet aircraft carriers and the latest missile frigates. Their amphibious assault capability is very great: half their entire naval inventory is in the Pacific. They are backed by a fully integrated Soviet merchant fleet capable of transporting seven divisions. They have moved, as we all know, although the Soviets keep on denying it in a rather feeble way, to bases in Vietnam, and since 1985 the base at Cam Ranh Bay has supported an average of 15 to 25 ships in the South China Sea and another 15 to 20 ships in the Indian Ocean. They also have modern bomber forces there and reconnaissance forces. This is a massive deployment of power and one cannot think that its purpose is beneficial to our interests or, for that matter, to the interests of the people of the South Pacific. We must look at the situation with very great concern. The other external threat to the tranquillity of the South Pacific is, of course, the Libyans. I believe that they are a force for mischief. There is no great evidence yet that they have done any particular harm to any of the countries of the South Pacific, but again I do not think that the involvement of Libya in the South Pacific-an area one would have thought was of absolutely no interest to Libya-can be intended for the benefit and the tranquillity of the people of the South Pacific. Again, we must watch that with very great care and be prepared to counter it if the involvement of the Libyans appears to be disturbing our area of very great interest. What has the Government been doing about this? Let us look at the political involvement of the Government. One of the early acts of the Prime Minister was to end Commonwealth Heads of Government Regional Meetings, very useful forums for discussing problems, for dealing with economic, political and defence issues. He was instrumental in ending them. Last year he did not bother to go to the South Pacific Forum; this year he attended it, but it was not really out of any great interest in the South Pacific as a whole. The Forum was used merely as a vehicle to project his attempt-a very ineffective and damaging attempt-to sort out Fiji's internal affairs. This caused adverse reaction from the Melanesian countries, which had the impression that we were trying to bully our way into the internal affairs of another country. That is the thing that we must avoid at all costs; we must not come over as the playground bully. Australia is much more powerful than those countries, yes, but we want to help them, not try to bully them. Of course, under certain circumstances military power may be significant, but certainly we should not initiate it or flaunt it. Talk softly and carry a big stick, not the other way around-which is the policy of this Government. The second area of grave concern is the failure of our intelligence in the Pacific under this Government. The events in Fiji caught us by surprise not once, but twice. This was a very serious failure of out intelligence activity, which is directed by this Government-or rather, more accurately, misdirected by this Government. One of the Government speakers in this debate revealed an astonishing ignorance; he seemed to think that the Australian Security Intelligence Organisation was responsible for external intelligence. Admittedly he is a backbencher but nevertheless it is typical of the attitude of this Government and its members to the crucial importance of intelligence. We have very small defence forces in world terms. We rely very heavily on effective intelligence, to be deployed directly when necessary. The third area of muddle by this Government is the whole question of sanctions regarding Fiji. The Government came to the conclusion, I believe accurately, that the imposition of sanctions on Fiji would not be helpful to a resolution of the problems there. The trade union movement, apparently conducting our foreign policy for us, imposed sanctions. This is typical of the muddle in our arrangements and the image we are projecting in the South Pacific. Then from the Government benches we had uproar over the American decision to send a very small training team to Papua New Guinea. It was represented by some members of the Government as being a secret agreement. Senator Tate —That was the Australian; it wasn't the Government. Senator HAMER —Senator Tate should listen to his backbenchers. The agreement was reached, and made public, at the request of the Papua New Guinea Government, and I believe it will be helpful to that country. It involves only a very small team of 15 people who will go there for two weeks. They will train at Wewak which, I point out to those who are becoming upset about the involvement of Indonesia, is 300 miles from the Indonesian border. We must also be able, where necessary, to support the tiny island states of the Pacific-and they are tiny-against extremist external threats. If we do not deliver support, the first time we are called on will be the last time. This Government has run down our Defence Force. It has reduced our defence spending and very much reduced our ability to help people in the South Pacific. It has destroyed our amphibious capability, and it destroyed our Fleet Air arm. These things are the means by which we could have gone to help the tiny countries threatened by external extremists. These, of course, are very serious policy errors, which we will regret in the future. This Government has failed to comprehend the needs of the South Pacific, it has failed to handle them with sympathy and it has failed to provide us with the resources so that, if a crisis occurred, we could meet that crisis. Senator WOOD(New South Wales)(4.58) —I have listened carefully to contributions from both sides of the chamber today and, in summary, they could all be fitted underneath Senator MacGibbon's definition of `leadership', which is `power and influence'. It seems that this Government and the potential government on the other side do not know the difference between leadership and power and influence. It seems that there is a preoccupation with control. There is a paternalistic preoccupation with control; control that is both economic and military. Senator Hamer has just finished telling us that we should support smaller nations against extremist external threats. The United States is capable of posing an extremist external threat to smaller nations in the South Pacific. Witness the bullying of Belau, to which other senators have referred in this debate. Belau has been bullied constantly since if formed its original constitution, and has voted time and time again to maintain its non-nuclear independent stance. The United States has used economic blackmail. It has exported violence and intimidation to Belau-a tiny Pacific nation, one that we should certainly support and defend against extremist external threats, even if the extremist external threat comes from a super-power that is supposed to be our closest ally. However, this Government and this Opposition have been silent on Belau, and the silence on Belau consents to the bullying. By ignoring the pleas of the Belauans, Australia has consented to extremist, external bullying by the United States. Fiji is another country whose external threat came not from Libya. We keep hearing about Libya's intentions in the South Pacific and how we must guard against Libyan interference in the South Pacific. But where did the interference in Fiji come from? It was not from Libya. It was not Libya which supplied money to the Taukei movement in Fiji to inflame the racism in Fiji. No one denies that there were racial tensions in Fiji, but these racial tensions were deliberately inflamed to create a vehicle for the coup. As Senator Vallentine said, the coup was 10 years in the making. We are being fed a lie. We are being told that the Government was caught with its pants down over Fiji, that Australian intelligence did not know what was happening in Fiji and that when the coup came the Government was surprised. I do not believe that for one moment because this Government knew all along what was happening in Fiji and it conspired, by its silence and inaction, in what happened there. Today a demonstration in front of Parliament House reminded us about East Timor. What happened in East Timor and our attitude to it must be one of the most shameful episodes in Australia's history. We abandoned a country which was a loyal ally during the Second World War. The Timorese shed their blood and died to save Australia and we have abandoned them. Where is the support for our allies? Where is the support against extremist interference? This matter raises questions also about what is happening on the border between Indonesia and Papua New Guinea. Does our shameful desertion of the East Timorese prefigure our attitude to a similar incursion in Papua New Guinea? Why are United States military advisers in Papua New Guinea? The term `military advisers' sends shudders down my spine. It reminds me very much of the military advisers who went to Vietnam-and we know what happened there. Every year Tahitians are going in their hundreds to hospitals in Paris and New Zealand to be treated for cancer, cancer which results from French testing in the Pacific. The French have bottled up the statistics and the research on cancer rates in the Pacific. If we were genuinely concerned about the people of the Pacific we would be genuinely concerned to make sure that the truth about the effects of French testing in the Pacific, in a medical sense, was put out to the world. But no; by our silence we conspire in that matter too. We bleat about French testing in the Pacific yet we sell the French our uranium for them to use in whatever way they wish. It may be our uranium being tested in the Pacific that is visiting cancers on the people of Tahiti. Senator MacGibbon said that we have much in common with France. Arrogance is probably one of the things we have in common with the French. Senator MacGibbon also said that New Zealand was mistakenly unilateralist and pacifist and that it broke ANZUS. It was the New Zealand people who forced the New Zealand Government to stop the entry of nuclear warships into New Zealand harbours. The will of the people was so strong that all the major parties in New Zealand now have a ban on nuclear armed and powered ships entering New Zealand waters. That is what democracy is about-that the will of the people should be heard. We hear about trade. I ask the question: trade with whom? We ought to look at the effects of our trade on the peoples in the South Pacific. When we trade with Fiji we tend to buy goods from Australian multinational corporations. In fact we are buying Australian products from Fiji the profits of which come back to this country. Very few of the profits are seen in Fiji or elsewhere. I will close by saying that I have to agree with some of the sentiments expressed in the terms of Senator Hill's matter of public importance. I have to disagree with some others because I am afraid that this Government has pursued consistent policies in the South Pacific, policies which have enhanced Australia's military and economic dominance in the region, which have gained the approval of Washington and Paris but which have immeasurably lost any respect that Australia may have had among the indigenous peoples of the South Pacific. The ACTING DEPUTY PRESIDENT(Senator Peter Baume) —Order! The discussion of the matter of public importance is concluded. Senator CHANEY(Western Australia-Leader of the Opposition)(5.07) —I move: That the Senate take note of the paper. I welcome the opportunity to make a couple of comments about the 1986-87 annual report of the Economic Planning Advisory Council (EPAC), a formal report which sets out the membership, the objects and a summary of the work of the Council and the papers which the Council has either produced or will produce. In that sense it is of some value because it is a reminder of EPAC's presence which has, perhaps, become a little less noticeable of late. Of more importance are the actual papers which are produced and, of course, the papers which are to be produced. On 6 November a paper was published by EPAC headed Major Issues/Priorities for Council. On page one of that document it is stated: Australia's economic performance over the next few years will be judged primarily on its ability to sustain employment growth, reduce inflation, and maintain or improve living standards, while at the same time continuing to correct the external trade imbalance. Simultaneous achievement of these four goals will be possible only if domestic output grows much faster than domestic demand-ie growth is markedly `skewed' towards export and import competing industries. I would not quarrel with that statement but I draw the Senate's attention to the fact that on page 12 of that report it is stated: . . . import replacement and export diversification may continue for a time, but to sustain a major expansion in the trade-exposed sector, additional investment is required. The report then notes: . . . the latest ABS projections . . . suggest a fall in total manufacturing investment, of perhaps up to 5 or 6 per cent in real terms in 1987-88. There could be no more damning a statement about this Government's management of the economy than that statement from the Economic Planning Advisory Council. The Government has suggested that the Australian economy is in some way in good shape, particularly when compared with other economies, and to blame other countries, and in particular the United States but more recently during the overseas trip of the Prime Minister (Mr Hawke), the Japanese, for Australia's misfortunes. The Opposition view is that a great deal of Australia's misfortune is to be laid squarely at the feet of the present Government. I do not believe that the fact that EPAC will now look to producing papers on key areas such as productivity, saving, investment, public infrastructures, labour market flexibility and general microeconomic constraints in 1988 is by any means good enough. Certainly, the Opposition welcomes contribution to public debate, but surely the time has come for some action. It is hard to believe that EPAC is only now getting around to addressing these vital issues. The fact is that Australia has been performing very poorly in relation to the rest of the world and in relation to its past record. The Hawke Government is continuing to pussyfoot around those issues which might upset its trade union support base. Labour market flexibility and the efficiency of the vital transport and communications sectors are prime examples, and only recently has the Government been able even to mention privatisation other than as a term of abuse. The simple fact is that Australia's performance is woeful. When we look at the economic statistics which relate to Australia and to the United States, we find that on virtually very indicator Australia is way behind the United States. We have a much higher rate of unemployment; the growth in our gross domestic product is lower; the GDP per capita is, of course, far lower; our world ranking is far lower and our foreign debt is 40 per cent of our gross domestic product as against 13 per cent for the United States. The one area that the Government points to as being an area of superior economic management in Australia is our Budget deficit as a proportion of GDP, and there the figures are cooked because unless we look at the total public sector figures, that is for the States and the Commonwealth Government, we do not get a true comparison, and when we lump in the State deficits then we find that the United States is better off than Australia. The ACTING DEPUTY PRESIDENT(Senator Peter Baume) —Order! The honourable senator's time has expired. Senator MAGUIRE(South Australia)(5.12) —I also rise to speak on the 1986-87 annual report of the Economic Planning Advisory Council (EPAC). Of course, the EPAC institution fits in with the Government's tripartite approach. EPAC is an organisation which includes in its membership business, trade unions and, of course, government. In 1986-87 two State governments, Victoria and Western Australia, were represented on the Council, as well as the Chief Minister of the Northern Territory. EPAC is an advisory body, it carries out inquiries, it consults and it prepares papers. It is an institution which was established by the Hawke Government following the historic National Economic Summit Conference in April 1983. At that summit the Government's objectives for the economy were clearly laid down, and they were to fight inflation and unemployment simultaneously. That represented a most refreshing and fundamental break from the previous policy of the Liberal Government, which was to fight inflation by regulating the level of demand in the economy, and that boiled down, in essence, to fighting inflation by increasing the level of unemployment. That is what actually happened under the Liberal Government when Mr Howard was the Treasurer. We found that to obtain a given level of inflation in the community more and more unemployment was required. That Government depressed the economy further and further in the vain hope of reducing the level of inflation and inflationary cost rises in the Australian community. Yet we saw at the bottom of the 1982-83 recession a position where the Liberal policies, with Mr Howard as Treasurer, after five Budgets, had resulted in not an 8 or 9 per cent rise in the cost of living in one year but in fact an 11.5 per cent rise. The peak unemployment rate, seasonally adjusted in that recession, was 10.4 per cent. Both double digit inflation and double digit unemployment resulted from the policies of the Liberal Government. The Economic Planning Advisory Council was established following the National Economic Summit Conference in April 1983. That policy, of course, was part of the prices and incomes accord with the Australian Council of Trade Unions and in line with the Government's policy of a planned stimulation to the Australian economy to increase investment, production and employment without the inflationary pressures and the cost of living rises which had characterised economic activity in Australia when Mr Howard was Treasurer. It is very interesting now to note the vast improvement in the Australian economy since that time, which totally contradicts the remarks made here just a few moments ago by Senator Chaney, the Leader of the Opposition in the Senate. The Government and the economy are performing vastly better than when the Liberal Party was in power. For example, instead of the 10.4 unemployment rate as a result of Mr Howard's policies, unemployment is now down to 8.2 per cent-a figure which I find too high but which is certainly vastly superior to the figure of 10.4 per cent. The cost of living rise is now 8.3 per cent on an annual basis, compared with the 11 1/2 per cent increase which occurred when Mr Howard was Treasurer, and I confidently predict that when the figures are available for the current December quarter-that data will be available at the end of next month-we will see an inflation rate not of 8 per cent but rather 7 to 7 1/2 per cent. That is the likely increase in the cost of living under this Government. Yet just five minutes ago Senator Chaney claimed that on all the indicators the Australian economy was in woeful shape. He claimed that in the past the Australian economy had performed better, but of course the figures give the lie to that. We see a growth in the gross domestic product for the September quarter, motor vehicle registrations are up 4.7 per cent in the September quarter and building approvals for new private dwellings are up 6.8 per cent in the September quarter. Of course, the real icing on the cake is the continued strong growth in employment, with 154,000 new jobs being created in the 12 months to October, bringing the tally under this Government to over 800,000 new jobs. Contrast that with the 186,000 jobs lost in the last 12 months when Mr Howard was the Treasurer of this nation. So EPAC is part of the economic policies which are continuing to produce further growth in jobs in this country. Senator SHORT(Victoria)(5.16) —I too want to speak very briefly on the 1986-87 annual report of the Economic Planning Advisory Council (EPAC). It is an extremely brief report. In fact, `scanty' would be a much more appropriate term for it. The thinness of the report is indicative of the lack of substance now found in the work of EPAC. In saying that, however, I certainly want to pay tribute to the work of the Director of the Office of EPAC, Mr Fred Argy. Mr Argy is a very highly able and distinguished public servant and economist. The problem with EPAC lies not with its staff-the staff has indeed been placed in an impossible position almost from day one-but squarely at the feet of this Hawke Government. The Senate will remember that EPAC was established following the infamous National Economic Summit Conference, held in April 1983, one month after this Government first took office. In the second reading speech on the legislation establishing EPAC the Treasurer (Mr Keating) said that EPAC's role `will be to act as a vehicle for community participation in the development of Government economic policy'. He also made it clear that EPAC's functions would include the development of new knowledge on economic policies and economic prospects, and that the Council would also advise in the forward planning of economic policy. It is quite beyond dispute that EPAC has been a totally unsuccessful adventure by this Government. Although it has produced some interesting papers of good quality, it has not acted as a vehicle for community participation in the development of Government policy. It has not developed new knowledge on economic policies and economic prospects, and it has not contributed in any discernible manner to the forward planning of economic policy or, if it had, it quite rightly would be ashamed of its results. EPAC has been just one more of the expensive and worthless councils, committees and other agencies established by this Government over the last 4 1/2 years in a purely propagandist but futile attempt to portray the Government as a competent economic manager. The former Labor Prime Minister, Gough Whitlam, put it so accurately last weekend-and I am not in the habit of quoting Mr Whitlam very often, but he put it very well-when commenting on Treasurer Keating's style of economic management and propaganda. A report of his comments states: `Every economic disaster which affects our country, we find the Treasurer saying, like Candide, that we are living in the best of all possible worlds, in the best of all possible times, under the best of all possible governments. `But Candide is not remembered for economic wisdom or success', Mr Whitlam said. Senator Maguire, who immediately preceded me, tried to portray that this Government had been a success in its management of the economy, and he pointed to various statistics in his attempt to indicate that. The simple fact is that on virtually every economic statistic and virtually every economic indicator that one could look at in this country relative to our position in the world we have slipped markedly and dramatically in the 4 1/2 years that this Government has been in office. It is the relative position of our country in the world that is the important determinant of our standard of living and of our future prospects. This Government has led the way down for our nation on virtually every one of those indicators. EPAC should be abolished. It will be abolished by the next coalition government. The Hawke Government knows that it should be abolished but it has not had the political courage to kill off EPAC, one of its original sacred cows. Instead, it has chosen to starve the cow. The latest annual report of EPAC states: As a result of a Cabinet decision in July 1986 the number of staff in the office was reduced from 42 to 25 and will decrease to 20 during the remainder of this year. At the same time, the Government has given EPAC additional responsibilities as a result of the recent abolition of the Advisory Committee on Prices and Incomes-a long overdue abolition-which has given EPAC a purely monitoring role and which will further weaken its standing in the structure of government. The ACTING DEPUTY PRESIDENT(Senator Peter Baume) —Order! The honourable senator's time has expired. Senator WATSON(Tasmania)(5.21) —The report of the Economic Planning Advisory Council (EPAC) for 1986-87 is a very disappointing document. It merely lists the members of the Council and then the items discussed at its meetings. There is no attempt to make even a brief comment about the economic situation which Australia now faces, in either general or specific terms. Although people may obtain the various papers issued by EPAC, as an annual report the document that Senator Gareth Evans tabled today should give a more comprehensive picture of the work covered during the preceding year and should detail what achievements, if any, the Council has had. When speaking to the EPAC Bill in 1983, the Treasurer (Mr Keating) stated that the Council would: identify feasible and desirable goals and targets for the economy as a whole; and develop policies to help realise the maximum growth potentialities of the economy and assist in the achievement of sustained economic growth. These aims are very laudatory, but the realities are that the economy has declined since 1983 and that the Economic Planning Advisory Council has yet to offer the magical and optimistic solutions which the Treasurer and the Prime Minister (Mr Hawke) said would emerge from its deliberations. Whilst it is very easy to be cynical about the achievements of EPAC, the comments on page 6 of this report about the Government's decision in 1986 to reduce the staff of the EPAC secretariat by one-third and the foreshadowed reduction by a further five officers are significant. They indicate to me and to others that this Labor Government has altered its position significantly from the public endorsements of the Treasurer and the Prime Minister in 1983 to a clandestine, yet relentless, reduction in support of the Council. The report notes that fewer reports and discussion notes can be produced with the staff reductions. It is very significant that in the 1985-86 report of EPAC 21 papers were published by the Council. In 1986-87, the period covered by the report presented today, only seven papers have been published-a significant wind-down in the work, output and productivity of the Economic Planning Advisory Council. All this causes me to speculate that this winding down is a prelude to the abolition of EPAC as the latest of the so-called good ideas the Hawke Government had when it was elected which, in the cold light of day and of economic reality, have proved to be superficial and band-aid solutions to the grave economic problems which Senator Chaney earlier outlined. The Government is obviously not genuinely committed to the development of a well-staffed, efficient and productive economic think-tank, which is what EPAC should be. When EPAC was set up it had a very demanding task ahead of it and could have made a substantial contribution to the development of macroeconomic planning for Australia. Sadly, the reduction of resources and staff indicates that the Prime Minister and the Treasurer no longer have any commitment to consultative economic planning or the development of a sustained strategy to meet the challenges of today's global economy. I ask the following questions: Has the Government altered its previous public endorsements of EPAC? Perhaps the responsible Minister can respond. Has EPAC failed to recognise the feasible and attainable goals which warrant the dramatic reduction in staff that has taken place since the middle of 1986 and which, according to this report, is to continue? I await a response from the Minister. Senator COONEY(Victoria)(5.25) —Senator Watson has asked a series of questions about the Economic Planning Advisory Council (EPAC) which imply that he and his Party are intent on keeping this body in operation. Immediately before him Senator Short made a speech. He said that his Party when it came to government would abolish the body. So again we get from the Opposition continual confusion about exactly what will happen. On the one hand, the very eminent senator from Tasmania, Senator Watson, asks why the Government does not improve EPAC. That was the effect of his rhetorical questions. He asked why we did not develop a think-tank, creating a body that could give us economic direction. On the other hand, another eminent senator, Senator Short from Victoria, said that the first thing the Opposition would do when it got into government would be to abolish the body. When honourable senators opposite are invited in these debates to get up and say what their answer is to this and to that, the great difficulty is working out what the question is. No matter who on the other side speaks, they all seem to ask a different question. That makes it very difficult to grapple with the questions that are raised. The majority opinion on the other side seems to be that presented by Senator Short and Senator Chaney, which is that EPAC is ripe for abolition, together with other bodies, such as the Commission for the Future. That is interesting. These bodies are the sorts of bodies that project some thought about where Australia is going, as to what its achievements and objectives might be and as to how to accomplish them. Yet these are the bodies which the Opposition, or at least the majority of its members, seems to want to abolish. Do they want to abolish, with these bodies, commitment to and planning for the future and vision of what Australia is about? The Opposition does not propose anything to replace these bodies. The Opposition also wants to hobble the unions so that they become ineffective and to privatise. Abolishing bodies such as EPAC, hobbling the unions and privatising are the three things which the Opposition says this Government should do to achieve economic well-being. If the abolition of these bodies, which exist to help plan the future, the hobbling of unions, which have acted magnificently over the period this Government has been in power and wholesale privatisation without any sort of thought being given to it are the prescriptions that come from the Opposition this country is in for terrible trouble should the Opposition ever gain government. The unions have co-operated well with industry and government over the years. That co-operation needs to be encouraged and developed. Against the background of the prices and incomes accord struck between the Australian Labor Party and the unions in February 1983 one can see the thrust of the unions' actions since then. The agreement talks about industry development policy and states: It is agreed that the current economic situation- this is a description of the economic situation which existed when this Government came to power in 1983- and future trends demonstrate the hopelessness of policies which seek to attain full employment by use of market forces alone. Interventionist policies which are closely monitored and comprehensive in nature are necessary to bring about the growth which is required on a sustained basis if unemployment is to fall on a continuous path. That is what should be aimed at. This quotation takes us back to the situation described by Senator Maguire so well earlier-the hopeless economic situation which this Government faced in 1983 and which, together with the trade union movement, it has so well answered. It is true that the economy is not as good as a perfect world would have it but it is certainly a lot better than it would have been had the policies practised by the Opposition when in government-which they have not forsaken since-operated over the last four years. If those policies were to operate in the future disaster would fall. EPAC shows the necessity of planning and is to be commended. The ACTING DEPUTY PRESIDENT(Senator Peter Baume) —Order! The honourable senator's time has expired. Senator MICHAEL BAUME(New South Wales)(5.30) —The Government is the accused and is in the dock over the Economic Planning Advisory Council (EPAC), and the dock brief that Senator Cooney so ably took, as he usually does, can do nothing to divert attention from the reality that this Government created EPAC as a diversionary tactic. It emerged, as Senator Short so rightly said, from the National Economic Summit Conference of 1983 and, as Senator Watson said, the Government is now killing it off. The Government is not letting the Council do its job properly; the Government is killing the messenger. That is the problem with EPAC now. It is no longer a diversionary tactic that is working for this Government. Ever since EPAC's projections about what would be the consequences of Government policy were leaked two years ago, this Government has set out to kill the messenger. I assure the Senate that there is no conflict or confusion between the positions put by Senator Short and Senator Watson; they are as one: there is no need for this body. It was a diversion and a stunt. But the Government is now killing it off because it is providing uncomfortable information to this Government. Let us see how uncomfortable this information is. In one of its latest reports it rejects the general view that manufactured exports have made an extensive contribution to improving Australia's trade portion and suggests that to achieve a faster adjustment to our external crisis Australia may need either slower internal growth or a lower Australian dollar. We know what the consequences of that would be. It would lead in both cases to increased unemployment and/or lower real wages. The reality is that EPAC has been the bringer of the bad news that this Government does not want to hear. In some of its papers-for example, that on external balance and economic growth-the Council has pointed out how the Government's own policies are incapable of solving our major problems. It said in that report: . . . a minimum requirement for balanced growth is that, at some point, the external debt stabilises relative to GDP. Such stability will, in most cases, also stabilise other indicators of the external debt burden, such as the ratio of debt interest payments to export receipts. But that has to be stabilised, and that is the important issue. The Economic Planning Advisory Council has pointed out the necessity of stabilising our foreign debt level, and even on EPAC's most optimistic expectations this will not happen until the 1990s. Not only will we continue to be saddled with an increasing debt, but we will face the most disastrous element of all, that is, the huge interest bill. This is the reality. This is the problem that EPAC has posed for the Government. This is the message that the Government is now killing the messenger for. When one looks at the figures and at what EPAC has suggested, one sees how disastrous this interest bill has become under this Government. Its proportion of the total balance of payments deficit has now soared-it has almost doubled under this Government. I refer to the net burden of interest payments as evidenced by the net income debits figure in the balance of payments figures. It is now 75 per cent of our monthly $1.2 billion debt. It has come simply from the interest bill on these net income debits. That compares with about 40 per cent when this Government came into office. The figure is now 75 per cent. The indicators are clearly disastrous and EPAC, as the messenger which brings to light these indicators, is now to be killed because it is bringing the bad message. The gross income debits-the figure I gave earlier was net of earnings that we get from overseas-make up 93 per cent of our $1.2 billion monthly debt. Nothing this Government has done will improve that situation, because every time it devalues to try to increase our capacity to export it increases the size of the debt and the interest burden. Every time it increases interest rates to try to protect the currency, it increases the size of the interest burden. The conditions set by EPAC to get us out of trouble cannot be reached. A balance of trade surplus of up to one per cent will be needed to stabilise the debt equivalent to 40 per cent of GDP, as the report says. That will not happen. It needs a continuing 3 per cent annual growth-- The PRESIDENT —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator JENKINS(Western Australia)(5.35) —I move: That the Senate take note of the paper. I wish to speak on the final operations report and financial statement of the Australian Institute of Multicultural Affairs. As stated in the foreword to this report, the Australian Institute of Multicultural Affairs, or AIMA as it is known, was set up under its Act in 1979. The repeal of that Act in 1986 abolished AIMA as from 1 January 1987. In place of AIMA we have the Office of Multicultural Affairs, which has been established within the Department of the Prime Minister and Cabinet. This rather slim and final report has a section entitled `Promoting multiculturalism' and also draws attention to the fact that the final report produced by this Council was entitled `Future directions for multiculturalism'. I had a problem in obtaining a copy of the report, which I gather is not available in Parliament House generally. I have now obtained a copy of the report and it deals with the Government's perception of multiculturalism and the direction that the Government believes multicultural strategies should go. The PRESIDENT —Order! The time for consideration of government papers has expired. The PRESIDENT —In accordance with the provisions of the Audit Act 1901, I present two reports of the Auditor-General on efficiency audits of the Department of Defence and the Australian Taxation Office and the report of the independent auditor on an efficiency audit of the Australian Audit Office. Senator MESSNER(South Australia) —by leave-I move: That the Senate take note of the reports. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator MAGUIRE(South Australia) —On behalf of the Joint Committee on Foreign Affairs, Defence and Trade, I present a report entitled The Management of Australia's Defence, together with the transcript of evidence and minutes of proceedings. I seek leave to move a motion in relation to the report. Leave granted. Senator MAGUIRE —I move: That the Senate take note of the report. This report is in response to a reference by the Committee to its Defence Sub-Committee, under Mr Manfred Cross, MP, which was originally issued in the previous Parliament and was subsequently renewed by the present Committee this year. It follows, and largely complements, the Committee's 1984 report entitled The Australian Defence Force: Its Structure and Capabilities. Like its predecessor, it will make a significant and constructive contribution to the defence debate in Australia. As its title implies, the report focuses on the higher defence organisation in Australia and examines whether the present organisational structure and policy processes are the most suitable for both peace and war. It begins with a description of the existing arrangements and how they have evolved, and then examines the major criticisms that have been made in this and earlier inquiries. The report concludes that the existing arrangements continue to exhibit a number of problems and deficiencies which serve to undermine the overall efficiency and effectiveness of the defence establishment. These are documented throughout the report and include, first, continuing overlap in responsibilities and consequent potential conflict of interest between the Secretary to the Department of Defence and the Chief of the Defence Force, and between the Chief of the Defence Force and the individual Service chiefs of staff. A second difficulty is the isolation of the Minister from the defence policy making process, excessive areas of control for many senior managers and lack of sufficient means of reviewing or monitoring the defence establishment as a whole. Third, there is inadequate involvement of the Chief of the Defence Force and his joint staff in the development of defence guidance and the defence program. Fourth, there is also the continuing imbalance between single Service and joint Service interests and perspectives; and fifth, there is overstaffing and overranking in the Defence Department in Canberra. Here the Committee recommends an absolute reduction in the numbers of higher level personnel in the defence establishment. Sixth, there is an unduly complicated policy process; seventh, inadequate means of developing strategic and national security policies and continued absence of basic defence guidance; and, eighth, continuing tensions between civilians and military personnel at all levels within the defence establishment and a breakdown of the `joint process' involving the interrelationship of the Defence Department and the military. Many of these problems and deficiencies were identified by earlier inquiries into the defence establishment. Some stem from the diarchic structure of the higher organisation which continues to separate the military and civilian staffs. It thereby ensures that much defence policy making proceeds by a process of confrontation and bargaining, rather than mutual co-operation and collaboration. The report makes a series of recommendations to help overcome or eliminate these problems and deficiencies. It identifies a number of problem areas in which further study is required, either by the defence establishment itself or by an appropriate external review body. In making its recommendations, the Committee's primary objective has been to enhance the overall efficiency and effectiveness of the higher defence organisation and its policy processes, while still ensuring the primacy of control of the Executive Government and the Parliament. Mr Acting Deputy President, I seek leave to have the remainder of my speech incorporated in Hansard. Leave granted. The speech read as follows- The issues examined in the report include: (a) the division of powers and responsibilities between the secretary to the Department of Defence and the Chief of the Defence Force (CDF); (b) political supervision and control of defence policy and activities; (c) the overall integration of defence functions; (d) the current staffing of the Defence Department and the Australian Defence Force (ADF); and (e) problems associated with planning, programming and budgeting in defence, and with the equipment acquisition process. Additionally, a major section of the report deals with the command and control of the Australian Defence Force, with particular reference to: (a) The evolution of, and problems associated with, the existing operational command structure; (b) the role and functions of Headquarters Australian Defence Force (HQADF); (c) the role and functions of the joint force commanders and their commands; (d) the single service command structure; and (e) the provision of collective military advice to the Minister and the CDF. The report ends with an overview of the implications for the defence establishment as a whole of the recommendations in the report, and a discussion of whether there are grounds for more substantive reforms later. It concludes that there would be considerable advantages in establishing a fully unified higher defence organisation in Australia. While understandably concentrating on perceived organisational and managerial deficiencies, the report acknowledges that in recent years there has been considerable progress in some areas of the defence establishment. The 1987 defence White Paper, for example, represents a significant milestone in the formulation of a logical and coherent strategy for the defence of Australia, and an appropriate basis on which to develop our Defence Force structure. Further, the adoption of a joint force operational command structure is both sensible and timely. Both the Department and the ADF have sought to rationalise and make more efficient many of their internal organisational and policy structures. The report has sought first to clarify and redefine in a number of areas the basic roles and functions of the principal organisational interests within the defence establishment. The suggested changes affect the relationship between the CDF and the Secretary to the Department, and the respective roles and functions of the joint staff and the Services. In the first case, the report proposes that the CDF be given prime responsibility for developing and issuing detailed defence guidance and preparing the annual defence program. In the Committee's view, the arrangements that have operated in the past have not worked satisfactorily and they have served to undermine the confidence of the military and others within defence in the force development process. More importantly, we believe, as a matter of principle, that the person who is to be responsible to the Government for the defence of Australia in times of emergency or war should, within the overall policy and resource constraints set by the Minister, have the major say in how the Defence Force and its supporting framework is developed and managed. The proposed realignment of responsibilities between the CDF and the Secretary is in line with changes that were recently made in the UK Ministry of Defence. It entails the transfer of the Force Development and Analysis Division and some other elements of the Defence Department's central organisation and the three armed service offices into HQADF. A further important change in this area is the proposed establishment of a Defence Guidance and Capabilities Committee which would be chaired by the Vice-Chief of the Defence Force. It would take over the current functions of the Force Structure Committee and the Defence Operations Concepts and Capabilities Committee. This would simplify and streamline the force development process and provide the potential for greater control of force development by the joint staff. At the same time, proposals have been made which would strengthen the present process for preparing the broad strategic framework within which defence must work, namely, through expanding the functions and roles of the Defence Committee and the Strategic and International Policy (SIP) Division. In the second case, the current roles and responsibilities of the individual armed services and their respective Chiefs of Staff would be further downgraded in favour of the CDF and the joint force commanders. It is proposed that the ADF be divided, in conceptual terms at least, into two discrete elements: an employing or operational element and a maintaining or administrative element. This would help emphasise the importance of joint service structures and capabilities, simplify the operational command structure, and remove the potential conflicts of loyalty and interest which characterise the present arrangements. The operational element would be purely a joint service body and would be responsible for planning and conducting all Defence Force operations and operational training activities in peace and war. The second element would be made up of the three services, which would play a purely enabling role with no operational responsibilities at all. In keeping with that approach, the report recommends that rank parity be established between the joint force commanders and the service Chiefs of Staff. It suggests that there is scope to rationalise the maintaining element of the ADF either along functional or joint service lines. Within this revised framework, the report proposes a number of additional changes and measures which aim to: (a) Increase the first-hand involvement of the Minister for Defence (and his Assistant Minister) in departmental and ADF matters; (b) Ease the work load of top-level management and provide additional mechanisms for reviewing the structure and performance of the organisation as a whole; (c) Provide for further rationalisation between and within existing functional areas within the establishment; (d) Simplify the current policy process by eliminating some committees and decreasing the number of interests involved in decision-making, especially at the top; and (e) Improve joint service structures, capabilities and career opportunities. On the last measure, the report acknowledges that the ADF now recognises the value of adopting in peacetime the kind of operational command structure that will be required in times of defence emergency or war, and that it has begun to move in this direction. It argues, however, that the present operational command structure is simply a single service command system by another name and that it will not provide sufficient opportunity to develop and practise joint service capabilities and doctrines or train military officers in joint staff appointments. Accordingly, the report recommends that the CDF: (a) Adjust the peacetime missions and tasks of the joint force commanders to ensure that they involve units and assets from two and preferably three services, and assigns these forces accordingly; (b) Investigate the establishment of a permanent `theatre' joint force headquarters in the north or north-west of Australia; (c) Review the existing joint force command structure in order to determine its suitability both now and in the future; and (d) Implement a range of policies (described in the report) that would establish a strong, confident and motivated joint staff. The problem areas in which further study or review is required include: 1. The utilisation and current relative distributions of the civilian and service work forces within the higher defence organisation; 2. officer and other rank separation from the ADF (here, I should mention that the matter of personnel wastage rates in the Australian Defence Force has been referred by the Senate to the joint committee for inquiry); 3. the means of formulating Australia's national security policies; 4. the defence planning, programming and budgeting system; 5. the role of the joint force commanders in the formulation and oversight of joint service and defence policy; and 6. the current means of providing collective military advice to the CDF and the Minister for Defence. The Committee appreciates the ready assistance given to the Sub-Committee throughout the inquiry by the Minister for Defence and his officers from the Department and the ADF. It also thanks those who made submissions to the inquiry and who took part in public hearings. I would like to thank the Deputy Chairman, Senator David MacGibbon, and the other members of the Defence Sub-Committee for their hard work. I would also like to place on record the Sub-Committee's gratitude to the staff of its secretariat who assisted in the conduct of the inquiry and in the preparation of the report. Particular mention should be made of the Committee's defence adviser, Dr Graeme Cheeseman, who is leaving the secretariat after four years to take up an appointment at the Australian National University. The members of the Joint Committee believe this report represents a positive and timely contribution to the defence debate in Australia. I commend the report to the House. Senator MacGIBBON(Queensland)(5.43) —The report of the Joint Committee on Foreign Affairs, Defence and Trade entitled The Management of Australia's Defence which has been tabled this afternoon deals with the management of the Australian defence forces. This is a subject that is little understood in Australia, yet it is vitally important. At the risk of oversimplifying, I suggest that the relevance of this report might be explained by saying that at one level we have the `no threat doctrine' which implies that there will be sufficient time to prepare the Australian defence forces if we are faced with a defence emergency. But the implication of that doctrine, whether one accepts it or not, is that the system by which the mobilisation is going to take place, by which the defence forces are to be managed, is workable and adequate for the task. Regrettably, the truth is not so. The system that we have in place at present will not work. Time after time over the years I have asked representatives of the Department of Defence, particularly the civilian secretaries, first assistant secretaries and other senior people, how good this system is. They have told me that it is excellent. I have then asked whether it would work in time of war, and they have replied, `No, we need another system'. That is really the proof of the pudding for a defence department. We must have a system that works when we need it and, furthermore, we must go as far as we can to work out the flaws in that system while we have the luxury of time to do so. I have a strong belief in the old adage that you train as you are going to fight. We must have a system in place that gives us a chance of being successful if we need to use it. We cannot start from scratch and learn during an emergency. If we do, we will probably lose; we will certainly lose a great number of lives. Even when looking at a management system in times of peace and devoting our best resources to it, we will still not see all the problems, but at least we can be sure that we will get rid of the obvious ones and we will go a long way towards developing an adequate system. I believe that the report tabled this afternoon is one of the most fundamental and important reports tabled in this Parliament in my time here. It is a very large report of nearly 400 pages and a great deal of thought has been put into it. There are things in it that a lot of people will not agree with, but it is meant to make people think of alternative ways of doing the task better. This report reflects the constructive side of the Parliament. As parliamentarians we come in for a lot of criticism about doing nothing and wasting time and public funds. But this report gives the lie to that. It is a very constructive report of which the Parliament can be quite proud. This report has no dissenters-it represents all groups and all political ideologies within this Parliament. It is a measure of the way in which the Joint Committee on Foreign Affairs, Defence and Trade worked that even people such as Senator Vallentine could put their name to its report-although she was only associated with it in its closing stages. She did not dissent, though I do not doubt that there are detailed points that she wishes to make in her speech, just as there are detailed points on which I would differ with the report. I very much regret that the scope of the inquiry was such that it was forced upon the Committee to abridge the terms of reference given to it by the Parliament. We dealt with two of the three referred points, namely: (a) The determination, management and implementation of Defence policies, and (b) the suitability of the existing defence organisation for peace and war. We were not able to take the final brief of expanding on how national security policy was developed at the highest levels in the Parliament, in Cabinet and in the Ministry. I hope that the Committee moves to pick up that reference as its next task after we have completed our inquiry into resignation rates within the Australian defence forces. When we do the higher defence policy part of it, we will have completed a linear progression of inquiries by the Defence Sub-Committee which started with the report Australian Defence Force-Its structure and capabilities, of October 1984, and continued through to this report on the management of the Department of Defence. Finally, I hope we can deal with the formulation of higher defence policy. I said at the outset that few people understand how the Australian defence forces are managed. The basic principle in Australia-in a democracy-is that there is always civilian control of the armed Services. That is proper and it is a position that is supported fully by every member of the Committee. A careful reading of the report finds that that belief is reinforced all the way through it. From a legal point of view, the administration of the Australian defence forces is covered by the Defence Act, which is updated from time to time. Under the Defence Act we have three Services-an army, a navy and an air force. Very few people know how those Services are managed-how the sizes of the Australian Army, the Royal Australian Navy and the Royal Australian Air Force are arrived at, what equipment they buy, what tasks are assigned to them and so on. Up to the 1970s we had three different Services. Through the 1970s a dramatic change in management took place. It was really a logical outcome of a change that was taking place for historical reasons. In World War I, World War II, Korea, the Malayan campaign and Vietnam the Australian Services tended to operate as discrete arms-the Army, the Navy and the Air Force. They tended to be allied with the forces of other countries, principally the United States of America and, before that, Britain. That generated a certain structure within them which was appropriate at the time. Changing circumstances after the Second World War set in train a gradual shift in the way in which the Australian forces were structured. It became apparent that we had to move to a position of self-reliance from a defence point of view. That meant that the resources that we had-small though they were from our population base-had to be co-ordinated and brought together. So we have had a continuing program of consolidation of the Australian defence forces into a unified Australian Defence Force, without going down the path taken by the Canadians of wearing one uniform and having one common rank structure and all the rest of it. For a period of about 40 years we have worked to unify the three separate Services into one structure. That process is nowhere near complete, although we have gone a long way down that path. In the 1970s the Whitlam Government decided to accelerate the program-it was quite correct in doing that-of bringing together the three forces by getting rid of the separate ministries. There was an Army Minister, a Navy Minister, a Minister for Air and three service boards-an Army board, a Navy board and an Air board-which controlled the Services. Over the top of all that, we had a Minister for Defence whose powers were not precisely defined, and we had a Minister for Defence Support who provided the equipment. So we had five ministries and three distinct Services. The reorganisation put in place by the Whitlam Labor Government resulted in our having one Minister for Defence, the abolition of the three service boards and the creation of a Department of Defence which administered the functions that were formerly the task of the three service boards. We had a civilian Secretary, allegedly in parity with the head of the defence forces, who was a creation of this reform-the Chief of Defence Force Staff as he was then, now the Chief of the Defence Force. Fundamentally, that was inevitable and it was a good move. There is no question that the consolidation was and is essential. One can argue that the Department of Defence, as one of the largest departments of state, is far too large for any one Minister to manage. The moves after the last election, which resulted in the Minister for Defence being supported by a Minister for Defence Science and Personnel, is an indication of the recognition in the Ministry that the task is a huge load. It may well be that there is a need for one or two supporting Ministers for the Minister for Defence; but that is irrelevant to our discussion this afternoon. However, where the Whitlam Government went wrong was in the selection of an officer from the Department of Foreign Affairs to draw up the blueprint for the amalgamation of the three separate services into the Department of Defence. It is no secret that Foreign Affairs tends to have an adversarial view towards the armed services. With the greatest of respect to Sir Arthur Tange, I do not think he had any real understanding or knowledge of how the three Services worked. He put in place a scheme which read very well to the untrained mind, but which in practice simply does not work. We have reached the stage now, 14 years after it was introduced, where we can no longer sweep the shortcomings of the Tange reform under the carpet and pretend they they are not a problem. One of the great difficulties in this system, for those of us who have been involved in defence for many years, is that officers who come up through the three Services are highly critical of the operation of the Department of Defence until the point where they get to half-colonel or colonel level. Once they get beyond that level and their careers are directly governed by the system that is in place, they all refuse to say anything about the system. This Committee has undertaken three years of investigation of the Department of Defence and we unanimously believe that there has to be a fundamental change in the way that Department is operated. While it is a big report and there are a lot of side issues involved, the fundamental point is that we believe that the situation where the Secretary has greater powers than the professional uniformed servicemen has to be changed. The Tange management system that we have in place in the Department of Defence commits the fundamental error of separating responsibility for a task from the control of the resources that are necessary to perform that task. To put it in simple words, what we do under the present system is say to the Chief of the Defence Force, `You are responsible for defending Australia'. But then we do not give him the control over the means to carry out that defence. We do not allow him to make his own assessment with his military analysts, of the strategic situation and of the needs that might arise for him to use his forces. We do not allow him control over how large those forces are. We do not allow him control over the selection of equipment he needs to do the task. What we have done is separate the responsibility for carrying out this task from the essential resources which must be under the control of that commander if he is to carry out his task efficiently. In that way, we have gone back over 100 years to the situation that was in place when the British forces were committed in the Crimea where, again, there was a separation of responsibility for the operational side of it from the resources needed to carry it out. We would have precisely the same situation today as occurred in the Crimea if we had to commit the Australian defence forces seriously in such a defence emergency. That is really what this report is about. The report makes it scrupulously clear that we support the principle of civilian control of the Department of Defence and of the armed forces in this country. What we do not support is the bureaucratisation of the Australian defence forces. We believe that civilian control is mediated through the Minister, who is answer- able to his Cabinet colleagues and to the Parliament and, through that, to the people of Australia. We believe that that is the correct interpretation of civilian control. When the Tange recommendations were implemented by the Whitlam Government and carried on by the Fraser Government, the Defence Act was modified to provide for the changed circumstances. On the surface, there is very little difference between the powers ascribed to the civilian Secretary to the Department and to the Chief of the Defence Force. It is implied in the Act that there is a degree of parity between them on their powers but, in reality, it is quite different. The Secretary is the person who has control of all the key committees. Either the Secretary or his nominee-a first assistant secretary or one of the deputy secretaries-chairs all the key committees. I read from page 110 of the report on the relationship between the two powers, which states: The CDF- that is the Chief of the Defence Force- is responsible to the Minister for the command of the ADF- that is, the Australian Defence Force- while the Secretary administers both the Department of Defence and the ADF (the latter jointly with the CDF). While these arrangements appear reasonably straightforward, a number of points are worth mentioning because of their implications for the way in which power is actually exercised within the defence establishment. The first point is that the Secretary alone is responsible for providing policy advice to the Minister. While the CDF is the principal military adviser, he must operate `within approved policy' and `subject to the resources allocated'. This predominant role is reflected in the membership of the key policy advisory committees-the Defence Committee, DFDC, FSC and the Consultative Group-which are all chaired either by the Secretary or his representative. Largely because of his policy-advisory role, the Secretary also has greater formal access to the Minister and could, if he chose, effectively control the agenda. So there is no parity between the Chief of the Defence Force or the uniformed services and the civilian element in the Department of Defence. We have this great plethora of committees set up-around 90 in number-chaired mainly by civilians, which paralyse the decision-making process within the Department. We have a situation where the civilian element tends to have a degree of permanence to it. The service personnel are on rotational postings every two or three years and the Chief of Defence Force is only in that position for two or three years, while the Secretary tends to stay on. It is true that we have had four secretaries in the last 14 years but by and large the time that the civilian members of the Department of Defence are in significant posts is considerably longer. That, coupled with the structural arrangements which give them the right to chair significant committees, means that effectively the power rests in their hands. This leads to a huge diversion of human resources into the headquarters at Russell here in Canberra. That, of course, is one of the reasons for the high resignation rate. Many people join the Services to take part in the activities that the Services undertake in times of need and to train for them. They do not join to sit in air-conditioned offices at Russell Hill. Furthermore, because they are at Russell Hill for so long, they became divorced from what the Services are about. Again, I think that is one of the contributing factors to the resignation rate; the senior officers in the Services now are not really familiar with a lot of the things going on in the three individual services. It also means a huge increase in the number of senior officers in administrative posts in the Department. There is an insidious element in this, because there is virtually de facto approval for the promotion of everyone from one star and above-the rank of brigadier, commodore and air-commodore-by the civilian component. People who have served in the Russell Hill offices are known to the civilian element, and people who have an independence of mind and a forthright expression of their views are viewed with disfavour by the civilian element. Promotions from two-star level and above are directly approved, as of law, by the civilian component. So we can be assured that the development of independent minds and of people who are prepared to be individualistic cannot take place under the system that we have in place. Even though there is a great measure of control by the civilian element of the Department of Defence, peace and harmony do not reign within it. Indeed, one of the characteristics of the post-Tange era in the Department of Defence is the great degree of confrontation that takes place. I would like to quote from the report of the Dibb Review of Australia's Defence Capabilities of 1986. In a relevant section Mr Dibb said: Indeed, it was the inability of the ADF and the Department to agree even on basic force structure concepts that brought about this Review in the first place. On the same page he said: There are a number of issues that require attention. Some of these were identified by the Defence Review Committee into the Higher Defence Organisation in 1982 (the Utz committee). That Committee's report correctly stated that the scope for `improving working habits and relationships' was considerable, but it did not address the institutional flaws which arguably aggravate those relationships. Later on at the end of the same chapter Mr Dibb said: These planning difficulties are exacerbated by adversarial attitudes that exist in the Defence community. While differences of view are inevitable-and indeed healthy-in any large organisation, the levels of disagreement within the Defence organisation are excessive. In other words, the civilians end up fighting with the professionals and the result is a marked diminution in the productivity and the output from the Department. Characteristically, Mr Dibb does not offer in his report any constructive solutions to redress these problems. When the Minister for Defence (Mr Beazley) talks about this matter he does so in a dissembling way by describing the situation as, I think, `constructive tension' or `creative tension'. He ought to try that concept on the Israelis when they are having differences with the Arabs. The fact is that we have here a fundamental problem of conflict which has to be resolved for the benefit of all Australians. This report makes a large number of recommendations. The central part of the report relates to the proposition that we advance as members of the Committee that, if we have professionals, we should trust them and take their advice; that we should put the management of the Australian defence forces in the hands of the service professionals and that we put the civilian component of the Department of Defence in a supporting and enabling role-that is, we reverse the positions that exist at present. There are some secondary elements in the report. We call for an increased involvement of the Parliament in defence. Not only do we recommend that the Minister for Defence become involved in the details of how significant decisions are made and in understanding the processes involved, but we also recommend this for the members of committees and members of parliament generally. I have probably made more speeches on defence in this Parliament in 10 years than any other single person, including Ministers for Defence. I think that is wrong. Defence is one of the really great offices of state. Defence, Treasury, Attorney-General's and Foreign Affairs are the four principal tasks of a Federal government. Yet the time we spend on foreign affairs and on defence is minuscule. That is wrong. That is one of the reasons why we have such a high service resignation rate today. The service personnel feel that no one appreciates what they are doing. To return to the report, we make considerable recommendations on the financial side as to how equipment should be managed and how materiel acquisitions should be carried out. We support the report of the Public Accounts Committee, which looked at this matter some while ago. We spend some time talking about joint commands. With the consolidation of the three Services into one Australian Defence Force, it is very important that we set up a workable command structure at the highest level so that in an emergency those forces can be used efficiently. Although Australia has a long and proud history in warfare, one of the consequences of our role as ally-first of all with Britain in the First World War and then with the United States of America in the Second World War-was that our forces were often attached as smaller units to the larger forces of another country. Because of that we lacked the command experience at a high level. In the report that the Committee made in October 1984 on the Defence Force, its structure and capabilities we recommended that changes be made to develop experience in joint command headquarters. The response of the Services to that recommendation has been luke warm. What they have done is convert the three command structures that they had in place-operational command for the Air Force, fleet command for the Navy, and field force for the Army-into an air command, a maritime command and a land command respectively and claimed that they are joint force headquarters. These are not joint commands. It is just the old pals running the same old shop in the same old way as before. What we have called for in this report is the creation of a command which will give practical experience and the development of doctrine and the practice of staff in joint operations; in other words, of the three Services working together as and when they are needed. Importantly, the command structure has to be set up-unlike the present maritime command, land command and air command-so that suitably competent officers of all three Services can head it up as commander and get the requisite experience. While this report deals at great length with the management of the Department of Defence its recommendations, if implemented by the Government, will not solve our defence problems. Good management is absolutely essential. As I have said before in this place, if we do not have a good management system the thing will not work. But a good management system by itself will not guarantee success. For Australia to have the Defence Force it needs we have to address three fields: the political field, the management field-which is addressed in this report-and the matter of the personnel in the Services. Dealing with the first of those fields, the political field, it is absolutely essential that there be an informed, educated Parliament. There must be debate and discussion within this chamber and in the other place about the needs of the Australian Defence Force and how it should be structured, used and operated. That does not occur at present and it must be developed. The second point is that there must be changes in the management system and this report makes some significant suggestions towards that end. The third point is that there must be a change in the senior officers in the Australian defence forces. Not all the problems that the Australian defence forces face at the present time are a consequence of the Department of Defence and it would be very wrong for anyone listening to me in this debate to believe that I am saying that all the problems stem from the way that the Department is structured at the present time. The Services themselves have quite a deal to answer for. I believe that at the present time there is a shortage of capable men and women in the senior ranks of the Australian defence forces. That is not to say that we do not have intelligent, capable, competent and very dedicated people, because we do. What we do not have is enough of them. We need to redress the problems of the high resignation rates, as a result of which, through default people who would not otherwise have been promoted have gone up the ladder and now fill a number of the senior ranks. In the future we want those people displaced by more capable personnel. The provision of defence forces for Australia is a great task which Parliament and the Senate have to face. We must combine the best human resources in both the civilian and the service fields for the benefit and security of this country. Senator VALLENTINE(Western Australia)(6.12) —As Senator MacGibbon said, I was a member of this Joint Committee on Foreign Affairs, Defence and Trade only in the latter stages, so really, I was not party to most of the earlier discussions and hard work that went on presenting this detailed report. I will emphasise something that Senator MacGibbon mentioned and that was that the terms of reference of this inquiry were changed midstream because the original terms of reference were considered to be too broad and just too wide to deal with in one report. The aspect dropped from the original terms of reference related to national security interests. I draw attention to the fact that page 387 of the report lists the authors of 35 submissions. Of these submissions, only about one-third were taken into account when the report was drawn up, so a number of people in the community will realise, when they see this report, that it has very little bearing on the submissions which they lodged in good faith about a year ago. I refer to the foreword and in particular to paragraph 3 which states: The Committee acknowledges the importance of national security and regrets that the views of those individuals and groups were not dealt with due to the narrower focus. In acknowledgment of the considerable community concern expressed, it recommends that a future inquiry into issues of national security should follow. I think this is most important when we consider also the witnesses who appeared at the hearings of this Committee and at page 388 it states that they were the Australian Defence Force, the Department of Defence, the Department of Foreign Affairs and Trade and the Returned Services League of Australia. It was a case of hearing from people who had a detailed knowledge of the management aspect of the defence forces, but who were not looking at the wider issue of national security. So, it is most important that people who made those submissions realise why their views were not taken into account. I think it is most important also that the policy issues are debated in the community and, as Senator MacGibbon said, also in this Parliament. The kind of defence forces we have is largely dependent on our foreign affairs policy and I feel that we should look at that aspect in conjunction with the kind of defence arrangements that we then need to put in place to defend this country if we ever are to have a really integrated and sensible policy that will take care of real security issues. In an inquiry on national security I think that important questions will be raised such as: What do we actually mean by `security'; in whose terms do we canvass this debate; and how can we best achieve real security when we are part of the Asian-Pacific region? I look forward in the future to such a thorough review of Australian national security interests. Senator TAMBLING(Northern Territory)(6.15) —I am pleased to join with Senator Maguire and Senator MacGibbon in particular in their remarks supporting this very important report which addresses the management of Australia's defence. Like Senator Vallentine, I joined the Joint Committee on Foreign Affairs, Defence and Trade during the session of the Thirty-fifth Parliament. It is interesting to note that, of the Defence Sub-Committee that did most of the work in the preparation of this Committee, six members were common in both the Thirty-fourth and the Thirty-fifth Parliaments. Of course, there were another 10 members of the various committees in both the Thirty-fourth and Thirty-fifth Parliaments. Nevertheless, the Committee does pick up and address many radical areas for change. It is acknowledged that the defence forces in Australia have evolved and, to a large extent, have become incestuous in many of the arrangements that have fallen into place at both the political and at the bureaucratic level. I think it is very refreshing that the committees of both the Thirty-fourth and Thirty-fifth Parliaments have been able to look at these problems in considerable depth. It is also opportune for me to comment on and to acknowledge the work of all members of those committees and, in particular, to the defence adviser to the Committee, Dr Cheeseman, and the role that he would have played in putting all that together. However, I take issue with one of the points just raised by Senator Vallentine, who commented that only one-third of the submissions made to the inquiry would be taken into account. Unfortunately, it appears that Senator Vallentine can neither count nor read. If she addressed the points in the foreword it was stated very explicitly that the refinement of the terms of reference meant that about one-third of the submissions to the inquiry, which dealt with national security issues, were not taken into account in the preparation of this report. Senator Vallentine got her figures wrong between the one-third that were not taken into account and the two thirds that were; she implied that only one-third was taken into account. I think it is rather significant to recognise that, whilst many important issues relating to national security will have to be addressed in a future inquiry, and I believe that all members of the Committee accept and acknowledge the importance of doing that, two-thirds or the majority of the submissions made were directly attributable to this particular report. The report relates to change with the object of effectiveness and efficiency. I think that honourable senators need to recognise that that is probably the most important aspect of the whole report and how it should be adjudged. As Senator MacGibbon said, out there in the wider world of the defence arena and in the general public, it needs to be looked at most carefully, particularly with regard to the function between the role of the military and the role of civilian support. We need to look very carefully at that part of the functional role that is operational and ought to fall within the responsibility of the defence management area and that part of the role that is enabling and administrative and is most properly the functional role of the Secretary to the Department and the bureaucracy in those particular areas. Senator MacGibbon alluded to the fact that many senior officers in the Defence Force were neither happy, content, nor felt that they had the challenge to participate in the future of the Defence Force. The Committee is addressing this problem in its next term of reference which it has undertaken to do within the next few months. It will pursue very carefully the issue of separation rates within the Defence Force and it will analyse that. There are many areas in this report where the issues are already flagged and in particular I draw attention to the areas of staff development, the challenge of appropriate education processes to ensure that we end up with the calibre of management in the defence forces in the future and that we are able to hold, and to hold in, many expensively trained people who ought to fully participate in the future of the Defence Force. This is most important as we assess the whole range and future of the defence establishment. As Senator MacGibbon said, the defence sector of Australia's Public Service-and that is what it is-has a very significant, large and important functional role. We need to make sure that the men and women who choose to make their careers in defence are adequately accommodated, adequately trained and adequately rewarded both in the process of their involvement in their careers and their job situations and in knowing that there is a future for them in the management of the defence programs of the future. I would also like to see a much closer addressing of the future training of the civilian members of the defence forces in the Public Service. I believe that we need to address very carefully the manner in which the civilians are trained-not just at Australian universities within particular disciplines. There needs to be a very careful integration of management training of people in both the military and the civilian bureaucracy to ensure that this is achieved. I am pleased to be associated with this report. I know that the debate will be wide-ranging and controversial, and over the next few months, as this report gathers a lot of attention, I hope that we will see the Government seriously address all the recommendations-and there are many of them-and that we can engage in a very positive series of changes that will stand for Australia's improvement and for the improvement of the defence forces. Senator HAMER(Victoria)(6.23) —I wish to speak very briefly to this report of the Joint Committee on Foreign Affairs, Defence and Trade about the management of Australia's defence. It is a very comprehensive and extensive report and requires close study. I strongly support the basic thrust of the report, which is that inside the Defence Department the balance of responsibility, the balance of power, between the professional and civilian elements has been distorted. I believe it was a result of the very proper establishment of a single Defence Force, but was distorted by the way in which action was taken under the Tange report. There are two matters which a brief study of the Committee's report has led me to believe were neglected, and these two matters are the relationship in rank between public servants and service officers and the balance of service officer appointments to the senior ranks between operational and support appointments. One of the problems in the rank structure of the Services was the way in which the Tange report awarded quasi-military rank to public servants. It described assistant secretaries as one star officers, that is, brigadiers; first assistant secretaries as two star officers, that is, major-generals; and deputy secretaries as three star officers, or lieutenant-generals. I do not believe that there was a military rank equivalent to a secretary. The result was that on all the committees that proliferated under the old system, where there were delegates from each of the three services and the Public Service, if the Public Service appointed a first assistant secretary the three Services had to produce a major-general, a rear admiral and an air vice-marshal. They were grossly higher ranks than were needed. What was wrong was that the levels were set incorrectly-at least one, possibly two, ranks too high. The changes were made on the basis of equivalent pay. It was notorious and one of the causes of the very high attrition rate among senior officers is that the Services were underpaid. Giving them a relative rank structure based on pay alone caused an explosion in the senior ranks of the service. I can cite figures relating to the number of officers of various ranks in the Services. For example, the Navy has one vice-admiral, 13 rear admirals and 27 commodores. I interpolate here that there are no sea jobs for commodores at all, yet there are 27 of them. The reason there are so many is that the tremendous number of committees set up under the old structure requires officers of those ranks to attend when officers of two or three ranks lower would have been appropriate if this absurd levelling structure between the Public Service and the professional armed services had not been set. The Army has one general, one lieutenant-general, 13 major-generals and 45 brigadiers. I interpolate again that there is an operational deployment force of two under-strength battalions. The Air Force has two air marshals, 10 air vice-marshals and 29 air commodores. Those numbers are grossly out of balance in comparison to operational forces. We might not think that that matters much, but it does matter because if there were, say, 14 admirals and 27 commodores and one job for one admiral but no job for any commodores, we would have a senior officer structure without current operational experience. One of the arguments used by a former Minister for Defence was that that was good because we were keeping people ready in case of expansion. There are two things in that regard; first, our Defence Force necessarily is equipment-based and we cannot expand the Defence Force quickly-we could not get the ships, the aircraft or other weapons of war. Secondly, the last thing we want is large numbers of senior officers with no current operational experience. It is far better to keep them in lower ranks so that they can gain operational experience and promote them as they are needed, if an expansion occurs. What we desperately must do is get our operational-non-operational balance in the services corrected, and that requires a very sharp drop not only in the numbers of service personnel in shore appointments and defence headquarters but also in their rank structure. That, in turn, if the system is to work as a co-ordinated one between professional servicemen and civilians, requires a change in the relative rank structure of professional servicemen and the public servants. Without that, we will not solve this problem, which, I submit, is very serious. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator MacGIBBON(Queensland) —by leave-As Deputy Chairman of this Foreign Affairs, Defence and Trade Committee it was remiss of me not to pay tribute to the great support that the Committee received from the secretary, Mr Alan Stephens, and from the military adviser, Dr Cheeseman. I apologise for not mentioning them in my speech. Senator BURNS(Queensland) —In accordance with the provisions of the Public Works Committee Act, I present the report relating to fitout of accommodation for the Department of Administrative Services, Chatswood, New South Wales. Ordered that the report be printed. Senator BURNS —I seek leave to make a statement in relation to the report. Leave granted. Senator BURNS —The report which I have just tabled is the Committee's first report for the Thirty-fifth Parliament and relates to the fitout of approximately 23,000 square metres of leased accommodation for the Department of Administrative Services and the Department of Immigration, Local Government and Ethnic Affairs. In recommending that the proposal proceed, the Committee has accepted that the Chatswood proposal is the most suitable of the options considered by the Department of Administrative Services. The Committee recognises that there has been considerable union opposition to the proposal but is of the view that it is in the interests of both the unions and management to work together to ensure the efficient operation of the Department of Administrative Services at Chatswood. Motion (by Senator Reynolds) agreed to: That, in accordance with section 5 of the Parliament Act 1974, the Senate approves the following proposal contained in the report of the Joint Standing Committee on the New Parliament House presented to the Senate on 3 November 1987, namely: The relocation of the Commencement Column Monument on the land axis between the old and the new Parliament House. Sitting suspended from 6.31 to 8 p.m. Assent to the following Bills reported: Appropriation (Parliamentary Departments) Bill 1987-88 Appropriation Bill (No. 1) 1987-88 Appropriation Bill (No. 2) 1987-88 Commonwealth Borrowing Levy Bill 1987 Commonwealth Borrowing Levy Collection Bill 1987 Debate resumed from 23 October, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator RICHARDSON(New South Wales-Minister for the Environment and the Arts) —Mr Deputy President, I suggest that the Broadcasting (Ownership and Control) Bill (No. 2) 1987, the Broadcasting Amendment Bill (No. 4) 1987, the Radio Licence Fees Amendment Bill (No. 2) 1987 and the Television Licence Fees Amendment Bill (No. 3) 1987 be debated cognately with the Broadcasting Amendment Bill (No. 3) 1987. The DEPUTY PRESIDENT —There being no objection, I will allow that course to be followed. Senator RICHARDSON —I also table explanatory memoranda to the Broadcasting Amendment Bill (No. 3) and the Broadcasting (Ownership and Control) Bill (No. 2). Senator MESSNER(South Australia)(8.01) —Firstly I will make some remarks concerning the timing of the Broadcasting Amendment Bill (No. 3) 1987, the Broadcasting (Ownership and Control) Bill (No. 2) 1987, the Broadcasting Amendment Bill (No. 4) 1987, the Radio Licence Fees Amendment Bill (No. 2) 1987 and the Television Licence Fees Amendment Bill (No. 3) 1987 which have now been hanging about for some three weeks. The Government has not seen fit to bring them forward earlier. In the dying stages of the time allowed for debating these Bills the Government suddenly wants to debate all five broadcasting Bills cognately, thereby truncating enormously the time which would have been available to Opposition senators to discuss these very important matters. The Government has rolled together a number of Bills in a fashion which now forces us to consider them together and this will mean that debate will not take place in the way that we on the Opposition benches would like. Despite that, I hope that the Government will see fit, if need be, to give the Opposition and the Australian Democrats an extension of time to debate these Bills if we so seek at the end of our speeches. I doubt whether we will have the time to be able to discuss these Bills as fully as they demand. Bearing that in mind, I turn to the Television Licence Fees Amendment Bill (No. 3) 1987, which is a Budget Bill placing further charges on the operators of television stations in Australia. These fees will provide extra income of $5.7m in the next full year, and in 1989-90 they will raise $6.4m. I do not wish to spend a lot of time discussing this matter but I make the point that the Government must have regard to the fact that there is a certain limit to the capacity of the industry to continue to pay rising fees which are being increased every year. Obviously, in this financial year the Government had the imperative to increase television fees enormously in order to meet the Keating Budget target which we all know is on the verge of falling apart. As I will demonstrate later with some of the other legislation, the so-called Budget deficit-in balance, as Mr Keating called it-of some $27m will not be obtainable because the Government has already written off significant amounts of revenue as a result of the introduction of its new system of establishment fees for radio licences. Bearing in mind that this Bill is a Budget Bill, the Opposition will not oppose it. The Broadcasting (Ownership and Control) Bill (No. 2) is somewhat technical in nature and relates to the legislation that was passed in the dying days of the pre-election Parliament in June this year. It concerns the new television ownership regulations which were introduced in that legislation. This Bill seeks to correct some technical problems. We are used to both the technical problems and the unintended consequences that often pop up in this Government's legislation because it has been ill-considered and rushed through its various processes in both the Cabinet and the Caucus. Consequently, this Bill will seek to correct some such provisions. The Opposition has no particular problems with this legislation. In the light of the fact that the Liberal and National parties will be looking further at the policy in relation to television ownership in the development of their policy on television, they will take into account the matters raised in this legislation. The point that needs to be made is that this Bill just cleans up some of the errors in the previous legislation and, of course, it provides for the technical operation of the multi-channel service which was one of the alternatives for the operation of regional television stations in Australia suggested by the Government some time ago. This is mostly irrelevant now because the Government has also provided the alternative for regional television stations to be able to operate under the aggregation principle. The commercial processes have already been set to work through the legislation that was introduced last June. We have seen aggregation adopted by regional television operators in Queensland, New South Wales and Victoria. No doubt this will lead to a revolution in regional television in those areas and is a direct result of the Government's legislation of last June. I remind the Senate that the Liberal and National parties did not support the ownership limits that were introduced into the Parliament at that time by the Hawke Government, but the legislation was passed with the support of the National Party. The Liberal and National parties are concerned about the effects on regional television of the development of either multi-channel servicing or the aggregation of areas throughout the three States concerned. The Government, notwithstanding an undertaking, as I understood it, not to proceed with aggregation in South Australia and Western Australia, in short order has now advised operators in those States that it intends to proceed very quickly with aggregation. That is causing a great deal of concern in South Australia, and no doubt in Western Australia as well, amongst television operators who are now being forced to make decisions which they did not expect to have to make for many years to come. The point about regional television is simply this: the Liberal and National parties are determined that local ownership and programming of television will remain the prerogative of operators in regional areas. I believe it to be of fundamental importance that localism be preserved and, consequently, I foreshadow moving an amendment to this Bill which indicates our concern at the possible loss of localism in both programming and the ownership of television stations. The Broadcasting Amendment Bill (No. 3) 1987 is a grab-bag Bill made up of several different matters. One of particular importance in the electoral sense will be addressed by my colleague Senator Short at a later stage in this debate. In view of the shortness of time, I will not, therefore, dwell on that matter except briefly to say that the Government has introduced amendments to the electoral law which will control the degree of electoral advertising that can be undertaken by broadcasters in the pre-electionperiod. The other parts of this Bill concern a large number of matters, but perhaps the most important is the section relating to the public broadcasting sector. As we all know, this sector is developing, and has developed since the early 1970s, as a vital and creative sector of broadcasting. It is alive and well and developing very strongly right across the Australian community. The Liberal and National parties are committed to the ongoing development of this sector of the broadcasting industry, as we believe that the community has a perfect right to involve itself in local broadcasting of all kinds to provide specialist services to those who demand them. This Bill seeks, after some 10 or 15 years of actual operation of public broadcasting, by a series of legal manoeuvres to set up a proper medium within the control of the Government and subject to broadcasting legislation in the way that it should be regulated in the normal course. I point out that under the legislation which, as I understand it, has applied to public broadcasters-that is, public broadcasting stations which are not owned by any particular person or any particular company but by community organisations-those stations have been subject to special licensing arrangements and, in some cases, have been granted commercial broadcasting licences in radio, whether by virtue of special governing restrictions on those licences or or by other regulation. The whole thing, of course, has been very unsatisfactory. We have to remind ourselves that the Government has been very slow to set up a new legislative framework for public radio broadcasting in this country. It was back in 1985 that Mr Duffy, the then Minister for Communications, advised the Parliament that he intended to introduce new laws in respect of public broadcasting. But it is only now, in 1987, that we see those stations being established with a proper legal framework. The Government at the same time introduced planning guidelines for the development and regulation of radio but, as I say, the industry has been floundering for some two years, waiting to hear the Government's intentions in this area. One other element of this legislation which is of importance is the definition of advertisements for the purposes of the Broadcasting Act. This has a great deal to do with, and reflects concern about, the practical operation of public broadcasters, as there has always been some grey area of doubt as to whether or not broadcasting stations in this area treated themselves as being sponsored for particular announcements, or whether they breached those very severe and tight arrangements and in fact were conducting advertisements on behalf of community organisations and bodies. This matter has been dealt with in this legislation, and we hope that it will be clarified for all time. There is included in the legislation some streamlining of Australian Broadcasting Tribunal procedures, which we in the Opposition support and would like to see taken further as time goes by. I now turn to the Bill which I regard as the central piece of this package, the Broadcasting Amendment Bill (No. 4) 1987. This Bill has a rather chequered history, and I think it is wise to run over the milestones along the way to its introduction. Honourable senators will remember that Mr Keating announced in the Budget that we were about to enter an era of licensing of radio and television stations by virtue of an auction system, or a tendering system, as he preferred to call it. Apparently that was a proposal brought to the Expenditure Review Committee by the Department of Finance and the Department of the Treasury in both 1985 and 1986. It is interesting to note that at that time Mr Duffy, the responsible Minister, actually cast out those suggestions and would not adopt them. In came Senator Evans, the present Minister for Transport and Communications, who thought, `This is a bright idea' and adopted them apparently with the coercion of the Treasurer, Mr Keating. It was not long after Senator Evans announced these new proposals that we found that he was in all kinds of trouble with those stations whose licence applications were already part heard. The Department had nominated four areas in particular for new licences in FM radio. They were Gosford, the Gold Coast, Shepparton and Geelong. The Government was seeking to change horses in midstream with these licences. Applications had been called and the people in those areas who were interested in making submissions for licences found that they were acting under a certain set of rules. Then along came the Budget and suddenly all those rules were changed. Many of those organisations-and there were something like 100 right across those four areas-had spent many thousands of dollars, and in some cases many hundreds of thousands of dollars, preparing their submissions and their cases for the Broadcasting Tribunal in seeking the licence. Then they found that, under the new proposals announced in the Budget, they had to turn around and redo their proposals and consequently were being judged on new criteria that were not outlined at the time the original call for applications was made. As you would expect, Mr Deputy President, there was an enormous outcry and before long the Minister, Senator Evans, realised his mistake and was faced with the option of going on in the face of such enormous public outcry or changing his view. Of course, he folded. The problem with the tendering proposal is simply that it runs against all the principles of broadcasting. It does not allow everybody an equal chance to obtain a broadcasting licence; rather, it allows those who can bid the highest amount of money for a licence to get the benefit. That means that those who are the more powerful financially in the community are perhaps able to do deals and make arrangements which smaller groups are not able to do. We in the Liberal and National parties believe that that kind of approach is wrong, because we should be encouraging, not discouraging, more and more localism in broadcasting and in particular in the area of radio, which we see as a very important medium for local participation, for local reporting and for providing local programming. We believe that those radio areas for which licences had been called and for which the rules have been changed were very badly treated by the Government in this proposal. We believe that the Government's alternative, which is suggested by this legislation and which provides for an establishment fee system, is just as bad in that it will require very large sums of money to be provided by licence applicants to the Government, not for the purchase of equipment, but merely for the purchase of the licence itself. Consequently, it will restrict the capacity of the organisation taking over the licence to develop programming and to become more effective in the local community. We will be moving amendments during the committee stage of this debate to affect changes to the legislation to exempt the four areas for which licence applications were called at the time the Budget was announced. We believe that the establishment fee system has all the defects of the auction-tendering system which the Government announced earlier and which will still put those four areas to very significant disadvantage compared with future applicants in other areas. We will also move an amendment to strike out the reference in the provision relating to the calculation of the establishment fee to an amount to be fixed by regulation. We notice that this has been drawn to the attention of the Government by the Senate Standing Committee for the Scrutiny of Bills, which we agree with. The legislation seeks to set a fee paying mechanism which can be determined by a regulation of the Government rather than by an Act of parliament. We believe that it should be controlled by an Act of parliament, that the Government should seek to pass a Bill through this place and the House of Representatives to achieve that purpose on an annual basis, thereby rendering itself capable of scrutiny at any particular time. The Government has chopped and changed its approach to radio station licence fees and the way in which applications are called. It has made an absolute mockery of the Australian Broadcasting Tribunal, whose job it is to approve applications for licences, because it has virtually taken out of the ABT's hands any decision-making power. The Government has done this-this has been well documented by complaint by the Chairman of the Broadcasting Tribunal, on the public record-by requiring a certain fee to be paid, however high it might be. That is something which Senator Evans obviously did not think through at the beginning of his exercise and trek down this road. He has become totally confused and mixed up. No doubt all Cabinet Ministers have been confused by his actions in this matter. In view of this confusion, and the great concern in the community about this change and the lack of a proper review of applicants by the Broadcasting Tribunal, the only proper thing to do is for the Government to stop and to refer the whole licensing fee proposition to the Senate Standing Committee on Transport, Communications and Infrastructure, which will then be able to come down with some suggestions as to what policy might be adopted in this area in the future. Therefore, at a later stage I will move for a reference of this legislation to the Senate Committee for such an examination. This brings me to a very interesting point. The Government originally claimed in the Budget that it would be getting some $22m revenue as a result of the sale of licences in the four areas I mentioned earlier. As a result of the changes which Senator Evans announced about a month ago when he introduced the establishment fee system he cut that amount of money back to about $11m, when one takes account of the fact that he also changed the amount that he expected to get from the conversion of AM to FM radio licences. The point about this is that Senator Evans, at one stroke, has given up $11m worth of revenue, which will reduce significantly the `balance' which Mr Keating claimed he was going to have in his Budget this year. That is a very significant change. I would now like to demonstrate that this year the Government will get absolutely no money from the sale of those four radio licences. The truth is that the four areas-Gosford, the Gold Coast, Geelong and Shepparton-are areas where the licence applications have yet to be heard by the Australian Broadcasting Tribunal. I am advised that the earliest the Tribunal will be able to hear the first of those applications, let alone approve the successful applicant and receive money from the applicant, is about May or June. That means that, given the time for payment of some 60 days after the date on which the issue is determined by the Tribunal, the Government has absolutely no chance of getting any revenue, even from the first applicant that is approved by the ABT, before June 1988. Consequently, the Government will not have any revenue this year and the whole amount of $22m will not be received. The whole exercise, therefore, has been futile. That makes it even more important for the Government to stop and to take account of our motion to have this Bill referred to the Senate Transport, Communications and Infrastructure Committee to investigate this whole matter. Quite clearly, the Government has plenty of time to give this matter consideration. It does not need this legislation today because it is not going to get money under the legislation by June anyway. What is needed now is a careful appraisal of the legislation. It should be considered by the Senate Committee and, accordingly, recommendations brought down when all factors have been taken into account. Senator Evans, no doubt, must be concerned about this development but he has nothing to lose. He is not going to get any money anyway. I read today in a Press release emanating from Senator Powell that some sort of a deal has been done between the Australian Democrats and the Government to introduce a system which the Democrats thought up out of the blue in conjunction with the Government which again will reduce the suggested amount of revenue that might be received. As I have said, no revenue will be received anyway. The Democrats have gone to the extent of calculating a new establishment fee system for the licence application areas I have just been talking about. Apparently, the new fees they have suggested have been agreed to by the Government. It would seem, therefore, that we will not be successful in having a proper, detailed examination of this question. I implore the Democrats, and Senator Powell in particular, to reconsider their position, to come to the support of the Liberal and National parties, guaranteeing the passage of our motion referring the question of the establishment fee system to the Senate Committee on Transport, Communications and Infrastructure. We believe that that is what is required. As I have said, there is no possibility of the Government getting the revenue it expected this financial year anyway. There is plenty of time for the Government to set this matter aside and refer it to the appropriate committee, get a report on it and have a broader community debate on the matter. I mention that in the context of the fact that at this stage there has not been any proper consultation with the industry or with the community generally on the question of the various changes that we have just been tracking through in our discussion tonight. I also foreshadow that in respect of this Bill I shall be moving at a later stage an amendment to the second reading motion to note the Opposition's concern at the Government's ad hoc approach in respect of these changes to broadcasting policy and setting down the reasons for our approach. (Extension of time granted) I thank the Minister for the Environment and the Arts (Senator Richardson) and the Senate. I mentioned earlier the suggested amendments that we will put forward at the committee stage in respect of the Scrutiny of Bills Committee report. If I may summarise on this Bill, the Government has made an unholy mess of its policy in radio broadcasting. This Bill represents the central piece in that confusion. Secondly, there has been a total lack of proper consultation with the four areas I have mentioned in which the applications had been called at an earlier time and only part heard, and the consultation did not extend to other operators and organisations in the community. Thirdly, having discarded the policy of tendering and auction fees which the Government had announced in the Budget, the establishment fee system was introduced out of the blue, again without any consultation or thought as to how that might have been established. I acknowledge, however, that the Federation for Applicants for Independent Radio-the FAIR organisation-which is interested in FM radio broadcasting came up with a proposal and suggested it to the Government at an earlier stage. I believe, though, that that was the only organisation that supported such an approach by the Government. The fourth point is that there is a definite need for a review of this legislation and of the whole licensing system by a Senate committee, and for that purpose we shall be moving the appropriate amendment. Fifthly, I ask the Senate particularly to note the rather retrospective effect of the change of rules that has now occurred twice both with the Budget and the new establishment fee system that has applied to those four areas for which licence applications had been called earlier. That is a sound justification for the opposition of the Liberal and National parties to that legislation. The final Bill in the package is the Radio Licence Fees Amendment Bill (No. 2) of 1987. This Bill contains two major parts. The first is the Bill providing for the payment of a fee by commercial radio licensees for a conversion of broadcasting on the AM frequency to broadcasting on a higher quality FM frequency. Secondly, the Bill also proposes to increase the licence fees payable by some commercial radio stations. The other amendment is the implementation of the establishment fee which we have just been discussing and on which I have already indicated the position of the Liberal and National parties. Again, on the AM-FM conversion the decision to allow this and to raise revenue from this source was made and announced in the 1987-88 Budget. In general terms we support that idea. We see that the proposals are to apply to regional FM station applications only, and we would like to see an accelerated program for the development of FM radio broadcasting in regional areas. The first point that needs to be noted is another point of major confusion insofar as the Government announced in its Budget that this fee would be calculated on the basis of 30 per cent of the incumbent licensee's annual gross earnings. Suddenly at this later stage in the legislation we find that that has been raised to 50 per cent of annual gross earnings. There has been no explanation, but it is suddenly a factor that is dreamt up out of the blue, obviously showing a lack of appreciation of the issues in the first place. The other point, as I mentioned earlier, is that the total amount of revenue to come from the sale of licences was to be $22m. There was no mention in the Budget of the amount of money to be received from the conversion from AM to FM radio licences. That suddenly has changed again, because we see that $5m is now expected to be received from this source in this current financial year. This is just a subterfuge to cover up the fact that the Government has dropped off $11m from its original estimate of how much it was to receive, in some way trying to patch up Senator Evans's reputation with the Department of Finance. This is a nonsense and is playing around with the issues. We are very disturbed at the way in which Senator Evans has handled this matter. It shows quite clearly his inability to grasp the realities of the whole broadcasting system. I have mentioned that we support the principle of converting AM stations to FM in regional areas and consequently will not be opposing that part of the Bill. However, we will be moving an amendment to refer that part of the Bill which speaks of the change in the establishment fee system to the Senate Committee on Transport, Communications and Infrastructure. That will be a matter for debate during the committee stage of the Bill and is a matter that we will come to at a later stage. However, at this stage I also foreshadow an amendment which the Opposition will move to the motion for the second reading. Although the Opposition will give the Bill a second reading, our amendment asks the Senate to condemn the Government: for its decision to increase the fee for the conversion of AM to FM broadcasting from the level announced in the 1987-88 Budget, that is 30 per cent of the converting Station's annual gross earnings, to 50 per cent of annual gross earnings, which will impose an additional cost burden on licensees in regional areas wishing to convert to the FM frequency. That sums up our major objections and is consonant with our position in regard to the Government's approach to broadcasting as it has been handled by the present Minister. We find it incongruous that people who are operating AM stations at present who may be able to seek supplementary FM licences can obtain those licences in regional areas without payment of any fee, and yet those converting from AM to FM will have to incur the 50 per cent fee which we have just been discussing. The Government has given no explanation for this approach, but clearly it puts supplementary operators in a position of some advantage in terms of capital outlay if the Government is so inclined. We have already seen some attempt by supplementary licence operators to obtain licences in that situation. We believe that the Government is rapidly getting itself into a frightful mess in this whole area. Subject to the amendments which we have outlined, we believe that the Government is not covering itself in glory in the area of broadcasting policy. Senator Evans in particular is blundering through this petunia patch of broadcasting without having proper regard to the local circumstances of individual operators or to the future of the industry and its well-being. We believe that the amendments we will move are of substance and certainly demand support. Consequently, we call upon the Australian Democrats to give us their support in the reference-particularly of the establishment fee system-to the Senate Committee on Transport, Communications and Infrastructure. Senator POWELL(Victoria)(8.41) —In this cognate debate I wish to address my first remarks to the Broadcasting Amendment Bill (No. 4) 1987, the Radio Licence Fees Amendment Bill (No. 2) 1987 and the Television Licence Fees Amendment Bill (No. 3) 1987. The purpose of the Broadcasting Amendment Bill (No. 4) is to introduce an establishment fee for new commercial licences. The obligation to pay the fee comes under the accompanying Radio Licence Fees Amendment Bill (No. 2). The other purpose of the first Bill is to prohibit the sale of new commercial television and radio licences within the first two years of their being granted. This, of course, is to avoid the repetition of what happened in Perth where the new television licence was sold before the station even went to air. On Tuesday, 15 September, when the 1987-88 Budget was brought down, the proposal for auctioning of new FM radio licences was announced. The Australian Democrats immediately expressed their strong concerns about that proposal. There followed a very strong campaign to draw the Government's attention to the impact of that auction plan on locally based applicant groups who, in many cases over a long period, had got together a number of local shareholders and who were now faced with being swamped by the media empires which would be able-because they have deeper pockets-to outbid local groups for the many licences which were coming up. The Australian Democrats found this abhorrent because we believe that the final decision on the most suitable applicant in these circumstances should continue to be in the hands of the Australian Broadcasting Tribunal (ABT) to ensure that the best and most appropriate local service was not decided by a resort to the higher bidder, which we believe quite strongly would necessarily come from amongst those who are currently dominating the media interests of this nation. Because of the work done by the Australian Democrats, groups of licence applicants and groups fighting to retain independent radio media-and, I add, the Australian Labor Party Caucus committee-at the same time as the stock market crash, the auction proposal was dropped by the Government. At this point I commend the Government for making that change and for seeing the light. Such a change of direction-acknowledging that a proposed system is less than perfect-is normally followed by a fair amount of criticism by other parties in the interests of point scoring. I note that the National Party's spokesperson in the House of Representatives today could not resist such an indulgence. I think that is one of the most regrettable aspects of Australian politics at the moment. When a government makes a decision which can be applauded, it should indeed be applauded. I was always somewhat surprised to find the Liberal Party of Australia claiming that that change was a stunning victory for it. In fact, the Liberals were near to useless during that critical period because they were unable to decide what they would do and were constraining themselves with their ridiculous habit of supporting all legislation announced in a Budget or a mini-Budget. I suspect that Senator Messner may also have been frustrated by that particular stance. I do not really know, but if the Liberals are to be at all relevant in this place they need to rethink that silly policy, particularly when the Government has woken up to them and is having two Budgets a year and therefore rendering the Opposition impotent for most of the sessions of this Parliament. All along, the Democrats have acknowledged the need for a fee to be paid by successful applicants for new FM licences. We believe that there should be due recompense for the allocation of what is, after all, a public resource which is being allocated for the purposes of private profit. It was the Democrats who proposed the payment of an establishment fee and we continue to support that view. We agree with the Government that the grant of a radio licence should bring with it some payment to the public purse. We believe that is fair, but we believe that such a fee has to be reasonable. The establishment fee, which was proposed by the Government and which was in the legislation passed in the House of Representatives, is too flexible and unable to fully take account of the whole range of factors which affect different markets-all markets having their particular characteristics. Certainly, the metropolitan FM stations have been enormously profitable, but it would be unrealistic to assume that therefore all regional FM stations would be also and would be, to use a phrase which upsets many, `a licence to print money'. The basing of the fee, as the Government did, on the revenue of the existing AM stations directly does not take into account the fact that some AM stations have higher revenue figures because of ownership of perhaps another local media outlet and the ability to maximise advertising rates as a result. Nor can such a formula take account of markets where an efficient AM operator has maximised the potential of that market. It has become increasingly obvious that many of the markets were likely to be declared not viable for independent licence under the system which the Government set in place in its legislation. Of course, this would mean a loss of government revenue because in these markets no establishment fee would be paid. Far more importantly, it would entrench the concentration of media ownership in radio, which is surely the last thing that we need or want in Australia because that is what has already happened with regard to the ownership and, of course, television and the print media. We recognise that some of the concerns expressed to us by aspirants for new radio licences were more genuine than others. It is obvious that some applicants would not be satisfied with any fee and that some want a licence without charge. I repeat our view, which mirrors the Government's view, that that should not be the case-that a public resource is being allocated for private profit and therefore some reasonable recompense is required. Our judgment is that, to ensure the future of regional radio with a fair degree of local programming and ownership, an establishment fee must impact less on the smaller markets. To that end we are proposing our amendments to the Broadcasting Amendment Bill (No. 4). In essence, those amendments establish an establishment fee which is based on a graduated scale by virtue, in the first instance, of being linked to the formula upon which the annual licence fee is calculated and, in the second instance, within itself a graduated multiplier to take account of those larger and more lucrative markets graduating down the scale to ensure that as far as possible smaller and less profitable markets can sustain a viable independent station. This will have two results-broadening the ownership of radio and, as we pointed out to the Government quite forcefully and successfully, netting some revenue to Government which would not be available if such markets were to supplementary licences. We realise that in this whole process the Government has halved the $22m Budget figure, under the auction proposal, with its existing proposal for an establishment fee-the proposal which was passed through the House of Representatives. By accepting our amendments, which we confidently expect that the Government will, and by the Minister understanding the arguments and the long term implications which have been put to him, the Government will be accepting a further reduction of almost $2m from the radio industry in this round of licences. Senator Short —What will that bring it down to, Senator? Senator POWELL —On our calculations, the approximate figure will be somewhat over $9m. I agree with Senator Messner that it is arguable whether all of the figure will be available to the government in this financial year. That is a matter for the processes as they are followed through. In this context we note that revenue from both television and radio licence fees is rising, but we also note that most of that increase reflects assumed increases in the earnings of stations. Television licences in particular escaped a significant increase in the Budget because of last minute work by the Prime Minister, Mr Hawke, when he hastily reconvened the Expenditure Review Committee. Its deliberations resulted in a lower figure. I suppose we should be pleased about the close interest that the Prime Minister obviously takes in broadcasting matters, particularly those affecting television and newspaper proprietors, but this did cause a loss of revenue-at the hands of the Prime Minister at that stage-from the most lucrative sector of the media industry. If the Government is faced with a shortfall of revenue in the broadcasting area, that should be remembered. We certainly remember it and we certainly remind the Government of that, as we have reminded the Minister. We also hope that the Government will look at the licence fee area in general and give consideration to some alteration of the criteria upon which it is based. The recent statements at the end of last year by the Treasurer (Mr Keating), who has confidently predicted a surplus Budget next year, lead me to say that a possible $2m shortfall this financial year in this area should be readily catered for. I underline again the fact that in this whole exercise the Australian Democrats have been looking at the long term implications. As we pointed out to the Government, if markets beneath the Shepparton level were forced to go to supplementaries-even the AM licensee in the Shepparton market, one of the plum markets for which applications had already been called, went through the process of appealing and claiming that that market would have to go to supplementaries under the Government's formula-that would mean, not even in the long term but come next year, no additional revenue from establishment fees for the Government. I believe the Government has accepted that argument. Most significantly, and to reiterate our major concern, we need to have diversity of ownership and control in at least one section of Australia's media, the television sector having been turned over to media domination by a few significant figures and to networking. Those basic reasons underlying also the need for strong local programming were at the base of our concerns. That is why we listened to people in the industry, looked at the implications and have come up with the amendments that we will be proposing. We were also concerned that applicants who are successful should be given time to pay the establishment fee. We were concerned that any legal challenge should not see the Government left for long periods holding the applicants' money pending the outcome of any legal challenge. We were pleased when the Government put forward an amendment in the House of Representatives which addresses this problem and which now gives a period of 60 days for payment, though we believe it would be fairer for the fee to be paid prior to the issue of licence, that is, at a time much closer to the time when the new radio station would be broadcasting and bringing in revenue. Another measure which the Democrats urged the Government to look at was the introduction of a licence transfer tax. In the United States of America where, incidentally, the regulatory body has prior approval power, unlike our Australian Broadcasting Tribunal these days, such a fee is being considered. Its introduction here could have helped to address the problem of licences being sold and resold many times over. I believe the Government should look at this again in the near future. We strongly support the two-year moratorium on the sale of new licences, which is introduced in this legislation. Indeed, we believe that the moratorium could be over a longer period. One of the most important results of the auction proposal being dropped is that the Australian Broadcasting Tribunal will now choose the most suitable applicant. We believe that the value of this should not be underestimated. We note the Minister's commitment to look at the regulatory powers of the ABT. We hope that the House of Representatives committee review of the ABT will prove a worthwhile exercise and that at the very least we will return to a situation in which the Australian Broadcasting Tribunal will have prior approval in the case of licence changes, and that such a change will be forthcoming. Nothing could be more important than the task which is entrusted to the Australian Broadcasting Tribunal of ensuring the public interest, particularly at this time when Australia's media is in danger of being held in a total stranglehold by a very few major financial interests. The Minister has also announced new ownership limits for radio which are not yet embodied in legislation but which have been announced and I understand will be introduced in the next session. We certainly made it clear that our support of the present legislation is dependent upon a Government commitment to reasonable ownership rules. I believe the Australian democrats can take some credit for what has been announced. The national limit of 16 stations is more than we wanted, but it is an improvement on the 20 recommended in a departmental discussion paper. We also pushed for a national audience reach limit which would have prevented a large radio network from buying up 16 stations in the biggest markets and therefore ending up with an audience reach of more than 80 per cent of the Australian population. Unfortunately, the Government has not adopted that proposal. However, there is to be a State limit restricting ownership to 50 per cent of markets per State. I believe that restriction would not be in place but for the pressure which the Democrats have exerted in this whole range of radio policy issues. We would have preferred a 33 per cent limit, but at least there is now a limit which will prevent the domination of a State by one radio group. Cross-media ownership laws will be extended to include radio in any market. People such as me who have lived in regional Australia know that this has been needed for many years. When the whole package is complete-I stress that in this exercise the Australian Democrats have had in mind the long term and how the whole package will affect the nature of the radio in Australia-there will be stronger ownership limits on radio than those that apply to television or the print media. The Australian Democrats are very happy about that and can take some credit for it. It will go some way to alleviating the damage which has been done by way of legislation in other media areas in recent times. All through this process we have sought to ensure the best media for regional Australians and the restoration of the Australian Broadcasting Tribunal's power to assess the most suitable applicant. The level of the establishment fee which we are proposing by way of our amendments, and the foreshadowed ownership limits, will together go a long way to achieving our aims for a substantially local and independent radio media. I turn now to the Broadcasting (Ownership and Control) Bill (No. 2). The major purpose of this Bill is to introduce grandfathering provisions because of the effect of aggregation. As television interests move into extended service areas they should not be in contravention of current cross-media ownership rules. This Bill also addresses the issue of the necessary changes to company structures-particularly those relating to company directors-so that they will not be in contravention of cross-media rules. Some other drafting improvements are also embodied in the legislation. There will also be some Governments amendments to this legislation. All I can say in this regard is that it is a pity that it could not get it right the first time. However, we do not have fundamental objections to those amendments and we accept this Bill. However, I wish to make some comments on the aggregation issue. I point out that aggregation is now becoming a reality and I stress that this is occurring against the opposition of the Australian Democrats. Here I pick up the pleas of Senator Messner for support for the Opposition's proposal to send the establishment fee issue to a committee and all his protestations about what we are or are not doing in the area of broadcasting legislation. I remind Senator Messner that in February of this year the Australian Democrats attempted to send the whole broad issue of media ownership and control to a committee so that there could be full public scrutiny of the full range of broadcasting legislation. At that time, of course, the Opposition was having its problems. It could not get its act together as far as media policy in general was concerned. As we saw, in the final analysis, particularly on the issue of aggregation, it all came apart and, because of inability of the coalition to stay together, the National Party renegades, quite surprisingly, crossed the floor and voted with the socialist Labor Government. We now have networking embodied in our regional television, perhaps for all time, with the excuse that this would bring in diversity. So now people in the country will be exposed, in the same way as people in the city are exposed, to second rate programs through networking and the stranglehold by the media mates who shore up this Government and who, the Opposition hopes, will shore it up when its turn comes or, at the very least, in the run-up to the next election. On the subject of ownership and so on in the area of television, we have recently heard rumours that either the Liberals or the Government-it really does not make much difference which; they are rushing and tripping over each other to please their mates as much as they can-will want to increase the ownership limit from 60 per cent to 75 per cent. There are some compelling reasons for that, since a couple of the owners are already over the limit. As I said, the Liberals and the Government are tripping over each other to impress these large television owners. While the Democrats acknowledge that there may have to be some adjustment for aggregation of the kind that we see in this legislation, it certainly need not be a rise in the audience reach to 75 per cent. Any attempt to use aggregation as an excuse to raise that limit will not wash. Similar rumours have been around that the prescribed limit for television ownership should be raised from 5 per cent to 15 per cent. This is an even more blatant attempt to please the Murdoch and Fairfax groups. Fortunately, it seems that the Labor Caucus is not so keen to proceed with that change, for good reasons, and it seems a little less likely now. We will remain vigilant on that question. I move to the Broadcasting Amendment Bill (No. 3). The main focus of this Bill is to clarify the use of sponsorship on public radio and the use of promotional advertisements, including community service announcements. The Bill also deals with ownership and control regulations of public licences to be controlled by the Australian Broadcasting Tribunal. Public radio is an exciting area of broadcasting and a relatively new one. Over the past 13 years it has grown rapidly around Australia. A recent survey showed that the public radio sector is attracting a larger audience than many realise. Fifty-eight per cent of Australians are aware of public, community or volunteer radio. Fifteen per cent listened to public radio in the week in which the survey was undertaken. This includes 21 per cent of the people who were surveyed in Melbourne, 28 per cent of the people surveyed in Perth and 53 per cent of the people surveyed in Darwin. The most widely listened to station, Melbourne's 3RRR, has an estimated 323,000 listeners. Public radio stations or community radio stations, as they are perhaps more appropriately known, take many forms. They range from rural community stations-one station in Harcourt is housed in a disused railway station and is quite fun to visit-to ethnic stations, campus based stations with high music content, Aboriginal stations and others. There are many innovative and worthwhile programs on all stations. One which I think is particularly worth mentioning is the Watching Brief program, which is syndicated all around Australia and which deals with environmental issues and other issues of global concern. My State of Victoria has a number of stations, including community stations in Portland, Ballarat, the Latrobe Valley and central Victoria, where, as I said, 3CCC operates from the old Harcourt railway station. Radio Port Phillip serves the Mornington Peninsula on Melbourne's outskirts. In Melbourne the two stations with the highest listening audience are 3RRR, which was originally a campus based station and which very successfully combines education and music formats, and 3CR, the very first public radio station in Australia, which provides access to a wide range of community groups. The birth of 3CR in 1976 actually preceded the issuing of public licences. Since then it has grown to the point where it now has over 170 programs each week, including 30 ethnic programs in 13 languages, with three new language groups waiting in a queue to join. The station has a broadcasting code which specifically excludes: Threatening, abusive or insulting and promoting hatred against or hostility towards groups of persons distinguished by their sex, sexual preference, race, religion, colour or ethnic or national origins, bringing into contempt or ridicule groups of persons distinguished by their sex, sexual preference, race, religion, colour or ethnic or national origins. The range of programs which are broadcast on that station at least include gardening shows, brass band shows, a local suburban football program, music programs, youth programs, women's programs, Aboriginal programs, programs for all sorts of ethnic groups, a whole range of environmental and anti-nuclear group programs and so on down the list. Approximately $1.5m was given in grants to public radio in 1986-87. This went to 110 different stations which themselves raised over $7m from their listeners. The funds from government are disbursed through the Public Broadcasting Foundation, an organisation with an excellent administrative reputation. It is disappointing to me that the Minister could not find room in his restructuring of the radio industry, at least thus far, to provide further funds for the development of the public radio sector. Such funds could have come from an increase in licence fees or by setting aside a small proportion of the revenue raised from the establishment or the AM-FM conversion fees. The Democrats believe that such a fund would be well justified in terms of both the benefit to the many listeners and an acknowledgment of the role that public radio plays in training. A recent survey showed that a large number of those working in the commercial media had in fact previously worked in the public radio area either as volunteers or as paid staff. A report from the public broadcasting sector includes a survey of the 14 larger and more established community radio stations showing that in the period 1982 to 1986 Australian Broadcasting Corporation radio employed 114 people from the public radio sector; ABC television, 26 people; Special Broadcasting Service radio, 14 people; and SBS television, two people. In the print media, 53 people moved from the public radio sector; in commercial radio, 95 people; and in commercial television, 39 people. It appears that time may overtake me and I would seek the indulgence of the Minister for an extension of no more than four or five minutes so that I may conclude my remarks in this cognate debate. (Extension of time granted) I thank the Minister for his indulgence. I think that that is quite an impressive list of the number of people who have moved from the voluntary sector into professional work, that is, training that is not paid for in any way. I believe it is a good argument for at least some increased funding in the public radio sector. This Bill will bring some welcome changes to the regulations covering the public radio sector. Amongst other things, it will clarify the area of promotion and sponsorship, including community announcements and program promotions. The public radio sector has been calling for a review of this area and we are pleased that this need finally is to be met. The Australian Democrats are pleased that we now seem to have a Minister who has quite a strong commitment to the public broadcasting sector. In the past, strong support has not always been there and it is a credit to the determination of individuals and community groups who have developed public radio that it is now so strong and so widespread. As I said, it has shown phenomenal growth since the beginning in 1974 to the present, when 70 stations are operating around this nation. The lack of a timetable for future public stations has been of concern to the Public Broadcasting Foundation and the announcement earlier this year of a timetable was welcomed. However, we point out to the Minister that there are some problems with individual applications and the long delay before they all begin to operate. It is a very difficult business for some applicants. For example, a group in Warrnambool in Victoria is shown on the timetable as due to be granted a licence in 1992. This group has been setting itself up for several years and it is now ready to begin operating. It would be unrealistic to expect it to wait until 1992. I hope, and the Democrats ask, that the Minister will do whatever he can to introduce some flexibility into the timetable to cover situations like this which I know are reflected in other areas around Australia. In general terms, in relation to the issues of broadcasting policy, and in particular to radio policy which is addressed in a number of ways through this package of Bills which we are debating cognately, the Australian Democrats welcome the pattern which is being set. As I have said in the course of my remarks, it is a pattern which demonstrates that at least one section of the media in Australia stands a chance-and a much better chance, given that the Government is expected to support our amendments on the issue of the establishment fee-of remaining diverse in ownership, with strong local content surviving, and that is the radio medium. The Australian Democrats deeply regret what has happened and is continuing to happen in the other areas of the media. We will continue to exhort the Government to move to increase diversity of ownership and to improve the ability of local content to survive. In the context of the radio legislation, we will be delighted with Government acceptance of our amendments. In large measure, we commend this legislation to the Senate. Senator HILL(South Australia)(9.15) —The Senate is debating a series of broadcasting Bills. I do not intend to speak for long but, as I remain concerned about the media restructuring occurring as a result of Government's legislative direction in this area, I intend to take this opportunity to voice my concerns again. The Bills before us are mixed in their effects. The Television Licence Fees Amendment Bill (No. 3) 1987 increases the rate of fees payable by television licensees. It is a tax increase by another means and, as was mentioned by a colleague in a previous speech tonight, there must be a limit on this. The Radio Licence Fees Amendment Bill (No. 2) 1987 is another revenue raiser which imposes increased fees payable by radio licensees. With this legislation the Government has increased the conversion fee since its announcement in the Budget and changed the originally announced auction system, which has already been dealt with at length in this debate. The combined effect of AM to FM conversions and the higher fees is expected to raise an extra 31 per cent in collections. The three broadcasting Bills are much more wide ranging. They deal with, among other matters, cross-media ownership, Aussat, electrical blackouts, the Special Broadcasting Service, associated members for the Australian Broadcasting Tribunal (ABT) and establishment fees for FM radio licences. Generally, they reflect the continuing direction of the Government's broadcasting package. The major issues which I wish to touch upon tonight revolve around the question of the concentration of ownership which is occurring as a result of the Government's package and the deficiencies at the Australian Broadcasting Tribunal, two issues which so far the Government is not satisfactorily addressing. My concerns arise from the unique nature of information and the unique function in our society of the media. I remind the Senate that the media is unlike any other market. In the 1960s, the British royal commission referred to the paramount public interest, and placed it apart from other competitive industries. I commend that sentiment to the Senate. The role of the media and its importance in a democracy prompted Ralph Nader to describe information as `the currency of democracy'. As I said, the media is not like any goods market; it deals with information, opinion and opinion formation. For that reason, it is important that there not be an undue concentration of ownership, whether it be in public or private hands. In its grand scheme of changes the Government claims a freer operation of market forces, but it fails to properly take into account, on the one hand, that the number of electronic licences is limited and, on the other hand, that the barriers to entry in the newspaper arena, particularly within metropolitan cities, are enormous. The Government claims that, by a combination of its cross-media ownership and audience reach provisions, a more diversified media ownership will be produced, but the facts suggest otherwise. Until recently, among metropolitan daily newspapers, representing 85 per cent of newspaper circulation, the four-firm concentration of the market was 99.2 per cent. It is now marginally less, but still involves four firms: principally, News Corporation Ltd and John Fairfax and Sons Ltd, with the comparative small fry, Northern Star Holdings Ltd and the Bell Group Ltd. These firms control our print media. If the Government had its way with the television audience reach of 75 per cent which it sought, the so-called `queens of the screen' as Senator Gareth Evans described them, could legally have had stations in every capital city, Darwin, Launceston, Wollongong and Newcastle and still not exceeded that limit. This is important because of the restricted number of licences available. Public debate still continues as to whether it is possible to have a fourth station, and no doubt that debate will continue further. The corresponding four-firm concentration of the market in television is better, but not by much-a mere 98.5 per cent. Ownership of media is important and prompted a comment which has been quoted in the Senate previously but which I believe is worth repeating. This statement was made by a person who has great knowledge in this area, Rupert Murdoch, who in 1977 said: I think it would be a pity if I grew any bigger in Australia. there are now basically three newspaper groups in Australia, and that's too few already. If I were to grow bigger and take over one of the other groups-or be taken over-that would be against the public interest. I'd like there to be six groups. The fewer there are, the worse it is. What has happened, in fact, is that there are now fewer groups. Mr Murdoch's position is significantly strengthened. Presumably, he is still saying, `The fewer there are, the worse it is'. That statement no doubt conflicts with his financial well-being. Many other people have commented about this concern regarding the concentration of media ownership, one of the most prominent being Sir John Norris in an inquiry in Victoria-and this quote is worth repeating-who said: The amount of news which pours in upon the media is so great that it is impossible to publish everything. Accordingly, the media must select the items for publication, and they must decide the manner in which they will present them. Little reflection is needed to realise that the power to select the facts that are to be published, and to decide the light in which facts are presented to the media's audience, is a major factor in determining public opinion. the real danger may not lie in the act of propagation of one-sided views, but in the conscious or unconscious suppression of shades of opinion which ought to have a voice. I commend those comments to the consideration of the Senate. Under a system of concentrated media ownership, there is every likelihood that that concentration will, in fact, grow further. As I indicated, the barriers to entry are becoming higher and higher and, while there may be competitors, their market share and influence will be marginal. One need only reflect for a moment on just how difficult it would be to set up a metropolitan newspaper in any major Australian city to compete with the established newspapers. We can recall the recent unsuccessful attempt, involving only a short period of time, to set up a daily financial newspaper in competition with the Australian Financial Review. In our market it is becoming practically impossible to set up a competitor, and those who draw to our attention the example of the independent newspaper in the United Kingdom, of course, fail to realise that they are talking about an entirely different market. We must bear in mind also that, when we talk about the power of influence through economies of scale, increasingly national boundaries are becoming unimportant as we look to more and more large international media organisations, such as Mr Murdoch's organisation, which simply have Australian connections. Our Australian based media operations, in some cases, have overseas media and other connections. It is these international connections and technologies that can profoundly influence what we see, read and hear. New technologies, the ability to syndicate across a large network, can give a big operator overwhelming economies of scale. Quite apart from the unequal competitive balance, we may see, I suggest, an unhealthy uniformity of programming. To achieve a competitive and quality media Australia needs a number of economically sound media chains and fewer players. It does not need a few very dominant corporations; it does not need token competition from operators who are involved mainly to diversify their investment portfolios. Because of the unique nature of information, this Government should ensure that this is the case. But it has failed to do that. Of course, we really need to recognise that the media, a big business, involves not only newspapers, television and the like-and I suppose that this has been brought to our attention particularly in the past few days-but also the supply of newsprint, reliable newsagency reports, magazines and methods of distribution. I raise this matter because in the past few days we have seen the potential for one chain, in effect, to take control of the whole vertical integration of these various parts of the industry. Of course, I refer to the possibility of News Corporation Ltd, subject to a Trade Practices Commission inquiry, taking control of the Australian Newsprint Mills-which, I think, produces about 90 per cent or more of Australian newsprint-and taking control of Australian Associated Press which is the major gatherer of news information in this country. Those groups will be added to News Corporation's enormously powerful newspaper outlet structure in this country. I think that even the most determined free marketeer must be concerned at the development of this type of vertical monopoly that covers every facet of the industry and how in the future it could not only dominate but also restrict the supply of information to the community at large. An example of the deficient, negligent approach to the media by this Government is demonstrated by its willingness to happily ignore the public statements of the Australian Broadcasting Tribunal over the past two years. The Government's answer is really a rather pathetic avoidance of responsibility; it has simply passed the task to a new parliamentary committee, its first assignment being to examine the powers of the Australian Broadcasting Tribunal. I will return to that point later. Another example of the deficiencies I suggest, in the approach to the media is the farcical award of the sale of the third Perth television station. The Government will come back immediately and say that, in some ways, it has provided an answer to that debacle, but I remind honourable senators briefly of some of the aspects of that farcical situation. In 1986, honourable senators will recall, Kerry Stokes was awarded the licence for the new station which was to be known as NEW-10. That occurred after 117 days of Tribunal sittings and the attendant expense of $6m. There were two significant changes in shareholdings in the course of that inquiry, both of which were quite legal, and the second being the most significant, because Mr Stokes disposed of his interests at a massive profit to Northern Star Holdings. The second change was significant because the station had not made a single telecast. Here is an example of a station that is simply a public resource being granted a licence by the public in terms of a particular owner but being transferred at a massive profit before it had operated. What does that mean in relation to the various undertakings that had been given and the representations that had occurred during the 117 days of the inquiry? Honourable senators may recall that Kerry Stokes said that up to 60 per cent of his West Coast Telecasters would be available to the public, but that did not occur. I am not suggesting that that was not the intention when the comment was made, but it did not happen and the station was nevertheless sold. A strong point in Mr Stokes's bid for the licence was a commitment to a resurgence in local production. No doubt that was of great appeal in Western Australia. He promised local documentaries, quiz and variety shows, community affairs programs, locally written drama and Western Australian ballet specials. There were plans to telecast 5 1/2 hours of local sport on Saturdays with an emphasis on low profile sports such as netball. Such sports are very appealing and should be covered, but they have not been adequately covered in the past. West Coast said that it would employ some 150 people with apprentices and younger employees being drawn from local technical institutions. Presumably, all these commitments no longer bind the new licence owners. Whether the remedy being imposed by this Government-that is, a two-year restraint with a power to avoid that-will be adequate to avoid a repetition of such a situation is still very much in question. The first matter I mentioned was that it was remiss of this Government not to address the continuing and constant complaints being made publicly and being brought to the attention of the Government by the Australian Broadcasting Tribunal. Before I sit down, I will briefly remind the Senate of these matters because they have not, as yet, been answered. The Chairman of the ABT, Deidre O'Connor, criticised deficiencies of the Broadcasting Act-criticisms which have not yet been met by legislation-and referred to it as a toothless tiger. Senator Gareth Evans conceded that the Tribunal faced an impossible task on its present legislation, and it still does. That has not been corrected by the Government, although the concession has been made. In an editorial on 10 November 1987 in the Australian Financial Review the Tribunal was referred to as a tremendously expensive and wasteful exercise in tokenism, exactly what the Tribunal should not be. I will not go through its early history but will refer to just two annual reports which specifically brought the challenge home to the Government, a challenge which has not been met. The first public expression of frustration was in the ABT's 1984-85 annual report, which stated: The Broadcasting Act-Unfortunately, the legislation has prevented the expectations of improved broadcasting administration from being fully realised. Although there was a radical change in the policy of broadcasting regulation and administration there was not a comparable change to the legislation. Rather, the new policy was implemented by welding the concept of a public inquiry on to the existing provisions. Not surprisingly, this has created difficulties and frustrations for the Tribunal, the industry and the public. Of course the Government did not listen. The Tribunal, in its 1985-86 annual report, was more direct. It detailed no fewer than 10 proposals for immediate consideration by the Minister and then detailed a further 12 proposals for attention. Progress on some of these proposals has been painfully slow. The Tribunal-and I must give it credit for its persistence-went on to state: In the long term, the Broadcasting Act needs radical revision. In many respects, the Act drains Tribunal resources for doubtful public benefit, and places unnecessary burdens on the business sector and the public. It does not deal properly with converging technology, at a time when the distinction between `broadcasting', `radio-communications' and `telecommunications' as a whole is becoming increasingly irrelevant. In the Tribunal's opinion, any revision of the Broadcasting Act should aim for the following: coverage of all telecommunications services with point to multi-point potential; a clear statement of overall regulatory objectives; a realistic framework that will be supported by the resources and government commitment to ensure that it is administered efficiently and is respected by the industry and public; the minimum degree of mandatory regulations necessary to protect the public interest in a particular service, coupled with a range of additional discretionary powers exercisable within the bounds of clear policy objectives and constitutional power. In the last year or two under this Government we have had a mass of broadcasting legislation, but it has not properly addressed the criticisms that have been brought to its attention by the Tribunal. I respectfully suggest that it is about time that it did. Those are basically the matters I wish to bring briefly to the attention of the Senate tonight. Despite the mass of legislation, many Bills have yet to come before the Senate and no doubt the arrival of a satisfactory media control within this regime will take considerably more time. It will be next year before the Senate debates the recently announced radio licence changes. Obviously it will be a long time before the House of Representatives committee recommendations on the Australian Broadcasting Tribunal are brought before the Parliament. As an individual I must say that it is a pity that there will not be an inquiry and that we will not receive recommendations about the community cost of the concentration of ownership within the media that we are experiencing in this country. Hopefully, greater application by this Government in meeting the very reasonable criticisms of the ABT in relation to reforming the Broadcasting Act will in due course give the ABT more teeth and ensure quality media for Australians. Senator BISHOP(New South Wales)(9.36) —I rise in this cognate debate to address my remarks specifically to that part of the legislation dealing with the establishment fee for FM radio licences. I trust that my remarks will be succinct and that I will not take too much time of the Senate. However, I would like to make half a dozen points which I think are important. Speakers in the debate have already pointed out that the history of this legislation, to put it mildly, has been ad hockery at its worst. Initially, four new licences were to be granted in the Gold Coast, Gosford, Ballarat and Shepparton and the closing date for those applications was 14 September. On 15 September, when the Budget was brought down, the Government had changed its mind and wished to proceed to a tender system which was, quite clearly, only a revenue raising device and which had no concern with the quality of additional radio licences. Then we saw a subsequent move from a tender system to the so-called establishment fee, which is now being varied yet again and which, in the words of Senator Powell at a Press conference which I understand she gave today, would ensure that the radio industry was not dominated by a small number of big networks. I find her remarks in no way convincing because the ramifications of the establishment fee remain the same. Essentially, new commercial FM stations in a regional market are small businesses which quite simply cannot carry the extra burden of the establishment fee. For instance, in 1985-86 the radio industry returned only 8.5 per cent operating profit on gross revenue-the latest figures available. Furthermore, it was originally envisaged, when radio licences were to be given on their merits as distinct from who was able to pay for them, that more people would have access to participation in the business of public broadcasting. The idea of the fee being in any way equitable has serious problems as well. For instance, in any of the given markets AM commercial licences are already in existence, exploiting those markets and having an established revenue base. The difficulty confronting people who have applied for these licences is one which ought to be acknowledged. Our move to have the matter referred to a committee deserves the support of the Australian Democrats, and indeed Senator Messner earlier today implored them to reconsider their position. The criterion for the new fee being imposed in Geelong, Shepparton, Gosford and the Gold Coast had been established, and there has now been a change in that criterion. I hesitate in this context to use the word `retrospective', but it is undeniable that the conditions that existed when people put together their applications no longer exist and indeed they have been penalised in that endeavour. Another point of concern is that the establishment fee for new commercial licences is to be twice that charged for conversion from AM to FM, and I see nothing from the new negotiations that the Democrats have had with the Government which is in any way going to change that. Then we come to the question of the 30-days period versus the 60-days period for the payment of an up-front fee. The fact that it is to be changed from 30 to 60 days really does not overcome two intrinsic problems. The mechanism for the granting of the licence is that the Australian Broadcasting Tribunal will decide on merit who is to be the successful applicant. That applicant will then be advised of that success and told that if he makes the required payment in the required time, the licence will be granted. What, then, is the position if there is to be an appeal? What, then, is the position if the establishment fee has had to be borrowed and interest is being paid on it? Should an appeal be upheld? Does that mean that the Government would return not only the paid establishment fee but also the interest that it has attracted? Indeed, if in that 60 days an appeal is launched, and the initial successful applicant does not make the prescribed payment within the 60 days, does he lose the right to that award, irrespective of what happens on appeal? There is a further question of some considerable debate. What is the nature of that establishment fee for taxation purposes? It is a considerable amount of money; it is not inconsequential. Is it a once-off capital payment or is it an expense? How is it to be treated by those people who are investing in that application for a licence? One of the more reasonable requests made by people who have been affected by the new legislation, and which I think is worthy of consideration by the Senate Standing Committee on Transport, Communications and Infrastructure, is this: Would it not be more equitable and fair that if an establishment fee were to be paid, that fee should be paid on an annual basis over the period of the granting of the licence, which is normally five years? Why is it required that the fee be an up-front payment? Is it only to be a revenue raising device? If so, as has been pointed out by speakers earlier in the debate, the benefit of the Government receiving the revenue in a short timeframe has now been negated because of all the changes that have occurred. It seems to me that there are many issues which remain unresolved, and this will always be the case when legislation is put up in a hasty manner and then chopped and changed on more than one occasion. I would like to recap those problems which I think are important and need to be redressed. Is it fair that a new licensee has to pay twice the amount of money of someone who is converting an AM licence to an FM licence and has already had the advantage of exploiting a market where such a fee was not payable? Is the new and more complicated formula to establish the amount of that establishment fee, following negotiation between the Democrats and the Government, a fair and equitable one? Is it fair and reasonable that people who have prepared their applications-that is, the four I mentioned earlier-on one basis that was prescribed by the Government, should find that the conditions have changed subsequent to the closing date, or should these licence applications be exempt from any future legislation? Is it fair and reasonable that in the 60-day period provided for the payment of the fee, that fee could possibly be at risk, and indeed, that interest which may accrue to someone who has paid it could be simply an additional cost which is borne? Is it fair and in the public interest that a system such as that proposed be introduced which will squeeze out the small businessmen in the radio industry simply because they cannot bear the additional burden of this establishment fee? I think those points that I have raised, together with the one that if the Government persists with the establishment fee, as it seems determined to do, it should be able to be paid in instalments, are all fair and reasonable. If we in this chamber are interested in seeing fairness and equity and in seeing the public good served, I suggest that the Democrats should answer Senator Messner's plea and support the actions of the Opposition. Senator SHORT(Victoria)(9.46) —The package of broadcasting Bills that the Senate is debating tonight are all very important. Senator Messner, on behalf of the Opposition, has covered in his remarks in the second reading debate, the main points that the Opposition wishes to raise in relation to the package of Bills as a whole. I will restrict my remarks tonight-and I would like to continue them in the committee stage of the debate-principally to the Broadcasting Amendment Bill (No. 3), although I recognise that, as Senator Messner has pointed out, the key Bill is probably the Broadcasting Amendment Bill (No. 4). In that context, and before getting on to the Broadcasting Amendment Bill (No. 3)-which I wish to concentrate my remarks on-there are some issues about those other Bills, particularly the Broadcasting Amendment Bill (No. 4), that I would like to make. The Opposition has foreshadowed, through Senator Messner, an amendment in relation to the Broadcasting Amendment Bill (No. 4) to add the following words to the motion for the second reading: ``, but the Senate notes with concern the ad hoc approach that the Government has adopted concerning recent changes to broadcasting policy which is exemplified by: (a) the decision to abandon the proposal to auction new broadcasting licences only six weeks after the proposal was announced; (b) the decision to implement an establishment fee system for new FM radio licences, which will: (i) seriously disadvantage local or community groups from obtaining the new radio licences in regional markets. (ii) result in a reduction in the competitiveness and diversity of radio services to listeners in regional markets. (iii) have a particularly deleterious effect on those applicants currently being assessed by the Australian Broadcasting Tribunal for the radio licences in Geelong, Gosford, the Gold Coast and Shepparton, and (iv) lead to widespread uncertainty in the broadcasting industry about possible future changes to broadcasting policy; and (c) the Government's failure to fully consider possible alternatives to the establishment fee system and to consult with the radio broadcasting industry''. The Opposition is expressing serious concerns about the Government's approach to these Bills. Each of the Bills is flawed in various ways. All of them are flawed with a common trait, that is, the basic uncertainty which has prevailed for months in the Government's attitude towards this legislation. I do not know when the Government is going to get into its head the fact that, if we are going to conduct business in this country on a commercial and proper basis, the industries concerned must be able to operate within a sphere of certainty. With chops and changes in Government policy, of which this legislation is but one example, from day to day and week to week, it is no wonder that there is a great deal of uncertainty and concern throughout industry. But uncertainty and concern are not confined just to industry but extend through the Australian Broadcasting Corporation and other non-commercial bodies. There is a great deal of concern as to just where this Government is going. It is about time the Government got its act in order. I urge the Government to take note of the concern being expressed by the Opposition on behalf of a very wide range of the community about the ad hoc approach it is adopting towards government in this country. The Democrats' statement, which I understand was in the form of a Press release today and to which Senator Messner referred, on the establishment fee system is a matter of staggering propensity. Earlier this year the Government proposed, in the Budget, I believe, the auction system in relation to licence fees which was going to bring in $22m. I remind the Senate that the Government was estimating a Budget deficit this year of a whole $27m-about $3 billion not enough. The $22m we are talking about is almost equal to that amount. Within about six weeks after the Budget was introduced the Government thought that that was not quite the way to go so it came up with another scheme which, as I understand it, is incorporated in the Broadcasting Amendment Bill (No. 4) and which was going to bring in $11m. Today we hear that the Government has done a deal with the Democrats to have another system of graduated fee scales which is going to bring in $9m-a fall of another $2m. Perhaps one can ask: What is $2m out of a total Government Budget of about $80 billion? One can say two things. Firstly, the degree of uncertainty and confusion that all this has caused is monumental and is costing industry a great deal. Because it is costing the industry a great deal, it is costing the community a great deal. If industry cannot operate effectively in an environment of government stability and certainty, the community-the user-is going to suffer. Secondly, we have had examples of this which are legion. The $2m here and the $10m there add up to a very large amount of money. If the Government is really serious in saying to the Australian people that it is a competent economic manager, that it knows where it is going in terms of government financing and that it expects the community and the private sector to pick up the ball and run effectively, I do not understand how the Government can really believe that that can happen with the degree of uncertainty it is generating. It is not just a matter of this legislation. It is a matter which pervades the whole area of Government management at the moment and is but one, although a significant, example of just how incompetent the Government is increasingly becoming at managing its own affairs and, therefore, the affairs of the community as a whole. Senator Powell said earlier that, I think in February this year, the Opposition refused reference to a Senate committee of a range of media ownership matters. I think I quote her roughly accurately. She implied that, by doing that, we had refused to have considered by a Senate Estimates committee the establishment fee issue. Senator Powell —No. Senator SHORT —That was the implication of what Senator Powell said. If she was not saying that I hope that she will take the opportunity in subsequent remarks afforded in the committee stage of this debate to refute the quite wrong implication she made in her remarks tonight. The subject that we were talking about earlier in the year had nothing at all to do with this subject. Indeed, what we are talking about now is yet another shabby deal that the Democrats have stitched up with this Government. If that is not what she was saying, let her have the courtesy and the honesty to get up and say so. The Bill on which I wish to concentrate most of my remarks is the Broadcasting Amendment Bill (No. 3). There are several important parts to the Bill. As the Minister for Transport and Communications (Senator Gareth Evans) said in his second reading speech, it covers a wide range of matters affecting public broadcasting and the Australian Broadcasting Tribunal's administrative procedures. Two significant aspects of the Bill-although there are many aspects of significance-to which I wish to draw particular attention are the provisions in relation to radio station 3CR in Melbourne, which is subject to one of the amendments relating to the public broadcasting provisions. The amendment in the Bill provides for the conversion of radio station 3CR to a public licence. As Senator Evans said in his second reading speech: The station was granted a limited commercial licence in 1976 before public licences were introduced. The conditions which were applied to the licence to establish its `limited' character related to restrictions on advertising. These conditions were reflected in the scheme of public broadcasting which was introduced subsequently. Since 3CR has always been conducted as a public licence, it is appropriate for it to be formally converted to that form of licence. The current situation is an anomaly which needs to be corrected to ensure that the other amendments made by this Act apply to 3CR in the same way as to other public stations. The conversion is a purely administrative process which will not affect the operation of the station. There are certain matters I would like to remind the Senate of. Station 3CR, since its establishment in 1976, has certainly been Melbourne's most controversial and, quite unequivocally, Melbourne's most offensive radio station. Senator Robert Ray —Only a few programs. Senator SHORT —Those programs are very important. They are the programs against which 3CR is measured and certainly ought to be measured. If there are offensive or highly offensive programs on any radio station, they are the programs by which that station rightly would expect to be judged. The pro-terrorist line that 3CR has followed since its establishment in 1976 is a line that we as members of the national Parliament not only should be aware of but should condemn. It has run, in particular through Bill Hartley's program Par Avion but in other programs as well, a pro-terrorist line. I think Senator Ray would not deny that point. Senator Robert Ray —Even worse, it runs an anti-Ray line every week. It never attacks you. Senator SHORT —I extend my sympathies through the Chair to the Minister, and I feel that is a matter of concern. I am glad to see him looking fairly relaxed about it. The fact remains that it is offensive, it is pro-terrorist, it is a racist station and it smacks in everything it says of bigoted, racist and terrorist statements. Statements early in its career prompted a bitter and well fought attack from Australia's Jewish community, which did not culminate in an inquiry because a deal was struck between the two parties, but I am told that it is honoured more in the breach. This matter and similar matters were brought to Parliament's attention in several adjournment speeches, particularly in the other House. If one looks at some of the interjections that took place in those adjournment speeches in the other House, one may not be surprised at, but one should be aware of, the interjections, particularly by the honourable member by La Trobe (Mr Milton). The honourable member for La Trobe has a considerable interest in that station. He holds trust shares or units in it. It is no secret. It is contained in the disclosure of members' interests in the other place and is something we should be aware of. It is not only the Jewish community which has been insulted by the poisonous venom that has emanated from 3CR. It has made continuous and extraordinary anti-American statements. After the shooting of the President of the US in 1981, a 3CR broadcaster said: I see they didn't get him anyway. It was a nice try though. Perhaps the guy who plugged John Lennon should have tried for the big R. Better luck next time. Greek and Italian organisations have joined in the chorus of protest against 3CR. Even the Cain State Labor Government in Victoria is complaining. Indeed, I support Cain Government Minister Crabb in the case that he has taken against 3CR. I understand that he is opposing 3CR's present licence renewal application. The Minister has initiated legal proceedings against the station alleging contempt of the conciliation and arbitration hearings. The conclusion reached by many in the late 1970s and early 1980s that 3CR was dominated by the ultra left to the exclusion of opposing views is just as valid today as it was then. A look at the list of its affiliated organisations is but one indication of that. In September this year in the report of the Australian Broadcasting Tribunal into 3CR`s licence renewal application, the Tribunal expressed concern: . . . the tribunal is concerned at Mr Hartley's lack of reponsibility when filling out a program questionnaire, especially considering that he is a director at the station. This lack of responsibility reflects adversely on him personally, and puts a particular onus on the station's management to deal with any outcome of the court proceedings which would affect the services provided to the public. As a consequence the Tribunal expects the licensee to keep it informed of the outcome of the contempt proceedings, and how this is dealt with through its internal management process, if necessary. One could go on further about 3CR, but I shall not do so at this time. I feel that the Senate needs to be aware of this point, given that one of the important provisions of this Bill is to change the station licence of 3CR. Although the Minister says that it will have no practical effect, my understanding is that it will give it some greater reach. I would be interested to hear the Minister's comments. The other point I wish to make on the Bill is listed in the Minister's second reading speech under the heading `Other Matters'. I refer to the deletion of the political identification requirements currently set out in section 333 of the Commonwealth Electoral Act and the consolidation of these requirements in the Broadcasting and Television Act. The Minister said: These provisions set out the requirement for identification of speakers in electoral broadcasters and records of electoral broadcasts to be kept by broadcasters. The amendment will overcome the confusion caused by the similar obligations which are currently imposed by these different Commonwealth Acts, thus implementing a recommendation in the 1984 report of the Joint Select Committee on Electoral Reform. The Opposition agrees that that was a recommendation of the Joint Select Committee on Electoral Reform in its 1984 report. We do not have any great difficulty with that proposition. The Electoral Reform Committee included some notable members of this place, in particular from our side of the House the Hon. Sir John Carrick, who took a great, abiding and expert interest in these matters. He was a signatory to that report and that in itself gives the Opposition confidence in the matter. We have examined the matter closely and would support the general thrust of the Committee's report, which by and large has been taken up at this stage in the amendment proposed to this Bill. The 1984 report of the Joint Select Committee on Electoral Reform, identified three areas of concern in relation to the broadcasting of election matter. Of those the first and perhaps the most important was: . . . inconsistencies between the provisions governing broadcasting of political matter in the Broadcasting and Television Act 1942 and the provisions governing the broadcasting of election matter in the Commonwealth Electoral Act 1918, and the need for consolidation of these provisions. What is being done in the present Bill is in essence to remove from the Commonwealth Electoral Act the relevant provisions in relation to the broadcasting of election matter, and to incorporate those in the Broadcasting and Television Act. We agree with that. We think that it is being done broadly in the correct manner. There are other aspects of a technical nature concerning this action which I will reserve for comment during the committee stage of the Bill. There are some matters that we need to look at, and I hope that the Minister will offer some comment on these. For example, the Committee on Electoral Reform recommended that the Australian Electoral Commission publish a manual of Australian electoral law and practice, including relevant obligations not contained in the Commonwealth Electoral Act 1918. Now that section 33 of the Commonwealth Electoral Act is being abolished and the general gist of it is being incorporated in the Broadcasting and Television Act, that adds additional weight to the Select Committee's recommendation along those lines. That Select Committee made more than 100 recommendations of which only about a quarter have been taken into account to date. I understand from the Minister for Home Affairs, Senator Robert Ray, who is the responsible Minister, that further amendments will be made to pick up the recommendations of the Select Committee, perhaps in the autumn session next year. If that is the case it will add even more weight to the Select Committee recommendation that there should be a manual which brings together all the various elements of Australian electoral law and practice in order to avoid confusion among interested parties which might not be fully aware of the various pieces of legislation and other rules and regulations that have effect. I conclude on that note. I will return to some of those points during the committee stage of the Broadcasting Amendment Bill (No. 3) 1987. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(10.11) —in reply-I am indebted to honourable senators for their contributions to this cognate debate and also to the relatively expeditious way in which they have tackled what has been undoubtedly a very complex set of measures-the Broadcasting Amendment Bill (No. 3), the Broadcasting (Ownership and control) Bill (No. 2), the Broadcasting Amendment Bill (No. 4), the Radio Licence Fees Amendment Bill (No. 2) and the Television Licence Fees Amendment Bill (No. 3). I understand that when Senator Messner spoke-I have not heard him or anyone else in this debate, I am afraid, with my other Cabinet preoccupations-he expressed his concern about the way in which the debate had been crammed together, making the point that it was difficult to give proper consideration to all the issues. It was on that basis than an extension of speaking time was offered and accepted by both Senator Messner and Senator Powell. While I certainly acknowledge the complexity of the task that everyone has had in confronting these measures, I believe that on the whole it is an efficient use of parliamentary time, particularly at this time of the year, in debating what speakers must acknowledge are certainly related measures. As to the alleged ad hoc nature of the Government's broadcasting policy, which I see is the subject of a rather flamboyant second reading amendment proposed to be moved to one of these measures, I do not accept that or that there has been insufficient consultation with the industry. As Senator Messner will presumably find out-one of these days, but not for some considerable time yet-if he is ever involved in putting together Budgets, there are sensitive matters about which it is very difficult to consult in detail in the run up to the budgetary announcements. Certainly, while there was only a general discussion about the primary budgetary measures now before us, since the Budget announcements there have been very extensive talks with all interested parties and developing details of the legislation. In moving an amendment in the House and in agreeing to support amendments that have been foreshadowed by the Australian Democrats today, the Government has shown its willingness to take the views of the industry very much into account. By contrast, the Opposition's only policy has essentially been to refer the whole difficult matter-it is acknowledged on all sides to be difficult-to a committee. The difficulty about referring this to a committee is that, quite apart from anything else, it would delay measures unconscionably. The revenue cost of the original Bill would be $16.5m this financial year. That reduces to just under $14m on the assumption of the passage of the amendment that has been foreshadowed by Senator Powell. It is a very large sum of money whichever way one looks at it. That would be very much at risk since the delays would obviously make quite impossible the passage of the legislation until after the decisions of the Australian Broadcasting Tribunal (ABT) were, for all practical purposes, already taken on the licences that had already been called. Accordingly it would represent a back door method of exempting those first four markets which would, I think, on any view of the equity and justice of this situation give them an inequitable advantage over the licences that have yet to be called. Senator Messner argues that because he claims revenue will not be received at all in 1987-88 there is time for committee consideration. However, he also claims that fees cannot be charged for licences already called. He was a little unclear at the end of the day on which horn of that dilemma he wants to finally perch his posterior. Further delays will certainly, I suppose, lead to further calls for exemptions from Senator Messner. I suggest that we are caught in a no win situation by the rather negative attitude-to put it most politely-that he has adopted. As to the claim that no revenue will be received this financial year because of the inevitable delay in final decisions forthcoming from the Tribunal associated with the payment periods and so on after that, the Government has always recognised the tightness of the timing, bearing in mind the need for the Tribunal scrutiny of the application in question. Estimates of timing have to take account of a range of uncertain factors. All I can say is that we looked at it very carefully. While I certainly acknowledge the tightness of the timing, particularly as it will impact on the conversion fees side of it, on balance we think that the estimates are a reasonable ballpark figure. Accordingly, we are very keen to press on with the exercise. As to some of the issues that were raised, a lot of them, I suppose, will be the subject of further debate in the hopefully not too extended committee proceedings. Let me say a word or two about some of the other matters. The AM-FM conversion fees issue has led to criticism from the Opposition, both of the change from 30 per cent to 50 per cent of current revenue in the period from the intitial Budget announcement to the introduction of legislation and on the basis of alleged inequity with the fee payable by the new licensee. The scheme in the Bills represents a different package to that announced in the Budget. In devising an alternative to the tendering scheme, the Government needed to reconsider all aspects of the new financial arrangements. The figure of 50 per cent of the establishment fee, which will be charged to the new licensee, reflects the fact that the new licensee is acquiring a new right to broadcast in addition to whatever financial advantage he derives from having it on an FM frequency. By contrast, the incumbent is only supplementing an existing right to broadcast with a new FM frequency and, as such, it is obviously the case that he should pay substantially less than the new licensee. If one looks at a claim of inequity in that comparison, the reference by Senator Messner to there being no conversion fee estimate or reference in the Budget is simply false. I draw his attention to page 309 of Budget Paper No. 1 where there is a specific reference to the conversion fee proposal. It was always intended to be subsumed in the Budget. Although it is not quantified-- Senator Messner —That is my point. Senator GARETH EVANS —There is certainly a reference to it and I am told that-- Senator Messner —Yes, I know that. Senator GARETH EVANS —Okay, we have each scored an equally trivial debating point and I hope that honours are now even as I move on to the next issue which relates to ABT processes. Several speakers commented on the current complexity of broadcasting legislation. I fully acknowledge the complexity. It is a jungle; it is a minefield. It justifies every description that anyone has ever offered of it. I do not blame the draftsmen for that. I suppose I do blame the sheer difficulty of coping with a fast moving, technologically very sophisticated environment. The Government is addressing these difficulties in three ways. First, some of the provisions of the Broadcasting Amendment Bill (No. 3) pick up ABT suggestions for amendments of the Broadcasting Act. So here and now we are trying to streamline-admittedly in a fairly marginal way-some of the matters in issue. Secondly, we are supporting the work of the House of Representatives Committee which will be looking at the role of the ABT. Thirdly, an internal departmental review will have a wide ranging look at the scheme of the current Act, including those provisions setting out the functions and powers of the ABT. I should also mention that I hope to introduce a further piece of broadcasting legislation in a matter of days before we get up-not for debate this session, but for scrutiny over the break-which will deal with the radio ownership and cross-media issues that I foreshadowed earlier. That legislation will, as part of it, involve quite a substantial rewriting and restructuring of the broadcasting legislation, hopefully in order to make it more accessible. Finally, on the subject of public radio, which has been the subject of some reference in the debate, I cannot promise any additional funding for the Public Broadcasting Foundation Inc. Budgetary circumstances have been tight and will undoubtedly remain so. Although I am personally very sympathetic to the claims of the public radio sector and will certainly be doing my best to enhance the degree of support in that area, I am not sure of the prospects of success at this stage. On the difficult and sensitive question of the public radio planning timetable, might I just say that, although I have put down a timetable in recent months as a planning aid, that should be regarded as indicative only. The Government has been discussing with the Public Broadcasting Association of Australia the need for a greater degree of flexibility in that planning timetable, particularly in the later years. I hope that it will be possible to resolve over the next few months some of the outstanding areas of concern with that timetable. Certainly, I am conscious of the problem and will endeavour to do something about it. With those remarks I commend the Bills to the House and wish them a speedy passage. Question resolved in the affirmative. Bill read a second time. The Bill. Amendment (by Senator Gareth Evans) agreed to: Page 20, clause 23, line 41, leave out `announce or'. This simple amendment relates to a matter which has been the subject of some discussion with the public broadcasting sector. It is designed to further clarify the operation of the sponsorship and advertisement provisions and, I believe, is uncontroversial. Senator SHORT(10.23) —I just want to ask of the Minister for Transport and Communications (Senator Gareth Evans) a question which I raised in my remarks on the second reading. It relates to the situation of 3CR. In the Minister's second reading speech, he said that the Bill would have no practical effect on 3CR. As I understand it, he is right that there will not be any effect until September because the station's present licence, renewed until 3 September 1990, is for restricted reach but that after that, when it is converted to public licence, it will have an extended reach. Is my understanding of that correct? Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(10.24) —Not automatically, I am told; that is a matter for determination by the Australian Broadcasting Tribunal. There are two separate issues: one is the service area; the other is the licence renewal. The service area is something for my ministerial decision and determination. Apparently the options in this respect are out and about for comment at the moment. I will respond in the light of whatever representations I get both from the station and from the Federation of Australian Radio Broadcasters and anyone else with an interest in this. But that is a separate and distinct issue from the licence renewal process, which was the matter that Senator Short was asking me about. Senator SHORT(Victoria)(10.25) —I thank the Minister, but I am not sure that I understand what he has said. Is he saying that nothing in this Bill will have any effect in any practical sense on 3CR? Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(10.26) —It depends on what the honourable senator means. The Bill changes the nature of its licence from a limited commercial licence of the idiosyncratic character that it has had in the past to a special interest public licence-in other words, bringing it into line with the broad run of the public access community stations. There will be a change in the character of the licence that flows from the Bill in this respect, but there is nothing else that will change as a consequence of anything in this Bill, including in particular the service area. Some discussion has been generated in some quarters about some alleged plan-maybe this is on Senator Short's mind-to give 3CR some metropolitan-wide FM frequency. Maybe that is what the honourable senator has in mind, because I have seen suggestions to that effect. Let me just say that there are no plans at the moment-certainly nothing has come anywhere near my knowledge or attention-to do anything of that kind. We are in the process of considering the whole question of AM-FM conversion for commercial licences, of which 3CR will not be one, after this particular legislative exercise is through. One cannot foretell changing circumstances some distance down the track. But the short answer is that there is no proposal in the wind at the moment. Senator SHORT(Victoria)(10.27) —As I understand it-the Minister can correct me if I am wrong-what will happen under this Bill is that 3CR will go from being a community radio station to a special interest station. If that is correct, does that not extend the interest and likely range of the station to a much wider area than it now covers? If that is the case, how does that square with the statement in the Minister's second reading speech? He said: The current situation is an anomaly which needs to be corrected to ensure that the other amendments made by this Act apply to 3CR in the same way as to other public stations. He then makes what seems to me to be a very strong statement: The conversion is a purely administrative process which will not affect the operation of the station. That is what I do not understand. If the station is being converted from a community licence to a special interest licence, surely that gives it a wider scope for extending its range and must be more than an administrative process. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(10.29) —For a start, the station does not have a community public licence at the moment. It is a curious animal called a limited commercial licence which, as I understand it, exists nowhere else in the country. Pursuant to that limited commercial licence, the station has for all practical purposes been operating as a community station but one with a relatively limited-as we all know, it has been the subject of a lot of debate over the years-range of issues and program target areas of interest. It is apparently with that in mind that, rather than getting a completely open textured community-type public licence, a C-type, the proposal is for it to seek, and presumably be granted as a result of this essentially administrative procedure, a special or S-type licence, which means that it does not have quite the same obligation to take all comers in a sense so far as the community access programming is concerned. Its particular objective, as I understand it, is to operate as a vehicle for people who have had difficulty getting access to other programming. It is with that in mind that it has decided that the best way of preserving exactly the same programming character as it has at the moment is to seek this kind of licence. It is not intended that there be any change in its programming character. The TEMPORARY CHAIRMAN(Senator Peter Baume) —Order! It being 10.30 p.m., pursuant to 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 Temporary Chairman having reported accordingly- The PRESIDENT —Order! It being after 10.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Senator TEAGUE(South Australia)(10.31) -I refer to the Government's decision-or lack of decision-with regard to a matter concerning transport. I am glad that the Minister for Transport and Communications, Senator Gareth Evans, is in the chamber. I wish to draw the Senate's attention tonight to a prime example of the way Labor governments are more concerned with taxing small businesses than helping them. The situation I shall describe is also an example of intergovernmental buck-passing and bureaucratic lethargy. It is a long running problem which neither the Federal nor the South Australian government has shown the will to resolve. It relates to licence fees imposed on a small business, a bottle shop, at Adelaide Airport. This shop is run by Peter and Heather Britton and it trades as the Happy Landing Bottle Shop. The Brittons have been running this business since November 1982. As their business is located on Commonwealth property, the State Government has not imposed the usual State licence fee on the Brittons' business. However, it has been a long-standing policy of the Commonwealth to impose its own comparable charge on such enterprises to ensure that they do not gain a commercial advantage over other businesses which are subject to State charges and fees. But in 1985 the South Australian Government found a way of levying its own fee on the Happy Landing Bottle Shop. The fee was imposed on the shop's wholesaler. This fee was, of course, passed on by the wholesaler to the bottle shop owners so that the Happy Landing Bottle Shop was, in effect, required to pay the State licensing fee. However, the Commonwealth's charge has not been withdrawn. Thus Mr and Mrs Britton have to pay the licence fee twice, to both State and Federal governments-a deplorable example of double taxation. In fact, this situation flies in the face of the principle behind the Commonwealth's assertion that it charges this fee only in lieu of State taxation in order not to give a commercial advantage to a small business on Commonwealth premises. The Brittons raised this problem with Mr Heini Becker, their State member of parliament, who has been pursuing this issue for a considerable time. In turn, Mr Becker has raised this matter with me. Accordingly, I wrote to the Minister for Land Transport and Infrastructure Support (Mr Peter Duncan), the junior Minister at the Department of Transport and Communications. Mr Duncan's short ministerial career at Federal level has been rather undistinguished thus far, and he does nothing to enhance his reputation in his reply to my letter on this matter, when it eventually came. The Senate will remember, of course, that Mr Duncan, when he was in the South Australian Parliament, clashed vigorously with his leader, John Bannon, now the State Premier and Treasurer, even to the point of resigning from the front bench in a great cloud of angry rhetoric. Perhaps that has flavoured his attitude to doing anything co-operatively with the South Australian Government. I suggest that this is yet another matter where Senator Evans, as the Minister for Transport and Communications, needs to take a closer look at what his junior is doing. I wrote on 28 September this year to Mr Duncan and received his reply dated 1 December. I do not know whether Mr Duncan actually read the letter before putting his signature to it. It is a reply that Sir Humphrey Appleby himself could have produced. It makes it clear that the Commonwealth will not compromise at all in this matter. The Federal revenue grab will continue no matter what. I quote from the Minister's letter: It is the Department of Transport and Communications' policy to charge all concessionaires who sell liquor at Adelaide airport a consideration fee at least equal to the licence fee that would be payable if they held a relevant State liquor licence. These fees are an important contribution to the Department's airport revenues which are aimed at ensuring Australian Government airports are operated in a manner which minimises their burden on the taxpayer. In other words, the Minister's highest priority is to maintain the Commonwealth's tax grab. I note that Senator Reynolds is now in the chamber, Senator Evans having left. I must add that requiring payment in lieu of the otherwise applying State tax was a fair principle up until 1985. But the double taxation has persisted for 2 1/2 years. Despite this having been clearly pointed out to the Minister, he gives this form of words which is circuitous and contains no kind of substantial response to the problem involved. It is for that reason that I say that the Minister's highest priority is to maintain the Commonwealth tax grab. By the end of the letter the Minister is trying to slide out of the matter by saying that the Commonwealth fee should not be seen as being in lieu of the State fee. That is directly contrary to the principle that was put forward some years ago. Mr Duncan concludes: . . . the Department could not consider the waiving of its consideration fee, which was originally levied at a rate comparable to, but not in lieu of- so he now claims- State licensing fees. This playing with words reflects no credit on the Department or its Ministers. The Minister's, or should I say, the Department's, letter to me describes an attempt to get some sort of response from the South Australian Government on the issue. To someone's credit, at least an attempt was made to get the State Government to back off from its 1985 stratagem to raise some revenue. Mr Duncan's letter admits: I can appreciate that the provisions of the (South Australia) Liquor Licensing Act 1985 and the imposition of the Department's consideration fee results in concessionaires at Adelaide Airport effectively paying twice for the right to sell liquor. In that regard the Department approached the South Australian Liquor Licensing Commissioner on July 3, 1986 with a view to obtaining an exemption from the application of the Liquor Licensing Act 1985 to any holders of an Authority issued pursuant to the Airports (Business Concessions) Act 1959. The Commissioner advised on July 8, 1986 that a report on the matter was being prepared for the South Australian Minister of Consumer Affairs, the Honourable C. J. Sumner. Subsequent inquiries indicated that the report was duly presented to Mr Sumner for his consideration. On December 8, 1986 the then Minister for Aviation, the Honourable Peter Morris, MP, wrote to Mr Sumner requesting his assistance in progressing the Department's exemption request. Since then, the Department has followed this matter up several times with the State Government Liquor Licensing Commissioner, but has not yet received a final reply. However, I am aware that the Liquor Licensing Commissioner is actively reviewing the situation and the impact of the State legislation on Airport business activities. What a lovely phrase-`actively reviewing'. If I were more cynical, I would suggest that that is bureaucratic language for `The file is lost, but we are looking for it'. In any case, what an inglorious saga this is. Clearly the State Labor Government has no more serious interest in resolving the stalemate than the Commonwealth Labor Government. There is no sign that the State Minister communicated with the Federal Minister before the State charge was imposed in 1985. There is no sign that the State Government is willing to yield any ground. So much for co-operation between two Labor governments. In bringing the matter before the Senate in this way, I urge Senator Evans to come to grips with this deplorable situation in which his junior has apparently been quite unable to achieve any progress. It is high time that the Commonwealth and the South Australian governments got together and sorted this matter out so that small business people like Mr and Mrs Britton can be relieved of this absurd burden of double taxation. Senator REYNOLDS(Queensland-Minister for Local Government)(10.41) —Before Senator Evans left the chamber, he asked me to be sure to bring to the Senate's attention the fact that he would take this matter up. He left the chamber only because he had to attend a Cabinet meeting and he made a point of asking me to let Senator Teague know that he would conduct a full review into the issues raised by the honourable senator. Question resolved in the affirmative. Senate adjourned at 10.42 p.m. The following papers were tabled: Acts Interpretation Act-Correspondence relating to extension of specified period for presentation- Phosphate Mining Corporation of Christmas Island Annual Report 1986-87. Affirmative Action Agency Annual Report 1986-87. Air Navigation Act-Regulations-Statutory Rules 1987 No. 278. Christmas Island Act- Ordinances 1987- No. 8-Phosphate Mining Corporation of Christmas Island (Winding Up). No. 9-Phosphate Mining Corporation of Christmas Island (Amendment). No. 10-Services Corporation (Amendment). Cocos (Keeling) Islands Act-Ordinance 1987 No. 3-Interpretation (Amendment). Excise Act-Declaration in respect of rebate and amount of rebate in respect of Bass Strait Oil, dated 11 November 1987. Health Insurance Act- Approvals (2) pursuant to subsection 23db (1), dated 26 November 1987. Determination pursuant to subsections 23dn (2), dated 26 November 1987. Statements of particulars (4), of a Ministerial determination pursuant to section 106aa, dated 26 August 1987 and 16 November 1987 (3). Lands Acquisition Act- Land, etc., acquired for- Defence purposes-Geraldton, Western Australia. National Park-Gimbat Pastoral Lease, Northern Territory. Pipeline Authority purposes-Cobar, New South Wales. National Health Act-Regulations-Statutory Rules 1987 No. 279. Navigation Act-Navigation (Orders) Regulations-Marine Orders 1987 No. 9-Part 7 (Marine Qualifications-Ratings). Public Service Act- Determinations 1987 Nos 109-112. Regulations-Statutory Rules 1987 No. 270. Radiocommunications Act-Regulations-Statutory Rules 1987 No. 272. Radiocommunications (Frequency Reservation Certificate Tax) Act-Regulations-Statutory Rules 1987 No. 274. Radiocommunications (Receiver Licence Tax) Act-Regulations-Statutory Rules 1987 No. 276. Radiocommunications (Temporary Permit Tax) Act-Regulations-Statutory Rules 1987 No. 275. Radiocommunications (Test Permit Tax) Act-Regulation-Statutory Rules 1987 No. 277. Radiocommunications (Transmitter Licence Tax) Act-Regulations-Statutory Rules 1987 No. 273. Remuneration Tribunals Act-Remuneration Tribunal-Determination 1987 No. 11-Remuneration and Allowances for holders of public offices, dated 6 November 1987. Seat of Government Act- Ordinances 1987- No. 65-Business franchise (Tobacco and Petroleum Products) (Amendment) (No. 3). No. 66-Real Property (Amendment). No. 67-Stamp Duties and Taxes (Amendment). States Grants (Tertiary Education Assistance) Act 1984-Direction-No. 30, dated 24 November 1987. Superannuation Act-Regulations-Statutory Rules 1987 No. 271. GOVERNOR-GENERAL'S PROCLAMATION-COMMENCEMENT OF AN ACT: A Proclamation by His Excellency the Governor-General is tabled, notifying that His Excellency has proclaimed the following Act to come into operation on the date specified: Insurance and Superannuation Commissioner Act 1987-23 November 1987 (Gazette No. S 310, 19 November 1987). The following answers to questions were circulated: (Question No. 4) Senator Bolkus asked the Minister representing the Treasurer, upon notice, on 14 September 1987: How much revenue will the proposed ID system raise over and above the measures planned to improve the Taxation Office's check and audit system, especially the proposed matching of external information to tax records. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: As the honourable senator would be aware, the Government has announced that it is not proceeding with its Australia Card proposal. (Question No. 23) Senator Vallentine asked the Minister representing the Minister for Defence, upon notice, on 15 September 1987: (1) Given that the figures for total US warships visits to Australia from 1974 to 1981 in an Answer to a Question without Notice in the House of Representatives on 7 September 1982 (Hansard page 1122) and in a Senate Answer to Question on Notice No. 20 (Hansard, 8 May 1985, page 1573) vary in the following way: 1974-26/24 1975-16/19 1976-36/26 1977-24/24 1978-43/39 or 41 1979-46/43 1980-60/49 1981-80/73, (a) why is there a discrepancy between the two different sets of figures; and (b) what are the correct figures for the number of US warships visits between 1974 and 1981. Senator Robert Ray —The Minister for Defence has provided the following answer to the honourable senator's question: (1)The data on US warship visits to Australia that were tabled in the House of Representatives on 7 September 1982 were not provided in answer to a Question without Notice but in the course of a debate on the Defence (Visiting Warships) Bill. These were figures which had been researched while the Labor Party was in Opposition and were not therefore official Government statistics-unlike those provided in response to Senate Question on Notice No. 20 on 8 May 1985. The discrepancies between the two sets of figures are probably due to changes made in the visit arrangements between the times the proposed visits were announced and the dates on which they were actually conducted. (Question No. 37) Senator Jones asked the Minister for Finance, upon notice, on 14 September 1987: (1) How many small businesses in the central Brisbane shopping district changed hands in the last financial year. (2) How many businesses in the same area were placed into receivership or declared bankrupt between June 30 1986 and June 30 1987. (3) What control, if any, can the Federal Government exercise over the apparent over-proliferation of retail shops in the Brisbane central business area. (4) What controls does the Federal Government have on the level of planning approvals financed by overseas capital for retail outlets throughout Australia. Senator Walsh —The answer to the honourable senator's question is as follows: (1)-(4) With the exception of information concerning bankruptcies, the matters raised concern what are primarily State responsibilities, and so would need to be pursued with the Queensland Government. Statistics concerning bankruptcies and receiverships are not available separately for the central Brisbane shopping district. (Question No. 62) Senator Puplick asked the Minister representing the Minister for the Arts, Sport, the Environment, Tourism and Territories, upon notice, on 24 September 1987: (1) How is the standard for discharge water from the ACT sewerage system set. (2) Is there an attempt at total nutrient removal from the water discharge before it is released into the river r representing the Minister for the Arts, Sport, the Environment, Tourism and Territories, upon notice, on 24 September 1987: (1) How is the standard for discharge water from the ACT sewerage system set. (2) Is there an attempt at total nutrient removal from the water discharge before it is released into the river system. (3) What downstream pollution monitoring is undertaken of the effects of the Canberra waste water discharge. Senator Richardson —The Minister for the Arts, Sport, the Environment, Tourism and Territories has provided the following answer to the honourable senator's question: (1) Standards for discharge water from the ACT sewerage system are set to prevent adverse effects on the Murrumbidgee River. These standards were formulated in 1977 following detailed studies by consultants and the then Departments of the Capital Territory and Housing and Construction and the National Capital Development Commission. The standards are regularly Standards for discharge water from the ACT sewerage system are set to prevent adverse effects on the Murrumbidgee River. These standards were formulated in 1977 following detailed studies by consultants and the then Departments of the Capital Territory and Housing and Construction and the National Capital Development Commission. The standards are regularly reviewed by a Committee which includes representation from the NSW Department of Water Resources. A licence is issued for effluent discharge from the Lower Molonglo Water Quality Control Centre under the ACT Water Pollution Ordinance. (2) Treatment at the Lower Molonglo Water Quality Control Centre removes virtually all the phosphorous compounds which can cause nuisance aquatic growths before water is released into the river system. While the plant at the Control Centre is also capable of removing nitrogen compounds which can cause nuisance growth, monitoring of downstream water quality has shown that this has not been necessary in recent years. Even so, the nitrogen which is present compounds which can cause nuisance aquatic growths before water is released into the river system. While the plant at the Control Centre is also capable of removing nitrogen compounds which can cause nuisance growth, monitoring of downstream water quality has shown that this has not been necessary in recent years. Even so, the nitrogen which is present as ammonia in raw sewage is converted to a form that is not toxic to fish and other aquatic animals. (3) A regular monitoring program which measures the effects of effluent discharge from Lower Molonglo is undertaken on the Murrumbidgee River by the ACT Water Quality and Investigation Laboratory. (Question No. 124) Senator Puplick asked the Minister for Local Government, upon notice, on 5 November 1987: What was the function or functions, or other commitments which the Minister had which prevented her from attending the official presentation of the Address-in-Repl Address-in-Reply to What was the function or functions, or other commitments which the Minister had which prevented her from attending the official presentation of the Address-in-Reply to His Excellency the Governor-General on 5 November 1987. Senator Reynolds —The answer to the honourable senator's question is as follows: I was prevented from attending the official presentation of the Address-in-Reply to His Excellency the Governor-General on 5 November 1987 because at the time I was ry to His Excellency the Governor-General on 5 November 1987. Senator Reynolds —The answer to the honourable senator's question is as follows: I was prevented from attending the official presentation of the Address-in-Reply to His Excellency the Governor-General on 5 November 1987 because at the time I was receiving a briefing from the Minister for Immigration, Local Government and Ethnic Affairs on the Business Migration Program. Senator Ryan —On 23 September 1987 (Hansard, page 565), Senator Stone asked me, as Special Minister of State, the following question: Firstly, is it not a fact that the key operational clauses 40 to 54 of the Australia Card Bill 1986 [No. 3] can come into effect only after the `first relevant day' and the `second relevant day' specified in clause 32 (1) of the Bill are fixed by regulation? Secondly, until this regulation is made, does this mean that the Australia Card cou Firstly, is it not a fact that the key operational clauses 40 to 54 of the Australia Card Bill 1986 [No. 3] can come into effect only after the `first relevant day' and the `second relevant day' specified in clause 32 (1) of the Bill are fixed by regulation? Secondly, until this regulation is made, does this mean that the Australia Card could not be required for any proposed transaction or for any specified purpose relating to taxation, investment, real estate purchases, share transactions, banking, social security or welfare? Thirdly, will such a regulation be subject to disallowance in either the House of Representatives or the Senate? Fourthly, does the Government nevertheless intend to push ld not be required for any proposed transaction or for any specified purpose relating to taxation, investment, real estate purchases, share transactions, banking, social security or welfare? Thirdly, will such a regulation be subject to disallowance in either the House of Representatives or the Senate? Fourthly, does the Government nevertheless intend to push ahead regardless with the Australia Card legislation, thus involving considerable public expenditure and inconvenience, in the full and certain knowledge that, even if the Bill were to be passed by a joint sitting, the Opposition with a clear majority of honourable senators will, by subsequent disallowance of the crucial necessary regulations, render ahead regardless with the Australia Card legislation, thus involving considerable public expenditure and inconvenience, in the full and certain knowledge that, even if the Bill were to be passed by a joint sitting, the Opposition with a clear majority of honourable senators will, by subsequent disallowance of the crucial necessary regulations, render that Bill totally inoperative? The answer to the honourable senator's question is as follows: In line with the Prime Minister's statement of 29 September, 1987 the Australia Card program has been discontinued. Accordingly, it is no longer considered appropriate or necessary to provide a reply. that Bill totally inoperative? The answer to the honourable senator's question is as follows: In line with the Prime Minister's statement of 29 September, 1987 the Australia Card program has been discontinued. Accordingly, it is no longer considered appropriate or necessary to provide a reply. Senator Walsh —On 7 October 1987 (Hansard, page 795), Senator Panizza asked me, as Minister representing the Minister for Primary Industries and Energy, a question without notice concerning farm quarantine due to pesticide residues. The Minister for Primary Industries and Energy has supplied the following answer to the honourable senator's question: The Government has acted quickly to implement an Integrated Action Plan to prevent recurrence of the recent meat residue problems. We believe that there is a national interest in helping producers to overcome these problems and this is reflected in the jories and Energy has supplied the following answer to the honourable senator's question: The Government has acted quickly to implement an Integrated Action Plan to prevent recurrence of the recent meat residue problems. We believe that there is a national interest in helping producers to overcome these problems and this is reflected in the joint effort by governments, farmers, meat processors, livestock buyers and others in the industry to ensure that the action plan is implemented. Accordingly the Government has allocated significant funds to assist producers, including $1 million to assist in the storage and transportation of recalled, banned chemicals, $0.5 million towards testing int effort by governments, farmers, meat processors, livestock buyers and others in the industry to ensure that the action plan is implemented. Accordingly the Government has allocated significant funds to assist producers, including $1 million to assist in the storage and transportation of recalled, banned chemicals, $0.5 million towards testing costs in the US and publicity in Australia, at least an additional $1 million in manpower for the Australian Quarantine and Inspection Service over the full year and $5.7 million over the next 3 years for the upgraded national residue survey and the establishment of a national data base. As part of the plan, State and Territory Governments costs in the US and publicity in Australia, at least an additional $1 million in manpower for the Australian Quarantine and Inspection Service over the full year and $5.7 million over the next 3 years for the upgraded national residue survey and the establishment of a national data base. As part of the plan, State and Territory Governments have intensified controls applying to the sale and use of agricultural chemicals and, among other things, the controls will allow the application of organochlorine chemicals only in non-agricultural uses in areas free of livestock. The restrictions will apply equally to Government instrumentalities and commercial operations. I believe that the SEC use aldrhave intensified controls applying to the sale and use of agricultural chemicals and, among other things, the controls will allow the application of organochlorine chemicals only in non-agricultural uses in areas free of livestock. The restrictions will apply equally to Government instrumentalities and commercial operations. I believe that the SEC use aldrin in spraying the main transmission poles and recently the Director of Agriculture in Western Australia stated that the SEC role is minor in the State's residue problem. Nevertheless, at a recent meeting the SEC agreed to take action to remove the contaminated soil around the main poles and replace it with uncontaminated soil. As of 20 October in in spraying the main transmission poles and recently the Director of Agriculture in Western Australia stated that the SEC role is minor in the State's residue problem. Nevertheless, at a recent meeting the SEC agreed to take action to remove the contaminated soil around the main poles and replace it with uncontaminated soil. As of 20 October 1987 there had been 150 properties quarantined in WA. Of these 97 had violative levels of residues and 53 had levels ranging from a half to the full maximum residue limit. However, 23 of these have been released from quarantine after investigation. It is estimated that around 350 properties are quarantined Australia wide. Apart from properties u1987 there had been 150 properties quarantined in WA. Of these 97 had violative levels of residues and 53 had levels ranging from a half to the full maximum residue limit. However, 23 of these have been released from quarantine after investigation. It is estimated that around 350 properties are quarantined Australia wide. Apart from properties under quarantine, I understand that some buyers of livestock are not purchasing from farmers that they believe may produce livestock with high residue levels. There is no information available on the number of properties that may be effected as buyers change their purchasing arrangements on a daily basis and the details are confidential to the companies involved. nder quarantine, I understand that some buyers of livestock are not purchasing from farmers that they believe may produce livestock with high residue levels. There is no information available on the number of properties that may be effected as buyers change their purchasing arrangements on a daily basis and the details are confidential to the companies involved. Senator Ryan —On 21 October 1987 (Hansard, page 1038), Senator Childs asked Senator Walsh, as Acting Minister for Industry, Technology and Commerce, the following question without notice: Has the Acting Minister for Industry, Technology and Commerce seen an article in the International Herald Tribune reporting that `odd pockets of contamination' in food keep showing up 18 months after the Chernobyl incident? As the foods range from French mushrooms, English mutton and Turkish hazelnuts to fish from Finland, are steps being taken to protect Australian consumers from imported contaminated products? The Acting Minister for Industry, Technology and Commerce undertook to refer the question to the Minister for Community Services and Health, who has provided the following additional information: Foodstuffs imported into Australia from countries affected by the accident at the Chernobyl nuclear power station have been under surveillance since mid-1986. France, the United Kingdom, Turkey and Finland were included in the thirty-one designated countries. Any radioactivity levels in imported foodstuffs have been such that the risk to health from consumption is negligible. It is expected that these levels will become steadily smaller in the next twelve months. Senator Ryan —On 2 November 1987 (Hansard, page 1528), Senator Coulter asked me, as Minister Assisting the Minister for Community Services and Health, the following question without notice: Is the Minister aware that the 2, 4, 5-T used in Vietnam contained on average approximately 20 times the level of 2, 3, 7, 8 tetracholo dibenzo dioxane (TCDD), with some samples of 2, 4, 5-T containing up to several hundred times the levels of TCDD now permitted in Australia? Does the Minister recognise that TCDD is a known mutagen and carcinogen? Does the Minister also accept that all recognised world authorities, such as the International Agency for Research on Cancer, believe that a linear/no threshold relationship exists between the level of exposure to a mutagen and the risk of effects arising, such as abortion and birth defects? Does it not therefore follow that the conclusion of the Evatt Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam that none of these health effects-abortions, birth defects and cancers-arose as a consequence of exposure to Agent Orange in Vietnam, is patently not supported by the evidence or by accepted scientific theory? Finally, will the Minister therefore advise her colleague, the Minister for Defence, that the Hogg inquiry must find that one of the principal conclusions of the Evatt inquiry was wrong? The Minister for Community Services and Health has provided the following information: No. However, I am advised that certain 2, 4, 5-T formulations used in Vietnam contained relatively high concentrations of 2, 3, 7, 8-tetrachlorodibenzodioxin (TCDD) as described in the `Report of the Royal Commission on Use and Effects of Chemical Agents on Australian Personnel in Vietnam.' I am also advised that the published views of the International Agency for Research on Cancer are that there is sufficient evidence for the carcinogenicity of TCDD in animals but that the evidence for its carcinogenicity in humans is inadequate. That Agency also considers that the evidence for genetic activity of TCDD in short-term tests is inadequate. As far as my Department is aware, neither the International Agency for Research on Cancer nor any recognised world authority has proposed any particular relationship between the level of exposure to a mutagen and the risk of adverse effects of the type proposed. Mr Hogg's report is now finalised and will be considered by the Government in the near future. Senator Button —On 2 November 1987 (Hansard, page 1529), Senator Lewis asked the Acting Minister for Industry, Technology and Commerce, Senator Walsh, the following questions without notice: Question 1 Did Austrade advise the Australian companies of the opportunities to tender less than 14 days before tenders closed when Austrade had known of the opportunities for 4 months? Question 2 Why were the documents sent with summary translations only direct to companies? Question 3 Will the Government enquire into the manner in which this project was conducted in order to ensure timely advice and effective assistance will be given to Australian companies exporting to non English speaking countries? The answers to the honourable senator's questions are as follows: Answer 1 The 307 items selected from the 1500 items scrutinized by Austrade's Tokyo office were progressively released over the four month period in the daily Japanese Government Gazette. Except for three cases at the very outset of the exercise, when the timing of advice to Australian companies was dictated by the volume of tender invitations available, Austrade's Tokyo office advised companies of the opportunities within 4 days of publication of the item. In general, Australian companies had a period of between 4 and 6 weeks in which to reply. Answer 2 Austrade's Tokyo Office has to make decisions about priorities and how best to use the resources available to it. To avoid wasting resources on making full translations of lengthy technical documents, not all of which would be of commercial relevance to Australian firms, Austrade's Tokyo Office decided to send English language summaries. The firms themselves could then decide if a good technical and commercial match was indicated and obtain fuller translations if the prospects appeared to warrant the expense. Firms were contacted directly because in Austrade's experience that is the most cost effective and expeditious means of conveying market intelligence to potential exporters. Answer 3 I am satisfied that Austrade's Tokyo Office provided a prompt response, appropriate to the opportunities it perceived, to the resources available to it and to the other demands on its time and resources. As Minister for Industry, Technology and Commerce I am interested in why Australian firms did not respond more positively. Some would have made sound commercial or technical decisions not to participate. But the lack of interest on the part of some firms might be indicative of a low export orientation or a lack of experience in overseas markets. An enquiry would not help in tackling problems of this nature. Senator Button —On 23 November 1987 (Hansard, page 2196), Senator Chaney asked Senator Gareth Evans the following question without notice: In light of the seriousness with which he regards the risks to the health of people in aeroplanes, why has he continued to expose service personnel who man the VIP flights to those health hazards, given he is not prepared to see the rest of Australia subjected to that indignity? The Prime Minister has supplied the following answer to the honourable senator's question: The ban to be imposed by the Government applies to Regular Public Transport (RPT) flights only; in effect, airline and supplementary airline flights. As such, defence force flights of any description are not covered; neither are flights by private aircraft nor corporate jets.