Monday, 14 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 Honourable the President and members of the Senate in Parliament assembled. The Petition of the undersigned respectfully showeth: 1. That changes to the Defence Service Home Loans Scheme will have the effect of reducing existing benefits to Servicemen and Veterans and are therefore to be condemned. 2. That the results of a review of the scheme should be published by the Government. 3. That the Scheme should be amended to increase the amount of the loan, speed up the processing of loans, and widen the eligibility to include all Servicemen by way of recognition of their service to Australia. And your petitioners as in duty bound will ever pray. by Senator Newman (from 3,019 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 Senator Ryan (from 33 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 Walsh (from 24 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Senator McLean (from 555 citizens). To the Honourable the President and members of the Senate in parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: 1. That we are totally opposed to the introduction of the Labor Government's Identity Card. 2. That this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security. 3. That we are deeply concerned at the Labor Government's inability to provide effective and efficient methods to combat tax and social security fraud without resorting to expensive, ineffective and authoritarian measures which are alien to the Australian way of life. 4. That we call upon the Labor Government to improve management systems within the Australian Taxation Office and other departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator Chapman (from 17 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: that we are totally opposed to the introduction of the Government's Identity Card; that this form of national and compulsory identification will be intrusive, costly for taxpayers and business and will not be effective in combating the growing problems of tax evasion, illegal immigrants or social security; that we call upon the Government to improve management systems within the Australian Tax Office and other Departments to crack down on tax evasion and fraudulent practices. And your petitioners as in duty bound will ever pray. by Senator McLean (from 425 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 Chapman (from 10 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of South Australia respectfully showeth: 1. We reject in principle the need for a national I.D. card on the basis that it will be a gross violation of individual liberty. 2. We reject the motion that the government can claim a mandate for the proposed legislation and state categorically it does not reflect our will. 3. We believe that, as with the proposed Bill of Rights legislation, the government's methods and arguments in promoting this legislation have been under-handed and undemocratic. 4. We believe as a matter of faith and judgment that the proposed legislation is anti-God and that its implementation will result in further attacks on individual freedom and responsibility, the family and the Church and that the real intent is the promotion of a powerful secular humanist ``big brother'' government. Your petitioners most humbly pray that the Senate, in Parliament assembled, should together with the House of Representatives take action to reject this proposed legislation. And your petitioners as in duty bound will ever pray. by Senator Chapman (from 86 citizens). This petition of the undersigned citizens of Australia respectfully showeth that we strongly oppose the introduction of the ``Australia Card'' or any other form of National Identification Numbering System. We believe that the introduction of a National Identification Numbering System is not only totally unnecessary but is a severe threat to our civil liberties and privacy. We condemn the Government's actions on this matter, particularly as no reasonable or responsible justifications for the proposal have been forthcoming from the Government. We humbly pray that the Senate, in Parliament assembled, should reject any proposal for a National Numbering System. by Senator McLean (from 1,341 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 interest of your many constituents. by Senator Giles (from 1,293 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 Senators Giles (from 137 citizens) and Walters (from 137 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 your petitioners wish to retain the Medicare Agency operated by A.P.P.M. Council, thereby reversing the decision of the Health Insurance Commission to close the agency on March 31, 1988. We further wish you to know that the loss of the agency will cause us severe inconvenience and that we believe that our agency is efficient and offers a high standard of service in processing Medicare claims. As in duty bound your petitioners will ever pray. by Senator Devlin (from 2,150 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 the Port Pirie Education Centre Inc. has for twelve years fulfilled a wide range of educational needs among underprivileged and isolated rural people in the upper north of South Australia: that the Federal Government's withdrawal of base grant funding will in effect cause the Centre to close at the end of 1987: that Federal Government managerial incompetence is evident in deciding to cause the closure of the Centre at the same time as approving a Community Employment Program grant of approximately $50,000 to upgrade the Centre's grounds. Your petitioners therefore pray: That the Federal Government will restore base grant funding for 1988 and beyond to ensure that the Port Pirie Education Centre Inc. can continue to provide its wide range of educational services to the people of the upper north of South Australia. And your petitioners as in duty bound will ever pray. by Senator Chapman (from 66 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows that recent changes and further planned changes to Social Security Benefits payments will unduly prejudice and unfairly discriminate against certain members of the Australian community least able to cope with further financial loss. Your petitioners request that the House of Representatives in Parliament assembled should: (i) restore the Supporting Parent's Benefit and the Widow's A Pension to parents whose youngest child is both aged between 16 and 24 and is a full-time student: and restore the Class B Widow's Pension. And (ii) pay the full Family Allowance Supplement to all Australian Social Security Beneficiaries with dependent children in addition to their existing entitlements. And (iii) that student allowances and conditions at least equivalent to those available before the changes in October, 1986, be re-introduced for those sole parents who desire to further their education. by Senator Haines (from 126 citizens). Petitions received. Senator CHANEY(Western Australia-Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move: That the following matters relating to the War Crimes Amendment Bill 1987 be referred to the Standing Committee on Legal and Constitutional Affairs, for inquiry and report by the first day of sitting in 1988: (a) whether the general nature of the evidence and related material believed to be available in foreign states, in particular the Soviet Union and eastern European countries, is likely to be of sufficient evidentiary value to warrant the institution of any prosecutions (in inquiring into this matter the Committee shall not encompass the facts of particular identified cases); (b) if so, what procedures should apply to the collection of evidence in foreign states; (c) the most appropriate procedures for presentation of that evidence in an Australian trial; and (d) the most appropriate procedures for instituting and conducting war crimes trials, having regard to the need to ensure that there is no diminution of the normal standards of justice applicable in Australia. Senator BOSWELL(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) condemns the Hawke Labor Government in general and Senator Richardson in particular for threatening the timber industry with loss of compensation if it does not cease logging immediately; (b) calls on the Government to acknowledge that we do have a Parliament and a Constitution and that the correct procedures should be followed to stop logging, that is, by declaration and proclamation with the Governor-General's assent with the right of either House of the Parliament to move a disallowance motion within 15 sitting days; (c) notes that Senator Richardson's tactics of offering no compensation without ceasing of logging is behaviour of the worst kind and should only be used in ALP parliamentary endorsements and awarding ALP parliamentary positions; (d) notes that Senator Richardson has avoided all forms of political debate and allowed it to be stifled by not declaring the boundaries in time for a motion of disallowance to be moved due to the Christmas recess; (e) challenges Senator Richardson to bring before Parliament this week a Government report on the World Heritage listing so the matter can be debated by elected representatives of the people; and (f) condemns Senator Richardson for spending $300,000 of taxpayers' money on commissioning consultancy reports and then ignoring those reports, such as the Socio-economic Impact of the World Heritage Nomination of Queensland Wet Tropical Rainforests compiled by the Department of Anthropology and Sociology of the Queensland School of Environmental Studies and Griffith University, Nathan, Queensland, which states that this listing has already resulted in severe decline in small business profits, cancellation of business contracts and that children were at risk. Senator CHANEY(Western Australia-Leader of the Opposition) —Before you call questions, Mr President, I would like some clarification-I do not think it is a matter of privilege-on the fact that the Senate was counted out on Thursday night. I was not here at the time but I was advised of it by my colleagues. Honesty required me to say that. But I was paired, I hasten to add. The matter has been raised with me by Opposition senators, in particular the fact that a number of Government senators, including the Government Whip, left the chamber after the quorum had been called. I seek your clarification as to the rules that apply to the enforcement of the rules in this place when a quorum is called. The PRESIDENT —There were some of us here for the adjournment on Thursday night who wish we had not been here. A point of order was raised by Senator Puplick. I said at the time that I did not see Senator Jones leave the chamber. I said that I would draw the matter to the attention of the party leaders and the party Whips and I am in the process of so doing. There are some to whom I have not yet spoken, but no senator should leave the chamber once a quorum has been called. That rule will be strictly enforced in future. Senator COLLINS —I give notice that at the giving of notices on the next day of sitting I shall withdraw business of the Senate, notices of motion Nos 4 and 5, standing in my name for disallowance of the pharmaceutical benefits declaration and the Australian Meat and Live-stock Order No. M33. I seek leave to make a short statement. Leave granted. Senator COLLINS —Mr President, the Regulations and Ordinances Committee has been examining the apparently unreviewable discretion of the departmental Secretary to declare pharmaceutical benefits; and the legality of a documentary incorporation into the Australian Meat and Livestock Orders. The Minister for Community Services and Health (Dr Blewett) has satisfactorily explained that the Secretary in practice has no discretion and the Australian Meat and Livestock Corporation has revoked Order M33 and remade it without the provisions which the Committee thought were probably invalid. I wish also briefly to draw the Senate's attention to the announcement by the Prime Minister (Mr Hawke) on Friday that the next Commonwealth Ombudsman is to be Professor Dennis Pearce. Aficionados of the Regulations and Ordinances Committee-they would have to be a very strange group of people-will know that Professor Pearce is the Committee's acting legal adviser and the author of the standard legal text book on delegated legislation in Australia, without which no Chairman of the Committee is properly dressed. Professor Pearce has been an extremely capable, independent and conscientious adviser to the Committee, whose previous advisers have included Senator John Spicer, a former Liberal Attorney-General; Thomas Williams, a former Labor Party member of the House of Representatives; and Sir Maurice Byers, a former Commonwealth Solicitor-General. Our current adviser is the distinguished Professor Douglas Whalan of the Australian National University, who is currently on sabbatical leave in England. For the Prime Minister to have seen fit to poach one of the Senate Committee's legal advisers to become the Ombudsman is tribute indeed to the Committee. It has reinforced my boundless confidence in the senior public servants whose job is to shake off the shackles of Sir Humphrey Appleby and suggest likely candidates for this important office from outside their own ranks. If a government and its officials are prepared to recognise the bipartisan but insistent Senate Regulations and Ordinances Committee as a nursery for important independent office holders then the millennium could be a little closer than we thought. I congratulate Professor Pearce on his appointment. I am certain that with his intellect, energy and commitment to justice, he will enhance the efficiency and independence of the ombudsman's crucial office. I wish him well as the Australian people's advocate in the busy and occasionally over-enthusiastic corridors of the bureaucracy. I seek leave to incorporate in Hansard a short statement explaining the Committee's scrutiny of the legislation I have mentioned and, in keeping with the Committee's usual practice, the ministerial correspondence attached to this legislation. Leave granted. The documents read as follows- Pharmaceutical Benefits Declaration No. PB2 of 1987 This Declaration appeared to confer on the Secretary of the Department of Community Services and Health a discretion to issue a written authority under which certain specified drugs would be regarded as pharmaceutical benefits and therefore obtainable at reduced costs. Many other preparations are prescribed as pharmaceutical benefits without the need for an intervening discretion. The Committee queried whether any avenue of appeal existed should a person be seriously disadvantaged by a refusal to issue the requisite authority. In a detailed and very helpful letter the acting Minister, the Hon. Ben Humphreys, M.P. explained that drugs are listed as pharmaceutical benefits only after being so recommended by the Pharmaceutical Benefits Advisory Committee, (PBAC) an independent statutory body established under section 101 of the National Health Act. The Secretary has no discretionary powers to act beyond the specific guidelines recommended by the PBAC and approved by the Minister. The Minister explained that: In examining an application for Authority to prescribe, the Secretary or his delegate makes no medical judgements, and indeed has no power under the Act to do so, but merely conducts a routine check to ensure that the intended purpose as described in the application is consistent with that declared in the Schedule of Benefits. Australian Meat and Live-stock Order No. M33/87 These Orders contained a provision which adopted certain definitions as referred to in another document `as amended from time to time'. The incorporation of a varying document (as opposed to the document as it existed at the time the Orders were made) appeared to be ultra vires the Order-making power of the Australian Meat and Live-stock Corporation. The Corporation explained to the Committee that it had acted on the Committee's advice about the possible invalidity of the Orders. The offending Order was revoked and a new Order put in its place. Previous reference to each of the above matters appeared in Senate Daily Hansard of 5 November 1987, page 1756. The Hon. Neal Blewett, M.P. Minister for Health Parliament House CANBERRA A.C.T. 2600 Dear Minister, At its meeting on 30 April 1987 the Committee considered the Declaration of Pharmaceutical Benefits made on 18 March 1987 under section 85 of the National Health Act 1953. Your expert advice on an aspect of the Declaration would be welcomed by the Committee. The Declaration replaces Schedules of drugs formerly set out in the National Health (Pharmaceutical Benefits) Regulations. Schedule 1 to the Declaration contains provisions that permit certain drugs to be ``pharmaceutical benefits'' only with the authority of the Secretary of your Department. See, for example, ``Alfare'' on page 2 of the Declaration and several other examples. A refusal by the Secretary to exercise his or her discretion and issue an appropriate written authority means that the drugs in question are not available at reduced costs as pharmaceutical benefits for the treatment of particular patients suffering from particular illnesses. The Committee readily admits that the use of certain drugs as pharmaceutical benefits for the treatment of certain illnesses must, as a matter of medical safety and public policy, be subject to careful controls. Nevertheless, administrative refusals to permit the use of certain drugs at reduced cost by persons who are sometimes in vulnerable circumstances can potentially be unfair, biased or erroneous. The Committee does not, of course, suggest that any past decisions have exhibited these flaws or that any future decisions will do so. However, the Committee is concerned with questions of principle pertaining to the possible infringement of the rights of individuals without any avenue of review or redress being easily accessible. The existence of appropriately structured avenues of appeal, can serve to underwrite the quality of initial decisions and thus instil public confidence in the competence and professionalism of possibly hard decisions. Review procedures also facilitate the correction of unfair or erroneous decisions in the unlikely event that these occur. Would you be good enough to help the Committee by advising it on the implications of a refusal by the Secretary to authorise the use of particular drugs; whether appeal or review procedures currently exist; and, if they do not, whether, perhaps in consultation with the Attorney-General's Department or the Administrative Review Council, some suitable avenue of appeal should not be put in place. In making these respectful requests for your assistance the Committee acknowledges that the discretionary decision whether to authorise use of a drug as a pharmaceutical benefit may often have medical policy as well as purely medical aspects. However, it is where difficulty in reconciling these possibly competing interests can cause injustice to individuals, that the need arises for an effective review of an initially adverse decision. The Committee would be most grateful to have your advice on these matters. Yours sincerely, BARNEY COONEY Chairman 27 October 1987 The Hon. Neal Blewett, M.P. Minister for Community Services and Health Parliament House CANBERRA A.C.T. 2600 Dear Minister, At its meeting on 22 October 1987 the Committee considered the Pharmaceutical Benefits Declaration under section 85 of the National Health Act 1953, being Declaration No. PB2 of 1987, tabled in the Senate on 6 October 1987. The Committee is interested in ensuring that the adverse or unfair exercise of various discretions by the Secretary of the Department, provided for throughout this Declaration, may be subject to some review or appeal process. You may recall that on 6 May 1987 the then Chairman of the Committee, Senator Cooney, wrote to you seeking your advice on this same issue with respect to the earlier Declaration dated 18 March 1987. It is, to say the very least, not a little discouraging that that letter, from a parliamentary scrutiny committee involved in the protection of personal rights, has yet to be acknowledged or replied to some 6 months later. The latest Determination raises the same issues of review and appeal. The Committee retains the same concerns about the absence of such procedures. Your comments on the Committee's first letter of 6 May 1987 and your advice in regard to this second letter would be very much appreciated by the Committee. I have enclosed for your information a copy of the Committee's previous letter. It would be most helpful if this matter could be dealt with as expeditiously as possible. Your sincerely, BOB COLLINS Chairman 28 OCTOBER 1987 Dear Senator Collins I refer to Senator Cooney's letter of 6 May 1987, in which he sought advice about the power to review a decision not to issue an authority to prescribe a pharmaceutical benefit. I am sorry that you have not previously received a reply to that letter. While a reply was being prepared, it was known that the Declaration of Pharmaceutical Benefits made on 18 March 1987, on which the letter was based, would be revoked by a new Declaration. Since the questions in that letter remained relevant for the new Declaration, it appeared to be more efficient on the resumption of Parliament and the completion of the Committee's new membership to provide the Committee with both the new Declaration and the information which was requested together. The declaration has now been forwarded to the Committee. Sub-section 85 (2) of the National Health Act 1953 provides that the drugs and medicinal preparations to which Part VII of that Act (dealing with pharmaceutical benefits) applies are- (a) drugs and medicinal preparations that are- (i) declared by the Minister, in writing, to be drugs and medicinal preparations to which Part VII applies; or (ii) included in a class of drugs and medicinal preparations declared by the Minister, in writing, to be a class of drugs and medicinal preparations to which Part VII applies; (b) medicinal preparations composed of- (i) one or more of the drugs and medicinal preparations referred to in paragraph (a), being a drug or medicinal preparation that is, or drugs and medicinal preparations that are, included in a class of drugs and medicinal preparations declared by the Minister, in writing, to be a class of drugs and medicinal preparations to which that paragraph applies; and (ii) one or more of such additives as are declared by the Minister, in writing, to be additives to which that paragraph applies. Under Part VII of the Act the Commonwealth shall provide benefits in respect of certain drugs and medicinal preparations. The declaration under section 85 sets out the drugs and medicinal preparations to which Part VII applies as follows: Schedule 1 lists the drugs and medicinal preparations that are available as pharmaceutical benefits and specifies the circumstances (if any) under which they are available. Schedule 2 lists compounds of certain drugs and medicinal preparations that are available as pharmaceutical benefits. Schedule 3 lists drug and medicinal preparations which may be used as ingredients of extemporaneously- prepared pharmaceutical benefits. Schedule 4 lists the additives that may be used with drugs and medicinal preparations. Schedule 5 lists pharmaceutical benefits available under special arrangements such as for people living in isolated areas. Prior to 1 April 1987, the drugs and medicinal preparations to which Part VII of the Act applies were prescribed in Schedules to the National Health (Pharmaceutical Benefits) Regulations. The Act was amended by the Health Legislation Amendment Act (No. 2) 1986 (Act No. 94 of 1986) to provide, amongst other things, that the drugs and medicinal preparations to which Part VII applies shall be declared by the Minister. The relevant amendments to the Act and consequential amendments to the National Health (Pharmaceutical Benefits) Regulations came into operation on 1 April 1987. A drug or medicinal preparation shall only be made available as a pharmaceutical benefit if the Pharmaceutical Benefits Advisory Committee (PBAC) has so recommended to the Minister for Community Services and Health. The PBAC is an independent statutory committee established under section 101 of the National Health act to advise the Minister for Community Services and Health on any matter concerning the listing of drugs and medicinal preparations as pharmaceutical benefits. The Committee comprises six medical practitioners nominated by the Australian Medical Association, one pharmacist nominated by the Pharmacy Guild of Australia, a pharmacologist and also a Department of Community Services and Health pharmacist. The current membership of the Committee is: Dr W. G. Grigor AM MB BS FRACP...Chairman Paediatrician, Sydney Dr B. D. Cowling MB BS General Practitioner, Adelaide Professor M. J. Eadie MD BS PhD FRACP Professor, Neurology and Neuropharmacology, University of Queensland Professor D. J. Birkett BSc (Med) MB BS DPhil FRACP, Pharmacologist, Adelaide Dr J. F. Macdonald MB BS, General Practitioner, Melbourne Dr W. R. J. Middleton MB BS BSc (Med) MD FRACP FRCP, Consultant Physician (Gastroenterologist), Sydney Professor A. Pitt MD FRACP FRACC, Consultant Physician (Cardiologist), Melbourne Mr E. K. Graver PhC MPS, Retail Pharmacist, Hobart Dr J. Cable MPharm PhD, Assistant Secretary, Pharmaceuticals Branch, Department of Community Services and Health, Canberra Matters considered by the Committee include: a. the addition of new items to or deletion of items from the Schedule of Benefits; b. increases or decreases in the maximum allowable quantities of benefits or number of repeats; c. amendment or removal of restrictions applied to benefits; d. introduction of restrictions to non-restricted benefits; and e. deletion of items. Applications and representations about the listing of pharmaceutical benefits are received from diverse sources, including manufacturers, organisations (such as specialist medical colleges, asthma and diabetes associations and pensioner groups) and from medical practitioners and other individuals. The PBAC spends a significant proportion of its time reviewing such representations. The Committee meets regularly with representatives of the medical colleges and societies and, where appropriate, seeks expert advice from such professional bodies and provides explanations of recommendations made (or not made) by the PBAC. Advice may also be sought from individual specialists in the various branches of medicine, from specialist institutions and from such other expert sources as the Australian Drug Evaluation Committee and the Influenza Vaccine Committee. The Committee's decisions and recommendations are therefore drawn from a wide range of experts, including practising clinicians and pharmacologists. The list of items available as benefits is continuously reviewed by the Committee. As a result of such reviews the Committee may recommend the listing of certain drugs, the imposition or variation of restrictions on the prescribing of particular drugs or groups of drugs, or the deletion of drugs whose availability as benefits is considered to be no longer warranted. Where a drug is restricted on recommendation of the PBAC, to the treatment of a specific disease or condition, these restrictions are described in detail in the Schedule of Pharmaceutical Benefits which is updated and distributed to all medical practitioners in Australia three times annually (copy enclosed). In addition the Committee often provides, for publication, the reasons for the recommendations it makes to the Minister for Community Services and Health. Frequently such advice takes the form of a circular letter from the Chairman to all medical practitioners. Articles may be arranged for publication in the medical press in support of the Committee's recommendations. The medical community is therefore kept fully and adequately informed of the availability of drugs on the Pharmaceutical Benefits Scheme, restrictions if any applicable to the availability of certain drugs and the medical reason or reasons for those restrictions. To obtain authority to prescribe a restricted benefit, the medical practitioner must forward to the Regional Director of the Department in his/her State a completed NHS Authority Prescription form (see attached) indicating, inter alia, the disease or purpose for which the benefit is required. Where the circumstances correspond with the authority requirements set out in the Declaration under Section 85 of the National Health Act, then the authority is approved. As a drug may not be listed as a pharmaceutical benefit otherwise than upon a recommendation by the PBAC, the Secretary to the Department of Community Services and Health has no discretionary power in relation to authorising the supply of a restricted benefit. The role of the Secretary or his delegate is therefore no more than an administrative function. In examining an application for Authority to prescribe, the Secretary or his delegate makes no medical judgements, and indeed has no power under the Act to do so, but merely conducts a routine check to ensure that the intended purpose as described in the application is consistent with that declared in the Schedule of Benefits. Should there be any doubt or ambiguity created as a result of the terminology employed by the doctor he/she is contacted by a qualified departmental pharmacist to clarify the terms of the application and then to assess consistency with the requirements under the Declaration under Section 85 of the National Health Act. The Secretary has no discretionary powers to act beyond the specific guidelines recommended by the PBAC and approved by the Minister. As mentioned above, where the Authority is consistent with the terms of the Declaration it is approved. It would be inappropriate to allow avenues of appeal against decisions of the Secretary or his delegate in these circumstances. Yours sincerely (BEN HUMPHREYS) Minister for Veterans' Affairs for and on behalf of the Minister for Community Services and Health Senator Bob Collins Chairman Senate Standing Committee on Regulations and Ordinances Parliament House CANBERRA ACT 2600 27 October 1987 Mr R. O. Austen, A.O. Chairman Australian Meat and Live-stock Corporation GPO Box 4129 SYDNEY N.S.W. 2001 Dear Mr Austen, At its meeting on 22 October 1987 the Committee considered AMLC Order No. M33/87 dated 25 June 1987 and tabled in the Senate on 6 October 1987. The Committee would be very grateful to have your advice on a technical legal matter arising under the Order. Section 49a of the Act Interpretation Act 1901 provides that where an Act authorises the making of regulations, the regulations may apply, adopt or incorporate either, the provisions of any federal legislation as in force from time to time, or the provisions of any other instrument but only as in force at the time the regulations take effect. Subsection 16m (1) of the Australian Meat and Live-stock Corporation Act 1977 applies section 49a to Orders as if Orders were regulations. Clause 3 of AMLC Order No. M33/87 provides that an ``AUS-MEAT'' accredited organisation means ``an establishment accredited in accordance with the AUS-MEAT Operations Manual, as amended from time to time, issued on behalf of the Australian Meat and Live-stock Corporation''. In the same clause ``AUS-MEAT Operations Manual'' is expressed to mean ``the manual so designated, as amended from time to time, published by the Corporation''.'' At first sight, this would appear to infringe the prohibition expressed in section 49a of the Acts Interpretation Act. It may be that by making use of paragraph 46 (b) of that Act a court could read down to its lawful limits the offending definition in the Order. This is by no means certain, however, and it is certainly possible that in a strongly contested case, where very large commercial interests were at stake, the entire Order could be held to be invalid. The Committee would welcome your comments and advice on this question. Yours sincerely, Bob Collins Chairman 8 December 1987 Senator Bob Collins, Chairman, The Senate Standing Committee on Regulations and Ordinances, Parliament of Australia, CANBERRA, ACT. Dear Senator Collins, I refer to your letters of 27 October 1987 and 4 November 1987 to our Chairman, Mr R. Austen, who is overseas. We have acted on the advice contained in your letter of 27 October 1987 and a copy of the new AUS-MEAT Accreditation Order, together with the explanatory memorandum, is attached. We note the comments in your letter of 4 November on paragraph 4.4 of AMLC Order M37/87. This Order was drafted and implemented at very short notice. However, exporters do not appear to have had any difficulty in understanding the intent of paragraph 4.4. In the course of implementing the Order, staff of the Corporation were in close contact with exporters to the U.S. and the Corporation's requirements have been met. In your letter of 4 November 1987 you also referred to the expression ``DPI'' in Order MQ21/87. This Order was circulated in draft form during August 1987, before the Department of Primary Industry was amalgamated into the Department of Primary Industries and Energy. The new name was not incorporated into the final form of the order at the time it was issued. However, we believe that the intent is clear and that the technical oversight will not create legal difficulties. Yours sincerely, PETER T. FRAWLEY Managing Director. AMLC. cc: Mr John Sault, Assistant Secretary, Meat & Livestock Branch, Livestock & Pastoral Division, Department of Primary Industries and Energy. 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. Interim Government response to the Senate Standing Committee on Science and Technology report on technological assessment in Australia. 2. Proposal for work in the parliamentary zone-construction of bus shelters-pursuant to section 5 of the Parliamentary Act 1974. 3. Attorney-General's Department-Office of Parliamentary Counsel-Annual Reports 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922 and section 16a of the Parliamentary Counsel Act 1970. 4. Constitution of the Administrative Appeals Tribunal-Administrative Review Council Report. 5. National Companies and Securities Commission-Annual Report 1986-87-pursuant to section 52 of the National Companies and Securities Commission Act 1979. 6. Family Law Council-Annual Report 1986-87-pursuant to sub-section 115 (9) of the Family Law Act 1975. 7. Service and execution of process-Law Reform Commission Report-pursuant to sub-section 37 of the Law Reform Commission Act 1973. 8. Freedom of Information Act 1982-Annual Report 1986-87-pursuant to section 93 of the Freedom of Information Act 1982. 9. Taxation Statistics 1984-85-Volume 2-Australian Taxation Office Report-pursuant to section 14 of the Income Tax Assessment Act 1936 and section 3b of the Tax Administration Act 1953 and the corresponding provisions of the general taxing statute of Australia. 10. Department of Immigration and Ethnic Affairs-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922-including a report on the operation of the Adult Migrant Education Program-required under the Immigration (Education) Act 1971 and a return which is required by section 42 of the Australian Citizenship Act 1948. 11. States Grants (Schools Assistance) Act 1984-Report on financial assistance granted to each State in respect of 1986-pursuant to section 91 of the States Grants (Schools Assistance) Act 1984. 12. The national policy for the education of girls in Australian schools-Commonwealth Schools Commission Report. 13. The national policy for the education of girls in Australian schools-the Commonwealth's contribution-Commonwealth Schools Commission Report. 14. Child Migrant Education-Annual Report 1986-87-pursuant to section 12 of the Immigration (Education) Act 1971. 15. Higher education-a policy discussion paper. 16. Sugar Cane Growers Adjustment Scheme-Annual Report 1986-87-pursuant to clause 21 of the agreement between the Commonwealth of Australia and the State of Queensland relating to adjustment assistance to sugar cane growers. 17. Meteorology Policy Committee-Annual Report 1986. 18. Australian Tourist Commission-Annual Report 1986-87-pursuant to section 25 of the Australian Tourist Commission Act 1967 and section 63m of the Audit Act 1901. 19. Australian Capital Territory Electricity Authority-Annual Report 1986-87-pursuant to sub-section 33 (4) of the Australian Capital Territory Electricity Supply Act 1962. 20. Department of Trade-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922. 21. Australian Centre for International Agricultural Research-Annual Report 1986-87-pursuant to section 39 (1) of the Australian Centre for International Agricultural Research Act 1982. 22. Australian Fisheries Council-resolutions of the 17th meeting. 23. The rice industry-Industries Assistance Commission Report. 24. The Defence Force Retirement and Death Benefits Authority-Annual Report 1986-87-pursuant to section 16 of the Defence Force Retirement and Death Benefits Act 1973. 25. The Treasury-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922. 26. International Monetary Agreements Act-Annual Report 1986-87-pursuant to section 10 of the International Monetary Agreements Act 1947. 27. Affirmative Action Agency-Annual Report 1986-87-pursuant to section 12 of the Affirmative Action (Equal Employment Opportunity for Women) Act 1986. 28. Central and local trades committees-Annual Report 1985-86. 29. Rural adjustment scheme-Annual Report 1986-87-pursuant to clause 25 of the schedule to the states and Northern Territory Grants (Rural Adjustment) Act 1985. 30. Department of Resources and Energy-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922. 31. Commonwealth Fire Board-Annual Report 1986-87. 32. Department of Arts, Heritage and Environment-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922. 33. Department of Sport, Recreation and Tourism-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922. 34. Tasmanian World Heritage Area Council-summary record of the fourth meeting, 15 May 1987. 35. WHO/Australian Inter-regional Ministerial meeting on AIDS-proceedings. 36. Department of Foreign Affairs-Annual Report 1986-87-pursuant to sub-section 25 (8) of the Public Service Act 1922. 37. Agreement between the Commonwealth of Australia and Midwater Technological Resources Pty Ltd-pursuant to sub-section 9b (4) of the Fisheries Act 1952. 38. Subsidiary agreement between the Government of Australia and the Government of Japan concerning Japanese tuna long-line fishing 1987-pursuant to sub-section 9d (1) of the Fisheries Act 1952. 39. Commission for the Future-annual report 1986-87. 40. Australian Institute of Marine Science-Annual Report 1986-87-pursuant to sub-section 44 (3) of the Australian Institute of Marine Science Act 1972. 41. Auditor-General's report on financial statements of the Australian War Memorial for 1986-87-pursuant to section 36 of the Australian War Memorial Act 1980. 42. Australian National Railways Commission-Annual Report 1986-87-pursuant to section 66 of the Australian National Railways Commission Act 1983. 43. Policy Co-ordination Unit-Annual Report 1986-87-Department of Community Services and Health. 44. Commonwealth Ombudsman and Defence Force Ombudsman-Annual Reports 1986-87-pursuant to sub-section 19 (4) of the Ombudsman Act 1976. 45. Australian Shipping Commission-Annual Report 1986-87-pursuant to section 35 of the Australian Shipping Commission Act 1956. 46. Addendum to the report on the Forward Estimates of Budget Outlays-1988-89 to 1990-91. 47. Members of Parliament (Staff) Act 1984-consultants engaged under section 4 of the Act-Annual Report 1986-87-pursuant to section 31 of the members of Parliament (Staff) Act 1984. Senator GARETH EVANS —I seek leave to have paper No. 1, which is the interim Government response to the report of the Senate Standing Committee on Science and Technology on technological assessment in Australia, incorporated in Hansard. Leave granted. The document read as follows- INTERIM GOVERNMENT RESPONSE TO SENATE STANDING COMMITTEE ON SCIENCE AND TECHNOLOGY-REPORT ON TECHNOLOGY ASSESSMENT IN AUSTRALIA (Tabled 29.4.87) Preparation of the Government's response has required extensive liaison with other Government bodies, as the Report proposed legislative action and changes to some Government arrangements. Comment has now been received from most of the bodies potentially affected by the Report's recommendations and preparation of the response is well advanced. The Government expects to be able to respond to the Committee's report early next sitting. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that the Minister for Local Government, Senator Reynolds, will be absent from the chamber during Question Time today as she has had a minor accident. Any questions in this chamber which would normally be directed to Senator Reynolds in relation to her portfolio, or those she represents, should be directed to the Minister for Justice, Senator Tate. Senator PANIZZA —My question is directed to the Minister for Justice. Is it a fact that the Commonwealth Commissioner for Employees Compensation received 340 claims for compensation following the McClelland Royal Commission into British Nuclear Tests in Australia and that he allowed only 13 of these on the grounds of contraction of cancer? Is it further a fact that the Commonwealth, presumably on advice from the Attorney-General's Department, is appealing against all these decisions and that, in the first case to go before the Federal Court of Australia, the Commissioner's determination was upheld by a single judge but rejected by a Full Bench to which the Commonwealth decided the matter should go? Does the Minister not agree that the Commonwealth is behaving in a very contradictory way in that, having opened up the issue through a royal commission, it now appears to be doing everything it can to avoid the consequences of its actions? Senator TATE —I am not aware of the recommendations of the McClelland Royal Commission into the matters the honourable senator has raised. I am certainly not aware of the Commonwealth's appeal against certain recommendations for compensation. I will try to get an answer for the honourable senator by the end of Question Time but I do not have anything in my brief. Senator COOK —Has the Minister for Finance read the truckling tribute to Sir Earle Page given by Senator Stone in his Earle Page Memorial Lecture and, in particular, his ringing endorsement of Page? He said: I have been profoundly impressed both by the fertility of his ideas and the substance of his achievements . . . a visionary and an achiever . . . his achievement is as enduring as it is imposing. Does the Minister know what these ideas are or were? Did the application of those ideas cause economic problems for Australia and do those ideas still cause problems? Senator Chaney —Mr President, I take a point of order. I cannot see how this question relates in any way to the Minister's portfolio responsibilities. Clearly, it is a waste of Question Time and I suggest that you rule the question out of order. Senator Button —Mr President, I wish to speak to the point of order. In this place we can all learn from experience. Senator Walsh is the Finance Minister in this Government. It might be very enlightening to hear views about what errors there were in the past and how we might improve. Senator Chaney is always encouraging us to do that. The PRESIDENT —I will allow the question on the basis that the Minister was asked a question about economic matters. I ask him to relate his answer to those areas of his portfolio that are relevant. Senator WALSH —Certainly, Mr President. The ideas that were put forward by Sir Earle Page in his autobiography Truant Surgeon are certainly highly relevant to economic questions in general and to the question that has been asked in particular, with one possible exception. There were a number of obsessions brought out in Truant Surgeon, the first of which was that we should have lots of new States, which was probably a harmless enough eccentricity. The others were settling most of the returned soldiers on the land, on farms, redistributing the Empire's population-he actually used that term-in order to exploit the unlimited resources of the Empire, and damming every reasonable sized creek, particularly if it flowed towards the Pacific Ocean on the eastern coast of Australia in order to irrigate the land. All those three things did have very serious economic implications, particularly when they were put forward by someone who was unfettered by the remotest ideas of fundamental economic concepts such as opportunity cost, marginality or comparative advantage. In other words, they were far from harmless. They drove the reckless overseas borrowing by State and Federal governments during the 1920s, which ran up a debt three times as high as that proportion of gross domestic product we now have. That was run up to fund a host of crazy and uneconomical land settlement and irrigation schemes. Indeed, some responsible economic journalists have recently suggested that it took us 20 years to get over the hangover from that crazy borrowing spree of the 1920s. I am astounded that Senator Stone should be resurrecting such cargo cult policies and cargo cult expectations in the late 1980s, suggesting that Senator Button may not have been correct when he assumed that everybody learnt something. It would appear from Senator Stone's endorsement of Sir Earle Page's ideas that he has not learned very much at all. I did endorse another comment that Senator Stone made recently; that is, that the coalition is not fit for government-particularly as he is now part of it. The fifth major idea or obsession which came through in Truant Surgeon was the policy of protection all round, after which a chapter was named and about which a chapter was written. In other words, that was the policy under which the most inefficient agricultural industries also got on to the feather-bed, or, to change the metaphor, managed to stick their snouts into the trough as well. It laid the foundations for the planned structural inefficiency, the full blossoming of which took place in the 1950s and the 1960s under another Country Party leader and which this Government is slowly correcting. As I said last week, it took us five years to clean up the financial mess which Mr Howard left behind him as Treasurer. It will take much more than five years to fix up the planned structural inefficiency which various coalition governments and National Party leaders in particular set up over many decades. On the matter of protection all round, I am equally astounded that Senator Stone wants to take us back for a replay of the 1920s and 1930s on that and on the other matter. In closing, I note that he has in recent times endorsed such Country Party past luminaries as the former Queensland Premier and the Deputy Prime Minister in the Bruce-Page Government. I expect that he will be endorsing Sir John McEwen's policy shortly, but I do not expect him to go all the way and endorse the present National Party of Australia leadership and its policies. Senator CHANEY —My question is directed to the Minister for Transport and Communications. I ask the Minister: Can he tell the Senate the circumstances surrounding the hiring of journalist Wendy Bacon for a job with the new Australian Broadcasting Corporation (ABC) television program The World Tonight and the subsequent reversal of that decision to hire her? Is it a fact that Ms Bacon's appointment was aborted on the ground that she was `unsuitable' for employment? If so, why has no more detailed explanation been given for the decision? Does her alleged unsuitability have anything to do with the fact that Ms Bacon is not well regarded by some of the Minister's mates in the New South Wales Labor Party? If the Minister has not inquired into this matter, which is causing concern among ABC staff and journalists generally, will he do so without delay and report to the Senate as soon as possible? Senator GARETH EVANS —I cannot tell Senator Chaney or anyone else of the circumstances surrounding this matter because I have not inquired into those circumstances, and I do not propose to do so. I believe that it would be quite inappropriate for me to do so. The ABC is an independent organisation. Once its manager is appointed, it is managed on a thoroughly independent basis. Ministers in this Parliament are constantly urging that that state of affairs continue. I propose to honour that spirit and state of affairs and will not interfere here or elsewhere in any way in staffing decisions of this kind. Senator CHANEY —Mr President, I ask a supplementary question. I note the Minister's appeal to principle. I ask him: Is that principle thought to be abused in the Australian Broadcasting Corporation? In other words, is the real principle being applied that, if a person is one of Labor's mates or a former employee of a Labor Minister, he gets a job, no questions asked, but, if he is critical of this Government, he will not get a job? If that is the principle that is being applied, what recourse does the public have against that sort of abuse if the Minister wipes his hands of the matter? Senator GARETH EVANS —It does Senator Chaney no credit to make any such imputation. I do not know whether he thinks there is any factual foundation for it. I am not in a position to respond further, having taken the course that I have, and I do not propose to be intimidated or provoked into responding to that kind of squalid, sanctimonious, trivialising little foray. Senator GILES —Is the Minister Assisting the Prime Minister for the Status of Women aware that the Official Secretary to the Governor- General wrote to the Prime Minister on 4 December 1987 about reporting requirements under the Equal Employment Opportunity (Commonwealth Authorities) Act 1987? Will the Government take action to ensure that the office of the Official Secretary complies with the reporting requirements of the equal employment legislation? Senator RYAN —The Office of the Governor-General is required to comply with the requirements of the equal employment opportunity legislation. I am aware that the Official Secretary wrote to the Prime Minister on 4 December 1987 in relation to reporting requirements under the Equal Employment Opportunity (Commonwealth Authorities) Act. The Prime Minister will consider his reply in the light of the statutory provisions that are applicable. I note too that a report in a Sunday newspaper stated that the Secretary to the Office of the Governor-General had replied that he did not need to put in a report in compliance with the Act because there was no discrimination in that Office. If it is the case that that is the Secretary's view, I think the Secretary should again look at the provisions of the Act. All government authorities and bodies are required to comply with the Act whether or not discriminatory practices are implemented. Probably many bodies would say at this stage that they do not engage in discriminatory practices. Nonetheless, because the Government is seeking an adequate database and an adequate picture of where women are employed throughout the public sector, it is important that all agencies, including the Office of the Governor-General, reply, and I expect that that will happen in due course. Senator POWELL —My question is directed to the Minister representing the Minister for Resources. I draw the Minister's attention to resolution No. 2 of the second meeting of the Australian Soil Conservation Council (ASCC) held in February 1987, in which the Council noted that a meeting of State representatives has been arranged to redraft the national soil conservation strategy `which will then be released for public comment for a period of three months'. In the light of this resolution, I ask: Why has the Minister allowed only five weeks-from 6 November to 15 December-for public comment on this document? Will the Minister give a commitment to extend the time allowed for public comment on the draft national soil conservation strategy until at least 6 February 1988 to comply with the ASCC resolution? Senator WALSH —I certainly will not give any commitment to extend anything. My recollection of this matter is unsure. I think that Mr Kerin might be making some announcement about this tomorrow. Some extension will be announced then. Senator CHILDS —Can the Minister for Transport and Communications provide any information in response to the assertion on 23 November by the Leader of the National Party of Australia in the Senate that the only subjects the Australian Broadcasting Corporation (ABC) Radio National program First Edition ever examines are women's issues, the environment and the peace movement? Senator GARETH EVANS —I have received some information from the ABC. Senator Chaney —It is up to the ABC, isn't it? Senator GARETH EVANS —That is true. I am not interfering with its management this time. I am defending the organisation publicly against a squalid and indefensible attack on its integrity. It should be evident to even the most mean-spirited observer and listener of the scene that, in fact, Senator Stone was absolutely in error and has as yet taken no steps whatsoever to correct the impression he made during the debate in this chamber on Appropriation Bill (No. 1) 1987-88, when he said: If one depended on First Edition for one's knowledge of the books that were to be reviewed in our community, one would imagine that nothing was ever written on subjects other than women's issues, the environment and the peace movement. Those are the only things the program ever talks about. I just want to say that I have received, and now table for the information of honourable senators-Senator Stone in particular-summaries of 63 editions of the First Edition program as broadcast between 4 September 1986 and 27 November this year. Those programs cover not only a mass of Australian and overseas fiction, but also a whole variety of subject matters, including multiculturalism, children's literature, religion, domestic and overseas politics, photography, poetry, music, Australian history, world affairs, public administration, food, military history, Kim Philby, Rudyard Kipling and Neville Wran-I do not know whether he would appreciate being treated in the same breath. I am uncertain whether Senator Stone's attack was prompted by the fact that he failed to get a run on the program either as a reviewer or as the subject of a book written by anybody else. However, I think he should acknowledge, as would any listener who is familiar with the Radio National program in particular, that First Edition provides a diverse and very valuable conduit for the community to become aware of the latest in literature, both here and overseas. It is a commendable element of Radio National programming. It does not involve any interference with management prerogatives for me to say so and to defend it vigorously on its behalf, because it is self-evidently the case in the public domain. Senator CHANEY —My question is addressed to the Minister for Transport and Communications and follows the latest defence of the Australian Broadcasting Corporation (ABC) that he gave. I wish to make an attack in this question on the ABC and its handling of the Ms Bacon employment and disemployment. I say that that was a squalid act and clearly related to the ABC's concern not to have anybody who would attack the Government. I ask: Does the Minister defend the ABC's treatment of Ms Bacon? Senator GARETH EVANS —That is a very cheap and pathetic debating point. For me to respond to that would involve an inquiry into the merits of a management decision. For me to respond to an honourable senator coming out with an assertion which is manifestly loony-the prerogative of prejudice combined with ignorance-and which is self-evidently the case to anyone who is remotely familiar with the public evidence available which does not involve tearing apart any veil or interfering with anybody, is a totally different state of affairs. If Senator Chaney were not in his post-election Christmas wind-down, he would have the intelligence to appreciate that fact. Senator DEVEREUX —My question is addressed to the Minister Assisting the Minister for Community Services and Health. Can the Minister inform the Senate whether the Commonwealth Government is continuing to provide the emergency relief funding to organisations and services which traditionally has been provided by State and non-government agencies? What is the level of that funding and has the Government provided any housing funds for low income earners? Senator RYAN —Yes, the Commonwealth is continuing to provide funding for emergency relief purposes to both State and non-government agencies. Of course, many of those agencies are well known to honourable senators and include organisations such as the Salvation Army, the Smith Family and the St Vincent de Paul Society, as well as a range of small community organisations in a particular locality. Senator Devereux will be pleased to hear that total funding for 1987-88 from the Commonwealth will be over $6.7m, which is an increase of $404,000 over the previous year. Of the total amount, some $538,000 will go specifically to Aboriginal organisations in recognition of the priority our Government places on assisting Aboriginal people to receive adequate assistance. All these grants have been approved after receiving advice from State advisory committees which incorporate representatives of voluntary agencies. The entire program could not exist without the significant contribution of agencies such as the Salvation Army and the Smith Family. It is a joint Commonwealth and community effort. When this financial year's grants are allocated, it is envisaged that some 650 organisations will receive funding assistance and that we will provide assistance to at least some 130,000 clients. I remind the Senate that in our last Budget poor families were the recipients of our new family assistance package, the most generous package of assistance to poor families ever made in the history of our nation. Our emergency relief efforts indicate a sensible working relationship with community bodies and governments working together to help the most disadvantaged in our community, which is and remains a top priority for our Government. Senator CHAPMAN —I direct my question to the Minister representing the Minister for Aboriginal Affairs. Is it a fact that an Aboriginal delegation has approached the Soviet and Iranian embassies requesting Third World aid for its so-called Aboriginal nation? Have this delegation, and an organisation called the Committee to Defend Black Rights, which has a current Federal Government grant of $13,000, also requested the Soviet Union and Iran to support its request for sovereign status and for Aboriginal embassies to be established in those countries? Do the organisations comprising this delegation, which are the Treaty '88 Campaign, the Far South Coast Regional Land Council and Aboriginal radio, receive considerable direct or indirect funding and support from the present Federal Government? Is it also a fact that the church-funded Foundation for Aboriginal and Islander Research Action, supported by peak Aboriginal groups including the National Coalition of Aboriginal Organisations, the National Federation of Land Councils and the National Aboriginal and Islander Health Organisation, which receive government funding, has written to the embassies of the United States of America, the Soviet Union, France, Germany, China, Japan, the Scandinavian countries and others, capitalising on recent comments by the Soviet Deputy Foreign Minister accusing Australia of `shameless racial discrimination', to seek funding for embassies in these countries and international condemnation of what it claims are Australia's racist policies? As these groups are obviously harming both the Aboriginal cause and Austra- lia's international reputation, thereby encouraging a possible white backlash, will the Govern- ment dissociate itself from these groups and cease to fund their destructive activities? Senator TATE —It is ludicrous to ask a Minister representing a Minister in another place such a very complex and long question of which one would require at least some little notice in order to give the honourable senator the benefit of a considered reply. Therefore, I am unable to help the honourable senator or the chamber in regard to the important matters that he has raised. If it is the case that the Federal Government funds organisations which are seeking the assistance of overseas governments in order to press a claim within the Australian community for sovereignty, it is impossible to imagine how that would sit with Australian sovereignty. I am quite certain that the Minister for Aboriginal Affairs in no way supports such an approach, if indeed it has occurred. I am unable to answer the question about Federal funding for any of the groups alleged to have taken part in this approach to the Soviet and Iranian embassies. What information I can get by the end of the week I will make available to the honourable senator. Senator COLSTON —I direct my question to the Minister Assisting the Minister for Community Services and Health. My question relates to dwelling approvals, an early indicator of housing industry activity. Is the Minister able to advise the Senate of the total number of dwelling approvals for the latest month for which figures are available-probably October? Is the Minister able to indicate whether there has been a turn- around in housing industry activity? If so, does this show the confidence of the housing industry following such factors as the Government's balanced Budget and falls in interest rates? Senator RYAN —It is the case that dwelling approvals provide an early indicator of housing industry activity, and the picture in those terms is very encouraging. Total dwelling approvals for October, in seasonally adjusted terms, continued the upward trend which has been evident over the last few months. Total dwelling approvals increased by 3.9 per cent to 11,484, the highest level since January 1986. The turnaround in industry activity is likely to continue, due to increased confidence following the Federal Government's balanced Budget, the reintroduction of negative gearing and the falls in interest rates. The Indicative Planning Council for the Housing Industry has revised its dwelling commencement forecasts upwards to 133,000 for 1987-88 and between 140,000 and 150,000 for 1988-89. During October, the number of private sector housing approvals increased by 7.6 per cent to 8,905 in seasonally adjusted terms-the highest level since October 1985. The figure for private other dwellings approvals increased by 0.5 per cent to 1,947. Total public sector dwelling approvals fell by 1.5 per cent to 856. During the three months to October, total dwelling approvals increased by 5.8 per cent to 32,963, private sector housing approvals increased by 9 per cent to 24,677-both of those figures are seasonally adjusted-and there was a fall in the total number of public sector dwelling approvals to 2,600. Clearly, with regard to dwellings, particularly in the private sector, the picture is a very healthy one. Senator BROWNHILL —I refer the Minister representing the Treasurer to an article appearing in a recent copy of the Australian Financial Review relating to changes to rules governing the application of sales tax, the mooted increase of as much as 10 per cent, and the fact that these rules may increase the retail cost of consumer goods. What extra revenue does the Minister consider will be generated and what will be the effect on the consumer price index (CPI)? Senator WALSH —I presume the question relates to the most recent rationalisation of sales tax. I cannot remember when it became operative. Senator Brownhill may have advised me of that, but I did not hear all of his question. I do not have with me the estimated revenue effects or the CPI effect. I will get them as soon as I can. Senator BROWNHILL —Mr President, I ask a supplementary question. Does that mean that the Commissioner of Taxation does not consult with the Minister for Finance when making changes that can have a big effect on the community? Senator WALSH —As I recall it a memorandum was put before the Expenditure Review Committee which provided estimates of those things as, so far as I can remember, has always been done since this Government has been in office. It might surprise Senator Brownhill to know that I do not remember every fact or figure that is put in front of me. Senator SCHACHT —Is the Minister representing the Minister for Foreign Affairs and Trade aware of media reports today that some senior South Korean military personnel may seek political asylum in Australia if any of the non-government candidates win the forthcoming South Korean presidential election? If so, and if any such military personnel seek asylum, can the Minister give an assurance that no such asylum will be given to the personnel, in view of the consistent human rights violations committed by the South Korean military Government during the last 15 years? Senator GARETH EVANS —All I can say is that any question of an application for entry to Australia remains hypothetical. It is one which could be evaluated only on the basis of the circumstances prevailing, the information available at the time and the identity of the senior military personnel concerned. Beyond that, there is nothing I can say. Senator CALVERT —I refer the Minister for Transport and Communications to the reported decision of the Australian Broadcasting Corporation (ABC) to acquire the exclusive rights to the opening of the Sanctuary Cove development on the Gold Coast planned for 6 January next year. Can the Minister tell the Senate the cost to the ABC of buying these exclusive rights and/or, if the report is not correct, the estimated cost of broadcasting the opening proceedings? Does the Minister agree with his colleague Senator Reynolds who, on the weekend, expressed strong disapproval of such expenditure at a time of extreme financial pressure on the ABC? Further, does the Minister consider that any broadcasting of the Sanctuary Cove opening would constitute advertising or promotion of a private business operation and amount to a possible breach of the rules affecting national public broadcasting? Senator GARETH EVANS —Lest Senator Chaney be minded to make another debating point, I repeat that the ABC is an independent statutory authority with full responsibility for its own programming activities and decisions. I have been told by the ABC though, in response to the newspaper reports over the weekend, that it is negotiating to acquire rights to a package of entertainment and sporting events which will take place during the opening of the Sanctuary Cove resort. I understand that it will not be covering the opening of the resort itself. I understand that the concept is that the events will involve performances by a number of international personalities. There are prospects of overseas sales of that coverage on that basis. I understand that the ABC is still in the process of assessing whether the arrangements would be attractive to it. Beyond that, I think it is inappropriate for me to speculate further as to what the outcome of that independent managerial decision-making process might prove to be. Senator CALVERT —Mr President, I ask a supplementary question. Now that the Minister has repeated the statement that he does not interfere with the ABC, how does he justify the comments made by Senator Reynolds? Senator GARETH EVANS —I have no further comment on the matter. Senator BOLKUS —I refer the Minister for Finance and Minister representing the Treasurer to an article on page 1 of today's Sydney Morning Herald reporting the defence of Senator Stone's recent attacks on the Opposition's economic policies by Queensland National Party President, Sir Robert Sparkes. I ask the Minister: Are the economic policies put forward by the Opposition, such as for unfunded tax cuts and major new expenditure proposals, engendering attitudes which impede the pace of economic adjustment? Does the Government welcome public censure of these fiscally irresponsible policies by Sir Robert Sparkes and Senator Stone? Senator Chaney —Mr President, I take a point of order. The question seems to relate to matters which are not within the ministerial responsibility of the Minister. The question also contains misrepresentations of fact and is, therefore, objectionable. The question refers to policies containing unfunded tax cuts. I am familiar with the policies issued by the Opposition and by the National Party separately before the last election. In each case there were clear statements about the requirement of cuts to be made to expenditure which would fund the tax cuts. In the case of the Opposition policy there was some $8 1/2 billion of cuts and, I think, in the case of the National Party policy there was about $14 billion, was there not? Senator Stone —Yes. Senator Chaney —I thank Senator Stone. So the question is not based on an accurate statement of fact and, in any event, relates to the Opposition and not to the Government, which is mishandling this economy quite adequately on its own at this stage. The PRESIDENT —Order! The question sought comments on economic policy and in that regard I will allow it. The question did not ask about Government policy but the second part of the question asked about Opposition policy. I ask the Minister not to answer that part of the question. Senator WALSH —It is certainly welcome news that a section of the National Party recognises that the policy put up by the Opposition before the last election was economically irresponsible. The reason it was economically irresponsible-- Senator Chaney —I take a point of order, Mr President. Is the Minister responding in terms of your direction, or not? It seems to me that the Minister has immediately ignored your direction. The PRESIDENT —I will listen to the Minister's answer. Senator WALSH —The first part of the question referred to the report in the Sydney Morning Herald. I am giving some of the content of that report. Mr Sparkes acknowledged-I welcome this acknowledgment-that it would be economically irresponsible for any party to propose to deliver massive tax cuts and instant increases in average living standards through some amalgam of cargo-cultism and supply side voodoo. Mr Sparkes is absolutely correct in coming to that conclusion. Senator Boswell —I raise a point of order, Mr President. The title of the President of the National Party is Sir Robert Sparkes. I ask you to call upon the Minister to use the correct title. The PRESIDENT —There is no point of order. Senator WALSH —In other words, the conclusion reported in the Sydney Morning Herald was correct as far as it went, but unfortunately, it stopped short of recognising that there was an even bigger unfunded gap in the policy presented by the National Party before the election. As I recall it, there was $22 billion worth of tax cuts over three years and only $4 1/2 billion worth of expenditure reductions spelt out. I am waiting for the other $18 billion. I would be glad to receive them any time. Senator TAMBLING —I direct my question to the Minister for Justice. Was the clearance by the Australian Federal Police (AFP) of Federal Hotels Ltd for the Christmas Island casino licence conditional on Dr Stanley Ho divesting himself of his interests in Tal Holdings Ltd, Federal's owners? Has the Australian Federal Police ever had reservations about Dr Ho's involvement with Federal Hotels? Given that Dr Ho's shares were still on Tal's register on 18 November, will the Minister recommend new inquiries to ensure that there is no continuing connection between Dr Ho and Federal Hotels? Senator TATE —The question asked was in three parts and the answer to each of them is no. But I think the Senate deserves a fuller answer. It just so happens that I have a fairly extensive brief to fill out those simple `no' answers to the three parts of the question. I could do no better than to read from the brief. On 14 September 1987 the Federal Police provided me with advice on its investigations into Federal Hotels Ltd-that is, in relation to its proposed development of a casino on Christmas Island. I quote directly from the advice: On 4 June 1987 the then Minister for Territories, on behalf of the Commonwealth, entered into an agreement concerning the development of a hotel and casino on Christmas Island. The agreement requires that the casino licence be issued to a reputable casino operator, approved in writing by the Commonwealth. The developer has proposed Federal Hotels Ltd as the operator and has sought the Commonwealth's approval. The Minister for Territories had indicated that before Federal Hotels' application be approved, the Commonwealth should ensure that it does not have undesirable financial connections. The AFP agreed to undertake this investigation with Federal Hotels Ltd meeting the costs. The inquiry was conducted by a team from the AFP Bureau of Criminal Intelligence and included consultation with State and Territory police forces, licensing authorities which have had experience with Federal Hotels Ltd and certain overseas authorities. The investigation focused not only on the reputation and character of Federal Hotels Ltd, but also on companies and individuals who may have an interest in the company, as well as directors, major shareholders and senior employees identified as having a direct association with the proposed Christmas Island casino. That was on 14 September. The advice goes on to say: On the basis of information available, the inquiry did not reveal any matter which would cause the AFP to recommend against the company being granted a casino licence. Should the company's application proceed, however, and persons not currently connected with the application become directly involved in the casino establishment, the AFP would need to be advised so that this advice can be reviewed. That is the end of the advice to me on 14 September. On 30 November the Federal Police provided me with further advice following allegations in Parliament on 27 October regarding a director of Federal Hotels Ltd and his association with persons and companies of alleged ill-repute. The AFP informed me that as a result of these allegations a number of Federal Hotels directors were re-interviewed. Those inquiries did not, however, alter the findings of the earlier advice given to me. To get this matter in chronological perspective a little further-it may be in the back of the honourable senator's mind-the New South Wales police report on Federal Hotels was made in mid-year. The AFP investigation commenced in mid-July. I understand that on 14 May 1987 his fellow directors of Federal Hotels Ltd voted Dr Ho off the board. At the time of AFP advice of 14 September, Dr Ho had resigned as a director of Tal Holdings Ltd-the parent company of Federal Hotels-and of Federal Hotels Ltd although he still held 5.65 per cent of Tal shares. I was advised late last week that Dr Ho has since sold all his shares and no longer holds any interest in Tal Holdings or Federal Hotels. Senator TAMBLING —Mr President, I ask a supplementary question. Will the Minister table the AFP reports on Federal Hotels? Senator TATE —No, I will not table those reports. I have given a very full answer, as was contained in my brief, which is directly, and without any modification or deletion by me, what the AFP presented to me on 14 September and 30 November. Senator HARRADINE —My question is directed to the Minister Assisting the Minister for Community Services and Health and concerns the grant of $191,000 from medical research funds to utilitarian philosopher Professor Peter Singer for a project entitled `Bioethical Issues in the Use of Human Foetal Tissue, Embryos and Gametes'. Is it a fact that the latest grant is in addition to that of $258,000 for the same project, to the same bioethics centre, over the last three years, giving a total of some $450,000? Is it also a fact that Professor Singer's often published views are that the human embryo, the human foetus, and indeed a newborn child, have no inherent right to exist and, specifically, that a human embryo is of no more inherent worth than a lettuce? How many medical research projects have been approved by the National Health and Medical Research Council over the last three years but have not been funded because of lack of money in the medical research grants fund? Does the Minister not think that doctors and scientists starved of funds for beneficial research should feel cheated by the channelling of $450,000 worth of funds from the medical research grants fund to Professor Peter Singer's projects, which in the original application are admitted to be non-scientific? Is it a fact that the funds are now being used to prepare papers for publication and submission to government bodies and the media in support of the campaign to prevent the major question of human embryo experimentation from being properly determined by the elected representatives of the people, in Parliament? Senator RYAN —Partly as a result of earlier interest expressed by Senator Harradine in this medical research grant, the circumstances surrounding it and the competing applications that were made at the time, the matter is being investigated by Dr Blewett. When all the information is available, I will make sure that Senator Harradine has access to it. Senator HARRADINE —Mr President, I have a quick supplementary question. I raised this matter a month ago. Is it not proper that it should be detailed to Parliament before Wednesday? Senator RYAN —I will pass that expectation on to Dr Blewett. Senator STONE —My question is addressed to the Minister representing the Treasurer. I refer to the so-called clerical error in the estimate of business investment for the September quarter of this year, which resulted in the Australian Bureau of Statistics revising its previous estimate of new capital expenditure growth downwards from, in real terms, 11.8 per cent to 0.5 per cent during that quarter. I ask the Minister whether the Commonwealth Statistician's revision which, as one prominent commentator has said, `renders the Forward Estimates utterly useless', was known to him or his Department ahead of the quite falsely optimistic comments which he and the Treasurer made about Australia's economic prospects when releasing the Forward Estimates last Wednesday. Senator WALSH —I would not have thought that Senator Stone would have the gall to ask this question. I nearly said, `that Senator Gall would have the stone'. There was, however, no pun intended-not consciously, anyway. Six weeks ago, Senator Stone was asserting that the estimates of the Budget outcome would be grossly in error because there would be a serious shortfall in taxation receipts and so on. Of course, there has been a formal official review of the Budget Estimates, the results of which were released by the Treasurer and me last Thursday. I do not have a perfect recall of what happened at that meeting, but I do not think a great deal was said about the economic outlook or that many bullish forecasts about the economic outlook were issued by the Treasurer. There were certainly none by me because, as I recall, I did not address the economic outlook at all. What I did draw attention to was the fact that in the last two Budgets that Mr Howard brought down as Treasurer the Forward Estimates of expenditure grew by 6 per cent in real terms in 1981, and by 8 per cent in real terms in 1982. In other words, not only was there a huge growth in government expenditure built into the Forward Estimates, built into policy, but also it was growing at an accelerated rate. Ever since this Government was elected, that growth rate in the Forward Estimates has been pegged back. It has taken us five years to clean up the mess that John Howard left behind him, but now we have finally done it. On a no policy change basis, for the first year of the Forward Estimates period there will be a real decline in public expenditure on present estimates and parameters. Senator Stone referred, in the sneering tone that he customarily uses, to the revision as a so-called clerical error. I do not know whether we were meant to read into that that in fact it was not a clerical error, that there was some malfeasance on the part of the Statistician in producing the original figures. Perhaps he would care to explain that later on. Certainly this was a disappointment to the Government and, I would expect, a disappointment to everyone except the Opposition, of course, which is always trying to talk down the economy. Indeed, it wants a catastrophic recession because it can see that with the bunch of duds, as Senator Stone called them, which represent it-the duds purporting to be Opposition spokesmen; I think that is the correct word-the only hope it ever has of getting into government is for there to be some sort of catastrophic depression. The Opposition wants that, but I do not think anybody else does. It was a disappointment that that figure was revised downwards. The level to which it has been revised downwards is, if I recall correctly, not as good in that quarterly period as had been expected when the Budget Estimates were released, but it is not completely out of touch with it. Senator STONE —Mr President, I ask a brief supplementary question. Will the Minister now respond to my simple question? I asked him: Was the revision in question, the clerical error in question, known to him or his Department ahead of the comments which he and the Treasurer made when releasing the Forward Estimates last Wednesday? Would the Minister answer yes or no, and stop wasting the time of the Senate? Senator WALSH —I did not know the precise magnitude of the error, but I knew it was going to be revised downwards. Senator Walters —You cheats! The PRESIDENT —Order! Senator WALSH —`Harpy's' at it again. THE PRESIDENT —Order! Senator WALSH —I knew it was going to be revised downwards. I do not believe that the Department of Finance officially knew about that, although I did tell one Finance officer, if not immediately before, then very soon before the Press conference was held. I do not know whether the Treasury Secretary knew of it at that time. If the honourable senator wishes, I will ask Mr Keating whether he did. Senator JONES —I refer the Minister Assisting the Prime Minister for the Status of Women and for the Bicentenary to recent criticisms by the Opposition and some sections of the community concerning various facets of the celebration of Australia's Bicentenary. This criticism ranges from the alleged dismantling of the Scottish bicentennial gift to the demolition of the Captain Cook memorial in England and certain aspects of the tall ships visit. Can the Minister explain to the Senate the current situation of these matters? Is it a fact that the Minister has received written assurances from the Opposition that it is in fact very supportive of the Government's plans for the Bicentenary? Can the Minister explain the role of the Opposition in the planning of the celebrations for the Bicentenary? Senator RYAN —It is the case that the Opposition has expressed its support for the bicentennial program, as Senator Puplick, on behalf of the Opposition, has made clear in writing. Of course, Senator Shirley Walters has been a member of the Australian Bicentennial Authority, the body charged with the development of the Commonwealth's major program for the Bicentennial. So the Government has good reason to expect ongoing bipartisan support for the program in general. In respect of some minor criticisms that have been raised, I have some information for the Senate. Senator Puplick expressed concern about the proposed demolition of a memorial to Captain Cook in a church in Cambridge in the United Kingdom. I am advised that this matter had been taken up with the Fraser Government and discussions have been continuing since 1980. The reason I was not aware of this matter when Senator Puplick raised it the other day is that it should not be considered in the context of the Bicentenary but quite properly it is a heritage matter. I understand that in recent months there has been correspondence between the Australian High Commission in London, the Parliament House Construction Authority and the Department of the Arts, Sport, the Environment, Tourism and Territories as to the possibility of relocating the plaque in Australia if its present custodians do not object to this and if funding for it can be found. There have also been criticisms in the newspapers about young people who had hoped to participate in the tall ships event as sailing trainees and who were not able to secure places. For the information of honourable senators, I point out that for the purposes of the tall ships event a tall ship is any sailing vessel with a minimum waterline length of just over nine metres or 30 feet. The crew must consist of at least 50 per cent of sail trainees between the ages of 16 and 25 and with no regular off-shore sailing experience. Of course this requirement maximises the opportunity for youth participation. We have now been advised that all young people seeking berths on tall ships training ships have been accommodated. In fact, a total of 26 young sail trainees gained places aboard vessels training for the trip to Sydney. In conclusion, it is clear that although we can expect the odd running criticism of various bicentennial events as they come on to the agenda, overall the aspirations of the Australian Bicentennial Authority, the Commonwealth Government and, I hope, the Opposition will be more than adequately fulfilled throughout the year. Senator NEWMAN —Is the Minister for Transport and Communications unaware of or is he unconcerned at the serious impact Telecom's proposal to meter local calls will have on the elderly, the disabled, the isolated and the telephone counselling services? If he is aware of the detrimental effect these proposals will have, why has he not answered my representations in October and November on this matter on behalf of my constituents? When will he take action to see that these constituents are not disadvantaged by this Federal Government authority? Is his inaction due to the fact that he supports the Telecom proposals or is it simply that he is not prepared to answer his mail? Senator GARETH EVANS —The timing of local calls is a very sensitive and delicate issue in which it is very important that there be an extended process of consultation and discussion based on a clear understanding of both the problems and the principles involved before any decision is made. Telecom has been looking at this issue in fact for a number of years. But, as I said in response to a question asked during the Estimates committees debate in this place, the question is becoming a more urgent one because of the rapidly accelerating use, or perhaps misuse, of the local call regime by businesses engaged in data transmission and the use of the network for local calls for computer hook-ups of one kind or another. Certainly, I think that any resolution of this matter should involve, as I said, a process of extended debate. Any response to it should be at the very least one that is revenue neutral, that does not involve any massive additions to the revenue of the kinds that have been quite wrongly, I think, speculated about by some people in responding to newspaper reports. It should involve in that sense a regime which means the short calls will be significantly cheaper than they are now. But, more particularly, whatever else is done to soften any possible introduction of any such regime, it is particularly crucial, as Senator Newman says and I acknowledge, that very close consideration be given to the implications for the elderly, the disabled and others who might be thought to be disadvantaged in one way or another by any such proposal. I do not propose to comment further on this issue at this stage. I understand that Telecom will be making an announcement later this week-not deciding the issue because it is premature for all the reasons I have just indicated to decide the issue, but rather initiating a process of public discussion and debate on it. Under those circumstances where an announcement of that kind is imminent, I think it is inappropriate for me to contribute further to speculation on the subject. Senator BURNS —My question is directed to the Minister for Home Affairs and it deals with what appears to be political discrimination in recruitment for the Australian Electoral Commission (AEC). Can the Minister comment on advertisements for positions within the Australian Electoral Commission which state that politically active applicants will not be considered for appointment? Does this form of employment discrimination contravene the provisions of the Public Service Act which specify very tight guidelines for employment? Will the Government review these electoral commission advertisements and guarantee that all applicants for positions within the Commission will get equal treatment? Senator ROBERT RAY —The question of political discrimination in the selection of personnel for some positions within the Electoral Commission has been raised, I think, by Senator Short at the Estimates committee hearings and certainly by Mr Don Cameron, MP, in a Press release issued on Saturday. I also acknowledge that Senator Burns has shown an interest in this particular matter which goes back some months. A belief that politically impartial, or at least non-active, personnel should be employed in sensitive positions with the Commonwealth Electoral Office dates back to before the First World War. I note that Senator Cook is not here; it even predates Sir Earle Page's entry into the Parliament. It is a time honoured tradition, I believe, and I assume that no honourable senator would like to see politically partisan activists exercising unfair power in relation to the conduct of elections. However, Labor governments have been committed to the elimination of discrimination in employment. They have promoted several pieces of legislation to that effect. There was the Racial Discrimination Act in 1975 and there was the Sex Discrimination Act of 1984. The Public Service Act acknowledges that these employment procedures set down in those two Acts are pre-eminent. The question has been raised whether or not the Australian Electoral Commission, by identifying some of its positions as politically sensitive, is in line with the Public Service policy on discrimination. Advertisements for some AEC positions include a paragraph stating that politically active applicants must undertake to refrain from such activity while being employed by the Commission. Section 33 of the Public Service Act outlines that discrimination that is essential for the effective performance of the duties to which the appointment relates is not unlawful. However, the Act states that such discrimination should be declared by the Act's regulations not to be discrimination. I accept Senator Burns's point in this regard and this particular section will be followed up. However, the Electoral Commissioner, Professor Hughes, did write to the Public Service Board on 9 September 1986 enclosing a copy of the policy of the Australian Electoral Commission in regard to these matters. Senator Short —In 1986? Senator ROBERT RAY —For the benefit of Senator Short, it was 9 September 1986. In that letter he said: The Board appreciates that the AEC is in a special situation in relation to political participation and recognises the importance of the Commission and its staff being seen to be, as well as in fact being, completely impartial as between the contesting parties in elections. The Public Service Board's Assistant Commissioner went on to advise: It is recognised in the case of the Australian Electoral Commission that the scope for conflict and apparent conflict, between political participation and the official duties of many Commission staff . . . is considerably greater than is generally the case elsewhere in the Service. The Public Service Board letter concluded: The Board's guidelines are necessarily at a level of generality; on many aspects, it is envisaged that individual departments and agencies will produce their own guidelines more directly applicable to their special circumstances. On this advice, the Australian Electoral Commission has adopted its policy of signalling to prospective applicants that political impartiality will be an important consideration in determining any appointment. I would view with the greatest disappointment if any technicality prevented the Australian Electoral Commission from taking such precautions. As was pointed out at the Estimates Committee, in reply to questions from Senator Short, Professor Hughes himself was appointed as Chairman of the National Committee on Discrimination in Employment and Occupation, under the Fraser Government, so he has had a fair degree of experience in running government policy on discrimination. Senior staff of the Australian Electoral Commission have been consulted on this matter and were in concurrence with the decision that certain areas within the Electoral Commission were out of bounds. Certain aspects within the Commission's activities are not politically sensitive, such as personnel and corporate services, and it is possible for people to pursue a career in those areas. The action taken by the Australian Electoral Commission is consistent with government policy-of both this Labor Government and past Liberal governments-it is also consistent with the International Labour Organisation Covenant No. 101 that sensitive public positions should be subject to specific and special employment guidelines. Senator BROWNHILL(New South Wales) —by leave-I withdraw the matter of public importance standing in my name, namely: The failure of the Hawke Labor Government to implement policies which would significantly reduce our current account deficit. This matter of public importance is of the utmost importance to Australia and is an issue to which the Government has paid little attention. However, there will be many opportunities in debates this week to highlight the inadequacies of the Government and to expose its failures to implement policies which would significantly reduce our current account deficit. My withdrawal in no way lets the Government stand uncondemned for its policies of high interest rates, high inflation, high and increasing tax take, prohibitive freight costs in Australia and restrictive work practices, and its multitude of other policies of neglect. Motion (by Senator Puplick) agreed to: That so much of the Sessional Order relating to the consideration of Government Papers be suspended as would prevent Senator Puplick from moving a motion relating to the order in which the papers are called on by the President. Motion (by Senator Puplick) proposed: That Paper No. 32, the annual report of the Department of Arts, Heritage and Environment, be called on first. Senator HARRADINE(Tasmania)(3.15) —I am not sure how long this discussion will go on and whether it is intended that the debate on this matter should take up the whole time allotted to Government Papers. If so, I have not been advised or consulted about this in any shape or form. One of the Government Papers is from the Attorney-General's Department and it is inaccurate in a most specific sense. Indeed, it is inaccurate as it affects the report of a Senate select committee. I feel it is most important that at some stage that paper should be able to be considered. I raise this, because I was expecting that paper, which is No. 3 on the list, would be dealt with. I presume that most other senators were aware of the change in the order of discussion. Senator Coulter —No, we did not know of it. Senator Puplick —Senator Macklin was advised. Senator HARRADINE —Well, I was not advised. I just raise with the Government and the Opposition the need at some stage to deal with the Attorney-General's paper before Wednesday. Senator COULTER(South Australia)(3.17) —It may well be true that Senator Macklin was advised of this matter, but it certainly was not raised at the Australian Democrats' party meeting this morning. I take it that the advice was given to him after that meeting. I and my colleagues here have no knowledge of this matter. We are concerned that there are a large number of Government Papers to be discussed this afternoon and some of us have been preparing to speak on earlier papers. Therefore, we find this course of action unacceptable. Senator CHANEY(Western Australia-Leader of the Opposition)(3.18) —I am sorry that the Australian Democrat Whip has not taken up this matter with his colleagues. It is not the wish of the Opposition unnecessarily to eat into the time that is required for legislation, as was indicated by the withdrawal of Senator Brownhill's matter of public importance. The reason this matter has been put forward-and Senator Puplick did not speak to his motion, again in the interests of not using up time; but the Senate now requires an explanation-is that in this, the last week of the session, the Government has introduced 47 Government papers. Given the fact that we have half an hour for discussion, it is quite clear that we will barely touch the sides. In the normal course we would deal with a few of these papers, but nowhere near the 47. In the area that was the subject of the motion by Senator Puplick-to bring up the report of the Department of Arts, Heritage and Environment, which is the thirty-second paper on the list-we are acting this way because last Friday a substantial announcement was made by the Minister for the Environment and the Arts, Senator Richardson, relating to a matter of great importance to not only Queensland but also the rest of Australia, namely, the intentions of the Government on the World Heritage listing of the Daintree rainforest. The Opposition understands, again because of the exigencies of the Government's program, that Senator Richardson does not propose to make a statement to the Senate on this important matter. This was one of the few opportunities that arose to deal with this matter and to have some debate in the Senate during the final week of sitting before we rise for the summer recess. That was the reason for our action. I thought there would be a very considerable Democrat interest in this matter-the Australian Democrats always pretend to be concerned about these matters. For that reason we sought the re-ordering of these papers which we believe is in the interests of Queensland and the whole of Australia. We thought we should have an opportunity to look at this matter by way of the report of the Department of Arts, Heritage and Environment which is before us today. I ask those Democrats who are in the chamber to reconsider their point. I think this is a sensible suggestion by the Opposition. If our suggestion is not agreed to we may have to create some other opportunity to debate this matter and that is likely to use up more of the time that we would like to spend, if possible, on the very considerable legislative program that remains. I shall deal with the point made by Senator Harradine. Clearly, the Opposition does not in any way wish to impede consideration of the sort of matter raised by Senator Harradine. He is concerned about the third paper. We would still wish to debate paper No. 32, if that is possible. If we do not get to that paper, we will be open to discuss with Senator Harradine as to whether there is some other vehicle whereby that could be done. No discourtesy was meant to Senator Harradine. We deal primarily with the Government in this matter; the Opposition does not set the program. We certainly advised the Government and I understand that we spoke to the Australian Democrats' Whip but, apparently, not to the Democrats. That is as far as this matter has been taken. No discourtesy was intended to Senator Harradine. I commend the motion of my colleague Senator Puplick and I hope that the Senate will accede to it. Question resolved in the affirmative. The DEPUTY PRESIDENT —Order! Before I call Senator Puplick on the first paper I make it clear that the time of 30 minutes for the consideration of Government papers starts now and not at the beginning of the debate. Senator PUPLICK(New South Wales)(3.21) —I move: That the Senate take note of the paper. The annual report of the former Department of Arts, Heritage and Environment touches upon the issue of the World Heritage listing and the nomination of various areas to the World Heritage List. In fact, it indicates that there is in process the nomination of the wet tropics of north-east Queensland to the World Heritage List. In the five minutes available to me I want to make a number of points about this. The first is that the Opposition absolutely deprecates the fact that the Government has decided to make this a purely political debate rather than a debate about the scientific merits or demerits of the listing of the Queensland wet tropics on the World Heritage List. The Government has gone about this in a way which demonstrates a total disregard for constitutional propriety in terms of the correct relationship which should pertain between the Commonwealth and the constituent States of the Australian Federation and, for the first time, introduces a major element of conflict between a State government and the Commonwealth Government about the protection of a significant part of Australia's heritage. The people of north Queensland have been treated in a cavalier fashion. They have been treated in a fashion which gives them a status which is no better than the members of the Enmore branch of the Australian Labor Party in the total disregard which has been had for their sensitivities, for their livelihoods and for the proper processes of consultation which should have been conducted. The Government's approach reveals an indifference to the scientific facts as far as this matter is concerned, including those which have been raised by me and by other honourable senators by way of questions to the Minister for the Environment and the Arts (Senator Richardson), which he has not answered in a satisfactory fashion, dealing with the question on its scientific merits. It reveals an ignorance of the significance of the timber industry in north Queensland and it reveals an attitude in which a government is prepared to close down an industry without adequate steps being taken for compensation to be paid, with the compensation package being used not so much as something which will help ease the pain which is being felt in north Queensland at the moment but as a blunt instrument with which to threaten people and beat them about the head if they do not conform with what the Government sees as its political imperatives. A totally inadequate time for consultation on this matter has been provided and no time has been provided for consultation between the determination of the final boundaries and the transmission of the necessary nomination papers to the World Heritage Committee in Paris which must take place in the next few days. Finally, the alternative employment strategies, so-called, have not been properly analysed, have not been properly explained and will turn out to be totally inadequate. The Government has put fear into the minds of people who should not have been frightened. The Government has generated hostility towards the cause of environmental protection when its objective should have been to seek wide community support for environmental protection. The Opposition has consistently made clear several principles upon which it will base its detailed response to the Government's announcement which I hope we will be in a position to make in the next couple of days, as soon as this matter has been considered by our shadow cabinet. There are areas of the Queensland wet tropics rainforests which are worthy of special protection being given to them because they are unique and of international significance. Nevertheless, there is a proper method of dealing with State governments. There is a proper method of dealing with the people of this region and there is a proper method of accommodating the timber industry, its protection and its long term viability. We reject this unilateralist approach. We reject this confrontationist approach. We will find, and in government provide, a proper balance between the protection of the environment, the identification of the unique and special features of the environment which need protection, the rights of individuals and the rights of State governments. We entirely condemn the Government for the way in which it has gone about this exercise in disregard of all those things which we think are proper in relationships between governments and relationships between a government, the people and the protection of the environment. Senator PARER(Queensland)(3.25) —I rise to support my colleague Senator Puplick in his remarks about the listing of the tropical rainforests of far north Queensland. The area of far north Queensland is part of my constituency. It is a very beautiful part of Queensland and nobody would deny that. I take issue with the way in which this matter was handled by the Minister for the Environment and the Arts (Senator Richardson) and his Government. The Minister, in his various Press releases, has talked about his consultation with various groups. Firstly, I would like to talk about consultation. The Prime Minister (Mr Hawke), in the pre-election phase in late June or early July, visited the Daintree area. It is interesting to note the remarks of residents in that area. When I talk about the Daintree area, I am not talking about the whole area that encompasses Cape Tribulation right through to Townsville. The Prime Minister visited the Daintree area and, according to the residents who went to greet him, his consultation was limited to his concern about whether the rain that was falling would affect his hair or put dirt on his white shoes. Having made a quick visit he went because he was concerned about his fluffed up hair and his white shoes. Senator Richardson then visited the Daintree area in his helicopter. He landed on the beach and, using his arms in the expansive way in which he does in this place, he said, `What a wonderful area. We must preserve it.' Someone pulled him by his arm and said, `This area is not included'. From my observance of the matter today the Cape Tribulation area is still not included. Let me talk again about consultation. The Chairman of the Douglas Shire, Tony Meijo, a member of the Australian Labor Party for 27 years, attended a meeting in Cairns, was not permitted to speak to the Minister, closed his bag and left. That was reported to me by the Chairman of the Douglas Shire himself. The Minister has said in a number of his Press releases that he has a shopfront office in Cairns. That shopfront office is nothing more or less than a propaganda office and it is full of misinformation. He has tried to lead the people of Sydney, Melbourne and other places to believe that clear felling has occurred in the areas that are under listing. Clear felling by the loggers certainly has not occurred. I know that the Minister will argue that 50 or 60 years ago it probably did occur and I would not disagree with that. But we should bear in mind that in those days the pioneers who went into that area cleared the Atherton Tableland under difficult circumstances. In the last two decades or so there has been no clear felling. In fact, I believe that the State Department of Forestry has done a fantastic job. It has limited the logging of trees to about 10 trees per 1,000 and its logging cycle goes on for about a 40-year period. Let me talk again about consultation. We have experts in that area such as Dr Geoff Stocker, PhD, a former Commonwealth Scientific and Industrial Research Organisation officer who is an expert in the whole area of forest management. Did the Minister listen to Dr Stocker? I doubt it. Ted Manion, the district forester of Atherton, is an expert and Les Hawkes, the district forester in Ingham, is a wonderful expert in the field. In fact, he did a course at the Australian National University on forest management. We also have women who are experts in this area. What we are talking about in this context is not the listing per se but the people who will be affected. I understand that Mrs Rowena Banks, who was leading a group of people, spoke to the Minister and posed a series of questions. He promised Mrs Banks that he would reply to those questions. In discussion with Mrs Banks on the telephone this morning, I am advised that so far there has been no response to those questions. Is it any wonder at all that they doubt the credibility of this Minister and this Government and what it is really about? We know what it is all about. It has nothing to do with rainforest listing; it is simply a political manoeuvre to respond again to a remark made by the Prime Minister before the election because he thought it was a good idea. It brings back memories of the famous tax reform when he responded to someone on the radio and thought that that was going to be a good idea as well. If this is the way this Government treats ordinary people of Australia, it is no wonder that they are concerned and that they realise they have been sacrificed on the altar of political expediency. Senator BOSWELL(Queensland)(3.31) —It is absolutely ludicrous that the only time that is available to the Senate to debate this most important issue is five minutes on Government Papers. In a notice of motion today, I pointed that out to the Senate. By going up to Cairns last Friday and making an announcement on the boundaries, Senator Richardson has destroyed many jobs and he has destroyed a wide timber industry. I point out that he has not had the courage to come into the Parliament to debate the matter. Senator Richardson knows full well that we have a constitution and a parliament in this nation. These important issues should be debated in the Parliament and should not be handled by Press release. Senator Richardson flew up to Cairns. That would not have been so bad if he had spoken to someone. He then ensconced himself in one of the luxury hotels up there, had a Press conference and would not consult with anyone in the timber industry, the forestry industry or the mining industry. He locks himself away and does not have the courage to come out and talk to these people. No wonder his Australian Labor Party (ALP) Secretary, Peter Beattie, accuses him of cowardice. I think the whole Senate would have to endorse the view that Senator Richardson is a coward because he has not had the courage to come into this Parliament and do what the Constitution requires of him-that is to ask the Governor-General to proclaim the area that is not to be logged. Then the Government or the Parliament of Australia can decide which way they want to go. The Minister has not done that. He has governed by Press release after Press release and red herring after red herring and we have not been allowed to debate it. I suggest that the Minister for the Environment and the Arts (Senator Richardson) has done the wrong thing by the people of north Queensland and the people of Australia by avoiding debate in this place. I challenge the Minister today to seek a declaration from the Governor-General. He should get in his car and go out to Government House today and say, `I want this area declared'. That will allow this Parliament to debate the matter. But he has even avoided that. I suggest that it has been by design, not by error. He has not been game to go to the Governor-General. He has waited for this Parliament to rise, thus avoiding giving us an opportunity to debate the matter. He knows as well as I do that the only way he is going to stop logging is by making a declaration with the consent of the Governor-General and not by threatening Queenslanders. Queenslanders will never succumb to threats that their money is going to be blocked unless they stop logging. That is thuggery; it is blackmail. The only people amongst whom it happens is the members of the right wing of the ALP, where they use it in endorsements, in preselections and in the awarding of parliamentary spoils of victory. That is where it should stay-firmly in the ALP. It has no place in the Parliament of Australia. The elected representatives of the people are here to make those judgments. If the Minister is not going to put this matter up, I accuse him of cowardice. In the short time I have left, I must say that many reports have come into this Parliament. I have one that fell off the back of a truck in front of me here. It is a draft report entitled The Socio-economic Impact of World Heritage Nomination of Queensland's Wet Tropical Rainforests, by the Department of Anthropology and Sociology at the University of Queensland's School of Australian Environmental Studies. This document states quite categorically that logging will have an effect on the small towns; it will make businesses bankrupt; it will put children in a risk area; and it will destroy the whole of north Queensland. Yet the Minister will not acknowledge that he has even got this report. But he will listen to Mrs Keto, the chairman of the rainforest conservation area group, the most biased group of people, who have come out and declared that they are against logging under any circumstances. The Minister listens to her. He has given her $13,000. That is the only report of which he has taken any note. I agree with Mr Beattie, the ALP Secretary: the Minister has not got the courage to come before this Parliament and debate the matter in the correct way and allow the representatives of the people of Australia to make the decisions. Senator MacGIBBON(Queensland)(3.36) —I also wish to speak on the annual report of the Department of Arts, Heritage and the Environment. I want to deal with the matter of ministerial responsibility-or, more accurately, ministerial irresponsibility. What we are seeing here is an industry destroyed on non-existent scientific grounds and non-existent economic grounds. This act of World Heritage listing and the banning of logging in north Queensland-I speak as someone who has had a long association as a Queenslander with the jewel of Australia-is an act of the sheerest political opportunism. It just happened that some of the research that Senator Richardson saw showed that maybe there was a vote in the conservation movement in Sydney and Melbourne. So we have gone down this path without any thought of the consequences. Conservation is a real issue in Australia. The Australian public are environmentally conscious. What Senator Richardson does not realise is that they are far more intelligent than he is, and the argument is far more intelligent than he is, and the argument is far more advanced in the public arena than either the greenies or the lunatic fringe in the Australian Labor Party realise. Conservation is good housekeeping. No one wants to live in a garbage heap. No one wants to destroy the heritage we have and enjoy; we want to keep that for our children. What the public realise and are demanding, and what Senator Richardson does not understand, is that we require an intelligent management plan. They want to use the resources for this generation, yet preserve them for the future. All we get from this Government is not intelligent policies but smart policies. We have only got to think back to last week to Mr Whitlam making an observation on Richardson and Keating and their smartness in a similar context. The aim of the Liberal Party and the National Party is to preserve what is unique up there, which means the great bulk of the rainforests in north Queensland. Our second aim is to consult with the community and come to what is a mutually acceptable management plan for the area. There has been no consultation with the people involved. Only the fruit cakes of the conservation movement and the extremists in the south have been consulted by Senator Richardson. Finally, we are going to preserve the timber industry. Senator Richardson might realise that what any government does a subsequent government can undo. The timber industry does have an important place in north Queensland. There never has been any clear felling practised in the north on forestry land and there has never been any wood chipping. The only areas where clear felling has taken place in the north are on private land-crown land that has been converted to private land and which subsequently has been converted for agricultural or pastoral purposes. The last big example of that was the King Ranch development in the 1960s. The Minister for the Environment and the Arts (Senator Richardson) comes fresh to this task in his new ministry with no knowledge at all about forestry practices. He has no knowledge of the geography of the north or the conditions that apply up there. He is both scientifically and technically illiterate. He is arrogantly contemptuous of the people and their livelihoods in this region. He never sought advice; he just jumped in, and he has now banned logging from this region-logging which takes place in only 18 per cent of what is a vast tract of country; logging that has been practised by a Department of Forestry which has a long and honourable history going back over 100 years of very good forest management practices. It is the best Forestry Department in Australia, under which only about three or four trees per acre are taken on a 40-year logging cycle. The national parks that have operated in Queensland also have a long and honourable history. People in the south seem to believe that only a few sticks of timber are left in the north, maybe four or five acres of rainforest. What we are talking about as untouched is of the magnitude of two million acres of virgin rainforest. It is a magnitude that most people listening to me simply cannot comprehend. It is an area that runs from Townsville to Cooktown, and that is only the part we are talking about listing on the World Heritage List. There are more rainforest areas to the north. We are not in a position of having only a few trees left. I commenced my remarks by commenting on the incompetence of this Minister. He held a Press conference on Friday and again his incompetence was demonstrated. He laid down an edict of doubtful legality that logging had to stop, but there was no amplification of it. Are loggers banned from taking out the logs that have already been cut? Are loggers banned from taking the environmentally sound practices of draining the access roads and the snigging tracks which are necessary with the onset of the wet season? No amplification of these points has been given at all. Instead, a $34m-a-year industry which directly employs over 700 Queenslanders and keeps them off the dole and indirectly supports nearly 3,000 has been sacrificed. Senator COULTER(South Australia)(3.41) —We are speaking to the annual report of the former Department of Arts, Heritage and Environment. I make it clear at the beginning of my remarks that I certainly regard this report as a very important one. The reason for my earlier remarks was that I thought we would have more time to consider it before speaking to it, but, as the Opposition has brought it on for debate today, we have to speak to it now. I dissociate myself entirely from the remarks which have been made by the Opposition and support the Government in its moves in the wet tropics. The Department came into existence under a Labor government and, moreover, it came into existence as a result of the activities throughout several decades of conservationists and those whom Senator MacGibbon described as the lunatic fringe. Without that so-called lunatic fringe we would not have had the Department of Arts, Heritage and Environment under the Federal Government nor departments of the environment under State governments. Senator MacGibbon —That is as silly as saying they are signing the INF treaty because of the peace movement. Senator COULTER —That is exactly true. If we did not have a peace movement, we most certainly would have already been obliterated from the face of this planet. If it were left to people such as Senator MacGibbon we would simply go on escalating nuclear weapons. One Hiroshima bomb has been manufactured every 20 minutes since 1945. Senator Walters —Mr Acting Deputy President, I raise a point of order. As we are talking about the Department of Arts, Heritage and Environment and the honourable senator is talking about nuclear disarmament, he is well off the subject. The ACTING DEPUTY PRESIDENT(Senator Burns) —I point out that when Senator Boswell attacked the Labor Party personally and drifted away from the subject, the honourable senator did not raise a point of order. There is no point of order. Senator Boswell —Mr Acting Deputy President, I raise a point of order. I have the highest regard for the position you occupy. I do not like to bring up this matter, but I think you said that I attacked someone personally. The ACTING DEPUTY PRESIDENT —That is not so. I said that you attacked the Labor Party. There is no point of order. Senator COULTER —I make the point that this is precisely what the Opposition did the other night. Senator MacGibbon —Mr Acting Deputy President, I raise a point of order. The question is not whether Senator Boswell attacked someone-- The ACTING DEPUTY PRESIDENT —What is your point of order? Senator MacGibbon —My point of order is that the honourable senator who has the call at the moment is not speaking to the motion before the Chair. He is talking about nuclear disarmament; he is talking about bombs and Hiroshima; he is away with the fairies; he is utterly irrelevant; and he ought to be brought back to the matter before the Chair. The ACTING DEPUTY PRESIDENT — If I had followed that course when Senator MacGibbon was speaking, many points of order would have been raised fairly. There is no point of order. Senator COULTER —This is precisely what the Opposition did the other night when Senator Wood was speaking to prevent him from speaking on a very important subject on which his view just happens to differ from that of the Opposition. Senator Walters —Mr Acting Deputy President, I raise a point of order. No points of order were taken on that occasion when Senator Wood spoke. The ACTING DEPUTY PRESIDENT —What is your point of order now? Senator Walters —My point of order is that the honourable senator is not talking to the report. He must talk to the paper before the Chair. The ACTING DEPUTY PRESIDENT — Order! There is no point of order. Senator COULTER —Let me pick up the issue of lead in petrol. The point I make is that the Department has insufficient power. In my view the Department of the Environment and the Arts, rather than the departments which deal with finance and economics, should be the embracing department. If we do not look after the environment, there will simply be no Australians here in the distant future. The report happens to mention lead in petrol. I draw the Senate's attention to the fact that a recent interim report published from a study in Port Pirie mentions that children growing up in Port Pirie lose several IQ points over the first few years of life and that this will almost certainly continue into later life. The ACTING DEPUTY PRESIDENT — Order! The honourable senator's time has expired. Senator WATSON(Tasmania)(3.46) —I refer to one aspect of the activities of the former Department of Arts, Heritage and Environment which has not been covered today; that is, the interim report of the Commission of Inquiry into the Lemonthyme and Southern Forests. The Senate will recall that that interim report, which was released in the last 10 days, excluded four areas which were being considered by the Helsham inquiry as not having any National Estate significance at all. Two of these areas are in the Southern Forests and two in the Lemonthyme and together they make up 226 hectares of forests. It is worth noting the response of the conservation movement to the release of this interim report. Unfortunately, Mr Alastair Graham, the conservation spokesman, said in the Examiner that all conservationists should reject the inquiry's finding and that the conservation movement would consider orchestrating a protest early in the new year, when logging will resume in these regions. What the Government did was establish an expensive and time-consuming inquiry which is jeopardising jobs in the forest. (Quorum formed) What the Government did was establish an expensive and time-consuming inquiry which is jeopardising the jobs of loggers, sawmillers and others in support of forestry industries. Effectively, this inquiry has locked up over 280,000 hectares of Tasmanian productive forest. When the Tasmanian Government specifically requested Mr Justice Helsham to address this small area of only 226 hectares early in his deliberations, that is what he did. The report recommended to the Federal Government that the area does not have special significance and that logging should be permitted. It was unfortunate to hear Senator Richardson's response that the Government had consistently stated that it would oppose forestry operations in the National Estate until it was satisfied that the National Estate values were protected or that there were no feasible alternatives. I believe that his intervention in this matter has further created a great deal of confusion in relation to this controversy. Despite the fact that the conservationists clamoured for this inquiry, which does not recognise the fact that the area has been logged in the past, they will not accept the report. I think the response of the Minister for the Environment and the Arts (Senator Richardson) indicates that he is certainly not going to accept the interim report either. I think this is somewhat unfortunate. This confirms the views held by the National-Liberal Party coalition that the conservation movement is headed by extreme personalities who will play the game only if the rules give them an overwhelming advantage. In this case when they have not, they have called on the Minister to reject the findings of the inquiry. I believe that if the Government is honourable it will accept the interim report and permit the resumption of forest farming in these four areas. If, however, the Minister, Senator Richardson, and others are more concerned about marginal seats in suburban Melbourne and Sydney and the ill-informed conservation votes in these electorates, it is likely that the inquiry will be ignored entirely for political gain. Senator RICHARDSON(New South Wales-Minister for the Environment and the Arts) —by leave-Senator Boswell referred to me as a `political coward', echoing the words of another person from north of the border. All I can say is that I have been wondering for some time where Senator Boswell's courage has been. I have been waiting for five months for a matter of public importance to be brought on or for a proper debate to be conducted on this matter. The Liberal Party of Australia has been running away from this subject for the last five months for good and obvious reasons. Although Senator Boswell's reasons are harder to find, at least the National Party of Australia has had a position, awful though it may have been. We know why the Liberal Party wants to avoid debate. Today we were given another lesson why. Today we finally got from Senator Puplick a remark, at least, about his views and the Liberal Party's views on World Heritage listing. He said, `There are areas worthy of special protection'. What a magnificent concession on the part of Senator Puplick and the Liberal Party! What we want to know from Senator Puplick is: what areas and what protection? I am told that we have to wait until next August before we know the answers. It is not only the people of north Queensland who do not want to wait until then; the people from all around Australia are also waiting for Senator Puplick and his Party to make a decision in terms of areas protection. I want to know where all the critics have been for the last five months. Senator Boswell —I have been here. Senator RICHARDSON —Senator Boswell could have brought on a matter of public importance on this subject any time he wanted. But he ducked it. As usual, he did not have the courage to get up and have a go. I am told that the scientific evidence is being ignored, that the Government does not have any and that it is making the wrong decision. The reality is that the scientific evidence for World Heritage listing is overwhelming. I have had correspondence from the World Heritage Committee of the International Union for the Conservation of Nature and Natural Resources congratulating us not only on the nominations that we have had but also, even further, on having the foresight to nominate the wet tropics. It is delighted with the nomination. I have absolutely no doubt that over the next 12 months that scientific evidence will stand up to examination. Senator Boswell —Why are they delighted? They haven't even seen the area. Senator RICHARDSON —I might say to Senator Boswell that some of the people dealing with this matter have a bigger clue about it than he does. Senator MacGibbon raised the most important point. He asked why we will not trust Queensland and why we will not deal with the Queensland Department of Forestry that has done such a magnificent job. `After all', he said, `they are logging only 18 per cent of the forests'. In spite of the lack of co-operation we had from the Queensland Government during the last days of the Bjelke-Petersen regime, there has been a ray of light and hope. We have been given access to Forestry Department maps for the first time. At the moment we have an expert team going over those maps. Mr Acting Deputy President, I might tell you that that team's preliminary report is that not just 18 per cent of these forest are available for logging, but over 50 per cent and, we think, closer to 60 per cent. I will give the final figures before the end of the week. The 18 per cent figure has been a lie. Senator Boswell —It has not ended yet because they are logging now. Senator RICHARDSON —They have to be protected because the Government in Queensland which Senator Boswell supports has never done the job. As my colleague John Gayler revealed yesterday, the Queensland Government has even allowed national parks to be logged. Where would it have ended? I will tell honourable senators where it ended. It ended last Friday when we announced the decision. From now on we will not let those rainforests be raped any more. Senator Boswell —They are logging now. The ACTING DEPUTY PRESIDENT —Order, Senator Boswell! Senator RICHARDSON —In regard to the degree of consultation that the people of north Queensland have had, let me say this-- Senator Boswell —They are logging-- The ACTING DEPUTY PRESIDENT —Order! I ask that the Minister please be seated. Senator Boswell, the proceedings are being broadcast. People would like to hear what is being said. Intelligent interjections can add to the debate and even provide some amusement, but please desist from continuing because the Minister cannot be heard. I call the Minister. Senator RICHARDSON —Thank you, Mr Acting Deputy President. It has to be pointed out that for the entire five months I have tried to talk to the Queensland Government and to the timber industry. However, the Queensland Government stood over the timber industry and would not let it come near us. Half of the timber workers sat in the park because they were threatened with the sack if they walked through a door to meet with me. That is a real example of thuggery. I do not mind a debate on thuggery; I will have such a debate with Senator Boswell any time at all. The people of north Queensland will judge us on the basis of the compensation package we deliver next year. On the basis of that compensation package, I have no doubt that not only will the Government be judged kindly but also our decisions will be recognised for what they are-decisions taken with foresight and, in the end, humanity and compassion. That is what this Government is about; that is what we are delivering. The ACTING DEPUTY PRESIDENT — Order! The time for discussion of Government Papers has expired. Senator Bjelke-Petersen —Mr Acting Deputy President, is it possible for this report to be brought up again so that those of us who would like to speak to it are able to do so? The ACTING DEPUTY PRESIDENT —It will be automatically placed on the Notice Paper. Bill received from the House of Representatives. Motion (by Senator Richardson) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Motion (by Senator Richardson) agreed to: That the Order of the Senate of 21 October 1987, relating to the introduction of Bills into the Senate after 26 November 1987, not apply to this Bill. Senator RICHARDSON(New South Wales-Minister for the Environment and the Arts)(3.37) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to validate regulations which were made recently under the Wheat Tax Act 1957. These regulations have been called into question because of a technicality related to the citing of the name of the industry organisation responsible for making a report to the Government prior to regulations being made. The purpose of the regulations is to increase the rate of the tax which is used to fund wheat research. As it now stands the Act refers to the industry body as the Australian Wheatgrowers' Federation whereas a resolution was passed at the October 1986 meeting of that Federation that its name be changed to the Grains Council of Australia. Because the regulations to increase the rate of tax from 40 cents per tonne to 45 cents per tonne which were made in September this year were on the basis of a report and request from the Grains Council of Australia, the Senate Standing Committee on Regulations and Ordinances has suggested that validating legislation is necessary as a matter of urgency to avoid the possibility of disallowance of the regulations. Provision was made in the Statute Law (Miscellaneous Provisions) Bill which was introduced in the Autumn Sittings this year to incorporate the change of name in the Wheat Tax Act 1957. That Bill lapsed with the calling of the July election but the same provision was subsequently included in the Statute Law Bill which has been before Parliament this Sittings. However that amendment would not apply retrospectively to regulations already made. The industry's request, through the Grains Council's report, to increase the rate of tax for the 1987-88 wheat season was in accord with the Government's objective of encouraging rural industries to increase their contribution for research to 0.5% of the industry's GVP by 1990. The Commonwealth's matching contribution is considered each year in the budget context and the 1987-88 estimate took account of the increase in the rate of tax proposed for that season. The proposed amendment has no additional financial implications for the Commonwealth. I commend the Bill to Honourable Senators. Debate (on motion by Senator Lewis) adjourned. Bills received from the House of Representatives. Motion (by Senator Tate) agreed to: That the Bills may proceed without formalities, may be considered together and be now read a first time. Bills read a first time. Senator TATE(Tasmania-Minister for Justice)(3.58) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follow- EXTRADITION BILL 1987 This Bill consolidates and, where necessary, amends Australia's extradition laws. In November 1985 the Attorney-General gave to the Parliament an undertaking that an exhaustive review of the extradition laws would be undertaken to ensure that there were no inconsistencies or problems of implementation. That review has resulted in the preparation of this Bill. As the Bill is substantially a consolidation of existing laws I propose, in this introduction, to concentrate upon changes to the current laws. The Bill also introduces important new principles most of which add to the safeguards afforded to people whose extradition from Australia is sought. It is these new safeguards which I regard as the most important elements of the Bill. The first is a statutory prohibition providing that no person will be extradited from Australia to face charges or to serve a sentence in respect of a purely military offence. By a purely military offence I mean an offence not known to the ordinary criminal law. I do not include in this category offences such as drug trafficking by members of defence forces which can be dealt with either by civilian or military courts. Military offences are offences like insubordination or desertion. Australia will not extradite, nor seek extradition, for such offences. The second new safeguard is to preclude extradition where the death penalty can be imposed for any offence for which extradition is granted. Unless Australia receives an undertaking from the requesting country that either such penalty will not be imposed or if imposed will not be carried out extradition will be refused. A third new safeguard gives effect to the obligation Australia will assume when it accedes to the Convention against Torture or other Cruel, Inhuman or Degrading Treatment or Punishment. The Bill requires refusal of extradition unless the Attorney-General is satisfied that the person will not be subjected to torture. Clause 45 is innovative. It will allow, in certain circumstances, Australia to read the benefits of the provision contained in most of our extradition treaties which permits the Requested State to refuse to extradite its nationals. Many civil law countries are precluded by law from extraditing their nationals. Common law countries, on the other hand, usually extradite because their laws do not generally give extraterritorial jurisdiction over nationals to the courts. The effect has therefore been an unequal application of the treaty obligation in relation to extraditing nationals where the parties to the treaty are a civil law and a common law country. Clause 45 seeks to redress the balance by allowing Australia to prosecute Australian citizens for offences committed overseas in cases where extradition is refused solely on the basis of citizenship and where the requesting country will not extradite its nationals. The courts of the States and Territories are vested with jurisdiction (via the operation of the Judiciary Act) to hear and determine cases where the Attorney-General consents to prosecution. The offence with which the person may be charged in Australia is the offence under the relevant State or Territory law with which he or she could have been charged had the conduct which gave rise to the extradition request occurred in that State or Territory. Australia will thus have the facility in appropriate cases, to try its own citizens for criminal conduct engaged in overseas and any sentence imposed would be served in Australia. Since the second half of the 19th century almost every extradition treaty negotiated has contained a provision which stated that extradition would not be granted for political offences. Originally political offences were offences against the state and those who committed them were often seeking asylum in the country of refuge. Wishing to be able to grant such asylum countries overwhelmingly recognised the concept of asylum by refusing to extradite those who have been referred to as ideologically motivated offenders. A problem then arose as to how to distinguish between types of offences and the motivation of offenders. That problem manifested itself in the decisions of courts determining extradition cases and has led to confusion as to the real meaning of the phrase ``political offence''. The civilized world is now faced with the grave problem of politically motivated terrorists whose crimes are such that they should not find a haven behind the doors of the political offence exception to extradition. The Bill seeks to clarify this difficult area of law by imposing limits on the political offence exception. It does so by excluding from that exception crimes recognised by the international community in multilateral treaties as being extremely serious. The crimes statutorily excluded from the exception are set out in the definition of ``political offence'' in clause 5 of the Bill. They relate to hijacking, safety of aircraft, genocide, torture, the taking of hostages and the protection of internationally protected persons. The Bill also has the effect of allowing treaties to be negotiated which add to the list of exceptions to the political offence exception. Crimes which may be added by way of regulation include crimes recognised in future multilateral conventions to which Australia becomes a party, other crimes against Heads of State or Heads of Government and crimes of violence committed in circumstances which create a collective danger to innocent life. This limitation of the political offence exception represents Australia's clear abhorrence of terrorist conduct and our unwillingness to provide any sort of haven for criminals whose serious or violent crimes are allegedly perpetrated for ideological reasons. The Bill simplifies certain matters which have led the courts into difficulty under the current laws. It does not change the law; it merely expresses in clearer language the concepts contained in the current acts. The major of these changes relate to the determination of duel criminality and the satisfaction of the prima facie evidence or committal for trial tests. Sub-clause 10 (3) makes it clear that the court is to look at all the acts or omissions alleged against the person sought and if any or all of those acts or omissions would have constituted an offence against the relevant law in force in Australia had the conduct occurred in Australia and the minimum penalty test is satisfied in respect of them then the dual criminality test is satisfied. Sub-clauses 11 (4) and (5) operate to unify throughout Australia the test to be applied by courts in determining whether evidence supplied by the requesting country is sufficient to justify the trial of the person sought. These sub-clauses will apply where a request is received from a country with whom Australia has an extradition relationship requiring the production of prima facie evidence that the offence was committed. Since arrangements of this sort were entered into there have been amendments to the laws of some Australian states which have had the effect of changing the test of whether a person should be committed for trial. At least one of these changes requires the magistrate to assess what a hypothetical jury might decide at trial. The effect of the application of this test to an extradition case is to permit the magistrate to postulate as to the potential outcome of a foreign trial and clearly has the effect of abrogating the rule that extradition proceedings should not be determinative of the guilt or innocence of the person sought. The test set out in the Bill requires the magistrate to form the view that the evidence provided would, if uncontroverted, provide sufficient grounds to put the person on trial. In other words, the magistrate must determine that the evidence provided is sufficient to warrant a court inquiry in relation to the offence or alleged offence. This test will be applied throughout Australia and will therefore overcome the problem, for example, of two or more co-conspirators being arrested in different states and having the magistrates coming to different conclusions on the basis of the same evidence. Clause 18 of the Bill recognises that certain people are willing to return to the country seeking their extradition and there to face the processes of the law. This clause therefore re-enacts the provisions relating to consent to surrender which were introduced into Australian law in 1985. Experience over the last two years has shown that a reasonable percentage of extradition requests have come to speedy and satisfactory conclusions by the person sought consenting to his or her surrender. Clause 20 takes the consent concept further by allowing a person sought to consent to being tried on return for offences for which extradition cannot be granted, normally because the sentence which can be imposed falls below the minimum required to make the offence extraditable. The benefit of the ``accessory extradition'' process is that it enables a person to return and stand trial for all outstanding offences for which he has been surrendered. The result may well be concurrent sentences and at the end of the sentence the person will have wiped the slate clean. He will not be faced with the unenviable choice of having either to face new proceedings or to permanently leave the country to which he was extradited. I expect that the provision will be most availed of by people whose extradition is sought by their own country. Clause 20 requires that the requesting country lists all extraditable and non-extraditable offences so as to give the person sought a clear understanding of the charges he can be required to face on return. The operation of the rule of speciality still protects him in respect of any offence not specified in the request for extradition and any offence for which extradition is not granted or not consented to as the case may be. The Bill contains an enhanced system of review and appeal procedures designed to ensure that the removal of decisions under the Bill from administrative review pursuant to the Administrative Review (Judicial Decisions) Act 1977 does not leave a person without recourse to proper review procedures. Although the system of review and appeal in this Bill is similar to that contained in the current Acts it imposes upon requesting countries seeking review new time limits within which applications or appeals must be made. It was only after lengthy deliberation that decisions taken under extradition laws were determined to be decisions which should be removed from the scope of the Judicial Review Act. Fundamentally the decision was forced upon us because fugitives were pursuing both their statutory rights to review under the extradition acts and, often concurrently, their rights under the Judicial Review Act. One case was taken to the Supreme Court of New South Wales on an application for the issue of a writ of habeas corpus at the same time as the full High Court was determining an application under the Administrative Decisions (Judicial Review) Act. Had either application succeeded the result to the fugitive would have been exactly the same. Another case shows that fugitives can, and have, made a habeas corpus application to the Supreme Court of a State, sought removal of those proceedings to the High Court, made application to the Federal Court pursuant to the extradition act and following determination by the Full Federal Court taken the matter back to a single judge of the Federal Court and thence on appeal to the Full Federal Court pursuant to the Judicial Review Act. The enormous cost to the Australian community of a review system which permits unnecessary duplication cannot be justified. Additionally, the lengthy delays caused by duplex review procedures have caused some consternation with Australia's treaty partners. In one case, the proceedings took in excess of 2 years. The Bill therefore establishes rights to review and appeal, all the way to the High Court, and at the same time leaves in place the High Court's original jurisdiction (also exercisable by the Federal Court) to grant relief. Another innovation is to be found in the provisions relating to temporary surrender. I do not anticipate that these provisions will often be used but I can see their great utility where the interests of justice require that a trial be conducted but the operation of extradition laws which bar the surrender of a person serving a prison sentence in the requested country have the effect of postponing that trial for years. Temporary surrender allows a person otherwise unavailable for surrender to be sent to, or received from, another country for trial and then to be returned to finish the first sentence. After that time he or she can be permanently surrendered to serve any sentence imposed at the time of temporary surrender. The provision will be useful in cases involving more than one accused where trials are better conducted concurrently. In this regard I see major drug rings being able to be dealt with effectively. An example of a case where temporary surrender to Australia may have been most useful was the Mr Asia case. I now turn back to the safeguards for a person whose extradition is sought. The Bill requires extradition to be refused in any case where the surrender is sought for the purpose of prosecuting or punishing the person on account of race, religion, nationality or political opinion. It also requires refusal of extradition where any prejudice on any of those grounds may result. Extradition must also be refused if the person has been acquitted, pardoned or has served the sentence imposed in respect of the same conduct where that acquittal, pardon or service was in either Australia or in the requesting country. Where a third country has granted the pardon or has acquitted the person the Attorney-General may refuse to extradite. This reservation to the Attorney-General of the power to consider third country pardons and acquittals has been proved in the international arena to be desirable. I concede that it would, in normal circumstances, be unheard of to surrender a person who had been pardoned. Recent experience suggests, however, that some drug offenders have the means and have sufficient influence to purchase pardons with the very intention of using such a pardon or acquittal to defeat extradition. The Attorney-General would require from the requesting country substantial evidence that he should go behind a pardon or acquittal and question its bona fides and can only foresee so doing in extreme circumstances such as cases where the country purporting to acquit or pardon had no connection with the alleged offence. Australia's model extradition treaty which has formed the basis of all treaties and arrangements negotiated since May 1985 contains other mandatory and discretionary bars to extradition which operate either to directly protect the person sought or to protect Australia's sovereignty. Pursuant to these treaty provisions extradition can be refused if the Attorney-General, acting under clause 22, considers that a treaty prohibition exists or treaty discretion should be exercised. For example no person may be extradited if they either have been or are likely to be dealt with by an extraordinary or ad hoc tribunal or court. Australia will only extradite where the normal courts of the requesting state are to deal with the offender. Nor may extradition be granted for a statute-barred offence. The treaty provisions permitting discretionary refusal operate in any case where Australia would have concurrent jurisdiction and either decides to exercise that jurisdiction or alternatively makes a deliberate decision in the exercise of that jurisdiction not to prosecute. Where the age or health of a person is such as would make surrender totally incompatible with humanitarian considerations most, if not all, modern treaties give a discretion to refuse to surrender and/or to delay surrender. All of these treaty matters are matters which must be considered by the Attorney-General before he issues a warrant for surrender. The Bill recognises that there may be other circumstances where the Attorney-General exercises a discretion not to order surrender. For example, the Attorney-General may refuse surrender when it would be unjust, oppressive or too severe a punishment to extradite. The Bill contains a special part which governs extradition relations with New Zealand. Our close ties with that country have made appropriate a reciprocal regime which bears a very close similarity to the extradition relations between the various Australian States and Territories contained in the Service and Execution of Process Act 1901. Fugitives are moved between Australia and New Zealand by a process based on the backing of warrants by magistrates. The whole process is normally handled by the police in exactly the same way as an interstate extradition would be handled. The Bill's only innovation in this area is to permit temporary surrender to New Zealand. As I stated at the beginning of this speech this legislation is the result of a comprehensive review of the efficacy of the current extradition laws. It embodies much of the wisdom of our courts which has been gleaned from judgments. The law has been rewritten to make it more readable and accessible both for courts, foreign countries, practitioners and fugitives. It seeks to recognise modern problems and to resolve them and in so doing adopts an approach which ensures that a proper balance is struck between the aspirations of the international community in wanting to limit havens for law breakers and the legitimate expectations of persons accused or convicted of crimes that they will be dealt with humanely and in accordance with law. I commend the Bill to the Senate. EXTRADITION (REPEAL AND CONSEQUENTIAL PROVISIONS) BILL 1987 Mr President, this Bill is introduced as a consequence of the introduction of the Extradition Bill 1987. The most significant provisions of this Bill deal with the period of transition which necessarily occurs when one set of laws is replaced by another. Additionally the Bill repeals the Extradition (Foreign States) Act 1966 and the Extradition (Commonwealth Countries) Act 1966 and amends certain acts as a consequence of the introduction of the Extradition Bill 1987. The extradition process has various distinct phases. Three are of particular importance. The first is the arrest and remand of the person sought. The second is the determination by the magistrate of the question whether the person is eligible to be extradited and the third is the determination by the Attorney-General of the question whether the person is actually to be surrendered. This Bill makes the necessary transitional provisions by allowing the repealed acts to continue to operate in any case which has reached the second stage. That is, where the magistrate has already commenced the determination of the issue of what was called ``liability to surrender'', all proceedings for surrender are governed by the repealed acts which are given an extended operation to cater for such cases. In a case where the person sought has been arrested and remanded to await the magistrate's hearing all proceedings and subsequent actions are to be taken under the new legislation. Warrants, notices and other instruments and documents made for the purposes of the former acts are continued in force for the purpose of the new legislation. Arrest warrants issued under the old acts but not yet executed are deemed to have been issued under the new act. The former extradition acts are also given extended operation in respect of persons transiting Australia (having been surrendered by another country to a third country) pursuant to the authority of one of those acts. Those acts also continue to authorise the entry into Australia of persons surrendered to Australia at a time prior to the commencement of the new law and to ensure the continued operation of speciality undertakings given or deemed to have been given by Australia under the 1966 laws. Other operations or effects of the former acts which are preserved relate to the taking of evidence for the purposes of an extradition request by Australia and the disposal of property seized under those acts. In my second reading speech on the Extradition Bill 1987 I explained that a new review and appeal procedure has been put into place and that decisions under the extradition laws were no longer to be reviewable under the Administrative Decisions (Judicial Review) Act 1977. This Bill implements that change and provides for the transition from the old rules to the new. It does so by providing that decisions under the new Act are decisions included in Schedule 1 to the Administrative Decisions (Judicial Review) Act and by maintaining judicial review rights in respect of any decision made prior to the enactment of this Bill and by making decisions made after the enactment of this Bill reviewable only under the review provisions provided in the relevant extradition act. Other than the amendments made to the Administrative Decisions (Judicial Review) Act and the Migration Act all amendments made to the legislation are consequential upon the change of name of legislation. The amendment to the Migration Act has the effect of applying to persons extradited to Australia the provisions of that Act which were put in place by the Mutual Assistance in Criminal Matters (Consequential Amendments) Act 1987. Those provisions ensure that persons brought into Australia become subject to the normal migration procedures once they have been dealt with by the courts for the offence for which extradition was granted. I commend the Bill to the Senate. Debate (on motion by Senator Lewis) adjourned. Message received from the House of Representatives intimating that it had agreed to the Bill with an amendment. Ordered that the consideration of the message in the Committee of the whole be an order of the day for the next day of sitting. Bill returned from the House of Representatives without amendment. Messages received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to the following Bills: Broadcasting Amendment Bill (No. 4) 1987 States Grants (Tertiary Education Assistance) Bill 1987 Motion (by Senator Powell) agreed to: That Business of the Senate, notices of motion Nos 1 and 2, standing in the name of Senator Powell, be postponed until the next day of sitting. Motion (by Senator Lewis) agreed to: That Business of the Senate, notices of motion Nos 3 and 4, standing in the name of Senator Lewis, be postponed until tomorrow. Debate resumed from 10 December, on motion by Senator Ryan: That the Bill be now read a second time. upon which Senator Short had moved by way of amendment: At end of motion, add ``, but the Senate: (a) condemns the Government for its further intrusion into State housing programs involving more administrative duplication and waste; and (b) believes greater responsibility for the provision of housing should rest with the States who are in the best position to address their communities' needs''. (Quorum formed) Senator COULTER(South Australia)(4.03) —The Housing Assistance Amendment Bill 1987 seeks to amend the Housing Assistance Act 1984. In my remarks the other evening I was pointing out that this amendment to the Housing Assistance Act gives the Federal Government the right to allocate money but to withhold some of that allocation to a particular State if that State does not conform with the conditions laid down by the Government, and moreover to re- allocate that money in the housing area to other States which are in conformity with the conditions. I was pointing out that only two months ago, through the States Grants (General Revenue) Amendment Bill and the States (Works and Housing) Assistance Amendment Bill, the Federal Government had reduced the general purpose capital grants to the States by $715m in this year and that this will lead to an estimated fall in funds for the States to spend on capital works such as housing of 56.5 per cent this year compared with last year. In 1986-87 the Commonwealth made $584.7m available to the States to spend on public housing. This year it is expected to provide $385.6m. The point I was making was that we are in very difficult circumstances in relation to housing, and specifically public housing for disadvantaged and other poor groups. This reduction in funding comes at a time when increasing numbers of people are seeking public housing. The poorest Australians are being asked to wait longer for public housing while the Government has, by introducing negative gearing for rental property, encouraged property speculators to reduce their tax liability without necessarily increasing rental stock. The Australian Democrats in general support the Bill and its attempts to shore up the Commonwealth-State Housing Agreement. We do not agree with the Opposition's claim that the Federal Government is intruding too much into State matters by providing conditions on those grants. But we are concerned that, when a certain amount of money is allocated in the area of housing and in view of the shortage of housing, money be spent in that area. We will therefore move amendments in the committee stage which will have that effect. When I spoke to Senator Short on this matter last week and asked him whether he would be prepared to support our amendments because I understand them to be very much in line with what the Opposition has in mind, Senator Short informed me that the Opposition would not be meeting again before this matter came before the Senate and therefore it would not be able to make up its mind on our amendments. It seems to me that our amendments are quite significant in that they conform with the intention which I read in to the amendment by the Liberal Party of Australia and I therefore ask the Opposition to support the Australian Democrats' amendments which do not change anything economically other than to guarantee that the $700m be spent in the housing area. I noticed on AM this morning that Sir Robert Sparkes, who was mentioned in an earlier debate this afternoon, said that Senator John Stone was elected to represent the people of Queensland. I hope that Senator John Stone, together with the other senators on the Opposition side, will make up their minds on this matter. The amendments which we will move seek to change two clauses of the Bill. The amendments state: (1) Page 2, clause 4, proposed new subdivision 11 (1a), leave out paragraphs (c) and (d). (2) Page 3, clause 4, proposed new subsection 11 (1b), leave out all words after paragraph (b), insert ``the Minister shall authorise grants for the purpose referred to in paragraph 6 (1) (a), being grants in the aggregate equal to that amount to States other than that State''. As I have indicated, the effect of these is simply to ensure that all the money allocated to the States for housing in the relevant year is spent. Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(4.09) —I rise to close the second reading debate and thank honourable senators for their contribution to the debate. There have been some criticisms of the Commonwealth's role in providing the States with funding for public housing purposes. Senator Short drew attention to the long waiting lists for public housing throughout the States. I am not going to deny that there are long waiting lists, nor will I deny that our Government would wish to see those waiting lists considerably shorter than they are. But what is very important and ought to go on the record yet again is the massive improvement in the provision of public housing that has been made possible under the Hawke Labor Government's policies as a result of the Commonwealth-State Housing Agreement. The provision of public housing in all States and Territories has increased enormously, and the number of people housed as a consequence has also increased enormously. There has also been a targeting of public housing resources to special groups with particular needs-single persons, young persons, Aboriginal people, and so on. While the Opposition can stand on the sidelines and say that there are unmet needs-and there are-it is very important to recognise that those unmet needs would be very much greater had it not been for the constructive policies of our Government and the support we have received for them from the State authorities. Of course, the Government does not accept the criticism stated in the amendment moved by the Opposition to the motion for the second reading of the Housing Assistance Amendment Bill 1987. The amendments to be moved by the Australian Democrats, which would reduce the flexibility of the Commonwealth in doing the best it possibly can with Commonwealth-State housing funds, are not acceptable either. In conclusion, the achievements of the Hawke Government-the first two administrations and this Administration-in increasing substantially the funds available for public housing programs are outstanding and have not been bettered by any previous government. There are unmet needs; we are conscious of them. We are working co-operatively with the States, looking at innovative ways to bring more finance into the public housing area. We believe that we will see further improvements in the next financial year as a result of these measures. I remind honourable senators that we have now committed ourselves to another triennium of Commonwealth-State housing funds. The base amount guaranteed by the Commonwealth is $700m a year-a fact greeted with great applause by all State governments and State housing authorities, and one which means we will continue to see an improvement in the quality and quantity of public housing available for low income families and individuals throughout Australia. I commend the Bill to the Senate. Question put: That the amendment (Senator Short's) be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 36 —— Majority . . . . . . . . . 6 —— Alston, R. K. R. MacGibbon, D. J.Archer, B. R. Messner, A. J.Baume, Michael Newman, J. M.Baume, Peter Panizza, J. H.Bishop, B. K. Parer, W. R.Bjelke-Petersen, F. I. Puplick, C. J. G.Boswell, R. L. D. Reid, M. E. (Teller)Brownhill, D. G. C. Sheil, G.Calvert, P. H. Short, J. R.Chapman, H. G. P. Stone, J. O.Crichton-Browne, N. A. Tambling, G. E. J.Durack, P. D. Teague, B. C.Hamer, D. J. Vanstone, A. E.Hill, R. M. Walters, M. S.Knowles, S. C. Watson, J. O. W. Aulich, T. G. Haines, J.Black, J. R. Jenkins, J. A.Bolkus, N. Jones, G. N.Burns, B. R. McKiernan, J. P. (Teller)Childs, B. K. McLean, P. A.Coates, J. Macklin, M. J.Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cook, P. F. S. Ray, RobertCooney, B. C. Ryan, S. M.Coulter, J. R. Sanders, N. K.Crowley, R. A. Schacht, C. C.Devereux, J. R. Sibraa, K. W.Devlin, R. Tate, M. C.Evans, Gareth Vallentine, J.Foreman, D. J. Walsh, P. A.Gietzelt, A. T. Wood, W. R.Giles, P. J. Zakharov, A. O. Beahan, M. E. Chaney, F. M.Reynolds, M. E. Messner, A. J.Maguire, G. R. McGauran, J. J.Button, J. N. Patterson, K. C. L.Richardson, G. F. Lewis, A. W. R. Question so resolved in the negative. Original question resolved in the affirmative. Bill read a second time. The Bill. Senator COULTER(South Australia)(4.18) —by leave-I move: (1) Page 2, clause 4, proposed new subsection 11 (1a), leave out paragraphs (c) and (d). (2) Page 3, clause 4, proposed new subsection 11 (1b), leave out all words after paragraph (b), insert ``the Minister shall authorise grants for the purpose referred to in paragraph 6 (1) (a), being grants in the aggregate equal to that amount, to States other than that State''. As I have indicated, the effect of these amendments is to ensure that the money which is allocated to housing goes to housing. I was rather surprised to hear the Special Minister of State and Minister Assisting the Minister for Community Services and Health (Senator Ryan) say a few moments ago that if these amendments were passed, they would have the effect of preventing the Government from being flexible. Surely, the flexibility which the Government seeks is to allocate money for certain purposes and, having done that, to use the flexibility which the Housing Assistance Amendment Bill 1987 gives it to withhold that money from a particular State if certain conditions are not met. The right of the Federal Government to withhold money in this area from a particular State and then simply to resume it to itself-in other words, not to allocate it at all-denies the States the amount of money which they might reasonably expect. A few moments ago the Minister pointed to the good record of the Government in the housing area. To withhold any portion of the money which has been allocated means that in that year some of the money will not be spent on housing, despite the fact that there is an evident need, a need which the Government has admitted. So, rather than denying the Government the flexibility, the effect of the amendments I have moved will guarantee that the Government exercises its responsibility with the appropriate degree of flexibility. The two amendments which I am proposing are linked in that the first amendment, to page 2, clause 4, proposed new sub-section 11 (1a), leaving out paragraphs (c) and (d), removes a section and the second amendment, having given certain powers, inserts the words, `the Minister shall authorise grants for the purpose referred to in paragraph 6 (1a), being grants in the aggregate equal to that amount,' in other words, to the total amount the Government has allocated, `to States other than that State', that is, the State from which grants have been withdrawn because that State has not fulfilled a condition which the Government has laid down. So I recommend these two amendments, which go together, to the Senate and ask that the Minister reconsider the matter. I do not think that the statement she made in relation to flexibility is pertinent to this amendment. On the contrary, the argument runs the other way. Senator RYAN(Australian Capital Territory-Special Minister of State and Minister Assisting the Minister for Community Services and Health)(4.22) —I point out to Senator Coulter that the effect of the Australian Democrats' amendments is to ensure that funds made available under the Commonwealth-State Housing Agreement stay in housing under that program. The provision in the legislation gives a further flexibility to the Commonwealth, which is most desirable and which allows the Commonwealth to re-allocate to another program, if necessary, outside the Commonwealth-State Housing Agreement. The supported accommodation assistance program, which covers emergency accommodation, and the capital program to support emergency accommodation would be the obvious choices. Whilst they are not funded under the Commonwealth-State Housing Agreement, we would like the flexibility to be able to re-allocate funds not used under the Commonwealth-State Housing Agreement for emergency accommodation. So the point that I was making about increased flexibility to the Commonwealth under the Government's proposal stands. I hope that the Democrats will now agree with it. Senator SHORT(Victoria)(4.23) —I want to reply to Senator Coulter's remarks during the second reading debate as to why the Opposition will not support these amendments. There are two reasons. Firstly, insofar as the substance of the amendments is concerned, they are important amendments and require careful consideration. There are arguments both ways in terms of what the Government is proposing to do and what Senator Coulter is proposing to do. I am not sure whether I believe that one should be able to allocate those funds either to any other program or to any other State. I am not sure whether I agree with either the Bill or the amendments in that sense. These amendments were brought to my attention for the first time when Senator Coulter rang me about them at 8.40 p.m. on Thursday night, only an hour and 20 minutes before this debate got under way. I understand that the amendments had been circulated in the Senate chamber earlier that day. It has not been possible for the Opposition to give the amendments the attention they need. They are substantial policy amendments. The Opposition does not do things lightly in terms of policy changes like that. We require appropriate consideration and debate to be given to them. It has not been possible, particularly as the House of Representatives has risen, to do that. There has not been a meeting of the shadow Ministry nor of the Party. It was not possible to arrange it. For that reason alone the Opposition is unable to support the amendments. Perhaps on future occasions when we are considering substantive changes to legislation we will be given the appropriate time to consider these matters, then we could give a more considered response. Question put: That the amendments (Senator Coulter's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 9 Noes . . . . . . . . . . . 55 —— Majority . . . . . . . . . 46 —— Coulter, J. R. Powell, J. F.Haines, J. Sanders, N. K.Jenkins, J. A. Vallentine, J.McLean, P. A. Wood, W. R.Macklin, M. J. (Teller) Alston, R. K. R. Hamer, D. J.Archer, B. R. Hill, R. M.Aulich, T. G. Jones, G. N.Baume, Michael Knowles, S. C.Baume, Peter Lewis, A. W. R.Bishop, B. K. MacGibbon, D. J.Bjelke-Petersen, F. I. McKiernan, J. P.Black, J. R. Messner, A. J.Bolkus, N. Morris, J. J.Boswell, R. L. D. Newman, J. M,Brownhill, D. G. C. Panizza, J. H.Burns, B. R. Parer, W. R.Calvert, P. H. Puplick, C. J. G.Chapman, H. G. P. Ray, RobertChilds, B. K. Reid, M. E. (Teller)Coates, J. Ryan, S. M.Collins, R. L. Schacht, C. C.Colston, M. A. Sheil, G.Cook, P. F. S. Short, J. R.Cooney, B. C. Stone, J. O.Crichton-Browne, N. A. Tambling, G. E. J.Crowley, R. A. Tate, M. C.Devereux, J. R. Teague, B. C.Devlin, R. Vanstone, A. E.Durack, P. D. Walters, M. S.Foreman, D. J. Watson, J. O. W.Gietzelt, A. T. Zakharov, A. O.Giles, P. J. Question so resolved in the negative. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Ryan) read a third time. Debate resumed from 3 November, on motion by Senator Gareth Evans: That the Bills be now read a second time. Senator DURACK(Western Australia)(4.34) —The Opposition continues to oppose the Petroleum Resource Rent Tax Assessment Bill 1987, the Petroleum Resource Rent Tax Bill 1987, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill 1987 and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill 1987, which introduce a petroleum resource rent tax on oil producers in the off-shore areas of Australia, other than the existing oilfields of Bass Strait in what are known as the off-shore green field areas. The reasons for our opposition to this new tax are set out fully in the speech I made in the Senate on behalf of the Opposition on 5 May. I do not propose at this stage to go over the whole of that ground again. On 5 May we had a very full debate in the Senate, in which a number of honourable senators took part. The debate, however, was adjourned by the Government and was not reintroduced. Because of the stance the Opposition and the Australian Democrats took, it was obvious that the legislation would be defeated. The Government took the legislation off the Notice Paper with the calling of the double dissolution in July this year. The Government has now reintroduced these Bills in exactly the same form as they were in in May. I sincerely hope that the Democrats will not be bought off with the 30 pieces of silver which the Government has offered them as token money for solar research and that they will maintain their strong opposition to this measure which was so clearly stated by Senator Sanders on their behalf in a debate in this chamber in May. I have some concern about whether the Democrats will maintain that opposition to the legislation in the light of the offer the Government has made to them in the form of money for solar energy research. Successive governments have spent money on solar energy research either through the National Energy Research, Development and Demonstration Council program or through the Commonwealth Scientific and Industrial Research Organisation. There has also been a good deal of research done in the States on solar energy. I have not seen the details of what the Government has offered. Is it to be a net sum of, reputedly, $5m? Is it to be $5m per annum or over a period of time or what? In any event, the Government seems to be making only a token gesture in support of alternative energy research. The Opposition is not opposed, by any means, to further research being done on alternative energy resources or on the development of technology for the use of solar energy in various forms. We certainly support that. We supported that research when we were in government. But the Opposition questions the practicality of replacing the existing energy resources, such as oil, coal and uranium, with alternative renewable energy resources in the immediate or even in the foreseeable future. Desirable as it may be that, in due course, we replace our existing sources of energy-it is a world-wide problem; it is not confined to Australia, and it is being addressed world-wide-nevertheless, the opinion at the moment is that despite the advances being made with solar energy technology, a recent example of which is the solar-powered cars which made the historic trip from north to south across Australia, the practicality of resorting to alternative forms of energy in a major way is remote at this stage and will remain so until the end of this century and maybe beyond. Although we agree fully with the need to pursue and develop alternative and renewable energy resources-resources that do not involve the serious problems of the traditional resources-we are faced in the immediate future with meeting the growing energy demands in a growing economy and with providing, in particular, electricity by traditional means. Here we are talking about the need, as far as possible, for Australian self-sufficiency in oil. Even with the possible development of alternative sources of energy for the production of electricity, there is clearly a need for oil and petroleum for transport needs. Even though oil may have been largely replaced by coal and uranium for the production of electricity around the world, it is clearly required and will be required for a long time yet as a means of fuelling transportation. That is of vast importance to Australia in particular because of our great distances and the dwindling of our existing reserves of oil. Only last week Esso Australia Ltd, a partner with Broken Hill Proprietary Co. Ltd (BHP) in Bass Strait, the only really major oil field in Australia, downgraded Australia's crude oil discovery potential. A news release from Esso in Sydney on Sunday 6 December stated: . . . announced a downward revision of approximately 25 per cent for Australia's crude oil discovery potential but forecast there are more reserves yet to be found than have been produced to date. However, because it appears unlikely there will be more very large oil fields discovered, the additional reserves will be in smaller pools, harder and more expensive to find. It is quite clear now, not only from that announcement but also from the experience of the oil exploration industry in Australia in recent years, that the prospect of Australia finding another oil field of the magnitude, or even the approximate magnitude, of our Bass Strait oil field is becoming very unlikely. The efforts of recent years have shown that Australia does not enjoy a great prospectivity for oil either on-shore or off-shore. By common consent, we have one of the lowest prospects for the discovery of oil anywhere in the world. As a result of the collapse of oil prices in 1986 and the accompanying severe decline in oil exploration in Australia during that time, this problem is becoming even more acute. In these circumstances, one would have thought that the policy of a responsible Federal government would be to encourage, as much as it possibly could, exploration for a product that is so desperately required in Australia. The former Department of Resources and Energy forecast that, in the absence of any further oil discoveries, by 1992-93 we will have to be importing oil to the tune of some $3 billion-a further $3 billion drain on our current account. By the year 2000, if that continues, that cost will be of the order of $4 1/2 billion. Statements made by Australian oil explorers and producers, in particular Esso and BHP, and the many other smaller companies in the business, show clearly that there is a prospect, although it is a low one, of finding smaller amounts of oil. They may not be of the order of the Bass Strait fields, but there are smaller pools around the country, and small pools are certainly of great importance when one considers the problem which is staring us in the face and which will get worse long before the year 2000, which is only 12 years away. Therefore, if we can even find smaller oil fields than Bass Strait over that period, it will help to tide us over a critical period for Australia's overseas current account. I do not need to labour the point about the need not only for improving exports but also for saving imports. It has been well and truly brought home to us over the last year or two. The Government should, in these circumstances, be following a policy of incentive for exploration, for companies to go out and find some of the oil that is obviously still to be found in Australia, both on-shore and off-shore, but particularly off-shore. In 1985, 49 off-shore wells were drilled, but it is estimated that in 1987 only 12 will be drilled. Although the picture has improved somewhat on-shore, there is a pretty wide consensus within the industry that it is within the off-shore, not the on-shore, fields that we are likely to find the larger pools, despite the extra cost and the extra difficulties of discovery. This Government, instead of encouraging and giving greater incentives to oil exploration, has placed further disincentives on oil companies. One might have thought that, if it was going to create more incentives, it would at least not create disincentives and put greater burdens on the exploration industry. That is quite the reverse of what has happened in other parts of the world, particularly in the United States of America, Canada and the United Kingdom in the past 12 months. Those countries have been reacting to the problem experienced by their oil industries as well as ours, namely, the virtual halving of oil prices. Naturally, that in itself has been a great disincentive. In those countries there has been some reduction in the tax regimes, the secondary taxes as they are generally called, on the oil exploration and production industries. Yet in Australia the Government has not only imposed new secondary taxes on the production of oil, particularly off-shore, such as that which is known as the new oil tax, but also introduced other taxes. I refer to general taxes such as the capital gains tax, which has had an effect on the farm-in, farm-out arrangements, and the fringe benefits tax. It has also now introduced the resource rent tax, something that was announced as Government policy three years ago. We have a climate in which there have been great disincentives for the oil industry not only in the lack of prospectivity, with which I have already dealt, but also in the great fall in the price of oil which occurred in 1986 and which continues. Indeed, there could be a further fall in the price of oil as a result of the problems currently within the Organisation of Petroleum Exporting Countries. So in a situation where these sorts of secondary taxes were introduced on oil producers around the world-and in Australia-in the 1970s in the context of the price of oil being $US30 a barrel and sometimes higher, this Government is proposing to introduce another secondary tax in the shape of the resource rent tax when the price of oil is around $US17 a barrel. The price could fall further, as it did during 1986. It is all very well for the Minister for Primary Industries and Energy, Mr Kerin, to talk about the price of oil being the major factor: it is an important factor but there are other factors. It is difficult to find oil in Australia and a producer has to look to the after tax profit, not simply the total derived income from the resource. It is in this field of producer realisation that this series of Government taxes, and the new resource rent tax, are such an important factor in the decision to explore. The Opposition has consistently opposed the Government's proposals for this new tax. I emphasise that it is a new tax. It is a replacement in the green fields, the off-shore areas, for the existing tax regime; it is not on top of it. But it is on top of a number of other taxes that I have already mentioned and, of course, on top of the ordinary company tax, which has been increased by this Government recently. In a climate in which the Government should be giving further incentives to Australian oil producers, it is proposing to create further burdens for them, further disincentives, in the shape of a new taxation regime by introducing this legislation. As I have said, the Opposition is opposed to this legislation. In the event that it is passed, the Opposition will propose to reduce the incidence of the tax. Although this tax is said to be a profits based tax, it deals only with expenditures on a particular permit area where production is occurring under a production licence. Any exploration expenditures outside that permit area virtually will not be deductible against this resource rent tax. Apart from the tax, that is a great disincentive because, as I have said, Australia has low productivity for exploration. Exploration effort throughout all of the off-shore areas of Australia is desirable; the deduction should not be confined only to the area where a company is lucky enough to find oil on a particular permit area. And a great deal of luck in involved in many cases. A company should have the incentive to find oil by being given the benefit of some deduction for the area it has explored. So, for all these reasons, I reiterate the Opposition's total rejection of this legislation. As I said, in the event that the legislation is not totally rejected in the Senate, despite our continuing opposition to these proposals, we hope that the Senate will give consideration to amendments to alleviate to some extent the incidence of this tax. This is an alternative proposal the Opposition will put forward. Senator SANDERS(Tasmania)(4.56) —I think it should be noted that this is the first time in my presence in the Senate that Senator Durack has not spoken for his full time. I do not know what this indicates. The Australian Democrats support the resource rental tax: it is our policy to support such taxes. We believe that the companies involved-the mining companies, the oil companies-are using the people's resource. They do not often recognise that fact; they choose not to recognise it. After all, it is not theirs; it belongs to the people of Australia and the people of Australia should benefit from it far more than they do. All the loopholes, rorts and devious machinations of the oil companies and mining companies to avoid paying taxes are well known and I think it is good that the Government is finally starting to make sure that the people of Australia benefit as much as the oil companies do. We wanted more for the people in this legislation. The last time it was around we felt that the people were not getting a good enough deal and also that the future was not being looked after. We were opposed to the legislation. We support it now. We feel that the people of Australia-especially the people of future Australia-are being looked after by the Government. I suppose one reason that Senator Durack did not take his full half hour is that the oil companies are not all that opposed to the legislation. After all, the Hawke conservative Government is not really going to do anything to disadvantage the oil companies or any of its major supporters-Mr Murdoch, Mr Bond and Mr Packer. So we can take it as read that the oil companies are not really going to be disadvantaged by this legislation as much as they would say. They can live with it. I will give a quote further down the line which shows that they can live with it. The position will be a little harder for them than it has been and they do not like it. However, we support the legislation because the people will get a little better deal. The Liberals are grandstanding over this because they shot themselves in the foot in the first place. Really, what they are involved in is a squabble between Esso and Exxon and all that, the Americans, and Broken Hill Proprietary Co. Ltd (BHP), the `Big Australian', is caught in the middle. BHP does want this resource rental tax because the Jabiru field was set up on the basis of the resource rental tax being initiated. If the resource rental tax system is not introduced, BHP immediately will be up for a whole bunch of excise back taxes. Of course, with the resource rental tax this expenditure is pushed on down the line a bit and so BHP is for it. So BHP wants it; Esso does not want it. BHP has been screaming to me about deductibility. It wants deductibility. It has deductibility applicable on its company tax. It is not being hurt here; it does not need it. I think it is screaming as a knee-jerk reaction, as it always does. It wants 1,000 per cent of the cake-it wants everything and then some. It is still getting a pretty good slice of the cake but the Australian people are getting some as well. What about the campaign of the oil companies? Is it reasonable? The Australian Petroleum Exploration Association (APEA) runs advertisements which state that Australia is running out of oil. We are told in a full page advertisement in the Canberra Times of 27 April 1987, showing a picture of an oil drum, that Australia is running out of oil. This is supposed to scare us into allowing the oil companies to drill for more oil and to give them even more concessions than we already give them. What utter rubbish! They already have the moon. What do they want? Another advertisement in the Australian Financial Review dated Friday, 6 March says, `Where is the incentive to find more oil?'. Implicit in all this is the belief that somehow, if we merely drill for more oil and find it all our problems will be solved. The earth is made of oil, all we have to do is go out and drill for it. What utter rubbish! Another assumption is made by the Australian Petroleum Exploration Association. A letter on this matter was addressed to the Australian Democrats but APEA turned it into a media statement because we did not agree with Keith Orchison, who wrote it. It became a public letter and I will now quote from it. I think that it indicates the Association's single minded approach to the whole energy question. It says: APEA supports the view that the self-sufficiency problem can and should be addressed in part by recourse by substituting LPG and NGV for gasoline by conversion of natural gas to liquid fuels . . . Okay, maybe, perhaps we can push it a little along that line. But what about something else that has been concerning everyone lately? This is directly related to the use of, exploration for and production of oil-the greenhouse effect. Where does this guy live? Does he live on earth? Apparently he does, but he does not take any responsibility for living on earth. He says that we should completely convert all our fossil fuels to carbon dioxide. That would be his approach. What would happen if we did that? We have just had the Greenhouse '87 conference in Melbourne and scientists all agreed that the result of burning fossil fuels is an increase in carbon dioxide and a warming up of the earth's atmosphere. There was no disagreement about that; there was a bit of disagreement over what year this might occur but there was no disagreement at all about the fact that burning fossil fuels will change our climate. One would think that a moderately intelligent person-even an honourable senator in this place-would take some responsibility for the future, but Mr Keith Orchison does not and the Australian Petroleum Exploration Association does not. Apparently Senator Durack does not; he is not concerned about the greenhouse effect, he wants to drill for and burn more oil. What do the scientists say? They say that there will be a massive increase in fire danger, there will be floods and major portions of the coastal cities will be flooded. The list goes on and on. This is not pie in the sky stuff, it is scientific reality. Scientists have been mentioning this for 20 years. We have had the troglodytes saying-as troglodytes do in this Senate-`Oh, it will never happen'. Well it may not happen in the lifetime of the geriatric people around here, but it will happen and it cannot be ignored. One cannot just brush it under the table. Often honourable senators in this chamber try to negate an argument by personal abuse. That does not work in the real world. This is not a section of the real world. We live in a lucky country. An interesting article appeared in the Petroleum Gazette, Volume 25 in the autumn of this year. It was written by G. G. Harvey, who is General Manager of BP Petroleum Development Australia Pty Ltd. It is an extract from his paper to the Bureau of Mineral Resources' 1987 petroleum and minerals review conference in Canberra on 18 March. He asks, `Can Australia regain its status as a lucky country?'. He says that we are a lucky country in oil but he goes on to say: Our view, shared by many, has put a far lower estimate on the cost of alternative energy supplies than those we made in the 1970s. Here is a man in the oil industry who says that alternative energy may be more economically attractive than he thought. So there are some thinkers in the oil industry after all. He goes on with this message for Australia: BP estimates that Australia's yet to be discovered reserves are very low, a little more than 0.5 per cent of the NCWs, 300 billion barrels of reserves. As Senator Durack said and as Mr Harvey points out, we do not have a lot of oil here anyway. The implication for this would be: why are we spending all this money looking for a dwindling oil resource when if we put the same amount of money into renewables we could get a lot more for our bucks? Mr Harvey makes another interesting comment. While Senator Durack was screaming about the poor benighted oil companies which are being so mistreated by the Government under the tax regime, Mr Harvey of BP says: On the relative attractiveness of the tax regime, Australia appears to be moving in the right direction. Here is a major oil executive saying that the Government is doing the right thing. He mentioned renewables as I did and as even Senator Durack did. Why are renewables not being utilised? Is it because they are uneconomic? No, in fact they are being utilised in many parts of the world. Is the technology not developed? Do we need more research? No, we do not. The technology is very well developed in many areas. We have seen the Press reports on the Sunraycer which went from Darwin to Adelaide on solar power at an average speed of 66.92 kilometres an hour. That is pretty good for anybody. It shows that the technology is developed if only we had the will to use it. A report in the Australian on 7 October 1987 was headed, `Solar power shines brightest among alternative sources'; another in the Canberra Times on 25 October 1987 was entitled, `Harnessing the sun and the wind: we have the power'. The media in general are full of articles about the technology, how we have it and how it will work. Why is it not implemented? When I was assistant professor of geography at the University of California at Santa Barbara, I invited a vice-president of Exxon Oil to speak to my class about environmental pollution. One of the kids asked me a question. He said, `What about solar power?'. This guy was an American; unlike Australian oil executives who want to laugh all the way to the bank and be loved while they are doing it, the Americans do not mind making a lot of money and being hated. Therefore, he was willing to tell the truth. He said, `Look, if we could throw a blanket around the sun and drill a hole in it we would be into solar tomorrow. We are only interested in something on which we can have a vertical integrated system. We explore for it, we pull it out of the ground, refine it and sell it. We can control all aspects of the marketing of it. That is the way you make a buck; that is the American way'. That is true, he was being honest. The reason business does not like renewables is that it cannot control the source. The wind and the sun are free and business is not into it. These people will not get into it until they have to-not until they have burned their last bit of oil and coal. Then honourable senators can be sure that solar will come on and it will be their prime concern. What about the various technologies? What about wind? I have just returned from a trip to Europe and in the Copenhagen Airport terminal there was a closed circuit television showing commercials. Why anybody would want to sit around and watch closed circuit commercials I have no idea, but the point was that wind power was being advertised as one of the products of Danish industry-off the shelf wind power. It can and does work. Two year ago I went to Hawaii and I sought out the wind farms on the big island. I found 250 25-kilowatt Jacobs going around and I thought that was really something. I was very impressed and I told the people who manage the field that I was quite impressed. They told me that this was nothing, that I should go to San Gorgonio Pass in California where there are 1,000 aero generators. So I went there. I crested the rise and looked out over the valley and there they were-lots and lots of windmills, I do not know how many. I went to see the guy in charge of the Southern California Edison Wind Project who had aero generators rating from 2 megawatts to about 50 kilowatts. He was a redneck-he had a hard hat and a red neck. He was the sort of person who in Tasmania would have a bumper sticker that says, `Fertilise the south west, bulldoze a greenie'. This guy in California said, `Look, wind power-there is nothing to stop it. It is a goer. The only thing that can stop it is nuclear war'. In America very many people are concerned, and rightly so, about nuclear war. In 1985, Southern California Edison had produced 662 gigawatt hours of electricity from the wind. That is about 10 per cent of total Tasmanian production, and we produce a lot of electricity in Tasmania. This year, in 1987, it has installed 1,000 megawatts in wind. I said, `Gee, that is good. How many windmills do you have around here?' A representative of the project said, `I think there are 1,500, but I am not sure because they are going in at such a rate. But we do not have many. You should go out to Alta Mont Pass where there are over 4,000'. I did not get up there. The point I am making is that technology works. Southern California Edison, which is a big business, is very convinced that it works and it has invested in it. In fact, it is a viable technology right now. We do not need to develop the technology; we do not need more research; we need the will to implement it. What about the local situation? What happens here with wind power? I think it is interesting to examine the response of our own Hydro-Electric Commission. How did it respond to wind power? In the first place I must point out that Russ Ashton, who is no longer the Commissioner, is a civil engineer. I think probably one of the reasons why we do not have renewable energy is that many of the engineers in positions of high power are civil engineers who are used to pouring concrete. They are not mechanical or electrical engineers; they are used to big, heavy duty projects. Russ Ashton said that wind would not work, that the windmills would all fall down, and the reason was that they had 300-tonne blades. Mr Ashton explained that these windmill blades would weigh as much as 300 tonnes. If people build windmill blades out of reinforced concrete I suppose that they will have pretty heavy blades. This is the type of uneducated response we get from a civil engineer bureaucrat. What has been done with the wind energy section report on the Franklin Dam alternatives? In order to knock it down the wind farm was to be located in south-west Tasmania, not in the windiest part which is north-western Tasmania. If it is to be located in that wilderness area the wilderness will have to be knocked down. It would cost $25m for site development and the knocking down of that area. It is also on the other side of Macquarie Harbour from the road so a bridge would have to be built across Macquarie Harbour at a cost of $42m. Because it is so isolated $9m would have to be paid for a camp. But the biggest cruncher of all is that here people were talking about 159 megawatts of wind power. They wanted to put in 300 megawatts of hydro back-up; in other words, twice as much hydro back-up as wind power, and that was going to cost $96m. That was the bureaucratic approach to wind power which is absolute and utter rubbish. It is unscientific, it is unprofessional and it is intellectually dishonest. Bureaucrats, by their very nature, are conservative. They simply do not want to face anything new. They can deal with coal, and oil has been around for long enough so they can deal with that. So generally they are quite conservative. The other thing about bureaucrats is that there are job interchanges amongst them. Many bureaucrats go back and forth between industry and government. I guess in the jargon it is called going native when a bureaucrat actually takes on the role of industry more than he takes on the responsibility of the people of Australia. But there is certainly a lot of interchange and I suppose that that is understandable. If someone is an expert in a field and he works in industry and the Government needs this expertise that person will be hired by the Government. So there is a lot of commitment to existing technologies in that area. I think one of the best indications of that is to be found in the 10 volumes of Energy 2000 which was put out by the former Department of Resources and Energy. There are a number of sections dealing with synthetic fuels, natural gas, coal, et cetera but the thinnest, scrawniest volume, which deals with renewable energy, states: The major impediment facing most renewables is their intrinsic lack of economic viability. People in the former Department of Resources and Energy never talked to Southern California Edison, to the Danes or to the Hawaiians. They have just come up with this because it is the traditional way of the bureaucracy responding to renewable energy. What does the former Department say about the future? It is even more grim than that. It states under the heading `Overall Outlook for Renewable Energy': Forecasts of this nature are inherently uncertain- that is true- Nevertheless there would seem to be no fundamental urgency for a significant increase in renewables use in Australia to the year 2000. With the bureaucrats not pushing it, with the former Department not pushing it, with the politicians not pushing it and with industry not pushing it, it is no wonder that we do not have very much in the way of renewables. Why do politicians not like renewable energy? Generally, because politicians have short attention spans and they do not want to understand a system put together from a bunch of little pieces, which is what renewable energy is. Renewable energy involves a diverse contribution to the energy problem. Politicians like things that appear simple. Politicians love nuclear power because they can go to a big building and throw a switch and, wow, it all lights up. They do not care that it is the world's most complicated technology and it could not possibly exist without a whole lot of subsidies-which, incidentally, renewables do not get; they want a nice big picture of them in the paper throwing a switch on something that goes whizz, bang and looks really great. The idea of actually going out into a cow pasture and turning on a switch of a windmill, which is one of thousands scattered around the place, simply does not appeal to politicians. They cannot grasp the significance of it anyway. What do we need to do? We need to institute a new commitment to renewable resources. Senator McLean —Hear, hear! Senator SANDERS —It is about time. I thought the honourable senator was asleep. The rabble opposite has been carrying on and I did not get any protection from the Chair. But I am glad that my Democrat colleagues have now entered the fray. We certainly need a new commitment to renewables because the amount of funding is decreasing all the time. Let me quote from an article in the Canberra Times dated 13 November 1987 which is headed, `$2.1m for research into renewable energy' quotes a spokeswoman for the Minister for Resources (Mr Peter Morris) as saying: . . . the amount being funded for solar and other renewable energy forms had decreased, one reason being that the Government had received 25 per cent fewer applications this year. It has decreased in real terms over the years and there are two reasons why nobody is making applications. The first reason is that they know that they will get knocked back if they are still in the business of doing renewable research any- way and the second reason is that a lot of them have simply left the field because the money has been so slow in coming. I am afraid that that is a reflection both on the Government and on the National Energy Research, Development and Demonstration Council (NERDDC), which was set up to manage funds for renewable energy. Unfortunately, most of its money goes into coal, synthetic fuels, and various big hit, high technologies. Very few of its priorities are for the soft options-wind and solar energies-although it spends a good deal on conservation, for which I applaud it. It is true that it is far more economical to save energy rather than producing it in any way. NERDDC has three priority levels: high, which gets the most money; medium, which gets some money; and low, which gets very little money. The high priority level involves mainly fossil fuels along with conservation. Solar energy is only a medium priority and electric vehicles are a low priority. Of course, both of these should be promoted to the high priorities. We have seen what electric vehicles do in running from Darwin to Adelaide on solar power alone. But the new magnequench motor that General Motors has developed for the Sunraycer is a very efficient motor. It is a new technology which has not been seen before. It improves the efficiency of electric vehicles and it has definite application in commuter vehicles, so it should be a high priority. Wave, tidal, ocean, thermal, geothermal and biomass are now low, and they should be at least medium priorities. Solar's share of the general round of grants should very definitely rise. NERDDC's image amongst the solar community is very poor. People with good solar credentials should be making the decisions on funding. NERDDC needs new blood. We should also take a look at energy accounting methods. The Energy 2000 paper says that renewables supply 6.3 per cent of Australian energy. But if we look at it in the light of the real situation, renewables supply more than 99.99 per cent of energy in Australia. That may sound like a lot, but honourable senators have to remember that renewables include photosynthesis. All our agricultural produce-I know this interests Madam Acting Deputy President-is grown by sun power. Honourable senators should consider the amount of energy it takes to run an electric clothes drier versus hanging clothes on the line. That is also solar power. I bet Senator Richardson never thought of that. He looks stunned by the revelation. Senator Richardson —I will have to concede, Senator Sanders, that I had not thought of that. Senator SANDERS —Yes. Solar power, in fact, does work; it works every day and we take it for granted. I think it is time we appreciated it. What are we going to do? One thing we can do is set up a fund to fill the gaps that NERDDC is now not addressing to put a new life, a new impetus into renewable energy demonstration in Australia. We do not really need any more research; the research exists. NERDDC does fund research. We actually need community programs to get the technology from the laboratory into the field to where it is needed. We should also have a mechanism whereby the community can feed back to industry and government; we should set up communication channels so that we can get renewables working in Australia. It is not happening at the moment. We need liaison; we need this knowledge from the community to be put to use. The Government has agreed to put a flat $5m into a trust account which, as I understand it, will be available on 1 July 1988. It is hoped that applications for these funds will start coming in on 1 January 1988. The funds will be used to take on areas that NERDDC is not now looking at and will not be used merely to offset any funds that NERDDC is now getting; in other words, NERDDC's funding should be increased. It should not be decreased in any way because of the new trust fund which is being set up. The whole point of all this is that we are running out of oil. We do have a problem and it is time that we face it now. It is as if we are driving along a road and there is a sign ahead that says, `Bridge out'. We look down and see that there is no bridge across the river. At the moment we have our feet on the accelerator; we are just going full tilt for that bridgeless gap. It makes perfectly good sense, if we are intelligent beings-I hope that we, as politicians, can exert some leadership here, not just keep our feet on the accelerator and head over the precipice-to look ahead, exert some leadership and do something which will benefit the country not just now, but for the future. Everyone agrees that the future at some time will be solar. Our entire society will work on renewable energy. It has to come sooner or later, why not sooner? Why not avoid the difficulties? Why not stop before we hit that precipice, before we hit that gap? It makes good sense. It is time to renew our commitment to energy independence and common sense. The Government has taken a major step towards facing the future with the resource rent tax and it has rekindled interest in renewables. Our kids will be grateful. Senator PARER(Queensland)(5.24) —In view of that recent speech, I have to read the name of the main Bill in this package of allied Bills again-it is the Petroleum Resource Rent Tax Assessment Bill 1987. When listening to Senator Sanders, one can half understand what he means by wind power. The best description one could give of him is that he really is the Flintstone of the Senate. He would have us going back to pedalling motor cars and I do not know how he will run an aeroplane with a windmill. Senator Sanders has ignored the fact that we are talking about liquid fuels, not coal, uranium or solar power which can be used to generate electricity. One can excuse the Australian Labor Party for pursuing its resource rent tax (RRT) because, after all, it is part of its platform. I think this is the second or third time that we have spoken about this very matter. I know that the industry hoped for a long time that through discussion it would be able to get the Government to review the approach it would take, but it neglected the fact that it was part of its platform and that is what it is implementing. The position taken by Senator Sanders was totally unintelligible. I only hope that Senator Macklin, who will follow me, will add some sensibility to the approach taken by the Australian Democrats, which I think is beyond everyone else's comprehension. The Treasurer (Mr Keating) is very fond of telling us how simple and equitable the taxation system is but, in fact, the resource rent tax is a discriminatory tax. It is a secondary tax which is a disincentive to exploration. Every Australian must know that the crude oil industry is the most heavily taxed industry in Australia. It pays about 69c in the dollar in taxation. It is not the companies that are paying this tax, it is the people of Australia. More important is the disincentive of these charges to go out and find more oil. I will come to that later. I will give some idea of the burden the industry bears in regard to the very savage tax regime. It pays the normal corporate rate of tax of 49 per cent. It has additional secondary taxes on on-shore and established off-shore areas where the Government royalty is 10 per cent to 12.5 per cent of well head value. There is also an excise on crude oil and certain off-shore liquid petroleum gas production. We will have a resource rent tax for off-shore green fields areas. We have recently passed-it was opposed by the Liberal-National Party Opposition-cash bonus bidding legislation which applies to so-called highly prospective acreages in Australia. I think everyone is aware of the fact that `highly prospective' in Australia means very low prospective in most other countries which are oil provinces throughout the world. On top of that is the 20c a litre fuel excise tax which is paid by the motorist. The very thing that the Treasurer of this country talked about-the tax man at the petrol bowser-continues. The so-called windfall gains from rising oil prices in the late 1970s which triggered the introduction of secondary taxes on crude oil production have disappeared, but the taxes remain. It must also be remembered that the aim of those particular taxes was so that people would conserve liquid fuels. Most people have forgotten that back in the early 1960s there was great concern amongst the then Government of Australia that we would have an enormous import bill to pay in the future unless oil was discovered in Australia. More importantly, I suppose that we would be relying on other countries for the supply of essential liquid fuels for machinery production. During the oil shocks of the 1970s the price of Saudi Arabian light crude was in excess of $US30 a barrel. By comparison, the latest figures show that oil is now just $US17 a barrel. In real terms, adjusted for inflation, it is no higher than it was in 1973-74. The devaluation of the dollar had something to do with that. The Government refuses to give up its huge revenues from the oil industry despite the clear evidence that the industry cannot afford to pay it. In the long run it is not the oil companies or the oil industry that will suffer, it is the people of Australia. What are the effects of the resource rent tax? The major effect is a deterrent to investment in the industry. Despite the oil price collapse, the Government continues to use the industry as a milch cow, blissfully ignoring the disastrous effects its punitive tax regime is having on the industry and Australia's economy in general. The resource rent tax and other secondary taxes, such as cash bonus bidding, are deterring oil companies from exploration at a time when there has never been a greater need to find more oil. Australia is running out of oil. We are consuming it much faster than we can find it. In 1985 we were around 100 per cent self-sufficient in oil, but existing reserves are now expected to supply only 25 per cent of demand by the year 2000. What does this mean? It means that if by the year 2000 we are to be only 50 per cent self-sufficient, we will need to discover, the Government has estimated, another 1.8 billion barrels between now and the year 2000. The Australian petroleum export industry has calculated that $26 billion, more than $2 billion a year, would have to be spent on oil exploration and 1,400 wildcat wells would have to be drilled if we are to achieve 50 per cent self-sufficiency. Instead of exploration increasing in Australia, the reverse is happening. I again point out that it is not a matter of people such as Senator Sanders saying, `Let us go for solar; let us go for the renewable resources'. We are talking about liquid fuels. We are talking not about fuels to run power stations but fuels to run motor cars and jet aeroplanes. I do not see any alternative other than liquid fuels. I agree that there are renewable fuels-and they have been discussed-such as cassava and sugarcane. However, they are well down the track. We can also convert coal to oil-at a price. As I have mentioned, the number of wildcat wells drilled has dropped dramatically from 47 wells in 1983 to about 11 this year. As at the end of September, only two off-shore drilling vessels were active and three were lying idle. We cannot afford this to happen in this country and we have to look at this. Off-shore seismic activity fell by some 35 per cent in 1986 and only 3,000 kilometres were recorded in the first nine months of 1987 compared with 28,000 kilometres in 1986. The short-sightedness of this Government's revenue grabbing policies is highlighted by the policy, for instance, of the Cana- dian Government, which earlier this year announced a subsidised incentive program for exploration and development drilling. The Canadian Government provides direct funding for one-third of the cost of a well up to a maximum of $Can3.3m a year for each qualifying company. In other words, the Canadian Government recognises the importance of the continued supply of liquid fuels into its economy. The Australian oil company Crusader Oil NL has moved its exploration operations to Canada rather than persist in Australia and it has blamed the Hawke Government's neglect of the industry for its move. Also, the Australian petroleum industry estimates that other Australian companies have spent more than $100m acquiring overseas exploration acreage and a further $60m on exploration activity in other countries in the past 12 months. The resource rent tax is an added disincentive to exploration in a country which, as I have already said, is a high risk country with a high cost environment. Despite what the Government says, Australia is not a prospective country and I think that fact is well recognised by the departmental officers who put together the Energy 2000 report. It never has been; it never will be. We were very fortunate to discover the Bass Strait basin. Most people will realise that back in the 1960s that was a wildcat well. It was not thought to be a prospective area. Recently Esso Australia Ltd revised downwards its assessment of crude oil discovery potential by some 25 per cent. It believes that only about 3 billion barrels of oil may be left to be found. This is a very paltry figure when compared with oil reserves of other countries. For example, the United States of America has 34.5 billion barrels, the Union of Soviet Socialist Republics 42 billion barrels, Mexico 48 billion barrels, the United Kingdom 13.2 billion barrels, while in the Middle East Saudi Arabia has 166 billion barrels. I repeat that according to Esso's estimates, Australia has 3 billion barrels of oil reserves. So what we must be doing in this country is providing incentives for people to drill wells and look for oil and, hopefully, find some, because if we do not, it is estimated that in about 1992 our oil import bill will be in the order of $3 billion and by 1995 it will be about $5 billion. The Government's justification for secondary tax is that petroleum resources are community property and that the whole community should share returns from those resources. Certainly the resources we have in our country belong to the people of this country. No one would deny that. The point is: do we want them discovered? Reserves are resources only if they can be found and developed. It is no good having what we think might be reserves if people are not prepared to risk money-it is a high risk venture-to find out. Using secondary taxes at the most opportune time in our history is killing the potential golden goose which may lay the golden egg for Australians. If the oil industry is prevented, by silly, stupid taxation, from exploring the finding new reserves, the community, far from sharing in returns from oil, will pay dearly for imports. I think Senator Sanders said that he had made a deal with the Government whereby some $5m of resource rent money would go into alternative energy research. I am not sure whether that is what he meant or whether that is what he said; it was very difficult to follow him. But if he did mean that, what is the use-the Government is well aware of this fact, which would be the reason it would be only too happy to accommodate the honourable senator-of 100 per cent of nothing? That is what we could be looking at down the track. The National Institute of Economic and Industry Research has produced some figures which show the disastrous effects the looming oil drought will have on our balance of payments. The Institute found that a massive crude oil bill will result in a deterioration in the current account deficit of $14 billion, in 1996 prices, by the middle of the next decade. To put it another way, the additional current account burden from this oil bill is equal to 2.3 per cent of gross domestic product, about the same reduction in the current account deficit which is now necessary if Australia is to return to any realistic debt servicing ratio and keep its foreign debt manageable. Even if the country manages to improve its balance of payments, which is highly unlikely, the additional burden of paying for our oil imports will return the nation to square one in the mid-1990s. That is what we are looking at. The other point I make is that this tax is not a profit-based tax as it allows a deduction for exploration costs only in the immediate vicinity of the project, whereas in a percentage business such as exploration, all exploration costs can be considered attributable to the rare discovery that pays off. My colleague Senator Durack has foreshadowed moving some amendments at the committee stage, and I think this is what we are really talking about. Discussions were held within both the industry and various political parties as to what could be done to correct the grossly inequitable situation. Under this current RRT deductions can be allowed on the resource rent tax only in a particular permit area. In other words, for drilling exploration holes outside that permit area there can be no deduction from RRT as it applies to that permit area. It was hoped that the Government would see the wisdom in allowing deductions for exploration outside a particular permit area as an encouragement for people to drill holes in those places. In the absence of that, it was decided that an attempt would be made to convince the Government at least to look at the possibility of allowing a 50 per cent tax deduction on money spent exploring areas outside the permit area and, in the event of oil being discovered, to allow a 100 per cent deduction. Our understanding is that that will not be supported by the Australian Democrats. As I said earlier, it has nothing to do with the oil companies, it is a matter of people getting out there with the risk capital and being prepared to spend the money to drill holes so that Australia can at least move in the direction of some sort of self-sufficiency. Unless we move in that direction, the next generation of young Australians will look back and say, `Why did those clowns do that back in those days? Why did they introduce a disincentive? Why are we now paying around $5 billion for imports because a disincentive was introduced in 1987 or 1988?' The Australian Petroleum Exploration Association has indicated that we face a bill of some $26 billion for exploration if we are to be 50 per cent self-sufficient in liquid fuels by the year 2000. If, in a country that is not recognised as an oil province, we implement legislation such as this which says, in effect, `If you find oil and, if you find more than we think you will, we will hit you with a punitive tax', what effect will that have on the prospectivity of discovering liquid fuels? I mention liquid fuels because one would have thought from the remarks of the previous speaker, Senator Sanders, that we were not speaking about them at all. If he was speaking about them, he was talking some nonsense about being able to use an alternative fuel to fly aeroplanes. I do not know how one would fly a jet without liquid fuels. Maybe he has got some-- Senator Durack —Maybe he found out when he was in Russia. Senator PARER —I thank Senator Durack. Maybe he has some Flintstone method of doing that. Senator Coulter —Have you not heard of the use of hydrogen? Senator PARER —I am delighted to hear Senator Coulter. Here is someone who is proposing the hydrogen car. I thought that theory was debunked a few years ago. I have heard of hydrogen. Senator Richardson —I have heard of somebody else who supported that. Senator PARER —That is right. We now have the new Democrats supporting us. Senator Colston —Don't you know that it does work? There are cars using hydrogen power. Senator PARER —There are cars using hydrogen gas. Of course, it is not just a matter of saying one does not have the key. I recapitulate that we are running short of oil. We are running short of liquid fuels. We need to create an incentive in this country, a country which is not known for its prospectivity for oil, for more people to go out and drill more holes. If we do not, it is only a matter of less than a decade when we will be adding to our import bill somewhere between $3 billion and $5 billion a year. The people who will be responsible for that will be members of this Government, with the support of the Australian Democrats. Senator MACKLIN(Queensland)(5.43) —The last time the Petroleum Resource Rent Tax Assessment Bill 1987 and allied Bills were before the Senate, they were defeated on the combined vote of the Opposition and the Australian Democrats. At that stage my party gave its reasons why it did not wish to support the Bills. As the Senate will remember, our reasons were quite different from those given by the Opposition parties. The Opposition parties took a position that Senator Durack again has outlined in regard to these Bills. Unlike the Opposition parties, our position was that the Bills were not sufficiently hard to take back from the oil companies that which we believed belonged to the people of Australia as the owners of the resource. It is a philosophical position with which, seemingly, the Opposition does not agree. Nevertheless, it has been our proposition throughout the debates on this legislation that petroleum, as a resource, is owned by the people of this country. It is mined and exploited by private companies, but there is a requirement to pay for the ownership of that resource in the form of some method of taxation, and that money should be returned to the people by way of that taxation regime. Until relatively recently the taxation regime was based on a combination of excise and royalties. That, of course, is the possible fall-back position for the Government with regard to its taxing regime if the resource rent tax fails to go through. I am sure that Senator Durack would agree that, for all the opposition by the oil companies to the resource rent tax, if the choice is between that tax and a combination of royalty and excise, quite clearly the oil companies will opt for the resource rent tax. Since the earlier debate on these Bills we have had a number of discussions with the Government in regard to a number of items. One of those concerned the impact of the resource rent tax and the amount of tax which is likely to be raised by it. We have been convinced that the take from the resource rent tax will, in fact, be greater than we first anticipated. While it is a shaded tax and does not meet a number of the other criteria which are in our party policy, we believe that it is a better form of taxation and that it comes closer to what we would be looking for than does the previous regime. Hence there are not many options left with regard to the implementation of our policy. One matter which figured in Senator Sanders's comments in the previous debate was the lack of thrust of this Government and previous governments in regard to alternative or renewable energy sources. The Government, in reviewing its policy in this area, has agreed with us and is now seeking at least to make some move in that direction. I agree with Senator Durack that the move is relatively minor. Senator Durack —It is a much more logical development. Senator MACKLIN —Yes; I will go on to make some comments about that. Of course, it is in addition to the moneys that have already been made available through a variety of other sources. We have a proposition in regard to the additional sums, which hopefully, the Government will take some note of. I must admit that our interest at this point lies more on the development side than it does on the research side. We would be looking for some type of demonstration of the viability of development processes. Many of them are viable and are operating as viable commercial enterprises in other countries. That could be done here if it were done in a way that was reasonable and acceptable. I raise a point in regard to part of my own State. I refer to the islands of the Torres Strait. Many of those islands are very small and, obviously, have only a small need for energy. Nevertheless, on some of those islands every house has ended up being equipped with a diesel. Anyone who has ever been on those islands at night when the lights go on and every house sets up its diesel would know that it sounds like a large jumbo jet coming in to land. It is extraordinary when we think of the enormous amount of sunlight that falls on the islands. At last there is a project under way to equip one of the islands, Banana Island, with a source of energy based on solar power. That, hopefully, will demonstrate to the people of the other islands that there are more acceptable, cheaper, more economical and less intrusive ways of dealing with the energy problem in their locality. Another interesting example from my own State is the operation of the Gladstone power station and the insatiable desire of the Queensland Government, among others, to centralise electricity power generation at one point. A power station owned by the Roma Town Council and employing local people used to be operated at Roma. That station, which ran on a very good contract negotiated with the natural gas supplier, was an admirable way of providing the people of Roma with their electricity-and, of course, of making a profit, thereby lowering the rates for the citizens of Roma. The Queensland Government closed down that power station and the people had to get their electricity from the grid at Gladstone. Unfortunately, this move was completed just before a number of power strikes took place. As a result, Roma ended up having its first power cuts for as long as anybody could remember. But that is beside the point. The point is, as was stated by Senator Sanders, that decisions about the use of power are often made by governments. They are often made not in terms of the most efficient or effective method of providing power or the long term viability of the power source. As Senator Parer mentioned, the Bills before us are directed at oil exploration effort. One problem with which we are confronted is that the use of oil depends also on the propositions that I have raised. Without a doubt the cheapest way of acquiring additional energy is conservation. Innumerable studies have been done but, unfortunately, they have been carried out mainly in the United States of America. I want to make some points later about the work done here in Australia. One study carried out in the United States on the efficient use of energy turned up figures which illustrate the sorts of savings that can be made in our total use of non-renewable resources, let alone starting on the development of renewable resources. The study states: . . . energy use in residential and commercial buildings could have been about one-fifth of the actual amount recorded without loss of comfort or amenities. That is, if the most efficient methods of use had been employed. It continues: Similarly, transportation energy- I draw this to the attention of Senator Parer, who was wondering about the aircraft and so on- use could have been down by 70% for the same number of passenger miles travelled and ton-mile of goods moved. Let us remember that this is American research. It continues: The industrial output . . . could have been produced with about 40% of the energy actually used. The figures in that study, even if one wanted to be conservative and halve them or even take only about one-tenth of them, would provide a staggering cost saving to the community. When talking about the insatiable need for more oil, we must remember to consider the cost-benefit arrangement. Surely, in any industry, in any business, one does not seek to squander as much as one can. Presumably, one seeks to use the resource that one has in as economical a way as possible. But I do not believe that is being done. Oddly enough, the moves that were made after the energy crunch do not seem to have been maintained. That is a pity, particularly when one looks at industrialised countries. Certainly, there are some pretty good examples around the world of countries which have sought to conserve non-renewables by more efficient use. But Australia has been sadly lacking in its efforts. The issue of renewable energy resources is attractive to many people, but is often put down. The former Department of Resources and Energy put out Discussion Paper No. 6, March 1986, entitled Energy 2000 Policy Review. A whole range of documents have been put out on this subject; there were 10 at that stage. This is the slimmest volume and, unfortunately, it has the least amount of good material in it. However, I think its stance will explain its size. It states: From this standpoint- that is, the general approach that has gone before in this paper- there seem to be no urgent decisions to be made with respect to renewables, either by the Commonwealth or state governments, which will have a substantial impact on the nature of overall Australian energy demand. From both price and resource-depletion aspects, there does not seem to be a compelling argument for government initiatives in the market to encourage the development of renewables. Senator Durack may know how difficult it is in discussion to get a government to move anywhere when it is confronted with a stance like that. Interestingly enough, we live in a continent in which many of our population could successfully generate their own power. This would result in a significant lowering or containment of costs in areas in which we have been seeking to do that for a long time. I refer particularly to rural industries. The work that has been done in Australia into applying overseas and locally generated research to Australian conditions, particularly rural conditions, has demonstrated clearly that the material is available; promotional work has been done. But, without the co-operation of governments-the quote I have just given suggests just how unco-operative governments are likely to be in this area-there does not seem to be much support for the rural sector to take up alternative power methods which could save a considerable amount of money, whether they be based on direct solar energy or indirect solar energy such as wind or, more particularly, biomass. The various methods that are available are relatively well known and Australia is fairly well placed with regard to most of them. But, without the policy-makers taking an interest in this area and without there being substantial funding, it is unlikely that Australia will make much progress. If I juxtapose here the considerable amount of money that Australia has spent over the years on nuclear research with the incredibly little amount it has spent on renewable energy resources, I think one can see that the final policy position now is that, although we have a research operation and we have spent money in this area, we will not be using nuclear power in Australia. Luckily, we have gained a few useful spinoffs for the community from this source in a number of small areas, particularly in the area of medicine. Without going into that matter, I think it is a pity that the policy decisions that are made concentrate on the non-renewables, as is again the case in this area. We have yet to see a sizable legislative initiative in the area of non-renewable resources. A number of factors were involved in the discussion of these Bills. One factor was in relation to how close this piece of legislation was to a resource rent tax or profit-based tax. Senator Durack's amendments were, of course, canvassed extensively. I refer to the problems surrounding deductibility. It seems to me that there are problems with the Bill in that regard. However, for reasons which will become obvious, I do not find acceptable the way in which the Opposition has sought to amend the Bill. I point out that the propositions that could be acceptable, such as that some added deductibility be made available for areas in the same basin, do present enormously complex problems-certainly, problems which were beyond the drafting abilities that we had available to us. It was at that point that the alternative proposition of 50 per cent deductibility and the more extensive exercise-the one that the Opposition previously removed in the House of Representatives, concerning total deductibility-obviously had to be taken into account. In the end it did not seem to us that any of those achieved what we were trying to achieve-that is, to look at a method of deductibility which would have made the operations with regard to exploration somewhat more rational. Since we failed successfully to draft amendments which would have encompassed that point, and since the Government indicated that it was totally unwilling to accept any such amendments anyway-and would, in fact, look to move back to the old excise and royalties proposition-it did not seem to us politic to continue down that line. Therefore, there were very few propositions to consider at the end of that discussion. From our discussion with the various exploration companies, the Australian Petroleum Exploration Association and the various groups as they came to see us, it was obvious that there was a divergence of views. I think it would not be too far off the mark to suggest that the divergence of views was based on the commercial interests of the various groups which talked to us, and their exploration propositions. Hence, if one looks around Australia at the exercises and exploration that are currently being undertaken, and the possibilities for the future with regard to various mining leases which are controlled by the various companies, one could easily discover on which side of the argument of any of these propositions a particular company would be. Our view, after all of those discussions was that there did not seem to be an alternative to what the Government was proposing that would provide a rational way of dealing with the issue-and I do not believe that the excise and royalties method is a rational way of dealing with the issue-which would still recognise the basic policy point which I have addressed in this speech; that is the philosophical point of the ownership of these resources by the people of Australia and the need to return, through some tax regime, a reasonable amount to those people. The previous Fraser Government increased the tax on petrol by pegging the price of petrol to the world parity price. At the time, one of the reasons given for that operation, other than its being a very good revenue source, was to try to dampen energy usage. We have always thought that there are two other ways which have been neglected, and which I raise today. One is the undertaking of immediate, extensive and intensive research and development. Indeed, at that time-I am not quite sure how many years ago it was-we raised in the debate the need for the additional revenue that was gained from that world parity pricing policy to be allocated to the renewable energy resource research and development program. That did not happen. I have also raised the other way-that is, an education program in our community, in order to look at ways in which we are able to conserve energy. Rather than simply imposing a penalty, we should also work constructively with the community-with architects, builders and community groups-to demonstrate how, in the use of energy for heating, cooling and water cooling, there are ways in which every householder is able to take steps to assist in the general conservation of energy. I, like Senator Durack and Senator Parer, am concerned that, in the medium term, we are faced with an enormously difficult problem. As our oil runs out, undoubtedly, without the development of renewable resources, we will be faced with ever increasing imports and ever increasing costs. At some stage, of course, it will dawn on somebody in government that now is the time to put vast amounts of money into the exercise of renewables. It has been demonstrated that it is possible to turn over to that sector of the energy generating industry-that is, the renewables-a whole host of domestic requirements. Indeed, publicity around Australia has been given in the last couple of years to people in urban residences cutting themselves off from the urban electricity supply, in other words, making themselves energy independent. We know that this is possible. The costs, of course, are still too high for most householders to contemplate. But those costs are partly a function of demand and partly a function of the capacity of the various companies to come up with an acceptable product. In the last 12 months the quality of such products which are available in domestic areas has improved in leaps and bounds. What we now need is quantity. If we move into producing such goods in quantity, we will see a rapid price reduction, which will provide the best incentive for householders to become more energy independent. I am not saying that overnight we are able to move from non-renewables to renewables. Obviously, that is not the case. If that were the case it would have occurred long ago. There are still major handicaps to being able to do so. What Senator Sanders said, and what I am saying, is that unless we start an intensive program we will not be able to do the things we are capable of doing now, nor will we be in a position to apply the research as it becomes available to us. It is that approach we recommend. It is interesting to note that countries that are nowhere near as lucky as we are with regard, for example, to solar power are nevertheless developing technologies far more extensively than we are. We are catching up, but in many cases the work that is now being done in Australia is, unfortunately, being done under lease, which adds to our export costs. We have the research base here in Australia. Some tremendous work is currently being done. What we need now is a promotional exercise by the Government to interest the wider community in the possibilities that exist, thereby generating a climate for further development. Whilst people may wave their arms and make predictions that one per cent or 10 per cent, or whatever it is, is able to be achieved I instance the development of the motor car. When one compares the early motor car, which appeared at the beginning of this century, with the motor car available now, one notes the extraordinary difference between them, although they do much the same thing, that is, take people from A to B. The developments have been brought about by market pressure, which might appeal to the Opposition parties. As market pressure built up research took place, innovation occurred and new developments came on to the market. The developments occurred as a result of the market being there, as a result of people seeking new items, better efficiencies, greater power, more comfort and the ability to start the car without getting out in the rain. All of the things we take for granted now in cars came about as a result of market pressure. I am suggesting a very similar operation with regard to renewables. Without the market operating in Australia there will be very little pressure and all the predictions we make will be as nought. If we get the market going, as the pressure occurs the research will come about to satisfy the demands and we will have much greater progress in this area than we have had to date. Senator MICHAEL BAUME(New South Wales)(6.13) —On the Petroleum Resource Rent Tax Assessment Bill, the Australian Democrats, along with the Australian Labor Party, are selling out this industry. The Democrats have changed their minds from their earlier position when they joined the Opposition indicating a blocking attitude to this damaging and disastrous legislation. Senator Macklin —Because we didn't think it was tough enough. Senator MICHAEL BAUME —We have heard from Senator Macklin the most extraordinary rationalising of the Democrats' decision to bring this disturbing and damaging legislation into force. At least Senator Macklin's position had the benefit of logic, even if his conclusions are as wrong as the premises on which the logic is based. That is different from Senator Sanders's incredible nonsense which bore little relationship to the matter under discussion. It is about time the Democrats admitted whether they are in favour of oil exploration because, having heard two Democrat speakers now, the clear impression one gets is that the Australian Democrats oppose the search for oil and oppose any suggestion that one of the ways to solve the energy problem, particularly in the medium term-where Senator Macklin concedes there is no prospect of his solutions being successful-is encouraging the search for oil. We have not heard one word from the Australian Democrats about whether they favour some kind of incentive, or any kind of increase at all without incentives, for the search for oil. Senator Knowles —No, they just favour more taxes. Senator MICHAEL BAUME —Yes. Senator Stone —Everyone has a windmill in his backyard. Senator MICHAEL BAUME —A windmill to be powered by having Senator Sanders positioned immediately in front of it would provide sufficient energy, I imagine, for most Australian homes. The problem is in the concession that Senator Macklin has made that in the medium term there is a problem. Nothing he has said is directed towards resolving that problem in the medium term. He admits that there is no possible solution overnight. Yet he supports a proposition which worsens the medium term position, which damages the incentive to invest in the search for oil off-shore and which would do untold damage to Australia's balance of payments, employment and, in particular, the economies and revenues of most of the States which the Australian Democrats purport to represent in this place. I note that the only State where there are no significant oil and gas revenues is Tasmania, represented quaintly by Senator Sanders. It is extraordinary that Senator Sanders, who is quite happy to use the proceeds of Australian oil exploration, is not prepared to carry what could be described as the `costs' if there are to be tax, or any other, incentives for oil exploration in Australia. The alternatives that Senator Macklin has outlined are meaningless in the medium term. They may well have some application in the longer run and there may be some merit in encouraging greater research and development in other energy resources. But Senator Macklin has admitted that that will not solve the problem now, when we are facing it. For him to try to justify actions which will diminish-and which have diminished, because of the expectation of this tax-the search for oil in Australia, is irresponsible and totally damaging to almost every Australian. Very few of us would be exempt from the consequences, in terms of our balance of payments and the real wealth of this nation, of the disaster we are now facing in the oil exploration business. It is not just a question of making profits for some oil companies. It is a question of what happens to Australia's capacity to import as a result of the fall in our export earnings and the massive increase in the cost of our oil imports, which we will continue to need if we do not find more oil. I cannot see how anything Senator Macklin has said today can justify his voting for this Bill and against the Opposition's amendments. It is appropriate to ask the Democrats here and now what their policy on oil exploration is. We have not heard it in the two Democrat speeches so far. We need to find out what their policy is towards oil exploration. We hear about their policy on everything else. We hear about their policy on windmills. We are now talking about taxing the oil industry and savagely reducing incentives for the most expensive of all oil exploration-off-shore exploration. Two Democrat speakers have taken an hour of the Senate's time and we have not heard what their policy is on oil exploration. I presume that it is not because they do not have one, unless it is a policy they do not wish to reveal. I believe that their policy is as revealed by what Senator Sanders said last week on Australian Broadcasting Corporation radio: `I feel we should not encourage exploration at all'. If Senator Sanders, as the spokesman, was reflecting Australian Democrat policy, I would be glad if some Australian Democrat speaker during this debate were prepared to admit it. No doubt oil wells disturb particular Australian fauna. Maybe the marsupial rat feels uncomfortable within 100 miles of an oil rig. Maybe the seals do not like temporarily an off-shore oil well, although I see that the seals regard the Broken Hill Proprietary Co. Ltd wells off Bass Strait as a second home. I do not know what it is in the Australian Democrat policy which would encourage any member, particularly the spokesman on this matter, to say, `I feel we should not encourage exploration at all'. I presume it is because-- Senator Button —Never forget your sense of the superficial, will you, Senator. Senator MICHAEL BAUME —I thank the Minister for his usual, totally unintelligent and unintelligible interruption. We are dealing with a major issue. The rabbit from Tasmania, Senator Sanders, is continuing to interject in his ridiculous way. Senator Sanders —How can I continue? I just got here. Senator MICHAEL BAUME —He has been interjecting almost all afternoon when he has been here. Senator Sanders —First, I was abused for not being here; now I am being abused for being here. Senator MICHAEL BAUME —I must say I prefer it when the senator from Tasmania is not here. At least we have a more coherent Senate. From Senator Button's interjection, it is clear that the Government has no awareness-or if it does have awareness it is being particularly stupid at the moment-of the consequences of its actions. It could well be argued that the reason the Government is introducing these measures is its short term desperation for revenue and its need for more and more taxes to present a respectable front in the financial area. It does not give a damn about the longer or medium term consequences. I will come back to that. Now that Senator Sanders is here, let me press the question about whether the Australian Democrats favour any kind of oil exploration. Senator Sanders —The answer is no; leave it in the ground for the future. Senator MICHAEL BAUME —Now we know what the Australian Democrats' policy is-they do not favour oil exploration. I hope that every voter in every State in Australia has heard that that is the Australian Democrats' policy. Senator Sanders —That is right; that is our policy. Senator MICHAEL BAUME —It will involve the loss of hundreds of thousands of jobs. I am not guessing that figure. Senator Sanders you have made one ludicrous speech already. Would you mind if I made my speech without your ludicrous interjections. The ACTING DEPUTY PRESIDENT(Senator Burns) —Order! I ask Senator Baume to address the Chair. Senator MICHAEL BAUME —If the Chair would keep Senator Sanders quiet I would have the opportunity of addressing the Chair. The ACTING DEPUTY PRESIDENT —I ask Senator Sanders to be orderly. Senator MICHAEL BAUME —I thank the Chair, at last. I was saying that Senator Sanders has now admitted that the Australian Democrats favour no incentives, no drilling and no exploration for oil in Australia. As a result of the statement Senator Sanders made on radio 2FC which he has now widened, in effect, saying he is opposed to all off-shore oil exploration-- Senator Sanders —If you look up my background you will find that I have opposed it for six years. The ACTING DEPUTY PRESIDENT —Order! Senator MICHAEL BAUME —Thank you, Mr Acting Deputy President. Last week, following the statement on 2FC by Senator Sanders that he did not want to encourage oil exploration at all, the Executive Director of the Australian Petroleum Exploration Association Ltd wrote to the Leader of the Australian Democrats, Senator Haines, asking whether that is Australian Democrat policy or whether it is Senator Sanders's policy. If it is Australian Democrat policy I believe that the other Democrat senators will find it very difficult to face their electors in their own States. For example, Victoria is heavily dependent on oil revenues from off-shore. The same situation will develop in Western Australia. It is interesting that Senator Haines has not responded to the request. That is why I am pressing it here now. She has not said what the Australian Democrats' policy is on oil exploration. Senator Sanders —I enunciated it for you. Senator MICHAEL BAUME —Senator Sanders enunciated his own ratbag policy. He did not say whether it was Australian Democrat policy. Senator Sanders —We are all ratbags. You said that yourself. Senator MICHAEL BAUME —Do I gather from the interjection that it is Australian Democrat policy and not simply that of Senator Sanders? Senator Sanders —That ratbag policy. Senator MICHAEL BAUME —Yes, that ratbag policy. Do I understand from that interjection that it is Australian Democrat policy in general to discourage off-shore exploration in Australia? Senator Sanders —It is. Senator MICHAEL BAUME —Well, I am glad that we have that comment on record. Senator Sanders —We are happy to have it on record. Senator MICHAEL BAUME —I wonder why the Leader, Senator Haines, has not bothered to respond then to the letter from Mr Orchison of the Australian Petroleum Exploration Association who wrote: In recent weeks I have written to you and your Democrat colleagues on several occasions regarding your Party's attitude towards exploration for petroleum so far without acknowledgment of the letters, let alone a response regarding policy. Yesterday on ABC radio 2FC your colleague Senator Sanders said `I feel we should not encourage exploration at all'. As a matter of urgency, I should like to obtain your assurance that this view does not represent the view of your party. If it does, I am sure that it would come as a surprise-- Senator Sanders-The oil companies own you, but they don't own us. Senator MICHAEL BAUME —Mr Acting Deputy President, I respond to that interjection so that the nature of it will be recorded. I believe that sort of disgraceful remark is one that lowers the tone of the Senate. I object to the fact that Senator Sanders is sitting sufficiently close to me to ensure that that offensive remark is heard over the air-he is close enough to my microphone-and I ask you, Mr Acting Deputy President, to require him to withdraw it. The ACTING DEPUTY PRESIDENT —I am afraid that I did not hear the remark. Senator MICHAEL BAUME —His statement was that unlike me he is not owned by the oil companies. I ask that that comment be withdrawn. The ACTING DEPUTY PRESIDENT —I suggest that it be withdrawn. Senator Sanders —I withdraw. Senator MICHAEL BAUME —Thank you, Mr Acting Deputy President. The letter stated: As a matter of urgency, I should like to obtain your assurance that this view does not represent the view of your party. If it does, I am sure that it would come as a surprise to the people of South Australia, for example, where the search for oil and gas has seen some $525 million spent on exploration alone in the past ten years and more than $1.5 billion spent on development, thus generating many jobs both directly and indirectly. (A study by Flinders University last year showed that every $1 million spent by the industry in South Australia generated between 12 and 20 jobs in indirect employment.) Senator Sanders —Twelve to 20 jobs! Senator MICHAEL BAUME —That is per million. They spent $1.5 billion, so Senator Sanders can work it out for himself if he has the capacity. The letter goes on: Overall in Australia, the industry has invested many billions of dollars in searching for oil and gas and developing new fields to the benefit of the economy as a whole as well as the benefit of the States of Victoria, Queensland, South Australia and Western Australia and of the Northern Territory. As your Party has senators from each of the States named above, I would be surprised if you wished to see this beneficial activity `not encouraged at all'- now Senator Sanders says discouraged- as your colleague suggests. In the radio interview Senator Sanders gave he made the quite astonishing assertion that the Australian petroleum industry- Senator Sanders —There would be a lot more jobs-- Senator MICHAEL BAUME —Mr Acting Deputy President, is it possible to take action against Senator Sanders for his repeated interjections made so close to my microphone? The ACTING DEPUTY PRESIDENT —I suggest that Senator Sanders desist to some extent. Senator Sanders —Yes, Mr Acting Deputy President, I take your point. Senator MICHAEL BAUME —The letter continues: In the radio interview Senator Sanders gave he made the quite astonishing assertion that the Australian petroleum industry has `had a free ride for too long'. Both he and other members of the Australian Democrats must surely be aware that petroleum producers in Australia have paid some $34 billion in taxes to State and Federal governments in the ten years ending June 1986. The Federal Government has received 96 per cent of these taxes in the form of an excise on crude oil and LPG production, royalties on production in off-shore areas and in company tax. The crude oil and LPG excise alone has accounted for almost one dollar in every sixteen of all Federal Government receipts in those ten years. If, as Senator Sanders appears to be proposing, oil and gas explorers should be taxed to discourage activity, the Australian community and in particular, the communities in the States where production exists (including South Australia which you represent) will be significant losers. That letter was signed by Keith Orchison of the Australian Petroleum Exploration Association. Naturally, the Australian Democrats have not responded formally, only by way of interjection tonight. I cannot expect any coherent response from them if all we can depend on is what has happened so far. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator LEWIS(Victoria) —I seek leave to give notice of a motion referring the Cash Transaction Reports Bill 1987 to the Standing Committee on Legal and Constitutional Affairs. Leave granted. Senator LEWIS —I seek leave to have the notice of motion incorporated in Hansard. Leave granted. The notice of motion read as follows- I give notice that, on the next day of sitting, I shall move: That the Cash Transaction Reports Bill 1987 be referred to the Standing Committee on Legal and Constitutional Affairs, for report on or before 31 March 1988, and the Committee consider: (a) the effectiveness of the proposals in the Bill to meet the objective of countering the underground cash economy, tax evasion and money laundering; (b) the cost of implementation of the Bill by cash dealers; (c) the cost-effectiveness of the proposals contained in the Bill; (d) the effectiveness of alternative means of limiting the use of banking and financial institutions as a means of laundering money, disguising profits illegally obtained or hiding the profits of tax evasion; (e) those matters relating to the provisions of the Bill which would normally have been reported on by the Business Regulation Review Unit; (f) the likelihood of financial institutions passing on the costs of the scheme to their customers through new account charges or otherwise; (g) the implications (if any) of excluding land transactions from the scope of the Bill; (h) whether the proposed limit of $1,000 on accounts that do not attract the verification procedures is appropriate; and (i) any other matters relevant to the Bill. Sitting suspended from 6.30 to 8 p.m. Debate resumed. Senator MICHAEL BAUME(New South Wales)(8.00) —Before dinner we had established that the Australian Democrats will be voting with the Government in support of this petroleum resource rent tax legislation, even though they recognise that in the medium term-at least Senator Macklin, in a rational if nonetheless unreasonable speech, conceded that it was in the medium term-there is nothing in what they are recommending that will solve the clear problem emerging for the Australian economy as a result of Australia running out of oil without further exploration. At least Senator Macklin recognises the existence of a problem, even though he has no solution to that problem. It is extraordinary that in that context the Australian Democrats have now conceded, through Senator Sanders from Tasmania-Sanders of the River; how could I forget?-by way of interjection, that the Democrats' policy on oil was not to have any further exploration and to leave oil in the ground-I cannot say for some future use, because he is opposed to its extraction and use and their policy is simply to leave it in the ground. It is bad enough for the Australian Democrats to have adopted this approach at a time when we are facing a medium term, and, of course, long term energy crisis and certainly a crisis involving the enormous cost of oil imports that will result from Australia's failure to maintain anything like an acceptable level of exploration and discovery of oil. But it is even worse that the Government is actually introducing this legislation anyway. The reason it is introducing the legislation is for short term gain, short term benefit, to try to resolve its immediate budgetary problems. This was revealed in effect in an article in the Australian Financial Review of 22 October, which stated: The Federal Government has doubled its expectations of earnings from the proposed new Resource Rent Tax which is to be applied to new offshore oil discoveries'. The resource rent tax will now earn `at least $100 million' by next financial year. It was previously estimated that the revenue from the resource rent tax would not be seen until 1990-91, when it would have amounted to only about $20m. So now we see why the Government is persisting with this legislation. It is for short term benefit-to the long term disadvantage of Australia. I suppose it is reasonable for the Labor Government to take that approach. After all, it will not have to cope with the long term problems it is creating, because it will not be in government to do so. But what it is doing here is grabbing, in the next financial year, $100m in revenue and costing the Australian economy, according to independent research from universities, billions of dollars of foreign exchange because of the impact that this legislation will clearly have on the search for oil in Australia. The background to this is very simple. For the past 10 years Australia has been consuming more oil than it has been discovering. In the period from 1977 to 1986 Australia's consumption totalled almost two billion barrels against discoveries of about only 830 million barrels. So there we have almost 2 1/2 times as much consumption as discovery. Demand for crude oil and condensate in Australia is forecast by the Federal Government itself to rise from about 560,000 barrels a day last year to 680,000 barrels a day within about five years. Once again we can see an enormous increase in consumption which, of course, is not being met by production. Production of crude oil and concentrates in Australia from existing fields is forecast by the Government once again to fall from 546,000 barrels a day, which is close to our current consumption, to 280,000 barrels a day in five years-in other words, to something like a third of our consumption. We will have to discover an awful lot more oil to solve that problem; otherwise we will be importing enormous quantities of oil at enormous cost. New discoveries are estimated by the Federal Government to add something like 80,000 barrels a day to production within five years, but, according to the forecast, this will leave Australia with something like a 50 per cent chance of having to import 320,000 barrels of crude oil a day by then. The cost of importing crude oil at this level will be about $3 billion-provided that there is an exchange rate of about US70c to one Australian dollar and an oil price of about $US18 a barrel-and, given those assumptions, we shall then have an immense burden, within five years, of $3 billion a year. Nothing that this Government is doing will do anything to encourage a sufficient pick-up in the search for oil to offset that problem. We can see what happened in 1987. Only seven wildcat wells were drilled in the first nine months of 1987, compared with 19 wells in the same period in 1986. At the end of September 1987, there were only two off-shore drilling vessels active, and three were sitting idle. We see here the disastrous consequences of a combination of lower oil prices and perhaps a market crash-although it had not crashed by September, and since then there will be even less chance of getting equity capital and other funds-but, mainly, the Government's policies and indecisions, and concern about Government policies. In the first nine months of this year, off-shore seismic activity fell by 35 per cent compared to the same period of the previous year. In the first nine months of this year, only 3,000 kilometres of seismic activity were recorded, compared with 20,000 kilometres in 1986. In other words, there has been something like an 85 per cent cut in seismic activity. The outlook for the off-shore exploration industry should be of major concern to the Federal Government, and that has been pointed out by the Australian Petroleum Exploration Association. The need for this concern is the growing gap between crude oil production and consumption and the assessment that off-shore sedimentary basins have the most potential for providing significant additions to Australian oil reserves, and that is exactly where this exploration should be concentrated. In fact, this legislation is aimed specifically against the very area where our only chances of real success exist. The problem is that the resource rent tax is being defended by people saying that it is simply to replace excise that goes everywhere else. This defence is simply basically untrue. The excise and the resource rent tax do not replace anything. They are both new secondary taxes that did not exist in 1983 and did not exist when there was a level of exploration off-shore in Australia that enabled significant discoveries to be made. This is a brand new tax, introduced by this Government. To pretend that it somehow replaces an existing tax is simply false, deceptive, misleading and typical of the nature of the debate undertaken by this Government. Certainly, this Government has introduced an on-shore excise, which I believe has done nothing to assist on-shore exploration. To introduce an off-shore tax and say that it is a much better tax than we might otherwise have had would at least be an honest way to do it. But the Government is saying that it is a better tax than the one it is replacing. It is not replacing any tax; it is replacing perhaps the prospect of a different kind of tax-the prospect only. This Government is introducing new taxes at a time when what is needed is even greater incentive. APEA has pointed out that off-shore petroleum taxes, including the resource rent tax, the new oil excise and cash bonus bidding for off-shore acreage, together with high company taxes and high finding costs, act to depress exploration except in the most prospective areas. That has already happened. The statistics show a dramatic reduction in off-shore oil exploration-the one type of exploration we desperately need. As APEA says, it is a fundamental requirement of the Federal Government to give greater encouragement to off-shore exploration than at present. This is a major failure of Government policy. It is no wonder there has been a decline. As has been pointed out repeatedly, the impending decline in Australia's production and in self-sufficiency will have important ramifications for Australia's balance of payments, for Government revenues and for security of supply. As an APEA publication pointed out recently, the former Department of Resources and Energy established that each percentage point fall in Australia's level of self-sufficiency means about 2.1 million barrels of additional crude oil imports are needed, at an annual cost of $58m. However, Government revenues from crude oil and liquefied petroleum gas excise and royalties in 1990-91 can be expected to fall to half the $2.37 billion that was raised in 1986-87. The obvious solution is to find more crude oil. That is what we are suggesting. If, instead of hitting the exploration industry with an effective 70 per cent tax rate, which is what this legislation does, the Government got rid of this additional tax and hit it just with the normal taxes-the company taxes and the other taxes that the industry has to pay-there would be greater encouragement to produce more oil and therefore it would give the Government more revenue. In fact, lowering the tax rate to a reasonable level, instead of the penal level of 70 per cent, would result in more oil being produced and therefore, quaintly, more revenue for this Government. More importantly, it would save us from the disastrous balance of payments impact of having to import more and more oil when in fact we are not able to produce anything like our requirements in the next few years. The ACTING DEPUTY PRESIDENT(Senator Powell) —Order! The honourable senator's time has expired. Senator KNOWLES(Western Australia)(8.14) —I wish this evening to talk on the Petroleum Resource Rent Tax Assessment Bill 1987 and allied Bills. This legislation, I believe, symbolises the real short-sightedness and blinkered ideology of both the Hawke Government and the Australian Democrats because what we are up against is an attitude that the oil industry, and its exploration arm in particular, are there to be farmed as a source of taxation revenue. I am rather pleased that my colleague Senator Michael Baume had at least a few minutes after the dinner break to talk on the legislation without the incessant interjections from Senator Sanders who, sadly for Senator Michael Baume, sits in very close proximity. Senator Sanders made a ludicrous contribution to the debate today. Senator Short —I wonder where he is now. Senator KNOWLES —That is a very good question. I presume he is still at dinner or he has gone to bed-one or the other. Senator Sanders made the most outrageous accusation during his speech this afternoon. In the first instance, he accused Senator Durack of not using his full time, when we disagree with the legislation. We have all become used to listening to absurdities from the Democrats but this really touched on the unbelievable. There are a number of reasons why Senator Durack and many of the Opposition senators are not using their full time at the moment. They are virtually all attributable to the Democrats and their behaviour, particularly their behaviour of last week. We have a number of Bills to get through before this Parliament rises at the end of this week. But the Democrats insist on getting up at a certain time. They will not sit late; they will not sit any extra days. Yet in the last week they have monopolised the broadcast time. The moment the broadcasting lights go on in this chamber the Democrats go into an absolute verbal frenzy. That was exactly what we saw last week. They called nine divisions on the last broadcast day when they were the only ones to vote for their absolutely absurd amendments. Senator Short —How much time did we waste? About 1 1/2 hours. Senator KNOWLES —That is correct; we did waste about 1 1/2 hours because the Democrats decided that they were going to call all these outrageous divisions. Added to that, Senator Haines on television this morning had the audacity to say that one of the things she has been able to curb in her 10 years in the Senate is her temper. We can all have a good old chuckle about that because we all saw the effects of her temper last week when she called divisions and quorums for the rest of the day, expressing her glee. No, not her glee but her temper. Senator Short —She must have thought it was April Fool's Day. Senator KNOWLES —She would be an April Fool every day of the year. The Democrats not only called unnecessary divisions, but they also called quorums constantly. Whilst continually wasting the time of the Senate, the Democrats were not even here last Thursday night to keep the Senate sitting. Senator Coulter —I rise on a point of order. I remind the honourable senator that she is not addressing the point at issue at all. Senator KNOWLES —Speaking to the point of order, I point out that I am addressing the debate that has gone on here before because I am trying to illustrate the absolutely despicable way in which Senator Sanders has contributed to this debate and, at the same time, retaliate to some of the accusations he has made. The ACTING DEPUTY PRESIDENT(Senator Powell) —There is no point of order. Carry on, Senator Knowles. Senator KNOWLES —Thank you, Madam Acting Deputy President. I will continue because I think this debate on the Petroleum Resource Rent Tax Bill is particularly important. The problems that we are facing this evening are compounded by an ideology that implicitly regards the oil industry as exploitative and its profits as illegitimate. This is an ideology to which the Democrats hold so strongly that they rejected this Bill in the last Parliament. Why? Because it did not go far enough. Senator McLean —We thought it was unwise. We can think of a better alternative. Senator KNOWLES —It was not because the Democrats thought it was unwise at all. It was simply because they thought it did not go far enough. Senator McLean was not even here in the last Parliament so I think it is rather unwise of him even to interject in the first instance. Hopefully, for the rest of us, he will not be here in the next Parliament. We have every reason for concern that the Bill may now pass at the price of further provisions that will drive more nails into the coffin of the off-shore exploration industry. The Opposition believes that the community is entitled to a fair return from the profits of resource industries through royalties and the standard rate of company taxation paid by all business enterprises. Where we differ strongly from the Government and the Democrats is that we believe that the primary objective of a responsible Federal government is to increase energy self-sufficiency as a higher priority than the safeguarding of a useful revenue source. This legislation increases the taxation strait-jacket on the oil industry and therefore can only discourage the exploration as the key to arresting a rapid decline in oil self-sufficiency. We must remember that if there is a decline in oil self-sufficiency then we will all suffer. As my colleagues have said previously today, we suffer in terms of the sheer price of oil. Senator Sanders yet again said that we should be looking at other forms of energy. What he failed to remember was simply the Bill that he was meant to be debating. When he was talking about nothing being done about other forms of energy, he was wrong yet again. The Queensland Government and the Coconut Island solar electric project have done a lot to look on other forms of energy, as have the Northern Territory Government and the business sector of Western Australia. So we must remember that this evening we are talking about liquid fuels. The Opposition is convinced that common sense demands that a $3 billion loss in foreign exchange through oil imports by 1992 must be the central economic issue of this whole question. The question that the Government fails to ask is: How can we best structure a tax regime to encourage oil exploration as a major national priority? Instead I suppose that at best we can only conclude that the Government's starting point is: How can we extract the best possible revenue return from the oil well and the petrol bowser without killing the goose? I believe that that is simply not good enough. We must be looking at the broader aspect of this whole topic. Let there be no question that Australia faces a spiralling oil import bill unless major new reserves are discovered. On 16 March this year the former Minister for Resources and Energy (Senator Gareth Evans) admitted that oil production from Bass Strait would be halved by 1990 and that Australia's oil self-sufficiency would decline from 95 per cent to 40 per cent. Effectively, only two years away, our self-sufficiency will go from 95 per cent to 40 per cent. Every percentage point off oil self-sufficiency means another 2.1 million barrels imported at a cost of $58m. By the turn of the century the shortfall will reach 390,000 barrels per day and the cost to our balance of payments will be $4.5 billion. The economic consequences of this drain and the decline in the local oil industry may dwarf our current problems. According to the Victorian Department of Industry, Technology and Resources, a 60 per cent shortfall in energy in the year 2000 will mean a $7.7 billion decline in gross domestic product on 1980 prices and a fall in manufacturing output of $2.8 billion. It will mean the loss of 225,000 jobs and a fall in wage rates of $24 per week, adjusted for inflation. The Government and, I suppose, the Democrats, believe in job creation, in keeping everyone in jobs and in keeping everyone on a reasonable rate of salary and income, yet we are being faced with 225,000 jobs being knocked out and relative wage rates being reduced by $24 per week. We should not lose sight of the fact that declining self-sufficiency in liquid fuels will involve an ominous dependence on overseas supplies from volatile and unstable parts of the world. The Democrats in particular would do well to remember, before they denigrate the Western alliance, that we will need to guarantee our sea lanes. I reiterate that these facts are not in serious dispute and that the Government has no excuse for failing to encourage oil exploration instead of slugging it with taxation. That is all that is being done at the moment. This industry is being hit time and again. I will talk later about the way in which this industry has been hit not only in taxation on its production but also in taxation in other forms via the fringe benefits tax and the capital gains tax. Spending on oil exploration has declined 54 per cent since 1985 when, to maintain self-sufficiency, we needed to discover fresh reserves at the rate of 120 million barrels a year with the average over the last 15 years being only 75 million barrels. Last year, the Bureau of Mineral Resources estimated that there could be undiscovered reserves of three billion to five billion barrels, some four billion barrels having been discovered since 1950, and that the greatest potential lay off-shore. This may sound encouraging but the facts are that these reserves must be sought over an area of six million square kilometres. In comparison, estimated undiscovered reserves in the North Sea of 15 billion barrels need be sought over only 0.7 million square kilometres. Only a couple of weeks ago we learned that Esso Australia Ltd has lowered its early estimates of undiscovered reserves by 25 per cent to a most likely three billion barrels. It is also reported that this downward revision is greater than the Government expected, yet it still proceeds with this legislation. In all sanity, when a company such as Esso has given those types of estimates, why would a government persist with this legislation? It is highly significant that Esso considers that the remaining reserves are in smaller pools than was previously thought when this legislation provides concessions only for contiguous permit areas. With new discoveries on this estimate we may still have 47 per cent self-sufficiency in the year 2000, otherwise it will be a mere 25 per cent in the year 2000. It is as simple as that. That is what we are looking at and that is what this Government and the Australian Democrats refuse to address. The facts are that Australia does not have the strong geological database that makes exploration in many overseas countries a far more attractive prospect. The Hawke Government also forgets that exploration costs are much greater than in countries within our own region. The cost of operating a drill ship is 78 per cent higher than in a place such as Indonesia and the cost of a standby boat is 275 per cent higher. Altogether, it costs an extra $1.3m to drill a 35-day well off Australia than is the case in Indonesia or Malaysia. Essentially, the exploration industry depends on risk capital. The recent collapse of stock market prices is likely to have a long term effect on those companies which engage in risk taking and cannot guarantee a steady return. Investors need to be able to look forward to the chance of what this Labor Government and the Democrats might term a windfall profit if they are to commit capital to an uncertain and immensely expensive exercise. The Government should recognise that these sources of capital are likely to diminish in the aftermath of the stock market crash and should review its tax measures. I believe that that should, in fact, be starting with this Bill. But, sadly, that is obviously not going to be the case. I do not think it is at all convincing for the Government to claim that this 40 per cent resource rent tax (RRT) does not actually increase the imposition on oil companies as it replaces an existing excise and royalty system. This argument ignores the broader question that taxes on the oil industry are too high and a major factor in discouraging exploration. The fact is that pre-1975 oil pays tax at the total rate of 91 per cent. While we may agree that this old oil should make a higher contribution to revenue than the profits from new ventures, a figure of 91 per cent tax speaks for itself. It naturally restricts the ability of the producers to channel profits into exploration. Surely that is what we should be encouraging? But, no, it is quite the reverse. We are looking at slugging them with a 91 per cent tax rate on pre-1975 oil. With this legislation so-called new oil will be taxed at the rate of nearly 70 per cent when the resource rent tax is superimposed over company tax and other impositions. In contrast, we should recognise that in the United States oil producers are taxed at the rate of 45 per cent and in Canada at 39 per cent-45 per cent and 39 per cent compared with Australia at 91 per cent for the old oil and 70 per cent for the new oil. No other industry in Australia pays as much in both primary and secondary taxes, contributing some $7 billion to revenue. Over the last 10 years the oil industry has contributed 12 per cent of Federal Government revenue. At the final point of sale the Government's share of the price of a litre of petrol is 58 per cent, with 51 per cent of that 58 per cent going to the Federal Government. At the same time, we should remember that 75 per cent of petroleum products are business inputs and that the Federal Government tax binge not only discourages exploration but also has a constant inflationary effect on the productive economy, so that every time the Government raises the cost of fuel it impinges on every other industry that uses fuel. But that is all a bit too simplistic for this Government to understand. It keeps raising the price of fuel. This Government made a promise in 1983 when it was elected. In 1984, after it had broken its promise not to have an early election, it again promised us cheaper fuel. We have not seen a reduction in the price of fuel-rather, quite the reverse-since the day this Government took office. The resource rent tax cannot be considered in isolation. Australia has a high rate of corporate taxation-49 per cent-and such Labor innovations as the fringe benefits tax and the capital gains tax impact heavily on the oil exploration industry. This industry has suffered through the short-sightedness of a government that cannot, for the life of it, understand why it needs to employ people in remote areas, why it needs to pay people who work in remote areas special benefits and why it needs to give people general benefits to get them to work in these areas. The capital gains tax hits the profits made by farm-outs and sole risk operations in the oil exploration industry. In a wider sense, it further discourages individual investors in speculative activity where large capital profits must offset the risk. Coupled with the resource rent tax is the cash bidding system, about which I spoke earlier this year. An analogy is bidding for a horse in a sweep and then giving 40 per cent of the winnings to the Government, because it is about the same odds. When the question is asked why only a handful of 43 Australian drilling rigs are working in Australian waters, the taxation policies of this Government are an obvious answer. While we have had to wait until this year for this legislation, the prospect of the resource rent tax has been an inhibiting factor since 1984. Three years ago the industry had this tax hanging over its head. It is a matter of record that after a previous Labor Minister had done his best to strangle our resource industry, the Fraser Liberal Government, in its seven years in office, saw oil exploration spending rise from $80m to more than $1,000m. Yet this Government has the audacity still to blame the Fraser Government for deficiencies. I wish that this Government could suffer the same deficiency, so to speak, in this field, because we would then see oil exploration going ahead instead of backwards. In the Fraser Government period, new oil fields attracted no tax other than royalties and company tax. Look at what they attract today. The Opposition will ensure, in government, that future oil discoveries will attract a total top tax rate of 49.25 per cent, a significant difference from the 70 per cent the Labor Party is demanding in these Bills. Before the Labor Government and the Australian Democrats decide to try to win popularity by attacking tax breaks for oil companies, they should probably note that a survey of over 2,000 Australians made available to the Australian Petroleum Exploration Association showed that 81 per cent of those surveyed believed that the finding of more oil was very important to Australia's economic future. That just goes to highlight exactly how much more aware the public, the constituency of Australia, is than both the Government and the Democrats. Some 57 per cent of those people also believed that the Federal Government should strongly encourage more exploration, but only 11 per cent believed that it was providing that encouragement. It just goes to show that the public cannot be bluffed; the public knows what is going on. Both the Government and, in particular, the Democrats, who are so fond of testing the temperature with their finger or foot, whichever way it goes, should look at what the public believes and also at what is in the best interests of the future of this country before they vote the way they intend to on this legislation. Under this legislation a well must be producing a 27 per cent profit before it becomes liable for the resource rent tax. The Government may well stress that expenditure compounded at the gross domestic product deflator rate can be offset against later profits, but this concession has serious limitations that render this legislation a continued overall disincentive to oil exploration. Retention lease projects are excluded from deductibility, as are the costs of cash bidding for exploration leases. This is what we fought so hard about only a few short months ago. Downstream activities such as refining and marketing cannot be deducted; neither can interest payments or the cost of income tax fringe benefits tax be deducted. However, most seriously, deductibility at the augmented bond rate applies only to an individual permit area. The fact is that it is estimated that 70 per cent of future oil discoveries will be made in fields producing fewer than fifty million barrels. I believe that this limitation, therefore, discourages exploration over wider and non-contiguous areas. The Opposition, in the committee stage of the debate, will be proposing amendments that will extend deductibility to include any exploration expenditure. The simple question as to whether we want to encourage as much exploration as possible must be asked again and again. If both the Government and the Australian Democrats can answer that question in the affirmative, we might get somewhere. However, at this stage it is quite apparent that neither the Government nor the Democrats wish to encourage exploration. We will also move to include the cost of cash bidding as a deductible expenditure. The fact remains that these Bills are just one more step in the process of attracting the maximum possible revenue from an industry that is far too important to Australia to be treated as a `cash cow', as it was described by Mr Stuart McGill of Esso Australia Ltd last year. He warned at that time that such treatment of an enterprise in the business world without adequate reinvestment causes business failure. Certainly, this Labor Government does nothing to encourage reinvestment. It is significant that the oil industry has suffered 30 new or increased tax impositions since 1983. As I said only last Thursday in the tax debate, this is a government which said that its taxation system would be easier, simpler and so forth. It has become more complicated. The taxation legislation has some 400 extra pages for people to go through, to sort out. The oil industry alone has suffered 30 new or increased tax impositions in that time. Most seriously, the actions of this Government have increased both the expense and the uncertainty of oil exploration. These Bills are a tax on risk taking and represent levies on projects rather than corporations. These are both principles that discriminate against Australian resource industries. Legislation that was first proposed in 1984 is no longer relevant to the Australia of 1987, when falls in oil production are well and truly with us, when other nations have greater potential reserves and lower costs, and when risk capital is fast drying up. I believe that a responsible government would scrap these Bills and look to the urgent stimulation of oil exploration through a more neutral tax regime that allowed full reward for risks taken in a vital national priority. However, sadly, I think the Opposition is going to be very much a Robinson Crusoe throughout this debate because we have seen in the past, as we have witnessed today, how both the Government and the Australian Democrats care little, if anything, about the future of this country, its oil exploration and the future of liquid fuels. Senator CRICHTON-BROWNE(Western Australia)(8.40) —We are debating the Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill 1987 and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill which essentially are intended to provide a resource rent tax for the Government. This group of Bills was first introduced before the dissolution of the previous Parliament. It was not passed on that occasion and, accordingly, the Bills appropriately and properly lapsed. Regrettably, the Government has not put the time since then to good use and has presented us with Bills which contain all the flaws, all the failures and all the unwanted ingredients of the original legislation. The resource rent tax legislation affects companies with off-shore production licences which have come into effect since 1 July 1984, when the Government first announced the tax. The legislation displays the kind of contempt for taxpayers for which this Government has become uniquely notorious. In July 1984 the Treasurer (Mr Keating) issued a scrappy little Press release and then waited until earlier this year, the first part of 1987-almost three years after the first Press statement, the first official notice to the industry and the community as a whole-before introducing legislation of 66 pages and containing 114 clauses. For three years the industry has known nothing more than what was contained in a Press statement. Three years later it gets the full meat of the legislation. The industry and taxpayers as a whole had nothing more nor less upon which to seek to make definitive judgments than that first Press statement. However, this Government, a government by fiat, a government under sufferance by way of legislation, believes that it can now legitimately introduce legislation and backdate it to 1984. I raise that matter because it is becoming fashionable-in fact it is being enshrined in the functioning of this Government-to think that, if one issues a Press statement containing broad and general guideline principles, that automatically gives one an imprimatur to introduce legislation at a later date which, and this has happened in many cases, may be quite different and separate from the impression given by the vagaries of a Press statement. This inexcusable delay really displays the failure of this Government to appreciate the difficulties faced by business in tax planning. In fact it shows gross contempt for the Parliament and the community as a whole. The Australian Labor Party displays a contempt for the principle that the Parliament, not the executive government, should impose tax measures. This Government seems to assume that, because it has issued a Press statement, everything is all right. That is not the case. This legislation attempts to shift petroleum taxation from the present excise arrangements, which are based on the time that the oil is discovered and the quantity produced, to one based essentially on profit. In calculating profit, the legislation in essence works on a cash flow basis. It allows deductions for expenditure incurred in production areas, whether in the nature of capital outgoings or normal expenditure. Where in the early stages of a project the moneys expended exceed the revenue gained, the excess expenditure can be carried forward at a compounding rate. If the excess expenditure has occurred in the last five years the excess compounds at the long term bond rate plus 15 per cent. If it has occurred outside the last five years, it compounds at a rate equal to the implicit price deflator for gross domestic product. When incoming funds, whether they be of a capital or a revenue nature, exceed the expenditure which has been carried forward, the rate of taxation shall be cast at 40 per cent. Of course, the company will still be liable for income tax on top of resource rent tax, but the amount paid in resource rent tax is deductible, and will be allowed as a deduction, under the income tax laws. By way of example, for a company which makes $1m from petroleum, $400,000 will, of course, automatically be lost by way of the resource rent tax. As this is income tax deductible, the amount which is assessed as company tax is $600,000 and a further $300,000 must be paid in company tax at the rate of 49c in the dollar. So an oil company, from the original profit of $1m, through this iniquitous, obscene and objectionable piece of legislation and through the notoriously high level of company tax, pays a total of $700,000 in taxation. It is important, in assessing the legislation before the Senate, to understand the state of the industry. The Government and, perhaps, the community seem to have gained the rather misleading impression that the Australian petroleum industry has flourished in recent times-perhaps as a result of the extensive oil reserves which were discovered in Bass Strait in the early 1960s. In July this year, of the 571,000 barrels of crude produced per day, 443,000 came from the Gippsland Basin or, in other words, Bass Strait-that is, 77 per cent of Australia's total production came from this area. Successive governments-I do not refer exclusively to the present Government or the previous Government, but I include previous governments-seem to hold the view that the oil industry is nothing more than a cow that is waiting to be milked. It was only three years ago that the vast majority of Bass Strait crude was taxed at the exorbitant rate of 87 per cent of the price of each barrel. Of the revenue earned in Bass Strait, an average of 79 per cent was taken in crude oil excise. Even after the concessions which have subsequently been granted, the top tax rate paid on Bass Strait crude is 79 per cent. The dominance and the profitability of the Bass Strait area, combined with the dramatic price increase in the 1970s, led, in my view, to the erroneous assumption that the oil industry, more than any other industry, was there to be bled and milked, and that it was simply a licence to print money. Nothing could be further from the truth. The off-shore recovery to discovery ratio is only 5:100-5 per cent-for the remainder of the country. Of companies in that 5 per cent, about only half have commercially viable options and, of those, a considerable number will recover only enough to break even on their exploration and development expenditure. With the indulgence of the Minister for Justice, Senator Tate, I wish to have incorporated two tables. The first is compiled by the Bureau of Mineral Resources Geology and Geophysics and shows the success rate-or perhaps one could say it shows the failure rate-of drilling in various basins in Australia. Senator Tate —You are not sure what it shows. Senator CRICHTON-BROWNE —The Government would describe it as a success rate but in real terms of semantics it really shows the failure rate. In other words, it shows the rate of strike. Senator Tate —It is one of those rabbit or duck things. You must look at it from a particular angle. Senator CRICHTON-BROWNE —Senator Tate is right. I will explain the tables in some detail. The second table shows the ratio of oil discoveries to square kilometre of prospect area. It shows, as does the former graph, that Australia is a very poor bet in terms of prospectivity. As a ratio, its performance is one of the lowest in the world. I seek leave to have those two documents incorporated. Senator Tate —I am not sure whether they are graphs. Senator CRICHTON-BROWNE —They are not graphs; they are statistical. Leave granted. The tables read as follows- Table 1 OFFSHORE STATISTICS 1964-1986 Basin Wildcat Apprs Explrn Devlt Oil Discoveries Oil & Gas Gas % success Initial Offshore Commercial Reserves Crude Oil Crude + Cond Crude/ Cond + LPG Gas (million barrels) *M;kcTR Bass and Sorrell... 27 4 31 - 0 1 1 6.5 0 0 0 0 Bonaparte & Ashmore-Cartier/Vulcan ... 65 13 78 - 2 1 5 10.3 20? 0 0 0 Browse ... 24 2 26 - 0 0 3 11.5 0 0 0 (97.2)* Canning ... 14 0 14 - 0 0 0 0 0 0 0 0 Capricorn & Nambour (Qld) ... 4 0 4 - 0 0 0 0 0 0 0 0 Carnarvon & Exmouth ... 124 41 165 14 8 8 13 17.6 15? 145 252 253 Carpentaria ... 1 0 1 - 0 0 0 0 0 0 0 0 Duntroon, Eucla, Polda Gt Aust Bight ... 9 0 9 - 0 0 0 0 0 0 0 0 Gippsland ... 93 53 146 246 10 13 4 18.5 3125 3308 3826 213 Money Shoal/Arafura ... 7 0 7 - 0 0 0 0 0 0 0 0 Otway ... 18 0 18 - 0 0 0 0 0 0 0 0 Perth ... 20 0 20 - 0 0 0 0 0 0 0 0 Total ... 406 113 519 260 20 23 26 13.3% 3,160 3,453 4,078 466 Overall finding rate (Million barrels/well) ... 6.1 6.7 7.9 Finding rate (excluding Kingfish, Halibut) ... 2.25 2.82 4.0 Finding rate (excluding all Gippsland) ... 0.094 0.389 0.676 Drilling data from BMR Reserves data from BMR for June 1986 * Not commercial TABLE 2 DISCOVERED OIL AND PROSPECTIVE AREA Oil Discoveries (1) End 1982 Prospective (2) Area Oil Discovered Per Prospective Area Million Barrels k.sq Miles BBLs/kms2 Australia... 3,472 2,370 560 UK... 17,219 227 29,300 Norway... 7,907 39 78,300 USA... 173,806 2,534 26,500 Canada... 17,964 1,887 3,700 Indonesia... 20,167 1,240 6,300 Germany... 116 43.5 1,030 (1) Data taken from `In Search of Oil' Volume 1, B. F. Girossling and D. T. Nielsen, published by Financial Times Business Information 1985. (2) Data taken from `Window on Oil', B. F. Grossling, published by Financial Times Ltd 1976. Senator CRICHTON-BROWNE —In addition to the difficulties of low prospectivity Australia faces very high production costs. Esso estimates that Australia's costs for marine seismic work are about 70 per cent higher than the world average. Off-shore drilling costs are said to be three times as expensive as they are in the United States. Another factor which has a great impact on this industry is the lower world price for oil. I will quote: In May 1985, Australian crude prices were $44.97 per barrel. By August of 1986 they had declined to $15.75. Since that low, they have recovered partially to now stand at $27.02 per barrel. The combined effect of low prospectivity, high costs and low oil prices has been devastating on the industry. This has been manifested and reflected in exploration expenditure. It is shown in those areas where low prices in the variables I refer to are likely to be most susceptible to an industry downturn. In the 12 months to June 1987, only 18 off-shore wells were drilled, totalling 33,600 metres. By comparison, in 1983, 49 wells were drilled totalling 137,000 metres. Off-shore drilling expenditure fell from $473m in 1983-84 to $78m in the year to June 1987. In September this year only two off-shore drilling rigs were working around Australia. Three were idle. By any measure, and certainly by these measures, the industry is not in good health. One would be hopeful that, with the recent modest upturn in prices-the level has come from the bottom-there will be some modest recovery. Self-sufficiency is a matter which ought to be on the minds of all honourable senators when they are contemplating this legislation. Currently we are using up our reserves a great deal faster than we are replacing them. In the 10 years from 1977 to 1986 we consumed 1,950 million barrels while we added only 830 million barrels to our reserves. Bass Strait reserves, we are told in Budget Paper No. 1 at page 331, are two-thirds depleted. In 1984 the Government estimated that Australia would be 95 per cent self-sufficient by 1990. That figure has subsequently been revised. The current suggestion is that it will be 65 per cent self-sufficient by that date. There are even suggestions that further revision will demonstrate that self-sufficiency will be as low as 50 per cent. Our forecast is that production from existing fields will fall by 266,000 barrels per day and will be replaced by discoveries totalling no more than 80,000 barrels per day. If that proves to be correct, by 1992 we will need to be importing 320,000 barrels of oil per year. If one assumes a price of $US18 a barrel and, optimistically, an exchange rate of US70c to $A1, this will add another $3 billion to our import bill. So our present direction can lead only to current account problems and a very real dependence on external supplies. It seems to me that our only real escape is to discover the greatest number of economic oil reserves possible. Under those circumstances we need industry conditions which are conducive to oil exploration. I turn to the resource rent tax itself. There are for me two main difficulties. The first is simply the rate of taxation. The Government is very fond of saying that a resource rent tax taxes only economic rents. Allegedly, economic rents occur where a company derives returns from an activity which are well above its production costs. The theory goes that as a result some of the profit can be taken by taxation without affecting the production decisions of the company. Allegedly, it is a perfect tax in that it can be raised without the normal disincentive effects. That would be true perhaps in the case of a well that was up and running and where, at the exploration stage, the company had no notice and therefore no disincentive through the Government's intention to impose the tax. It certainly does not apply when companies are at the exploration stage and they know that the resource rent tax is to be put in place. As I have indicated, the combined effect of resource rent tax and income tax will be to impose a tax equal to 70 per cent of the profit of the company. Exploration companies view the many dry wells that they strike as an inevitable cost in what they hope will be ultimately a viable commercial find. Companies can afford to explore in the less prospective areas only in the belief that they will have that rare find which will keep them going and the money so received from that rare find will cover the higher levels of expenses. Cutting the return and reducing the number of areas which are considered viable for exploration represent a disincentive for companies to invest, explore and seek to exploit in the less likely areas. The second defect in the Bill is its failure, in my view, to truly tax profits. Under the income tax law, exploration expenditure of oil companies is a deductible expense regardless of where it is incurred. It has been recognised that exploration expenditure in several or all areas is still part of the one big operation of finding commercial wells. The resource rent tax, in principle, does not recognise that. In general, it limits the deductibility of expenditure to that incurred on the one project. In clause 36 there is provision for projects within the one exploration permit to be taken to be in one project group and for the expenditure of one-by definition of that one exploration group-to be set off against the revenue of another. Apart from the limited provision for the Minister to issue a certificate to combine projects, there is no potential in the Bill for the expenditure in one exploration permit to be offset against revenues earned in another completely separate permit. That is totally out of step with the way in which the industry operates. It is even out of step with the way in which the Income Tax Assessment Act 1936 operates. It is absolutely ridiculous to suggest that when a company takes out several exploration permits, a failure in one area is not all part and parcel of the finding of a successful area. Exploration is a probability industry. Yet if this Bill becomes law, the Government will give no deductions for the unsuccessful permits while standing ready to put its hand out the moment a company is successful. In my view, this is simply not a true calculation of profit. It amounts to the artificial inflation of the profits of producing wells. In effect, the tax imposed on successful projects is even higher than the 70c in the dollar that I mentioned earlier. Instead of producing a climate which is conducive to oil exploration, the Government is adding yet another disincentive to the already difficult Australian exploration conditions. I said at the outset that successive governments have regarded the oil industry as simply waiting to be milked. I quickly make some brief comments about the level of taxation which is imposed on the industry in general. I give an indication of what consumers pay in tax each time they buy a litre of petrol. Currently, Australia imposes a crude oil excise anywhere between zero and 79c. The Federal Government imposes a petroleum products excise on items such as petrol, dieseline and kerosene, to name but a few. For petrol this equates to 20.83c a litre. The Royal Automobile Club of Western Australia has estimated that the combined cost of the Federal Government's crude oil and petroleum products excises amounts to 27.6c per litre of fuel. Royalties are imposed on sections of the industry and a franchise fee is imposed on service stations by all States except Queensland. These amount to another 5.8c per litre of fuel. In total, 33.4c is paid in taxes on fuel which would otherwise cost 26.9c per litre. This amounts to a total tax of 124 per cent on the cost of the product. In addition, the companies involved are required to pay 49c in every dollar they earn in profits. Clearly, the petroleum and petroleum products industry is, as it says, the most highly taxed industry in Australia. The crude oil excise is in effect wholly borne by the industry, as it is fixed on the basis of import parity-although, of course, a great deal of this tax is passed on to the consumer. A report released by the Industries Assistance Commission last year clearly demonstrates how both Federal and State governments have grown increasingly dependent on the oil industry for revenue. Not only is this not good for the industry, but also it is simply not good government to depend so heavily on one industry for revenue. As with the mistletoe on the tree, the more governments feed on the industry, the more they weaken it and the more they contribute to its demise. This industry has certainly already begun to wane. Future governments will find it difficult enough as it is to grapple with the natural depletion of our oil reserves. These problems will be compounded dramatically if any avaricious grab for more money by governments such as this continues to draw from the life of the industry. That is what this legislation will do. It imposes extortionate taxes and it assesses them in a manner which shows no understanding of the speculative nature of the exploration industry. By killing off exploration the Government kills off the growth in the industry, kills off the source of its own revenue and places the whole economy in jeopardy. I take the view that this legislation has no virtue, no intrinsic merit and no logical conclusion. Rather, it is simply another form of taxation or revenue collection which this Government seeks to impose on a particular industry which it judges-or misjudges-able to pay. It is likely to further cripple and debase the industry. I hope that the common sense of the Australian Democrats will prevail and that they will do as they did last time; that is, indicate their intention to vote against this legislation and do so. I would be greatly disappointed if I thought the Democrats were prepared to be bought off for a miserable $5m so that they could continue to tilt at windmills. Senator Stone —You give too much weight to their importance. Senator CRICHTON-BROWNE —Perhaps I do. Perhaps I have placed too much emphasis on their integrity, their sense of justice and fairness or their sense of believing in any principle. I recall their saying last time this legislation was before us that it had no merit, that it deserved to be defeated and that it was their intention to have it defeated. But now I understand that for the princely sum of five-- Senator Stone —Five pieces of silver. Senator CRICHTON-BROWNE —Yes, five pieces of silver-they have cast this industry upon a cross and have chosen to ensure that it will be crippled in the future. Senator WALSH(Western Australia-Minister for Finance)(9.03) —The Petroleum Resource Rent Tax Assessment Bill, the Petroleum Resource Rent Tax Bill, the Petroleum Resource Rent Tax (Interest on Underpayments) Bill and the Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill have had a very long gestation period, something over four years. This is a fact of which I am well aware because when the legislation was first introduced I had the primary responsibility for dealing with it for the Government. I did not think it would take this long-indeed, a bit more than double the gestation period for an elephant. There were a number of reasons for that. The first was the need to have a fairly protracted series of negotiations with the States and the industry. Following that, there had to be negotiations, with which I was not directly involved-Senator Gareth Evans had taken over the primary responsibility for the legislation by that time-with the Australian Democrats, in particular in order to ensure the passage of the legislation. Senator Stone —You would never have offered the Democrats $5m. Senator WALSH —Well, as I said, that happened after I was involved in the matter. But it was necessary for the Government to negotiate with the Democrats, because the troglodytes in the official Opposition-and this has come out again in the second reading debate, although I am sure that this is not true of Senator Stone, who did not speak in this debate-clearly have no conceptual understanding of the proposal. In other words, their general economic ignorance and illiteracy carry over into this policy proposition and this debate. So there was no point in discussing anything with the troglodytes in the Opposition and they have demonstrated again, in the amendments of which they have given notice, that they have still learnt nothing. Like the Bourbons, they have learnt nothing; I am not sure whether they have forgotten anything. I want to make a few points on as much of the second reading debate as I heard. Firstly-and again with that qualification, on as much as I heard of the debate, which was less than 100 per cent-there has been no recognition of the fact that this proposition is part of a package. The element of that package which has been ignored is that the pre-existing royalty in off-shore areas, that is the well-head value royalty in off-shore areas not subject to the 1979 Act, which was pushed through by the Fraser Government-rather shamefully, if I may say so-is to be abolished. The possibility exists-indeed it is not just a possibility but a probability, so far as the Jabiru field is concerned-that in fact the resource rent tax (RRT) payments will be less than the royalty payments which would otherwise have been due. In other words, it is not primarily an exercise about increasing government revenue. It may or may not have that effect. Nobody can predict in advance of a great deal of detailed knowledge, which cannot be possessed at this stage, whether the tax take would be higher or lower under the rent tax regime than it would have been under the well-head royalty regime. The resource rent tax imposes a much more rational tax and one which will have a much less distortionary effect on rational investment decisions. Senator Durack specifically mentioned that oil prices are now lower than they were when this tax was being planned. That is true. He said that oil prices will be lower in the future. That may be true but obviously nobody can know for certain. What he appears not to understand is that if oil prices are lower both a royalty regime and a rent tax regime will reduce the amount of tax payable by producers, but the rent tax regime, under those circumstances, will skew the tax payment downwards relative to that which would be payable under a royalty regime. In other words, it has a self-correcting mechanism by the nature of its design. There has been some mention of wider deductibility, that is, allowing for the assessment of RRT liability. Exploration expenditure incurred outside the permit area, which is ultimately convertible, is ultimately converted into a production licence which may or may not cover the whole permit area. In principle there is a valid argument for that, which was put to the industry by me 18 months ago or thereabouts with the proviso that of course there would have to be an offset; that is, if wider deductibility were to be allowed, either the threshold rate at which the original expenditure is compounded or the RRT rate would have to be adjusted. The industry at that stage, I think unanimously, said it was not interested in wider deductibility; it was interested only in the threshold rate of return and the tax rate itself. In other words, the industry was given the option-an option which, by the way, in my view would have made this a marginally better tax than it finally is-at that time, and it made its decision. The industry was vehement about the question and the Government, given that it is a marginal issue, decided to comply with its wishes. I know that the Broken Hill Proprietary Co. Ltd (BHP) in particular would have preferred to have some wider deductibility, and if I may pay a compliment to BHP, it has been more rational about this issue, all the way along, than any of the other major producers. One or two of the minor producers have been equally rational. As far as I and the Government are concerned, the decision was effectively made by the industry a couple of years ago and we cannot review it now. The other point I mention is that the amendments of which the Opposition has given notice, although I was made aware of them only about five minutes ago, are essentially the same amendments moved by the Opposition when this legislation was last before the Senate in late May or early June of this year. They are technically flawed, as they were technically flawed when they were moved then. They fall into three categories. The first is the question of wider deductibility, which I have already mentioned. The third is to increase the threshold rate. The Government will not be accepting either of those. The second, which is the proposed amendment to clause 32, is an attempt, so I am advised-read in isolation, it does not mean much at all-to repeal the cash bidding regulation which the Government put through in 1985 legislation. This is a complicated issue and it is an excellent one on which to demonstrate the economic ignorance and illiteracy of the Opposition. The Opposition opposed cash bidding which, for the benefit of those who are listening, if anybody is, is a system in which an area of land-in this case read `sea' for `land'-is thrown open for exploration and if the exploration is successful, ultimately, presumably, for production. Companies which wish to explore the area are invited to submit a cash bid for the right to do so. It is a system that has been used in the United States of America and a number of other countries. It is one way of extracting, right up front, the economic rent which actually exists or is perceived to exist. The Opposition is opposed to this policy on the completely spurious grounds that Australia is not sufficiently prospective and that, if a cash bidding system were in operation, judgment would be made that the alleged low prospectivity of Australian off-shore areas, in conjunction with lower oil prices and a few other things, would kill off exploration activity. I am amazed that even some of the mental retards in the Opposition cannot see the flaw in that argument because, if the industry made that judgment, there would be no cash bid. If the industry had made the judgment that the price of oil and the prospectivity of a particular area were so low that it was not worth a cash bid, there would be no cash bid. I would have thought that even the National Party of Australia could understand that. But no, not only the National Party but the troglodytes or the trucklers of the Liberal Party, even though they have had this, I would have thought, fairly elementary piece of logic put before them many times, persist with this specious argument. This admits only two possible conclusions-one, that they are too stupid to know any better and the other that they are being bought off, in one way or another, by the oil industry. Senator Stone —I take a point of order, Mr Acting Deputy President. I have been sitting here patiently listening to the Minister, and he has several times referred to the troglodytes on this side of the House, and the trucklers, and used other unparliamentary phrases. Mr Acting Deputy President, I put it to the Minister through you that if he has arguments to put he has the mental equipment to put them perfectly coolly, perfectly calmly and perfectly intellectually without descending to the level of personal abuse to which he is only too prone and which does not lend itself to the enhancement of the proceedings of this chamber. I seek your ruling on this matter. The ACTING DEPUTY PRESIDENT(Senator Burns) —I ask the Minister to withdraw those comments. Senator WALSH —Certainly, Mr Acting Deputy President. I am happy to do that. The ACTING DEPUTY PRESIDENT —I also suggest that people on the other side also refrain from that sort of behaviour in the future. Senator WALSH —Let me point out the incongruity of Senator Stone objecting to the descriptions that I have applied to the Opposition. At the Mont Pelerin address about two years ago Senator Stone described Mr McMahon, or Sir William McMahon as some people call him, as the most unworthy person ever to occupy the office of Prime Minister. He then allegedly quoted Arthur Fadden describing him as `Billy the flea' and concurred in that judgment. Anybody who can throw that sort of abuse around is remarkably thin skinned if he cannot take a bit of it back again. Senator Stone —I rise on a point of order. The Minister is now debating your ruling, Mr Acting Deputy President. I ask him to withdraw the comments he has just made. Senator WALSH —On the point of order, I do not believe I am debating your ruling at all, Mr Acting Deputy President. I am just pointing out a bit of history, which Senator Stone uses and endorses, in describing a former Prime Minister, terms like `Billy the flea'. It has nothing to do with your ruling, in my view. The ACTING DEPUTY PRESIDENT —It seems to me that if a person makes an utterance he is always in danger of being quoted. Senator WALSH —If Senator Stone wants to shift this debate to a more, should one say, intellectual plane, I would certainly be very interested in hearing him, as a one-time economic rationalist anyway and a former Treasury Secretary, attempt to destroy the logic of my argument about cash bidding. I do not intend to delay the passage of these Bills any longer and I thank the Australian Democrats for their support. I do not know what the splinters around the place are doing but with the Democrats' support the Bills will, of course, be passed. Question put: That the Bills be now read a second time. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 38 Noes . . . . . . . . . . . 32 —— Majority . . . . . . . . . 6 —— Aulich, T. G. Jenkins, J. A.Black, J. R. Jones, G. N.Bolkus, N. McKiernan, J. P.Burns, B. R. McLean, P. A.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R. (Teller)Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cook, P. F. S. Ray, RobertCooney, B. C. Richardson, G. F.Coulter, J. R. Ryan, S. M.Crowley, R. A. Sanders, N. K.Devereux, J. R. Schacht, C. C.Devlin, R. Sibraa, K. W.Evans, Gareth Tate, M. C.Foreman, D. J. Vallentine, J.Gietzelt, A. T. Walsh, P. A.Giles, P. J. Wood, W. R.Haines, J. Zakharov, A. O. Alston, R. K. R. Lewis, A. W. R.Archer, B. R. MacGibbon, D. J.Baume, Michael Messner, A. J.Baume, Peter Newman, J. M.Bjelke-Petersen, F. I. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Puplick, C. J. G.Calvert, P. H. Reid, M. E. (Teller)Chaney, F. M. Sheil, G.Chapman, H. G. P. Short, J. R.Crichton-Browne, N. A. Stone, J. O.Durack, P. D. Tambling, G. E. J.Hamer, D. J. Teague, B. C.Harradine, B. Vanstone, A. E.Hill, R. M. Walters, M. S.Knowles, S. C. Watson, J. O. W. Beahan, M. E. McGauran, J. J.Reynolds, N. E. Patterson, K. C. L.Button, J. N. Bishop, B. K. Question so resolved in the affirmative. Bills read a second time. PETROLEUM RESOURCE RENT TAX ASSESSMENT BILL The Bill. Senator DURACK(Western Australia)(9.30) —As I foreshadowed when I spoke in the second reading debate, I have circulated to honourable senators a number of amendments that I propose to move as a whole as they really deal with one subject. Before I proceed to move the amendments, I want to raise one or two matters with the Minister for Finance (Senator Walsh). I want to raise a question which has figured prominently in the debate about the Government's resource rent tax proposal. When the legislation was brought into this chamber and debated on 5 May, as is now well known, Senator Sanders, speaking on behalf of the Australian Democrats, announced pretty much to the surprise of most people that the Democrats would oppose the legislation. He said that the reasons for the Democrats' opposition to the legislation were: The Government has raised the threshold rates and reduced the tax rates to the point where, while in name it is a resource rent tax, in practice it is not; it is a give-away tax, a give-away to the oil companies. . . . . . . . the petroleum companies will pay no tax whatsoever. They have paid none in the last three years in this respect. I put it to the Senate that they will never pay any tax on this, and the Government knows this. The first reason that was advanced by the Democrats was that the tax was just not heavy enough. Senator Sanders then went on to say: We are unhappy with this legislation. We feel that this Bill pays no attention to renewable resources. It is time that we in the Senate, the Government and this country took some cognisance of finite world economics. I think he meant finite world resources. He continued: We must go to renewable resources. This Bill does not address that. It makes no provision for channelling any of the funds gained-if they are ever gained-from the resource rent tax into renewable resources. He then went on to announce that the Democrats would not support the legislation. Since the debate in this chamber on 5 May, until the debate commenced this afternoon and Senator Sanders and then Senator Macklin from the Democrats spoke in the second reading debate, there had been no indication whatever of any change in the situation that existed in May. We have now been informed by honourable senators in this debate that the Government will make a payment of some $5m to advance research into and development of alternative or renewable energy resources. I have made inquiries of the Minister for Primary Industries and Energy (Mr Kerin), who Senator Walsh represents here today, as to the decision the Government has made. I read something in a newspaper-one newspaper-a week or so ago about some such decision that the Government has made. There has been no official announcement whatever by the Government as to what it proposes to do. But whatever it proposes to do has been announced in some garbled form by Senator Sanders and Senator Macklin. They announced the actual details of the proposal in a way which was totally incomprehensible. I would have thought that the Minister for Finance, Senator Walsh, who is seated at the table, would have had more than a passing interest in this pay-off in which the Government is obviously engaged to obtain the vote of the Democrats. The Australian Democrats have done a complete somersault, as they are the first to admit, here today. I have already quoted from Hansard to show the position they took in the previous debate. They have now changed their position from one of opposition to one of support-a total volte-face. Rumours have been circulated in one newspaper, and it is clear from what has been said by Senator Sanders and Senator Macklin and from the vote they have just made, that something dramatic has changed since 5 May. Certainly, the legislation has not changed. The legislation before us now is in exactly the same terms, almost literally word for word. This is the legislation which Senator Sanders said is a give-away to oil companies and will enable them to pay no tax whatever. This is what the Australian Democrats said. There is no difference in the legislation from what was before us in May. The tax provided for is the same as that provided for in May. The only difference is that in May the Democrats said they would vote against it and today, just a few minutes ago, they voted for it. Presumably, some changes occurred in the private deals that have been made between the Government and the Democrats. The clue to that seems to be, as Senator Sanders said, that they were unhappy because the Bill paid no attention to renewable resources. It still does not. There is nothing in the Bill about payments for research or development in renewable resources, yet there has been some suggestion from the Democrats that the Government proposes to make such payments. This evening we have to consider not simply a Bill to impose a resource rent tax and the accompanying legislation. The reality is that we are asked to consider and vote on legislation which encompasses the resource rent tax proposal, some further government decisions and some government expenditures which the Government has agreed to make and which, in the ordinary course of events, would be provided for in the shape of some grant Bill or some legislation of an appropriation nature which the Government would tell us all about, saying what it proposed to do. The Government has been totally silent. There has been no statement by the Minister, either outside this Parliament or inside it in this debate, as to what this payment is. Senator Stone —The Minister is not even here. Senator DURACK —The Minister is not even listening. We have been given indirectly some garbled versions. Senator Sanders spoke about $35m. Perhaps it is $5m over seven years. We do not really know quite what this is. Senator Sanders —Take a look at Hansard. Senator DURACK —It is a little difficult to read Hansard when it does not come out until tomorrow. Senator Stone —The Minister for Finance must know. It comes from his vote. It comes from the Advance to the Minister for Finance. Senator DURACK —The Minister for Finance will naturally know what the Government has decided. I am asking at the commencement of this committee debate: Will the Minister please make a statement and tell us what the Government has decided to do? What payment is it making? What amount is it? Is it a lump sum or is it an annual sum? Senator Michael Baume —Over what period? Senator DURACK —Over what period will it be made by the Government? Generally, what is the nature of the Government's commitment, on which it has, until now, been totally silent and which has made the complete difference to the Democrats' vote, on this Bill, which we have just had-a vote which has gone from one of total opposition to one of total support? Before taking this debate any further, I hope the Minister will be able to enlighten us on these matters. Senator WALSH(Western Australia-Minister for Finance)(9.40) —I understand that the Minister for Primary Industries and Energy (Mr Kerin) will make a statement on the matter Senator Durack has raised. I am not sure just when that will be. Senator Stone —Now that the House has adjourned? He can't be cross-examined on it now that the House has adjourned. Senator WALSH —Politicians can talk outside the House of Representatives. Politicians, both in government and in opposition, put out Press statements on a continuing basis whether or not the Parliament is sitting. Senator Stone —The Bill has been through the House of Representatives and the Minister chose not to make a statement at that time. Senator WALSH —The statement will not be functionally related to this legislation. My advice is that this measure will not require any legislation at all because a trust account will be set up under the Audit Act. I do not want to pre-empt Mr Kerin or the Minister for Resources, Mr Peter Morris, or whoever makes the statement. However, I think I can give a general outline of the decision. As I have already mentioned, a trust account will be administered by the Department of Primary Industries and Energy. It will not be funded from resource rent tax (RRT) revenue and, therefore it is not, in any legalistic sense, related to the Petroleum Resource Rent Tax Assessment Bill. At this stage the anticipated revenue from the RRT will be very substantially in excess of the amount of money which will be provided for research into alternative forms of energy. I repeat the caveat that I do not want to pre-empt a statement of either Mr Kerin or Mr Morris that the priorities for specific applications will be determined ultimately by the Minister but, in practice, they are more likely to be determined by the National Energy Research Development and Demonstration Council, as has been the case for many years. Under the previous Government, formal ministerial approval was given for energy research projects nominated by that Council. It is anticipated that there will be additional expenditure of about $1m a year. Senator Durack has not formally moved the amendments but I presume that he will do so later, so I will speak to them now-although I covered them in my speech in the second reading debate. There are essentially three amendments: one on cash bidding, one on wider deductibility-the Government will accept neither of these amendments-and one on the threshold rate at which undeducted expenditure will compound. I have given the reasons why the Government will not accept these amendments. However, I mentioned in my speech in the second reading debate that there were technical defects in the amendments relating to wider deductibility. I am advised that the technical deficiency in the amendments in their present form is that, although they alter the manner in which exploration expenditure is treated, they fail to make corresponding alterations to the treatment of assessable receipts. That lack of flow-through to the assessability provisions would result in receipts from the sale of petroleum obtained during the exploration stage not being assessable. I doubt whether even the Opposition intended that to be the case. I am also advised that the amendments would allow deductibility for exploration expenditure incurred outside a resource rent tax area. In other words, if the amendments were carried the oil companies, or producers or potential producers, would be getting it both ways. This is a situation which was described succinctly, if I may say so, by Senator Stone in his address to the National Agricultural Outlook Conference, I think it was in January 1981, when he delivered a well-deserved shaft at the provisions the Fraser Government had enacted for farmers to be able to opt in or opt out of the tax averaging provisions of the Income Tax Assessment Act. If I remember correctly, Senator Stone said, `This is an arrangement under which, heads, farmers win, and tails, all other taxpayers lose'. Although one needs in this case to transpose farmers for oil producers, what the Opposition is doing here, wittingly or unwittingly, is something similar; that is to allow deductibility of expenditure incurred in an area where revenue would not be exposed to resource rent tax. I understand, although I do not think it necessary to go through all this as well, that should the amendments of which Senator Durack has given notice be carried they would, for technical reasons, require a number of consequential amendments to other clauses of the Bill. Senator DURACK(Western Australia)(9.47) —The Minister for Finance (Senator Walsh) seems very anxious to move into consideration of the amendments that the Opposition has moved. He seems very reluctant indeed to give any detail about that secret side deal the Government has done with the Australian Democrats in regard to something which Senator Walsh says technically is not part of the legislation. Technically that may be true. It is as plain as a pikestaff of course that the legislation in no way whatsoever deals with the creation of any trust fund or any appropriation of that kind by the Government for any particular purpose at all. What the Minister for Primary Industries and Energy (Mr Kerin) has failed to address is the highly significant fact that whatever the Government has done and secretly conveyed to the Democrats has dramatically changed the passage of this legislation through the Parliament. The function of a second reading speech-something that may have escaped Senator Walsh, although he is capable of very effective after dinner speeches; one of which we have heard tonight-is to enlighten the Parliament as to the intentions and objects of the legislation and the effect of Government policy which is contained within the legislation. This has been done at great length, I might say, in the second reading speech to this legislation-as, indeed, it is done in relation to most legislation. However, in this case the Parliament has been totally deprived of a very significant piece of information, so significant in fact that a party with the balance of power in the Parliament has changed its vote. Senator Sanders —Your problem is that you didn't listen to my speech. I explained all that but you didn't listen. Senator DURACK —I am not objecting to the Australian Democrats. I am objecting to what the Government has done. Senator Parer —Tell the Democrats, too. They don't know. Senator DURACK —Yes, that may help the Democrats because there seems to be confusion amongst them. In this regard we are being asked to pass legislation which contains another significant element. As I said, it is so significant that another party has changed its intention as a result of it. We have had a very reluctant Minister giving us some very vague indication of the Government's apparent proposal to establish a trust fund. Senator Stone —The Minister earlier denied any involvement in the negotiations, yet they have been negotiated by the Minister for Primary Industries and Energy. Senator Sanders —You don't listen-$5m flat. Senator DURACK —But all that the Minister for Finance has told us is that there will be a trust fund into which $1m a year will be paid. He does not even tell us for how many years that will be paid. Perhaps Senator Walsh will at least tell us what is the total limit. Is this a yearly payment, indefinitely, of $1m? Is it a payment over so many years? Is it a lump sum that will be paid over this period? What is the general purpose of it? Presumably it will be by way of an appropriation. But whether we will get any detail before then, or other legislation to give effect to it, is at this stage totally vague. Before we proceed any further into a detailed discussion of this legislation-I know Senator Walsh is anxious to get on with the debate-it is only proper that the Senate should be informed of at least the total commitment that the Government has given in relation to these payments which have bought off the Democrats and encouraged them to change their vote. Senator PARER(Queensland)(9.52) —I will be pretty brief. The Minister for Finance (Senator Walsh) mentioned $5m. By way of interjection, Senator Sanders has clarified this by saying that it is $5m flat. I do not know what that means or what period it is over. But the Minister has said that the $5m will go into a trust account and it will not come from the resource rent tax (RRT). In the second reading debate Senator Sanders said that this amount of $5m for windmills, pushbikes or whatever would not affect current expenditure by the National Energy Research, Development and Demonstration Council (NERDDC) on alternative forms of energy. So, the question we are all asking is: Where is the money coming from if it is not coming from RRT but from some other source? Senator Sanders made it quite clear that it is not coming from NERDDC, so, presumably, the existing expenditure on alternative forms will not change. I ask the Minister to clarify this, not only for us but also for the Democrats, who seem to be as unsure as we are of what this is all about. Senator WALSH(Western Australia-Minister for Finance)(9.53) —I have just had another quick glance at the second reading speech, a copy of which I have here and which sets out the rationale behind the legislation. I do not use that term at all pejoratively; I use it in the sense that it explains the underlying economic logic of this form of taxation. I am sorry if Senator Durack cannot understand that, but I do not think that is my fault. Senator Durack and Senator Parer raised other questions. I thought I had made things clear in my earlier remarks but, if I did not, I apologise. As I understand it, the announcement which Mr Kerin or Mr Peter Morris will make-I do not know whether it will be this week or some time later-is that $1m a year will be paid into a trust account for each of the next five years. Senator Parer —From where? Senator WALSH —From Consolidated Revenue. One of the few things that Malcolm Fraser ever said that were correct was that there is no such thing as a free lunch. Things have to be paid for sooner or later. I am disappointed to see that over the last 12 months the Liberal Party of Australia has degenerated to the point that it is now running with the proposition that there is such a thing as a free lunch-that one can have $8 billion worth of tax cuts offset by $2 1/2 billion worth of expenditure cuts, or something like that. So $1m a year for each of the next five years will be paid into a trust account and used to enhance existing expenditure on alternative energy research. As I understand it, that is the proposition which will be announced some time in the near future. Recommendations will be made to the Minister by the National Energy Research, Development and Demonstration Council, known as NERDDC. Senator Durack and others are perfectly entitled to criticise that decision if they wish. I guess they could even have a go in the House of Representatives, at amending the consequential appropriation Bill that will eventually provide the money for it, if they want to. But if they want to make these sorts of initial decisions, they will have to be in government, not in opposition. Senator COULTER(South Australia)(9.56) —I am not too sure whether the Opposition is complaining about the amount of money, where it is coming from or, indeed, how it is to be spent. I suspect, from the remarks which were made during the second reading debate, that it is particularly concerned that money should be spent on alternative energy. I will say a few words on that subject. The analysis which the Opposition has made is quite sound, but the conclusion it draws is quite false. It seems to be saying that Australia is running short of liquid fuels. That is perfectly true; we are running short of liquid fuels. Indeed, the world is running short of liquid fuels. As an aside, I note that the market system on which both the Opposition and the Government tend to rely-- Senator Stone —Is that why the price is falling? Senator COULTER —If Senator Stone will listen, he will find that I am explaining that. The market system on which his Party and, indeed, the Government rely does not take account of future shortages; it takes account only of instantaneous supply and demand. The fact that by the mid-1990s fuel prices are expected to rise-and rise perhaps much more steeply than we saw in the early 1970s-- Senator Stone —What were they expected to rise to in 1982, Senator? They were expected to rise to $80 by this time, weren't they? Senator COULTER —The situation now is somewhat different from that which caused the price rises of 1972, 1973 and 1974. Those price rises occurred substantially because of a political situation in the Middle East in which the Organisation of Petroleum Exporting Countries chose to exercise its political power in the face of quite adequate supplies of petroleum. Of course, since then we have seen the exploitation of North Sea oil, which, on all projections, will run down very substantially in the next few years. The best figures which I have seen suggest that there will be a steep rise in price in the mid-1990s. Senator Parer —Where did you get this from? Senator COULTER —If one reads journals like Science, Nature, and so on, one will find those sorts of figures. Senator Stone —You ought to read a couple of economic journals. Senator COULTER —It is very significant that these people who are economists take no account of the real world-the real, natural world-at all. They simply deal with money. They fail to realise that money must have its roots in real resources and, unless it does, we are headed for a very serious fall. As I have indicated, there is a growing shortage of liquid fuels. That is true both of Australia and of the world as a whole. Furthermore, a statement was made by the Opposition that the rate of exploitation of petroleum has exceeded the rate of new discoveries for a considerable amount of time. That is also true of Australia and the rest of the world-it is particularly true in Australia. Interestingly, Senator Knowles said that the Fraser Government increased expenditure on exploration from $80m to $1,000m. Yet the statement was made a moment later that 77 per cent of the oil was still coming from Bass Strait and that that oil was discovered in the 1960s. Clearly, we had spent roughly $1 billion on further exploration which had produced very little result. Yet we seem to be being told by the Opposition that we need to spend more money on exploration. Senator Parer —They take the risk, not the Government. Senator COULTER —I do not mind whether it comes from private companies or from the Government. The fact is that it comes from the Australian economy and, on the Opposition's own statements, we have spent $1 billion which have produced very little result. Yet the Opposition is now arguing that we need to spend even more money on exploration. It has also stated quite clearly and repeatedly that the prospectivity-it is a horrible word-of Australia is poor. It is one of the poorest countries in the world in this respect, yet somehow we need to scrape together more money to go out and explore for more oil. Senator Parer —Not the taxpayer. Senator COULTER —Yes, the taxpayer, either directly or indirectly. What does the honourable senator think profits are, if not a private form of taxation? It comes out of the national revenue, whether from private or government sources. The sources of the wealth of the country are the resources on which the country is built and the work of its people. If that comes from private sources, so be it. If it comes through government sources it is essentially part of the same national revenue. The Opposition seems to have failed to realise that future generations also have a right to some of those resources. It is quite unrealistic simply to rip these resources out of the ground and exploit them in the view that the present generation has a perfect right to do that. Senator Stone —Do you not understand that there will not be any if they are not found in the first place? Senator COULTER —That is rather interesting. Senator Stone does not seem to realise that we-the human race-are now taking out of the ground, world wide, fossil fuels at a rate approximately one million times the rate at which nature laid those resources down so many million years ago. Senator Stone —If that is your problem, why are you opposed to nuclear energy? Your proposition is false in the first place. The TEMPORARY CHAIRMAN(Senator Powell) —Order! I ask that remarks be directed through the Chair. There are too many interjections. Senator COULTER —Thank you, Madam Chair. I would much rather speak to you than the interjections. But what is being said simply underlines the extremely simple analysis which is all that the Opposition seems to be capable of. It does not seem to be able to understand relatively simple scientific facts in relation to the observation that the human economy is only a part, a subset, of the total world ecology. The human economy can grow and expand only at the expense of the natural world. To the extent that it grows-- Senator Parer —Rubbish! Senator COULTER —I hear the remark `Rubbish'. That is the crux of this argument. The Opposition simply does not understand that we are dealing with a finite earth and we cannot go on exploiting it in this way. The Australian Democrats have sought and achieved the agreement of the Government to spend a small amount of money-we believe it is far too small-to find a real solution to this problem, which is the provision of energy for us and future generations. That requires a relatively long lead time. One of the faults in the Opposition's argument is that it does not realise that we cannot solve this problem in one or two years. The implementation of the technology will require relatively long periods of application. I mention here one of the failures of the Government. Insufficient attention was given in the so-called Button car plan to fuel efficiency in the manufacture of Australian cars. While Senator Knowles said that rising fuel costs will raise the cost of everything and therefore cause inflation, she fails to recognise that we do not need a certain quantity of fuel. We need transport and we can achieve that and, in fact, decrease costs, by using fuel more efficiently. While we increase the cost per unit per litre, we may well, if we go down the efficiency road, use sufficiently less fuel and decrease costs overall. As to the alternatives which have been mentioned, Senator Sanders pointed out that a number of these are already technically feasible. They are already economic. What is required is the will to put them in place. Senator Parer —Which ones are economic? Senator COULTER —I thank Senator Parer for that question. I will answer it. As I hope the economists in the chamber will know, a mix of factors go into lifetime costs. There is the initial capital cost of buying the equipment and there are the running costs. One area in which solar energy is eminently successful and can compete very successfully with either gas or electricity is the provision of hot water. The initial capital cost of solar units is very large. The Australian electricity energy industry has uniformly amortised the capital cost of generating equipment into the cost of electricity so that there is a hidden subsidy in the cost of electricity which distorts the market's impression to the point where it appears to be cheaper to go out to buy an electric hot water service. Studies were done in South Australia several years ago by the Stewart committee which showed that wind energy-another alternative Senator Sanders mentioned-is cheaper than central coal-based electricity. I invite fellow senators to look at the Stewart committee report to see that central coal-based power was costing 4c per kilowatt hour and that wind energy-and this goes back several years-could be produced at about 3.8c per kilowatt hour. These studies were done by engineers for the Department of Mines and Energy in South Australia, a department which is not given to praising the alternatives; on the contrary, it has been trying very hard to prove the opposite. A number of impediments which have been built into cost structures militate against the use of the alternatives which, in fact, are economic on a lifetime basis. What is being attempted is the engineering of some funds which will move us-the Democrats would believe far too slowly; we would like to see more funds available-down the road to the imposition of these alternatives which will not only ameliorate our demand for oil but will also be far less polluting. What has not been picked up, and which will limit the use of fossil fuels, particularly liquid fuels, is the amount of pollution such fuels cause not only in terms of unburnt hydrocarbons and in terms of carbon dioxide, which causes the greenhouse effect, but also in terms of the heat which is released to the surface of the earth. I do not think those trained in economics realise that the energy throughput of the earth's human population is now greater than the energy throughput of all other plants and animals on the face of the globe. This gives an indication of the level of pollution which one species alone is already causing, and this problem will be exacerbated by a further increase in the use of these fuels. Therefore, the Democrats are very anxious to support this small amount of funding and hope that it will be increased in the future. Senator SANDERS(Tasmania)(10.11) —I have often observed in this place that, when there is no logical basis for the Opposition's arguments, it resorts to personal abuse. We have certainly seen a lot of that. It is also, I am afraid, a great indication of the ego and, probably, the self-aggrandisement of politicians. Because they are paid a fat salary and have a big white car to ride around in and a private subsidised dining room, they think that they are somebody, that perhaps they know it all. I thought that Senator Coulter put a fairly understated case for the use of renewable energy, referring to the fact that the earth is running out of resources. Senator Sheil said, `Rubbish, rubbish' when Senator Coulter said that we are running out of oil and minerals. When Senator Coulter said that honourable senators could refer to articles in Science or Nature, Senator Paper scoffed and said, `Ah, Nature! Do you have to take off your clothes to read this magazine?'. Apparently he does not know that it is an authoritative magazine. Senator Parer —I didn't say that. Senator SANDERS —His colleague who sits next to him said it. Those people celebrate their own ignorance before the nation. We often deny reality in this chamber, with its artificial lighting and with its windows blanked out so we cannot see the real world. It is a bit like a bunch of ants sitting in an ant-hill discussing whether or not they will allow the sun to rise the next day. Some of our discussions have that much relation to reality. I think it is time that honourable senators actually opened their eyes to reality, and to the fact that this is a finite earth and we are damaging and overexploiting it. I hear a sigh from Senator Parer behind me. They say, `This is not happening'. While it is not happening on the scale that they have perhaps noticed over the last 10 minutes, 10 hours, 10 days or even 10 years, looking at it in terms of geologic time, which as a geologist I do, it is happening at an accelerated pace. I have been talking about the greenhouse effect for 20 years, and now people accept it. If we had listened 20 years ago to people who were talking about it, we might have been able to do something then. We are trying to do something now. It behoves all honourable senators to take a non-political look at what is happening to the real world-to open their eyes for once without the party leanings or the trappings of political power-and to try to think for the future instead of the present. In this entire debate, speaker after speaker from the Opposition has protected the oil industry, protected the richest companies on earth. The product of these companies is worth more every year than the gross national product of most countries. What an incredible state of affairs it is for those people to be protecting the richest and most powerful organisations on earth. Why do they do so? I have no idea, except that I think they buy the advertisements. I think they believe those wonderful ads on television from BP Australia Ltd, the quiet achiever, which says that it really wants to go out and explore and find more for the people of Australia. It certainly does not want to do it for profits! No, it does it for the people of Australia. Also there is the big Australian, the Broken Hill Proprietary Co. Ltd. It does all these wonderful things for the people of Australia! What rubbish! These companies do these things for themselves. But I think these people in the Opposition believe that they are in fact helping Australia in the process. They are not; they are helping themselves. I turn to the amendments. I was wondering whether we would ever get to the amendments. I presume we will. I refer to the matter of deductibility, since it has been mentioned. The oil companies already have massive deductions and massive tax help. What about thresholds? They should be lowered, if anything-certainly not raised. There has been a lot of talk about renewable energy. People have said, `If we do not like oil we should build nuclear power reactors'. I will not even get into that fatuous argument. To attack just a little corner of it, I make the point that nuclear energy releases heat into the atmosphere. How will Senator Stone account for that? The point is that Opposition senators have said of petroleum resources, `Look, we need it for our transport system'. Senator Parer —Are you going to restructure society? Senator SANDERS —Somebody said, `Are you going to restructure society?'. Yes, we must restructure society. We have to have efficient transit systems in the cities. For small delivery vehicles and perhaps for specialised commuting tasks we need to move to electrical power. We must also-listen for it, folks; we will hear a screech from the back row-we have to reinstitute such forms of transportation as bicycles. There is dead silence in the chamber-stunned silence, I suppose. Yes, I said `bicycles'. Senator Calvert —Rickshaws? Senator SANDERS —No, not rickshaws-bicycles. The bicycle is the most energy efficient form of transportation ever invented. it is humanity's most benign invention. It is a wonderful thing. It travels quietly, with great energy efficiency. It is easy to park and easy to buy. Millions of Chinese use them. Millions of other people in what we consider the undeveloped world use them. We somehow have got away from them. Bicycles can be a viable alternative option. In fact, we are selling far more bicycles in Australia every year than we are cars. Many bicycles get sold. What we need for bicycles to become a truly viable option is bikeways. Senator McKiernan —Madam Temporary Chairman, I raise a point of order. This is a very entertaining speech, but I fear it has got slightly off the track-be it a single or dual track. I ask you to call the honourable senator to order. It is getting quite late. There is an extraordinary amount of business to get through, not only today but the rest of this week. With a bit of discipline all around, we can do it. The TEMPORARY CHAIRMAN(Senator Powell) —I point out to the Committee that we are at the committee stage of the Petroleum Resource Rent Tax Assessment Bill. I believe that the debate is moving somewhat off that direction. It sounds often more like a second reading debate. I draw the attention of the whole Committee to the point of order. Senator SANDERS —Of course, this matter is central to the debate. One of the difficulties we have in the Senate is that we never really address the real problems; we just glance off them. This is an attempt to address the real problems. We do need alternative energy structures. We need a new look at the way we run our society. It will come. We can either choose to do it of our own volition or it can be imposed upon us. Senator Stone —Madam Temporary Chairman, I raise a point of order. I rise to support the point of order previously made by Senator McKiernan and to point out in passing that Senator Sanders, in response to your ruling from the chair, has in effect debated your ruling which, I think, under the Standing Orders, he is not permitted to do. Moreover, having debated it, he has immediately compounded the offence by continuing in the same manner as previously. After all, what Senator McKiernan ought to have said was: `The Government has paid for the silence of the Democrats. Why do they go on?'. The TEMPORARY CHAIRMAN —Once again I remind the Committee of the Bill we are addressing. I ask all senators to address their remarks to the Bill before us. Senator McLean —You have another 15 minutes in which to do it, Senator. Senator SANDERS —No, I do not wish to delay this Bill. Senator Stone's fatuous outburst deserves no reply, so I will not give it one. I do not wish to take the 15 minutes that Senator Stone has apparently now given me, but we must take action now on the resource rent tax, on the renewable situation and on restructuring our society. Are we going to take this action or are we going to wait until it is too late? From the speeches I have heard in here, and from the interjections, I think this Parliament would be quite happy to postpone this until it is too late. I think we must take action now. I believe that this Bill, unamended and with the spin-off of a sunshine fund, is an important first step towards a rational energy program. I recommend the Bill and I recommend voting against the amendments. Senator DURACK(Western Australia)(10.20) —I raise another matter with the Minister for Finance (Senator Walsh) of a threshold nature. Under the regime of off-shore taxation of oil production there was a Commonwealth-State agreement about the sharing of royalties that occurred in the areas of what are known as joint authorities between the Commonwealth and the States, under which the Commonwealth and the States shared royalty payments. As this new regime of a resource rent tax is replacing the royalty payments which the States shared, as well as some excise arrangements which were imposed by the Commonwealth, the States stand to lose quite considerably as a result of the Government's proposals when they ultimately take effect, as they clearly will now because of the support the Democrats are giving the Government. On the face of things the States will lose quite heavily from these arrangements. I would like the Minister to tell us-I remind the chamber that he is the Minister for Finance and presumably he has been engaged in discussions with the States, and I would be very surprised if they have not raised this matter with the Government because some of them have already raised it with the Opposition-what new arrangements will exist between the Commonwealth and the States. Are there any in relation to sharing the resource rent tax revenues that are received? If not, are other arrangements being put in place for revenue sharing between the Commonwealth and the States to replace the revenue that the States have lost? Or is the Government simply taking the attitude that it is just too bad for the States and they will have to wear the loss of revenue from these arrangements? Senator WALSH(Western Australia-Minister for Finance)(10.23) —As far as the Ash- more and Cartier Islands territory is concerned, which is the only off-shore area in which there is an immediate prospect of a rent tax being payable, the States have never had any entitlement to any revenue from there, which I think Senator Durack knows. I have just been reminded that the statement put out in June 1984 committed the Government to holding discussions with the States about the royalty distribution in the rest of the off-shore areas. To the best of my knowledge those discussions have not been been held because, as I mentioned earlier, of the very long gestation period of this legislation and the fact that, with a bit of luck, it will actually pass the chamber tonight. The Commonwealth's objective at that time-and from memory I think this was perfectly clear from the statement I issued, and if not, it has certainly been made clear from many other statements that I issued around the same time or said to the industry-is to get rid of the royalty in the entire off-shore area and to replace it with the rent tax regime. Again to the best of my knowledge that was a view shared by Senator Evans, when he had the responsibility for this policy area, and it remains the view of Mr Kerin, and certainly there has been no Government decision to change that. Senator DURACK(Western Australia)(10.25) —I find that a very unsatisfactory reply. As I understand what Senator Walsh has said, in 1984-that is well over three years ago-he made a commitment that, with the advent of the resource rent tax (RRT) regime, there would be discussions between the Commonwealth and the State governments as to the sharing of some of that revenue, to replace the loss of revenue that the States would have under the royalty regime. Senator Walsh —I would have thought you should not be talking about the legislation. If ever there was a spineless cave-in by a government it was what you masterminded in 1979. Senator DURACK —It is no good shouting and going on with meaningless noises. I know it is late in the evening and well after dinner. The position is that the Minister has said that his good intentions, as the Minister, to discuss these matters with the States were shared by Senator Gareth Evans, who had good intentions of discussing these matters with the States and, in an even better performance for the Government, the present Minister for Primary Industries and Energy (Mr Kerin) has good intentions of discussing these matters with the States. The Government has had 3 1/2 years of good intentions. Now we have the Bill about to become an Act. I know that immediately, in relation to the area to which the RRT applies, there is no loss to the States, but Senator Walsh has just announced that the object of the Government is to expand the resource rent tax regime to the whole of the off-shore areas and I think, to the on-shore areas as well. Senator Walsh may agree. What is the Government proposing? Has it proposed anything to the States or are we still in the realm of good intentions of discussing these matters with them? Senator WALSH(Western Australia-Minister for Finance)(10.26) —If Senator Durack could remember anything for more than five minutes he should remember this, because it was he who presided over one of the most spineless sell-outs that any Commonwealth Government has ever perpetrated and that is, having been given constitutional authority over the area beyond the low water mark by the High Court decision of 1975, the spineless Fraser Government then sold out and allowed all the States to have a say in what was never State territory, constitutionally determined. However, that is there. To get rid of the royalty in that part of the off-shore area other than the Ashmore and-- Senator Durack —You have never sought to change it. You would not be game to front Burke, would you? Senator WALSH —Senator Durack is complaining about my drawing attention to how he presided over that spineless sell-out in 1979. It is the Commonwealth's intention, and I have just been shown a copy of the statement that I issued-- Senator Stone —What about the spineless sell-out by the Commonwealth to protect the revenues of the Burke Government? Senator WALSH —Senator Stone is saying that Malcolm Fraser was intimidated by Charlie Court and so was Senator Durack. I have no problem with that. If Senator Stone is talking about the agreement that the Commonwealth made to forgo revenue on the North West Shelf gas project, that was an attempt to compensate the Western Australian Government for the mess that it inherited from the megalomaniac who was Premier at the time, who signed a take or pay contract and then added 50 million cubic feet a day to what he was committed to pay, for good measure, and who still had the effrontery to say that it was good business. If Charlie Court thinks that that is such good business I have invited him before to buy the gas from the Western Australian Government at the price that the Western Australian Government has to pay for it. That is about the last thing that I would have thought that Senator Stone or anybody on his side of politics should be talking about-the scandal of the stupid take or pay contract that the megalomaniac from the west signed on behalf of the taxpayers of Western Australia. This Government, very generously if I may say so, made some arrangements which lessened the financial penalties that the Burke Government had inherited from the megalomaniac who had been Premier about 12 months before it came into office. Senator Stone —Not only inherited but enthusiastically endorsed. Senator WALSH —I have noted, and I will point this out in Western Australia, that Senator Stone wants to impose the whole burden of Charlie Court's megalomania and stupidity on the citizens of Western Australia and is opposed to the Commonwealth Government making any revenue concessions in order to ease that burden. As Senator Durack would know, I think, the Commonwealth can abolish royalties in the Ashmore and Cartier Islands Territory. To get rid of the royalty in the rest of the off-shore area would require an amendment to the legislation. After the Bill is passed, the Commonwealth will discuss propositions to get rid of that royalty. I cannot forecast what the outcome of the discussions would be, but the legal situation is that the Commonwealth can act unilaterally in respect of that royalty provided it has a majority in both Houses. The TEMPORARY CHAIRMAN(Senator Powell) —Order! It being 10.30 p.m., under sessional order, I put the question: That the Temporary Chairman do now leave the chair and report to the Senate. Question resolved in the affirmative. The Temporary Chairman having reported accordingly-- The PRESIDENT —Order! It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator TEAGUE(South Australia)(10.31) -In the Senate at 1 o'clock on Thursday I was making some observations about my visit to China in November. Having completed half of my summary remarks, I reached the point where I was referring to the Thirteenth National Congress of the Communist Party of China and the very successful consolidation of the modernisation policy which the Congress has achieved for China. The full Zhao Ziyang speech is important to read. It is important for every senator interested in China-Australia relations to comprehend it fully. It is clearly the most important political document from China in this year of 1987. In our visit, just a week after that speech, it was clear that not only politicians, not only members of the ruling party but also students and members of the public, sat and listened to the speech of Zhao Ziyang on television. There are two fundamental principles which that speech and which the Chinese Government and people in their practices now endorse. One can be summarised as the principle of objective reality and the other as serving the people. The Liberal Party of Australia's delegation, including myself, does not have any wish to interfere with the internal decisions of China. Rather, I make the observation that these two principles do have real meaning in China. They are real guidelines to political decision-making and practice. I note as well that they also have real meaning in Australia. In Australia we value making decisions based upon objective realities and not some wishful thinking or some ideological tenacity. Also, we in Australia value decisions that serve the people. It is not too simplistic to say that they are two principles that are common touchstones between Australia and China. In some ways, without being too philosophical about it, they can be put in terms of truth and service. I believe that any government in any country at any time will serve its people well and will continue to survive with the confidence of the people if it genuinely represents truth and service; that is, in the terms I originally mentioned, if there is a full grasp of objective reality and of serving the people. There are some strong contrasts between contemporary China and the China of only 10 or 20 years ago. One of the strongest contrasts is that concerning freedom. During the Cultural Revolution 10 or 20 years ago no one could argue that the people of China were free. They were not free to speak, hardly free to think and not free to share an observation, political or otherwise, about developments in their own country. But in my visits in each of the last three years I have observed an enormous contrast in that the people of China are free: they do say what they think. It is a very rare question indeed that they cannot answer or that they do not wish to answer in a sensible fashion. There is a very sensible basis for discussion of every question in China today which, to anyone who was familiar with China 10 or 20 years ago, was unthinkable then. Unfortunately, many people-including some of the present leaders of China-were put in gaol for saying what they thought during the Cultural Revolution or for making the mildest criticism of the then leadership or of the leftist policies that were dominant. The crunch came in October 1976 with the arrest of the Gang of Four. As that news spread spontaneouslyabout China it led to celebrations amongst the people. I have heard many graphic descriptions of the celebrations on that famous night in October 1976, when all fireworks were exploded. Not one unexploded firework was left in any of the cities of China. All beer and spirits were consumed and the people stayed up all night to celebrate the end of the leftist regime. Such was the spontaneity and the comprehensiveness of that celebration that when considered together with other bearings on fuller analyses of Chinese politics, I am confident-along with many international observers-that the Cultural Revolution will never be repeated in China. The people wanted to cheer the end of dishonesty, duplicity and hypocrisy and they wanted release to freedom. They wanted to be able to think for themselves and to share their thoughts with others. I still regard it as something of a miracle that we have had such a transformation towards freedom in the largest country of the world. Some Western cynics may well put the view that students were arrested 12 months ago-in December 1986. A few academics advocating Western style democracy were demoted from their positions. But I fully recognise that, when I talk about freedom, it is not a freedom for every political idea to be advocated to the people of China as an alternative to the Government's main guidelines for political development of China. There is not an acceptance of Western democracy or of a polarised opposition to the Government's policies. There is an ability for individuals to think, to speak and to answer questions, but there is not pretence that China is advocating a Western style democracy: let every country decide its politics for itself. There are four aspects of this freedom to which I wish to refer. The first concerns the Christian churches. As an Australian Christian, I have been aware of the suffering of Christians wrongly persecuted and misunderstood for their genuine faith and personal commitment. When I first visited China in 1968, all churches were banned. Not one church was open; there was no public worship. The churches had been expropriated by the leftist groups and were being used as centres for Red Guard revolutionary groups, storehouses and places for repairing machinery and cars. But it is genuinely a wonderful observation to me that those churches have now all been re-opened. No one can put forward evidence now of any church that existed before the Cultural Revolution that has not had the capacity to open again. I believe, but I do not know the situation as intimately, that the same can be said for other religions-Islam, Buddhism, Taoism and some others. In China today there are 4,000 Protestant churches, 3,000 of which existed before the cultural revolution and 1,000 having been added as new centres of worship since the 1976 end to the 10 lost years. The churches that suffered damage at the hands of the leftists have been compensated by direct financial grants from the Chinese Government. Those grants have been put to good effect in the full repair and the extension of buildings, and the churches are flourishing. In addition to the four million members of the Protestant church, which is the church under the governance of the Christian China Council and the so-called three `self' movements-self-governing, self-propagating and self-financing-there is also the Catholic church, which has slightly more members and it has also had all of its churches restored. The Protestant church has 11 active and growing theological colleges one of which, in Nanjing, is a national college, and there are some 600 students in training. The churches have observed that this is an insufficient number to meet the needs of their congregations but they are glad that their membership has every opportunity to grow and expand freely in China. I think Western churches have a lot to learn from the experiences of Chinese Christians. In addition to the formal churches there are many informal home churches, some of which are in full communion with the 4,000 Protestant churches I have mentioned and some of which, due to distance and other reasons, are not. In 1968 I stayed at the Fu Tan University in Shanghai, which was closed down. Lectures were suspended, students were sent to the countryside and lecturers, professors and vice-chancellors were all dismissed. The universities were in the hands of Red Guard leftist revolutionaries. But now the universities have fully re-opened and are flourishing and developing. Their best graduates are able to apply for study in overseas universities and generally there is a gaining of international standards, to the benefit of China, throughout Chinese universities. I refer, thirdly, to minorities. There are some 100 minority languages in China. I have been able to visit minority peoples in Sinjiang, the Uighur and the Kazakh people, who are mostly Islamic people on the western fringe of China, above Tibet and below Mongolia. I have also been able to visit, most recently, Yunnan, where there are 26 minority language groups. It is my observation that, consistent with the open door policy of China with regard to international affairs, China has adopted a multicultural approach to these minority peoples. They are encouraged to retain their languages, they are encouraged to have minority language and cultural institutes with research and teaching facilities and the rights of minority peoples are guaranteed, consistent with the national objectives of China. It is my observation that China, of all countries, most approximates the multicultural policies that have been established in Australia for a decade or so. There are many autonomous provinces where a greater degree of freedom is given to minority peoples in provincial government. There has been a blossoming of a free market whereby the produce of individuals and small companies can be sold on an open market for whatever price the market can sustain. This was unheard of 20 years ago when the leadership of China was accused of being on the capitalist road. There is a higher take home real income for Chinese citizens and there is a concentration on consumer goods in the market-place. Televisions, motorbikes, pianos and the like are being sold to members of the public who are hungry to see their own families enjoy and prosper with consumer goods. Films are published in China that promote market economics and decisions in local management. Religious groups, universities, minority language groups and the market-place all have evidence of a complete transformation towards freedom in China. I wish to refer briefly to Tibet. Exaggerated and, at times, misinformed and hostile Press coverage has been given to the demonstrations in September and October this year. These hostile Press reports have raised a potential area of misunderstanding between China and Western countries, including Australia. However, the Chinese Embassy in Canberra through its Ambassador, Zhang Zai, in a letter to the Canberra Times written by the counsellor at the Embassy, Huo Junduo, and in a four or five page circulated statement by the Ambassador, has corrected this misinformation. Undoubtedly both the Government and the Opposition in Australia recognise Tibet as being an autonomous province of China. It is clear that the demonstrations were by a small minority of Buddhist monks in Lhasa only. They were timed to coincide with the Dalai Lama's visit to the United States Congress. The Chinese call this small group `splittists', those with the romantic notion that Tibet can be split away from China. I understand that this has not led in any part of the world to any persistent misinterpretation of Tibet being part of China. Last week the Parliamentary Library issued a current affairs paper. It gave a considerable amount of information about Tibet and indicated the developments in China over the last 20 years, especially since 1959. I wish to emphasise the education exchange between China and Australia. With regard to English language programs, I am convinced that Australia is the best place for Chinese to gain full proficiency in English. I welcome the development that 10,000 Chinese will be studying English in Australia next year. This is a very marked increase on 1986 and replaces almost an absence of Chinese students studying English in the preceding years. Australia can assist Chinese students in this way as it has assisted the students of South East Asia over the last 40 years of the Colombo Plan. It is essential that we ensure that the good foundations that presently exist are maintained and that we do not short change the standard of the courses given to these Chinese students. With regard to post-graduate joint programs, there is also enormous potential for jointly supervised post-graduate students taking degrees in Chinese universities but with one or two years experience in association with an Australian university. Problems arise in English in terms of a cultural bridge and good selection being followed. We should see much larger numbers of students in every field of study coming to Australia. I look forward to the way that Australia will contribute and also what Australian students will gain by similar studies within China. I refer to Australian investment in China. It is not just a question of Australian trade having grown considerably with China, but also direct Australian investment in which, through joint ventures and in other ways, Australian technical knowledge and industrial experience can be put to the mutual advantage of Australia and China. There are excellent opportunities in terms of the open door that is given especially to Australia. We need to understand that Australia has to genuinely resolve to understand the political foundations of this investment and industrial development and to be genuinely concerned for the middle and long term success of the enterprises for which this investment is made. It is of fundamental importance that politicians such as ourselves ensure that the foundation on which this investment is based is firmly maintained. Many Australians are now visiting the various provinces of China and increasing numbers of Chinese delegations are coming here. We must ensure that those visits are self-disciplined, that they are not just a familiarisation tour but that they achieve constructive results and, in the end, genuinely serve the peoples of our two countries. I conclude by again emphasising that Australia-China relations have an exciting future. Over the next 20 years, or even the next 50 years, we will be able to point to increasing achievements in our relationship in all of the fields to which I have referred in my brief remarks. Australians should be stimulated by these good prospects to work not only for the present year and the next five years but also for the next 50 years towards establishing the best relations we can between China and Australia. Senator JONES(Queensland)(10.52) —On behalf of Senator Cooney, I present the seventeenth report of 1987 of the Senate Standing Committee for the Scrutiny of Bills concerning the Customs and Excise Legislation Amendment Bill (No. 2) 1987. Ordered that the report be printed. Senator REID(Australian Capital Territory)(10.53) —Mr President, you may recall that on 26 November 1987 in the committee stage of the Appropriation Bill (No. 1) 1987-88 I raised the matter of the sewerage rates ordinance in the Australian Capital Territory and, in particular, section 5. I pointed out that in a number of commercial buildings the occupants are paying the sewerage levy in relation to toilets that are in the public area of the buildings and they are also rated on their shops as though they contained flushing units in them when they do not. I shall not go over the whole of the statements that I made on that evening but I remind the Senate that on that occasion the Minister who was then in the chamber, the Minister for Transport and Communications, Senator Gareth Evans, said: I will take that question on notice. Subsequently, when I continued further with the proposition I was putting, he said: I will ensure that he- he was referring to the Minister responsible for the Australian Capital Territory- acts very quickly to give Senator Reid an answer. I have not had any response from either Senator Evans or the Minister for the Arts, Sport, the Environment, Tourism and Territories (Mr John Brown). It is a question which those who are involved with this problem wish to have answered. I ask the Minister to give this matter his attention. The Minister seems to have plenty of time to give his attention to a casino and the like and his rhetoric would indicate that he is concerned about the welfare of the private sector. He seems to imply that he recognises that it is necessary to diversify the economy of the Australian Capital Territory so that it is not totally dependent on the public sector. This is just one significant matter to which we have had no response whatever. I have raised other matters and I refer, in particular, to the future of the aviation college which is completely within Senator Evans's responsibility; it is under the administration of his Department. As honourable senators would know, some time ago the Joint Committee on Public Works approved the college being developed at the site of the Watson High School, which is now closed, and that work should have been commenced. Over a considerable period the Department of Aviation looked at possible sites and determined that the structure should be built in the Australian Capital Territory. It is important that we acquire as many of these sorts of facilities as possible. It is not just a question of being acquisitive and of having them located here. This is the national capital and institutions of this kind ought to be based here. I concede that there is good reason for the Maritime College not being situated in an inland capital but there is no reason for the aviation college not to be located here when it has been determined by this Government that it should be. The Department of Transport and Communications was given just five days to produce a feasibility study relating to the college being moved to Launceston. However, the Minister is still not able to give us an answer as to where the college will be. If the college does not go ahead soon it will not, in any place, be ready to commence when it ought to be. It is another example of the Minister and the Government having complete disregard for the national capital, its future and what goes on here. There are a number of matters relating to the Government's administration of Canberra to which I have referred from time to time. Mr President, you will have heard all of them, having sat in, of course, on the adjournment when I have raised them. The third edition of the journal of the Master Builders Association (MBA) of the ACT published today raises some matters which it puts under the heading `Administration (mis) Manages Territory Taxation'. The only way in which I would differ with the MBA is that I would say that it is the Government that mismanages these matters, not the Department of the Arts, Sport, the Environment, Tourism and Territories although, perhaps, that is a matter that could be debated. The reality is that there are some anomalies that need to be dealt with. I refer to the new tax which is to be imposed by way of penalty on the late stamping of a contract for the sale of a property. Any contract not stamped within 30 days will acquire a 20 per cent penalty. There are a number of reasons why it may not be feasible or reasonable for a contract to be stamped within 30 days, although there can be no doubt that a contract must be stamped before the settlement takes place. However, the requirement that it be stamped within 30 days can only be a revenue raising measure, especially when a penalty is imposed at the level I have indicated. I think that the Minister should explain to us the reason for this imposition. This is especially so because I frequently get complaints about the length of time that the Department takes to approve commercial activities that people want to get on with in the Australian Capital Territory. It seems that it all works one way when revenue raising is concerned but not the other way when it comes to private enterprise wanting to get on with its activities. The editor of the MBA journal states: The logic of this legislation is so nonsensical and oppressive that it should be rescinded and those responsible for it should be found a job in the parks and gardens blackberry eradication program where excessive enthusiasm will be of benefit to the community. That might be drawing a long bow in some respects but I think it indicates the sort of frustration that the private sector feels when dealing with government in the ACT. Another matter mentioned in this journal-one which I have mentioned frequently-concerns payroll tax in the ACT. The Minister was very vocal at the time of the last Budget about the need for the ACT to pay its own way. Of course, he explained this in terms of the number of local taxes which were increased at the time. The fact is that until recently we paid payroll tax at the same rate as New South Wales and adjustments in favour of the employer were made to match those in New South Wales. That is no longer the case. We are now out of step with New South Wales in that the payroll exemption in that State has risen to $400,000, while ours remain as it was about 18 months ago. Of course, this means that any business considering coming to the ACT may well consider setting up in Queanbeyan because, in fact, it would be considerably cheaper to do so. The Government ought to look at giving private enterprise in the ACT the same terms and conditions in regard to the payment of payroll tax, as apply to our near neighbour. A further matter which this journal deals with-I have a file going back to the beginning of the group apprenticeship scheme with the Master Builders Association-is payroll tax on the employment of apprentices by the MBA. Other such schemes in Australia are exempt from the payment of payroll tax. But here the MBA pays payroll tax on second-year, third-year and fourth-year apprentices. This means that the master builders are not able to employ as many apprentices as they would be able to if they were exempt. Considering the very high youth unemployment rate in the ACT and the need to give young people the opportunity to attain skills, it is important that this scheme be given the widest possible opportunity to operate. The scheme has worked well. Over 100 apprentices have graduated through it. At present there are 98 apprentices in the scheme. The other night I was privileged to attend the graduation at which a number of apprentices received awards for a variety of successful activities in their apprenticeship courses. But it does not seem possible to get through to the Government that the ACT scheme ought not to be treated differently from similar schemes in the States. There seems to be some desire to make profit out of the fact that apprentices are being given an opportunity to acquire skills in the building industry here. The other and quite amazing thing, which I did not know until I read this paper, is that the master builders are now required to pay payroll tax on their employees grouped together within the group apprenticeship scheme. Let me make quite clear what I am talking about. Until now payroll tax in the ACT has been administered by the Department of Finance and the Department of the Treasury. Under the new financial arrangements it is being passed to the ACT administration. The Government, in its wisdom in handing this over from one to another, has decided to capitalise on the existing situation of one payroll tax number for the Master Builders Association and its employees and is now insisting that the same number be used for the group apprenticeship scheme, which is a totally separate scheme. It ought to have a separate number as it has in the past. The Master Builders Association as such is not an employer. The scheme is a group scheme whereby a number of people gather together to give young people an opportunity to work in the industry and acquire skills. This decision will have a significant effect in increasing the amount of payroll tax payable. It really is incomprehensible to me that anyone could dream up such a means of ripping money out of the system for this purpose. As is stated in the paper, not only do we tax apprentices in a way in which they are not taxed elsewhere, but also we tax a voluntary non-profit body whose aim is to help young people get training and employment. I invite the Minister to have another look at the problem and to sort it out very quickly. It is important in particular that the group apprenticeship scheme be exempt from payroll tax. It is important for our private sector that payroll tax be paid at the same rate as in New South Wales. The linking of the tax on the master builders with the group apprenticeship scheme is an anomaly that ought not to be allowed to continue. Another matter relevant to the private sector in Canberra is a matter in which you, Mr President, may be able to offer some assistance. The tourist industry in Canberra is particularly important to us and to the number of jobs available. There is a rumour that the new Parliament House may be open for only five days a week instead of the seven days that this building and other buildings in Canberra are open so that tourists may be able to see through them during the week and weekends. If it is to be open only five days a week-I do not know which five days it would be-I would regard it as a disaster for the tourist industry in Canberra if it were to be closed on Saturday and Sunday. I would also regard it as totally unacceptable if it were to be closed on sitting days. So I cannot imagine what is being considered. The building must be open seven days a week. What has to be determined is when it will be open. The tourist industry cannot be allowed to wait until May of next year to find out what will happen. It needs to make plans for bringing people to Canberra, for package tours to the national capital. The Government has been telling us for years that the Parliament House will promote itself; that there is no need for any special promotion of Canberra; that it will attract tourists; that all we need to do is wait until it is open and the tourists will come. If the industry does not know when it will be open, in order to make plans, it is put in an impossible situation. As I said, it must be open on Saturdays and Sundays, otherwise it will be a complete disaster and very harmful. What are the arrangements for the opening? There are people in Canberra who want to make arrangements for that day. They want to be able to encourage people to come here to be part of the group of people who will line the route to the new Parliament House. They want to organise barbecues, food stalls and other activities. They want to know that the building will be open after 11 o'clock so that people can look at it. It is not possible to run a tourist industry when these matters have not been decided or disclosed. I do not know whether nobody cares about how other people go about their business, or what the problem is. But the fact is that the tourist industry in Canberra does not have the information it needs to make arrangements for this very important event in Canberra. It is not just the private sector in Canberra which is concerned about what will happen on 9 May and thereafter; the airlines want to know what will happen. You would know, Mr President, that the timetables for planes into and out of Canberra are such that flights are few and far between. If thousands of people are to come to Canberra for that event, the airlines need to know what the arrangements are so that they can do something about scheduling flights to and from Canberra around 9 May. Additional traffic will be expected, and additional aircraft and additional parking for aircraft will be needed. When will the building be open to the public on or after 9 May? Will it be open seven days a week, as it must be, and when will we know what is happening? All of these matters which I have touched on tonight, principally tax matters but also this matter affecting the tourist industry in Canberra, are important. They might in themselves appear to be quite small and insignificant. Lumped together, they indicate to me that the Government is long on rhetoric and short on doing the things that matter as far as the private sector and the Australian Capital Territory are concerned. The PRESIDENT —Senator Reid did not raise this issue with me prior to the adjournment debate tonight. However, I am able to tell her that there was a proposal that the new Parliament House be open only five days a week, from Wednesday to Sunday, during the initial moving-in period. She will be pleased to know that the Speaker and I agreed today that the new Parliament House will be open seven days a week from 10 May. As to the arrangements for the opening of the new Parliament House on 9 May, it is to be the opening of a building, not a Parliament. Therefore, the people in control of the opening are the officers of the Department of the Prime Minister and Cabinet, not the Presiding Officers. However, I will give her a full report on the arrangements as soon as possible. Senator NEWMAN(Tasmania)(11.08) —I recognise the lateness of the hour, and I shall endeavour to be as brief as possible. I wish to raise three quite separate matters, all relating to people I care about. Thus, they are important to their daily concerns. The first relates to the people in the municipality of New Norfolk in Tasmania. It is a matter about which my colleague Senator Calvert has also made representations to the Minister for Transport and Communications (Senator Gareth Evans). I refer to a letter which I have received from the Council Clerk of the municipality, because I think it sets out the matter as succinctly as is possible. He refers in his letter to a recent incident which he says has exposed Telecom Australia to some criticism. The incident revolves around the desire of Telecom to remove two public telephone services from country areas in the New Norfolk municipality. The decision to remove the service was taken by an administrator within Telecom and conveyed verbally to the Council. The Council Clerk was advised by the Telecom employee that he had no intention of confirming the conversation in writing, as to do so was often a source of adverse publicity for his organisation. The Council Clerk stated that there were some facets of the incidents to which Council objected. They are: (1) The lack of courtesy displayed by Telecom in this instance in failing to approach Council on an official basis purely to avoid publicity which may be adverse. In this instance it has worked to the contrary and considerable public criticism has been generated by the tactics adopted. (2) The policies which are used by Telecom to decide which public telephone services to remove. The letter states that the Council Clerk was concerned that a national policy exists which dictates that a public telephone service will remain only in those areas where sufficient funds are generated by that service to cover its maintenance. He went on to say that he found that quite unacceptable-as I do. Obviously, if we are looking at public telephones we are looking at what is a very basic public service. Inevitably there are occasions when such public services have to be subsidised by higher revenue-generating operations in other places. If Telecom's logic were to be applied across the board we would only have telephone boxes where a major amount of revenue was generated. That, obviously, will not help people in sparsely populated areas such as the municipality of New Norfolk. I simply ask the Minister to see whether the policies being applied by Telecom are fair to these small sparsely populated municipalities which need public phone boxes, and to see what can be done as soon as possible for the citizens in the New Norfolk municipality. The second matter I wish to raise relates to a petition which Senator Devlin tabled today in the Parliament. It was a petition from 2,150 petitioners requesting the Government to reverse its decision to close the Medicare agency operated by the Associated Pulp and Paper Mills Ltd (APPM) Council for its work force. I have also been approached by the work force of APPM in Tasmania to see what can be done to save the Medicare agency. Mr President, no doubt you are not aware that the APPM mill is some considerable distance from the nearest shopping area with a Medicare office. As a result, a Medicare agency has been operating at the woodchip and particle board mill for some time. It services about 900 employees and their families. This agency is located extremely conveniently for the work force. Employees would otherwise have to go a long distance to a Medicare office. The employees live in fairly scattered rural communities. The current arrangement is that an employee of APPM processes medical claims both for the company's medical benefits scheme and also for Medicare. The company receives a commission for the Medicare claims process. The company understands that the arrangements will be changed on 31 March 1988 and this will lead, as I said, to great inconvenience for the workers and presumably to additional costs for the Commonwealth as the volume of claims from this number of people inevitably must lead to an extra employee in the Devonport office. I ask the Minister to intervene urgently to save this Medicare agency leading to, I believe, a net saving to the Commonwealth in place of the proposal for change. The final matter I wish to raise is also important to people I care about; that is, the Government's decision announced just recently concerning the defence service home loans scheme, which has been a matter of great concern to the veteran and service communities. I have raised this matter many times in this place. Senator Reynolds tabled a petition with several thousand signatures just a few weeks ago and I have also tabled a petition from many thousands of petitioners. The policy of the Liberal Party of Australia has been that the private sector should be involved in the defence service home loans scheme and there should be immediate action to reduce the long delays in the scheme. I welcome the fact that the Government has taken action in both these areas, that there will be involvement of the private sector in the new defence service home loans scheme and that there is a commitment to stop the long backlog immediately. I also welcome the fact that the Government has seen fit to introduce portability into the scheme. I have been pushing that for a long time. It is something which is going to be of great importance not just to service people but also to the taxpayers of Australia. It makes very good sense that this portability will allow service people to take their loans with them as they are posted from one part of Australia to another. I recognise that Senator Gietzelt has spent a great deal of time over the past years trying to get the interest of the private sector into the defence service home loans scheme. I believe that his proposals had a fatal flaw. It is something which still has not been addressed by the Government's recent announcement. I want to draw attention to that now. It is the fact that service men and women who enlisted after 15 May 1985 cannot become eligible for defence service home loans. So we still have two classes of servicemen; those who become eligible after six years of service and those who can never become eligible. I urge the Government to remedy this. It should have been remedied in the review which has just taken place. It is quite unconscionable to have servicemen serving side by side under two totally different conditions of service. Equally, the Government has a real interest in having more people in the scheme. I understand from those who expressed interest, when Senator Gietzelt advertised for expressions of interest in the private sector, that because the cut off date in May 1985 had been implemented there was, inevitably, going to be a gradual reduction in the number of people who would be eligible for a loan. That will mean that there will be fewer people in the scheme. It will mean that for any private sector involvement the overhead costs per loan will become greater. Inevitably it will become a very expensive scheme to operate. It will be much fairer to all parties if there is a continuing flow of new people coming into the scheme as their eligibility is decided. I believe that the Government has missed out on something very important. I strongly urge it to look again at the matter. The Senate has heard from me and from others about the discontent throughout Australia. The petitions that have been circulating ask the Government not just to preserve the existing scheme, but also to amend the scheme to increase the amount of the loan, to speed up the processing of the loans and to widen the eligibility to include all servicemen by way of recognition of their service to Australia. The Government has promised to speed up the processing of the loans. It has agreed to change the scheme so that people will be able to borrow more than the $25,000 for which they will get subsidised interest rates. I welcome that. It is a very sensible decision. Let us not forget that in March 1987 we had 2,500 applications which had been approved and which were awaiting completion. In other words, we had an enormous log-jam. These people have been waiting anxiously to find out what was going to happen to the loans that were already approved. In addition, since the Budget, people have been distraught at the possibility of losing their future eligibility. I remind the Government that the defence service home loans scheme was introduced for two main reasons: first, as compensation for war service and, secondly, to `attract and retain regular service men and women in the Defence Force in peace time'. If ever there was a time when we needed to ensure that we attracted and retained regular service men and women in the Defence Force in peace time it is now with the appalling resignation and separation rates we are facing. So the Government has made a good first step. It has missed some points and I urge it to refine the announcement it has made and when it is improving the scheme to ensure it improves it thoroughly. Senator BROWNHILL(New South Wales)(11.19) —I bring to the notice of the Senate the importance of school visits to the Parliament to enable students to see us and to learn about our parliamentary system. I congratulate and thank the attendants for the job they do in showing these young people from primary schools and high schools how the Parliament operates. Recently the Spring Ridge Public School, a country school, and its Principal, John McGrath, visited. I will read one letter to the Senate and I will incorporate others if the Minister for Home Affairs (Senator Robert Ray), who is at the table, will allow that. One letter, from Elissa Roberts, says: I am writing to you so that you can share my feelings with all the people that you read it to in Parliament. I want you to know exactly how I feel about Parliament and Politicians. New Parliament House is very impressive. The way the grass and glass is incorporated together is beautiful. They make it look so outstanding and comfortable. When we came to the Provisional Parliament House we sat in the House of Representatives and the Senate. It just showed me how much we need Opposition to keep Government in line, and Government to make decisions on our behalf. I would like to thank Mr Ralph Hunt for organising afternoon tea. It was most kind of him, and a special thank you to you, Senator Brownhill, for spending a great amount of time with us. Also, I think that Canberra in general is a beautiful city, well worth being built as the National Capital. I hope this information is enough to make everyone realise that children know what they're talking about. I would really appreciate if this letter could be read out in Parliament, or even published, as people should be able to share their feelings. It was very nice for a young primary school person under the age of 12 years to write such a letter. I seek leave to incorporate the other letters in Hansard. Leave granted. The letters read as follows- Jodie Birkbeck Darby Road, General Store Spring Ridge. 2343. To Senator Brownhill, This letter to you is to tell you my feeling's of parliament. It was really nice to see you at parliament House. We were to have afternoon tea with you thanks again. Now to tell you my feelings of parliament. My feelings are excellent because I like the way they sit down and sort out there problems and arguments and another good comment is that the new parliament house is looking great, the giant flag pole makes it stand out all over canberra. provisional parliament is very well organised, the organisation is good because the guards walk around and keep things well organised. Well I really enjoyed my stay at parliament it was great. Oh one more thing thank you again for afternoon tea and for taking up your time to talk to us, thanks. Your Sincerely Jodie birkbeck IAN MILLS C/- Primray School, Spring Ridge 2343 10/12/87 Senator Brownhill C/- Parlianent House Canberra 2606 Dear Senator Brownhill, A thank you for the great after noon tea. The new Parliment House is great as it look sleek BUT the flag pole is a rip off my way is beter. The old Parliment house is OK. I Liked The expedition center down under kings hall. The Senator were great in the meetings. Your Falhflly Ian Mills year6th Terri Wilson C/- Primary School Spring Ridge 2343 10.12.87 year 4 Senator Brownhill C/- Parliament House CANBERRA 2605 To Senator Brownhill, I really like Canberra. I thought it was going to be like Sydney, with all the high tall buildings and the hustle and bustle. Canberra in a way is more like Tamworth. I didnot like the sound of the price of the flagpole. After all, its not really fair because it is all our tax money. I like New Parliament house but I don't see why it has to be peoples money they work for. Some people might not have wanted it because they didn't see the need to. I love the sight of Provisional Parliament house from the top of Anzac parade. I like the way it was built, nice and easy. A Bit About The Polititions. I like the way John Howard really makes his point he is a good speaker. Bob Hawke in my opinion is quiet and listens to other people before himself. Ralf Hunt is a happy and pleasant person to talk to and I'd like to thank him for providing afternoon tea. Thankyou Senator Brownhill for talking to us. I would like just to say Merry caristmas. Yours Sincerely Terry Wilson Kiersten Powell C/- Primary School Spring Ridge 2343 10/12/87 Senator Brownhill C/- Parliament House Canberra 2605 Dear Senator Brownhill, These are my thoughts on New and Old Parliament House. I think that New Parliament House is great. I like how it is designed. Provisional Parliament House if good but not as good as New Parliament House. By the Way thank-you Mr Hunt for supplying afternoon tea for Spring Ridge Public School. I would like to Say thank-you Senator Brownhill for talking to us. Yours Sincerely Kiersten Powell Year 4. Tim Langfield C/- Primary school Spring Ridge 2343 10/12/87 Senater Brownhill C/- Parliament house Canberra 2605 Dear Senator Brownhill, I think parliament house is good because I like the grass on top and the glass. I thorght provisional parliament house is good because the paining showed us the prime Minister of Australia and showed us what they look like. Thankyou Mr hunt for having us for afternoon tea and talking to us and thankyou Senator Brownhill for talking to us as well. your Sincerely Tim Langfield 4 Class kellie-ann Frith C/- Primary School Spring Ridge 2343 10/12/87 Senator Brownhill C/- Parliament House Canberra 2605 Dear Senator Brownhill, I really like the new Parliament House because it has a nice structure and it is really big. I like how the grass gose up the sides of the building In the Provisional Parliament House I like the house of representatives. there is more action. In the Senate there was nothing going on. I like the kings Hall. That is where all the paintings of the priministers are. Mr Hunt was a kind man for the afternoon tea and you Senator Brownhill for answering our questions. Merry Xmas and Again thankyou. Yours faithfuly Kellie-ann Frith 4th Class Euan Dyson c/- Primary school Spring Ridge 2343 10-12-87 Senator Brownhill c/- Parliament House CANBERRA 2605 Dear seanter Brownhill I felt proud to have two parliment houses. I liked provisional house because it is nice thank you for your help in our work and thank you mr hunt from Euan year 4 Nicholas Hurst c/- Prmner school Spring Ridge 2343 10-12-87 Senator Brownhill c/- Parliament House CANBERRA 2605 Dear Senator Brownhill. I like New Parliament House because it has grass on top of it. I like old Parliament House because we got to see Senator Ray John Hawed and the two House. Mr Hunt is a good man. Mr Hunt I thank you for the drinks and lollies. I wish you a merry cristmas Yours Sincerely Nicholas Hurst Year 4 ``Beauly'' Quirindi 2343 10/12/87/ Senator Brownhill Parliment House Canberra Dear Senator Brownhill, I think that new Parliament House is prety good. I like the way how the grass grows over the top and how the glass is shaped. In the provisiounal Parliment House. I liked the paintings of prime ministers in the main hall. Please thank Mr Ralph Hunt for giving us afternoon tea. Your's faithfully Andrew Mills Year 4 Melissa Pezzuto c/- Sring Ridge Ph 473991 2343 N.S.W. 10/12/87 c/- Parliament House Canberra 2605 Dear Senator Brownhill, Well, I think that the New Parliament House looks terrific because I like the way it's on a hill and it has grass growing on top of it. Aswell as it has unbreakable glass which I think is good. And I think the best thing about it is the big flag that you can see all over Canberra. I think that Provisional Parliament house looks good because when we went to the Senate and the house of representitives there was very similar lay outs but I'd rather the House representitives because there is more action. I like the painting's in the main hall as well. I think Mr Ralph Hunt was very nice to organise our stay in Provisional Parliament House and morning tea. and I think you were very nice too for taking up your time for us I wish you all a merry cristmas and a happy new year. Yours sincerly Melissa Pezzuto. Year 4 Nathan Field c/- Primary School Spring Ridge 2343 10.12.87 Senator Brownhill c/- Parliment House Canberra 2605 Dear Senator Brownhill, Here are some of my thoughts on the New Parliment House and Provisional Parliment House first I'll give some of my thought on the New Parliment House. My thoughts on the new Parliment House are it is very big and beautifull compared to the Provisional Parliment House. but the Parliment House and the two House were very nice. P.S. Thankyou for morning tea. yours sincerely Nathan Field Yr 5 John Dyson C/- Primary School Spring Ridge 2343 10.12.87 Senator Brownhill C/- Parliament House Canberra 2605 Dear Senator Brownhill, I thought the desine of New Parliament House looks beautiful because of the huge flag on top of it and I also like how they are putting lots of trees in. I like the Provisional Parliment House to because when we get there the flags of Australia and Belgium were flying. Most of all I liked the two houses, first the House of Representatives in which John Howard was speaking, second the Senate where we saw all the senators and the black Rod. And we also saw the Mace. And thank you and Mr Hunt for afternoon tea. Yours sincerely John Dyson Year 5 Kim Peters C/- Primary School Spring Ridge 2343 10.12.87 Senator Brownhill C/- Parliament House Canberra 2605 Dear Senator Brownhill, I liked Canberra and all who live there, but there is one thing I like best about Canberra is New Parliament House because it will last longer than Provisional Parliament House, but there is one problem about the flag pole, it cost to much and it's taking all the tax payers money. I also liked Provisional Parliament House because it is set up in a different arrangement than New Parliament House. I would just like to say thankyou to Ralph Hunt and office for organizing afternoon tea. While I am talking about politicians, I would just like to say that I like how Mr Howard makes his point in parliament. I would also like to thank you Senator Brownhill for giving up your time to talk to us. Yours sincerly Kim Peters Year 5 Debbie Crowther C/- Primary School Spring Ridge 2343 10/12/87 Senator Brownhill C/- Parliament House Canberra 2605 Dear Senator Brownhill, Hi! How are you? I'm well. I'm writing you a short letter explaining my thoughts on parliament. I think that parliament House was really terific because it looks alot more stylish and bigger than the provisional Parliament House. Also Provisional Parliament House very good, I really liked the paintings of Australian Prime Ministers in the past. In the House of Representatives, Mr Howard really made sure that he got his point through. In the Senate everything was really quiet if you compared to the House of Representatives because nobody was yelling like John Howard. I really enjoyed it. And I think everybody else did too!! Your Sincerely Debbie Crowther 6th Class P.S.-After noon tea was really nice-Good thought. Eric Pezzuto C/- Primary School Spring Ridge 2343 10-12-87 Senator Brownhill C/- Parliament House Canberra 2605 Dear Senator Brownhill The New Parliament house was great I like how the grass grows over the top of the building. And the giant flag pole witch can be seen for miles. The Provisional Parliament house was good to! In the Senate I seen Senator Ray. But in the house of Representatives their was more action. The Politicians. Mr John Howard is a very good speaker. I thank Mr Hunt for afternoon tea and you for talking to us about Canberra we all thank you very much. Yours Sencerly Eric Pezzuto Year 5 Rebecca Hazelwood c/- Primary School Spring Ridge 2343 10/12/87 Dear Senator Brownhill, C/- Parliament house Canberra 2605 Dear Senator Brownhill, This is my letter to you on my thoughts of Parliament. New Parliament house is progressing very well. One day we went past it and there was grass growing up one side. Then the next day we went past it the grass was growing up the other side as well. We have also seen models and pictures of it as it will be in the future. I also like the giant flag pole which is very lovely at night because all the lights shine on it. At the provisional parliament house I liked the house of representatives better than the senate because there was a lot of action going on as John Howard was trying to get his message across. Whereas in the senate it was a bit dull and not very interesting. I would also like to thank Mr Ralph Hunt and his office for afternoon tea and you, Senator Brownhill for giving up your time to talk to us. Yours Sincerely Rebecca Hazelwood year 5 Tanya Johnson c/ Primary School Spring Ridge 2343 10/12/87 Seanator brownhill, C/ parlamaint house Camberra 2605 Dear Seanator brownHill, Hi all the kids have told me all about you and camberra because I didnot go, there. But there is aways a first time. They all liked it up theare, Theare weare lots of laughs and jokes and still are. one of the boys, named nathan siad in his report that you wouldent want to know what they had for lunch. Well I will go now yours sincearley Tanya Johnson Jeffrey Lewis C/- Primary School Spring Ridge 2343 10-12-87 Senator Brownhill C/- Parliament House Canberra 2605. Dear Senator Brownhill, here is my letter to you of my impressions on Parliment House. I don't think we really needed a new Parliament House because the old one is good enough!! In my opinion The Senate and The House of Representatives were completely diffrent in the organisation. Like, for instance, The Senate, It has a President, while the other has a Speaker. The only thing that annoyed me was the manners of Mr John Howard as he turnd his back on the Labor Party, Thank you for the Afternoon tea. And can you please thank Mr Hunt M.H.R. for me? Yours Sincerely, Jeffrey Lewis. Year 5. Senator BROWNHILL —I thank the Senate. The letters show that school children learn a lot about Parliament when they come here. They show that they have feelings. Those school children could be future Prime Ministers of this country. Senator SHORT(Victoria)(11.21) —In Question Time on the last day of sitting, that is, Thursday, 10 December, I asked a question of the Minister for Home Affairs (Senator Robert Ray) concerning overseas visits during 1984-85 by officers of the Australian Electoral Commission. I am pleased to see that the Minister is on duty in the chamber tonight. I gave him prior notice that I would be asking some follow-up questions tonight. My question last Thursday related to the fact that a colleague in the other place, the honourable member for Moreton, Mr Donald Cameron, asked a question on notice last year in which he requested details from all Government Ministers of all overseas trips made during 1984-85 by the employees of their respective departments and all statutory authorities. I asked Senator Ray whether he could advise the Senate whether the information provided by the then responsible Minister in relation to overseas trips made by officers of the Australian Electoral Commission was complete and accurate. In response to my question, Senator Ray answered, inter alia: The information given in answer to a question on notice- that is, Mr Cameron's question- has, on further examination, been proved to be inaccurate. We are talking about the very early life of the Australian Electoral Commission when two of its officers visited New Zealand to coincide with the holding of the 1984 New Zealand election. This study visit was intended to check features of the New Zealand electoral organisation for the benefit of the new Electoral Commission being established here. The understanding of the Commission officers was that, under Public Service conventions, the visits by Australian Public Service personnel to Papua New Guinea and New Zealand were not regarded as overseas travel . . . I interpose to say that Papua New Guinea and New Zealand were mentioned as being obvious overseas travel places in the Personnel Management Manual, which I think is the former Public Service Board's manual, which was provided several years before this incident arose. Senator Ray went on to say in his answer: I agree that those two trips, under any sort of criteria, should have been listed in that particular response. The conclusion that I draw from their omission is that I believe the officers are being truthful when they say that they misunderstood the terms of overseas travel. I repeat: they misunderstood the terms of overseas travel. On my interpretation of the Minister's answer, particularly the latter part to which I have just referred, he attributed the omission of the proper information to the officers who undertook the travel. That is how I interpret the Minister's saying that he believes that the officers are being truthful when they say that they misunderstood the terms of overseas travel. Anyway, that is a point that I would like to clear up. I would like now, if I may, to put to the Minister some questions. I fully appreciate that he may well not be able to answer all of them this evening. But I would be grateful for urgent replies-certainly prior to the Senate's rising later this week, if at all possible. The questions I put as a follow-up to the ones I have already asked are as follows: First, who were the two officers involved and where were they based at the time? Secondly, who authorised the information that eventually was submitted to the Minister for inclusion in Hansard in response to Mr Donald Cameron's question on notice? Thirdly, did the information that was submitted within the Australian Electoral Commission for approval before transmission to the Minister include the two trips? Fourthly, if so, does this mean that a conscious decision was taken to delete them? Fifthly, if so, who took the decision to delete them? Sixthly, were the omissions communicated to the then responsible Minister or the now responsible Minister prior to my raising the matter in the Senate last Thursday; and, if so, when was that communication made and what was its content? Seventhly, when did the Minister first find out about the inaccuracy in the answer given to Mr Cameron's question on notice-was it last Thursday or was it earlier? Finally, if the responsible Minister at the time, or the present Minister himself, had information on the omissions prior to my raising the matter last Thursday, why were steps not taken to advise the Parliament earlier of the error? That is the end of my questions. As I said, I do not expect that the Minister will have answers to all of those questions this evening, but I ask for his early response to them, if possible. Senator CRICHTON-BROWNE(Western Australia)(11.28) —I apologise to the Minister for Home Affairs (Senator Robert Ray), who is at the table. My name was not on the list earlier, but it was put on subsequently. I understood that we would have an overflow from last Thursday because those of us who sought to speak then were denied an opportunity when we were counted out because Government senators chose to remain outside the chamber. I raise an issue of considerable concern to a significant section of the community; that is, the decision of this Government, with the support, of course, of the Australian Democrats, to impose a tax on testamentary gifts to charities. That has occurred through the operation of section 160y of the Income Tax Assessment Act. Ordinarily, when a person dies, section 160x of the Income Tax Assessment Act operates so that capital gains tax is not payable when an asset is passed from a testator to a beneficiary. What happens is simply that the beneficiary inherits the testator's cost base. If he later sells the asset, he pays capital gains tax calculated on the purchase price paid by the testator and adjusted for inflation. With the indulgence of the Minister, I now seek to have incorporated in Hansard section 160y of the Income Tax Assessment Act, which sets out the position which is of concern to me. Leave granted. The document read as follows- Asset bequeathed to tax-exempt person 160y. (1) A person is a tax-exempt person in relation to the year of income for the purposes of this section if the person is a person whose income of the year of income is exempt from tax by virtue of a relevant exempting provision. (2) Where- (a) a person dies on or after 20 September 1985; (b) an asset that formed part of the estate of the deceased person and was acquired by the deceased person on or after that date has passed to a beneficiary in the estate of the deceased person; and (c) the beneficiary is a tax-exempt person in relation to the year of income, section 160x does not apply in respect of the asset but the following provisions of this section have effect. (3) The asset shall be deemed for the purposes of this Part to have been disposed of by the deceased person, and acquired by the beneficiary, immediately before the death of the person for a consideration equal to the market value of the asset at the date of the death. (4) If the asset passed from the legal personal representative of the deceased person to the beneficiary, then, on the subsequent disposal of the asset by the beneficiary, the cost base, the indexed cost base or the reduced cost base to the beneficiary of the asset for the purposes of this Part shall include any amount that would, if this section did not apply, have been included in that cost base, indexed cost base or reduced cost base, as the case may be, by virtue of paragraph 160x (3) (b). Senator CRICHTON-BROWNE —I thank the Senate. It is obvious that this is a special taxing provision for assets bequeathed to a `tax-exempt person' or persons, which, for the present purposes, can be taken to mean charities. The section deems a gift of an asset to a charity to be a disposal at market value by the testator to the charity, immediately before the testator's death. The practical effect of the section is to make a testator's estate liable to capital gains tax when an asset is bequeathed to a charity. While this is not a tax directly on the charity itself, that is the effect this will have. The truly disgraceful aspect is, however, that this has not occurred by accident. The Government is fully aware that the tax will affect charities. One of two events must occur under this iniquitous law. Let us say, for instance, first, the testator wills an asset to the Royal Blind Society and leaves substantial funds to relatives. The Royal Blind Society will take the asset but the estate will be required to pay capital gains tax on it before there can be a distribution of funds to the relatives. Quite clearly, if the gift of an asset to a charity means willing relatives an immense capital gains tax liability, few people making a will will do so. It is a major disincentive to leave assets to charities. The second possibility is that there may not be enough funds in the estate to pay the capital gains tax liability. In this case there is no alternative but to sell the asset which was meant for the charity, pay the capital gains tax out of the proceeds of the sale and then pass whatever is left to the charity. In either case, one thing is clear: that is that this Government is prepared to take its cut at the expense of charities such as the Blind Society, the Red Cross and the churches. Inevitably, if the Government introduces a tax which has the effect of reducing the funds donated to charities, that tax will eventually be paid for by the poorest people in the country. It should be remembered that governments and courts have accorded charities a special place in the general law and in revenue laws because for centuries they have recognised that charities ultimately operate for the public benefit. To be legally recognised as a charity, an organisation must be for the relief of aged, impotent and poor people; or, secondly, for the advancement of education; or, thirdly, for the advancement of religion; or, fourthly, any other purpose beneficial to the community not falling under any of the preceding three leads. No doubt Senator Ray would know that governments as far back as Queen Elizabeth I have taken very special steps to see that charities operate as efficiently as possible, because ultimately it would be for the advancement of the community as a whole. In present times, State Attorneys-General are obliged to ensure the proper and honest administration of charitable trusts. The Federal Government, for its own avaricious purposes, now attacks an important source of wealth for charities and in turn the poor, the old, the deaf, the blind, the disabled, education and religion. One need only make a casual flick through the pages of the Australian Law Journal to see the number of charities which try to attract testamentary gifts to see what an important source of income they are. I have spoken with the Red Cross in Western Australia and have been informed that an average 75 per cent of the value of legacies to the Red Cross in Western Australia is made up of property and/or shares and hence is liable for capital gains tax before it passes to that organisation. Typically, it is the largest testamentary gifts which contain property and shares. I seek leave to incorporate in Hansard a table from the Red Cross of Western Australia showing the importance of testamentary gifts. Leave granted. The table read as follows- Legacies-Australian Red Cross Society (WA) Financial Statements 1985-86 1985-86 Amounts Previously Received $ $ B. Y. Abel ... 926.50 4,972.34 C. G. Bateman ... 6,750.00 22,033.00 D. M. Burgess ... 145.25 15,123.48 J. Burnside ... 10,000.00 H. F. Carter ... 16.49 201.20 C. J. Earl ... 6,029.18 P. J. Enright ... 5,000.00 R. V. Haining ... 363.16 23,154.81 M. C. Hayward ... 3,585.62 11,395.75 J. P. Healy ... 52,255.85 W. A. Laker ... 988.34 18,215.12 E. C. Lawrence ... 28,173.36 121,221.46 E. I. McClelland ... 1,000.00 S. L. Mainland ... 50.00 H. J. G. Mitchell ... 7,500.00 15,000.00 N. V. Morley ... 8,243.05 V. M. Phillips ... 128,863.67 37,718.80 Gubakhsh Singh ... 552.82 L. Tearle ... 12,000.00 C. V. Wardrop ... 640.70 TOTAL: ... 273,084.00 Senator CRICHTON-BROWNE —Of course, the 75 per cent estimation will vary from year to year, but I leave it to honourable senators to make their own calculations and assessment of the importance of these gifts to the Red Cross in my State alone. I also remind them that this is only one State division of one charity. There are many others. Any government which claims any sympathy or compassion with the poor and needy would repeal this law. Of course, we could expect little help from the Treasurer (Mr Keating) of the present Government. He has already, quite deliberately, tried to impose the fringe benefits tax on charities. He said quite openly in the House of Representatives that he thought that fringe benefits tax should apply to charities. He would have introduced it-as we know-into this House had it not been for the actions of Opposition senators. The Treasurer has stated that not to impose tax on the capital gain accrued on assets bequeathed to charities would remove it from the tax base. I ask the Treasurer how this differs from income tax deductions for donations to charities. In the case of income earned, there is a potential liability to income tax at the end of the year. If, however, the taxpayer donates his income to a charity, the Government allows a taxation deduction and the potential tax is lost, much to the benefit of charities. In the case of an asset, there is an accrued capital gain which is potentially subject to capital gains tax if sold. The Government says that it cannot afford to miss out on this gain if the asset is passed to a charity. One might ask: Why is it any different for the Government to forgo the capital gains tax from the Government forgoing the income tax by allowing a deduction? By clearly preferring the interests of the Australian Taxation Office, the Treasurer shows where his priorities lie. One would hope that the Prime Minister (Mr Hawke) would take some action here. He said at the last election that he wanted to end child poverty by 1990. If this promise is to be regarded as anything more than election froth and bubble and the Prime Minister's word is to carry any weight, he ought to remove this iniquitous section of the Income Tax Assessment Act. It is my belief that charities are better than governments at dealing not only with child poverty but with all forms of social evils. The Government therefore ought to do all in its power to induce people to bequeath gifts to charities for the poor and less fortunate, not to discourage them. It could make no better start than by allowing testators to make bequests to charities free of the fear that they will leave their relatives a capital gains tax liability. I have gone through this speech reasonably quickly because I have no doubt that Senator Ray will not spontaneously tell me that the Government is going to announce the introduction of legislation tomorrow to remove the capital gains tax. But I hope he takes this on board and that the Government considers and contemplates it in the very near future. Senator ROBERT RAY(Victoria-Minister for Home Affairs)(11.35) —I listened with great disinterest to Senator Teague's travelogue. He is one of those partners from the South Australian Branch of the Liberal Party of Australia-like the Leyland Brothers-but at least I was spared the other half, Senator Hill. Senator Teague apparently found some great ideological guidance in China. I draw his attention to the old Maoist saying, `Punish one, educate a hundred'. I was certainly punished tonight, but I am not too sure about the second half of the saying. Senator Reid dived into the sewerage rates ordinances. I am sure that, when Senator Gareth Evans reads her remarks, he will redouble his efforts to get some sort of response to her questions. Senator Reid raised a number of other matters, as she often does in the adjournment debate. Once again I am forced to reflect on at least the gracious absence of the butcher of self-government, former Senator Vigor, from this chamber. If we had self-government, many of these issues would be resolved. Let us hope that in the new year we can all work on an electoral system out of which none of us will win, get some sort of an agreement and get self-government for this Territory-the sooner the better. Senator Newman raised three issues about the New Norfolk area, and I must admit I have no knowledge of the issues raised. She raised the question of the Medicare agency. This has already been raised with me by Senator Devlin, who I know is going to take it up with the relevant Minister this week. I would assume that, with a joint attack from Senators Newman and Devlin, it would be a very game Minister who resisted their advances on this subject. I was pleased to hear Senator Newman's remarks about the defence service home loans scheme. It was very gracious of her to congratulate the Government, although we probably have not done everything that she would like in that area. I am a beneficiary under such a scheme. The first family home that we moved into was financed by such a scheme, and I am as pleased to see it continue as Senator Newman is. Senator Brownhill raised the question of visits by school children to this chamber and the other, and I am sure that those letters which he has incorporated will enlighten most of us. It is always difficult explaining to the school kids who is in what party. I have an easy way of explaining the National Party of Australia. I always refer to the seven dwarves of the National Party. We start off with Senator McGauran, who is obviously Bashful, and then move on to Senator Brownhill, who is Sneezy; Senator Tambling, of course, is Doc; Senator Boswell, I am sorry to say, is Dopey; Senator Bjelke-Petersen is Happy; and Senator Sheil, with his propensity at Question Time, I refer to as Sleepy. Unfortunately, that leaves the title of Grumpy for only one individual, and that is Senator Stone. That sort of explanation often brings the children more in tune. I am pleased with Senator Brownhill's remarks tonight. Senator Short raised an issue about the Australian Electoral Commission. This is almost making a mountain out of a molehill, although I appreciate the question that he asked tonight. This is part of a vendetta, not by Senator Short but by Don Cameron, against the Electoral Commission. Where its antecedents are I am not sure, but he has a sort of Corsican approach to this matter, although he uses not a stiletto but a handful of blancmange. Mr Cameron, who graciously rang me tonight-I promised not to bag him too badly-has raised an issue about the Electoral Commission. It all came out when I was on an overseas trip with him and we happened to be going to Belgium. Half the party, including Senator Bjelke-Petersen, went off to see Waterloo, and Mr Cameron and I had morning tea with an official of the Australian Electoral Commission. Mr Cameron wanted to know what he was doing there. He was in fact observing an election. Senator Short raised a number of questions. He asked who the officers were. They were Mr Nugent, who is now, and I think was then, Electoral Officer, for New South Wales, and Mr Emmerson, who is Deputy Electoral Officer for Queensland. Senator Short was probably correct to say that the answer that I gave on Thursday could be misinterpreted, because I was answering in two parts. I was talking about the officers who took the trip and then about the officers who had failed to give the correct answer-two entirely separate groups. If I had paragraphed Hansard better, that would have been very clear. It was not those two individuals concerned who failed to give the correct answer. Senator Short went on to ask another series of questions. He asked who authorised the answer. I understand Professor Hughes has taken responsibility for authorising that answer. I might add some additional information which I did not have when the matter was raised at Question Time. The study trip of the two Australian Electoral Commission officers to New Zealand took place from 7 to 17 July 1984. At that time the Government Overseas Visits Committee was still in operation and was required to approve overseas travel. It was not, however, required to approve travel to either Papua New Guinea or New Zealand. For this reason a mistaken assumption was made that for the purposes of Mr Cameron's inquiry New Zealand was not included in the normal category of overseas visits. I take on board Senator Short's reference to the manual describing what an overseas trip is. The Electoral Commission did advise the Government on 19 December 1985 of the visit to New Zealand and the visit of another officer to Antarctica. At the time of the advice, December 1985, the Australian Electoral Commission commented that these, however, `do not constitute overseas trips within the accepted meaning of the term'. At 19 December 1985 that was its view, so it was not prompted by Mr Cameron's later inquiries. It had actually stated in a report to the Government that it did not regard them as overseas trips. Therefore, I think the Commission's bona fides are reasonable. The two officers produced a report on their assessment of the New Zealand electoral procedures. I will make a copy of that report available to any honourable senator who may be interested. Senator Short went on to ask whether the original draft included the New Zealand trip. I do not know, but I will endeavour to find out. The next two or three questions would be predicated on the answer to that question, so I cannot help with the answers to those questions. Senator Short asked when the Minister previous to the previous Special Minister of State knew about these matters. I will have to make inquiries. Senator Short asked when I first found out about it. I was dropped a very large hint when we were discussing other matters, I guess, when Senator Short wanted me to respond in part. So the first time Senator Short raised the matter with me was the first time I had ever heard of it. On the question of why the correction was not put to Parliament earlier, again I will need to make some inquiries in that regard. I think I have covered the matters I can. I will get the extra information, if I can, by the end of the week. I am quite happy, by the way, to give a lot more information on trips by electoral commissioners. They have made about five or six in the three or four years of their existence. I think that their examining of trends overseas is very valuable. I do not think they are making a meal out of it, and just taking junkets. Senator Short —I am not suggesting that. Senator ROBERT RAY —No, I do not think so. I do not think the trip to Antarctica by Mr Maley, for instance, could in any way be described as a junket. I think only one or two trips are planned for the next couple of years by officers of the Commission. Question resolved in the affirmative. Senate adjourned at 11.43 p.m. The following answers to questions were circulated: (Question No. 82) Senator Puplick asked the Minister representing the Minister for Resources, upon notice, on 20 October 1987: (1) How much money has been provided in each of the last 3 financial years from the Snowy Mountains Hydro-Electric Authority to the New South Wales National Parks and Wildlife Service for road maintenance within Kosciusko National Park. (2) When was the agreement to provide such funding entered into. (3) When did the agreement expire. (4) If the current agreement expires within the next 12 months, what discussions are taking place between the Authority and the NSW National Parks and Wildlife Service for its renewal and for what period is it expected that such renewal will operate. Senator Walsh —The Minister for Resources has provided the following answer to the honourable senator's question: (1) The amounts paid by the Authority to the New South Wales National Parks and Wildlife Service for each of the last three financial years are as follows: 1984/85-$615 399.86 1985/86-$691 007.99 1986/87-$760 809.69 (2) The Agreement between the State and the Authority came into effect on 1 April 1968. (3) The Agreement between the State and the Authority expires on 1 April 1988. (4) Discussions have been held between the Authority and the New South Wales Parks and Wildlife Service as a result of the impending expiry of the Agreement in April 1988. The Authority has agreed to continue maintenance of certain roads required for the operation of the Scheme but which the New South Wales National Parks and Wildlife Service does not wish to maintain for public access. The Authority does not intend to renew the Agreement and there is no requirement in the existing Agreement for it to do so. The intention of the payments was to facilitate a transition of responsibility for maintenance of roads constructed by the Authority and which the Government of New South Wales wished to retain for public access. By April 1988, the Authority will have fulfilled its obligations under the Agreement. (Question No. 98) Senator Sanders asked the Special Minister of State, upon notice, on 27 October 1987: Is the Australian Government promoting kangaroo products overseas for the Bicentenary. Senator Ryan —The answer to the honourable senator's question as as follows: The Australian Government is not directly promoting kangaroo products overseas for the Bicentenary. Marketing of Bicentennial products is the responsibility of the Australian Bicentennial Authority. The Authority has advised me that it appointed an agent to administer its direct marketing program. The agent has produced an official merchandise catalogue which it is distributing primarily within Australia as well as to some overseas addressees. The catalogue describes a wide range of Bicentennial products, including some soft toys made from kangaroo fur. The catalogue also contains soft toys made from synthetic materials. The Commonwealth Government through the Wildlife Protection (Regulation of Exports and Imports) Act controls the export of kangaroo products to ensure that this trade does not adversely affect the long-term survival of the species concerned. (Question No. 120) Senator Puplick asked the Special Minister of State, upon notice, on 17 November 1987: What was the function or functions, or the 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 Ryan —The answer to the honourable senator's question is as follows: The Minister was unable to attend this presentation as she was involved with duties relating to her ministerial responsibilities. Senator Ryan —On 23 September 1987 (Hansard, page 561), Senator Macklin asked me a question without notice concerning the possible establishment of further private, fee-charging institutions and the eligibility of such institutions for government subsidies, Austudy allowances and research grants. The Minister for Employment, Education and Training has provided the following answer to the honourable senator's question: The Government is aware of several proposals for the establishment of private tertiary institutions, including those such as the Bond University and Kyoto Institute of Technology as well as others involving various forms of association between new private institutions and publicly funded institutions. The Commonwealth recognises that developments such as these are primarily matters for the States. Commonwealth grants will not be available to such institutions. In the case of the Bond University, the proposed joint venture by the Bond Corporation and the Japanese EIE Development Company received Foreign Investment Review Board approval on the understanding that no requests would be made for Commonwealth support. Senator Macklin also asked whether students at private tertiary institutions would be eligible for AUSTUDY allowances. Courses are approved for AUSTUDY purposes only if they are wholly or substantially public funded, whether by the Commonwealth, State or Northern Territory Governments. There is no proposal for further extension of AUSTUDY eligibility to courses in the private sector. Senator Macklin also asked whether academics and departments in private institutions would be eligible for grants from the new Australian Research Council (ARC). That will be a matter on which the ARC will provide advice when it has been established. The Government recognises the importance of these issues in the context of its policies for the long-term development of tertiary education. Accordingly, the Task Force established to prepare a Policy Discussion Paper on higher education issues will be addressing the place of private institutions established under State auspices within the overall framework of higher education provision, and the relationship between public and private institutions. Senator Ryan —On 20 October 1987 (Hansard, page 957), Senator Haines asked me a question without notice concerning staffing levels and functions of the Women's Bureau in the Department of Employment, Education and Training. The Minister for Employment, Education and Training has provided the following answer to the honourable senator's question: As Senator Ryan stated, there is no reduction in the Government's commitment to improving the position of women in employment, education and training. The mission of the Women's Bureau in the new portfolio is to improve the access to and status of women in employment, education and training. The Bureau was upgraded to Branch status by this Government in 1983 and will retain this status in the new Department. The Bureau's functions of policy co-ordination and development and its publication program will continue. The Bureau will continue to provide advice on employment, education and training matters that affect women to the Minister and Secretary and to policy-makers and program managers within the portfolio. In 1986/87 the elements which came together to form the present Women's Bureau had an approved average staff level (ASL) of 14. The ASL allocation for 1987/88 is 12. The Bureau commenced 1987/88 with 15 staff which rose to 16 shortly after the start of the financial year. The present staffing level in the Bureau is 12. The Bureau will, with support available from other elements of the Department, like the Publications area, have available to it adequate resources to fulfil its designated role. Senator Ryan —On 21 October 1987 (Hansard, page 1045), Senator Jenkins asked me a question without notice concerning the English as a Second Language Program. In the course of answering Senator Jenkins's question I undertook to seek information from the Minister for Employment, Education and Training on allocations to Western Australian government schools under the ESL Program. The Minister for Employment, Education and Training has provided the following information for the honourable senator: In 1987 Western Australian government schools are receiving $2.023m under the General Support element, $0.335m under the Language Teaching element and $1.011 for each eligible newly arrived student in receipt of intensive ESL instruction. Legislation has been introduced into the House of Representatives to give effect to supplementation of 1987 figures for price increases occurring during 1987, and providing for maintenance in real terms of Western Australia's share of General Support and Language Teaching element funds and a doubling in real terms of per capita allocations for New Arrivals. Details are available in the legislation. Because the New Arrivals element is funded retrospectively on a per capita basis, details of the precise allocation of funds to Western Australian government schools under this element are not available. In 1986, 836 students were assisted under this element of the ESL program in Western Australian government schools. Senator Button —On 26 November 1987 (Hansard, page 2489), Senator Panizza asked me the following question without notice: I refer the Minister for Industry, Technology and Commerce to the answer he gave me regarding the import duty on diesel injection pump parts and turbo charger parts. I quote his reply: Importers of replacement parts used for diesel injection pumps and turbo chargers not manufactured in Australia will continue to have the opportunity to import their goods at 2 per cent duty irrespective of the proposed tariff changes referred to by the honourable senator. My questions are: What exactly does he mean by `have the opportunity to import their goods at 2 per cent'? Secondly, is it automatic that those specialised parts not manufactured in Australia will remain at 2 per cent? Or does it mean that the importer will have to reapply to obtain that concession, thereby causing those importers to pay the higher 25 per cent rate of duty until the decision is made and then apply for a refund? The answer to the honourable senator's question is as follows: The honourable Senator did not quote my reply in full as I went onto explain in my initial reply to him that the opportunity to continue to import their goods at 2 per cent duty would be subject to the normal provisions of the Tariff Concession System administered by the Australian Customs. Importers of parts currently dutiable at 2 per cent, but which are due to increase on 1 January 1988 on the introduction of the Harmonized Tariff, may therefore apply for tariff concessions orders if it can be established that the imported parts do not compete with any parts produced in Australia. Under the existing tariff, parts of goods may incur the duty rate applicable to the whole good, however, such is not the case with the Harmonized Tariff. In the Harmonized Tariff special provision is made for parts for certain goods some of which are produced in Australia. It cannot be assumed that tariff concessions will be issued for all parts that previously attracted 2 per cent duty. Importers have been encouraged to lodge applications for tariff concessions as early as possible in order that the legislative requirements may be met for a 1 January 1988 commencement date. Where applications have not been finalised by 1 January 1988, normal duties will apply with refunds being obtainable when and if a tariff concession is granted. Importers are aware that concessions may not be issued retrospectively. Consequently, concession applications submitted after 1 January 1988 may only operate from date of lodgment.