Tuesday, 15 December 1987 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the A.C.T. respectfully shows- That X-rated videos denigrate true human values and lower community standards. That the continued availability of this pornography is contrary to the wishes of the majority of Canberra people. Your petitioners therefore ask the Senate to take action to bring about the prohibition of X-rated videos in the A.C.T. And your petitioners as in duty bound will ever pray. by Senator Reid (from 365 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 notion 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 462 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 Australia 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 Reid (from 43 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 education 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 121 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 Michael Baume (from 99 citizens). To the honourable The President and members of the Senator in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 October 1986 to be a serious breach of trust by the Government. This cut has reduced the base for future adjustments. The Government has promised to restore the base as soon as economic circumstances permit. Having regard to the state of the economy as portrayed by members of the Government in recent months and the interaction between Social Security pensions and the above mentioned adjustment, your Petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Government to restore the pension base for the calculation of future adjustments and that the restoration be effected in conjunction with the Social Security adjustments in November 1987. And your petitioners as in duty bound will ever pray. by Senator Reid (from 21 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: We consider the Federal Government's decision to have Telecom charge for the cost of ``Directory Assistance'' inquiries will greatly disadvantage, the sick elderly and the handicapped. Specifically, it will impose an unjustified financial burden on those with sight impediments and reading difficulties, such as the elderly. It will also disadvantage physically handicapped people and persons confined due to illness. Your petitioners most humbly pray that the Senate in Parliament assembled should urge the government to: Reverse its decision to have Telecom charge for ``Directory Assistance'' inquiries. And your petitioners as in duty bound will ever pray. by Senator Reid (from 75 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 are gravely concerned at the closure of the Medicare Cash Payment Agency in Rosebery, Tasmania on 31st March 1988 which will result in a loss of the cash reimbursement facility and direct representation from Medicare. And your petitioners as in duty bound will ever pray. by Senator Tate (from 342 citizens). Senator WALTERS(Tasmania) —by leave-I present to the Senate a petition, from 306 citizens, which is not in conformity with the Standing Orders as it is not in the correct form, praying that the Senate amend the Customs Prohibited Imports Regulations and the Australian Capital Territory (Classification of Publications) Ordinance to ban the importation and production of pornographic material in the Australian Capital Territory. Petition received. Petitions received. Senator RICHARDSON(New South Wales-Minister for the Environment and the Arts) —On behalf of Senator Gareth Evans, I give notice that, on the next day of sitting, he will move: That the following Bill be introduced: a Bill for an Act relating to the conversion of the Australian National Airlines Commission to a public company, to repeal all but certain provisions of the Australian National Airlines Act 1945, and for other purposes. Senator REID(Australian Capital Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the failure of the Joint Select Committee on Video Material to present any report to the Parliament since the Committee's establishment on 19 March 1985; (b) condemns the failure of the Labor Caucus to require the Committee to report to the Parliament, as a matter of priority, and in particular, the Government's failure to require the Committee to report by 10 December 1987, and the extension of time until 28 April 1988, which has been given to the Committee for the presentation of its report; (c) further condemns the failure of the Federal Government to respond to calls by people in the Australian Capital Territory and elsewhere in Australia for a moratorium on the sale and distribution of X-rated video material in the ACT pending the production of the deferred report of the Joint Select Committee on Video Material. Senator JONES(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the double century by the Queensland and Australian captain, Allan Border; and (b) congratulates Allan Border for posting his highest test score, his twenty-second test century, and becoming Australia's foremost test run-getter with his double century, passing records set by the great Bradman and Greg Chappell. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that the Resources and Energy spokesman for the Australian Democrats, Senator Sanders, has now admitted that his Party is opposed to the exploration for oil in Australia; and (b) condemns the Australian Democrats for going to the recent election campaign without revealing to the people of Australia their anti-oil exploration policy, implementation of which would be disastrous for all Australians. Senator COLLINS(Northern Territory) —Pursuant to my notice of intention given yesterday, I now withdraw Business of the Senate notices of motion Nos 4 and 5, standing in my name, for disallowance of certain delegated legislation. Senator COLLINS(Northern Territory) —I give notice that, seven sitting days after today, I shall move: That the Export Inspection (Quantity Charge) Regulations (Amendment), as contained in Statutory Rules 1987 No. 251 and made under the Export Inspection (Quantity Charge) Act 1985, be disallowed. I seek leave to incorporate in Hansard a short statement of explanation. Leave granted. The statement read as follows- Today is the last day to give protective notice to protect the Committee's freedom of action on this matter. The Departmental Secretary has been given a discretionary power to approve export inspection procedures. Such an approval is the condition for eligibility to be exempted from certain charges. The Committee is examining whether that discretionary power is reviewable should a grievance arise from an adverse decision. Senator COLLINS(Northern Territory) —I give notice that, at the giving of notices on the next day of sitting, I shall withdraw Business of the Senate notice of motion No. 1 standing in my name for three and four sitting days hence respectively for disallowance of certain National Health Act principles and Defence (Public Areas) By-laws. As I am withdrawing a notice of motion, I seek leave to make a short statement. Leave granted. Senator COLLINS —Firstly, the health principles guide the exercise of official discretions determining nursing home fees. The Senate Standing Committee on Regulations and Ordinances sought advice on appeal procedures. The Minister for Community Services and Health (Dr Blewett) has assured the Committee that discretionary powers are to be progressively eliminated as a new uniform fee system is introduced. A transitional appeal mechanism is in place involving State based fees review committees of inquiry. Secondly, the by-laws control access to certain Commonwealth land. The Minister for Defence (Mr Beazley) has agreed to stipulate than only `wilful' acts of destruction or interference with flora, fauna or property will be punishable offences. For the information of honourable senators, I seek leave to incorporate the Minister's two letters in Hansard. Leave granted. The documents read as follows- Dear Bob I refer to your letter of 27 October 1987 about the Financial Arrangements Principles for the determination of nursing home scales of fees which have been formulated pursuant to subsection 40aa (7) of the National Health Act 1953. I apologise for the delay in replying. I understand that in the absence of a reply before 20 November 1987, and as a precautionary measure, you have given notice that you would move a motion in the Senate on behalf of the Standing Committee on Regulations and Ordinances that the Principles be disallowed. You have raised questions concerning the use of discretionary power by the Secretary of the Department under the Principles and the appeal avenues open to nursing home proprietors affected by such decisions. In particular, you asked whether or not the discretionary decisions are subject to review by the AAT. As you will be aware, the National Health Act (NHA) and the Nursing Homes Assistance Act (NHAA) were amended with effect from 1 July 1987 to authorise the phased introduction of new funding arrangements for all non-Government nursing homes for the aged. The arrangements applying prior to 1 July 1987 under the NHA provided for fees to be determined for each nursing home which reflected the home's actual operating costs, subject to a test of reasonableness exercised by the Secretary (or his delegates). Under an alternative arrangement for nursing homes operating under the NHAA, each home's net operating deficit was funded by the Commonwealth. The administration of these two cost reimbursement schemes was complex and depended heavily on the exercise of discretionary powers. In contrast to this the new funding arrangements introduced from 1 July 1987 will gradually phase-in a system of national uniform nursing home fees where discretionary power will be gradually removed. From 1 July 1987, the NHA provides for fees to be determined by the Secretary taking into account the formulae contained in Section 40ag. The Principles under Sub-Section 40aa (7) are designed to ensure that the formulae are fairly and consistently applied. Under the formulae, the fees for all non Government nursing homes for the aged will be coalesced again using a fixed formula, to a national uniform level on 1 July 1991 in respect to infrastructure costs. When all existing nursing homes have had the infrastructure costs which they incurred up to 30 June 1987 assessed and validated by the Secretary, there will no longer be a need for the Secretary to exercise any discretionary power under the Principles in relation to the infrastructure component in fees. It is expected that this point will be reached during 1988/89. In addition, on 1 July 1988 the government intends to commence the phasing-in of national uniform nursing and personal care staffing standards for nursing homes. Similarly, once the uniform staffing standards are fully in place (probably by the end of 1989) the Secretary will no longer need to exercise a discretionary power under the Principles in relation to the nursing and personal care component in fees. Decisions flowing from the exercise of these powers are not subject to review by the AAT. Notwithstanding this, however, I wish to stress that there is an effective review mechanism available to proprietors who are dissatisfied with any decisions of a discretionary nature taken pursuant to the Principles. When a scale of fees has been determined by the Secretary, compliance with that scale becomes a condition to which the approval of premises as an approved nursing home is subject (sub-section 40AA (6) (c) (i) of the NHA). The mechanism which provides for a Ministerial review of a nursing home's scale of fees is established by sub-section 40AE (2) of the NHA. It is appropriate to explain the effect of this provision in two parts, as amendments to it are proposed in the Community Services and Health Legislation Amendment Bill 1987 which is currently before the Senate- (i) In its current form, where the Secretary does not alter the conditions applicable to the nursing home (including fee levels) in accordance with a request by a proprietor, that proprietor may request the Minister to review the Secretary's decision. This review must be conducted in accordance with the Principles which were in force at the time the decision was made and which continue in force at the time of the undertaking of the review (unless the Minister is satisfied that it is not appropriate to apply any particular principle) (subsection 40AE (3A)). (ii) Under the proposed amendments, where the Secretary makes any fees determination with which a proprietor is dissatified, that proprietor will be able to request the Minister to review the Secretary's decision. This review will be conducted in accordance with the Principles which were in force at the time the decision was made (subsection 40AE (3A)). Under both the current and proposed arrangements, subsection 40AE (4) provides that before any Ministerial decision can be taken on review, the proprietor's request must be referred to the Nursing Homes Fees Review Committee of Inquiry, established under the NHA. There is a Committee established in each State. In making its report to the Minister, the Committee would have regard to the same Principles as the Minister is required to apply. In the conduct of their examinations of requests for reviews, the Committees of Inquiry seek written submissions from the proprietor and the Department. In addition, the proprietor and representatives are afforded the opportunity to present their case orally to the Committee. In addition to the review mechanisms on the merits through the Committees of Inquiry and the Minister, there is also judicial review available through the Federal Court. Once a decision has been made by the Minister, the proprietor of the nursing home may seek the review of that decision pursuant to the Administrative Decisions (Judicial Review) Act 1977. Since the establishment in 1973 of the review mechanism in subsection 40AE of the NHA a significant number of proprietors have sought redress through it, with only a small minority subsequently appealing to the Federal Court about the decision taken on review. Accordingly, in my view, there is a mechanism for an effective review of the merits of the decisions to arrive at a scale of fees taken under the Principles. I trust that the information set out above is sufficient to enable the Committee to see fit to withdraw its notice of motion. Should you wish, I would be happy to arrange for an officer of the Department to meet with you to clarify any aspects of this matter. Yours sincerely Neal Blewett Senator Bob Collins Chairman Senate Standing Committee on Regulations and Ordinances Parliament House Canberra, A.C.T. 2600 10 December, 1987 Chairman Senate Standing Committee on Regulations and Ordinances Parliament House CANBERRA, A.C.T. 2600 Dear Senator Collins I refer to your letter dated 6 November 1987 in which you expressed concern that paragraphs (c) and (d) of by-law 12 of the Defence (Public Areas) By-Laws would create offences of strict liability. It was not intended to impose criminal liability for accidental acts, and I accept your Committee's comments on this point. In order to avoid the risk that the by-law may be so interpreted, an amendment will be prepared to insert the word ``wilfully'' in paragraphs (c) and (d). Yours sincerely KIM C. BEAZLEY Senator POWELL(Victoria) —I give notice that, on the next day of sitting, I shall move: That a select committee on the use of agricultural chemicals in Australia be established. Senator HARRADINE(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that the Annual Report of the Attorney-General's Department states that the key recommendation of the Senate Select Committee on the Human Embryo Experimentation Bill 1985 was for the establishment of a national body to regulate the area of human embryo experimentation in Australia; (b) notes that the Senate Select Committee on the Human Embryo Experimentation Bill 1985 refers specifically to its ``chief recommendation'' in the final sentence of paragraph 4.38 of its Report which states: ``In short the Parliament should adopt the chief recommendation of this Report (see paragraphs 3.6, 3.7, 3.21 and 3.22) as the basic statutory principle underlying research on human embryos in Australia'', and that this principle was stated in the final sentence of paragraph 3.22 as follows: ``The Committee recommends that the principle protecting the embryo from destructive non-therapeutic experimentation be adopted by the Senate in its consideration of this matter''; (c) notes that the Senate Select Committee Report clearly obliges the recommended national body to be bound by the basic statutory principle which would implement the key recommendation of the Report to make ``unlawful any destructive non-therapeutic experimentation which frustrated the development of the human embryo''; and (d) draws the attention of the Attorney-General to the discrepancy in the Annual Report of his Department. Referral to Committee Motion (by Senator Chaney) put: 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. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 62 Noes . . . . . . . . . . . 7 —— Majority . . . . . . . . . 55 —— Alston, R. K. R. Hill, R. M.Archer, B. R. Jones, G. N. (Teller)Aulich, T. G. Knowles, S. C.Baume, Michael Lewis, A. W. R.Baume, Peter McGauran, J. J.Bishop, B. K. MacGibbon, D. J.Black, J. R. McKiernan, J. P.Bolkus, N. Maguire, G. R.Boswell, R. L. D. Messner, A. J.Brownhill, D. G. C. Morris, J. J.Burns, B. R. Newman, J. M.Calvert, P. H. Panizza, J. H.Chaney, F. M. Parer, W. R.Chapman, H. G. P. Puplick, C. J. G.Childs, B. K. Ray, RobertCoates, J. Reid, M. E.Collins, R. L. Richardson, G. F.Colston, M. A. Ryan, S. M.Cook, P. F. S. Schacht, C. C.Cooney, B. C. Sheil, G.Crichton-Browne, N. A. Short, J. R.Crowley, R. A. Sibraa, K. W.Devereux, J. R. Stone, J. O.Devlin, R. Tambling, G. E. J.Durack, P. D. Tate, M. C.Evans, Gareth Teague, B. C.Foreman, D. J. Vanstone, A. E.Gietzelt, A. T. Walsh, P. A.Giles, P. J. Walters, M. S.Hamer, D. J. Watson, J. O. W.Harradine B. Zakharov, A. O. Coulter, J. R. Macklin, M. J. (Teller)Haines, J. Powell, J. F.Jenkins, J. A. Sanders, N. K.McLean, P. A. Question so resolved in the affirmative. Referral to Committee Motion (by Senator Lewis) put: 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 $1000 on accounts that do not attract the verification procedures is appropriate; and (i) any other matters relevant to the Bill. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 60 Noes . . . . . . . . . . . 7 —— Majority . . . . . . . . . 53 —— Alston, R. K. R. Hill, R. M.Archer, B. R. Jones, G. N. (Teller)Aulich, T. R. Knowles, S. C.Baume, Michael Lewis, A. W. R.Baume, Peter McGauran, J. J.Bishop, B. K. MacGibbon, D. J.Black, J. R. McKiernan, J. P.Bolkus, N. Maguire, G. R.Boswell, R. L. D. Messner, A. J.Brownhill, D. G. C. Morris, J. J.Burns, B. R. Newman, J. M.Calvert, P. H. Panizza, J. H.Chaney, F. M. Parer, W. R.Chapman, H. G. P. Puplick, C. J. G.Childs, B. K. Ray, RobertCoates, J. Reid, M. E.Collins, R. L. Richardson, G. F.Colston, M. A. Ryan, S. M.Cook, P. F. S. Schacht, C. C.Cooney, B. C. Sheil, G.Crichton-Browne, N. A. Short, J. R.Crowley, R. A. Sibraa, K. W.Devereux, J. R. Stone, J. O.Devlin, R. Tambling, G. E. J.Durack, P. D. Tate, M. C.Evans, Gareth Teague, B. C.Foreman, D. J. Vanstone, A. E.Gietzelt, A. T. Walters, M. S.Hamer, D. J. Watson, J. O. W.Harradine, B. Zakharov, A. O. Coulter, J. R. Macklin, M. J. (Teller)Haines, J. Powell, J. F.Jenkins, J. A. Sanders, N. K.McLean, P. A. Question so resolved in the affirmative. Motion (by Senator Powell) agreed to: That notices of motion Nos 1 and 2 standing in the name of Senator Powell be withdrawn. Senator LEWIS(Victoria)(10.26) —Mr President, I seek leave to debate notice of motion No. 3 cognately with notice of motion No. 4 standing in my name. Leave granted. Senator LEWIS —I move: That new orders 12a, 12b and 12c and Section V of the Schedule contained in the Export Control (Fees) Orders as amended (Amendment), being Export Control Orders No. 17 of 1987 and made under the Export Control Act 1982, be disallowed. Notices of motion Nos 3 and 4 relate to the Export Control (Fees) Orders as amended (Amendment), being Export Control Orders No. 17 of 1987 and made under the Export Control Act 1982. That most complex wording relates to the imposition of a 15c per head fee imposed on the beef industry by this Government. Notice of motion No. 3 relates to the disallowance of that part of the order which specifically relates to the fee. It is my view that it is a valid notice of disallowance; it relates to part of an order. Those in the Minister's office, being from the House of Representatives and failing to understand the procedures of the Senate, have disputed that it is a valid disallowance motion. So, in order to secure myself, in notice of motion No. 4 I call for the disallowance of the whole order. However, if the Government Minister at the table, the Minister for the Environment and the Arts (Senator Richardson), acknowledges that notice of motion No. 3 is a valid notice of motion to disallow, I will withdraw notice of motion No. 4 and there will be no need to put that vote to the Senate. But if the Minister is not prepared to agree to that, we will have to vote on both notices of motion. Turning to the substance of this matter, Export Control Orders No. 17 is a component of what is called the integrated action plan on chemical residues found in the beef marketed overseas by Australians. This plan involves a national ban on DDT and other persistent organochlorine pesticides, such as dieldrin, in agriculture. In a Press release on 14 August, the Government announced that it would be upgrading the national residue survey, with annual expenditure increasing from $1.8m to $5.6m. The Government also announced that the industry would be required to fund 50 per cent of the national residue survey which previously had been fully funded by the Government. There was no consultation with the industry when the Government issued that Press release on 14 August imposing this fee on the industry. In a subsequent Press release just over a month later, namely, on 18 September, the Government announced not only that it was imposing the fee, but that it was imposing the levy of 15c per head to be applied retrospectively to 1 July 1987. So there was an announcement in August in which the Government said, `We are going to impose a levy', and in September it announced that the levy would be 15c a head and that it would be applied retrospectively to 1 July 1987. The Liberal and National parties are opposed to the levy anyway, for reasons I will come to in a few moments, and they are totally opposed to the retrospective application of penalties. Although the national residue survey applies not only to beef-it applies to all meat, dairy products, eggs, honey, grain, grain products, fruit and vegetables-the levy is being applied only to livestock slaughterings. The livestock industry is the only industry required to fund the national residue survey between July and December 1987. There is no guarantee that this situation will change next year. We are all aware of the problems of the cattle industry at the moment, but it is our view in the Liberal and National parties that most of these problems are largely outside the control of the cattle industry. Chemicals were sold in Australia when their use was banned elsewhere and legislation was not properly policed. The matter certainly is very complex, so complex that we will be moving, probably later today, to set up a Senate committee to inquire as to the reasons for the problems the cattle industry currently suffers. The industry has entered into an annual commitment of over $30m to fund mass testing of cattle carcasses. Clearly, the industry has satisfied its markets right around the world with its present testing procedures. To date, this testing has been funded by a non-statutory body-in other words, it is not imposed by the Government. These vendor levies have been imposed voluntarily but will be funded by the Australian Meat and Livestock Corporation's slaughter levies from April 1988, with government matching assistance sought but not obtained. We are aware that there are several hundred cattle properties already quarantined where residue violations have been reported and the livelihood of the producers has been removed. We are very concerned about these people, who are facing ruin as a result of these quarantining procedures. We believe that the removal of the retrospective component of this levy is essential, that there needs to be a clarification of the role of the national residue survey and that there should be equity among all rural sectors encompassed by the survey. The cattle producers, supported by the sheep meat producers, seek adequate government consultation about these levies and cost-sharing arrangements for the total chemical residue testing program. For these reasons, the Liberal and National parties support the disallowance of the fees imposed by these orders. Senator POWELL(Victoria)(10.34) —The Australian Democrats do not support the disallowance motion moved by Senator Lewis, in spite of the fact that similar motions have been on the Notice Paper for at least a week in our name following representations from the livestock industry, particularly the Cattle Council of Australia, which raised the issues which Senator Lewis has clearly outlined, issues which go to what has been happening, particularly in the beef industry, subsequent to the discovery that we have a problem of chemical residues in our livestock industry. The problem was addressed very quickly, and the industry must be commended for having acted as quickly as it did. Of course, it had no choice but to do so because its livelihood was at risk in terms of our ability to persuade our major trading partners that we could handle the problem, that we could clean up the residue where it was found to exist and that we could institute testing regimes, both here and in the importing countries, which would guarantee the quality of the product. It is an established fact that the industry has done that responsibly, and at great expense to itself, but we must not forget that today we are being asked to disallow export orders which are critical to that very export, which the industry itself has done so much to guarantee, and which enable that export to be continued in the face of a particularly difficult problem. In the view of the Australian Democrats, to so disallow would be to take the extraordinary risk of sending out signals which could be interpreted as indicating a moving away from the current position which the cattle industry has been in and has taken-that of the responsibility for the maintenance of that export industry, again, at great cost to itself. The reason the Australian Democrats have spent a good deal of time on this and have taken up the issue with the Cattle Council of Australia is that there is a great deal of justice in the points which the industry has made. In a sense, the proposal for disallowance is quite understandable because, in this instance, the national residue survey is being upgraded at further expense to the beef industry. That cannot be denied for one minute, and it is not denied. However, like all of the other systems that have been set up since this problem came to notice, at this point there is no alternative simply because the national residue survey has been a considerably important issue in negotiations that have taken place for the maintenance of our beef exports. This upgrading is a requirement, certainly in the case of the United States, for the continuing export of our meats to that country at least. I am quite sure that any perception that there was not a commitment to this in Australia would destabilise that market, if not the Japanese and other significant markets. However, that does not get us very far in terms of the beef industry. It is critical that the cost of the national residue survey specifically and costs associated with the responsible attitude of the beef industry be spread more widely, and as soon as possible. Already the Government takes on a 50 per cent share of the funding, I assume on behalf of the rest of the community, but in the primary industry sector the burden is being borne specifically by the livestock industry. At the beginning of next year other commodity groups will become co-funders, with the livestock industry, of the upgraded national residue survey. In the view of the Australian Democrats, that will inject some justice into that process. It is worth noting that the national residue survey is separate from the intensive testing of organochlorines, which is 100 per cent industry funded. We need to stress again that in this context the industry is bearing an enormous burden, but I suggest that is nothing to the burden which it would bear if what we do in this place sends out these sorts of signals to our trading partners, which quite clearly would be the result of this action. Senator Walters —Why did you put the notice of motion down? Senator POWELL —As I have already explained to the Senate, the notice of motion was put down by the Australian Democrats from the point of view that there are genuine concerns and genuine points of justice that need to be aired on behalf of the beef industry. It is important that we look not just at what the industry has done so far, as Senator Lewis has pointed out, but also at what the Government has done so far so that we can have a clear picture of what can be done in the future. The cost of residue testing in the USA is an additional cost that has to be taken into account. The cattle industry is spending $550,000 a week on residue testing and the recouping of levies of $350,000 leaves an enormous debt in that industry. One of the issues that have been raised with us is what happens to those hundreds of farms and properties which are at the moment being isolated and quarantined, again on a voluntary basis responsibly by the industry. I think it is important that we recognise that those people have been encouraged to take what action they can if it is a matter of going to the wall, and in some instances it certainly is, and they have been encouraged to take up their cases under the rural adjustment scheme. From consultations that I have had some people are reluctant to do that, and I can understand that reluctance in an industry which has worked very much on a self-help basis. I suggest that we recall the remarks of the Minister for Primary Industries and Energy (Mr Kerin) who, of course, is responsible for the administration of the rural adjustment scheme, when he said last week on the National Farm Report that if independent producers are experiencing hardship because of this issue they should be encouraged to take it up under the rural adjustment scheme. As I said, I understand that people have hesitated to do that, and I believe they should not, because this is an industry in trouble. It may not be one which is recognised as being in as deep trouble as perhaps the grain industry, but I am sure that on an individual basis there is assistance available for those people. During this week of consultation with me, the beef industry-Senator Lewis referred to this-raised the lack of consultation in this issue. I think we have to look at that complaint-which is what I would term it-which the cattle industry has brought to me at least, and obviously to Senator Lewis, and see what has happened. There is a clear indication from the Australian Agricultural Council that there has been ongoing work in consultation amongst a variety of groups and organisations. The 126th special meeting, which was held in Canberra on 5 June, I think made great strides in that process. It decided: `to implement a mandatory trace-back system . . .; `to establish an extension task force to develop and implement as quickly as possible a program aimed at the proper use of agricultural and veterinary chemicals'; and agreed to a standing committee of the Australian Agricultural Council to seek representation `on the following task forces . . . which have been established by industry'. So there was a direct decision, subsequently implemented, for the industry task forces and the Agricultural Council to work together. I think we should note what these task forces are and what they are doing. First of all there is the legislation task force. The report of its meeting was before the Senate a couple of weeks ago. I noted on that occasion that that task force is `to nationally identify short and long term issues against the background of existing legislation and recommend changes'. The participants in that task force are the Australian Meat Exporters Federal Council, the National Farmers Federation, the Agricultural and Veterinary Chemicals Association, the Meat and Allied Trades Federation of Australia and the Standing Committee on Agriculture. The convenor of this task force is the director of the Cattle Council of Australia, Mike Pendergast. Presumably, bringing Australian Agricultural Council representation to that task force provides a very high level of government consultation. There is also the sampling task force, which is to review short and long term issues related to residue sampling regimes in Australian meats. Represented there is the Australian Meat and Livestock Corporation (AMLC), the Australian Meat and Livestock Research and Development Corporation, Ausmeat, the Commonwealth Scientific and Industrial Research Organisation's relevant meat research laboratory, the Australian Government Analytical Laboratories and the Standing Committee on Agriculture. The convenor there is from the Australian Meat Exporters Federal Council. The job of the third task force, the traceback and identification task force, is to review short and long term issues regarding positive traceback systems in Australian livestock. Again, there is a similar broad range of representation. There will be the Sheepmeat Council, the Cattle Council of Australia, the Australian Council of Livestock Agents, the Australian Lot Feeders Association, the Standing Committee on Agriculture and the Australian Meat Exporters Federal Council, with a convenor from the AMLC. As well as that, the industry established a compensation task force to investigate comprehensive insurance schemes against the rejection of their products. It became obvious to me, during the negotiations over the past little while, as well as subsequent to the release of this report in the Senate a few weeks ago, that while industry is of course widely represented, through the Australian Agricultural Council and its own industry task forces, at least some parts of the industry have a perception that their voices are not being heard, specifically on the issue of the burdens that they have borne in maintaining our vital meat export trade, and hence the proposal to disallow these export orders. We must remember that the residue problem was not caused by the cattle industry, and the Democrats believe that it must be seen as a national problem, and not simply a problem of one particular industry. While we have considerable and strong sympathy with the livestock industry in general over the burden that it is bearing, the problem here is that we are in danger of sending out the wrong kinds of signals. One of the things that we have to do is to look at the issue in its broadest sense, because in disallowing these orders, all that we could do would be to prevent this additional levy which, I repeat, was essential to the upgrading of the national residue survey and remains essential, only for those few weeks from the original moving of the notice of motion last week until the end of this year. That may be a satisfactory symbolic exercise for the industry, but it is a short-sighted perception. It would also demonstrate a lack of commitment to the upgrading of the national residue survey. That upgrading will include other industries from the beginning of next year, and that is very welcome because this problem is relevant not only to livestock and the beef industry, but also to agricultural industry around Australia. As we have said, hundreds of farmers have voluntarily quarantined their farms and it is important that we address that issue. Earlier this morning, I moved a notice of motion for the establishment of a Senate committee to address the broad issue of agricultural use of chemicals in Australia and it seems to me that that is the way to address the real concerns that have been put forward by the Cattle Council of Australia and by the livestock industry in general. I say this because we must not do anything that would send out the wrong kinds of signals. The sorts of points which need to be made by this Senate are the ones some of which I have already made: Industry has been responsible and government has responded as quickly as government is capable of doing. I refer here also to State governments. It is an area of concern to us in this place that up until now this Parliament has had no jurisdiction over agricultural and veterinary chemicals and, having had discussions with the Minister, I welcome the prospect of legislation on the issue of agricultural and veterinary chemicals at Commonwealth level being introduced at the very beginning of the next session. We need to send out signals that there is a sense of responsibility and a determination that as a nation as a whole we want to sustain our beef export industry and indeed our exports of all meats and agricultural products. The Democrats believe that to do this we have to do far more than has currently been done. We also have to think about issues which perhaps have not been getting sufficient thought. I can understand why the immediate issues are always the ones that get the most thought and concern. How should we test? How can we continue to export? Who must pay? I have already said that we believe there is inequity in the forms of payment that have been set in place. We must not continue to assume that this matter is the total responsibility of the meat industry. We also have to ask ourselves why these chemicals have been used, what effect they have had-what effects the chemicals we are currently using are having or may be having. We need to address the broader issue of the effectiveness of chemical use, which is beyond the realm of the currently potentially damaging use of chemicals. There is currently a recognition of the problem of increasing resistance to agricultural and veterinary chemicals. Just last week on the Country Hour the chairman of a task force within the Agricultural and Veterinary Chemicals Association addressed that issue. He said that it is a major concern for the chemical industry that resistance is increasing across a range of chemicals. In relation to weedicides in particular, he proposed an integrated weed management system which would introduce processes other than simply use of chemicals, other management procedures which are available. It is the Australian Democrats view that it is one thing to look at the problem in the short term and that it is quite another thing to recognise that what we saw in May of this year was really just the coming to the surface of a quite significant problem which had to be addressed in the industry where it was found but one which clearly demonstrated to us that we have a potentially ongoing problem. As I have said, even the chemical industry itself recognises that we need to look beyond simply moving from one chemical to another once that chemical is found to be damaging or ineffective. I have been disturbed by some comments that I have before me from the Weekly Times of 2 December in which the Victorian Minister for Agriculture is quoted as saying that producers must bear the onus for chemical residue problems. My question to him would be: Which producers? Is he talking about the agricultural producers or is he talking about the producers of the chemicals and the various people in the whole distribution chain? I would say that we need also to look at what kind of advice has been given to rural producers of all kinds by State departments of agriculture. We need to look at what kinds of new advice they may be able to be given in the event that it is decided that the advice has been limited to advice surrounding the use of chemicals. Let me go back specifically to the disallowance. The Cattle Council of Australia and the cattle industry itself supported the upgrading of a national residue survey. Of course they did because, as I have said, they have had a responsible attitude all along on the issue. They understand the ramifications for the export of their product and other products from this nation. I and the Democrats understand the level of frustration and concern that the cattle industry will be taken for granted in all this. It is perhaps a very common human trait that if people pick up responsibility they are usually lumbered with it for the rest of time. I do not want to see that happen to the cattle industry any more than the cattle industry wants to see it happen, so I think we have to address that issue. As I have said, I have had discussions with the Minister. I believe that when I move for the establishment of a Senate committee it will have terms of reference aimed at doing several things: firstly, providing the sort of forum which the industry has told us it does not believe that it has had through the Australian Agricultural Council; secondly, looking at just what mechanisms are in place, including national and State legislative mechanisms, to continue to address this issue and to ensure equity in terms of the costs involved-that is, equity across the whole board not just within primary industry itself because this is not just a primary industry problem; and, thirdly, looking at where we go from here to ensure that nothing like this ever happens again within Australia, certainly with regard to our agricultural industries and also with regard to the whole range of environmental and health problems which are associated with chemical abuse, overuse and misuse or ineffectiveness. This is an issue which is increasingly causing concern. I have put this range of issues to the Minister as being matters which need to be addressed. I am confident in the expectation of support from the Government. Of course, that is essential because unless there is support from any government for an initiative such as this, particularly where such important trade matters are at issue, it is really not an exercise which could be confidently expected to be of any value at all. The Democrats have decided that to take the kind of step proposed by Senator Lewis would be to put our export industries at risk. We are also cognisant of the fact that any inquiry which is established must clearly state a continuing commitment and sense of responsibility, both from industry and government and from the community at large on this issue, in the interests of our export industries and in the interests of the environment and public health as well. For those reasons we are not supporting Senator Lewis's motion. Senator CRICHTON-BROWNE(Western Australia)(10.58) —I thoroughly and absolutely support Senator Lewis's motion for the disallowance of the Export Control (Fees) Orders. There is nothing special or unique about the motion but there is something terribly predictable about the attitude of the Australian Democrats to it. Last night, on the issue of the resource rent tax, they were bought off for a miserable $5m to fiddle around with a few windmills. I wonder what the price is today. They had given notice of a motion themselves for the disallowance of these orders but, after one talk with the Government, they were seduced into withdrawing it. What is their excuse? They do not want to put the industry at risk. The bottom line is that we already have a national residue survey (NRS) which is funded exclusively by the Government. We now have the Government demanding that, on top of all the other costs the rural sector has, the farmers pay 50 per cent of the cost of the national residue survey, not only for beef and all other animals but also for all on-farm costs. The Democrats support this charge on the basis that if they do not they will be putting the industry at risk. What tortuous logic. It is not logic; it is not meant to be logic. It is another sell-off by the Democrats. What will the Democrats do now? They will have an inquiry. They not only sell their souls but they are also plagiarists. The coalition parties first put forward the proposition for an inquiry. We quite properly discussed it with the Government and the Democrats and suddenly, predictably, the Democrats are on their feet saying that they will have an inquiry. They do not even have original thoughts. This idea came from the coalition and as it was the nearest thing that the Democrats could get to looking respectable, they got up and plagiarised it. The Democrats have no integrity. Senator Knowles —They will withdraw that notice of motion too! Senator CRICHTON-BROWNE —That is right. We will find next that they will change their minds about the inquiry, unless they can find some loony group which supports them and which will, in some ways, be affected by it. What is the Government asking of the rural sector? It is asking the rural sector to fund half of the cost of the upgraded national residue survey and, over three years, that cost of $11.3m will be added to the current ongoing cost of an annual budget of $1.8m. That is what is being asked of the rural sector. As a result of the incompetence of the national residue survey so far, the Government has decided to upgrade it and change its programs. As I understand it, in 1987-88, the Government is talking about taking 25,000 samples. It ought to be remembered that the national residue survey is being upgraded not only because of the pesticide problem but also because the European Economic Community has placed a ban on meat products containing certain hormones. It ought to be remembered-- Senator Powell —A broad chemical problem. Senator CRICHTON-BROWNE —That is right; we have a broad chemical problem which the Democrats are suggesting ought to be paid for and carried by the cattle industry. But the significant component of the upgrading of the NRS is the non-meat component. That will be substantially enhanced from 1988-89 onwards and equal emphasis will be given to that as well. We might ask ourselves: Why is it necessary for there to be an upgrading of the NRS? What has suddenly happened that has caused the need? This program has been an absolute disaster, an abject failure. Before the pesticide crisis the only sampling that was done for organochlorines was by the national residue survey and that testing was done only at export abattoirs. But inasmuch as some of the beasts that came out of those abattoirs were consumed domestically the testing was done for the domestic market as well. When a violation occurred the results of that violation were passed to the various State governments and they were also provided to the Australian Agricultural Health and Quarantine Service. We might well ask ourselves: What was the next inevitable step? We had violations. Then no further step was taken, although I understand that, in some cases, the State governments went to the farmer and, to use their expression, they counselled him. They said, `You have a problem and we suggest that you do not do it again'. That was the end of the contribution of the NRS. We might ask ourselves: Why, in the middle of this year, did we suddenly have a crisis with our United States of America (USA) export market? It was because violations had been detected for a number of years right across Australia, but with particular emphasis in Western Australia, and absolutely nothing was done about them. The national average of violations varied between 0.4 and 0.45 per cent. In Western Australia the average level of violation was over one per cent-250 per cent higher than in the rest of Australia. Did that ring bells? If it did, they were very muted, and the Department of Primary Industry and the State agricultural departments were very deaf. Not a thing was done about it until the Americans took more care at their end of the market. Their testing detected real problems and, as a result, there has been intensive testing in Australia. The Government's solution is simply to load the cost of its own scandal, its own cover-up and its own incompetence on to the poor old farmers-not the broad spectrum of the rural sector but, just for the moment, the cattle producers. The Government does not load the cost on to the shippers, the consumers, the companies which bought the beef and sold it in the United States or the chemical industry; it is simply loaded on to the poor old farmer. What is being asked of the farmer now? Besides paying the 15c a head, the farmer is being asked, as a result of the incompetence of the NRS, to undertake the cost of the intensive testing which is taking place, which is between $38.50 and $40 a test. He is being asked to buy back every pound of contaminated beef from the United States. The shippers, the Government and the purchasers are not being asked to buy back this beef; the farmer has to buy back his own beef, which he has already sold. Who is paying for the testing of the beef that is quarantined in the United States in containers? Who is paying for what is described as pyramid testing in the United States? It is not the United States consumers, the United States purchasers, the shippers, the chemical companies, the Australian community or the Australian taxpayers, but the Australian farmers and nobody else. We find that this Government is prepared, like Pontius Pilate, to wash its hands of its own incompetence and pass it back to the rural sector-at a time when the rural sector is already in a significant downturn, other than for those farmers who are blessed with sheep. In my own State of Western Australia alone, about 183 farms in the south-west have been quarantined. That represents about 85,000 hectares of prime grazing land. `Quarantined' means that a farmer cannot grow beef on that area. The Government says to farmers, `Have your stock agisted somewhere', but it does not tell them where. It does not tell the farmer how he is going to pay $1.50 to $2.50 per week per beast for agistment costs; it does not tell him how he will pay his transport costs, which amount to about $13 or $14 per head for an average trip of 230 to 250 kilometres; it does not explain to him how he will pay the $80 a tonne for the additional fodder cost; it does not tell him where he is going to put his beasts in the middle of summer in a dry season; and it does not tell him what he is going to do on the farms where the cows are already calving and there is another calf at foot. Overnight, farmers in Western Australia have found that they have absolutely no income, no prospect of income and no means of adjusting or making arrangements so that they can earn a livelihood in another way. Senator Knowles —And the Democrats say they should be encouraged to go to the wall. Senator CRICHTON-BROWNE —The Democrats tell us that they are going to make the rural sector pay half the cost of the national residue survey to save the industry. I ask the Democrats to stand on their feet in this chamber and tell us why the Government should not continue to pay it as it did in previous years. Why is it that suddenly, in a time of rural crisis, the farmer is required to pay half the cost? Senator Walters —And retrospectively. Senator CRICHTON-BROWNE —And retrospectively-I thank the honourable senator-to 1 July 1987. The Democrats intend to support this legislation, which increases the levy on beef to $18-a modest increase of 300 per cent! And the Democrats tell us that they support the rural sector. The Democrats are going to support legislation which, besides the upgrading of the NRS, provides an additional cost of $5 per head for intensive testing. Besides the farmer paying the 15c per head there will be an additional cost of $5 per head-and the Democrats are supporting the legislation. At a time when the rural sector is between a rock and a hard place, what do the Democrats do? They attach themselves like lean leeches to this Government and shovel all the cost on to the rural sector. I ask: What are the Democrats all about? What is this Government all about? They are about abrogating responsibility, about ensuring that somebody else assumes responsibility for the mistakes of the Government in the past. As I say, the NRS is being upgraded for one reason only; because it has been demonstrated by the American Government that its management is incompetent. To overcome the sins and the failures of the Federal and State governments, the solution is simply to charge the farmer 15c a head. That is the solution, the panacea, that this Government offers. I fully support Senator Austin Lewis's proposal for the disallowance of this charge of 15c. It is the least that can be done to ensure that the farmer receives some relief. In conclusion, I remind the Senate why at the end of the day we have problems with the NRS. The testing carried out was not intensive or even detailed testing; it was just random testing of the industry. It was such random testing that, by the time a sample was taken and analysed, the beast which had created the violation was in a Coles New World supermarket or on the high seas on its way to America. The Government's answer was, `We could not do anything about the violations because the beef had left the abattoirs'. To compound that sin, the NRS could not even tell the State governments or the farmers where the violation came from. No steps were taken to ensure that the source of the violation could be categorised. That is just symptomatic of the problems confronting the industry now. Later this afternoon we will be debating the Live-stock Slaughter Levy Amendment Bill and associated legislation, together with the initiative of the coalition for the establishment of a Senate select inquiry to examine the whole range of problems which confront the rural industry in respect of pesticides. Perhaps that will be a more suitable time for a more detailed debate. All decent, responsible, concerned senators who care for the Australian rural industry, a $2.5 billion annual industry, will support Senator Austin Lewis's motion. Senator BOSWELL(Queensland)(11.15) —I certainly support Senator Lewis's motion for disallowance. The Government and the Australian Democrats have treated this industry in a most shabby way. The livestock industry plays a significant role in the economy of Australia. Every week a total of $90m is injected by the industry into our economy; $4.9 billion will be injected into it in the period 1987-88. The industry is one of Australia's profitable industries. It reduces our foreign debt and earns this nation important export dollars and yet it gets no recognition whatsoever from this Government. I listened with interest to Senator Powell's contribution. I concentrated as hard as I could but I could not follow one word that she said. She seemed to be making some hollow excuse for completely backing away from what the Democrats believed two weeks ago. However, we have come to expect that from the Democrats. Last night they sold out on the Petroleum Resource Rent Tax Assessment Bill. The previous time it was before the Senate they voted with the coalition but last night they voted against it. Senator Crichton-Browne —Why? Senator BOSWELL —I understand that some shabby deal has been done between the Government and the Democrats, and we have become used to this. It may be for additional staff, extra office accommodation or a few windmills. I do not know why the Democrats sell out their principles but they have certainly become the political prostitutes of Australia. That is the best way I can describe them. One never knows where they are; they will change their minds at any time and for any reason. Let rural Australia judge the Democrats at the next election. If rural Queensland did not vote for the Democrats the number of Democrats would be reduced by one. It is only because rural Queenslanders, for some misguided reason that I have never been able to understand, support the Democrats that Senator Macklin can here destroy their livelihoods. I will be adding this measure to the list of sins the Democrats have committed against rural Australia over the five years that I have been a member of the Senate. I get back to the difference in this Government's attitude to primary industry and to secondary industry. On 1 September, as a result of the national residue survey, the levy charged per beast slaughtered was increased by 15c, and this was made retrospective to 1 July. The beef industry has accepted the responsibility and more than accepted its share of the problem. It has imposed levies to clean up a mess that it did not cause. Probably the only thing Senator Powell said in her speech that made sense was that the residue problem was not caused by the cattle industry, and yet that industry has accepted the responsibility to clean up the problem. In the last 12 months it has imposed between $15m and $25m in voluntary levies. It has reduced the figure for violations from 0.04 to 0.007. The industry has recorded areas of heaviest violations, and it has done a magnificent job in correcting the residue problem. However, as has been said in the Senate, the problem was not caused by the industry. It merely used the chemicals, the products, that were endorsed by the various State and Federal governments. Yet it has been forced to shoulder the whole of the responsibility. Every day it is spending $130,000 to clear up this problem, or to minimise it, and yet it has received absolutely no help from the Government. When the steel industry got into trouble the Government allocated it $500m over five years, when the car industry got into trouble it got $300m over five years and when the coal industry got into trouble it got $40m. Yet the beef industry, which plays such a critical role in the economy of Australia, has had absolutely no help from this Federal Government. I continually say in the Senate that this Government has one rule for primary industries and another for secondary industries. I have a list of some of the anti-rural measures that the Democrats have supported over the past three years. They voted with the Australian Labor Party on its anti-rural tax package. They voted to impose the fringe benefits tax and the capital gains tax, to quarantine farm losses and to remove the full tax write-off by farmers of water conservation expenditure. In 1986 the majority of Democrat senators supported Government Bills to recover the subsidy paid on imported fertilisers, thus ensuring the Bill's passage, and this cost rural Australia $12m. In 1985 the Democrats opposed the move to restore fuel rebates introduced by the last Liberal-National Party Government. This cost rural Australia $67.5m. The list goes on and on. The Democrats have completely changed their direction. Only a couple of weeks ago they gave notice of a motion supporting the abolition of the 15c per beast levy. The beef industry has done everything in its power to clean up its industry, even though the problem was not primarily its fault. It used only the chemicals that were recommended and endorsed by the various State governments. Tomorrow or the next day we will pass legislation that will impose another levy which will fund the testing of residue in all cattle. Imposing retrospectively a levy of 15c a head on the cattle industry is a shocking action by this Government, an action that has proved what we already know-that this Government has no affinity with the industry. The Government does not care; it has done nothing for rural industry except impose one cost after another. It has shown that there is a two-tiered system and that secondary industries get all the support they need at the expense of the rural industry. I certainly support the motion of disallowance. Senator KNOWLES(Western Australia)(11.25) —I rise to speak on this disallowance motion very briefly because we have a very full program today. However, I consider it to be a most important disallowance and it is something that I have been particularly concerned about from the time it came up. Today we have seen a further Democrat double back flip which highlights the insanity of the way in which the Australian Democrats support measures that will absolutely stifle a very vital part of Australian industry. There is no reason on earth why the Government cannot continue funding the national residue survey. Even the Democrats agree with that. Only a couple of weeks ago they put down a notice of motion identical to that which we are debating today. Of course, the normal decision-making process took place, which is what they consider to be testing the water and seeing what they can get out of the Government in return for a vote. But they have now changed their mind. I am even more concerned today to hear Senator Powell say that many of the farmers who have been quarantined and who are currently quarantined should be encouraged to go to the wall. She also said `if rural producers are experiencing hardship'-`if' being the operative word. If she does not know, as spokesman for the Australian Democrats, that there are people experiencing rural hardship because of the pesticide problems, it is about time she did. Her incompetence in this area is something about which we are absolutely amazed. Any threat to Australia's beef trade with the United States of America can be viewed as a threat to the Australian economy generally. Yet the Australian Democrats do not see this issue as important enough for them to vote for this motion of Senator Lewis-which is identical to the one put down by them. The farmers will be asked to pay a levy of 50 per cent where the Government was previously paying the whole lot. How can the farmers afford to pay this when overnight they have been put into a position of nil income? In my State of Western Australia there are between 170 and 180 farms in total quarantine. As my colleague Senator Crichton-Browne said earlier, they have been told to agist their cattle elsewhere. Where do they take them? How do they get out of quarantine? How do they pay the money to have the cattle agisted elsewhere? How do they pay for the feed? None of these matters has been taken into consideration. The Government is purely and simply saying, `You go and solve the problem'. The Department of Agriculture in Western Australia-I have to give credit where credit is due-has been very helpful in many areas. But the Western Australian producers in particular will be very badly affected by legislation that is coming up later this week. I think it represents a significant added cost that the farmers simply cannot afford at a time of crisis. If the Government and the Democrats say that they can afford it, it is about time they talked to the rural producers and the cattle producers; they simply cannot afford it. How can a dollar be squeezed out of someone who does not have a dollar? This levy has come at a time of quarantining as well as a reduction in stock prices. These two things combined are certainly factors that should be taken into consideration by the Government and the Democrats; but obviously it is all too hard. State governments have shirked their responsibilities, as well as the Federal Government, and it is about time that they both decided to assist these producers and get them out of this tight spot. Incidentally, this is a tight spot that they did not get themselves into in the first instance. They were using the chemicals that they were advised to use. The great tragedy of this whole matter is that the departments here did not take the lead from the United States in the 1960s when such chemicals were banned. It is about time the governments really looked at their responsibilities because the concern over the increase in levies relates to a very important principle. It is the justice of expecting the livestock producers of Australia to bear, unaided, the necessary costs of ensuring that our meat exports are free of chemical residues. I do not think it is a matter of simply saying that the primary producers have a serious problem and that the taxpayers should bail them out. As Senator Boswell said a couple of minutes ago, the Government has not blinked at bailing out other industries in Australia when they have run into difficulties. Why is it now bashing the rural producers again? A few years ago it was said that it does not matter about the policies that are brought down for the rural sector because this Government will never get a vote out of them anyway. It is a very cynical approach to hit consistently a very important section of the Australian economy is such a way. The fact is that the producers are not simply looking for taxpayer handouts; it is not their attitude. Of the overwhelming number of people that I have spoken to, none have indicated that they are looking for a handout. They are looking for justice. Beef producers are having their farms quarantined, with cattle rendered absolutely immovable and unsaleable simply because they have complied with procedures approved by the Department of Agriculture. Let us not forget that aspect of it. The departments have approved the procedures and yet now the Government is saying that we should not take any responsibility for it. It is most important to stress that the meat residue problem is not the fault of the livestock producers. The industry sector is being asked to finance all of the activities for the collection of the levies, to allow the Government to get off the hook. Therefore, I very much support the motion of Senator Lewis. Senator MACKLIN(Queensland)(11.32) —This has been an interesting debate, probably for the level of vitriol directed at the Australian Democrats. It is fascinating that the Opposition parties would not have supported our notices of motion, if we had wished to press ahead with them, on the grounds that they know and very much realise that, if we had voted with them, the type of damage that would have been done to the industry would have been immense. They would also turn around under those circumstances. They are quite happy to do a little grandstanding exercise but I suppose no one can begrudge them that in the week before Christmas. The facts of the matter are quite clear. The Australian Democrats put down a notice of motion with regard to this item prior to the Opposition parties waking up to the fact that it was an issue. Senator Knowles —Not true. Senator MACKLIN —Senator Knowles can look at the Hansard and see which one went down first. In fact, today's Notice Paper indicates which one was first. The circumstances are fairly clear. In this place people put down notices of motion time and again for a couple of reasons. The first one is to grab hold of the issue and say that it is an issue. This is something that the Government has to address. Possibly the best example of that particular operation in this Parliament is with regard to the Standing Committee on Regulations and Ordinances which does this on a fairly constant basis so that it is able to raise those issues with the Government at a better level of leverage. If the honourable senators on the back bench do not understand that particular operation that is probably why they are on the back bench. But other people who actually have the responsibility for these exercises have to engage in that as it gives them leverage. It makes the Government direct its attention to the exercise. Senator Knowles —Don't insult the listening audience. Senator MACKLIN —It is very simple to do with Senator Knowles. The operation with regard to chemicals in the agricultural industry is a very delicate one. From the point of view of trade, a matter for which I have responsibility as spokesperson for the Democrats, I recognise the delicacy of the issue with regard to our United States markets. In the last 14 months I have visited the United States Congress twice and have lobbied it with regard to our trading position. It is fairly clear that trade between our two countries at the moment is at a very delicate level. I believe that Australia's trading interests have been seriously damaged by the United States activity time and again. We should not give it another weapon by allowing it to move in on any of our other agricultural products. There have recently been negotiations between the American Government in Washington and industry with regard to the level of chemical residues in the beef exported from Australia to the United States. Obviously, many industries in the United States have been interested in exploiting this issue to their advantage and to our disadvantage. We must be careful not to give United States industry a weapon with which it is able to beat us about the head. The Government, quite rightly, has taken the view that we need more stringent national residue surveillance with regard to our meat exports. It has taken that view-with the full support of the industry, by the way-in the very clear knowledge that, if it did not take that action, it could jeopardise our entire export trade to the United States. That cannot be contemplated under any circumstances. It is interesting that the previous couple of speakers in the debate-Senator Boswell and Senator Knowles-raised the chemical residues issue. No reference was made, of course, to the previous Government's inactivity over a long period. National agricultural and veterinary chemical legislation is about 20 years overdue. We hope that this Government, which has also delayed introducing such legislation, will move as quickly as possible to overcome that hiatus in the introduction of a package of legislation to deal with agricultural industries in this country. But the Opposition decided to go further. Senator Boswell decided to throw around a few barbs by talking about deals and whatnot. That is a pretty simple exercise. I ask Senator Boswell: What did the National Party of Australia get out of its two celebrated deals with the Government regarding the increasing of the number of members of parliament and media monopolies? Senator Robert Ray —Senator McGauran was one of the members. Senator MACKLIN —I do not think that was a very good payoff. Today, for example, the Opposition parties sided with the Government because of a deal that they made on the war crimes legislation and the Cash Transaction Reports Bill. We are talking about the ability of parties to push their own policy items when none of the parties in this place is in the majority. Fairly obviously, to get one's own policies up and running, one needs, from our point of view, the support of either the Opposition parties or the Government. We will continue to follow that course because we have a policy agenda that we wish to pursue. On occasions, we have been able to get the Opposition's support for those policies. The Opposition may not want to characterise as deals the times when it agrees with us on various items. Normally, it does not characterise those as deals. When we agree with the Government, the Opposition characterises such agreements as deals, and vice versa-the Government characterises our agreements with the Opposition as deals. Quite frankly, it does not worry me a great deal because I am sure the electorate is intelligent and knows what the numbers are. I am worried about this type of debate and the problems we might cause. It is all very well for some senators to get themselves a bit of media attention or a few well chosen comments for their political party, but I urge them to consider that what we are dealing with is a matter of enormous delicacy. I hope that all senators will look very carefully at any activity which could in any way allow the American industry to damage our exports to the United States before they launch into such activity, even though they might be able to score a few political points. They should not do that at the expense of a very important export industry. We also need to recognise that responsibility for chemical residues is not simply that of the industry. We have made this point time and again. Senator Powell, in all her contributions, has made it very clear that the Democrats' viewpoint is that the Government is obviously involved in the promotion of certain chemicals to the industry; the chemical companies are obviously involved, and have a responsibility in this matter; the industry is involved, and also has a responsibility. We believe that the exercise goes much further than simply saying that the industry has responsibility for this matter. We would hope that the Government would be able to support a much wider extension of responsibility. We believe that the $10m already expended has been well spent because of the significant role that the industry plays in our economy. But without some type of legislative base which will affect chemical companies, those people who provide advice to companies, and those people who promote the use of a range of insecticides, pesticides, weedicides and herbicides, we will not have moved very far. We need to place the onus on the various companies which are involved across the board, starting with the chemical companies and finishing with the end user on the farm. In looking at these propositions-which we have done; Senator Powell gave notice of motion for disallowance of the export control orders last week-we have had the opportunity to consider carefully all of these matters. We, unlike the Opposition, do not have the luxury of simply saying, `Provided that the Democrats are opposing it, we can do anything we like, because it won't have any effect'. We are very concerned about this matter. We wish to register our view that the responsibility should be a great deal wider than that of the end user, but we are unwilling to go down this path at this time because of the obvious exercise that the Government is undertaking with regard to the national residue survey. That upgrading is part of its general negotiations with the American Government so that the US will stay its hand. That must have been a difficult political exercise for the Government, knowing the types of pressures that the American rural sector has been able to bring to bear upon the American Government. The US Government gave $30 billion in support to the agricultural sector last year. I remind the Senate that that amount is equal to half of our total national Budget. Support to the tune of $30 billion obviously indicates that the US agricultural sector has a very powerful lobby. That lobby sought to cut off Australia's entire exports to that country by using chemical residues as the excuse. The fact that the Government has managed to prevent that occurring needs the support, not the opposition, of the Parliament. Senator WALTERS(Tasmania)(11.45) —I will speak only briefly. Senator Macklin is the cause of my speaking at all. Senator Macklin rose only in support of his colleague. It was clear that the Australian Democrats were trying to find excuses for having changed their minds, finally having made a deal with the Government. The Opposition has moved to disallow a 15c levy on cattle slaughtering to cover the cost of a residue survey. The residue survey is to be undertaken on all agricultural products but the Government has said that the meat industry alone should pay the levy. The Government will pay half of the cost of the survey. The full cost will be shared by the Government and the meat industry. The Democrats had given notice of a motion for disallowance of the orders because, I presume, they believed that they were unjust. They believed the orders were unjust not only because they are to be imposed while the survey is being undertaken but because they are retrospective to July. The Opposition will not tolerate such an unjust imposition on an industry that is already facing problems. The Democrats, supposedly, also believed that the retrospective imposition of this levy was unjust. This is not the first time that they have changed their mind. The Democrats always hang around waiting to see what they can get if the Government is prepared to do a deal. The Government does not want to pay the full cost of the survey. It wants the meat industry to pay half. So the Government has done a deal with the Democrats. The Democrats have once again changed their minds and withdrawn their disallowance motion. In a valiant attempt to explain to listeners why the Democrats have done so, Senator Macklin rose to muddy the waters. He talked about the Senate Standing Committee on Regulations and Ordinances. I do not know whether he has ever sat on that Committee, but I have and it is a totally different concept altogether. The Australian Democrats are a political party that should know what it is doing. Originally they moved to disallow the 15c levy because they thought both the levy and its retrospective imposition were unjust. Now, because they have done a deal supporting the Government's imposition of this levy on the industry, they are telling the people, `We just did it to bring the matter to the attention of the Government. Now we have brought it to the Government's attention we will back off'. What absolute rubbish! Never has a political party insulted the intelligence of its listening audience so much as the Democrats. When we raised the question of the few properties in Australia that had been quarantined, from necessity, because of the problem in the beef industry, the Democrats said that the growers have to bear the brunt; they must take some action, even if it means those growers will go to the wall. That is a humane attitude, it is not? Under the instruction of the Federal and State governments, a few farmers were told that certain chemicals were safe to use on their properties. They took that as being correct and used those chemicals. Now they find that they are unable to sell their meat on the export market. The chemicals are present in only infinitesimal amounts but because the Americans chose to apply a specific test, much more stringent than the tests they apply to their own beef in the United States, these properties have had to be quarantined. These farmers have calves arriving, and they are told by the Democrats that they do not need government help, even though it was government instruction that caused the problem; that they should just go to the wall. Let the listening audience understand that the Democrats are not saying that because these people were misinformed by the Government they should get government help. They are saying that they should bear the cost and go to the wall-wrap up their properties and just go to the wall. So long as the people on the land realise the sort of support they are getting from the Democrats, that is all I am aiming to do today. It is time that the people of Australia realised what hypocrites the Democrats are and how they change their vote. They never allow anyone to know just what they are doing. They hang around to see whether they can cop a deal from the Government. That is why I have risen to speak in this debate-to point out to the listening audience what goes on. Senator ROBERT RAY(Victoria-Minister for Home Affairs)(11.51) —Senator Lewis has moved a disallowance motion. I should at least state the Government's position. These orders were made to enable the Government to recover from the industry 50 per cent of the cost component of the national residue survey relating to meat. I wonder when the Liberal Party of Australia changed its policy. I always understood that it was in favour of 50 per cent cost recovery in these areas. These charges relate only to meat, although similar orders will be made in the near future to apply the charge to non-meat products in a similar manner. These orders will be effective from 1 January 1988. The national residue survey is an essential part of international trade in agricultural and fisheries produce. It provides for residue monitoring, enabling government to government certification that tolerances in the form of the maximum permissible residue levels are not being exceeded. In particular, our major market for meat, the United States, requires Australia and other countries exporting meat to the United States to maintain a system of residue surveillance at least equivalent to that of the United States itself. Australian residue monitoring procedures are subject to frequent audit by overseas authorities. The national residue survey is only one element of the mandatory inspection process for agricultural commodities. Without it, the certification demanded by most importing countries could not be given and trade would be adversely affected. As the national residue survey is an integral part of the inspection process, it is proper that the industry share the cost with the taxpayer and pay 50 per cent. Some of these points should be noted by those who have been so vociferous in their opposition to this measure. The Government, through its efficiency measures, has reduced real costs to the industry of meat inspection by some 30 per cent since 1984. Even after the costs of the residue survey are included in the charges for the current year, the net increase per adult cattle beast is less than the rise in the consumer price index. Last year the charge was $2.61. It had not altered for two years. The current charge is $2.50 per beast. When one adds 15c, it goes to $2.65. So over a three-year period there has been only a 4c increase. Yet the Opposition is saying that we are trying to grind the beef producers of this country into the ground. What rubbish! This charge constitutes less than 4 per cent of overheads. I wonder what the Opposition is about. Does it want us to return to the good old days of the Fraser Government when we sent horse and kangaroo meat overseas labelled as prime beef? That is what happened. These inspection processes are absolutely vital. Unfortunately, I was not in the chamber when my colleague from Victoria, Senator Lewis, moved this motion. Senator Lewis will have to forgive me for not responding to the obviously rational points he would have made in the debate-he represents the great State of Victoria. However, I was here for the harangue from Senator Crichton-Browne. If this disallowance motion were to be successful, the cost to Government would be $4m. That does not worry Senator Crichton-Browne. I think he is a secret socialist. He is always in favour of our spending money on something else. Of course he rarely supports any measure aimed at raising revenue. When he goes out on the political hustings he points to that evil place Canberra and all the money we spend. He says we are supposed to reduce massively government expenditure, yet in this chamber he tries to appeal to a sectional interest in the community by saying there should be no charge in this area. I wonder where we will get that $4m. The fee is a fairly just charge. Senator Crichton-Browne complains because apparently Senator Powell and Mr Kerin have had some discussions about a wider inquiry, not just into inspection costs but into the whole issue of pesticides. I am not privy to any inside information but I understand that those talks are progressing fairly well. We then had a contribution from Senator Boswell, who opened his remarks by saying that he did not understand a word that Senator Powell had said. I only just managed to understand a few words from Senator Boswell. He talked about a shabby deal between the Government and the Australian Democrats. Of course any deal between the Government and the Democrats, whether there is or is not one, is always described as `shabby'. If the Opposition and Democrats vote together it is apparently a coincidence of great principles. Senator Boswell went on to say that we were not at all concerned about rural Queensland. I wonder whether he thinks that up every time he heads out of Brisbane, where he lives, into the bush? Senator Maguire —Our country vote went up. Senator ROBERT RAY —As Senator Maguire indicates, our country vote went up in the last election. The electors have finally woken up to the fact that the National Party of Australia no longer is the good old Country Party of old. It now consists of doctors, retailers, Melbourne city councillors and retired public servants. The embourgeoisment of the National Party is a rather sad sight to anyone who follows the great traditions of Australian politics. It now consists of a rag-bag group of carpetbaggers who live in the big city, wander out into the bush and think they can con the bush votes every three years. What a load of rubbish they carry on with these days. They now make up a city oriented party. They have betrayed the bush. It is no wonder that even the National Farmers Federation, in its most erratic moments, could not support the National Party. Senator Boswell went on to say, `What has the Government ever done for the beef industry?'. I am about to tell him. We have taken a lot of initiatives abroad to defend this industry. The Minister for Primary Industries and Energy (Mr Kerin) has gone abroad time and time again to defend the beef industry since this problem first arose. We sent trade delegations consisting of backbenchers and others to the United States to defend our position and to try to get the best possible deal for primary producers. We have restructured the Australian Meat and Livestock Corporation and made it a far more active and better body than in the past. As I indicated in the figures earlier, we have consistently reduced the costs of inspections. We have secured markets wherever possible in a difficult environment. In places such as Japan, we have defended those markets. So Senator Boswell's contribution, as always, was just a load of hot air. Senator Macklin made a contribution I am fairly angry about because he provoked Senator Walters into a 10-minute diatribe. But, apart from that, his contribution was relatively constructive. Then we heard from Senator Walters who apparently got up to speak only to admo-nish the Australian Democrats. Admonishing the Democrats is a very popular sport at the end of session. I do not mind that but I just wish it had been done with a little more sophistication and a little less whining. If the coalition is so upset with the Democrats why, in the last Federal election, when those opposite registered their how to vote cards, did they give the Democrats second preferences in every case? I am honest enough to admit why we did it. We prefer the Democrats to the Liberals. Sometimes our bile gets up and we wonder about that dislike and that preference but, on the whole, we have a philosophical position that the Democrats are more acceptable than the Liberals, with the exception of you, Mr Acting Deputy President. Senator Walters —I take a point of order. Senator Ray has said that the Liberal Party in every State gave the Democrats its second preferences. That is not true. In Tasmania, we certainly did not give the Democrats second preferences. The ACTING DEPUTY PRESIDENT(Senator Teague) —There is no point of order. Senator ROBERT RAY —I thank Senator Walters for her correction. I should have said `their effective preferences'. When the Liberals' preferences were distributed, the Democrats were the effective second preference. Of course, the Liberals run their preferences through Senator Harradine. We did in part, too. But their effective preferences always go to the Democrats. The only exception, I think, was in South Australia some years ago, when an experiment was tried. Talking about shabby deals, from time to time we get an emissary across from the Liberal Party of Australia saying, `Why do we not do a cut out deal? Why do we not all refrain from sending our effective preferences to the Democrats?'. We have always rejected that approach. But there are plenty of shabby deals around. To sum up on this issue before Senator Lewis responds, we are saying that inspection charge costs have been held at a remarkably low level. They were $2.61 for two years. This year we got them down to $2.50 and, even with the inclusion of this 15c per head, the costs go to $2.65, which means that over a three-year period there is no way that these charges have increased by even as much as the consumer price index. They are well below such increases. It is only fair that everyone contributes. The Liberal Party and National Party of Australia position that the Government can forgo $4m in revenue is a matter of their always picking up individual items and saying, `Governments should spend money in this or that area, but we will not pass any legislation to increase revenue'. At the same time, they have this philosophical view, ranging from a $4 billion cut in government expenditure by the Liberals to a $16 billion cut by the National Party. One wonders how they can sleep at night when they try to reconcile that form of hypocrisy. Senator LEWIS(Victoria)(12.03) —in reply-I would like to thank honourable senators who contributed to the debate. I believe that the case I made against this levy was confirmed by the Minister for Home Affairs (Senator Robert Ray) in the first minutes of his speech before he entered into an attack on the National Party of Australia. He pointed out that it was only fair that all sections of Australian agricultural primary producer industries contribute to this levy. That is the first point that I made in my opening remarks-that currently this levy is directed specifically at the livestock industry, does not cover the other industries and, therefore, is unfair. Senator Ray then confirmed my case by saying that in order to introduce this system of fairness the Government will introduce new levies-which I gather will commence from 1 January-on other sections of primary production. That was the second point of our complaint about this levy; the levy not only is imposed on only one section of primary industry but also is imposed retrospectively on that one section of primary industry. The livestock industry has to bear this levy from 1 July this year. That totally makes my case, on the basis of what Senator Ray had to say. I will say one other thing about what the Minister has just said to the Senate. He made a plea to the Australian Democrats to continue to support the Government. I assure Senator Ray that he does not have to worry about that. It is quite clear that since Senator Chipp has left this Parliament, politically the Democrats have turned radically left and now, quite clearly, represent the fourth faction of the Australian Labor Party, to the left of the Left faction of the Labor Party. Senator Wood and Senator Vallentine probably make up the fifth faction. As there are only two of them, they do not have to have meetings as do the Democrats before they send out their faction leader to negotiate with the Government as to what will happen with legislation. In the same way, the left wing of the Labor Party has its meetings and sends out its faction leader to discuss with the Government what it will do. The middle faction-the Centre Left; whatever it calls itself-and the so-called right faction do the same with their faction leaders. It is only a question of who is right of left and who is left of right, and I am not sure what the position is. Clearly, the Democrats are in a similar situation to the factions of the Labor Party. They have their separate meetings and keep separate minutes. Then they come along and enter into some sort of an arrangement whereby they support the Government. From time to time, in order to be able to protest that they are not a faction of the Labor Party, they occasionally vote against the Labor Party-but not when it counts. When the pressure is really on, the Democrats are always in there supporting the Government. As I have said, I believe that my case for the disallowance of the orders was made out by the Minister in the first few moments of his response. Unfortunately, I think because the Minister was not aware of it, he has failed to respond to my request that the Government acknowledge that my notice of motion No. 3 is a valid notice of motion for disallowance. So I will have no choice but to move notice of motion No. 4, standing in my name, whether or not the motion before us is carried. Question put: That the motion (Senator Lewis's) be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 33 Noes . . . . . . . . . . . 36 —— Majority . . . . . . . . . 3 —— Alston, R. K. R. McGauran, J. J.Archer, B. R. MacGibbon, D. J.Baume, Michael Messner, A. J.Baume, Peter Newman, J. M.Bishop, B. K. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Puplick, C. J. G.Calvert, P. H. Reid, M. E.Chapman, H. G. P. Sheil, G.Crichton-Browne, N. A. Short, J. R.Durack, P. D. Stone, J. O.Hamer, D. J. Tambling, G. E. J. (Teller)Harradine, B. Teague, B. C.Hill, R. M. Vanstone, A. E.Jenkins, J. A. Walters, M. S.Knowles, S. C. Watson, J. O. W.Lewis, A. W. R. Aulich, T. G. Haines. J.Black, J. R. Jones, G. N.Bolkus, N. McKiernan, J. P. (Teller)Burns, B. R. McLean, P. A.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R.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. Walsh, P. A.Gietzelt, A. T. Wood, W. R.Giles, P. J. Zakharov, A. O. Bjelke-Petersen, F. I. Reynolds, M. E.Patterson, K. C. L. Beahan, M. E.Chaney, F. M. Button, J. N. Question so resolved in the negative. Senator LEWIS(Victoria)(12.13) —I move: That the Export Control (Fees) Orders as amended (Amendment), being Export Control Orders No. 17 of 1987 and made under the Export Control Act 1982, be disallowed. I do not need to add any more to the debate which has taken place. I inform honourable senators opposite that I do not intend to take this to a division. As I have said, I believe that our case has been made out by the words of the Government's spokesman, Senator Robert Ray. I draw attention to the fact that up until this morning the Australian Democrats had a similar notice of motion on the books, but I gather that, having withdrawn it, they will not support my motion. Question resolved in the negative. Consideration resumed from 14 December. The Bill. PETROLEUM RESOURCE RENT TAX ASSESSMENT BILL 1987 The CHAIRMAN —The Committee is considering the petroleum resource rent tax Bills. By agreement the Petroleum Resource Rent Tax Assessment Bill is being considered separately and as a whole. The question is: That this Bill stand as printed. Senator DURACK(Western Australia)(12.15) —In the committee stage last night I addressed two questions to Senator Walsh, which led to some debate and as a result we did not reach the point of moving the Opposition amendments, which I would like to move as a whole. There are 16 amendments, but they all deal with the one subject. They are mixed up together and some are consequential upon others. I seek leave to move my amendments together. Leave granted. Senator DURACK —I move: Clause 2- (1) Page 2, after the definition of ``Deputy Commissioner'' insert the following definition: `` `eligible exploration permit area' means an exploration permit area other than an exploration permit area constituted by blocks that are the subject of a permit to which a production licence in force on or before 1 July 1984 was related;''. (2) Page 3, after the definition of ``excluded fee'' insert the following definition: `` `exploration for petroleum' means any exploration carried on in any eligible exploration permit area, retention lease area or qualifying production licence area;''. (3) Page 5, after the definition of ``project combination certificate'' insert the following definition: `` `qualifying production licence area' means a production licence area constituted by blocks that are the subject of a production licence that came into force after 1 July 1984;''. (4) Clause 5, pages 7 and 8, omit the clause, substitute the following clause: Petroleum exploration and recovery in relation to certain areas ``5. (1) For the purposes of this Act (including this section) a reference to recovery of petroleum from a production licence area, an exploration permit area or a retention lease area is a reference to recovery of petroleum from the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. ``(2) For the purposes of this Act, a reference to recovery of petroleum from the eligible to recovery area in relation to a petroleum project is a reference to recovery of petroleum from: (a) Where the production licence or any production licence in relation to the project is a permit derived production licence-the exploration permit area in relation to the exploration permit to which the production licence is related (being recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); (b) where the production licence or any production licence in relation to the project is a lease derived production licence-the retention lease area in relation to the retention lease to which the production licence is related (being recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); and (c) the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. ``(3) For the purposes of subsections (1) and (2), where, at a time when no permit derived production licence in relation to an exploration permit is in force, a retention lease that is related to the exploration permit comes into force, any recovery of petroleum that occurred while the exploration permit was in force in the block or blocks in respect of which the retention lease was granted and during the period: (a) where paragraph (b) does not apply-before the retention lease came into force; or (b) where, before the retention lease came into force, a permit derived production licence, or permit derived production licences, in relation to the exploration permit were in force-after that production licence or all of those production licences, as the case may be, ceased to be in force and before the retention lease came into force, shall be taken to have occurred in the retention lease area and not in the exploration permit area notwithstanding that the retention lease was not in force at that time. ``(4) For the purposes of subsection (2), where, but for this subsection, the same recovery of petroleum would be recovery of petroleum from the exploration permit area or the retention lease area in relation to 2 or more production licences, the recovery shall be taken to relate only to the production licence that first came into force.''. Clause 19- (5) Page 13, line 19, after ``taken'' insert ``, subject to subsection (2a),''. (6) Page 13, after subclause (2) insert the following subclause: ``(2a) For the purposes of the assessment of augmented bond rate exploration expenditure or GDP factor expenditure, an eligible production licence that is specified in a project combination certificate shall be taken not to be so specified and there shall not be taken to be a combined project in relation to any eligible production licences so specified.''. (7) Clause 32, page 21, at the end of the clause add the following paragraph: ``(e) any payment made under the Petroleum (Submerged Lands) (Cash Bidding) Act 1985.''. (8) Clause 34, pages 22 and 23, omit the clause, substitute the following clause: Augmented bond rate exploration expenditure ``34. (1) For the purposes of this Act, a reference to the augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to: (a) in relation to the first occurring petroleum project, the sum of: (i) any amount of exploration expenditure actually incurred by the person in any eligible exploration permit area in the financial year, not being expenditure incurred more than 5 years before the production licence in relation to the first occurring petroleum project came into force; (ii) any amount that is taken by subsection (3) or subsection 36 (1) to be augmented bond rate exploration expenditure incurred by the person in relation to the first occurring petroleum project in the financial year; and (iii) any amount that is taken by Division 5 to be augmented bond rate exploration expenditure incurred by the person in the financial year; and (b) in relation to any petroleum project other than the first occurring petroleum project-any amount that is taken by subsection 36 (1) to be augmented bond rate exploration expenditure incurred by the person in relation to that project in the financial year. ``(2) For the purposes of this section a reference to the first occurring petroleum project is a reference to: (a) where a financial year is a year of tax in relation to a person in relation to 2 or more petroleum projects-the project in relation to which the relevant production licence first came into force; and (b) in any other case-the petroleum project in relation to which a financial year is a year of tax for a person. ``(3) For the purposes of subsection (1), where the sum of the augmented bond rate general expenditure and the augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula A (1.15 + B), where: A is so much of the excess as does not exceed the amount of the augmented bond rate exploration expenditure; and B is the long-term bond rate in relation to the financial year, shall be taken to be augmented bond rate exploration expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year.''. (9) Clause 35- Pages 23 and 24, omit subclauses (1) and (2), substitute the following subclauses: ``(1) For the purposes of this Act, a reference to the GDP factor expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to the sum of: (a) in relation to the first occurring petroleum project: (i) any amount of exploration expenditure or general project expenditure actually incurred by the person in any eligible exploration permit area more than 5 years before the production licence in relation to the first occurring petroleum project came into force; (ii) any amount that is taken by subsection (3) or subsection 36 (1) to be GDP factor expenditure incurred by the person in relation to the first occurring petroleum project in the financial year; and (iii) any amount that is taken by division 5 to be GDP factor expenditure incurred by the person in the financial year; and (b) in relation to any petroleum project other than the first occurring petroleum project-any amount that is taken by sub-section 36 (1) to be GDP factor expenditure incurred by the person in relation to that project in the financial year. ``(2) For the purposes of this section a reference to the first occurring petroleum project is a reference to- (a) where a financial year is a year of tax in relation to a person in relation to 2 or more petroleum projects-the project in relation to which the relevant production licence first came into force; and (b) in any other case-the petroleum project in relation to which a financial year is a year of tax for a person.''. (10) Page 24, line 3, omit ``or (2)''. (11) Clause 36, pages 24-6, omit subclauses (1) to (3), substitute the following subclauses: ``(1) Where there is a project group in relation to a person in relation to a year of tax, the following provisions have effect: (a) in relation to any petroleum project other than the last occurring project-where there is a carry forward expenditure amount of the person in relation to the project in relation to the year of tax, that amount shall be taken to be augmented bond rate exploration expenditure or GDP factor expenditure, as the case requires, incurred by the person in the year of tax in relation to the next occurring project and the person shall not be taken by sub-section 34 (3) to have incurred augmented bond rate exploration expenditure, or by sub-section 35 (3) to have incurred GDP factor expenditure, in relation to the first-mentioned project on the first day of the next succeeding year of tax; (b) in relation to the last occurring petroleum project-where, but for this paragraph, the person would be taken by sub-section 34 (3) to have incurred an amount of augmented bond rate exploration expenditure, or by sub-section 35 (3) to have incurred an amount of GDP factor expenditure, in relation to the project on the first day of the next succeeding year of tax, that expenditure shall be taken to have been incurred instead by the person on that day on relation to the first occurring of such of the projects in relation to which the financial year is a year of tax in relation to the person as are petroleum projects on that day. ``(2) For the purposes of this section petroleum projects in relation to a person in relation to a year of tax shall be taken to occur in the order in which the relevant production licences in relation to the projects came into force.''. Clause 37- (12) Page 26, line 24, omit ``in relation to a petroleum project''. (13) Page 26, lines 29 and 30, omit ``in the eligible exploration or recovery area in relation to the project''. (14) Page 26, line 33, omit ``the eligible exploration or'', substitute ``an eligible exploration permit area or the eligible''. (15) Page 26, lines 34 and 35, omit ``the project'', substitute ``a petroleum project''. (16) Clause 44, page 30, lines 28 and 29, omit ``an exploration permit,'', substitute ``a''. I do not propose to speak at any length to these amendments because it is quite clear from what Senator Walsh said last night that the Government is opposed to them and that the Government has in fact studied them and made a very conscious decision, ahead of hearing any further debate from the Opposition, to oppose them. In essence these amendments seek to widen the deductibility of expenses incurred by an oil company in relation to the assessment of the resource rent tax (RRT) which, of course, is now going to be imposed upon the oil industry as a result of the vote of the Senate last night. The wider deductibility is primarily in regard to exploration expenses on permits held by an exploration company outside the permit area on which the production which is liable to a resource rent tax is being undertaken. It is certainly true, as Senator Walsh pointed out, that one of these amendments includes, in the area of expenses and deductibility against assessment of RRT, any payments made under the Petroleum (Submerged Lands) (Cash Bidding) Act 1985. That is included as a deduction. Senator Walsh had a rather dramatic view of it. He thought that the Opposition was trying to reverse the cash bidding legislation. We would like to reverse it. We strongly opposed it. In fact the Australian Democrats carried out the same exercise on that legislation as they have done on this. They originally opposed it and it was defeated, but after Senator Sanders joined the Senate he managed to persuade his colleagues to change their vote on that and that is why we have a cash bonus bidding regime. I do not imagine that the Democrats are likely to support any proposal to water it down. As I said, that is the object of these amendments and although I asked Senator Walsh last night questions about other matters, he launched into the Government's answer to these amendments. I do not know whether Senator Tate knows that, but he will be saved some trouble if I inform him of it. It is quite clear from the attitude of the Democrats that they are opposed to weakening in any way the resource rent tax. They would in fact like to see it strengthened and widened and made more onerous on oil companies, which they clearly hate and wish to see out of business. Senator Sanders has made that all too clear. I hope that everyone notes that that is really what the attitude of the Democrats is to this important industry in Australia. The Opposition had hoped that through the debate on these amendments there could be negotiation on this question with either the Government or the Democrats, or indeed both. Apart from our total opposition to the principle of a resource rent tax, if there is to be a resource rent tax we would be anxious to reduce its impact as far as possible. These amendments that I have moved are designed to do just that and they are, in principle, correct-as Senator Walsh acknowledged last night. He said that certainly they are quite proper in principle. We have had a lot of in principle and rationality claims put by Senator Walsh in favour of this tax, and those claims espoused by him are encompassed in the basic principle of these amendments; namely, that if we are going to have a profits based tax-which RRT is claimed to be-all the expenses that an oil company has incurred in exploration should be set against the tax. Senator Walsh says that if that were the case the Government would demand a higher rate of tax or a lower threshold before the tax comes into being. That was a very gung-ho approach that the Government was able to take to this matter in the heady days back in 1984, when the RRT was announced by the Government. At that time the Jabiru oil field, off the north-west coast, had been discovered and the Bureau of Mineral Resources was telling the Government that there were very great prospects for this field, and that it could contain about one billion barrels of oil. In other words, it would almost be a repeat of the major find in the Kingfish field in the Bass Strait. But of course the forecasts since 1984 have been greatly reduced and the fields that the Broken Hill Proprietary Co. Ltd is now developing at Jabiru and Challis have got, between them, perhaps 50 million or 60 million barrels and not anything like the figures that were forecast by the Bureau of Mineral Resources in 1984. The resource rent tax, the rate of tax and the threshold for the tax that were determined on those forecasts of the Bureau of Mineral Resources should, in our opinion, be greatly revised in light of the situation that has now developed. In my speech during the second reading debate I dealt at some length with the low prospects for new oil discoveries in Australia, not only in the north-west area but all around Australia. We know a great deal more, not only about prospects in the Timor Sea but about the prospect of finding oil in any of the off-shore areas of Australia to which this tax applies. So a very different situation has existed since 1984. Yet, the Government's attitude is to plough on with legislation which was finalised in 1984, but which has not come to the Senate before now simply because of the length of time taken to draft it. As Senator Walsh made quite plain last night, the whole scheme of this legislation was determined in 1984, and negotiations with industry, which he said that he as Minister at the time undertook, were finalised in the middle of 1984, in the atmosphere of high confidence about the prospects in the Timor Sea off the north-west coast of Australia. The rate of tax, the threshold and so on were then determined with the prospects of great profits being obtained, but they simply will not be achieved there, and it is most unlikely that they will be achieved anywhere in the off-shore region to which this tax applies. Therefore, we believe that the Government should have been prepared to reconsider the detail of this tax in 1987, as against the views that may have been justified in 1984. The Opposition has been prepared to negotiate for a lower volume of deductibility than these amendments provide. We have been quite flexible in seeking a variation of these amendments from the Government, but the Government is adamant, as Senator Walsh made clear last night, that it will not entertain any further consideration of the form of the amendments, even though he agreed that they are a proper and rational inclusion in a resource rent tax regime. That is unfortunate. Likewise, the Democrats have made it perfectly clear that they will not consider any amelioration of the burden of this resource rent tax. I was interested in Senator Macklin's contribution last night, in which he explained how he at least had given some consideration to the amelioration of this tax in some respects, and the Democrats had sought amendments along not quite the same lines as these, but along another line which the Opposition would have been happy to discuss with the Democrats. However, Senator Macklin must have been rolled by the superior forces of Senator Sanders among the Democrats, because no such negotiations were ever opened between the Democrats and the Opposition once Senator Sanders got into the box seat. Senator Macklin's contribution was rational, and it is a pity that the Democrats did not take more notice of their deputy leader because he was conscious of the same problem of which the Opposition is conscious and which we are trying to ameliorate in these amendments. We would be flexible and we would have been happy to negotiate with the Government or with Senator Macklin if he had carried his views to his colleagues. Senator Macklin went on to say an odd thing, which was that, in the end, the Democrats decided that industry would be worse off if there were no resource rent tax because the Government would reimpose the old royalty and excise regime which applies in the Bass Strait field, but he seems to have overlooked the fact that the Government could not do that except by further legislation. The Government brought in legislation which removed the application of royalties and excise to the Jabiru field and, if the resource rent tax had been defeated, the Government would no doubt have sought to impose a royalty and excise regime on the Jabiru field. The Opposition would not have opposed a royalty regime because we have always said that that is the only proper way of obtaining an economic rent, plus the company tax on profits. It would have been possible for the Senate to have defeated any attempt by the Government to reimpose an excise regime in this area. Unfortunately, Senator Macklin did not seem to appreciate that and, because of the dilemma which seemed to influence him in declining that opportunity, any further investigation of amendments to this legislation was passed by. Senator SANDERS(Tasmania)(12.31) —I will be brief. It has been said by Senator Durack that we shall oppose these amendments, and this is true. We feel that there is adequate deductibility already for the oil companies. They are the richest and most powerful companies on earth and they have plenty of tax lurks and perks and need no more help from this Parliament, especially from the Government and the Australian Democrats. If the Opposition wants to keep pushing the oil company barrel, that is its decision, but the oil companies are doing very nicely, thank you, and do not need any more deductibility. We feel that thresholds at the moment are too high. If we moved any amendment on thresholds, it would be to lower them. That would mean obtaining more money for the people of Australia for the resource that the oil companies are renting under this resource rental tax. It is obvious that that cash price bidding program is working well. The oil companies are keen to bid on these fields and there is no reason to tinker with this program. We feel that the Bill to impose the resource rent tax, unamended and with the spin-off of a sunshine fund for renewable energy, is an important step in establishing an energy policy which will look to the future rather than to the past. We oppose the amendments. Senator PARER(Queensland)(12.33) —I shall also speak briefly, because I know that, as with Senator Durack, we are probably wasting our breath as we have yet another shady deal between the Government and the Australian Democrats. Senator Sanders has made clear his hatred of the oil companies but, unfortunately, he has allowed it to carry over, because it could reflect on every Australian in years to come. What the Democrats seem to have forgotten, or do not realise, or are perhaps blind to, is that we are running out of liquid fuel. We are talking about liquid fuel and not about energy materials for fuelling power stations, or fuel for industry. Senator Sanders —What about restructuring society? That is our policy. Senator PARER —I am glad that Senator Sanders interjects because he shows exactly the stupidity of his argument. He is talking about the restructuring of society, and presumably he means going back to bicycles, horses and carts. What we are talking about is the use of liquid fuels for motor cars, aeroplanes and other vehicles that must use liquid fuels for propulsion. I support the amendments moved by Senator Durack because while we do not support a secondary tax, which is what the resource rent tax is, we do seek to ameliorate it to the extent of allowing expenses to be deducted outside what is known as the permit area. This, in itself, is an encouragement for more and more companies to go out and explore because we do not have a recognised oil province in Australia and never have had. We just do not have the geological structures that are necessary for an oil province. If we are not going to have to face the threat of $3 billion-worth of imports by 1992, and maybe $5 billion by 1995, we need more people to go out and explore to see whether they can find some basins of oil which will protect us as we go towards the year 2000. I support Senator Durack's amendments, which would give a little more encouragement to enterprise to go out and seek oil so that we do not become reliant on other countries for the liquid fuels that we shall need. Senator TATE(Tasmania-Minister for Justice)(12.35) —The Government rejects the amendments. Senator Durack, in the course of his elaboration of the reasons which led him to put forward these amendments, interspersed his remarks with an indication that Senator Walsh had last night elaborated on the reasons why the Government would reject them. I, of course, attach much greater weight than Senator Durack does to Senator Walsh's reasons and I hope other honourable senators find them as persuasive as I did. Senator DURACK(Western Australia)(12.36) —I wish to add something now as I ran out of time before. Last night Senator Walsh made some critical comments about the drafting of the proposed amendments: he claimed that they were deficient in some respects. Of course, that is not the reason why the Government has opposed the amendments; it was clear that it would oppose them no matter how satisfied Senator Walsh might have been with their drafting. The Opposition obtained very highly qualified professional assistance in the drafting of the amendments. We are perfectly well aware of the technical nature of this legislation, which it has taken the Government nearly three years to draft. Very careful attention was given by the Opposition to obtaining expert advice and assistance in the drafting of the amendments. Such criticism comes rather ill from Senator Walsh, the Minister for Finance, who has had recently to confess to very grave errors in recent national accounts, and when I see on the Notice Paper a Bill we have to deal with before we get up to validate a wheat tax due to an error by expert advisers. Even though there might have been some error or some controversy about the quality of the drafting of these amendments, nevertheless the Government puts through legislation and publishes national accounts in which its expert advisers have made blatant mistakes. We get this time and again from the Government. I am sure that an expert lawyer or accountant, if he made a very detailed analysis of the petroleum resource rent tax package, would be able to find some errors in it as well. Maybe such errors will come to light. It is a very technical area and mistakes can be made. I am not in a position to argue about the technical quality of the amendments but the Opposition has taken care to get expert professional advice on their drafting. If the Government had been in any way prepared to negotiate on a more satisfactory resource rent tax regime of course the Opposition would have been very open to further negotiation with the Government about such technical matters. As I said, the charges Senator Walsh trumped up last night come rather ill from a Government Minister who has had to confess to some pretty major errors from the Government's expert advisers in the last week or two. Amendments negatived. Senator DURACK(Western Australia)(12.39) —I would like to raise a further matter in relation to the legislation while we are in committee. I do not move an amendment but I wish to make some comment on an answer that Senator Walsh gave last night just prior to the adjournment at 10.30. I had asked Senator Walsh about the progress of negotiations which he as Minister for Finance had first announced back in 1984 when this new resource rent tax regime was unveiled. The question related to the position of the States and the Northern Territory under this legislation when it takes effect. Ultimately, although the States are not immediately affected by the application of the resource rent tax at the Jabiru field, when it is applied in all the off-shore areas of Australia, it will seriously affect the returns which the State governments now enjoy under the royalty arrangements in place with the Commonwealth in respect of developments in those areas. So I was anxious to know what arrangements the Federal Government proposed to make to recompense the States for a loss of revenue. I understood the Government had conceded that there would be a loss of revenue and that it proposed to come to some accommodation with the States to recompense them. I was astonished, firstly, that Senator Walsh was able to say only that discussions will be held. Even though he said in 1984 that discussions would be held, they have not yet been held. He was able to answer only by repeating that discussions would be held, of course, before this legislation applied in an area where the States would otherwise have expected to obtain a share of royalty payments. But what I found even more astonishing was Senator Walsh's further suggestion that if the Government got the numbers in the Senate, it would squeeze the States out of any share of revenue from petroleum developments in the off-shore areas of Australia. Presumably, as the Government has support from the Australian Democrats on this legislation, it would get their support for such a proposition to deprive the States of any share of revenues derived from petroleum developments in off-shore areas of Australia, despite the fact that there is what is known as an off-shore constitutional settlement with the States which was entered into after long negotiations with the Fraser Government. I might say that Premier Wran was a notable participant in those negotiations and the existing State Labor governments have been very pleased indeed with the off-shore constitutional settlement as a whole, not just their share of royalties. I am sure that Premier Burke from Western Australia-from which Senator Walsh comes-would be very interested to learn about Senator Walsh's threat to deprive the States of any say in any share of revenue from the off-shore areas. I hope I misunderstood Senator Walsh. Perhaps he did not intend to make the threat that he did but I can only express my complete astonishment that a responsible Minister would make a threat of this kind in such a cavalier way concerning a very serious settlement between the Commonwealth and the States which was negotiated and passed ultimately by this Parliament and which this Government has not attempted in any way to dismantle. Of course, if it did attempt to do so, I am sure the Labor State governments would be as horrified as I am. Bill agreed to. Petroleum Resource Rent Tax Bill 1987, Petroleum Resource Rent Tax (Interest on Underpayments) Bill 1987 and Petroleum Resource Rent Tax (Miscellaneous Provisions) Bill 1987 agreed to. Bills reported without amendment; report adopted. Bills (on motion by Senator Tate) read a third time. Sitting suspended from 12.46 to 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that the Minister for Local Government, Senator Reynolds, is again absent from the chamber for Question Time today, I understand due to a continuation of the reason which applied yesterday. 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 LEWIS —I refer the Minister for Industry, Technology and Commerce to the latest Business Outlook released by the Syntec research group which estimates that Australia's unit labour costs will increase in 1987-88 at a rate double that of our trading partners. It concludes: In the face of this cost problem it is absurd for Messrs Hawke and Keating to assert that all is `on track' in this economy. Against this background I ask the Minister: Firstly, on what wage cost assumptions did he base his excessively optimistic assessment released last Sunday of export growth prospects for Australian industry? Secondly, does the Government intend to make any wage policy adjustments to stem the continuing attrition of Australia's international competitiveness in 1988? Senator BUTTON —I am not familiar with the latest Business Outlook published by Syntec. Perhaps I am a day behind and I am more familiar with the Confederation of Australian Industry (CAI) and Westpac-- Senator Stone —Four days. Senator BUTTON —I thank the honourable senator for the sotto voce interjection, which does me no harm. I am more familiar with the CAI-Westpac survey, which I think is fairly optimistic about the economic outlook for industry generally. I was asked, in the light of the estimate provided by Syntec, which I have not read, whether I regard it as absurd for Mr Keating and Mr Hawke to have said that things were all-I forget the expression that the honourable senator used-- Senator Lewis —`On track' was your Leader's expression. Senator BUTTON —I think it is absurd to suggest that either of those gentlemen has ever said that in precisely those terms, or without qualification, because it is a unanimous view within the Government that there is-- Senator Lewis —What? That is, all is not on track? Senator BUTTON —No. There is no point in the honourable senator asking questions if he knows the answers already. Senator Lewis —I am trying to draw conclusions from what you are saying. Senator BUTTON —I think it is a unanimous view within the Government that, while the major factors affecting the economy are as well on track as we might expect them to be at present, a number of difficulties will face the Australian economy in the next year or so, fore- most amongst which, of course, are the current account deficit and the size of the international debt. Those matters are constantly in the minds of Government Ministers. I am sure that Mr Hawke or Mr Keating has not said anything which does not contain those qualifications. I was next asked: On what wage policy assumptions was the document, to which Senator Lewis referred, prepared? I assume that it was prepared some time ago but that is not the point. I would think it was prepared on assumptions relating to the wages outlook at the time of its preparation. That seems pretty logical to me and I think probably that is what happened. I do not want to intrude into the honourable senator's speech later, or mine for that matter, but while wages policy and relative wages are very important issues, that document was not really directed to that point. The point about that document is that it was designed to draw attention to a number of Australian companies which are highly competitive internationally in the current wages environment and the foreseeable wages environment. That is because they are companies largely for whom price, as distinct from a number of other issues, is not the major determinant of their capacity to sell their products. That is the point about that document. I suspect that, in those circumstances, it would not have gone on at great length to address wage policy issues. But I admire the honourable senator's adroitness in tying together the Syntec survey of a day or two ago and that document. It is a super long bow. Senator LEWIS —Mr President, I ask a supplementary question. Let me draw a further bow. The Minister referred in his answer to the document having been prepared on the basis of the wages policy at the time of its preparation. I ask the Minister, as I asked him in the main question: Does the Government intend to make any wage policy adjustments in the light of Australia's falling international competitiveness in 1988? In other words, has the Government's wage policy changed since the preparation of that document? Senator BUTTON —I suppose that, in a sense, I can say that it has, because only a week ago Mr Willis announced some new directions in preparing the parameters of wage policy for 1988 and beyond-a view which has been supported not only by the Australian Council of Trade Unions, but also by some major industry groups. I suppose that, in getting through the second tier negotiations and preparing for a more flexible wage fixation system, it can be said that there has been a change in the parameters of foreshadowed wages policy. That is true and that is the change. However, let me just go back to another point which the honourable senator raised in his question. There has been a very real fall in wages in this country over several years now. The Government recognises the need for that adjustment to take place. But at any time at any stage in this country one could make comparisons between wages in Australia and wages in some of the countries with which we trade. For example, Korea is a very big trading partner of Australia. If the honourable senator is suggesting that, under this Government or any government of the ilk of the previous government, Australian wages would be adjusted to the level of wages in Korea, I invite him to say it outside and not here. This question about comparative wages in-- Senator Chaney —That is a cheap debating point. What about the nominal wage change? Senator BUTTON —Senator Chaney has come in to bail out the honourable senator. The fact of the matter is that we cannot just say, `Australian wages should compare with those of each of our trading partners at any time'. I have already indicated to the honourable senator that there has been a change in the parameters in which wages policy will be developed in 1988 and beyond. In all that, of course, the Government will seek advice. But we will not seek advice from honourable senators opposite because in their last three years of government wages increased by 14 per cent, 14 per cent and 16 per cent. So we will not be seeking any advice from them. Senator AULICH —My question, which is directed to the Minister Assisting the Minister for Community Services and Health and the Minister Assisting the Prime Minister for the Status of Women, refers to the allegations of fraud made against Foundation 41 and Dr William McBride by two former Foundation 41 researchers over results obtained by Dr McBride in experiments using the anti-morning sickness drug, Debendox. I understand that Debendox was withdrawn from the market by its makers, the Merrell Dow company, due to Dr McBride's adverse reports on the drug's side effects. Given the importance of this issue to women and to the reputation of scientific research in this country, I ask: Firstly, what avenues are open to Merrell Dow to reintroduce the drug, Debendox? Secondly, have government grants been made to Foundation 41? Senator RYAN —Yes, I am aware of the controversy surrounding Dr McBride's research in relation to Debendox. I think at this stage it would not be appropriate for me to comment or to take sides in that controversy. The matter is still being sorted out within the scientific community. However, it is a fact that Debendox was withdrawn from the market some time ago and the decision to withdraw was taken by the responsible company, Merrell Dow. I am not clear as to what grounds the company had for withdrawing the drug, but it has, indeed, been withdrawn. Senator Aulich asks what procedures would be available to Merrell Dow if it wished to reintroduce Debendox on the market. If in the future the company does wish to reintroduce the drug, relevant data would need to be placed before the Australian Drug Evaluation Committee, and the normal evaluative procedures would apply. At this stage there is no suggestion that that procedure has been invoked. Senator STONE —I refer the Minister for Finance and Minister representing the Treasurer to his answer to my question yesterday about whether he knew before the release of his Forward Estimates report last Wednesday that the original September quarter estimate for the growth of business investment would be revised downwards sharply from 11.8 per cent to 0.5 per cent? Since this revision, plus the latest survey of private business investment expectations, strongly suggest that there will be no real increase in business investment in this financial year and, as a consequence, undermines the whole framework of economic assumptions which underly the Forward Estimates for 1988-89 and beyond, I ask the Minister: Was he told, either by his Department or by the Treasurer's office, of the business investment revision before the Forward Estimates were released last Wednesday? If so, why did the Minister not mention that advice during the Press conference at which he and the Treasurer sought to mislead those journalists present as to the significance of those Estimates? Does the Minister now regret this unprincipled cover-up on his part and on the part of his colleague the Treasurer? Senator WALSH —I am well aware of the fact that the Stone fable, which has just been recited again here, was being furiously peddled around some of the more gullible journalists in the Press gallery yesterday by Senator Stone himself. To the best of my knowledge not even the most gullible journalists in the Press gallery bought it, but I have not looked at all the papers. On the question as to whether I knew, I answered that yesterday. I knew that there was to be a revision-and that it was to be downwards-in the first published figures on business investment for the September quarter. I did not know the degree of the downward revision. As I recall it, I was told by a member of my staff who, I think, had been told by a member of the Treasurer's staff. I was not formally notified by the Department of Finance. Yesterday I did mention that I had told one of the Finance officers-I think before the Press conference was held-that I had heard that there was to be a downward revision. As to the Press conference, we were not asked any questions about that. If members of the Opposition want to talk about cover-ups, I recommend to them a very close reading of the minute that Senator Stone had either authorised or, I suspect, written himself, addressed to the Treasurer had a Liberal government been returned in the election on 5 March 1983. Unfortunately I do not have a copy of it with me, so I cannot quote from it. Senator Stone told the former Treasurer, as he now is, the week before the election that the Budget Estimates on both the outlays and receipts side were in need of drastic revision, in particular for the 1983-84 financial year, and that there was an impending Budget deficit of nearly $10 billion. What did Mr Howard say when Mr Stone told him that fact on the Tuesday before the 1983 election? What did Mr Howard do? He covered it up. He said, `Give the electorate the mushroom treatment. Don't tell them the facts. Let the mugs go on believing the $6 billion phoney figure for a prospective deficit that I have already fed to them'. That is what Mr Howard said. Mr Howard got official advice in writing from Senator Stone, as the then Treasury Secretary, telling him that the prospective Budget deficit was not $6 billion, but $9.6 billion-nearly $10 billion. As I said, I regret I cannot quote the precise passages because I do not have the document with me. What did Mr Howard do? When the question was put to him, `What are we going to do about it?', he said, `Sit on the figures. Let us cover them up. Let us go on'. He went on, not only covering up but also actually continuing to tell fibs to the electorate. He knew it was a fib and that the prospective deficit was $10 billion and not $6 billion. He went on telling the big fib-that it was, in fact, $6 billion-right up until election day because he thought he might be able to get away with it. Senator STONE —Mr President, I ask a supplementary question. Leaving aside those largely irrelevant aspects of the Minister's reply, I refer to that part of his response in which he told the Senate that the reason he did not refer to this matter in his and the Treasurer's Press conference last Wednesday was that nobody asked a question about the revision to the investment figures. If I might say by observation and in passing, that was hardly surprising. Will the Minister now respond to my question as to why he sought, by that omission, to mislead those journalists present about the significance of that revision? Will the Minister agree that a falsehood by omission is just as much a falsehood as one by commission? Senator WALSH —It is not the custom, certainly for members of this Government, to release in advance-even if they are aware of them, and usually they are not aware of them in detail-the Australian Bureau of Statistics (ABS) economic data or revisions of that data, particularly data which could be economically sensitive and affect things such as share prices and exchange rates. It may have been Senator Stone's custom when he was Secretary to the Treasury to give background briefings to journalists on ABS statistics and revisions to same before they were officially released by the Australian Statistician; but it is not the custom of this Government, and I hope it never will be. Senator Stone —Mr President, I raise a point of order. I ask the Minister to withdraw that remark which casts doubt upon my integrity. The PRESIDENT —I ask Senator Walsh to withdraw. There is an imputation of improper motive. Senator WALSH —I will withdraw it, Mr President. But, regardless of whether Senator Stone made a practice of doing that, in the question he has asked he has obviously endorsed the principle that that ought to be done. Senator FOREMAN —My question is directed to the Minister for Justice, who is no doubt aware of calls for a special conference of all State Premiers, the purpose of which is to institute national gun laws. I ask: Will the Minister also investigate the possibility of including restrictions on the sale of ammunition in such a proposal? Senator TATE —I thank Senator Foreman for his question. Of course, I am aware of calls for a national conference. When Mr Unsworth took this initiative and made this suggestion it was readily taken up firstly, I think, by Mr Cain. Then the Prime Minister responded by saying that he would convene a Premiers Conference to which all jurisdictions, including the Northern Territory, would be invited. It is very important that we in Australia take a national approach to the control of firearms in our community. It is quite clear from media reports over the last three or four days-from reading editorials and general headlines and listening to commentators-that there is strong public support for Australian politicians to take a stand. Perhaps this is the last opportunity that we will have to take a stand against the drift towards a United States-style society where the bearing of arms is regarded as a constitutional right, emanating from its particular frontier and revolutionary history, rather than a privilege and a concession by society-a concession which ought to be granted only in the most stringently supervised circumstances and after very high hurdles have been jumped by those who seek possession and ownership of weapons in our society. We in Australia do not want to drift that way and it is time that we, as a nation, took a definitive step in that direction to secure our preferred shape of our society. All Premiers and the Chief Minister of the Northern Territory have been invited to the Premiers Conference. I now understand that, despite some earlier speculation that the Queensland and Tasmanian Premiers would not attend, Mr Ahern has indicated that he will attend and Mr Gray has indicated that a Minister may attend to represent the views of the Tasmanian Government. That attendance would be very welcome. It would be even more welcome if both of those governments agreed to take the steps which were foreshadowed by the police Ministers meeting in Hobart a fortnight ago to have common standards and criteria for the licensing of persons who possess firearms and for the obtaining of permits to purchase firearms. On 10 December an editorial in the Daily Sun in Brisbane stated: We want still tougher gun laws than those the Government- that is the Queensland Government- has ready to put before Parliament when it resumes next year. . . . Don't let us wait for a massacre here before semi-automatics are banned altogether. On the same day, Thursday, 10 December, the Mercury, which is published in Hobart, stated: Tasmania must change its mind and agree to sign the agreement for nationwide uniform gun laws . . . continued refusal would take on the appearance of callous indifference. I believe that those editorials represent public opinion in both of those States and indicate to politicians, as do the polls published in the Age of a couple of days ago, that the public is willing to support very tough and stringent legislation in this area. Certainly, the Commonwealth is ready to play its part. In the Australian Capital Territory, over which we have control, a dangerous weapons ordinance is being drafted at the moment to make the situation much more stringent than it is at present. I hope that this will rule out the possibility of any border-hopping between the Australian Capital Territory and the surrounding New South Wales jurisdiction. It is very important that we have uniformity in this regard. I do not necessarily mean technical uniformity in every provision-- Senator Stone —You might apply the same rules to videos. Senator TATE —I understand the analogy that the honourable senator is drawing. As far as this matter is concerned, it is important that the Australian Capital Territory does not have laws which are slack compared with those prevailing in New South Wales and other jurisdictions. In regard to the importing of weapons over which we also have control, regulations at the moment prohibit the importing of automatics and semi-automatics with pistol grips. But the regulations certainly need to be tightened up, and that matter will be looked at. I have also written to my colleague the Minister for Transport and Communications, asking him to review laws relating to the sending of firearms through the postal service. I expect that his reply will be available for consideration at the Premiers Conference. So the Government is taking a comprehensive approach. In relation to Senator Foreman's question about ammunition, I agree with him that any examination of stringent national gun laws must, of necessity, involve restrictions on the sale of ammunition. Indeed, part of the proposed national controls agreed by most Australian police Ministers in Hobart on 27 November, about which I informed the Senate last week, was the restriction of sales of ammunition to persons authorised to possess a firearm. Senator JENKINS —My question is directed to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. I refer to the Migration Amendment Bill 1987 which was amended in the Senate on 9 December 1987 to ensure that the status quo is maintained and that no fee will be paid by appellants seeking a review of status through the immigration review panels. As the amended Bill was agreed to by the other place, I ask: Have any of the prescribed fees of $240 per appeal been collected from appellants? If so, what amounts have been collected and, in the light of clause 2 of the unamended Bill and the departmental leaflet dated September 1987 stating that the fee of $240 be payable as at 16 September 1987, at what date was the collection of fees commenced? Further, in the light of the amendments to the Bill, which removed the provisions for collection of fees, will the Minister refund moneys already collected from appellants? If so, what steps will the Minister take to refund moneys to appellants in Australia and overseas? Senator TATE —Senator Jenkins has asked a rather detailed question of which she was kind enough to give my office some notice. I have the following answer to part of her question from the Minister for Immigration, Local Government and Ethnic Affairs. In relation to the first part of her question of whether any of the prescribed fees of $240 per appeal have been collected from appellants, the answer is no. However, an administrative fee for appeals of $240 has been collected from applicants. The answer to the second part of her question is that about $400,000 has been collected as at 14 December 1987 from this administrative fee. The answer to the third part of her question is that arrangements for the collection of the administrative fee were in place on 16 September 1987, but the first fee was not collected until the following day. In answer to the fourth and fifth parts of her question, the effect of the amendment to the Migration Amendment Bill was to remove provisions which would have provided for a legal entitlement for the reconsideration of certain decisions and the mechanisms for the collection of fees associated with the entitled services. The Opposition has made it clear, both in the other place and in the Senate, that it is not opposed in principle to legislated appeal rights or a legislated fee. The Opposition wishes to see the details spelt out in legislation rather than in regulation. I expect that the Government will introduce legislation that will take the Opposition's view into account. It is expected that such legislation would sanction the collection of a prescribed fee for the service of reconsideration of a decision as from 16 September 1987. In the meantime, the Government must come to a view about the continuation of the current administrative based scheme. It does not believe that senators, in deleting provisions to establish the legislated appeals system, intended that the Government abandon the current scheme which was extended after the 1987-88 Budget and which has been in operation since 1982 when it was established by another government. Similarly, the Government does not believe that the additional staff resources to reduce appeal waiting time, which were partly funded by the administrative fee, should be forsaken. It believes that the Senate would also hold that view. On that basis, the Government would also intend to continue with the current review mechanisms and the current fee requirements. As I understand it, this position conforms with the views of the Opposition as expressed in the other place. Senator JENKINS —Mr President, I ask a supplementary question. Senator Bishop —When is a fee not a fee? Senator JENKINS —That is a question which I will have to leave. Is the Minister content that, although we have not legislated, that fee has been collected retrospectively? The Bill cannot possibly come before us until the next session of parliament. Presumably, many $240 administration fees-call them what you will-will be collected between now and whenever the Bill is next before the House of Representatives. Is the Minister happy about that situation? Senator TATE —Luckily, my state of being happy or unhappy is quite irrelevant. The fact is that I have been provided with the view and answer of the Minister for Immigration, Local Government and Ethnic Affairs in relation to this question. Senator Walters —And like a parrot you gave it. Senator TATE —I am not a parrot; I am representing the Minister and therefore doing my task. That is the view of the Government to be conveyed to Senator Jenkins. Senator MAGUIRE —My question is directed to the Minister for Transport and Communications. I refer to the latest annual report of the Australian National Railways Commission and its reference to the Gladstone-Wilmington railway line in South Australia's mid-north. I ask: What proposals, if any, are being considered by Australian National for conversion of that narrow gauge railway to standard gauge? When is the earliest a decision might be made to proceed? What are the economic reasons for doing so? Senator GARETH EVANS —The Australian National Railways Commission has conducted a number of reviews, including an economic analysis of various options for the Gladstone- Wilmington line, and as a result has decided to standardise the line to Booleroo Centre. Standardisation is being progressed by replacing worn narrow gauge sleepers with standard gauge sleepers. The program was commenced three years ago and is expected to be completed by early 1989 when sufficient standard gauge sleepers will be in place to enable conversion of the line. Conversion will eliminate the cost of the break of gauge at Gladstone and this will enable the operation of block grain trains as far as Booleroo Centre. There is sufficient volume of grain traffic to justify the conversion. The project is being carried out at minimal cost as part of the normal maintenance program on the line. The actual cost directly attributable is not readily available but is estimated to be about $0.2m. Senator TEAGUE —My question is directed to the Minister representing the Minister for Foreign Affairs and Trade. Last Monday I asked the Minister whether the Government is reviewing its policy towards strategic defence research being undertaken by both the United States of America and the Soviet Union. In particular I asked-I quote from the Hansard-the following question: In the light of the current evidence and the statement of Mr Gorbachev, will the Australian Government reassess its policy on this matter? Has the Minister the response to this question he undertook to seek? Today I refer to further reports. For example, yesterday's Adelaide Advertiser ran the headline `Gorbachev's dramatic Star Wars concession'. It was reported that at the Washington summit Mr Gorbachev made an additional significant statement when, referring to the strategic defence initiative, he said to President Reagan, `You can do anything you want'. As this Soviet reappraisal of strategic defence appears to remove the Reykjavik obstacle to the further negotiation of mutual 50 per cent cuts in strategic weapons, what new initiatives is the Australian Government now pursuing to press the important disarmament goals supported on both sides of the Senate and which now have such good prospects of achievement in the coming months? Senator GARETH EVANS —That sounds like a very good dorothy dix question, but it did not come from our side. Unfortunately, I am not yet equipped to give Senator Teague a sensible answer on that subject in addition to what I said to him the other day-which was perfectly sensible as far as it went but did leave a couple of loose ends about which I said that I would seek further advice. He has asked me a further question today seeking still more in the nature of a response as to what our position might be in relation to the obviously rapidly changing circumstances, but rather than continue to rabbit on in this fashion I think it would make more sense if I were to get a sensible answer from my colleagues Beazley and Hayden and put down an answer before the end of this week. Senator TEAGUE —Mr President, I ask a supplementary question. Can the Minister undertake-given that eight days have elapsed and this is a significant matter that was debated last week-to answer, quite specifically, what those new initiatives are before the Senate rises? Senator GARETH EVANS —I am indebted to Senator Teague for his acknowledgment of the significance of the part that Australia plays as a middle power in world disarmament forums and the way in which the rest of the Western and Eastern worlds are hanging on what new initiatives we may be prepared to contemplate in the light of these changed circumstances. Senator Stone —It is a bit like a second course. Senator GARETH EVANS —Yes, it is a bit like that. In all the circumstances I can do no more than suggest that I will give a better answer before the end of this week. Senator CROWLEY —Has the Minister representing the Minister for the Arts, Sport, the Environment, Tourism and Territories seen the article in the Australian of Monday, 14 December entitled `Korean koalas take a bite of tourist trade' which refers to the number of overseas made souvenirs available in Australian tourist outlets and to tourists' dissatisfaction at being unable to buy quality Australian made goods? Has the Minister any data on who does the tourist shopping, and how is it broken down between men and women? If we can safely presume that women spend many of the tourist dollars, can the Minister explain why there are no women on the committee to inquire into tourism shopping in Australia and how their needs and preferences will be taken into account? Secondly, will the Minister look at ways in which Australia's very splendid arts and crafts can be promoted and made available throughout all our tourist outlets? Senator RICHARDSON —I thank Senator Crowley for her question. I have seen the article she mentioned. No doubt honourable senators are aware that Mr Brown-the Minister for the global department including tourism-recently set up an inquiry. Senator Parer —He does not like koalas. Senator RICHARDSON —He has no dislike of koalas; he has not been piddled upon for some time. That Tourism Shopping Inquiry is chaired by Mr Bevan Bradbury, a former chairman of Coles Myer Ltd. It comprises a number of prominent people in the retailing industry all of whom no doubt have had experience in ensuring that the needs of the industry are tailored to the consumers. One assumes that consumers are not necessarily broken up by gender. Without wishing to pre-empt the outcome of the inquiry, there are sufficient indications that Australian manufacturers are missing opportunities by not supplying more of the goods sought by overseas tourists. Visitors to Australia this year will spend about $800m on tourist shopping, which is an extraordinary amount. Unfortunately, we must concede that they would spend much more if they had available to them all of the items necessary to satisfy their requirements fully. For example, Japanese tourists leaving Australia in 1987 will probably take with them upwards of $200m which they had planned to spend but did not because they could not get the goods they wanted. Next year Australia will be host to more than two million overseas visitors and expenditure on shopping by those visitors will probably be at an all time high. To find that replicas of our unique flora and fauna are manufactured overseas does nothing to enhance our reputation as a reliable and attractive place for tourists to shop. Unless the tourism industry, the manufacturers and the retail industry co-operate to market competitively priced quality goods, Australia will miss out on a substantial amount of foreign exchange. It is interesting to note that the article referred to by Senator Crowley states that one souvenir retailer has reported an increase in business since stocking goods manufactured in Australia. I hope that other retailers follow that example and I urge them to do so. Obviously within this country we have talented Australians in the arts and crafts industry who are producing high quality works. If those goods were sold in tourist outlets I have no doubt that they would easily outsell imported goods. Of course, the inquiry will be addressing all of those questions and will report by the end of June. As to the second part of the honourable senator's question, there is a dearth of data on the general question of tourism shopping patterns, including expenditure by gender. The committee is currently seeking submissions from interested parties which, together with other research, should provide answers to many of the outstanding questions. I can assure honourable senators that the absence of women on the committee of inquiry is in no way intended to reflect adversely on the importance of women in tourism shopping. The committee members were selected on the basis of their particular experience in sectors of the retail and tourism industries, and, in the case of the union representative, his industrial experience and position in the key union involved. It is my hope that as a result of the inquiry Australia's high quality arts and crafts will receive the prominence and the exposure that they so richly deserve. Senator CROWLEY —I ask a supplementary question, Mr President. Did I understand the Minister to say that this committee will be receiving submissions? Will the Minister advise people extensively of the opportunity to make submissions to that committee? Senator RICHARDSON —As with all the inquiries that have been conducted under the watchful experienced eye of Minister Brown, I am sure that there will be more than enough publicity of the fact that submissions are wanted. When it comes to the question of gender in shopping, I am sure that not only Senator Crowley but plenty of other people will be interested in making submissions. I have no doubt that the arts and crafts industry, which has already expressed interest in the inquiry, will be making a submission. Senator KNOWLES —I refer the Minister for Transport and Communications to his written answer dated 9 December in response to my question of 8 December, in which he admitted that the report from Mr Roger Beale to him on 1 September-and I quote: . . . wrongly identified a Mr Spiridon Apokis as a Director of Continental Venture Capital. He was, in fact, Director of Josa Investments, a major shareholder of Continental Venture Capital. What was the degree of shareholding of Josa Investments in Continental Venture Capital Ltd? Is it suggested that Josa Investments exercised a degree of control over Continental Venture Capital? Will the Minister table the report of 1 September from Mr Roger Beale which contained this wrong information? Senator GARETH EVANS —I will have to take that part of the question, relating to the degree of shareholding and the significance of any control that may have flowed from it, on notice. I will certainly give consideration to the tabling of the report. The only question affecting a decision in that respect would be the normal freedom of information considerations about commercial confidentiality and questions of privacy or criminal process. Subject to those normal caveats and provisos, I will be happy to give sympathetic consideration to the honourable senator's request. Senator KNOWLES —Mr President, I ask a supplementary question. When will the Minister give consideration to tabling that report? Senator GARETH EVANS —I will endeavour to sort it out by the end of this week. Senator VALLENTINE —I direct my question to the Minister representing the Prime Minister. As this is the week in which we remember the Indonesian invasion of East Timor in 1975 and the 100,000 to 200,000 people who have died there since, I refer the Minister to the following statement made by the Prime Minister on the Australian Broadcasting Corporation current affairs program PM on 19 May this year: The closing of the Libyan People's Bureau was because of the Libyan connection with OPM and Fretilin. Given that Fretilin has denied the allegation and, to date, has had no connection with Libya, I ask the Minister whether the Prime Minister has ever substantiated the accusation against Fretilin and, if he cannot, whether he is prepared to give an apology. I also ask whether the source of the allegation was a fake Indonesian document and, if so, whether he could make a copy available for translation into English. Finally, can the Minister inform the Senate how Libya has voted on the East Timor resolution at the United Nations when it has come before the General Assembly each year? Senator BUTTON —Senator Vallentine gave some notice of this question but, I suspect, not enough. It raises issues concerning several portfolios. I will direct the substance of the question to the Department of the Prime Minister and Cabinet and seek to obtain an answer as soon as possible. Senator Vallentine will recall that she asked me a question last week in which she sought details which involved a number of portfolios, and I think she would appreciate that I responded with alacrity. Senator ALSTON —Does the Minister for Transport and Communications agree that timed local calls would mean that callers to government offices and departments, with queued switchboards and piped music, would hold on for engaged lines at their own expense? Would this not be an outrageous burden for many sick, poor and disadvantaged welfare recipients who are forced to ring government offices for assistance? Will the Minister undertake that any timed local call scheme will not reward government inefficiency and boost revenue of Telecom Australia in this manner? Further, why has the Minister pre-empted the release on Thursday of Telecom's options paper on timed local calls by expressing a preference for a revenue neutral outcome? Has the debate been helped to date by the hysterical pre-election outburst of the Victorian Minister for Consumer Affairs, Mr Peter Spyker, and the New South Wales Minister for Consumer Affairs, Mrs Deirdre Grusovin, who have both described timed local calls as an outrageous proposition? Senator GARETH EVANS —I do not have much to add on this subject. As Senator Alston says, an options paper from Telecom will be issued later this week in which Telecom will identify the nature of the problems as it perceives them and a number of ways in which those problems might be addressed, including, in particular, problems that obviously exist so far as the elderly, disadvantaged and disabled are concerned. I do not think I am pre-empting anything by expressing a preference for revenue neutrality in any scheme that might conceivably be introduced. It has become well known in the last few days that that is Telecom's view of what, if anything, should be done in this respect. It is not a device, as some people have very wrongly claimed, to generate masses of additional revenue; rather, it is a way, in Telecom's view, of getting some rationality into the effective allocation and utilisation of an always scarce resource. Whether it is possible to allocate that resource through a pricing mechanism of this kind in a way that will not cause disadvantage or inequity is the matter that is in issue. It must be addressed by a process of consultation and discussion-preferably of a non-tendentious kind-over the next few months. Issues such as the implication for callers of the queueing of calls by business enterprises and government departments will have to be addressed. One possible option-I do not know whether it would be appropriate for government departments-is the wider use of the 008 free call concept. That is something which undoubtedly also will be given consideration and will be adverted to in Telecom's discussion paper or discussions on this matter which will occur later this week. I do not think it is in anybody's interest for people on either side of the fence to make judgments about what may or may not be involved in any such new regime of this kind. It is, as I said the other day, a difficult, sensitive issue and one that does raise very real questions about where the burden of rational resource allocation should fall. I think we would all be sensible to address the issue in a calm and rational way, rather than in the excited and overheated way in which it has tended to be discussed so far, and the way in which Senator Alston was contributing by his question. Senator BOLKUS —I refer the Minister representing the Minister for Foreign Affairs and Trade to an article in last Saturday's Sydney Morning Herald on the subject of the continuing division of the island of Cyprus. I ask the Minister: What steps has the Australian Government taken with either the Turkish Government or the Turkish-Cypriot regime in order that more details can be provided as to the current whereabouts of missing Greek Cypriots in the northern sector of Cyprus? Senator GARETH EVANS —In this year's session of the Commission on Human Rights, the Australian delegation expressed concern over the lack of progress in resolving the whereabouts of missing persons in Cyprus and urged the parties to the dispute to co-operate fully with the Committee on Missing Persons in order to bring about a quick resolution of the remaining cases. The Australian Government considers that the United Nations Committee on Missing Persons provides the best avenue for determining the whereabouts of missing persons in Cyprus. We will certainly continue to encourage the parties directly concerned to lend that Committee every assistance. Senator HAMER —My question is directed to the Minister representing the Minister for Industrial Relations. The Minister will remember that last week I asked him about the container depot at Rozelle which is now closed as a result of low productivity by the Waterside Workers Federation. I am sure, because of the great importance of an efficient waterfront to Australia's export performance and economic recovery, that the Minister will now have familiarised himself with this matter. In his answer to me last week the Minister suggested that management might have been at fault in this poor performance. Is the Minister aware that the employer, Conaust (NSW) Pty Ltd, has managed to introduce improved work practices in its Melbourne depot which have resulted in a productivity rate of at least 10 containers per gang compared with 4.7 per gang at Rozelle? Is he also aware that because the Sydney branch of the Waterside Workers Federation of Australia would not agree to the same improved work practices, Conaust was forced to close the Rozelle depot? I ask the Minister: Is it the position of the Government that these Sydney Waterside Workers Federation members, who will now return to a waterside workers pool, should get the productivity wage rise of 4 per cent under the second tier system, even though their poor productivity has resulted in the closure of a depot and the loss of jobs for about 30 other people? Senator BUTTON —I am not fully familiar with the circumstances at Rozelle. I am no more familiar with them than I was the other day. That does not deprive me of the capacity to answer Senator Hamer's question, however. The point I was trying to make the other day is simply that productivity depends on a number of issues, including labour force practices, management practices and so on. If the parties do not get it right between them, they will suffer the fate of the Rozelle depot. If a work place, installation or a facility such as the Rozelle depot closes as a result of the incapacity of the parties to get it right, that is the way it will happen. The Waterside Workers Federation will presumably begin to understand that message-if it has been recalcitrant in understanding that message-- Senator Walters —It is a bit late. Senator BUTTON —It may be a bit late; it may not be a bad thing. I cannot comment on that. Places do close because they are uncompetitive. New places open because they are competitive. Senator Walters —They do not get a productivity rise, though. Senator BUTTON —If the honourable senator will let me try to answer Senator Hamer's question, she can have a discussion with him afterwards and tell him where he is wrong. I very much welcome the fact that the company has apparently had more success at the Melbourne depot. Senator Hamer then asked me whether the waterside workers who were employed at the Rozelle depot should be singled out under wages policy considerations for selective punishment. Senator Hamer —No, it is a lack of reward-not punishment. Senator BUTTON —A lack of reward, all right. Senator Hamer asked whether they should be singled out for a selective lack of reward. I think that would be a extraordinarily difficult exercise to undertake around the country. So my answer to that part of the question is no. Senator COLLINS —My question is addressed to the Minister for Transport and Communications. I must declare that I have a personal interest in this question. Has the Minister noted an incident last week involving a Boeing 737 aircraft operated by USAir in which the pilot of the aircraft shortly after take-off reported a complete loss of power on the starboard engine of the aircraft, which was found on examination to be due to the complete loss of the starboard engine itself, which had fallen into a field? Can the Minister advise the Senate whether he is aware of the reason for this terminal engine failure on this 737 and whether it has any implications for the 24 Boeing 737s which are operated by domestic airlines in Australia? Senator GARETH EVANS —I have seen, as no doubt we all have, the Press reports that a USAir B737 experienced what air accident investigators euphemistically described as an engine separation-I would have thought it was more in the nature of a divorce-at about 5,000 feet in the vicinity of Philadelphia a few days ago. The aircraft in fact made a safe landing at Philadelphia airport in the aftermath of that incident. Preliminary advice indicates that an engine attachment cone bolt failure may have been the cause of the said separation. There have been several incidents overseas of such cone bolt failures in the last few years. Now for the good news-the aircraft concerned in the incidents have been B737-100/200 series aircraft. Aircraft of this series of B737s are no longer operated in Australia. B737-300 series aircraft are operated by Australian Airlines and Ansett Airlines of Australia. This aircraft has a different type of engine mounting configuration. Based on the known problems with the mountings on the earlier series of B737s, the Australian first of type certification for the 300 series specifically addressed the engine mounting integrity for that aircraft. Senator CRICHTON-BROWNE —I direct my question to the Minister representing the Minister for Primary Industries and Energy. I refer him to the present problems with organochlorine pesticide residues. The Minister will be aware that the national residue survey (NRS) has detected previously that over a number of years Western Australian cattle have shown levels of over twice those of other States. Can the Minister tell me why the Bureau of Rural Science, which manages the NRS, will not provide me with a breakdown of the locations where the tests in Western Australia took place and the results of the tests in the various locations? Senator Walsh —Who will not supply it? Senator CRICHTON-BROWNE —The Bureau of Rural Science, which manages the operation for the Department of Primary Industries and Energy. Senator WALSH —The simple answer is that I do not know. I will see whether I can get some information from Mr Kerin. Senator DEVLIN —My question is addressed to the Minister representing the Treasurer. I refer to the recent book of the New Zealand Finance Minister, Roger Douglas, titled Toward Prosperity, and in particular to a passage on page 197 in which Mr Douglas wrote: Overseas research had shown that when top personal rates were cut, Government in fact collected more tax because high earners no longer went to such great lengths to avoid their tax liabilities. Is the Minister aware of this research? If so, could it provide a basis for a lowering of the marginal tax rates? Senator WALSH —Mr President-- Senator Alston —The supply-side effect. Senator Stone —That's voodoo economics. Senator WALSH —I know. It is very much like it. I read Roger Douglas's book two months ago-three months ago, perhaps-and I came across that passage. I must say I was surprised by it. I, and people in my office as well, have since contacted a number of academics who specialise in tax matters. None of them are aware of any research justifying or supporting that conclusion. Senator Alston —Did you ring Mr Douglas? Senator WALSH —No, I have written him a letter asking him whether he can refer me to this alleged research, although the fact that fairly wide inquiry among what should have been a group of people particularly well-informed on the subject has found no such research suggests to me that there is no research-at least no reputable research-which comes out with that conclusion. As somebody suggested by way of interjection when the question was first asked, this proposition is, of course, supply-side economics of the type that was embraced by John Howard in the election campaign but from which he is now trying to run away. Senator ARCHER —I direct my question to the Leader of the Government in the Senate. I remind the Minister that on 16 October this year he described the level of consumer debt as a national malaise which would seriously affect the economy. I also refer him to the comments made recently by the Prime Minister when he scorned the need for a higher level of domestic savings. The Brisbane Courier-Mail of 10 November reported the Prime Minister's view as follows: There is no need for Australians to save more and borrow less . . . `My advice to them is to continue their patterns of behaviour.' How does the Minister reconcile the responsible comments that he made with those of the Prime Minister, especially as figures compiled by the Australian Bureau of Statistics show that the current level of domestic savings is the lowest ever for the period of this Government? Senator BUTTON —I take it that the allegation is that I made this comment at some period of my enlightenment. Is that right? Senator Archer —I give you great credit for it, too. Senator BUTTON —Oh, I thank the honourable senator very much! I did not appreciate that. If Senator Archer says that I said that, he must be right. But I am not able to comment on the remarks attributed to the Prime Minister as reported in the Brisbane Courier-Mail. Senator Stone —You do not believe it, do you? Senator BUTTON —It sound an unlikely story to me. For the benefit of Senator Stone, I might say that I have seen things the Courier-Mail has said about him and I regard those allegations as irresponsible. They are actually very flattering. I would like to put that part of the question to the Prime Minister and get his early response. Senator Archer will probably find that the level of domestic savings has started to increase significantly following 19 October this year-and that may be a good thing. Senator ZAKHAROV —Has the Minister for Finance and Minister representing the Treasurer seen an article in today's Sydney Morning Herald reporting the contents of a letter from the Leader of the Opposition, Mr Howard, to his colleagues defending the Liberals' election tax policy? What is the conceptual difference between supply-side economics, which Mr Howard argued was not the basis of his tax policy, and the incentive effect which Mr Howard argued was the basis of his tax policy? Would this Government implement major tax cuts to be funded on the basis of supply side or incentive effects alone? If not, what other factors would the Government consider before implementing a tax cut? Senator WALSH —I have been asked what the difference is between supply-side theory, or Reaganomics, and Mr Howard's tax policy. The difference is that Mr Howard calls it incentivation, but it is based on exactly the same false premise. I have seen the report in the Sydney Morning Herald. If the report is correct, I am astounded. I am not really able to pass judgment on that because nobody in the Liberal Party has yet leaked me a copy of Mr Howard's letter, but I would certainly be very grateful to receive one. The journalists who have a copy of the letter apparently regard it as unethical to leak a further copy or photocopy of it to me. Assuming that the report is, if not complete, at least accurate in the essential details, I find it quite astounding that Mr Howard should now be trying to run away from the supply-side voodoo which he was so enthusiastically embracing a few months ago. I am sure that everybody on this side remembers the launch of incentivation early in February this year. Incentivation sank without trace in about two days because it was greeted with well deserved ridicule. What incentivation was all about, for the couple of days it was officially alive, was a proposal that we should replicate in Australia what Ronald Reagan, or the Reagan Administration, has done in the United States (US)-that is, actually test, empirically, supply-side theory. We all know what the consequences of that empirical test were in the United States (US)-a US Budget deficit which ran as high as $220 billion and which, in five years, turned the United States from being the largest absolute creditor nation in the world to being the largest absolute debtor nation. However, leaving aside incentivation, which sank fairly quickly-there was no attempt to resurrect it by the Liberal Party, for quite sensible reasons, for a change, I suggest-in the bogus alternative Budget which Mr Howard finally produced he built into the arithmetic, such as it was, which stood behind the Budget $900m worth of increased taxed collections because of the incentive effects flowing from lower personal tax rates. That is, Reaganomics, supply-side theory, incentivation or whatever you like to call it, was actually built into the Opposition's numerical tables, but from which, assuming that the Sydney Morning Herald report is correct, Mr Howard is now trying to run away. The PRESIDENT —I have received a letter from Senator Lewis proposing that a matter of public importance be submitted to the Senate for discussion, namely: The Government's failure to address the underlying problems facing Australian industry. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator LEWIS(Victoria)(3.04) —On my proposal the Senate is now debating as a matter of public importance this Government's failure to address the underlying problems facing Australian industry. This Government has put in an enormous amount of work in selling itself with jargon, with glossy booklets of the type I hold up, with media hype, and with the development of certain myths, such as the one just mentioned by Senator Walsh in his answer to a question-those myths repeated by a compliant and complacent Press ad nauseam. Similarly, with this Government's industry policy we have had an abundance of jargon and so-called plans for this, that and the other-each launched with a massive public relations campaign. We have had a steel plan, a motor vehicle plan, a chemical industry plan, and the plan that never was-the textile, clothing and footwear plan, which I will come to in due course. These are the so-called sectoral plans. The problem with these products is that the performance never matches the rhetoric of the Minister for Industry, Technology and Commerce (Senator Button). It never gets within a bull's roar of the Minister's rhetoric because the plans simply do not deliver. The underlying philosophy behind these plans has been an accommodation between big business, big unions and big government and a cosy arrangement to protect as many jobs and special interests as possible at the expense of the rest of the community. They have enabled many groups to exploit the taxpayers, or consumers. The vast majority of Australian firms and the productive work force within those firms are outside these sectoral plans and are ignored by this Government. Indeed, what is worse, many of them have been destroyed or are being destroyed by this Government. It is this industrial base, the small businesses-in particular, I am referring to the small manufacturing industries-outside these grand plans of the Minister that have some of the greatest potential to overcome the unemployment and other economic problems of this country. Their import substitution products are vital to the economic well-being of the nation but, as I have said, this Government has ignored them. In many ways the Government's taxation regime has destroyed, or is destroying, these industries. There is a malaise in Australian industry which the Government is not addressing. Certainly, the sectoral plans do not address the root cause of the malaise. The plans are alleged to address restructuring, to manage change, to work on people's attitudes, and to wean them off protection but, in the ultimate, all they do is increase the powers of the existing players while discouraging innovation and new entrants. New entrants, in particular, find it very difficult to get into the field once this Government has introduced a sectoral plan. Dr Barry Aldrich, a Sydney business consultant for the Committee for Economic Development of Australia, in a recent study of the confidential investment intentions of 25 Sydney manufacturers in a wide variety of industries, pointed out as recently as 24 November this year: Manufacturers will make major new investments in new technology and improved plant only if they are confident that the necessary productivity gains will be achieved in practice. Many see trade union resistance to rapid productivity improvement as a serious obstacle to direct investment in more productive equipment. As a consequence, many manufacturers are adopting or have adopted the alternative strategy of growth by takeover, or merger with competitors. I am not arguing against takeovers or mergers-they save some companies-but there is a failure to encourage investment in new manufacturing plant that is one of the major problems of industry. This Government is not attending to that problem. Many manufacturers see the investment climate in Australia as hostile, so frequently they look overseas. Substantial new investments dedicated, in particular, to export markets are frequently seen by manufacturers as being unacceptably risky. I know that the Minister will get up and say that he is able to quote certain manufacturers in Australia which have exported and are continuing to export. I congratulate them. I welcome them-I wish there were more-but they are the exception to the rule. They are not the rule in this country under this Government's policies. That is what this debate is all about-this Government's failure to address policies for industry which will encourage many industries instead of the elite few. The sorts of complaints we are talking about are: high interest rates, high corporate taxes, hostility to foreign investment, many of the hindrances to investment projects created by environmental procedures and uncertainties arising from tendencies by government to support a stated policy of political expediency in particular cases-and I look at Senator Richardson's political expediency in the Queensland wet tropical north. The absence of specific investment incentives is one of the things that many exporters especially complain of. The Government's failure to buy Australian-made is a complaint I hear very frequently around Australian industry. Indeed, many Australian government authorities, in their purchasing specifications, use what might be called lock-out specifications, whereby Australian manufacturers are locked out through the use of tender documents which refer either specifically or indirectly to a specific product. Let me say something about that. If a government authority decides that its specification will be written in the form of what it wants rather than what its functional needs are, the result is that the authority ends up with old-fashioned technology, because the person writing the specification must be looking at a specific item of equipment which he or she wants purchased by the authority. I can refer to many examples in the defence industries. The acquisition of the FFG frigates to service an aircraft carrier is a typical example of a specification, written for a particular purpose, which has ended up being a disaster. But that was in a big area. This is happening all around government departments where specifications are written quite clearly to end up with a product. If the person writing the specification has a particular product in mind, the result will be that the Department ends up with last year's rather than next year's technology, because the equipment is in existence. It might even be two, three, or up to five years, old in its technology. The Government is allowing its departmental officers to do this. I give an example. In a tender document issued within the last four weeks, IBM Australia Ltd is mentioned four times in the body of the document. It will be no surprise if IBM ends up supplying most of the equipment to fill that tender. We have been delighted to see the recent change in regard to a tender called by the Australian Taxation Office, which refers to the functional needs of that office rather than its wants. Most government statutory authorities, in these purchase areas, call for international computers. Wang Computer Pty Ltd seems to be very popular and, of course, once a department gets a Wang piece of equipment, it is locked into Wang forever. Having tenders written for functional needs rather than specific requests is of great importance to manufacturers in all aspects of industry around Australia. It is one of the matters this Government simply has not attended to and it is about time the Minister did something about it. Australian manufacturers are not investing in plant and equipment. In substantiation, I refer to the recent correction-- Senator Watson —Can you blame them? Senator LEWIS —I agree with my colleague from Tasmania, Senator Watson, who said, `Can you blame them?'. In this climate, of course we cannot blame them. I refer to the recent correction from the Australian Bureau of Statistics whereby the figures for the growth of constant price, private gross fixed capital expenditure on equipment was written down from 11.8 per cent to 0.5 per cent for the September quarter 1987. Frankly, after 4 1/2 years of this Government and this Minister telling us how wonderfully well this industry policy is working, 0.5 per cent for the quarter ending September 1987 is not good enough-and that was before the stock market crash of October this year. What is happening in industry around Australia is of major concern. The truth is that this Government's policies are not working. Notwithstanding the rhetoric or the high-powered publicity and the glossy publications, the policies simply are not working. Let us look at automobiles. This year, Australian production will fall to 1968 levels in the automobile industry despite the fact that this Government has had an automobile sectoral plan for about four years. Why has that happened? The Minister will try to say, `It is not my fault. We had to have a fringe benefits tax. We could not help the fall in the value of the dollar. We cannot really do anything about our high interest rates. We have to maintain them or the dollar will fall even more'. But it is his fault because he is No. 3 in this Government. It is the Government's fault that these things have been imposed on the economy and that the car industry is talking about production at 1968 levels. This Minister is No. 3 in this Government-so it is his fault that we are in this situation. I add that, even if the car industry had achieved high sales, we would have had to find some means, other than wheels, for moving vehicles around, because car manufacturers say that there would not have been enough steel to produce the wheels necessary to cope with the number of vehicles which should normally have been produced had this Government not taken disastrous steps with regard to the fringe benefits tax and other economic policies. I have referred to glossy publications. Last Sunday, the Minister gave me a glorious opportunity by releasing the publication entitled Australian Industry: New Directions. This publication is most selective-- Senator Watson —Which way are we going now? Senator LEWIS —As Senator Watson says, `Which way are we going now?'. The publication contains nonsenses such as a quotation from the Prime Minister (Mr Hawke) in which he says: . . . it is not unrealistic to expect Australia to double its manufacturing exports in the next five years. What nonsense that is. Anyone who looks at current investment in plant and equipment will know that it is simply not possible to achieve a doubling of manufacturing exports in the next five years. I will refer to the textile, clothing and footwear plan-the plan that never was. This plan was announced by the Minister with a lot of publicity and much hype. Right from the word go, the Minister said-and I quote from Hansard as recently as 5 June this year: There were several principles which guided the Government during its consideration of an appropriate future strategy for these industries: Predictability and stability of policy would be essential in such complex industries if they are to restructure and rationalise operations . . . So the first and guiding principle of the Government was predictability and stability. What has this Minister done since then? There have been a whole lot of ministerial leaks about the possibility of changes to the textile, clothing and footwear plan, which is why I say it is the plan that never was. Last sitting week I twice gave the Minister an opportunity to deny those leaks that he and his Government are considering revising the plan. On each occasion, the Minister not only refused to deny that they were considering changing the plan, but he speculated further about changes to the plan-before the plan is implemented. The plan was announced in November last year and, as I say, repeated on 5 June this year, shortly prior to the election. One would not like to suggest that as at 5 June the Minister knew when the Prime Minister was going to call an election, but I bet he knew that it would be pretty close. At that stage he wanted to make sure that this industry was not going to be working against him in the course of the election. He made a great play about it on 5 June. But, come November 1987, four months later, he started to speculate about the plan being changed before it commences in March next year. That is the plan that never was. Senator Archer —He wouldn't do that. Senator LEWIS —Senator Button would not do that! Senator Button is marvellous at getting publicity. As I have said, his rhetoric is superb. I agree with about 90 per cent of what he says. The problem is that this Government simply does not perform to the extent that he says that it will. The booklet refers to productivity figures for industry from 1979 to 1984. What about subsequent years? What about looking at the last couple of years? What happened to productivity in those years? Senator Button —You tell us. Come on, you tell us. Senator LEWIS —We are waiting. The Minister and his Department have the figures. Why did they not have them published in the booklet? In any case, the Prime Minister's statement about doubling manufactures has little relevance because many manufacturers are so small that doubling their exports would be very insignificant against even a small increase in value added major exports such as coal, wool and minerals. It is absolutely essential that we do what we can to assist those industries. We need to ensure that those industries are not being given a rough deal by a lot of regulations which are in force at present. The Government would do well to look at regulations which work against those industries. Quite frankly, the booklet to which I have referred does not address the fundamental problems of high taxation, over-regulation, comparatively high interest rates and inflation, and inflexibility in the labour market. As I am left with only three minutes in which to speak, let me refer finally to the editorial in today's edition of the Australian Financial Review. I thank the Australian Financial Review for bringing out this editorial on the day on which I have brought forward this matter of public importance. Under the heading `Why Australian companies should invest abroad', it says: While total private investment within Australia increased by only 5 per cent in real terms over the past six years, Australian investment abroad has increased ninefold. Over the past six years investment abroad has increased by 900 per cent, while investment in Australia has increased by only 5 per cent in real terms. The editorial went on to say: One can hardly blame companies for investing overseas when the real rate of return-allowing for interest rates and corporate tax-is so low. The article went on to suggest that those companies should invest off-shore. But what about the small manufacturer to whom I referred-the heart and soul of industries in this country which this Government is ignoring? How does that manufacturer invest off-shore if he already has all his funds tied up in investment in this country? It is that person to whom this Government must look in terms of doing something about interest rates, tax and providing flexibility in the labour market. This Government needs to introduce some of the policies which we in the Liberal and National parties have been advocating for five years. This Government has not adopted those policies. That is the reason this Government's industries policies have been a failure and continue to be a failure. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.24) —The genesis of this matter of public importance is revealed by listening to Senator Lewis's speech. If he returned persistently to one theme, it was to the fact that I got a lot of publicity. He referred to that more than to anything else. Of course, he does not receive such publicity. However, the rather devious and broad-spraying attack-if I might call it that-that he made last Sunday on a publication called Australian Industry: New Directions achieved some publicity. I congratulate him on that; it is a good sign. Senator Lewis's speech was a sort of grab-bag of ill-fitting concepts, suggesting that, in his role as shadow Minister, he wanders around Australian industry saying to everybody he meets, `What is your particular neurosis? Who is responsible for your problems? What can governments do to help you?'. So we get a collection of extraordinary things, such as `industry is too protected so we will have more government purchasing to protect it further' and `some industries are too protected and others are not'. He talked about the poor little mythical companies which have diabolical problems because of the things he ultimately came back to-interest rates, wages and so on. The argument does not hang together. Let met go through a couple of the points which Senator Lewis made. He said that the Government is selling itself with hype, jargon and so-called plans. He identified the plans-steel, passenger motor vehicles and chemicals. There is no plan for the chemicals industry; there never has been. I am surprised that a shadow Minister should say that there is a sectoral plan for the chemicals industry. There is none. We reduced the tariffs in the chemicals industry, that is all. There is no plan. Senator Lewis had ample opportunity to talk about the other two plans-steel and passenger motor vehicles. He talked about steel at great length a month or two ago on the basis of Press reports. But there have been subsequent Press reports about the steel industry which he studiously ignored until I drew them to his attention. Senator Lewis says that the-- Senator Chaney —Those reports suggest great confusion in industry, don't they? Senator BUTTON —Yes-that is precisely the point I made in answer to questions at the time. Senator Lewis picked up some ratbag comment, came in here and accused me of attacking Broken Hill Proprietary Co. Ltd and so on. It is very silly to rely in this place on such reports. Senator Lewis said that the passenger motor vehicle industry is not working. He said, `Look at automobiles; the market is down because of Government policies'. The honourable senator is precisely right. As the Treasurer (Mr Keating), in my presence, told the automotive industry a year ago when it complained about the reduced size of the market, the shoe is designed to pinch. What he meant by that was precisely this: this Government has faced up to the fact that we have had to have a decline in the Australian standard of living. One of the first industries to feel that, sadly, has been the motor vehicle industry. People have put off decisions about buying cars and so on. Is the honourable senator going to come in here and say that there has not been very significant, indeed massive, investment in the motor vehicle industry, that there has not been a significant improvement in technology and quality in the last year or two? That is what it is all about, is it not-investment, technology and quality? That has happened in the automotive industry and Senator Lewis knows it. When he discusses the automotive industry, he talks about the market; when he talks about something different, I do not know what criteria are in his mind. The main thing is the glossy publications to which he objects-the hype, the talk, the so-called plans, the jargon and so on. He said that the Government does not deliver. Let us go to some of the things which Senator Lewis regards as important. He cannot just pick up these itsy-bitsy surveys all over the place, talk with a few manufacturers and decide that everything is going wrong. I am not saying that everything is going right. If we are making a transition from an economy which is totally dependent on commodities to an economy which is less dependent on commodities, we do not turn those things around overnight. There are many aspects to it, as the honourable senator's colleague the honourable member for Wentworth, ex-Professor Hewson, recognised in an article in the Sydney Morning Herald of 12 December. He simply makes the point that something is starting to happen in Australian management in the decade of the eighties, as he puts it. Ex-Professor Hewson, Liberal representative Hewson, says: Until a few years ago . . . the mediocrity of Australian management was one of the best examples of the mediocrity of Australia. Fortunately, things may be changing. Since the turn of this decade, there have been some tentative, but . . . significant, changes. If this process is sustained, we could well look back on the 1980s as having fostered a managerial revolution of lasting significance. The only point I make about that is that it is a very important factor in undergoing that transition from a period of dependence on commodity exports, on commodity output, which does not really require a great deal of initiative. Selling coal to a captive market, as we did in the 1960s and 1970s, does not require the same sorts of skills as are required in selling manufactured products-not the same sorts of skills at all. I think the danger in the honourable senator's position is this: true, there are high levels of achievement in Australian industry and poor levels of achievement. I draw Senator Lewis's attention to a document called Australia and the World: The Management Challenge, a document of the Australian Institute of Management which was published quite recently. Page 6 of that document mentions perceived issues in export growth, and compares companies described as high achievers with companies described as low achievers. Let us look at the issues which the low achievers regard as important. First of all, they regard price as the most important thing. Most of the issues which the honourable senator raised as being important relate to price. They are price-related factors. They regard demand as the second most important thing; they regard capacity as the third most important thing; finance is very important, and so on. They regard tariff barriers as very important, and distance from markets as important. In other words, they say it is all too hard. The high achieving companies list these as the most important factors: detailed planning, research and development, top management commitment-that is the highest factor amongst the high achieving companies-confidence, international marketing skills and quality. These are the factors which the high achievers stress as being important. They stress, for example, that tariff barriers are of very low importance. The honourable senator should not, with respect, lock himself into a position of supporting the low achievers. What we have to do, and I think it is a collective exercise, is get more people out of the low achiever basket and into the high achiever basket. That is what this publication, Australian Industry: New Directions is all about. It is a bit of hype; I concede that. It is designed, in a sense, to be motivational, I concede that. I do not retreat from that at all. This document lists 300 companies which are making it in international markets in spite of all the dreadful things that the honourable senator says about the world. They are out there doing it-companies such as Kodak (Australasia) Pty Ltd, with $180m worth of exports. Perhaps it is in the right business, but it is no good our picking up those who are in the wrong business and saying that we have to look after them, because this economy cannot produce everything in the manufacturing sector; it cannot be competitive in all aspects of manufacturing. All the tables in this book illustrate that point. Senator Lewis ignored a lot of them. He was very concerned about wages. Have a look at the table on wages on page 18 of the report under the heading `Manufacturing wages in selected countries'. The low achievers still argue that the issue of wages is our most significant problem. Look at the relative wage rates for 1986, in Australian dollar terms, between Japan and Australia, between the USA and Australia and so on. It is an interesting document. All I am saying is that we do not want to get locked into that issue any longer. Senator Watson —But you can't walk away from their problems, which you are doing in this debate today. Senator BUTTON —I cannot walk away from whose problems? Senator Watson —The low achievers' problems-you are saying let them die on the vine, let them wither. Senator BUTTON —Not at all, Senator. I accept the disciplines of the market better than Senator Lewis does. Some of the low achievers will go to the wall, and some of them ought to. We have to face up to that. Look at the relative unit labour costs, on the previous page, compared with those of our trading partners. The honourable senator may well object that that table goes up only to March 1987, and at the time it was published the Syntec review was not available and we could not change the figures. But we cannot make this sort of thing a movable feast all the time, whereby we adjust all these figures to coincide with the day Senator Lewis is going to introduce a matter of public importance into the Senate. That would be an extraordinary exercise indeed. I have made some comments about what the honourable senator said about the motor vehicle plan. I concede in part some of the points he makes. We would like to do better with some of them, and we are. We would like every hamburger stall in Australia to be doing well, with government support, but that is not going to happen under this Government. All those things are highly desirable. But I want to come to what I perceive to be the main issues which the honourable senator, largely because I read what he says in the paper, listed at the end of his speech. Employment is an important issue, and manufacturing employment has stabilised in this country in the last three years. There should not be, as the honourable senator suggested, protected employment as a result of what he might have described as corporatism; that is, big companies, big unions and big government all combining to produce the car plan. It should not be done that way, and that was precisely the situation when the car plan was introduced. Read what I said, Senator. I said that employment in this industry would go down, down, down. I said the same in relation to the textile, clothing and footwear industries-that employment in those industries would go down. It is understood by the manufacturers and the unions in these industries that that will happen. It has to happen here because it is happening everywhere else, and this country can be no exception if we are to develop viable and efficient industries. Employment is an important issue. The value of the Australian dollar is very important in terms of competitiveness. Senator Lewis chastises us about interest rates and other things, and it is appropriate that he should. But the value of the Australian dollar is very important in terms of competitiveness. Price competitiveness is one aspect of overall competitiveness. But we should not concentrate too much on it because if we get ourselves in a situation where the dollar appreciates significantly, Australian industries that have taken a window of opportunity because of price competitiveness arising from the fall of the dollar will lose it if they do not concentrate on other aspects of competitiveness, such as quality, design, good marketing and these sorts of things, as the sorts of companies mentioned in this `offensive' booklet are. Those are the sorts of things they are concentrating on. But the dollar value is important. The reason we had no significant manufacturing industry at the end of the Fraser Government's term of office was simply because the dollar had been kept overvalued for too long in order, as Mr Fraser put it himself, to try to keep the inflation rate down. That did not work either, but that is why the dollar was overvalued. Senator Lewis raised the question of corporate tax. There is in this document a comparison of corporate tax rates. The Government is presently reviewing the corporate tax system. Let me say again and again that the present tax structure in Australia, compared with Japan, the United States and Canada, is not too bad. Senator Watson —The primary rates. Senator BUTTON —No, Senator, not the primary rate, not the nominal rate; the rate with the concessions that are quite deliberately built into this estimate here-the 5:3 depreciation, the research and development incentive and things such as that. I say it frankly outside this place, and I say it in here. If one is making hamburgers in Australia, for which one does no research and development, one is probably comparatively worse off than if one is making hamburgers in the United States. But we, with the greatest of respect to those who are, are not about encouraging the hamburger business as an export led or oriented business in this country. That is why the concessions are couched in the way that they are. One can make that comparison and say that one would be better off producing hamburgers in the United States of America. One might be. Senator Watson —But why are you talking about taking away some of the concessions? Senator BUTTON —That is a trade-off which would have to be discussed with the business community, and is being discussed and about which it is now making representations to us. It wants a lower tax rate and also concessions. It has to try to make up its mind as we have to as a Government. But one cannot have both. In the United States, the concessions have been abolished and the overall rate of corporate tax has been lowered, but one cannot meet a businessman in the United States who does not say that, because of the Government's policies and its failure to tackle domestic and trade deficits, it is likely that corporate taxes in the United States will increase, which will take away Senator Messner at the knees, because he has been asking questions about that for a long time. Senator Lewis also drew attention to wages, which are important in terms of international competitiveness. Senator Lewis —What about flexibility in the labour market? Senator BUTTON —Flexibility in the labour market is a very important issue. The Opposition can see that we are trying to work our way towards greater flexibility as a government but we are not about to throw the baby out with the bath water. One cannot sweep in and wave a magic wand which will produce labour flexibility overnight without creating a great deal of chaos. The other issues, such as skills training, the contribution of the education system and industrial relations, are important. The table in Australian Industry: New Directions shows an appalling comparison between time lost in industrial disputes here and time lost in other countries. However, we are still about twice as good as the British on these figures. Ten years of Thatcherism experimentation have resulted, in 1986, in an appalling record of industrial relations. Our record is bad, but New Zealand's is worse, and Britain's is worse still. We are not good enough. We have an enormous way to go, and that is why, in answering questions, one has to use care. Senator Lewis asked about the steel industry, but in answering his questions I did not accede to his invitation to go around swatting people, because I do not think that that is the best way to handle it. I am not concerned about Australian companies making significant investments overseas. I think that that is a sign of maturity in Australian industry. Most of those investments are in the transport sector and such areas, although there is some manufacturing, but it is mostly in transport. We are seeing the growth of world scale Australian companies, and that is a very good thing in many ways, because those companies will take others with them into international markets, and that is not a bad thing, so we should not be too concerned about that. Policies in relation to the firm as an economic unit, and assisting firms as economic units, are very important. I do not have time to deal with this at great length now. The book Australian Industry: New Directions, which presumably Senator Lewis would have sent to the film censor, tries to deal with some of these issues in a positive way because we are in a process of transition, and the demonstration effects of good firms in the Australian industrial environment as a whole can be a tremendous benefit to helping us make that transition. Senator COULTER(South Australia)(3.45) —It is interesting that the Opposition should have chosen these words to introduce its matter of public importance: . . . the underlying problems facing Australian industry. The question itself contains the seeds of its own answer. It is clear that the Opposition does not perceive how clearly it has revealed the inadequacy of its analysis. What is industry, and what is the purpose of industry? It is self-evident that industry is the manufacture of goods and services, and the making of those goods and services available to those who need them-I say need, not want, quite deliberately. The purpose of industry in Australia, or indeed in any society, should be to meet better the needs of those people who are served. Problems such as there might be must be seen in this light. The question then becomes how well or poorly Australian industry is meeting the needs of Australians. Australian society does not exist to serve the needs of industry, but the other way around. To pose the question in the words of the Opposition is to imply that industry has needs which should override the needs of the people. What we have heard today confirms that the Opposition believes this. The Opposition has other beliefs. Industry, presumably industry leaders and decision-makers, need larger profits, more loosening of control by the elected representatives-governments- and a politically and economically weakened work force, which is therefore more easily manipulated by management. Above all, market forces must be given free rein. Markets must determine our present and our future. We have heard from Senator Lewis how environmental constraints must be loosened because that will better fit the needs of industry. There is a mythology which lies behind the Opposition's world views. It is powerful and pervasive, and it rejects evidence. It was touched on last night during the debate on petroleum exploration, dependence on fossil fuel and the development of renewable alternative energy forms. This mythology integrates certain beliefs and I thank the Opposition for raising this matter today, because it gives a further opportunity to lay to rest many of the idiocies in that mythology. Firstly, it says the environment available to be exploited by humans is infinite. Secondly, it says that infinite economic growth is both desirable and possible. Thirdly, it assumes that infinite technological innovation will solve problems of growth faster than they arise. Moreover, it believes that political and social problems can be solved through the application of more technology. Fourthly, it says that the model of continuous economic growth, which came into existence quite recently-only several hundred years ago, initially to explain the industrial revolution, but more recently intellectually to buttress and justify a continuation and intensification of industrialisation-is the norm of normal human behaviour and social organisation. I point out here that something approaching the human animal has been on earth for about two million years at least, and the last 200 years is not a model that can be projected into the future in that way. Fifthly, it makes the assumption that humans are infinitely adaptable and, as technology and industry change the human environment faster and faster, humans can infinitely adapt to those changes. Unless we realise that this complex of beliefs is at variance with the real world, we shall fail adequately to address the perceived problems of any part of Australian industry. This complex of beliefs is held with religious fervour by many members of both the Opposition and the Government, and we have had a good presentation of this from Senator Button. I do not doubt that bringing reality into the thinking of both parties is not going to be easy, and I again thank the Opposition for the opportunity to explain quite simple facts yet again to those whose minds are so difficult to open. The Australian Democrats is the only party which bases its policies fundamentally on an understanding of the relationship between homo sapiens and the environment. This understanding recognises our dependence on the continuing integrity of the natural environment. It recognises that the natural environment is finite and it recognises, moreover, that the human economy is simply a subset of the natural ecology. When I used that term yesterday, Senator Stone asked me what `subset' was. I was rather surprised that someone with a presumed mathematical background would have asked such a simple question but it perhaps indicates how little he understands of these things. I pointed out then that given that definition the human economy can expand only at the expense of the natural ecology. The Democrats seek not a growth economy but a sustainable economy which will allow our descendants to live a quality life in balance with the ability of the natural environment to sustain indefinitely the impact which our human populations are placing upon it. Only the Democrats have their policies grounded in an understanding of biology and the physical sciences. Again, we heard Senator Stone and several other members of the Opposition laugh yesterday when I mentioned references from Science and Nature. I think one at least had never even heard of the journal Nature. I point out that they are the two most widely read scientific journals in the whole world. Only the Democrats understand the full consequences of the rapidly escalating and unsustainable impact of human populations on the natural environment. Only the Democrats are attempting to integrate this understanding into policies which relate not only to industry but also to the totality of human social organisation and direction. That is the point that Senator Sanders was attempting to pick up when he said that the Democrats are trying to change the total social structure. That is what we are really about, because unless we do there is very little future. I will go on to explain that in a moment. Let us take a few specific examples to illustrate the radical difference between the Democrats' approach and that of the Laborials. The coal industry is said to be in poor shape. Prices per tonne on world markets have been falling. The solution proposed by the Laborials is to find ways of selling more coal. The Government seeks to reduce royalties and government charges on the coal industry. The Opposition seeks to reduce the wages of workers and the so-called power of the trade unions, and its soul mates, those who own the mines, are encouraged to become even more capital intensive with fewer workers producing ever more coal. Yesterday's Age contained a congratulatory article about the deal to export $197m worth of coal each year to Turkey until the year 2014. No doubt the Laborials think such contracts great. What they fail to recognise, or deliberately shut their eyes to, is that this approach to solving `the problems facing Australian industry' is taking us, and more particularly our descendants, down a blind alley from which it will be harder and harder to implement real, viable solutions. Yesterday Senator Sanders mentioned the 10-volume Energy 2000 report published in 1986 by the then Department of Resources and Energy while it was under Senator Evans. Those 10 volumes used the words `carbon dioxide' once only, in a single sentence which referred to the greenhouse effect. Neither the Minister nor his Department is making judgments about industries-which they clearly hope will extend well into the twenty-first century, as indicated by the coal export contract going to the year 2014-based on the best scientific evidence relating to global consequences of those industries, consequences which will radically affect every aspect of life on the face of the planet. Is it that the Government does not care about these consequences because, of course, it will not be in government and will not have to deal with them in the year 2014, 2020 or 2040? I hope that is not the case. Is it that it is ignorant? That is not credible. Honourable senators will remember Professor David Suzuki speaking to the Commission for the Future on the environmental constraints within which human society and particularly industry must operate if humans are to survive and enjoy a human and humane existence. Professor Suzuki's address to the Commission was broadcast on the Australian Broadcasting Corporation's Science Show. Professor Suzuki had been invited to Australia by the Commission, which received a rocket from this Government for extending that invitation. Professor Suzuki's message is one which this Government would rather not have heard in Australia: it might cause Australians more closely to question the short-sighted-one might say deliberately blinkered-view of the future which both Government and Opposition would attempt to sell to the Australian public. It was G. K. Chesterton who said: There is nothing in front but a great wilderness of standardisation either by Bolshevism or Big Business. But it is strange that some of us should have seen sanity, if only in a vision, while the rest go forward chained eternally to enlargement without liberty and progress without hope. It is that vision which the Australian Democrats hold before the Australian people. To provide another example in the energy area which Senator Button has also referred to, and I think Senator Lewis referred to it earlier, I refer to the so-called Button car plan. Speaker after speaker on the Opposition side of the Senate spoke last night and this morning on the dire future facing Australia through a shortage of liquid fuels. Repeatedly it was said that Australia was one of the poorest prospective oil regions in the world and estimates were given as to how many billions of dollars it would cost this country each year for oil imports by the mid-1990s. There is nothing wrong with the analysis so far, but the Opposition's solution to this problem-an opposition blindly wedded to bigger is better-is to spend vast sums of money exploring for oil which may not be there. Even if it is, going down that road just puts off the day of reckoning because oil is a non-renewable resource and each new production means the next barrel is harder and more expensive to find. Apparently members of the Opposition have not heard of the second law of thermodynamics. The sensible alternative is to use our oil much more efficiently. Oil itself is not what is desired; it is the services which oil makes available that are desired. Transport consumes the largest single slice of Australia's oil and private transport the largest amount of the total transport sector. The fuel costs of transport are made up of two components-the cost per litre and the number of litres used getting from A to B. Cars which consume fuel at half the rate of the average Australian car are already in use. They are not in wider use because of the fixed costs of car ownership relevant to the costs of car use. As I indicated last night, the market responds to present or instantaneous supply and demand. It cannot and does not take into account future shortages or indeed the legitimate demands which future generations will make against those same non-renewable resources. Given the long lead time required for the car industry to tool up for new and different models, it would have made a great deal of sense if the so-called Button car plan had incorporated as one of its prime objectives making the Australian car stock substantially more fuel efficient. There are a number of other points that I would like to have made but in summary I simply say that what is missing from both the Government's policy in relation to industry and the Opposition's criticism of that policy is any understanding of the environmental consequences of the policies being followed and the way in which they will intersect within the lifetime of our children and our grandchildren-those whom we will know in our lives-and the consequences they will have for our industry. Senator BROWNHILL(New South Wales)(3.59) —The Government's failure to address the underlying problems facing Australian industry, which my colleague Senator Austin Lewis has brought before the Senate this afternoon, includes the failure of the Hawke Labor Government to address itself to government expenditure, the current account deficit, high taxation and the lack of incentive in the taxation system. There has been a lack of attention to the high inflation rate in Australia, a lack of attention to our foreign debt, and a lack of attention to high interest rates-which are most probably one of the greatest disincentives to industry in Australia-and to specify work practices, industrial relations and transport. The Government has failed, despite all the claims made by the Prime Minister, Mr Hawke, that the economy is on the right track, and despite statements by other members of this Government, including Senator Button, that we are on the right track. Government spending has increased at an annual rate of 3.9 per cent in the four years of the Hawke Labor Government. It is interesting to note that in the seven years of the coalition Government, government expenditure rose by only 2.1 per cent on average. Total government spending is now in excess of $80 billion, which represents about $5,000 a head for every man, woman and child in Australia. This Government has had the opportunity to do something since 1984. When it came into office the domestic economy was on the upturn, the drought had broken and the effect of the Fraser Government's wages pause was really helping the economy. But this Government's 1984 Budget comprised a 6 per cent real increase in outlays, which we are still paying for. Because of the Government's major failure to seize this opportunity, we are still paying the price for what this Government could have done and should be doing now-that is, cutting that government expenditure. What about the balance of trade and the current account deficit? Since May 1985, practically all monthly current account figures have been around the $1 billion mark. It is interesting to note that every time those balance of trade figures and current account deficit figures come down, the Government skites about them if there is less than a $1 billion deficit in a particular month. In 21 of the 30 months since May 1985 we have had a deficit of over $1 billion. The total for 1986-87 is some $13 billion plus, and we have had no indication that things will change. It is interesting to note that the former Minister for Trade (Mr Dawkins), in a statement on future trade initiatives in May 1985, said: It is vital that as a government, we implement policies to ensure success. Our primary goal is to maintain the economy in a position of sustained non-inflationary growth. The annual trade deficit for the end of 1985 was $881m in the red, and it was some $3 billion in the red the next year. Obviously, the only growth was in the size of the deficit. The reason I mentioned Mr Dawkins is that we have now had Senator Button making this statement in the foreword to a publication entitled Australian Industry: New Directions: The emphasis is now on international competitiveness, export orientation, research and development, innovation and marketing. He went on to say: The extent of change occurring in Australia industry is significant and highlights our capacity to adjust. This report outlines the major restructuring . . . He said further on: The challenge is for Australia to use and develop its rich natural, technical and human resources in a way which maximises our growth prospects in world trade. I ask: Will that foreword be as pathetic as Minister Dawkins's statement some years ago? Will those things be realised? Under the Hawke Labor Government, I doubt that they will. What about taxation? Government tax revenues have increased some 61 per cent under this Hawke Labor Government. They have increased from some $44 billion to $65 billion this year. The figure for all levels of government in 1986-87-Federal, State and local government-is some $81 billion. As a proportion of gross domestic product (GDP), which is the total value of all goods and services produced in a year on which a value can be placed, it is some 30.8 per cent. Let us look at the foreign debt. Australia is now one of the top debtor nations in this world, ranking with countries such as Israel, Mexico and Argentina. Total foreign debt has increased from $13.6 billion in 1980 to $110 billion now. A lot of that has been caused by money that has been borrowed overseas that could not be borrowed in Australia because of high interest rates. Estimates are that Australia's net external debt is approximately 32 per cent of our GDP as at June 1987-that is, approximately $90 billion. Simply to prevent that net external debt position from worsening further, Australia's trade balance would have to improve by at least $10 billion. When one considers that exports of the rural community account for some 30 per cent of those exports in 1986-87, which total $13.7 billion, one realises that the improvements needed to generate an extra $10 billion, just so that we do not recede any further, are enormous. It will require all sectors of the community, especially manufacturing, to make a contribution to reducing Australia's debt. Australia's inflation rate continues to be considerably above the average for the Organisation for Economic Co-operation and Development (OECD) countries. Their average annual rate for 1986-87 was 3.5 per cent and Australia's was 9.3 per cent. By comparison, Japan has an inflation rate of about 0.4 per cent, the United States of America about 3.9 per cent, and West Germany, 0.7 per cent. With the collapse of the stock market, to which Senator Lewis has already alluded this afternoon, the pressures will make even more unlikely the fulfilment of the prediction of the Treasurer (Mr Keating) of 6 per cent inflation by the middle of next year. Of course, high interest rates, which I have already mentioned, have constantly been a pressure on industry and the trading sector of the economy. Our interest rates have been constantly higher than all other OECD countries. Despite repeated comments by the Treasurer and the Prime Minister that interest rates would fall-even Ministers in this place have said so-only recently have we seen any downward movements. As I have already said, they will be affected by the stock market crash and they will affect the industrial climate of this country. Several specific factors affect industrial development and these issues deserve special emphasis. I have already mentioned the first issue, which is industrial relations. Let me quote again from Minister Dawkins's speech in 1985 regarding the progress in the national economic situation brought about by the Government: This has involved the successful operation of the prices and incomes accord . . . the resultant stability in business and general economic conditions has been a factor in the strong recovery of investment. As well, the fact that the incidence of industrial disputation has been at its lowest level for 17 years has significantly enhanced our reputation for reliability of supply. This Government has consistently prided itself on its industrial relations policies. The reality is somewhat different. Figures for industrial disputation over the last couple of years have declined only marginally. More significantly, the number of working days lost has again increased steadily from 1983 until this year. Of course, this is the year in which the Government completely caved in to the unions' wage demands. There is a big cost to industry due to industrial disputes. Individual companies must take action to protect themselves against the action of unions. For example, in the car industry, where manufacturers are trying to trim inventory with the just in time system, a fear of bare assembly lines causes many to cling to just in case supplies. Management at General Motors-Holden's Ltd says that car companies build in as much as 15 days inventory supply to offset delays on the waterfront. This stock is worth more than $30m-odd. The recent dispute at Cooldrive Consolidated Industries in Victoria demonstrates just how dangerous industrial action can be for firms attempting to cut costs in this manner. It simply makes them more vulnerable to attack by unions. Some firms, such as Mitsubishi, hold an inventory off-shore to reassure overseas clients that industrial disputes will not affect delivery. Wage costs have already been mentioned by Senator Lewis. A second major aspect obviously connected to the Government's inability to implement a policy on industrial relations conducive to the improvement of industry in this country is its failure to reduce real wage costs. Labour costs remain a major burden on the economy. As I have already said, the Government has extolled the virtues of its wages accord, yet since 1983 average weekly earnings have risen significantly. If this country's economy and its industry are to succeed they need a reduction in real wage costs and add on costs. Such a reduction is, in fact, a necessity. To improve the balance of payments by $1 billion we would need a reduction of just over one per cent in real wage costs, assuming that these costs to employers include items such as payroll tax and superannuation. A reduction in real wage costs of this magnitude-of one per cent-would increase exports by some 3 per cent. At the same time imports would fall by one per cent; aggregate employment would rise by one per cent; and gross domestic product would increase by 0.6 per cent. Despite all its rhetoric that we Australians must tighten our belts to improve our overall economic competitiveness, the Government has failed to take steps to ensure that real wage costs are reduced. This Government has really failed to develop policies on restrictive wage costs to assist industry. This Government stands condemned for its failure to stamp out the abuses of union power. Restrictive work practices are not legitimate work practices but rather extortionate demands that the employer ignores at his peril. They have nothing to do with work safety or efficiency. Examples can be found in most industries, but particularly in the shipping and stevedoring industries which you, Mr Deputy President, have highlighted in this chamber. Two examples are, firstly, two-crew manning systems where two crews are rostered on for 26 weeks and off for 26 weeks, necessitating all positions to be unnecessarily duplicated; and secondly, overmanning, featherbedding and excessive crew numbers. Australia has 15-man stevedoring gangs while England and America have only four-man gangs. The effects on the Australian economy are disastrous. Domestic transport costs are another area of major Government failure. In a country that is as big and diverse as ours, the Government has failed to assist the transport industry by removing some of the underlying problems. Transport costs in this country are exorbitant, compared with those in other countries and with international charges. For example, it costs Comalco Aluminium Ltd 44 per cent more to transport Australian steel from Port Kembla to Fremantle than from Fremantle to Japan. Waterfront costs account for about 75 per cent of shipping goods across Bass Strait. According to some figures it can cost as much to load cargo in Australia as it does to ship it most of the way to Europe. This Government stands condemned for the fact that it has not addressed itself to the underlying problems facing Australian industry. The ACTING DEPUTY PRESIDENT(Senator Morris) —Order! The honourable senator's time has expired. Senator BOLKUS(South Australia)(4.14) —I also rise to speak on the matter of public importance raised in the Senate this afternoon by the Opposition. For the sake of those who might be listening, I wish to spell out this matter of public importance. It reads: The Government's failure to address the underlying problems facing Australian industry. The first point I need to make about the matter of public importance is that it has been brought up this afternoon by an Opposition which, over quite a number of years, had an opportunity to confront some of the problems that we have had to meet in government over the last four years. Members of the Opposition when in government were quite haphazard and inadequate in their response to these problems. It should be noted that even in the last week at least a few members of the Opposition have recognised that their policies are still inadequate to face the problems that exist, not only in Australian industry but also in the whole ambit of the Australian economy. In recent days we have had a continuation of the saga from Queensland-the Stone and Sparkes show on the one hand as opposed to the Howard and Peacock show on the other, the end result of which is that the former Secretary to the Treasury, in passing a comment on the adequacy of his current colleagues and their handling of the economy, has basically said that they are unfit to govern. I think that has been the judgment of the Australian people for quite some time and it will continue to be so if the level of input from the Opposition is what it has been during the debate today. One does not deny the fact that there have been problems in the Australian economy and in Australian industry. Senator Chaney may laugh at that, but I am sure that if he were in a position of responsibility he would also have to confront those policies. However, being the reasonable bloke that he is, he may not have the same sort of success as our relevant Ministers have had. The problems basically stem from two levels-the historical problems and the current problems. Both levels of problems are interrelated. We have inherited very high tariff barriers. This Government has been extremely assiduous about trying to rectify that sector of policy. We remember coming into the Senate time after time when the now Opposition spokespeople were Ministers and hearing them say that our future and our economic resurgence depended on primary industry, whether it was the agricultural sector or the resources boom. We were promised by a whole list of Liberal senators and Ministers, particularly before elections, that massive booms in these areas in the primary industry sector would be the salvation of the Australian economy. In government we have had to meet problems related to the drop in our terms of trade. The other lingering problem that we had to confront was one of distrust between the Government, the Opposition and the unions. Senator Stone in his former position as Secretary to the Treasury was quite keen to engender division. His were the policies of confrontation and this Government has had to meet and resolve the legacy of that confrontation. Of course, we have had the legacy of the structural foreign debt from the Howard-Stone days. I am continually amazed by the fact that Senator Stone can come into this Parliament, somewhat cleansed of all his previous sins, mistakes and indiscretions as the Secretary to the Treasury, and ask us to believe that he is now a changed person with a new direction. Let us look at the new direction of the Hawke Labor Government. It has been a direction that has acknowledged the need for major adjustment in industry. It has been a direction which is based on the consultative process of progress. Let us compare that with the policies of the current Opposition. To find them one has to look at a whole list of spokespeople-Howard, Stone, Peacock, Carlton, Hewson, Sparkes, Sinclair, not to mention the minor players, Lewis and Messner. There are nine of them. On any particular day one might go to any one of them and come up with any response, but common to their responses are those principles that Senator Walsh has espoused here time and again-voodoo economics, and a sledgehammer approach to both the business sector and unions. But the underlying factor in all this has been a haphazard approach to the economy. The basis of the Opposition's matter of public importance debate today has been the two claims which Senator Lewis made in this House today and in the Press in the last few days. The first is that the Australian economy has to suffer high levels of taxation. Let us look at that in terms of our international competitiveness. Our tax levels are the second lowest as indicated in a recent Organisation for Economic Co-operation and Development (OECD) survey of OECD countries. But despite that, the Australian Government is still reviewing the corporate taxation system. This review, which has been going on for some months, is part of an overall review of the taxation system. Let us look at the corporate tax system. By comparison with OECD standards the Australian corporate sector has an extremely low level of taxation-the second lowest at 2.8 per cent of gross domestic product compared with the OECD average of 3 per cent. Not only can we compare Australian taxation levels very favourably with those of the rest of the world, but importantly for the course of this debate we can also compare them extremely favourably with the rates of taxation that the Australian business and private sector had to face under the Howard-Stone regime. The second claim made by Senator Lewis is that the Government has presided over an inflexible labour market. Nothing could be further from the truth. The basic principle of the Government's policy in this area has been one of flexibility and co-operation. We have consulted with unions and peak industry sectors and we have taken advantage of the flexibility that has resulted from the depreciation in the value of the Australian dollar. But we are cognisant of the fact that unless we are cautious, we could very quickly fall into a recession and end up with a wages spiral. Compared with our major trading partners, real unit labour costs, adjusted for exchange variations, now see Australia more competitive than it has been at any time since the early 1970s. The Opposition, in its ideologically based jingoism, does not seem to acknowledge or even recognise this empirical fact. The Opposition does not even recognise that over the last six years-since 1981-82-real unit labour costs have decreased by 8 per cent. The Australian wage and salary earner has made a major sacrifice that the Opposition does not seem to acknowledge. I turn to industry policy-a policy on which one needs to spend some time-and rebut the claims of the Opposition. The Australian Government's industry policy is very clearly thought out. It is espoused very succinctly in the booklet that has been the subject of debate this afternoon-Australian Industry: New Directions-and stands up to scrutiny. The policy is based on four premises: first, there is a need to revitalise and restructure mature industries by the application of new technology and management practices; secondly, we recognise the need to foster new industries and activities by enhancing competitive strengths; thirdly, we support the development and diffusion of generic technologies-biotechnology, new materials, infra-technology, manufacturing technology-and recognise that these areas are basic to Australian international competitiveness in the 1990s; and fourthly, we acknowledge and we work towards living within the link between Australian industry and world economics. I do not have enough time to go through all of the Government initiatives in pursuance of these policies. I seek leave to incorporate in Hansard a list of 23 initiatives that over the last four years have been taken by the Australian Government-initiatives which cover the areas of research and development, national industry extension services, support for technology and business efficiency, development finance, trade promotion, offsets programs and industry sectoral plans. Leave granted. The list read as follows- Federal Government Industry Programs R&D Support: 150 per cent tax concession for business R&D expenditure Grants for Industrial Research and Development National Industry Extension Service: Co-ordinating Commonwealth and State extension services Other Support for Technology and Business Efficiency: Innovation Centres International Licensing Network Link Centres for the Development of Entrepreneurs National Teaching Company Scheme Development Finance: Australian Industry Development Corporation Management and Investment Companies Program Offsets Program: Use of leverage provided by Government projects for development of technology-intensive industry in Australia Trade Promotion: Austrade program to increase Australian exports Removing Obstacles to Competitiveness: Removal of State preferences National Offsets Policy Business Regulation Review Unit Reviews of transport costs Industry Sectoral Plans: Steel Passenger motor vehicles Heavy engineering Textiles, clothing and footwear Information industries Communications equipment Pharmaceuticals Pulp and Paper Senator BOLKUS —I thank the Senate. The responses fall within three categories. On the sectoral level, the vehicle industry plan is an important one. There is a history of opposition and resistance in this place to that plan. Honourable senators should compare the repeated intransigence of the Opposition when the plan was being developed with the current success of the plan. The value of export components is up from $277m in 1982 to $463m in 1986, and the plan is just starting to work. In terms of assistance plans, at June 1987 the management investment companies programs had provided a much needed $170m to companies in need of venture capital. At the same time, money and resources have been made available under the grants for industry research and development plan to small, innovative firms, especially those in the area of generic technologies. I cannot leave this topic without mentioning the massive success of the Australian Industry Development Corporation (AIDC). Under the Fraser Government the AIDC had assets worth in the vicinity of $962.7m. Its range of assets has now increased to $2 1/2 billion. In terms of its areas of activity, one can see that it is pivotal to Australian industry restructuring and redevelopment. The AIDC participates in industry restructuring ranging from heavy engineering, raw materials, processing programs and the white goods industry in which it has been extremely successful. Also, it provides finance, research and advice in fields as diverse as new technology, malaria vaccine, underwater robotics and biotechnology. The AIDC is a perfect example of the Government's approach. It has carefully chosen areas in which to assist industry; it has chosen to support innovative and growing enterprises within the industry sector. The time allocated for me to speak in this debate is drawing to an end, but I make a final point. The Australian people have been presented with a very clear choice during this debate. On the one hand we have a government which has a superb economic record in terms of getting Australia back on the track. Senator Stone —Ha, ha! Senator BOLKUS —Senator Stone may laugh. He was Secretary to the Department of the Treasury. Senator Stone —One hundred and ten billion dollars of debt-going up by $11 1/2 billion a year. What a superb economic record! Senator BOLKUS —If Senator Stone stops squawking for a while, I will read the advice that he, as Secretary to the Treasury, provided to Mr John Howard when he was his Treasurer during his last period of influence in Australian politics. In March 1983 the honourable senator, together with Mr Howard, presided over an economy which led him to write to Mr Howard as follows: Due to a series of post-Budget expenditure decisions-- Senator Stone —Mr Acting Deputy President, I raise a point of order. Senator BOLKUS —Does not Senator Stone like to hear the truth? Senator Stone —I suggest that the honourable senator address the Chair. The ACTING DEPUTY PRESIDENT(Senator Morris) —Order! There is no point of order. Senator BOLKUS —Mr Acting Deputy President, the honourable senator has just made a token response. Let me read the sort of advice that Senator Stone was forced to give because of his joint responsibility in the destruction of the Australian economy between 1978 and 1983. In March 1983 the last advice-the last rites-that he gave to the Fraser-Howard-Stone trifecta was: Due to a series of post-Budget expenditure decisions, and slower than expected economic activity it is now estimated that outlays in 1982-83 will reach $48.7m, $1.6 billion higher than budgeted and 18 per cent higher than the previous year. A man who could not add up now expects us to believe that he can. No matter how many calculators he has bought in the last four years, they will do him no good. He went on to advise: When the estimated cost in 1984-85 of the new policy proposals is added, the prospect is for a Budget deficit of almost $10 billion. Such a deficit would be equivalent to 5 1/2 per cent of projected GDP, the highest in Australian post-war history. This is the last testament to the Howard-Stone-Fraser trifecta. As I said at the start of my contribution, the Leader of the National Party has amazing gall to come into this place, together with his consorts in the Opposition, and try to argue the high economic moral ground. Senator CHANEY(Western Australia-Leader of the Opposition)(4.28) —I rise to support the matter of public importance brought forward by Senator Lewis on behalf of the Opposition, which is: The Government's failure to address the underlying problems facing Australian industry. It says a lot for Senator Bolkus's sense of humour that in his contribution to the debate he could talk about the economy being in good shape. I do not intend to waste the quarter of an hour allocated to me responding to Senator Bolkus. But since he chose to quote Senator Stone in another day and role, I suggest that he read what Mr Whitlam had to say in the last couple of days in a letter to the Australian Financial Review about the economic performance of the present Government. He compared the comparative economic statistics of this Government with those of the Government he headed, a government that the present Government's Ministers widely and openly acknowledge was an economic disaster but which, as Mr Whitlam pointed out, in comparative terms with the rest of the world, was performing in many respects better than the Hawke-Keating Government. Let me return to the reasons the Opposition has brought forward a debate on the problems facing Australian industry. For the people of Australia, 4 1/2 years of Labor government have brought declining living standards. Mr Acting Deputy President, you represent the State of New South Wales for the Australian Labor Party. The simple reality is that your constituents have, during the course of this Government, seen their living standards decline. In Question Time today Government Ministers proudly indicated that real wages have declined under the Hawke-Keating Labor Government. That is a strange boast for a series of Labor Ministers to make, but it is the harsh reality that faces the people of Australia. The odd thing is that we have suffered these declining personal living standards at a time when Australia has got more deeply into debt. Our net foreign debt has gone up to nearly four times the amount it was. In other words, it is not a case of our borrowing to maintain our living standards; we have been forced to borrow and at the same time see our living standards decline. Now every man, woman and child in Australia is overhung by thousands of dollars worth of debt and there is no sign of that debt decreasing. Indeed, the Government's Budget which was brought down only last August by Mr Keating says that that debt is increasing still further. Australia's great rise in debt is occurring at a time when the price of many of our basic commodities has improved. The Government cannot point to the continuing decline in our terms of trade as the reason for our continuing problems because some of Australia's commodities are receiving good prices: wool is one, gold is another, and the price of aluminium has firmed somewhat. We have found some improvement in the basic large volume commodities that Australia lives on. Yet the situation of individual Australians continues to decline. We have continuing high trade deficits. The trade figures which came out today indicate a further decline in our situation with respect to imports and so on. We have a significant problem which faces us and which directly impacts on every man, woman and child in Australia. The Government has been trying to get out of any debate on this issue by saying that Australia is much better off than other countries. But the foreign debt under which Australia now labours amounts to 40 per cent of our gross domestic product (GDP). In other words, what we owe overseas is equal to 40 per cent of the total production of this country in any year. That compares with a gross foreign debt in the United States of America of 13 per cent of its GDP. So Australia is actually in a quite perilous position. The public relations effort of the Government is the one thing that is to be commended, but the simple reality is that the country is in a knife-edge situation. With a softening of commodity prices we would face the prospect of a further significant worsening of our balance of trade. Therefore, we would see great pressure on our dollar and the whole future of the Australian economy put at enormous risk, which would of course affect the living standards of Australians. What is the answer to all this? How is Australia to get out of its predicament? The answer is quite simple. As a country we have to produce more; we have to become a wealthier country by producing more. We have to increase our productivity and our investment. The Government likes to look at what the Organisation for Economic Co-operation and Development (OECD) has been saying about Australia. The OECD report on Australia published in March 1987 refers to the investment that is needed to increase our national wealth. Page 49 of that report states: . . . if most of the shift to tradable goods were to occur through an expansion in manufacturing . . . This is the area for which Senator Button is responsible and which we have been basically talking about in this debate. If we are to get an increase in our tradable goods through expansion in manufacturing this sector would need to raise output by at least one-third between 1986 and 1991. This is a very significant challenge for us. The OECD is saying that we would need to raise output by at least one-third between 1986 and 1991. It goes on to say: Although some of this is likely to be made up from existing capacity, increased investment is certain to be needed. Total private business investment is now at historically low levels, its share in GDP amounting to 9.5 per cent compared to 12 to 13 per cent for 1965 to 1972. The one thing we will not hear Senator Cook talking about when he contributes to this debate is the level of private investment in the early 1980s, which was very high. We will not hear Senator Cook drawing that sort of comparison or talking about the continued abysmal, frightening and dangerously low levels of investment which have occurred under this Government. We do have an industry Minister-the Minister for Industry, Technology and Commerce (Senator Button)-and he participated in this debate. He made a rather smart alec and personal attack on Senator Lewis instead of dealing with the substance of the debate. He is a Minister who has presided over continuing abysmally low levels of investment. He thereby presides over a situation which guarantees the continuance of our very severe problems. That is the simple fact. All of the pointing to the good examples contained in Senator Button's glossy booklet of success will not do away with the fact that, unless Senator Button can achieve a sharp rise in investment in industry in this country, we are doomed economically. That is the sorry situation that we are debating. This is not some abstruse, obscure, irrelevant, academic, economists' debate. This is a debate which goes to the living standards of the men and women of Australia. These are the men and women that you, Mr Acting Deputy President, and I represent. These are the men and women who are seeing their living standards decline. I said that the OECD referred to the need to increase manufacturing, to have a raising of output by at least one-third between 1986 and 1991. This is a very significant challenge for the Minister, who was at the table and who contributed in his smart alec way to this debate. I will not in any way try to fudge the issue. I now refer to the report of the Minister's own Department that was brought into the Parliament quite recently. Here we are chasing an increase in output by one-third over a five-year period. Is Senator Button presiding over something that looks as though it might achieve that sort of objective? I invite you, Mr Acting Deputy President, on your flight back to Sydney at the end of the week when you are contemplating a well-earned break, to look at his Department's annual report and at what it says about the manufacturing sector and its production. What happened to it in the last year? It went down by 0.5 per cent. Senator Button-who said that Senator Lewis does not like the nice publicity he gets-is presiding over a manufacturing sector which had declining output, according to the annual report of his Department. It is about time Senator Button was a little less smart alec, and a little less skilful at describing, as he does quite effectively, some of the things that are required for success, and started to come to grips instead with the reasons why we have such widespread failure. Over the last few years the Opposition has been as supportive as it could be of the positive aspects of the Government's industry plans. We have taken a positive stance because we believe that the problems of this country are large. We believe that in a sense those problems are beyond politics. If the Government is prepared realistically and courageously to try to solve some of Australia's problems, it should have the support of the Opposition. Therefore, to the extent that industry plans have involved accepting the reality of the need for greater international competitiveness and a movement towards that, we have supported them. I had intended to quote in this debate some of my own remarks about the reservations we had about what we saw as a bureaucratic approach to industry policy on the part of the Government; but I do not think time permits. I just compare what Senator Button conceded in an interview with the Australian on 7 December 1987. He said: In some ways the steel plan was the worst thing I ever did . . . Worst in the sense that everybody liked it so everybody started to come here and say `Well, we want a steel plan too'. Some industries . . . need a plan like they need a hole in the head. The problem with the plans as such is that they tend to be bureaucratic, which Australians love, and that doesn't add to your competitive advantage. I wish that Senator Button had been gracious enough to stop and consider some of the things that the Opposition had been saying to him over the last few years. In October 1986 I said: Australian producers have a history of seeking, and obtaining, very specific guidance and assistance. Broad guidance is fine, but there is a very fine line between a benign and helping hand and being told your next move: I might be wrong, but I imagine that part of the appeal of the Car Plan, the Steel Plan, the more recent heavy Engineering Assistance package, is the fairly explicit direction they give. I get the distinct impression from many of the business people I meet that to be handed your very own industry plan, with its own administrative board, is the ultimate dream. . . . I am a little sceptical of these industry-specific plans, although I applaud their stated aims. If they help change attitudes and promote interaction and co-operation between related industries and between management and employees, that is welcome. But to the extent that they can be used as a shield against the need for more rapid adjustment, I think we must remain cautious. In particular, I doubt if Australia has the time to adopt the bureaucratic approach to removing restrictive work practices which is part of the Heavy Engineering plan. My simple point is that this Government has adopted an approach which has in many respects inhibited Australian manufacturers facing up to the reality which they cannot escape. The miserable investment record under this Government is a sure sign of the fundamental failure that we are presently witnessing. I am sorry that this debate is not a longer one. I conclude my contribution by saying that the Opposition has, in a quite explicit way, set out that it believes that we will not get the new investment in Australia which is required until we meet four broad requirements. We believe that there must be reduced and restructured taxes, made possible by reduced government spending; we believe that there must be reduced and less costly regulation of business activity; we believe that there must be a restoration of the rule of law in industrial relations and a flexible labour market; and we believe that there must be rigorous control and reduction of business input costs, especially government taxes and charges. It is all very well for Senator Button to say that he encourages Australian investment abroad; so does the Opposition. But if Australian investment abroad is due to the fact that people are simply not prepared to invest in their own country, and if we are no longer an attractive destination for investment by foreigners, we will never work our way out of the hole that we are now in. The pathetic approach to reform of industrial relations and wages policy, which has been a hallmark over recent years, is one of the major reasons why this country has continued to decline. The total failure of Senator Button, widely acclaimed as a successful Minister, to face up to the realities of the environment for carrying on business in this country, is something that will haunt him for the rest of his days. Senator COOK(Western Australia)(4.42) —It is, of course, the role of oppositions to oppose and, in opposing, often they can fall into the role of being destructive, carping and negative. That is what we have seen this afternoon. In rising to close the debate on behalf of the Government, I draw attention to the huge absence in any of the speeches by Opposition senators of an alternative proposal. We had, from Senator Chaney as he closed the debate for the Opposition, a cadet actor's attempt at modulating his voice after the manner of amateur theatrics. He talked about investment and concluded with the door slamming application of his magnificent four points-matters concerning tax, government expenditure, industrial relations and business regulation. All of those points are trite in the sense that, while they deal with subjects, nothing that has been said by either Senator Chaney or, indeed, the person who led this debate, Senator Lewis, explains what exactly they propose to do. They sit back and criticise what is being done. They try to cast a negative pall over what have been some benchmark successes in our industry approach. Senator Chaney, in the latter part of his speech, concentrated on wringing his hands and directing personal gibes towards Senator Button. He has concentrated on doing exactly what he accused Senator Button of doing. He has tried to empty a bucket over the most popular and successful industry Minister that this country has seen. I must say that we expected something better from Senator Lewis, who opened the debate. We expected something pithy, earthy and with some content. We got an exercise in the negative and the trivial. One could say that the speech of Senator Lewis was deeply superficial. What did he speak about? He spoke about the problems that he believed existed in that not everyone had an industry plan. I draw attention to the fact that Australia has a mixed economy. It is not the intention of this Government to intervene willy-nilly across the board in this economy. It is the intention of the Government to target industry plans in specific areas where there is need. That is not so in every area. That some areas do not have a plan is not an indication of failure; it is an indication that other industries, in the competitive climate in which they have to dwell and succeed, are concentrating on getting on with business. It is odd for someone aspiring to be a believable spokesman on industry policy-someone who I believe supports at least a mixed economy or a market economy-to call for more, and larger, diversified plans. The other matter he talked about was how one writes tenders and whether the Commonwealth writes them properly. That is a massive contribution to informed debate in this country! All the other matters he spoke of were matters that Senator Button demolished in his reply. The fundamental weakness in what members of the Opposition have put forward is the lack of a credible, cohesive or believable alternative model. Until they come up with some new ideas, some policy directions that can be contrasted with what the Government is doing, all that they propose are merely carping criticisms-criticisms that paint them as negative, destructive and defensive. This Government is trying to get on the front foot, and is succeeding in doing so, in industry policy, to convince Australians-I refer by way of example to the booklet that the Department of Industry, Technology and Commerce has produced, which has been the subject of some criticism here-by way of role models that success is possible, that innovation is achievable and is a fact of life in Australia today, that companies can win significant export contracts, and that there are ways in which one can succeed in industry in Australia. By holding up those role models-an important act in itself for the rest of industry-we will encourage industry to try a bit harder, get its settings right and be more successful in terms of exports, import replacement and, indeed, in terms of its whole business operation. That is what the booklet is about. It seems that this whole debate about fundamentals in industry policy is an attack upon a so-called `glossy' produced by the Department. If honourable senators opposite want it to be produced in a matt finish rather than in a glossy finish, I am sure that can be organised. The significant thing about the book, overlooked by all Opposition contributions, is that it gives specific examples. It names names; it produces records; it shows that excellence in Australia is achievable by industry and, by so doing, points the way to other industries to follow suit. However, we have seen a series of basically unsubstantiated, superficial and narrow interpretations. I want to reply to this matter of public importance, as it is called, by referring to its terms: The Government's failure to address the underlying problems facing Australian industry. That is what we are supposed to be debating. A benchmark statistic that has been seemingly ignored by the Opposition is that in the years 1986 to 1987 export of Australian manufactures grew by 25 per cent in nominal terms and by 14 per cent in real terms. That represents a significant growth in the number of manufactured goods exported from Australia. It compares with the figure for real average annual growth of 4.9 per cent between the years 1977-78 and 1983-84-years in which the Opposition, which has launched this matter of public importance, occupied the treasury bench and was responsible for industry policy. Our performance, as evidenced by a 25 per cent nominal rate and 14 per cent real rate, can be compared to the Opposition's performance-a 4.9 per cent rate of real term growth; yet it criticises us. I ask the question: What is the Opposition saying? It has raised tax as a general heading. It says, `Yes, tax is a problem, and until that gets better, nothing can be done'. This Government has organised the most significant tax reform package this country has ever seen and is now in the process of reviewing business taxation. This review of business taxation is being undertaken with a view to lowering the rate of taxation and to see whether more incentive can be introduced into the taxation system. The Opposition talks about over regulation. Of course, we have set up the Business Regulation Review Unit which has kicked out of the structure a number of regulations which we inherited from the Opposition. We have gone further. We have reduced tariffs to increase the competitive environment within Australia in order to encourage Australian industry better to sustain its products on an international market. Interest rates across the board have fallen generally. Rather than resorting to citing the figures, I just remind the Senate that that is the case, that is the record, that is the achievement and that is the commitment for continuance in the future. If this debate were being held a year ago, one of the things we would have heard a lot about is the level of the deficit. That has been absent from the Opposition's argument today, because in fact no deficit is projected at all. It is a major benchmark that we are looking to a surplus of $580m in this budgetary year. We have not heard any reference to deficit because we are moving into surplus through effective fiscal management, and we are looking at the possibility of strengthening that direction with a May statement next year. Industrial relations is Senator Chaney's new-found fetish. He likes to talk about industrial relations. On the industrial relations front the record is that the number of disputes, the number of people involved in disputes and the number of man days lost through disputes in Australia have fallen significantly under this Government. What does the Opposition offer by way of alternative? It offers an alternative model which generates confrontation, animosity, distrust, disbelief and disputes throughout Australia, as we saw in the years of the Fraser Government. That is the model being put to us by the conservative Opposition here. Our record is one of reducing disputes at a time when wages needed to be adjusted downward in order to put Australia into a better economic and industry competitive position so that we could get some control over some of the inputs of production and start to expand and lift living standards again as we gained a bigger share of the world market with the goods that we produce. I dwell for a moment on the issue of industrial relations by referring to what has commonly been regarded in the past-certainly during the Liberal years of administration of this country-as an area of massive industrial unrest, the Pilbara area of Western Australia, the export iron ore mining centre of this country. In that area disputes were seemingly endemic. Under the policies of this Government, by bringing employers, governments and unions together to approach the underlying problems that gave rise to disputes and to work out constructive solutions we have seen a massive reduction in industrial disputes there. At the last Australian-Japan iron ore conference, held in October at Observation City in Scarborough, not one single Japanese delegate raised the question of industrial relations in the Australian iron ore industry. Senator Tate —You played a key role in setting up that process. Senator COOK —It is very kind of Senator Tate to draw the Senate's attention to that. But this was not done for my self-congratulations; it was done so that the industry could become a more competitive exporter and employer of labour in Australia. Indeed, I will quote from the speech delivered by the Chief Executive of BHP-Utah Minerals International, Gordon Freeman, to the Japanese at the Australia-Japan iron ore conference. Referring to the Western Australian Iron Ore Industry Consultative Council, the mechanism through which we were able to help achieve this reduction in industrial activity, Mr Freeman said: This approach by the MUA- that is, the Mining Unions Association- can be seen as a manifestation of the success of the joint discussions between governments, unions and employers under the umbrella of the Western Australian Iron Ore Industry Consultative Council. Improvements in reliability of supply continue to be achieved as more harmonious working relationships among employees, unions and management development. We have been able to build stockpiles of iron ore with a degree of co-operation not seen before. I reiterate: the Japanese never raised the question of industrial relations or the question of reliability of supply and, importantly, we are beginning to turn around the negative view, promoted by conservatives in this country, that Australia is an inefficient and unreliable supplier. It is about time we heard something a little more patriotic from the Opposition benches and it is time that we started to praise achievements rather than carp and criticise what have been faults-faults which we are addressing and in respect of which we are finding paths to improvement. So much for industrial relations. (Quorum formed) My time has been eroded by the Opposition's juvenile device of trying to interrupt my speech by calling a quorum. However, I go to my concluding point. Senator Austin Lewis, in a statement to the Australian newspaper, described the booklet produced by the Department that has been under attack here. He said that Senator Button and his Department: were acting more and more like pushy salesman with a shonky product. If the so-called `shonky product' is Australian industry, I think Senator Austin Lewis should be censured by the Senate for this fundamental attack on the quality of products in this country. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. The discussion of the matter of public importance is completed. Senator BOLKUS(South Australia) —I present the report on the operation and administration of the freedom of information legislation, together with the transcript of evidence. Ordered that the report be printed. Senator BOLKUS —I seek leave to move a motion in relation to the report. Leave granted. Senator BOLKUS —I move: That the Senate take note of the report. I also seek leave to have my speech incorporated in Hansard. Leave granted. The speech read as follows- The Committee, and its parliamentary predecessor, the Constitutional and Legal Affairs Committee, conducted an extensive review of the operation and administration of the Freedom of Information Act. Our report contains 126 recommendations, of which all are unanimous except the 15 from which Senator Stone has dissented. It is the Committee's unanimous view that the Freedom of Information Act has been, and is, of considerable benefit to the Australian community. We unanimously agree that the existence of freedom of information legislation throughout the Commonwealth would be advantageous. In our report, we discuss the responses to the Freedom of Information Act by the various parties affected by or interested in this legislation. We were particularly conscious that some State agencies, and some individuals about whom information is contained in Commonwealth records, have displayed some opposition towards the Act. We are pleased to confirm that the FOI Act has attracted more support than opposition. The vast majority of individuals and organisations, and even Commonwealth agencies, informed the Committee of their support both for the FOI Act and for the benefits which they have seen as flowing from its operation. Even agencies which encounter difficulties discharging their obligations under the FOI Act, such as the Australian Federal Police, expressed their general support for the Act. Of course, the operation of the FOI Act has presented some difficulties. Our report recommends a number of changes designed to minimise these. For instance, we have recommended that documents created by `crime intelligence agencies' should be exempted from the operation of the Act in the same way as are documents created by ASIO. On the other hand, we have tried to identify provisions in the FOI Act and interpretations of the Act which lend themselves to abuse by overly secretive bureaucrats. Where possible, we have recommended amending the Act, on other occasions we have simply recorded our conclusions in order to guide administrators in their application of the Act. For instance, we have recorded our conclusion that it should not be possible to refuse to release documents because a decision-maker considers that the disclosure of the document might lead to unnecessary debate. With Senator Stone in dissent, we have recommended that the Act be amended to delete the provision which requires agencies and ministers to consider whether it would be misleading to release a document which has been edited to remove information which is exempted from disclosure under Part IV of the FOI Act. In the majority of the Committee's view, it is wrong to take into account the possibility that an applicant might be misled by the contents of a document for the purpose of refusing to release it. The question is merely whether the information contained in the document is exempt. Much of the debate about the operation of the Freedom of Information Act has centred upon the charges which were imposed upon processing of requests for access to documents by the 1986 amendments to the Act. We noted that the Attorney-General's Annual Report on the FOI Act, which was tabled last Wednesday, did not make any real attempt to assess the impact of these charges. The same is true for most of the annual reports which have been tabled recently. For instance, the 1986-87 annual report of the Department of Local Government and Administrative Services which was tabled last week merely comments that these charges `do not appear to have markedly discouraged applicants'. Nonetheless, we are very concerned that the possibility that limitless charges will be applied to the processing of requests is deterring people from using the Act. On balance, we have decided to accept the existence of some charges for processing FOI requests. However, we do so only on the basis that an upper limit be imposed. Senator Powell has joined with the remainder of the Committee in this conclusion. But we note in the report that for Senator Powell this is very much a second best option. The report records Senator Powell's commitment to the principle that the provision of access to documents under the Freedom of Information Act should be free to applicants. In deference to disparities between types of requests, the Committee has recommended a lower maximum be applied to requests for access to personal documents than should be applied to other requests. Where an applicant seeks access to personal documents, the Committee has concluded that the maximum fee chargeable for any request should be $85. Senator Stone has dissented from the Committee's recommendation to reduce the application fee from $30 to $15. In the report, we have made a series of recommendations to the effect that the fee for applications should be reduced from $30 to $15; and that agencies and ministers should be allowed to charge for only a maximum of 2 hours for each of search and retrieval time and decision-making time. The Committee has recommended a higher maximum be applied in for applications to access of non-personal documents. The Committee has concluded that the maximum fee chargeable for the provision of access to non-personal documents should be $540. For this calculation, the Committee has recommended that the charges be limited to a maximum of 15 hours for each of search and retrieval, and decision-making. The Committee has also recommended that the size of the fee for lodging applications for review with the Administrative Appeals Tribunal should be reduced. This time with Senator Stone's dissent, the Committee has recommended that a fee of $120 be payable for lodging applications with the Administrative Appeals Tribunal. Senator Powell endorses this recommendation as a second best option to no fee at all. The Committee has made numerous recommendations in respect of exemption provisions and the procedural provisions of the Freedom of Information Act. The Committee has also noted with approval a number of suggestions for procedural reform advanced by the Administrative Review Council. Time does not permit me to mention all of these recommendations here, so I refer only to some of the most important. The Committee has recommended that two of the restrictions upon the section 48 right to seek the amendment of records be removed. The Committee has unanimously recommended that requests for amendment should not depend upon the applicant having previously gained access to the record under the FOI Act. And with the exception of Senator Stone, the Committee has recommended that the right to seek correction should be open to all persons in Australia, regardless of their citizenship or residential status. We are aware of the suggestions that there should be restrictions upon the rights of non-citizens, or at least people who have not been granted permanent residence. However, with the exception of Senator Stone, we have rejected this view and have recorded our conclusion that there should be no discrimination in this regard. However, because of the pressures said to have been placed upon the administration of the FOI Act by FOI request from illegal entrants and illegal residents in Australia, the Committee has recommended that the restrictions on charges which I mentioned earlier, should not apply to applicants whose presence in Australia at the time of making the application is illegal. At a technical level, the Committee has recommended that the Act provide for the transfer of parts of requests, and the transfer of requests for the amendment of records. The Committee has also recommended that the section 24 workload test should be amended to make it clear that applicants' motives are not to be taken into account for the purpose of this test, and that requests should not be aggregated. The Committee has also specifically recommended that the fact that the processing of requests will exceed the maximum times for which charges may be levied, in accordance with the earlier mentioned recommendation, should not be treated as a factor relevant to the workload test. I should mention here that Senator Stone has dissented in respect of the recommendations about applicants' motives. Broadly, it seems that Senator Stone departs from the remainder of the Committee, in that he takes the view that applicants' motives are relevant to their rights of access under the Freedom of Information Act. With the exception of Senator Stone, all of the members of the Committee are strongly of the view that the Freedom of Information Act should be interpreted to confer upon the public at large a right of access to documents in the possession of the Commonwealth, regardless of applicants' interests in the information contained in the documents and that this right should not be constrained by any consideration of motives. In so doing, we affirm our commitment to the principle expressed by Senator Durack when he introduced the FOI Bill in 1978: that access to information under this legislation is not to depend upon the showing of any special interest in that information. The Committee has decided that the system of conclusive certificates should be retained. However, in the Committee's view, this system rests upon the principle of accountability of ministers to the Parliament. The Committee (with the exception of Senator Stone) has therefore recommended that whenever a conclusive certificate is issued, the responsible minister must report this issue to the Parliament. The Committee (again with Senator Stone in dissent) has recommended that conclusive certificates should be valid for a maximum of two years. At the end of this two year period, it should be possible for an application for access to a document previously the subject of such a certificate, to be considered afresh. The Committee has made various recommendations extending the reverse-FOI procedures. The Committee has recommended that consultation in respect of business documents be mandatory, and that third parties consulted under reverse-FOI applications who wish to oppose the release of documents be required to seek the internal review of such decisions before approaching the Administrative Appeals Tribunal. The Committee is also of the view that people about whom documents contain personal information of the type contemplated by section 41 of the Act should be consulted before disclosure of such documents. In this, the Committee has agreed with the amendment of the Act which was proposed by in clause 5 of the Privacy (Consequential Amendments) Bill 1986. I have referred only to a few of the Committee's recommendations and conclusions. Before concluding, I would like to thank the staff of the Committee for their work on this inquiry. I am sure that the remainder of the Committee joins with me in acknowledging their work. I commend the report to the Senate. Senator BOLKUS —I seek leave to continue my remarks later. Leave granted; debate adjourned. Consideration of House of Representatives amendment resumed from 14 December. House of Representatives amendment- Schedule 2, Page 28, proposed paragraph 111ba (3b) (a), omit ``announce or''. Motion (by Senator Tate) agreed to: That the amendment made by the House of Representatives be agreed to. Resolution reported; report adopted. Debate resumed from 23 November, on motion by Senator Richardson: That the Bills be now read a second time. (Quorum formed) Senator LEWIS(Victoria)(5.03) —I thank Senator Puplick for calling a quorum to enable me to get back into the chamber. I understood that debate on the Broadcasting Amendment Bill (No. 3) 1987 would take a little time but, apparently, under the guidance of my colleague Senator Puplick, it went through in a flash. The Senate is now about to debate a package of Bills: the Customs Tariff Amendment Bill (No. 2) 1987, the Customs Tariff (Coal Export Duty) Amendment Bill 1987, the Customs and Excise Legislation Amendment Bill (No. 2) 1987, the Petroleum Excise (Prices) Bill 1987, the Excise Tariff Amendment Bill (No. 2) 1987, the Bass Strait Freight Adjustment Levy Amendment Bill 1987, Bass Strait Freight Adjustment Levy Collection Amendment Bill 1987 and the Bass Strait Freight Adjustment Trust Fund Amendment Bill 1987. It is an absolute disgrace that the Government has brought these Bills on for debate cognately. They are a massive package. One could quite easily spend 30 minutes debating the Customs Tariff Amendment Bill, or the Petroleum Excise (Prices) Bill, or the Bass Strait Freight Adjustment Levy Amendment Bill. I cannot deal with all the legislation in this speech, so I will have to leave it to colleagues of mine to deal with certain aspects of the package, in particular, the Bass Strait legislation. The ACTING DEPUTY PRESIDENT(Senator Teague) —Order! Senator Lewis has referred to a cognate debate. Is it the wish of the Senate to debate these Bills cognately? There being no objection, it is so ordered. Senator LEWIS —I did not take any exception to your suggestion, Mr Acting Deputy President. I would have liked to say no, and not permit the Senate to debate the Bills cognately, but in order to get this legislation package, and all the other legislation that we have to get through, through by Friday evening, we have been blackmailed, in effect, into accepting that this legislation be dealt with as one package. I turn to the Customs Tariff Amendment Bill (No. 2) 1987. The Minister for Industry, Technology and Commerce (Senator Button), who is present, would be the first to acknowledge the difficulties that have been experienced in relation to this Bill. The Bill deals with the harmonised tariff legislation first enacted in June of this year. That legislation was contained in 532 pages of a Bill. It tried to introduce a harmonised tariff. By a `harmonised tariff' we mean tariff words and schedules in accordance with those which are used around the world. The Opposition supports tariff harmonisation, so we supported the legislation enacted in June. We will be supporting this legislation, which amends the June legislation. This Bill is a very detailed amending Bill. Although it has been reduced to 26 pages it is still very complex. Unfortunately, it still contains a number of anomalies. The Bill has been introduced to try to correct the anomalies and mistakes contained in the original legislation passed in June, the Customs Tariff Act, of some 532 pages. The Government has now brought in this substantial amending Bill to try to correct the anomalies. When I examined the correcting Bill we are now debating, in conjunction with my staff, and as a result of representations made to me by many people in the industry, we discovered a large number of mistakes, oversights and matters which needed correction. The Minister has written to me, giving the Opposition a number of undertakings about various amendments and changes which the Government will make. It is for that reason that we do not propose to amend the Bill. In our view, this Bill is very much an interim Bill, designed, as I say, to correct the worst anomalies of the harmonised tariff legislation enacted in June of this year. We have co-operated with the Government to avoid non-Government amendments because I was concerned that any amendments I might have been able to draw, with my limited resources in opposition, might have created unintended distortions to a complex classification schedule. So on each occasion when I was concerned about an amendment I wrote to the Minister and pointed out the anomaly or the correction which needed to be made. In due course the Minister has written back to me saying that he would make the corrections. So I am prepared to accept the Minister's undertaking and the amendments which might occur in due course. However, I move: At end of motion, add: `, but the Senate is of the opinion that the Government should: (a) ensure that imported second-hand engines meet the full requirements of Australian design rules; and (b) correct anomalies that result in upward adjustment before phasing down of tariff'. I shall explain this amendment later. In relation to the Customs and Excise Legislation Amendment Bill (No. 2) 1987 I foreshadow that I shall move the following amendment: Leave out all words after `That', insert: `the second reading of this Bill be made an Order of the Day for the first day of sitting in 1988, to allow customs agents and the industry time to make appropriate representations in relation to the Bill'. I shall also explain this amendment later. The Government's decision on the classification schedule of the harmonised tariff was to remove most domestic sub-headings on the basis that assistance effects would not be significant for Australian industry overall and would be outweighed by the simplified tariff with what was described as `a few minor modifications'. The few minor modifications, according to the Industries Assistance Commission, reimpose about one half of domestic tariffs. However, most of those tariffs have a phasing down component to cushion the effect of the harmonisation tariff. That seems to the Opposition to be a sensible compromise although, clearly, it was not to the liking of the Industries Assistance Commission. This tariff Bill and the Government's amendment to it represent Opposition initiatives, among them the discovery of additional anomalies since the Bill was tabled. It covers everything from vegetables to textiles, from motor vehicles to pharmaceutical products, and from handbags to plastics industries. As I said, the coalition supports the concept of harmonised tariffs as a step in the right direction, as a culmination of negotiations with the International Customs Union and all major customs countries, although the complexity of the language leaves a lot to be desired. Let me give as an example one of the matters which came to our notice in relation to the importation of saucepans and other cooking equipment. The schedule under which that item is now disclosed, item 8419, has a very long heading which I will not bother to read out. The heading includes these words: Machinery, plant or laboratory equipment, whether or not electrically heated, for the treatment of materials . . . It goes on: . . . for domestic purposes. So it is a very wide heading. Included under that heading is item 8419.8: -Other machinery, plant and equipment: A sub-heading under that is: --For making hot drinks or for cooking or heating food. When I looked at that, I discovered that that imposed a tariff of 25 per cent. I complained to the Minister about that tariff and in due course I was told that it would be reduced. It has been reduced in the amending Bill. I thank the Minister for that, but I simply point out the very difficult and complex nature of this matter. Quite frankly, in the first instance I was unable to follow it. For some considerable time I thought that what we were dealing with was people's opinions about what words meant, as if we were Alice in Wonderland, rather than dealing with the legal interpretation of words so that a cooking instrument meant a saucepan and did not mean some other complicated thing to do with heating: . . . whether or not electrically heated, for the treatment of materials by a process involving a change of temperature . . . The Attorney-General, Mr Bowen, in announcing a comprehensive review of Australia's customs and excise laws by the Law Reform Commission, admitted on 1 December that the two Acts and 11 other pieces of related legislation had become outdated and too complicated. He said: The Commission has been advised to emphasise simple English expression in any draft legislation it may recommend in an effort to reduce uncertainty over its meaning and operation. I totally agree with that. It should be a priority consideration. It has been reported that the Government is considering a much wider pattern of tariff reductions to be introduced during the autumn session of parliament next year. I urge the Minister to provide better lead time and closer consultation with industry to avoid the confusion created by this Bill, thus providing the stability which is essential in good commercial practice. There are other problems with the harmonised tariff, described by one Customs agent as `an unmitigated disaster,' but because of the number of anomalies now being corrected in this Bill, it should not be delayed. For example, pumps for diesel injectors are not manufactured in Australia but are now lumped with motor vehicle parts. As such, they attract a 25 per cent tariff. In other words, pumps for diesel injectors jump up to a 25 per cent tariff rate, even though no one in Australia produces them. But because the pumps are not manufactured in Australia, manufacturers of pumps for diesel injectors are able to seek a concessional entry order which would attract only a 2 per cent duty, which is the current duty. So diesel pumps are classified as attracting a 25 per cent tariff. If we can find our way through the 500-odd pages of the legislation to find diesel pumps, we will see that there is a 25 per cent duty rate. We might think, `Gee, that is a great worry'. But if a person happens to be in the know or gets in touch with Customs officers of the Department of Industry, Technology and Commerce, that person will be told, `Do not worry about that. Diesel pumps are not manufactured in Australia so you are entitled to apply for a concessional entry order. The duty is then only 2 per cent'. That strikes me as being a most unusual, complex and convoluted way of handling the matter. But, I suspect, it is just one of the problems arising out of this harmonisation exercise. Another problem is that the machinery for obtaining concessional entry is also cumbersome and time-consuming with a statutory 28-day period to apply. So the importers of diesel pumps have to wait 28 days after they make their application. I have been telling all the importers who have been in touch with me that they should lodge their applications quickly and should not wait until 1 January 1988 before they get their application in, because they would then have to wait for 28 days. They are entitled to lodge their applications now. I hope that departmental officers have already received applications from all the importers of these pumps. Even so, there is likely to be an overlap period. With a 28-plus day delay, it is likely that some applications will not have been dealt with by 1 January. I point out that neither the Customs Tariff Act nor the Customs Act gives the Comptroller discretion to accommodate this problem. It seems extraordinary that the Government did not encourage the people involved to seek a concessional entry order much earlier. I suppose the Government has a lot to do, but I think it should have been in touch with these people, telling them what to do, to apply for this concessional entry order. I also believe that the Bill should contain some discretionary power whereby this problem could be overcome by the exercise of a discretion. Failure to do so has led to speculation that tariff harmonisation has been utilised as a revenue-raising exercise and will result in exploitation similar to that connected with metrication. I remind the Senate of the cost to the nation of our marvellous metrication system. There is also a problem with concessional entry, as exemplified by Davies Craig. It is unable to import flat electric motors at the concessional rate because Preslite Australia, an Australian manufacturing company, says quite rightly that it makes electric motors for use in fans. The problem is that Davies Craig uses a flat electric motor. Preslite does not produce a flat electric motor; it produces a bigger motor that goes on the back of fans. Davies Craig says that it wants to import flat electric motors and Preslite says that it makes electric motors for fans. The Comptroller has decided to impose the higher tariff on these motors, notwithstanding the fact that Preslite does not make a flat electric motor. Davies Craig says Preslite's motor is not any good for the fan it wants to make. The thing that really worries me is that the Comptroller's decision is non-appealable-there is no appeal. I have another example, in relation to the police speed radar. State governments will pay some $700 or $800 a year extra for every radar used by police forces around Australia. This example is very similar to the problem with the flat electric motor-and, as I say, there is no appeal. Let us take another example. Currently, detergent packs are admitted free. Under item 3402.20.00 they were to be subject to a 20 per cent tariff. The Minister has now amended this to zero. Clearly, it is another case in which the harmonisation tariff has resulted in increases. I give another example. Charles Alvey and Son Pty Ltd makes marvellous side fishing reels. This excellent Queensland company, which is Australia's major manufacturer of fishing reels, produces a first-class quality product which is widely sought by discerning Australian and overseas fishermen. The company does not want any tariff protection. It is quite happy in its market not to have any protection for its reels. But as from 1 January, the tariff on all imported fishing reels will jump from 2 per cent to 25 per cent, simply because they are to be classified as items which attract a 25 per cent tariff. Notwithstanding the fact that Alvey is not seeking any increase in tariff-in fact, there is not a product which competes with the Alvey reel; the imported reels are not the side reel that it makes-Australian fishermen will be lumbered with a 25 per cent tariff imposed on imported fishing reels simply because they fit within the new harmonisation description. With the Government decision to reimpose about half the domestic tariffs, it seems quite inept to provide tariff protection to an industry which has not sought such protection. This lends support to speculation that the tariff harmonisation procedure is being used as a revenue raising measure rather than simply as a method of getting our tariff harmonised with those of the rest of the world. Another problem concerns the importation of Japanese second-hand engines which are sold as scrap in Japan. My amendment seeks to ensure that imported second-hand engines meet the full requirements of Australian design rules. It turns out that engines sold as scrap in Japan are not required to comply in full with Australian design rules when they are brought into Australia by an importer. I believe that the Government should require them to be so covered. Australian second-hand engines should not be lumbered with the full requirement of Australian design rules while imported second-hand engines are able to get away with avoiding that requirement. As I have said, this measure poses two problems. The first concerns the Australian design rules for emission control, which the Federal Government has washed its hands of; it says that that is a State matter. Secondly, having been sold as scrap in Japan, there must be a dumping element as the engines have a much higher value when sold as second-hand engines rather than as scrap. I appreciate that the Minister will say that this is a very complex question, that it is not really his fault, and avoid responsibility for it. But, frankly, there is no excuse for the Government not addressing the problem. I do not have time to address all the problems associated with harmonised tariff. I urge the Minister to ensure that future legislation is dealt with separately and not cognately. I now turn to the Customs Tariff (Coal Export Duty) Amendment Bill. This is the second Bill in this cognate debate on eight Bills and I have already used 23 minutes of my time. Frankly, this piece of legislation is disgraceful. It is simply a tax on the Utah Development Co. Such a tax was imposed as a windfall gain tax by Mr Hayden when he was Treasurer in the Whitlam Government in 1975. It is not a duty on coal, because no coal produced by any other company is so taxed. The incidence of this tax is restricted to mines operated by Utah. I can understand the Australian Labor Party, with its great hatred of the American community back in 1975, saying, `Let's get stuck into Utah'. The truth of the matter is that Utah is now wholly owned by Broken Hill Proprietary Co. Ltd (BHP). So this tax is designed specifically to cover BHP-Utah. No other coal company pays it. Every time it appears that a coal company might have to pay this tax, the Government changes the rules and regulations so as to excuse every other company. The only company that ends up paying the tax is BHP. I do not have time to examine that matter in any greater detail. No doubt my colleague, Senator Parer, will expand on that problem. I now turn to the Customs and Excise Legislation Amendment Bill (No. 2) which is another major piece of legislation. It is disgraceful that the Government should wish to deal cognately or in haste with the complex issues involved in this Bill. The Minister is well aware of the concerns that have been expressed over the Bill, yet he has failed to address them. In the other place, Government members would have us believe that the coalition parties in the Senate are, in some way or other, defending shonky practices. That is absolute nonsense. The boot is very much on the other foot. Under the Customs Act, the Comptroller has far-reaching powers and has not hesitated to exercise them. In 1986-87, goods to a total value of $16m were seized and about $9m was recovered in fines, reparations and additional duty demands. The Attorney-General (Mr Lionel Bowen) announced on 1 December that the Law Reform Commission will inquire into the Customs Act, the Excise Act and 11 related Acts and report to the Government by 30 September. Although the Attorney-General has acknowledged that the legislation is complex, here we are trying to deal with the matter at this stage. What we have said is that the Government is trying to push this through. The industry simply has not had an opportunity to give it the consideration which it needs. We say that this Bill ought to be left until the autumn session so that industry can make the representations which it wishes to make. I have received dozens of representations about the Bill which I would like to debate in the Senate. Fortunately, I understand that the Australian Democrats intend to support my foreshadowed amendment that the Bill be debated further during the autumn session, which will give us an opportunity to look at the problems involved in this legislation. I have had an indication from the Government that I can seek an extension of time. On that basis, I refer briefly to the fact that the Customs Agents Federation of Australia, the Australian Federation of Air Freight Forwarders Ltd and various companies have made very long and complex submissions to me on the difficulties inherent in the Bill. The Petroleum Excise (Prices) Bill, the Excise Tariff Amendment Bill (No. 2) and the three Bass Strait Bills propose amendments to incorporate into the relevant Acts changes resulting from the Government's decision to deregulate crude oil marketing with effect from 1 January 1988. The Excise Tariff Amendment Bill (No. 2) and the Petroleum Excise (Prices) Bill involve various excise proposals and the Bass Strait package enables the implementation of transitional arrangements for the marketing of Australian produced crude oil from the current allocation scheme to a deregulated or free market. At least that is the way the Government puts it. The Senate Standing Committee for the Scrutiny of Bills has drawn our attention to clause 9 of the Petroleum Excise (Prices) Bill and the powers of entry, search and seizure. In particular it pointed out that the issue of a warrant by a judicial officer is always preferable to the conferral of a power of entry without warrant. Sub-clause 9 (1) of this Bill would permit a `person' to enter on to `any land or premises' without the safeguard of having obtained a search warrant from a judicial officer. I ask the Minister to tell us what he proposes to do about that reference from the Scrutiny of Bills Committee. I seek leave to extend the time of my speech by another five minutes just to finish off these few matters. Leave granted. Senator LEWIS —I thank the Senate. The actual manner and form of the Government's action demonstrate a remarkable lack of consistency in policy. On 2 April 1981 Mr Keating said: . . . the Labor Party is opposed to import parity pricing . . . is opposed also to the use of the crude oil levy as a mechanism for taxing oil producers. It is inefficient and inequitable and should be removed and replaced by a properly designed resources rent tax which is neutral in effect, and a better mechanism to divide this wealth between the companies and the community. This legislation changes the basis of calculating excise on crude oil from import parity pricing to a formula based on what is called volume weighted average prices-given the special term `volware'-which are the prices realised for crude oil sales by the Bass Strait producers. Excise tariff rates will move with the consumer price index. The Government claims: The net result of this policy is that as crude oil prices change, Government revenues will remain the same overall and petrol price changes are kept to a minimum. The Automobile Association of Australia has estimated that this move will result in an initial drop of about 1.3c per litre in the price of petrol at the pump. Excise concessions are proposed in an attempt to encourage the exploration and development of petroleum following recent reductions in crude oil prices. What has happened here is that the Government has, virtually, destroyed the oil exploration industry. On the one hand it is now trying in some way to grant some concessions in an attempt to re-establish some oil exploration, but on the other hand it has introduced the resource rent tax which, in effect, has placed this industry in a precarious position. Whilst the Opposition does not oppose this package, it is critical of the increasing use of the petrol bowser to raise taxes for general revenue. I point out that since this Government's election, excise has increased from 6c per litre to 20.83c per litre as at 1 October 1987, and the Government has failed to allocate adequate revenue from that petrol excise for road funding. As can be seen right around this nation, various government road construction authorities, both State and local government, have been unable to construct the necessary roads. As one of the engineers recently said to me, `We are being funded on the basis that our roads will last for 85 or 90 years, whereas in fact with the money that is available we are able to build them to last for only about 10 or 15 years.'. Senator COULTER(South Australia)(5.34) —As Senator Lewis has indicated, there are quite a number of Bills before us. I do not wish to speak to all of them, only to the first three-the Customs Tariff Amendment Bill (No. 2), the Customs Tariff (Coal Export Duty) Amendment Bill and the Customs and Excise Legislation Amendment Bill (No. 2). The Customs Tariff Amendment Bill (No. 2) introduces changes to the Customs Tariff Act 1987, which introduced to Australia, as Senator Lewis said, the harmonised tariff. Harmonised tariff-the most revolutionary customs change since Federation-will operate from 1 January 1988. Along with 60 other nations, Australia will adhere to the new international harmonised system developed by the Customs Co-operation Council, which classifies all tradable goods into about 5,019 categories defined by function and purpose. Australia currently has about 2,700 customs categories. The Bill before us contains amendments which correct errors and anomalies created by the translation of current assistance arrangements to the harmonised system. One of the errors not addressed by this legislation is the reduction in the tariff on imported pressure gauges from 25 per cent to zero. In the Industries Assistance Commission report entitled Medical and Scientific Equipment, the IAC admits, on page 174, that it has made a mistake. It states: In its report on the Harmonized Tariff, the Commission recommended that pressure gauges (classified to 90.24.1 (b) in the current Tariff) should be duty free on implementation of the Harmonized Tariff. That recommendation was the result of an oversight which occurred during the Commission's rationalisation exercise. The Commission has reviewed the decision for these goods and will propose in this report that they retain their present tariff assistance. Despite this very clear recommendation by the IAC to the Government to rectify the mistake, the Government has decided not to do so in this legislation. It wants to wait to make a decision on all of the recommendations of the IAC report on medical and scientific equipment. The Australian Democrats believe that the mistake should be rectified now so that Australian producers of pressure gauges can be sure that the imported products will be be admitted duty free from 1 January, which is only a few weeks away. I note in passing that my colleague Senator Janet Powell made a request in relation to this matter to the Minister for Industry, Technology and Commerce (Senator Button) on behalf of Budenberg Gauges (Australia) Pty Ltd of Ringwood, Victoria, and Mr Barry Jones said he was hopeful that a decision on the medical and scientific equipment report would be made before 1 January. I believe that the Government does intend to make some announcement on this matter during this debate, and I hope to hear that the matter will be rectified. Budenberg Gauges and J. A. Floyd & Co. Pty Ltd of North Essendon, Victoria, are two manufacturers of pressure gauges who claim that they will simply have to stop producing if this error is not corrected by 1 January. The Democrats will therefore be moving a requested amendment, which has been circulated, to this effect: Page 24, Schedule, after item 124, insert the following item: ``124A. Omit 9026.20.90, substitute: `9026.20.90 - - - Other...25%'.''. The alternative to charging tariffs by legislation is to make the change through customs tariff proposals. The tariff is increased from the day the change is tabled. If Parliament is not sitting, the changes are gazetted and need to be passed through both Houses subsequently. Another requested amendment we seek to make is with respect to solar cells and assembled solar arrays. The Government in this schedule is changing the tariff from 20 per cent to 21 per cent. While there is a manufacturer of solar cells and arrays in Australia we believe, particularly in the light of the debate last evening, that it is very much in the interests of the use of alternative energy systems that the tariff on imported cells remain low. Therefore, we will be moving the second amendment that has been circulated to the effect that: Page 20, Schedule, item 99, proposed new item 8541.40.00, leave out ``20% DC: 15%'', insert ``2%''. The final matter on this legislation relates to the motion which the Opposition is appending to the effect of requiring second-hand engines to meet Australian design rules, an amendment which we will be supporting. The Customs Tariff (Coal Export Duty) Amendment Bill 1987 seeks to adjust downwards the tariff on certain specifications of coal. In further emphasis of the remarks that I made earlier this afternoon, I wish to say that the Government is proceeding in the wrong direction-and clearly the Opposition would do likewise if it were in government-in relation to exports of coal and the coal industry. Again, I would like to put on record that, through a variety of industries, not least the coal industry, human industrial development is changing the composition of the global atmosphere faster than at any time in the earth's history. I am not just talking about the time since human beings have been on Earth. Since the beginning of the industrial era, fewer than 200 years ago, the concentration of carbon dioxide in the atmosphere has increased from 270 parts per million to round about 340 parts per million at present, and it is rising at the rate of about half a per cent per annum. That is an absolutely unprecedented change in the composition of the atmosphere, which will have enormous consequences for every aspect of life-increasing world temperatures, increasing ocean levels, changing climate patterns, changing the ability to grow food in certain areas, rendering the whole global national parks system obsolete because those national parks will be in the wrong place to preserve the species for which they have been set aside. Those are the sorts of consequences at which we are looking, and for governments to be deliberately, encouraging, in any sense, the further consumption of fossil fuel, through changing tariffs downwards, would seem to us to be a retrograde step. On the Customs and Excise Legislation Amendment Bill (No. 2), the Australian Democrats accept the proposition put by Senator Lewis with respect to the complexity of this Bill and the difficulty being faced by many people in this industry in making adequate representations to the Government in the limited time which was available for the making of those representations and for getting this legislation properly discussed and possibly modified. I made representations to Senator Button's office some weeks ago, when this legislation was coming up, and it was more than a week before anybody from Senator Button's office got back to me and by that time I was in Adelaide and it was not possible to meet with these people. It is only in the last few days that quite intensive negotiations have been entered into, and I regard that as a quite unsatisfactory opportunity to get back to those who made representations but, more particularly, for those people to approach the Government directly and enter into the necessary negotiations and come to some understanding. Therefore, we shall be supporting the Opposition's amendment on the Customs and Excise Legislation Amendment Bill (No. 2), namely, to the effect that the Bill be held over until the autumn session of Parliament. Senator PARER(Queensland)(5.45) —I rise to speak briefly on just one of these Bills-the Customs Tariff (Coal Export Duty) Amendment Bill 1987. Before doing so, I should like to make a brief comment on the remarks made by Senator Coulter, who said that he believed that this reduction in export duty was proceeding in the wrong direction and that, by implication, he would like to see the duty increased, presumably so that the price would go up to the extent that it would make our coal less competitive as compared with that produced by the rest of the world. That is the most incredible suggestion from the Australian Democrats, although no more incredible than some of the other suggestions that we have heard in recent days. I draw the attention of the Democrats to the fact that Australia produces about 10 per cent of what is produced in the United States and 10 per cent of what is produced in China. Other major producers are South Africa, Poland, Colombia, and so on. Senator Coulter —They are going to be in the same position as we shall be if they go down the same road. Senator PARER —Senator Coulter has no realisation of what the real world is like out there. Coal is not in short supply. We are competing with the rest of the world, and if we do not supply coal, someone else will. Simply by adding the costs, and bearing in mind the difficulties the coal industry is in, and that the Government has seen fit recently to offer the coal industry in New South Wales $40m to keep it alive, what Senator Coulter suggests makes no sense whatsoever. It just gives an indication of the funny thinking that occurs among some of the Democrats. I wish briefly to discuss the background of the Bill. We are discussing legislation that was introduced in 1975, in the dying days of the last Whitlam Government. It imposed an export duty of some $6 a tonne on hard coking coal, and $2 a tonne on other coal. Because of increased demand, prices for coal had increased, and because of the reckless spending of the Labor Government in those days-a level of spending that we are seeing again today-it was decided to impose yet another secondary tax on the industry. It was not too different from the resource rent tax that we debated earlier today. The tax was imposed on an industry which had already suffered because of government interference in the form of export controls and the use of those controls, quite improperly, to decide which mines could open and which could not. These conditions were imposed on a growing industry which had never sought government assistance or interference. In October 1976, the Fraser-Anthony Government decided to reduce the coal export duty, with a view to its total removal. It was prevented from removing it totally because of the previous excesses of the Whitlam Government. The Labor Opposition opposed the reduction of the levy primarily because, in the words of the honourable member for Blaxland (Mr Keating), who is now the Treasurer: The Government has not announced its intention to introduce a tax measure as a substitute for the coal export duty- and that- the industry was healthy enough to sustain a selective tax. Another major reason why the honourable member for Blaxland opposed the reduction in duty was the perceived level of foreign ownership in the coal industry. What these foolish proponents of a secondary tax failed to understand was that an artificial cost on a mine, whether it be an export duty or an artificially high rail freight or port charge, reduces the level of economically recoverable reserves, thus reducing the mine life. Restrictive work practices which reduce the level of output per man employed has a similar effect, particularly in the labour intensive underground mines. In view of our current balance of payments problem, we can be thankful that the emergence of the Fraser Government prevented the Whitlam Labor Government from destroying the developing coal export industry. Without it, we would be in diabolical trouble today. Over the years, the coal export duty has been steadily decreased, so that the duty is now paid by only one company. It was a discriminatory tax to start with, but it is even more discriminatory today. That company is, of course, Broken Hill Proprietary Co. Ltd-Utah International, and the interesting thing is that it is not paid on all its coal. Coal is currently exempted from export duty if it is mined at depths below 60 metres and has an ash content of 12 per cent or more and a free swelling index of three or less. This amendment reduces the specified ash content to 10.5 per cent and increases the specified free swelling index to five or less. Both those factors are used as a gauge to determine classifications of coal. Generally, the swelling index indicates whether the coal is a steaming coal or a coking coal. The ludicrous situation has occurred whereby the blending of coals which were previously exempt with coals which were dutiable to produce coal of a quality to satisfy a particular market meant that full duty was payable on the blended product. The Minister for the Environment and the Arts (Senator Richardson), in his second reading speech-I find this incredible because it casts doubt on the credibility of either this Government or its department-made clearly incorrect statements. He said that the purpose of this Bill is to ensure that certain exports of coal to steaming coal markets at lower prices operating in those markets do not attract the coal export duty which is currently set at $3.50 a tonne. He went on to repeat the background of why the levy was introduced in the first place, which was to pick up what were called windfall profits. The Minister stated: The present policy objective of the Act is to only make dutiable high quality coking coal destined for world steel industry markets. That is totally and utterly incorrect. How the Minister could put this in his second reading speech is beyond me, particularly as I assume he would have received departmental advice. A lot of high quality coking coal which goes to the world steel industry does not attract duty. Yet this is the statement in the second reading speech. It says that these coals attract a price premium relative to steaming coal which is exempt from export duty. Steaming coal has been exempt for a long time. But quite a lot of coals which are not dutiable go to the world steel industry. The Minister also stated that this coal will end up in power stations. Again, I challenge that statement because my understanding is that this coal goes to a particular market in Japan. It is what is called non-IQ coal or non-import quota coal. It is a coking coal; there is no doubt about it. It goes into the steel mills. Yet we are led to believe that what we are dealing with is a type of coal that ends up as a steaming coal. That is not correct. Furthermore, if it has an FSI, or crucible swelling index, of five it is a coking coal; it is not a steaming coal. Steaming coal does not have any swell and that is why it is used. It cannot be used to make coke but coking coal can be used for either purpose. I would be interested to hear the Minister in responding to this debate justify the remarks made in both the second reading speech and in the explanatory memorandum to the Bill which I believe are incorrect. I turn to what is dutiable and what is not. There is a $3.50 a tonne export duty payable for coals which come from BHP-Utah coal mines, produced at depths above 60 metres, with an ash content of 10.5 per cent or less and a crucible swelling index of five or more. We are opposed to secondary taxes, particularly on the coal industry, which at this stage is going through difficulties. I would have liked very much to have been able to propose an amendment to the Bill which would have changed the specified ash content to about 7 per cent and increased the crucible swelling number to eight. Such an amendment would have exempted all coals from export duty. However, I understand that this Bill is considered to be a Budget Bill and for this reason we will not be introducing such an amendment. I again reiterate that it is a duty that should have never been imposed in the first place which goes back to the days of the Whitlam Government. It is selective and discriminatory and at a time when the coal industry is experiencing enormous difficulties the tax should have been removed altogether. Senator SHORT(Victoria)(5.55) —The Senate is debating a raft of eight Bills at the second reading stage in what I accept was agreed between the various parties would be a cognate debate covering this grouping of Bills which ranges from customs tariff amendments, customs and excise legislation and petroleum excises to Bass Strait freight adjustment levies. It is extraordinary for the Senate to have to do this so late in this Budget session. The reason is the enormous bunch of legislation over recent weeks due, without any doubt, to the utter mismanagement of the Manager of Government Business in the Senate (Senator Gareth Evans) in programming the work of this chamber. I think it is an absolute disgrace, firstly, that the Senate is sitting so late in the year and, secondly, that in so doing we are still being rushed in a pressure cooker atmosphere which means it is absolutely impossible to give important legislation the consideration that it needs and warrants if we are to be seen to be exercising our proper democratic parliamentary processes. The Bills that we are talking about tonight, although they vary one from the other in their degrees of importance, collectively add up to an important package of legislation. They touch on the whole area of the Government's industry policy and therefore they touch very importantly on the whole thrust of economic policy. In their detail they have specific and important implications for individual manufacturers, producers, importers and other units of economic activity in this country. We had a very interesting debate in the Senate earlier today on the Government's failure to implement and conduct a proper industry policy. It was one of the most important debates that we have had for some considerable time. It was pertinent for it to be brought on on a day when we are debating the legislation that is now before us because the relationship between industry policy and the specifics of at least some of these Bills is crucial. It was an indictment of the Government's industry policy that we had to bring forward for discussion the matter of public importance that we did-the failure of the Government and in particular the Minister for Industry, Technology and Commerce, Senator Button, to face up to the realities of the problems facing this country in terms of getting its industry vibrant, growing and dynamic. The failure of the Minister and the Government to recognise that is probably the largest single problem in this nation today in getting down the very rocky road that anyone with half a brain would know we face over the next one to two years. The Government's failure to recognise the real significance for this country of the fall in the stock market back in October and the impact and the flow-on effect that that will have on the productive economy of our nation is extraordinary. The Government's laid-back attitude towards this whole matter is one that we will rue as a nation for a long time to come. The chickens are coming home to roost in this country as a result of the policies of this Government over the last four to five years, with falling productivity and falling output-as we heard today in the figures taken from the annual report of the Minister's own Department. This is at a time when we are also experiencing inflation rates far higher, relative to the rest of the world, than we have ever faced in our history. That has really been the pattern over the last two to three years under this Government. We still have record interest rates-record by our own historical standards-although admittedly there is some temporary fall in interest rates at the moment. But the prospects of that drop being maintained into the future would have to be very questionable. Senator Richardson —There were no falls under Howard; just rises. Senator SHORT —Let me just pick up Senator Richardson's interjection. Under the previous Fraser Government there was never the gap between inflation in this country and inflation in the rest of the Western world, or the gap in interest rates in this country compared with those in the rest of the Western world, that we have today. In terms of relativities, under this Government we are experiencing and have been experiencing for the last two to three years the most uncompetitive situation in our history. All that honourable senators on the Government side of the chamber have done to try to overcome that situation is to let the exchange rate for the Australian dollar fall. We have had a fall of about 30 per cent in the value of the Australian dollar since this Government came to office-and that is not the solution to this country's economic problems. Indeed, one can very well argue that it is a counter-productive measure because it allows the Government, at least on a short term basis, to get off the hook of responsibility that it ought to be exercising in the areas of wages policy, fiscal policy and monetary policy. This Government has been totally and absolutely dilatory in all those areas. As a result, I repeat: the fundamental situation of this economy is very grave. So that is the economic policy side in very broad terms, and it impinges very considerably-we cannot distinguish between the two-on industry policy. Today we heard about the Government's institution, over recent years, of a number of sectoral plans for industry. The Minister himself, the architect of these plans, has got up when it has suited him and lauded these plans, but he is now saying-he said it recently in relation to the steel industry plan-that possibly the worst thing that he ever did was to introduce the steel industry plan because of the precedent that that potentially set for other industries, given the very real problems in sectoral plans, such as their inevitable and inexorably growing bureaucratic operation and the inflexibility they they produce in the industries themselves and, therefore, the delay that they cause in allowing the necessary readjustments and restructuring of industry in this country. Today the Minister accepted that. That was an extraordinary admission by this Minister. I think it was a correct admission, but it is a pity that he is saying it at this stage rather than having had the courage of his convictions and acting in a more responsible manner for the sake of industry restructuring in the past. He has tried to con Australian industry and the Australian public into believing that they do not have to worry about reduced government spending, reduced government taxes, or regulation of industry or wages policy; they can get away without worrying about all those things. All they need to do is to devise a plan for the particular industry sector. As we have seen from past experience, and as I believe we will see increasingly from future experience-and as Senator Chaney so eloquently put it in his remarks earlier today-that is a recipe for doom in this country. If this Government does not wake up to that and turn its own policy directions around very quickly, that potential doom will very soon become a reality. Turning to some of the particular aspects of the Bills before us, I just want to comment on two or three of them. First of all, I wish to support very strongly the remarks that were made by Senator Parer in relation to the Customs Tariff (Coal Export Duty) Amendment Bill. This Bill is desirable in the sense that it proposes to remove a potential anomaly-something which the Opposition certainly supports. But a couple of questions really ought to be asked in relation to this Bill. The first and fundamental question is: Why do we have a coal export duty at all? This duty, which was imposed by the previous Whitlam Labor Government in August 1975, has cost the coal industry of this nation about $1 billion during the 12 years of its operation. That is a crazy policy to have when the biggest problem facing Australia at the moment is the external constraint due to our balance of payments problems. We are putting a restraint on our largest export earner-at least, it was last year. Coal contributes a very significant amount of our total export income and it makes no economic or logical sense at all to maintain a tax on that product, particularly with the changes in the coal market and the world outlook for the coal industry that have occurred in the years since it was first imposed. I would like to see the coal export duty abolished. That is what this Government ought to be doing in this Bill. As I have said, if it does not take that step, we will not oppose the proposed change; but we ought to be getting rid of this levy completely and for all time. The Customs Tariff Amendment Bill (No. 2) has also caused concern for many people in manufacturing industry in Australia. I will not say much more about it in this second reading debate because we wish to raise certain matters in committee. Suffice it to say that it is a problem Bill for certain producers in this country. In that context, one of those producers, Budenberg Gauges (Australia) Pty Ltd, a small producer in my State of Victoria, had a problem as a result of the tariff harmonisation that occurred earlier this year, amendments to which are being caught up in this present legislation. That company had a problem due to an error that was made by the Industries Assistance Commission (IAC) in its report on measuring and scientific equipment earlier in the year. It made a factual mistake in its analysis of the industry of which Budenberg is a part. It claimed at the time that the products of interest to Budenberg were free of duty, whereas they were dutiable at 25 per cent. Under the tariff harmonisation procedures, the net effect of that error flowing through was that, as from 1 January next when the harmonised tariff arrangements come into force in Australia, the products of that industry would have been facing duty-free entry from abroad compared with the 25 per cent duty now. That would have been a severe problem which probably would have put Budenberg out of business. I am pleased to say that as a result of the matter having been raised by Senator Lewis and others with the Minister, Senator Button, the Minister announced last week the necessary changes to prevent that occurring. The Opposition thanks Senator Button for taking that action which was obviously necessary to correct a factual error that had been made by the IAC. The other piece of legislation that I wish to conclude my remarks on is the Customs and Excise Legislation Amendment Bill (No. 2). The Bill proposes a series of amendments to the principal Customs Act 1901 and the Excise Act 1901. The most important of those amendments is to the valuation provisions of the Customs Act and the introduction of consequential enforcement and penalty provisions. There are some very important elements of this Bill, many of which might be better suited to debate in the committee stage. I will foreshadow some of the concerns that the Opposition has. We are concerned with the fact that various issues that arise under this Bill have been matters of concern to a range of people in the private sector including some manufacturing companies which import certain products. One major company in particular is concerned with the new treatment in the Bill of inland freight in the country of purchase of a raw material that it imports for use in its own manufacturing process. There has been a change in this Bill in the treatment of inland freight for duty purposes. This would have a very significant impact on this company and is a matter of great concern to the company and to the Opposition. We are also sharing the concern of Customs agents throughout Australia of various provisions of this Bill, particularly so far as its enforcement and penalty provisions are concerned. Several provisions appear to have some almost draconian implications and content. We believe that they are matters that should be looked at much more carefully and the opportunity given for much fuller discussion between the clients of the Australian Customs Service and the Government before they come into legislation. That is the reason why Senator Lewis, on behalf of the Opposition when opening this debate earlier this afternoon, foreshadowed the following amendment to the motion for the second reading: Leave out all words after ``That'', insert: ``the second reading of this Bill be made an Order of the Day for the first day of sitting in 1988, to allow customs agents and the industry time to make appropriate representations in relation to the Bill''. I think that is a very important and very necessary proposal by the Opposition. I think I am correct in saying that it has the support of the Australian Democrats. It will enable necessary discussions to take place over the recess period between industry, Customs agents, the Government and its agencies so that when we come back for the autumn session next year the concerns that clients have about aspects of the Bill will at least have been fully considered and thought through by all parties. Because of the pressure cooker environment in which we are all operating there is evidence at the moment that aspects of this legislation have been rushed. That is the surest recipe for getting things wrong. We should allow a stay of proceedings for a few months so that we all can have a much more careful look at this legislation. This would obviously be the most sensible thing to do in the circumstances. As far as I am aware, it will not have any financial impact or other adverse implications. We hope that the Government will accept that proposal. I think it will be in the interests of all concerned. I conclude my remarks on that note. I look forward to pursuing some of these very important matters in the committee stage or during the further consideration of the Bill, hopefully next session. Senator BISHOP(New South Wales)(6.15) —I wish to pick up from where Senator Short left off and deal specifically with the Customs and Excise Legislation Amendment Bill (No. 2) and deal, very particularly, with the question of inland freight and insurance charges being made dutiable by this piece of legislation. I think it is important to put on the record the background and the facts as to why inland freight and insurance have, heretofore, not been duti- able plus the fact that the Government has deliberately made a policy change to make them dutiable under the legislation. I quote the beginning of the second reading speech: This Bill proposes a series of amendments to the principal Customs Act 1901 and Excise Act 1901, the most important of which are the amendments to the valuation provisions of the Customs Act 1901, (division 2 of part VIII) and the introduction of consequential enforcement and penalty provisions . . . To effect the second instalment of the Government's strategy to combat commercial practices designed solely or predominantly to understate the value of imported goods, so as to minimise or avoid customs duty. My difficulty with that statement in the second reading speech is that it asserts that the reason that duty is not paid on inland freight and insurance is simply that people are attempting to avoid or minimise the amount of duty payable when, in fact, the historic reason is quite clearly to the contrary. Indeed, it is fallacious to say that the main reason that duty is not paid currently on many items of inland freight and insurance is in order to understate the value of imported goods. The history of this practice lies perhaps with the General Agreement on Tariffs and Trade (GATT), where the concept of the transaction value of goods was established. It defines transaction value as the price actually paid or payable for goods when sold for export to the country of importation, adjusted in accordance with the provisions of article 8. Article 8, in turn, provides that the inclusion or exclusion from Customs value of freight and insurance is entirely the decision of the signatory country. Thus it was within Australia's purview to decide whether or not to include inland freight and insurance as part of the transaction value. A deliberate decision was made not to do so. Section 159 (3) (g) of the Customs (Valuations) Amendment Act 1981 states that any inland freight or inland insurance should only be taken into account when they are paid, or payable, directly, or indirectly, by the purchaser to or for the benefit of the vendor. Thus, if the inland freight and insurance were paid to a third party which was at arm's length it was, quite properly, not dutiable. I repeat that the assertion made in the opening of the second reading speech that it is a question of avoidance to undervalue the goods that are being imported is quite wrong. The decision to introduce by legislation a duty on all inland freight and insurance is a deliberate policy change and, as such, discussion and consultation with the industry affected are essential. Thus a deferral of the consideration of the Bill to allow consultation with industry is essential. One reason the 1981 decision did not include inland freight and insurance within the dutiable component is very simply that to do so could well prejudice the people who are importing from a source which is considerably inland. I would like to cite an example. It concerns soda ash. Soda ash is a commodity which is used by many companies in Australia. It is obviously an ingredient of glass making and packaging. This commodity is manufactured in Australia but is mined in the United States. It has been the custom of one user of soda ash to import something like 20 per cent of its requirements in the form of mined soda ash from Wyoming in the United States. The soda ash has to be taken across the United States continent before it can be shipped to Australia. The effect of imposing a duty on the inland freight and insurance component of that shipment will be to force up the price of soda ash by some 40 per cent. The history of soda ash is interesting. It was considered as part of a package by the Industries Assistance Commission which broadly recommended that the duty of 20 per cent be phased down to 15 per cent. Subsequently, it was investigated by the Department of Industry, Technology and Commerce which could see no good reason why duty should be payable on it at all. Notwithstanding this, the duty was suddenly put back to 20 per cent because of some lobbying from one source or another. It is important that the landed commodity coming into Australia should compete in price with the manufactured commodity. As the manufactured commodity of soda ash is subject to parity pricing, it is only reasonable to have an actual landed price that is in some touch with reality. The difficulty with this Bill is that it sets out to establish a premise which is not correct-that is, that the decision not to have inland freight and insurance dutiable was somehow not deliberate when it was deliberate. The Government has made a distinct policy change, which it is implementing through this Bill and, as such, there needs to be time for consideration. If this consideration does not take place and perhaps no solution is found, what will result is a dramatic increase in the cost of this commodity and others which are likewise affected. The net result will be an immediate adverse impact on the costs of a wide range of products which are manufactured in Australia and use the sorts of ingredients and commodities which are affected by this Bill. One tends to find a similarity in thinking behind this package of Bills and the new tax- ation legislation in that the difficult parts are overrun somehow because of the main thrust-the Government wants to see its legislation put in place immediately. The move of the Opposition and, indeed, the Australian Democrats to have this legislation deferred until the autumn session is not only reasonable but also essential. I think it would be useful to recap and restate the background to our position so that the Government will be concerned to look at the true ramifications of this Bill when further consideration and discussion take place. First, under GATT the signatory countries were allowed to make up their own minds. Secondly, in 1981 a deliberate decision was made not to include inland freight and insurance as a dutiable component. Thirdly, in 1987, as part of a two-step mechanism, the Government has introduced a change in policy and wishes to see inland freight and insurance become dutiable. I do not think it is good enough to say that traders in commodities which have not been affected before have been avoiding duty or trying to minimise landed value. They have been using the law as it was properly meant to be used and they ought not to be treated in the way that this Bill sets out to do. Senator CHAPMAN(South Australia)(6.25) —This cognate debate covers eight Bills involving a range of customs tariff, excise, export duty and freight levy matters. My remarks will be directed at and be most relevant to the Customs Tariff Amendment Bill (No. 2) 1987. This Bill deals with a number of tariff matters, a significant one being the harmonising of tariffs from 1 January 1988. This proposal gives rise to certain anomalies in the application of customs tariffs. Some goods previously free of duties are now being brought into dutiable categories. Therefore, goods previously free of tariffs will now have tariffs applied. So tariffs are inadvertently being placed on goods where industry did not seek such assistance. There are other instances in this legislation where tariffs of a lesser amount on certain imports are being rounded up. Such consequences from this legislation necessarily direct our attention to the whole question of tariff protection and trade policy. It is also necessary to direct our attention to this matter in the light of the outburst of the Prime Minister (Mr Hawke) against the trade policies of the United States of America, Japan and Europe in Tokyo on 3 December 1987. The Prime Minister claimed that Australia's standard of living has suffered because Japan, the United States and Europe are acting against their own self-interest with regard to trade policy. That may well be the case, but it is also a matter of the pot calling the kettle black. Despite the extravagant claims of this Government, favoured sectors of the Australian economy remain heavily protected. The average effective rate of protection for manufacturing industry has fallen only marginally from 21 per cent to 19 per cent over nearly half a decade during which this Government has been in office. During 1984-85 that effective rate of protection increased to 22 per cent. That minimal overall fall is due entirely to the impact of the depreciation of the Australian dollar in reducing the measured quota assistance to textiles, clothing, footwear and passenger motor vehicles. The average effective rate of protection of these four specific industries has fallen from a massive 176 per cent to a somewhat lower, but still massively excessive, 120 per cent over the past two years. I emphasise that this is not the result of the positive initiatives taken by this Government but rather because of the depreciation of the Australian dollar which, of course, is a sad reflection on the ability of this Government to manage Australia's economy. When these four industries are excluded, the average effective rate of protection has remained virtually unchanged at 14 per cent over the life of this Government. Similarly, the effective rate of assistance afforded to manufacturing industry, excluding those quota protection industries, has shown little change, remaining at between 18 and 19 per cent since 1982-83. Consequently, levels of assistance will increase if per chance the Australian dollar appreciates while quota protection remains in place. In addition to the Government's failure to achieve real tariff cuts, a variety of new assistance measures, often described as positive assistance, have been introduced recently or modified in an effort to direct resources to potential growth industries and to diversify our export base. These measures include provisions to increase expenditure on research and development, to help industry upgrade its performance in the commercialisation of new technology and to assist in marketing, particularly with regard to exports and innovation. Some of the new assistance measures that have been introduced are available to all industries and are related to perceived shortcomings in market processes. An example of this is research and development assistance. Other new forms of assistance have also been designed to provide selective support for industries with high technology characteristics or some orientation towards export markets. An example of this is the offsets program which has always been highly selective in its application and which will now give greater priority to high technology projects. Most of these forms of assistance can be distinguished from the traditional forms of assistance, but they have similar effects. An example is government purchasing arrangements which provide Australian industry with a further margin of protection against import competition. That measure clearly has effects similar to tariff protection. Sitting suspended from 6.30 to 8 p.m. Senator CHAPMAN —Before my remarks were interrupted by the suspension of the sitting for dinner I was making the point that, despite the claims of this Government, there has been no real reduction in the effective rate of protection which is provided for manufacturing industry in this country, and, indeed, a number of new forms of assistance have been introduced. In addition to those matters which I raised before dinner, the Government has also introduced elements of protection through sectoral plans for mature industries. These industries include the passenger motor vehicle industry, the textile, clothing and footwear industries, the steel industry and heavy engineering. The failure of these particular sectoral plans is quite evident, and was the subject of a matter of public importance debate earlier today. We also have assistance in the form of development strategies for growth industries. The basis of selectivity in each of these arrangements is the view that, because particular attributes are often possessed by industries that are internationally competitive, other industries can become more competitive if they are assisted to acquire these attributes. In practice, assisting an industry to use advanced technology or to export will not necessarily enable it to make a greater contribution to the growth of real wealth. It may acquire the specified outward appearances of competitiveness but remain reliant on public support. Such measures inevitably impose costs elsewhere in the economy. This is the case whether the measure used is in the form of tariff or quota protection or whether it is budgetary support to encourage new product development and the acquisition of new technologies and skills. There is evidence to suggest that some positive assistance measures detract from rather than improve the performance of the economy overall. Providing assistance to new export industries must ultimately be judged not in terms of its effect on export revenue alone but on the income from other exports as well and, more importantly, from general production in the economy. Export growth is only in the national interest if it increases national wealth. When special assistance is required to encourage selected export activities the probability of this occurring is significantly reduced because each element of assistance provided to such industries imposes costs on industries that do not receive that sort of assistance. This extra cost may occur directly through higher material input prices or indirectly through the cost of capital or the bidding up of wages. Of course, when selective assistance programs are wrong and shown to be wrong they give rise to two sets of costs-the forgone opportunities for growth from alternative activities and the further adjustment required to get the structure of the economy back into line with the realities of the market. Granting special assistance to some producers-whatever form that assistance takes and whether designed to avert adjustment or to meet a particular perception of future trading opportunities-always involves a cost to others. All such policies also encourage an assistance-dependent mentality in industry generally. This is the very antithesis of what is required in the Australian economy today to make it more productive and more internationally competitive. The motor vehicle plan, to the extent that it allows exports of Australian motor industry products, is a specific example of the pot calling the kettle black with regard to the statement of the Prime Minister in Japan earlier this month. These exports in the motor vehicle industry are being obtained through exactly the same trick that Europe and the United States of America are using to allow their agricultural products to compete on export markets against our own in the international economy-that is, through a subsidy being paid by domestic consumers and taxpayers. Under the so-called export facilitation scheme applying to the motor vehicle industry, for every dollar's worth of export of whole cars or components-for example, engines-manufacturers earn the right to import free of duty a dollar's worth of components or whole car. So manufacturers are exporting the things we do least badly and using that entitlement to import things that we do very badly. Thus, these boosted manufacturing exports are largely artificial, being sustained by the intricate assistance arrangements in the domestic market. Australian taxpayers and car buyers are therefore subsidising workers in the car manufacturing industry, the profits of these industries, when they are made, and, of course, most importantly, the purchasers of those vehicles and motor industry products in other countries. It is clearly beyond any logic for a government to pretend that Australia can build up a big export trade in manufactured products which require such heavy levels of protection in our domestic economy and which, in the current circumstances, have priced themselves out of our domestic market. It has been estimated that each motor vehicle being exported from Australia under the current plan is being subsidised to the extent of $10,000. That means that if the target of 40,000 units exported is achieved, it will cost Australian consumers and taxpayers $400m. Of course, that represents a transfer to overseas buyers of $400m of Australia's wealth. Hence, it can be clearly seen that protection continues in many forms. This is contrary to the interests of the great majority of Australians. They will be best served by improved access on world markets for Australian products which are genuinely competitive and for which we have a comparative economic advantage. The influencing of the trade policies of countries such as Japan and the United States, and the European Community, will be of major importance in achieving that access for those products which are competitive. Our capacity to influence the policies of those countries will be significantly reduced if our own house is not in order. Continuing excessive levels of protection demonstrates that our own house is not in order. But the capacity to influence the policies of other countries is not the only reason for putting our house in order by reducing protection. Unilateral action to reduce protection in a more significant way will reduce the cost burden which this protection imposes on our efficient industries-both primary and secondary-which are now competitive on world markets, and will allow them to generate the national income and economic growth for Australia of which they are capable. It will also impose greater discipline in the area of wages policy and government expenditure which, in turn, will further increase the competitiveness of exporters. The initiatives required to improve Australia's trade performance which I have outlined warrant more detailed consideration. However, in view of the large amount of legislation remaining on the Notice Paper, as a result of the Government's inability to manage its legislative program, and which must be dealt with in the next few days before the Senate adjourns, I will draw my remarks to a close to allow my colleagues the opportunity to contribute to the debates that will occur. I will therefore save my remarks on a more detailed analysis of trade issues for another occasion. Before concluding, I emphasise that more sectors of the Australian economy must become internationally competitive and thereby develop their export potential. If this is to be achieved, more effort must be devoted to achieving real reductions in protection. This will be greatly assisted by greater independence being given to the Industries Assistance Commission. In particular, it must have its power restored to initiate its own inquiries. The restoration of this degree of independence to the Industries Assistance Commission by enhancing the transparency of our own protection regime will also strengthen our arguments against those countries, such as Japan and the United States, and the European Community, whose current behaviour with regard to international trade is both irrational and undesirable. Indeed, those countries would be hard pressed to avoid instituting similar independent analysis of their own policies if we did restore the capacity of the IAC to initiate its own inquiries. In conclusion, I therefore urge the Minister and the Government to take this important initiative with regard to the IAC so that our trading performance does have the capacity to be more significantly enhanced. Debate interrupted. Senator LEWIS(Victoria) —by leave-I give notice that, on the next day of sitting, I shall move: 1. That a select committee, to be known as the Select Committee on Agricultural Chemicals, be appointed to inquire into and report upon regulation by governments of the sale and use of agricultural chemicals in the beef industry, the use of such chemicals by governmental instrumentalities and questions of compensation and assistance for growers. 2. That provision for the composition and powers of the committee be contained in a subsequent resolution. Debate resumed. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.11) —I understand there has been a fairly wide-ranging debate on these Bills. I regret that I have not had the opportunity of hearing all the discussion. I did, of course, hear the last 10 minutes or so of Senator Chapman's carefully crafted speech-not by him, I suggest. One thing he told us in that carefully crafted speech was that the Government did not have control of the arrangements for handling business in the Senate. Senator Chapman in the whole of that time did not advert to these Bills at all. There have been six speakers on these Bills and an amendment to the second reading motion suggesting that one Bill be defeated at the end of the second reading debate has been foreshadowed by Senator Lewis. That will happen, will it not? Senator Lewis —What? Senator BUTTON —Well, maybe it will not happen. There have been six speakers on these Bills. I would have thought that the issues with which they are concerned were capable of some fairly compact treatment by the Opposition. But, of course, they have not turned out to be capable of compact treatment by the Opposition because the Opposition does not understand the issues. It has given a series of different reasons over the last week as to why it cannot grapple with these Bills and why one has to be dealt with at a subsequent time, and I want to come to some of the points which I understand have been made in support of that sort of view. I refer to some of the comments which I understand Senator Lewis has made in the course of his remarks. Senator Lewis suggested that certain words be inserted, which would amount to a deferment of the Customs and Excise Legislation Amendment Bill (No. 2). Effectively the Bill would be adjourned to the first sitting day in 1988: . . . to allow customs agents and the industry time to make appropriate representations in relation to the Bill- and, reading between the lines, to help the Opposition to understand it. That is the burden of Senator Lewis's criticism. The first suggestion which Senator Lewis made is that insufficient notice and consultation with the industry has occurred on this Bill. I remind Senator Lewis that a number of allegations about Customs fraud were made a year or so ago, some of them by members of the Opposition. It was at that time that the Australian Customs Service took steps to see that there were no errors or loopholes in the valuation procedures and that any loopholes that were identified were closed. Legislation was introduced in the last sitting of the Parliament which identified those loopholes and started to close them off. The current legislation, of course, deals with penalties, which are a necessary corollary of taking steps to close loopholes in the legislation. I do not remember and I am not prepared to identify-it is very difficult to identify-the exact figures of fraud in relation to Customs valuation. The figure estimated for fraud in respect of Customs valuations is about $146m. The Opposition is up to its old tricks again-if the taxman cometh, let us put every obstruction in his way to stop him collecting government revenue if we can find some reason for doing so. Senator Lewis says that this legislation ought to be adjourned so that a proper look can be had at the nature of the legislation. Let me say again that its principal focus was foreshadowed during the last sittings in the complete redrafting of the valuation division of the Act, highlighting the array of costs, charges and agreements relating to goods which may be included or excluded for the purpose of assessing the Customs value of the goods. That meant a tightening of the legislation and the actual valuation methods to close off loopholes. Senator Lewis and other honourable senators have said that people ought to have been consulted about this closing of the loopholes, but that would have been a public invitation to those privileged few who were milking the system to an estimated extent of $146m to participate in the question of closing the loopholes which they were jumping through. Legislation had to be put in place before any consultation on this issue could be considered. The Government was not prepared to advantage commercially a few interest groups to the detriment of the community as a whole. The second suggestion is that insufficient notice of the legislation was given. It is very important to distinguish the giving of early notice from the claim that consultation should have occurred. The Government agrees that early notice should have been given of a very important direction it was taking in relation to the valuation of goods. Notice was given as early as April 1987. It is simply not accurate to say that the importing community and the agents it employs have not had sufficient notice of this proposed legislation, which is the second instalment of a strategy to tighten loopholes in the valuation system and a second step in the strategy to crack down on fraud and avoidance practices in the valuation of imported goods. So there were two parts to the Government's strategy. The first part, an attack on those avoidance and minimisation practices, was contained in the legislation passed during the autumn sittings of the last Parliament. In the second reading speech on that legislation I gave notice that the Government would be proceeding with the second part of its strategy to combat these practices during the Budget sittings. I take it that the Opposition is now in favour of closing loopholes but is not in favour of doing anything about it if somebody gets caught jumping through them or trying to get round them. On the question of notice, in the weeks which proceeded the passage of that last Bill through the Parliament the Australian Customs Service issued an Australian Customs notice targeted to the importing community outlining the main features of the legislation proposed for both sittings, including notice of the proposed introduction of a system of automatic penalties similar to that contained in the income tax legislation. On 21 April I issued a Press release drawing attention to the Government's policies in this area which received widespread coverage in daily newspapers. So it is simply not credible to claim that persons were unaware of the Government's firm resolve to stamp out valuation avoidance practices. It is not credible for anybody in the Customs agents community or in the importing community to claim that. It can be claimed by Senator Lewis, but, if he does claim it, it is incredible that an Opposition spokesman should make that sort or claim after the sorts of steps which have been taken, both within this chamber and outside it, to identify what the Government's intentions were. It is not rational to suggest that anti-avoidance legislation should be subject to public comment and scrutiny by public exposure prior to its reaching the Parliament for consideration. With most high value, high volume imports arriving by air, any deferral of this Bill for a further three to four months, especially since the Bill includes consequential enforcement and penalty provisions to complement the reforms contained in it and the first Bill, passed in the last sittings, could result in a quite considerable customs duty shortfall owing to the continued unrestrained use of commercial practices which are principally designed to understate the value of imported goods and so avoid the appropriate customs duty payable. Senator Lewis has to decide whether he is for or against that practice. He must decide whether or not he supports people making fraudulent and false declarations as to the value of goods. When he reaches a conclusion, perhaps he can tell us. The deferral of this legislation for three or four months is likely to result in that practice. I can only remind honourable senators of the revenue shortfall which the valuation amendments in this Bill and its partner from the last sittings are intended to address. I do not want to go into the details of those matters but it was estimated this year that one major importer had saved $4m in customs duty a year by the sorts of shonky procedures to which I was referring a minute ago. If all major importers adopted that practice there would be a revenue loss of $90m a year. Thank goodness they do not. It is difficult to quantify exactly duty shortfalls caused by manipulation of overseas freight charges and so on, but there are plenty of examples and plenty of evidence to support the suggestion that that is happening. So much for the suggestion contained in the Opposition's second reading amendment-that Customs agents and the industry should have time to make appropriate representations in relation to the Bill. This has been going on since April this year. There have been many public announcements here and outside on what the intention was and what the Government proposed to do. Senator Coulter has alleged that the Government was tardy in meeting any requests for briefing on the Bill. One of the frustrations which have been encountered is that, despite the allegations of inadequate or insufficient consultation, since the introduction of this legislation into the House of Representatives on 19 November, requests to my office for briefing have been almost non-existent. But after the Bill was passed in the House, and during the week's recess just after the Bill's introduction into the Senate, offers of briefing to the Australian Democrats, for which the Australian Customs Service was prepared to visit the respective States of Australian Democrats senators, were turned down. The response was simple: `Do not bother us until after the Senate reconvenes next week'. Democrats do not work in the week away from Parliament. Senator Puplick —They are a small party and they tire easily. Senator BUTTON —That was the gist of the response. Senator Coulter's briefing was given after several attempts to arrange it, due to his commitments in respect of debates and so on. It occurred on 9 December, six days ago-not two days ago as suggested by Senator Coulter in the course of this debate. The briefing on 9 December was cut short by Senator Coulter. While the invitation for further briefing was left with him, he chose not to avail himself of that. Senator Puplick —He probably used up his quota of neurons for the day. Senator BUTTON —I want it to be clear that Senator Puplick said that and not me. I would not say such a thing. The DEPUTY PRESIDENT —By saying that you have just put it in the Hansard. Senator BUTTON —Yes; that is precisely where I want it, Mr Deputy President. Some comments were made by various honourable senators about the other Bills in this package of Bills. I do not know whether it is necessary for me to go through those in any great detail. Senator Aulich —All good contributions. Senator BUTTON —Were they all good contributions? The honourable senators concerned, if they wish to do so, can raise the matters at a later stage. The weight and importance which honourable senators attach to the various comments are not capable of estimation by me as I was not here. I regret that. I will deal with a couple of them. Senator Lewis and Senator Parer referred to the discrimination of imposing the coal excise levy on Broken Hill Proprietary Co. Ltd. I agree that the coal export duty has shortcomings. That is conceded. In the best of possible worlds one would not have it. But the Government has sought co-operation in introducing a rational system based on a resource rent tax for all resource industries. We have not had co-operation from the States. The duty makes an important contribution to revenue and, in the light of budgetary circumstances, the Government believes that it should be retained. The BHP-Utah mines in central Queensland remain profitable and the company has continued developing the coal resources of the Bowen Basin, notwithstanding the existence of duty, enormous rail charges and a number of other imposts on the industry imposed by both State and Federal governments. Senator Parer raised the question of steaming coal, saying that some steaming coal had not been used as such but rather as non-import quota coal. All I can do is to assure Senator Parer that the information received by the Government at the time the Bill was prepared was that the product being mined by Utah was to be used as steaming coal. Finally, I remind both honourable senators that the amendments assist exports as unwashed and lower quality coking coal can now be exported into steaming coal markets. The Bill is revenue neutral in effect; it neither adds to nor lessens Commonwealth charges on the coal industry. The Government is committed to a stage by stage process of improving and closing loopholes in the customs valuation procedures. It is committed to a system which is fair and reasonable and which has teeth in terms of penalties which can be imposed on those who seek to defraud the Commonwealth or, by negligent conduct of one kind or another, fail to pay the proper contribution which they should make to the revenue of this country collected by duties. Their failure to do that is something which imposes a burden on their competitors, a burden on other sectors of the industry and a burden on the revenue. It is a source of great regret that somewhat specious grounds are being advanced for deferring the legislation until February next year. I commend the legislation to the Senate. Senator LEWIS(Victoria) —by leave-Mr Deputy President, I claim to have been misrepresented. For someone who was not present during the debate, I find it quite incredible that Senator Button should rise in this place and make such a totally unwarranted attack on me. It is a clear indication that in the course of the matter of public importance today I got right up his nostrils over his industry policy. The DEPUTY PRESIDENT —Order! The purpose of this is to explain where the honourable senator was misquoted or misunderstood. You should not attack Senator Button. Senator LEWIS —Thank you, Mr Deputy President. I have been misrepresented because the Minister for Industry, Technology and Commerce (Senator Button), in effect, said that I have moved that the Customs and Excise Legislation Amendment Bill (No. 2) 1987 be not dealt with-I might say that he did not even know the name of the Bill-until the autumn session in order to give the Opposition time to understand it. As I have said, it is quite clear that the reason for making such a petulant and childish attack on me-- The DEPUTY PRESIDENT —Order, Senator Lewis, you are getting a bit wide of your explanation again. Senator LEWIS —I shall certainly confine it to this area because it is disgraceful that the Government should be endeavouring to rush this legislation through the Parliament. Let me say firstly, in relation to this allegation by the Minister, that the Attorney-General (Mr Lionel Bowen) himself announced on 1 December- Senator Button —Mr Deputy President, I raise a point of order. I have let Senator Lewis foam on, but there has been no suggestion yet of a misrepresentation of his position. He claimed to have been misrepresented. He just wants to get something off his chest and this is not the vehicle for that. The DEPUTY PRESIDENT —Order! The point of order is valid. Standing Order 410 provides that senators may explain where they have been misquoted or misunderstood, but no debatable material may be introduced. Certainly attacks cannot be made upon other senators. Just explain where you have been misquoted or misunderstood, Senator Lewis. Senator LEWIS —Mr Deputy President, on the point of order- The DEPUTY PRESIDENT —I have ruled on the point of order. I now want you to make your personal explanation. Senator LEWIS —On my personal explanation, I say again that the Minister said that the reason for moving that the debate on this Bill be deferred until the autumn session is-I think these were his words-to help the Opposition to understand it. What I am saying to you, Mr Deputy President, is that not only do I understand it but also in effect this is some of the most complex legislation that has ever been before the Senate. I was about to point out that the Attorney-General himself has said so. The Law Council of Australia believes that `it is most desirable that consideration of this Bill by the Senate should be deferred until the autumn session of the Parliament next year'. The reason suggested by the Minister for the Opposition moving this amendment is absolute nonsense. As I said to you, Mr Deputy President, the Minister has made these personal allegations against me and other members of the Opposition because we have got up his nose in terms of his industry policy. Question put: That the amendment (Senator Lewis's) be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 39 Noes . . . . . . . . . . . 28 —— Majority . . . . . . . . . 11 —— Archer, B. R. Macklin, M. J.Baume, Michael Messner, A. J.Baume, Peter Newman, J. M.Bishop, B. K. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Patterson, K. C. L.Calvert, P. H. Powell, J. F.Chaney, F. M. Puplick, C. J. G.Chapman, H. G. P. Reid, M. E.Coulter, J. R. Sanders, N. K.Durack, P. D. Sheil, G.Haines, J. Short, J. R.Hamer, D. J. Stone, J. O.Harradine, B. Tambling, G. E. J.Hill, R. M. Teague, B. C.Jenkins, J. A. Vanstone, A. E.Knowles, S. C. (Teller) Walters, M. S.Lewis, A. W. R. Watson, J. O. W.McGauran, J. J. Wood, W. R.McLean, P. A. Aulich, T. G. Foreman, D. J.Beahan, M. E. Gietzelt, A. T.Black, J. R. Giles, P. J.Bolkus, N. Jones, G. N.Burns, B. R. McKiernan, J. P.Button, J. N. Maguire, G. R. (Teller)Childs, B. K. Reynolds, M. E.Coates, J. Richardson, G. F.Collins, R. L. Ryan, S. M.Cook, P. F. S. Schacht, C. C.Cooney, B. C. Sibraa, J. O.Devereux, J. R. Tate, M. C.Devlin, R. Walsh, P. A.Evans, Gareth Zakharov, A. O. Bjelke-Petersen, F. I. Reynolds, M. E.Alston, R. K. R. Colston, M. A.Crichton-Browne, N. A. Ray, RobertMacGibbon, D. J. Morris, J. J. Question so resolved in the affirmative. Original question, as amended, resolved in the affirmative. Bills read a second time. The Bills. Senator COULTER(South Australia)(8.41) —I seek some guidance from Senator Button as to the fate of the gauges section in Customs Tariff Amendment Bill (No. 2) 1987. It was stated several times during the second reading debate that the Government has accepted that the tariff on pressure gauges would be put back to 25 per cent but I have received no communication from Senator Button's office to that effect. I would like to know exactly what is happening. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.42) —The Government announced its decision on the Industries Assistance Commission (IAC) report on medical and scientific equipment, which covered pressure gauges, on 9 December of this year. That decision included a 25 per cent duty on non-electrical gauges which would otherwise have been duty free from 1 January 1988. It is intended that all changes regarding the IAC report on medical and scientific equipment will be implemented by a customs tariff notice later next week for commencement on 1 January 1988. In this way pressure gauges have been addressed by the decision of the Government and it does not seem appropriate in the light of such a recent decision to separate this element from the total package relating to medical and scientific equipment. Senator LEWIS(Victoria)(8.43) —During the second reading debate Senator Coulter said that one of his Senate colleagues had been in contact with Mr Barry Jones about Budenberg pressure gauges and in effect he was promoting the Australian Democrats as having been very desperately involved in that. As my colleague Senator Short pointed out in the debate this afternoon, while the Democrats have been talking to Mr Barry Jones about this matter I, as Opposition shadow Minister, have been negotiating with the Minister who is responsible, and that is Senator Button. The truth of the matter is that Senator Button, as he has already indicated, has agreed with my representations on behalf of Budenberg Gauges (Australia) Pty Ltd and has given me certain undertakings which I have accepted. As a result, the Liberal and National parties are not prepared to agree to the amendment foreshadowed by the Democrats. While I am on my feet, I just say that the foreshadowed amendment in relation to solar arrays and solar cells is the sort of amendment which the Democrats are inclined to move from the hip or at the drop of a hat. I would like to know whether they have consulted industry, whether they have consulted the Government, or whether they are aware of what may be the ultimate consequences of this amendment. I just cannot agree that some sort of amendment should be made to this legislation by the Senate without that sort of consultation. I say to Senator Coulter that he should have listened to what I had to say during the second reading debate. I made the point that I had received numerous representations about many amendments to this legislation. But my attitude was that I was not prepared, on behalf of the Opposition parties, to move the amendments. I went to the Minister and said to him, `You are the people with the expertise in this area. Are you prepared to move the amendments? Are you prepared to correct this anomaly? Are you prepared to correct this injustice?'. I have accepted the Government's undertakings so to do and that is why we do not have any amendments to this legislation. It seems to me that the correct approach for an opposition with limited resources on such a particularly complex and difficult piece of legislation is to say to the Government, `You fix it. We do not have the ability to fix it. If you do not fix it we will have to look at your refusal to fix it and we may take some other action'. Notwithstanding the Minister's personal attack on me, he has agreed to fix up every one of the matters that I have raised with him in this legislation. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.47) —I am really very grateful to Senator Lewis for acknowledging that I am such a decent chap after-- Senator Lewis —That is putting it a bit too high. Senator BUTTON —The honourable senator thinks that that is putting it too high. He acknowledged that I was a decent chap after the horrendous attack I made on him tonight when I said that he was incredible, which I do not think is a very nasty thing to say about anybody. Senator Lewis is right about pressure gauges. He wrote to me about that issue and I replied-and delivered the letter myself, did I not, Senator Lewis? Senator Lewis —Yes, you did, in the Senate. Senator Stone —I was here when you did it. I corroborate that. Senator BUTTON —Yes, Senator Stone was there when I did it. I am in real trouble now as I have got into a conspiracy. I caught both Senator Stone and Senator Lewis together and I delivered a letter. Senator Coulter also made representations to me about pressure gauges and I hope that the reply I have given him is sufficient to satisfy his concerns, as it was for Senator Lewis and as it ought to be for any reasonable man-I was going to say like Senator Lewis, but that would be a mistake and it would be taking it too far. The Government will not accept the proposed amendments concerning photovoltaic cells. We decided to retain the general tariff of 20 per cent for assembled solar arrays and solar cells following negotiations with the industry. The decision was based on the fact that this level of protection is consistent with protection currently available to other electronic products and to alternative products such as power generators. They are all in one classification. Moreover, the Government considered that the integration of the photovoltaic industry with other industries-electronics, communications, et cetera-would offer the scope for the development of complementary innovative products and components in that sub-sector of industry. The amendment is not accepted and that explanation has already been advanced to Senator Lewis. Senator COULTER(South Australia)(8.49) —I thank the Minister for his explanation. As a person recently elected to the Senate, I must say that it is sad to find fellow senators on a broadcast day simply trying to claim that they were the ones who got this amendment up, or that they were the ones who had been successful. The point to be welcomed is that the matter of the pressure gauges has been sorted out. As several other remarks were made earlier, I must explain that, when Senator Button said approaches had been made to my office in Adelaide, that was perfectly true. As I recall, I approached his office almost three weeks ago, on the Thursday, and it was not until the following Tuesday that his office got back to me. I was then in Adelaide. As honourable senators will know, there is some work to do in one's office. We do not simply sit around waiting for Senator Button's Department to ring and then, at short notice, seek a meeting with him. In that week I had only three days in Adelaide. I was off to a Senate committee meeting on the Thursday and on the Friday I had another set of appointments in Melbourne. So it was quite impossible for me to meet with the officers from Senator Button's Department during that time. I find it rather depressing that I should be attacked for not being able to meet with him at such short notice. Regarding the solar cells, it may well be true that, as a matter of convenience, Senator Button's Department finds it appropriate to put solar cells in with other electrical equipment. But the fact remains, as we debated last evening at some length, that there is a need to encourage alternative energy systems, of which photovoltaic cells are one, the price of which, short of this impost, is rapidly decreasing. We are achieving wider and wider application of solar cells around the country, such as in remote telephone boosters. Photovoltaic cells are being used in remote farmhouses or for pumping for electrical systems. We are getting to a situation where this form of electricity is becoming competitive in remote areas. It is also rather remarkable that members of the Opposition are not prepared to support this request. Last night they were arguing quite vigorously against the application of $5m for alternative energy systems. We now find that they are further trying to block the use of these systems by supporting an impost of 20 per cent. Senator Button has indicated that it is relatively easy for a change to be made between now and 1 January, when this legislation comes into effect, with respect to the pressure gauges. I simply ask him again to consider that these are not simply ordinary electrical devices; they are solar cells, photovoltaic cells, which have an important and growing use. It is important that they do not have this tariff imposed upon them. The final point that needs to be made is that it is not true that the Australian Democrats have not consulted with industry and are not aware of the existence in Australia of an industry which manufactures solar cells. However, relative to the consumption of solar cells in Australia, this is a small industry. It is rather ironic and paradoxical to find members of the Opposition complaining that the Government was imposing protective measures on industry and arguing that it should decrease those protective measures and yet in this particular case they seem to be supporting a 20 per cent impost on imported solar cells and presumably doing that as a mechanism for protecting local industry. We believe that it is far more important that the price of solar cells be kept as low as possible and that these cells come into much wider use and much wider experience. I move: (1) That the House of Representatives be requested to make the following amendment: Page 20, Schedule, item 99, proposed new item 8541.40.00, leave out ``20% DC: 15%'', insert ``2%''. The effect of the amendment would be to reduce the Customs duty on solar cells and arrays to 2 per cent. Question put: That the request (Senator Coulter's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 8 Noes . . . . . . . . . . . 56 —— Majority . . . . . . . . . 48 —— Coulter, J. R. Macklin, M. J. (Teller)Haines, J. Powell, J. F.Jenkins, J. A. Sanders, N. K.McLean, P. A. Wood, W. R. Archer, B. R. Hill, R. M.Aulich, T. G. Knowles, S. C. (Teller)Baume, Michael Lewis, A. W. R.Baume, Peter McGauran, J. J.Beahan, M. E. McKiernan, J. P.Bishop, B. K. Maguire, G. R.Black, J. R. Messner, A. J.Bolkus, N. Morris, J. J.Boswell, R. L. D. Newman, J. M,Brownhill, D. G. C. Panizza, J. H.Burns, B. R. Parer, W. R.Calvert, P. H. Patterson, K. C. L.Chaney, F. M. Puplick, C. J. G.Chapman, H. G. P. Reid, M. E.Childs, B. K. Richardson, G. F.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. Sibraa, K. W.Crowley, R. A. Stone, J. O.Devereux, J. R. Tambling, G. E. J.Devlin, R. Tate, M. C.Durack, P. D. Teague, B. C.Foreman, D. J. Vanstone, A. E.Gietzelt, A. T. Walters, M. S.Giles, P. J. Watson, J. O. W.Hamer, D. J. Zakharov, A. O. Question so resolved in the negative. Bills reported without requests; report adopted. Bills (on motion by Senator Button) read a third time. The Deputy Clerk-Notice has been received from Senator Hamer that, on the next day of sitting, he will move: That the following matters be referred to the Standing Committee on Legal and Constitutional Affairs: (a) Whether the War Crimes Amendment Bill 1987 should apply to all wars rather than only the Second World War; and (b) whether the definition of serious crimes in clause 6 of that Bill is appropriate and that the Committee consider these matters in conjunction with the other matters relating to the Bill referred to it. Debate resumed from 25 November, on motion by Senator Tate: That the Bills be now read a second time. Senator LEWIS(Victoria)(9.04) —In relation to the Customs and Excise Legislation Amendment Bill (No. 2) I move: Leave out all words after ``That'', insert: ``the second reading of this Bill be made an Order of the Day for the first day of sitting in 1988, to allow customs agents and the industry time to make appropriate representations in relation to the Bill''. Earlier tonight Senator Button said that the reason we are moving for the deferral of this legislation is to give us time to consider it. This is absolute nonsense from the Government. It is disgraceful that the Government should wish to deal in haste with the complex issues raised by this Bill and try to push it through. The Minister for Industry, Technology and Commerce (Senator Button) is well aware of the concerns that have been expressed over this Bill, yet he has failed to address them. In fact, he has alleged tonight that the coalition parties are in some way defending shonky practices. That is an absolute nonsense. The boot is very much on the other foot. In fact, the Government is adopting the same attitude towards the revenue raising provisions within this Bill as the Commissioner of Taxation is adopting in relation to the taxation Act. People are not entitled to organise their affairs in any way so as to minimise the amount of duty or tax that they may be required to pay under the relevant legislation. The moment they bob up their heads in any particular way they will get them shot off by the Government. This Government will pin people to the absolute maximum with regard to the tax that they may be required to pay or, in this particular case, with regard to the customs tariffs which they may have to pay. Let us now look at this complex legislation. On 1 December the Attorney-General (Mr Lionel Bowen) announced that the Law Reform Commission would inquire into the Customs Act, the Excise Act and 11 related Acts and report back to the Government by 30 September 1989. He gave the Law Reform Commission not 12 months, but only until 30 September 1989 to look at this complex legislation and come back with some simple changes to it. The Attorney-General acknowledged that the legislation has been described as `complex and labyrinthine'. It was specifically recommended for urgent review by the task force established by the Comptroller-General of Customs to examine alleged shortcomings in Customs legislation and practice. That task force reported in March 1987 and the Government has claimed that this legislation is the result of its recommendations. But that report has never been made public. The Government has refused to reveal its contents yet it expects the Opposition to accept its assurance that this legislation results from that report. The Government also argues that because of the importance of customs and excise legislation, recently announced amendments should proceed and would not prevent other amendments which might become necessary. I refer the Senate to a letter that I received from the Law Council of Australia dated 4 December of this year. In this letter the Secretary-General of the Law Council of Australia, Mr Bennett, says: The Law Council of Australia believes it is most desirable that consideration of this Bill by the Senate should be deferred until the Autumn Sittings of Parliament next year. The Council believes that this course is necessary to enable its complex provisions to receive the consideration they deserve. The Customs Law Committee of the Business Law Section of the Law Council has given this Bill such consideration as has been possible since its introduction on 18 November 1987 and has provided a report in which it has said as follows: As the Bill had a speedy passage through the House of Representatives, the committee has not had time to undertake anything but a fairly cursory view of the issues raised by the Bill in the time available to it. I will not read the rest of the letter, which goes on for another one and a half pages, but it contains a plea that the Senate do not deal with this legislation in a hasty manner but that the Opposition be given the opportunity to consider it in detail. That is what the Opposition seeks to do by this proposal now before the Senate. I have had an enormous number of representations from Customs agents and industry. I ask that the Senate defer consideration of this Bill in order to give these people time to make the appropriate representations to the Government. I do not want the Opposition to be placed in the position of having to move amendments to correct the Bill. These people say that there are major defects in the Bill. They want time to consider the Bill and to make their representations to the Government. That is what the Opposition is proposing by this measure. Let me deal with some of the problems that arise from this Bill. For example, there is the problem of the value of goods in Australian currency. We must consider whether their value is in accordance with the current rate of exchange at the date of purchase, the date that they are imported or some other date. The Government appears in this legislation to be attempting to overturn the decision of my very good friend-although I have not seen him for 10 years or so-Mr Justice Marks, a judge of the Victorian Supreme Court, in the recent case of AMI-Toyota Ltd against the Commonwealth. Let me point to another problem in this legislation. The Government is changing the value of the transaction from the actual transaction value to the free on board or free on rail value. Frankly, I do not think that Government back- benchers or the Government committee understand what this proposed change means. Let me try to explain it to them in a way that they might understand. Let us presume for a moment that an importer is buying, say, rural industry products such as tractors. If he is buying small tractors which are capable of being placed in a container, and he buys them from a company in the middle of the United States of America or, if you like, in the middle of the Union of Soviet Socialist Republics, those tractors have to be taken from that factory works and transported overland to a ship which will then carry them to Australia. One must consider what free on board or free on rail value is to be placed on them. One might find this incredibly difficult to believe. When I first heard it and understood it, I found it difficult, too. If the tractor is sufficiently small that it can be placed in a container at the factory works, its value is considered to be the free on rail value at the point of works. So the tractor might be worth $40,000 ex-factory; it is placed in a container at the factory and $40,000 is considered to be its value. If the tractor, the harvester or whatever is so big that it cannot fit into a container at the factory and must be loaded on to railway flat-top, transhipped across country at a cost of, say, $5,000 and loaded on to a ship at the port, the free on board cost becomes the cost when it is loaded at the port. From the point of view of importing the vehicle, duty is imposed on one product at the rate of $40,000 because it was loaded into a container at the factory where it was manufactured but, in the other case, the vehicle was transported and loaded on to a ship, and the value becomes the cost of the product plus the cost of freighting it across the country. It is absolute nonsense to think that the tariff we impose should depend on whether the product can be loaded into a container at the works or whether it must be loaded on to a railway flat-top. I am sure that Government senators and members really have not understood that that is what this legislation is all about in regard to the free on board and the free on rail problem. One particular company in Australia has a major difficulty in relation to that matter. I refer to Australian Consolidated Industries, which imports soda ash from the United States of America. Soda ash is a product which is not loaded into a container where it is purchased from the mine in the middle of the United States. It is shipped in open rail containers from the mine to the port and loaded in the ship in the way that one would expect a mineral to be loaded and shipped to Australia. What will happen is that there will be a 40 per cent increase in the tariff on that product because the cost of the product will include the cost of freighting it across the United States. What absolute nonsense is that? The cost of the freight should not in those circumstances be added to the cost of the product. But this Government is changing the provisions in order to, as I said, follow people down the burrow. The Minister says, `We have to be very careful. Some people may be cheating here. Some people may be doing some deal with the freighters. So we have to be very careful and impose this tariff on the full value, including the cost of freight'. If the Government were to lower the tariff I would accept that maybe we ought to include the whole of the freight. But then we run into the difficulty which is in fact created by the General Agreement on Tariffs and Trade: that once the goods are loaded into a container they are considered to be free on board. So the Government is facing this major problem. What is it doing? It is ignoring it. That is the sort of thing to which this Government needs to give consideration. It is the sort of thing on which industry needs to have the opportunity to make its representations. I point out that if that measure were applied in reverse-that is, to Australian products-we could visualise what would happen to tariffs imposed on our coal exports. Everyone knows that many of our coal exports in Australia have to be loaded on board rail in the State in which they are mined and transhipped by rail from the place where they are mined to the port. This is done at great expense, which is in fact a revenue earner for the relevant State government. If other countries around the world apply the principle that we are going to apply to them-if they apply in reverse the principle to Australian coal and other mineral exports-we will find that our coal and mineral exports will have this sort of tariff embargo placed on them, very possibly to the substantial detriment of this nation. I see a couple of members of the Government backbench sitting nodding their heads as they begin to understand the major problems in this matter. It is for these reasons that the Liberal and National parties are moving to have this Bill delayed until the autumn session. I point out also that the Customs Agents Institute of Australia, the Customs Agents Federation of Australia and the Australian Federation of Air Freight Forwarders Ltd have all made similar representations to me. In addition, the Senate Standing Committee for the Scrutiny of Bills has made similar observations. It said that clause 16, proposed new sub-section 165 (1), would provide no limitation period for the collector's power to demand further duty if the duty had been short levied by reason of fraudulent conduct. The example cited for comparison was that of the position of a private individual who had suffered loss on another's fraud. Such a person, the Committee said, is normally barred from recovering loss six years after he or she might with reasonable diligence have discovered the fraud. The Committee said that clause 16, new sub-clause (2), is a standard transitional provision which precludes new interest provision from applying in respect of goods entered for home consumption prior to the date on which the Act receives royal assent. Contrary to the interpretation suggested by the explanatory memorandum, the sub-clause explicitly says that the whole of the sub-section, and not the new interest provision only, would come into effect after the commencement of the section. Other matters are raised by the Senate Standing Committee for the Scrutiny of Bills which I will not deal with in detail, as I am sure that honourable senators will read its report. I have also received representations from accountants who act for Customs agents and individual clients in this matter. The sorts of points that I have heard are, for example, that the opportunity for a contribution to be made by commerce on both occasions that this Bill has been considered has been restricted to the period when the legislation has been before the Parliament. I heard the Minister tonight saying that this matter has been in the wind since April of this year. It may have been in the wind, but the only time that the industry and those associated with the industry have had an opportunity to consider this matter has been since the legislation came before the Parliament last month. Accountants have pointed out to me that foreign freight, as I have mentioned in regard to rail freight, and insurance costs from the factory to the container are to be dutiable under this legislation. Existing and past legislation specifically provides for these costs to be non-dutiable, provided payment or benefit did not accrue to the overseas supplier. This placed goods containerised at the export port on the same dutiable footing as goods containerised at the factory. That so called equality is now removed. I ask: How are Customs going to determine the genuine freight for something shipped from, say, Moscow across the Trans-Siberian railway to Vladivostok? How are we to find out from the Soviet Union what was the rail cost of freighting goods across the Soviet Union? Are we going to write a letter to the Premier because the Soviet Union will not expose the cost of shipping goods across the country for export? The Liberal and National parties do not object to the Government protecting its revenue, but there are changes which may have the most significant impact on importing activities. They deserve closer examination. Generally, these matters include, firstly, the fact that Customs valuation is moving away from a factual concept as envisaged under the General Agreement on Tariffs and Trade, in other words, from the price stated on commercial documents, to some sort of manufactured value which the Australian Government will impose upon these goods. Secondly, there is an increase in dutiable values and the inclusion of foreign inland freight and insurance, which may also be counter-productive for our own exports. Thirdly, there is increasing inclusion of the value of services and obligations in dutiable values. But, for example, the Government intends to include agents' commissions on the purchase of these goods. Another matter which deserves examination is the increasing intrusion into privacy by the beaurocracy and the increasing reliance on past the post examination procedures when goods have gone into the market with little chance to recover costs. In summary, even discounting the self-interest of the Customs agents, a strong case has been made out for the Bill to be deferred to the autumn session. I also mention the Comptroller's powers to enable him to prosecute breaches, which he has successfully done, although section 183 of the Customs Act, which gives him wide powers, does not appear to have been utilised. The argument put forward by the Department that it is essential to have this legislation in place by 1 January 1988 does not appear to the Liberal and National parties to be justified in the absence of the use of section 183 and successful prosecutions under existing legislation. Finally, I put it to the Government that it is a legitimate, reasonable and sensible approach that the Liberal and National parties are proposing to the Senate, which is that we give the industry, the lawyers, the accountants, the Customs agents and the individual companies an opportunity to examine the legislation and then make their representations so that the Government can make the changes which need to be made to this legislation, so that the Government can have its experts apply their minds to the sorts of representations that are being made and can solve the problems. Then the Government will be able to introduce the amendments. It will not require the Opposition parties to introduce the amendments. The Government will then have the support of the Liberal and National parties for this Bill. Senator COULTER(South Australia)(9.26) —I will be very brief. I make only three points. First, the Australian Democrats will support this amendment by the Opposition. I would like to place on record that the Democrats are not about putting penalties in the way of the taxman, as asserted by Senator Button. We strongly support the proper and fair collection of tax. Our reason for supporting the amendment has nothing to do with any penalty being imposed on the Government by way of blocking this legislation. The second point is that Senator Button has pointed to the importance of this legislation. He gave a figure of $140m as possibly being the amount of tax avoided in this area. If this legislation is so important, why is it being put through with such haste and so little consultation? It is not adequate for Senator Button to say that notice was given of this legislation back in April. This is a new Senate. Senator Button must know that he will not get legislation through unless he gets the support of at least one other party. In the light of that fact, he should have given more opportunity-- Senator Tate —You were given a month and you would not go into the blasted briefings that were offered to you. Senator COULTER —That assertion was made earlier by Senator Button. It is completely untrue. I repeat for Senator Tate's information, as he was not in the chamber earlier, that I approached Senator Button's Department-the Department of Industry, Technology and Commerce. It did not contact me during the several days remaining in that week while I was still in Canberra. I was contacted on the following Tuesday when I was back in Adelaide. I was leaving on the Thursday morning to go to Melbourne for a Senate standing committee meeting, and I stayed over in Melbourne until the Sunday, when I came back to Canberra. It was simply not physically possible to meet with officers from Senator Button's Department during that time. Thirdly, Senator Button asserted that one Customs agent had avoided paying $4m per year-I think that was his assertion. I simply point to the logical stupidity of such claims, because if that was known, the question must be posed, `Why was that Customs agent not taken to court for that avoidance?'. For that reason, the figure cannot possibly be known. It must remain an unsubstantiated assertion. Primarily for the reason that insufficient time has been given on this legislation, the Democrats will support the Opposition amendment. Senator TATE(Tasmania-Minister for Justice)(9.29) —There is no point in entering into any lengthy defence of an untenable position, given the numbers in the chamber. I understand that Senator Lewis foreshadowed this amendment earlier and that Senator Button indicated why the Government was opposing, as it must of course, this proposition that there be a further delay in the passage of this extremely important legislation for the protection of revenue. But if the Opposition and the Australian Democrats are so minded, the sooner we have the division the better. The PRESIDENT —Order! The question is that Senator Lewis's amendment to the Customs and Excise Legislation Amendment Bill (No. 2) 1987 be agreed to. The Senate divided. (The President-Senator the Hon. Kerry Sibraa) Ayes . . . . . . . . . . . 39 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 12 —— Archer, B. R. Macklin, M. J.Baume, Michael Messner, A. J.Baume, Peter Newman, J. M.Bishop, B. K. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Patterson, K. C. L.Calvert, P. H. Powell, J. F.Chapman, H. G. P. Puplick, C. J. G.Coulter, J. R. Reid, M. E.Crichton-Browne, N. A. Sanders, N. K.Durack, P. D. Sheil, G.Haines, J. Short, J. R.Hamer, D. J. Stone, J. O.Harradine, B. Tambling, G. E. J. (Teller)Hill, R. M. Teague, B. C.Jenkins, J. A. Vanstone, A. E.Knowles, S. C. Walters, M. S.Lewis, A. W. R. Watson, J. O. W.McGauran, J. J. Wood, W. R.McLean, P. A. Aulich, T. G. Foreman, D. J.Beahan, M. E. Gietzelt, A. T.Black, J. R. Giles, P. J.Bolkus, N. McKiernan, J. P. (Teller)Burns, B. R. Maguire, G. R.Childs, B. K. Morris, J. J.Coates, J. Ray, RobertCollins, R. L. Richardson, G. F.Colston, M. A. Ryan, S. M.Cook, P. F. S. Schacht, C. C.Cooney, B. C. Sibraa, K. W.Crowley, R. A. Tate, M. C.Devereux, J. R. Zakharov, A. O.Devlin, R. Bjelke-Petersen, F. I. Reynolds, M. E.MacGibbon, D. J. Evans, GarethAlston, R. K. R. Button, J. N.Chaney, F. M. Walsh, P. A. Question so resolved in the affirmative. The PRESIDENT —The question now is that the Petroleum Excise (Prices) Bill 1987 and the Excise Tariff Amendment Bill (No. 2) 1987 be read a second time. Question resolved in the affirmative. Petroleum Excise (Prices) Bill 1987 and Excise Tariff Amendment Bill (No. 2) 1987 read a second time, and passed through their remaining stages without amendment, requests or debate. Consideration resumed from 19 November, on motion by Senator Gareth Evans: That the Bills be now read a second time. Question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment, requests or debate. Debate resumed from 25 November, on motion by Senator Ryan: That the Bill be now read a second time. Senator LEWIS(Victoria)(9.36) —The Senate now turns its attention to the River Murray Waters Amendment Bill 1987. This Bill amends the River Murray Waters Agreement and establishes a Murray-Darling Basin Commission. It will provide legislative recognition of the Murray-Darling Basin Ministerial Council and provide for the Ministerial Council to establish a Community Advisory Committee. In summary, the Bill replaces the River Murray Commission with a Murray-Darling Basin Commission which, in addition to assuming statutory responsibilities of the old Commission, will have an advisory role to the Ministerial Council on water, land and environmental matters in the Murray-Darling Basin not covered in the 1982 River Murray Waters Agreement. The four governments-the Commonwealth, New South Wales, Victorian and South Australian governments-will provide two commissioners each to represent water, land and environmental interests. The old Commission had four commissioners in total. The legislation establishes a ministerial council, comprising three Ministers from each of the four governments who are responsible for water, land and environment policies. The previous ministerial arrangements were for water Ministers only. The legislation establishes a Community Advisory Committee to bring together and present to the Council community views on the management of the natural resources of the basin. The chairman of the Committee is Professor John Burton of the University of New England and there are approximately 17 representatives of regional and national organisations. Complementary State legislation is presently before the State parliaments. Approximately six additional staff will be employed to provide advice on land and environmental matters at a cost of about $320,000, to be borne equally by the four governments. I turn now to the issues raised by this proposal. The new Commission will have no additional constitutional power. It will continue to exercise the traditional authority to regulate the flow and division of Murray River water between the three States and the more recent power over water quality in the river and the advisory function of water quality in the State rivers flowing into the Murray. The stated purpose of the new arrangement encompassing the Murray-Darling Basin is to broaden the advisory role to include land and water and environment management in the basin. We hope that the inclusion of the responsible Ministers and officials will result in greater co-operation and co-ordination in the policies of each of the governments in relation to the region. In 1985, Queensland refused to join the Council and Commission, but it has had an observer on the standing committee. Since 1985, there has also been a standing committee of the 12 departmental heads, which largely duplicates the Commission, which has eight of the same 12 officials. There is no commitment to additional finance to assist in the control of salinity-high water tables and drainage, for example, are beyond that allocated in the Federal waters assistance program (FWAP) and, to a lesser extent, in the national soil conservation and afforestation programs. The taxation concessions-I refer to section 75 (d)-are also allowed for certain on-farm works for salinity control. This assistance is less in real terms than that provided by the coalition government in the national water resources program, and considerably less than the proposed bicentennial water program. Taxation concessions for on-farm works such as drainage, soil conservation, tree planting and so on were also more generous. The River Murray Commission enjoyed a good reputation along the river, usually superior to that of the States governments in relation to remedial measures. There is genuine local concern for the future of the area, and a sense of achievement with the improvement in water quality and land management practices. The rapid tourist development along the river is both a source of employment and an additional cause for environmental concern. The Liberal Party of Australia and the National Party of Australia warn of the concern of local people that their view will be ignored by the Council and the Commission. We also criticise the promotion of the new arrangement as the saviour of the area, and the inference that up until now nothing has been done by governments or farmers. That is absolute nonsense. There are problems, but much has been done. The coalition parties criticise the extra layers and numbers of Ministers and officials who will duplicate and retard the decision making process. We criticise the facade that additional bureaucratic structures will replace the need for Federal and State government financial assistance for already known remedial procedures-for example, salt interception works. We do not oppose the legislation, but I now move, in the following terms, a second reading amendment criticising the increased bureaucracy and politicisation of the decision making process and the lack of financial commitment for remedial measures: At end of motion, add ``, but the Senate is of the opinion that the Murray-Darling Basin Agreement should be amended: (a) to recognise progress made by previous governments, by the persons who live along the Murray River and in the River's drainage area; (b) to reduce the new bureaucratic administrative and consultative arrangements for the Basin to enable efficient action and co-ordination; and (c) so that the Government with the States provides a firm commitment to finance the already known necessary remedial measures along the Murray River which would immediately improve water quality''. The Liberal and National parties do not oppose the legislation but this amendment makes certain criticisms of it. Whilst we have our grave concerns about this proposal by the Government we wish it well because we are desperately concerned about the problems of the River Murray. We say to the Australian Labor Party that it has a marvellous opportunity to solve the problems. The Labor Party is in government in Victoria, New South Wales and South Australia and federally, which gives it an opportunity which should not be missed to make changes which may not be possible on other occasions for political reasons. This is a marvellous opportunity for the Labor Party to get in there and genuinely do something about the River Murray. I hope the massive bureaucracy that the Government has surrounded the River Murray basin with, and that I have referred to tonight, will not result in decisions being deferred or delayed while consideration is given to various alternatives, measures and arrangements, but will lead to action being taken. In particular, I make a plea for the reafforestation of the area because it is clear that the major problem for the land mass in the area is the high water table. As we know, trees pump water into the sky. Reafforestation of the entire area with many of the salt tolerant trees which have been developed in the Australian Capital Territory for this specific purpose should be carried out. The Government has a marvellous opportunity. I say to it: Please make sure that you take every advantage of the opportunity which you have. Senator POWELL(Victoria)(9.48) —It is a pleasure to speak to the River Murray Waters Amendment Bill 1987. The legislation before us seeks to set in place a new institutional arrangement for the Murray-Darling Basin as a whole. New arrangements were agreed to by the Murray-Darling Basin Ministerial Council in March of this year. They will give effect to the Murray-Darling Basin Agreement. This agreement amends the River Murray Waters Agreement. It establishes the Murray-Darling Basin Commission, which comes into effect on 1 January 1988. Further amendments provide for legislative recognition of the Murray-Darling Basin Ministerial Council and include provision for that Council to establish a community advisory committee. The catchment area of the Murray-Darling Basin is, of course, huge-over one million square kilometres. Over 1 1/2 million people are directly affected by the River Murray, and the entire population of Australia is indirectly affected. The Murray-Darling Basin has been accurately described as Australia's agricultural heartland. As the Minister for Resources (Mr Peter Morris) acknowledged in his second reading speech, it produces about one third of Australia's total output from natural resource based industries. The area has 25 per cent of Australia's cattle and dairy farms, about 50 per cent of Australia's sheep, lamb and crops land and roughly three-quarters of Australia's irrigated land. In economic terms, this production is valued at around $10 billion annually. Unfortunately we are forced to recognise that the Murray-Darling Basin is an area fraught with enormous problems. Of course, there is ample evidence that these problems have been the concern of many people over time, and increasingly so. I would suggest that the expression of those concerns has led to the political will to move in the direction in which we are moving with this legislation. I would simply like to point specifically to some of the problems as they are outlined in an article in November this year in the Times on Sunday by Ean Higgins entitled `A River At Risk'. One could go to any number of feature articles in newspapers and so on to come up with this range of problems. But I think it is important, when we are talking about legislation which is replacing the old River Murray Commission with a new authority with a different approach and a different base, just to look at some of the reasons why we are being asked to make some significant changes. As I have said, the problems of the Murray River are widespread and impact very much not only on the people who live in the area but also on Australia as a whole. In the article to which I referred I think it is important to note the comments of Bruce Davidson, a senior lecturer in agricultural economics at Sydney University. He said: . . . the irrigation program was a `terrible mistake' and has cost Australian taxpayers around $1 billion in expenditure never recouped. He went on to say: It was a failure economically but it was an enormous success politically. Dr Davidson also said: If you had a shaky electorate, you could promise them another dam. If you were really lucky, you could get two electorates; one where the dam is built and a second where you do the irrigation. Of course, this is a bullet which is very difficult to bite. Paragraph (c) of the amendment which has been proposed to the second reading of the Bill, and which was circulated just a few minutes ago in the chamber by the Opposition', states: so that the Government with the States provides a firm commitment to finance the already known necessary remedial measures along the Murray River which would immediately improve water quality. I am not sure whether the Opposition is saying that it recognises the enormous problem that has been caused and that we should close down irrigation. The problem is that, after spending billions of dollars winning votes over the past century, State and Federal governments of both political colours now have to decide how to share the astronomical costs of repairing damage to the river environment. Let me detail just some of the aspects of the damage in that river environment. Because of the increase in nutrients and because of the use of fertilisers along the river the build-up of excessive algae can clog up water supplies in the urban areas along the river. The doing away with the natural dry-wet cycle has caused all sorts of problems to the natural environment-the flora and fauna. Bob Pressey, a researcher in the New South Wales National Parks and Wildlife Service, and one of the contributors to this article, said: If you're interested in tucker for waterfowl which stimulates their breeding . . . water levels are very important. This is the kind of thing that is disturbed by doing away with that wet-dry cycle which is natural in the area. As a former resident of the Echuca area and, therefore, the Barmah Forest area, I can only hope and trust that the wonderful stand of river red gum to be found in that area will be able to be sustained in the face of this change in the natural environment. Of course, around the Kerang area in Victoria are the most spectacular examples of the enormous salination that has been caused along the Murray River. The Murray River crayfish is almost extinct locally in the Mildura area. De-snagging, which takes place because of the desire of human beings, as much as anything, to use the river for their recreational pursuits, deprives quite a number of river creatures of their homes and kills them off. The article tells us that, in the basin as a whole, 10 plant species are extinct, 37 are endangered and many more have been reduced in size and abundance. That information comes from the Ministerial Council report, which states: . . . 20 species of small mammals are extinct and 16 are endangered. Six reptile species and 35 species of birds are also endangered. The accumulation of a range of pollutants and the salinity problem are well known. Various studies of the Murray have come up with proposed final solutions. I am not sure which of those solutions is being referred to in the attachment which the Opposition is proposing. Rex McCann, a farmer in the Kerang district has formed the Pipe and Salt Committee. He proposes a scheme which would cost $500m to put in bores along the Murray, pump out the saline water table and run it in a PVC pipe in the middle of the river all the way to the sea. Another proposal, known as the Pells scheme, proposes exactly the reverse: writing off the Murray, turning it into a sludge by channelling all the salt into it and constructing fresh water irrigation canals on either side of the river for its whole course, and so on. I do not know what the Opposition is referring to in its amendment. It is a last minute attempt to make some kind of political capital out of legislation which I believe clearly should be supported by everybody in this House. At the conclusion of this article, I believe the Adelaide University's Dr Walker makes a couple of particularly salient points. He states: To fix the Murray . . . `would require a cost even government cannot accept. We are locked into a situation where solutions are apparent, but politically impractical' . . . I do not know which of these solutions the Opposition is referring to. The article continues: Despite its huge significance to Australia, the Murray-Darling remains one of the least understood river systems in the world. I think we all as Australian citizens stand condemned for that fact and for not really knowing as much as we should know about this river system. However, we do have a new emphasis which the Australian Democrats are delighted about. The emphasis is as set out in the new Murray-Darling Basin Agreement, which states: The Commonwealth, New South Wales, Victorian and South Australian Governments wish to promote and co-ordinate effective planning and management for the equitable, efficient and sustainable use of the water, land and environmental resources of the Murray-Darling Basin. This approach is more holistic than previously where the focus was on the waters of the Murray and did not give adequate emphasis to the total catchment management involving co-ordinated use and management of not only water but also land, vegetation and other natural resources on a catchment basis. As I said about three weeks ago while speaking on the sixty-ninth annual report of the River Murray Commission, the total catchment management approach, promoted for a number of years by many people, including the Catchment Education Trust-the doyen of that trust is Ernest Jackson who is now resident in the Albury area-and the Australian Democrats, is of fundamental importance and is a most desirable way of proceeding in the tasks of trying to remedy the degradation of our natural resources, conserving those resources and managing them in a sustainable way. This total catchment approach, providing as it does the most effective method of rural conservation in Australia, is part of the national conservation strategy and has been adopted by both the Victorian and New South Wales State governments in their implementation of policies on land degradation. The Democrats have welcomed the adoption of this strategy by those government. I note also in the minutes of the twenty-ninth meeting of the Australian Water Resources Council held in Perth in July this year that the South Australian Minister of Water Resources, Dr Don Hopgood, presented a keynote paper on integrated catchment management and stressed the importance of this approach in the light of the experience in South Australia. I think it is important to put on the record here some of the challenges identified by Dr Hopgood in his paper, as a number of them are reflected in the legislation before us. They include: identification of integrated catchment management; research needs and gaps; education and promotion; public participation in integrated catchment management; and Council's agreement with the urgent need for all governments to give priority to the allocation of resources to integrated catchment management projects in a move to redress the damage of past practices. As well, Council noted a range of measures being implemented by various States consistent with the principles of integrated or total catchment management involving inter-disciplinary and inter-agency committees and workshops, extension work and publications. There is only one effective way of tackling these problems and that is the holistic way. We are seeing the development of the whole-farm planning concept at the farm level. I mention the Potter farmland plan in Victoria's Western District, a scheme which sets up 15 demonstration farms showing the best principles of ecological farm management. The Potter farmland plan epitomises the new wave of responsible community action that is starting to emerge in some of Australia's most threatened regions. These are working partnerships between governments-State, Federal and local-private enterprise, and individual land-holders. Revegitation, tree planting, and proper planning and management of land use according to its natural soil types and environmental factors are its keynotes combined in a system of whole-farm planning. I also refer to the National Farmers Federation kit `Caring For Our Country', which it has provided to schools for school children. This kit also takes the holistic approach-the whole-farm approach-and stresses issues such as soil erosion, salinity, and tree decline. It is a first-class kit for children. It will make a great contribution towards the educational aspects of what is necessary in this whole process and will help to secure Australia's future. The kit contains a great deal of information and attitudinal education. This legislation also establishes a commission which will have the capacity to facilitate measures and actions based on total catchment management. It further expressly provides for public participation via a community advisory committee. I would hope that this committee will also be very useful in the promotion and education of total catchment management. In this context, I am rather bemused by the second point of the Opposition's proposed second reading amendment in which it says that the agreement should be amended `to reduce the new bureaucratic, administrative and consultative arrangements'. I hope that the Opposition is not demonstrating there a lack of support for community consultation. In a recent article entitled `Agriculture Needs Hard Thinking on Land Usage' in the journal Inside Australia, Jim Gasteen, who is a former grazier and now land use consultant and conservationist, recognised that it is not possible to continue producing and consuming at an ever-increasing rate without proper consideration of the ecological processes essential to a healthy, balanced environment and that failure to achieve this means failure of both natural and man-made systems. Later in his paper, commenting on trying to combat issues such as soil erosion and land degradation in general, and although major advances have been made in science and technology and there has been a great upsurge in awareness of the problems facing all countries, Mr Gasteen stated: The great difficulty of actually making things work remains. This is crucial. Mr Gasteen continued: Better communication is needed at all levels to bridge the gap between the rural sector and governments, and to develop better relations among administrators, educators, developers and conservationists. He further states that in helping to create a framework for change `one of the most important steps in this process is the formation of a wide variety of government advisory and consultative committees incorporating community interests'. The Australian Democrats believe that this legislation is providing for the community advisory committee process which will do this. Finally, I believe that the Government wants a strong, co-operative approach to better management of the Murray-Darling Basin. I commend the concerted and conscientious efforts by the governments of South Australia, Victoria and New South Wales, along with the Federal Government, in putting aside parochial views of the past in order, in the words of Jim Gasteen, to make things work. I will comment on the first point in the Opposition's second reading amendment, in which it calls upon the Senate to recognise progress made by previous governments. I can only see that as a plea for the Senate to give some kind of pat on the back to previous coalition governments at State and Federal level in that area. Given the abysmal history, I do not see how either the coalition or the Australian Labor Party, having been in government in those jurisdictions at any time during our community's exploitation of the Murray-Darling area, could possibly want to give a pat on the back to any of the governments involved. Certainly, people living along the Murray River, who are also mentioned in this attachment, have tried and are trying at the moment to redress these critical problems. I believe that this legislation will go much further in addressing these problems and the Australian Democrats are pleased to support this new initiative. Senator BROWNHILL(New South Wales)(10.06) —The purpose of the River Murray Waters Amendment Bill 1987 is to amend the present agreement between the Commonwealth and State governments involved in the River Murray in order to establish the Murray-Darling Basin Commission. The geographical area relating to this Bill is about one-seventh of Australia, so we are talking about a considerable area. It is an area which is represented by the honourable member for Riverina-Darling, Noel Hicks-a very good Opposition member and Whip of the National Party of Australia in the House of Representatives. It is also represented by the honourable member for Farrer, Mr Tim Fischer, and the honourable member for Murray, Mr Lloyd, two very good members of parliament. Senator Hill —And me! Senator BROWNHILL —Senator Hill says that he plays quite a part in representing that part of the Murray that goes through South Australia. Therefore, a lot of people are interested in this Bill and a lot of people represent those who are living in those areas. Obviously, if they represent those areas, they also represent the soil and the country. The area is a major producer of agriculture. In fact, it supports not only the politicians whom I have just mentioned but also 25 per cent of the nation's sheep and cattle farms, about 50 per cent of its sheep, lambs and crop lands, and almost 75 per cent of its irrigated land. It is an immense area of very productive land. In productive terms, it generates about $10 billion worth of production annually. This is a great area which produces a lot for Australia. Equally as large as the area is the bureaucracy involved in its management. Some 33 State Government departments or authorities and an additional 10 intergovernmental organisations are involved. By any judgment, this area is of unbelievable importance to Australia. The Murray-Darling river system involves more than 20 major rivers and is the fourth longest in the world-3,780 kilometres. It provides almost three-quarters of the water used in Australia for domestic purposes, industry and agriculture. Sixteen cities draw their water supply from it. Yet over the years we have much exploited and battered this very precious resource. The rivers in this system and the country they drain have been suffering enormous problems with soil degradation and salinity for many years. Salinity problems have been getting progressively worse and today we have a situation where every 60 seconds a massive 2.5 tonnes of salt-more than 1.3 million tonnes of salt a year-flows over the South Australian border and into the State that Senator Hill represents. In a dry year the concentration of salt can exceed the World Health Organisation's maximum desirable level for drinking water. Within South Australia itself, major inflows of saline ground water cause steep rises in salinity levels under both normal and dry conditions. Much of this salt comes from inflows of water into the river caused by rising water tables. That is one of the biggest causes of salinity. This has been caused by two factors-the clearing of native vegetation and irrigation. Native mallee trees with root systems that can reach to a depth of some 17 metres are a very effective means of extracting water. Unfortunately, many of these trees have been felled and as a result recharge rates have increased. In some areas of irrigation ground water levels have risen to such an extent that they are already at the surface. of course, as the water rises it brings with it dissolved salts. This results in wasted land. It is now estimated that some 1,219 square kilometres of irrigation land suffers from saline soils and 5,240 square kilometres overlie an ocean of salt water less than two metres below the surface. So we can see that there is definitely a problem in these areas. I believe that the Community Advisory Committee proposed under this Bill will help to focus on community concerns about the management of the rivers. Of course, the Government would want to ensure that it listens to the community's views on the matter. The Government ought to be aware that local groups are not at all convinced that their views will be taken into consideration. This is one of my concerns with the Bill. Of course, if one is cynical one could be excused for thinking that this Government is merely window-dressing the problem-creating a bit more bureaucracy and pretending to do a little more. It is a pity that Senator Richardson has left the chamber. If he spent more attention and effort on soil degradation and some of these other things that are going on with the soil around Australia, rather than just worrying about the popular issues such as trees alone in rainforests, he would be doing a lot more for the productive resources of this great country. If this legislation turns out to be what has been suggested by some people, this Government stands condemned-as does the rest of Australia for allowing it to get away with it. In recent months studies have been initiated at least to determine the extent of the problem and to put into some order priorities for repair. According to the Murray-Darling Basin environmental resources study prepared for the Murray-Darling Basin Ministerial Council, high priority projects to overcome the most urgent problems would cost about $172m. To repair the entire system would cost $785m. These are not inconsiderable sums. The proposed scheme to pump salt water through the bores from the water table around the Murray and channel it into basins to evaporate is at least a start. It will cost about $27m to establish and around $1.7m annually to run. The problems of the Murray include salinity but there are more problems than that. Salinity is one part of the overall problem of land degradation. A preliminary estimate of the annual value of agricultural production forgone through land degradation in various forms at the present time amounts to $217m, which is by far the biggest loss. Nearly $145m a year is the result of loss of soil structure-that vital resource, the soil. Other degradation problems include wind erosion on pastoral lands; sometimes during drought it also affects crop lands. Water erosion is a significant hazard in all areas. Soil acidity-due to pasture improvement and use of fertilisers-occurs extensively. Soil structure decline, a result of bad ploughing techniques, is widespread in cropping areas. Shrub invasion of semi-arid grazing lands and a decline of palatable range land species affect wide areas, and pest plants and animals cause degradation and heavy economic losses throughout the region as well. The environmental study suggests that the primary goal in managing land resources should be to achieve efficient and sustainable production whilst avoiding or minimising off-side effects. Research needs to be done into salinity, soil erosion, acidification, desertification and pest and plant control. More work also needs to be done on apathy. It is one of the biggest problems that we have with the preservation of our natural resources in Australia. It is, after all, apathy associated with ignorance that has brought about much of today's problems. Continuing apathy will only exacerbate the problem. That is what I fear most about this legislation. I do not believe that any government has done, or is doing, enough about the problems of salinity, soil loss, acidity and a host of other problems associated with our productive resources. It is not being done because the solutions are too hard to implement. Certainly, in recent years, farmers in northern Victoria have changed their irrigation techniques because of the rising water tables. Farmers who use the river system are only too aware of how precious a resource they are dealing with. They must be congratulated for that and for the fact that they are taking some precautionary steps at this stage. But they must be given government encouragement and support. There must be financial incentives for people to do the right thing. There must be action by State and Federal governments and, if you like, a bit more `putting your money where your mouth is'; rather than just talking about conservation, something should actually be done. This Government, of course, is a born again greenie, chasing an environmental vote just because it is a vote, but not having an interest in the actual resource. It claims to have won the hearts and minds of conservationists of this country; I really doubt it. If that is so, let it start to prove it. Let it by all means bring forward Bills such as this to show that it is working on the problems, but let it improve this increased bureaucracy, do some real work and make some real improvements. Senator SHORT(Victoria)(10.17) —As my colleagues Senator Lewis and Senator Brownhill have pointed out, the River Murray Waters Amendment Bill 1987, which we are debating, replaces the River Murray Commission with a Murray-Darling Basin Commission which, in addition to assuming the statutory responsibilities of the old Commission, will have an advisory role to the Ministerial Council on water, land and environmental matters in the Murray-Darling Basin which were not covered in the 1982 River Murray Waters Agreement. The Bill will provide legislative recognition of the Murray-Darling Basin Ministerial Council and provide for the Ministerial Council to establish a community advisory committee. I note in that broad context that a meeting of the Ministerial Council last Friday, which was reported in the Press over the weekend, stated that the Ministers from the three States-that is, New South Wales, South Australia and Victoria, my own State-and the Commonwealth have taken the first concrete steps to jointly fund a clean-up of the River Murray by approving a $22m desalination project. I will return to that subject later. I believe, in supporting the amendment to the motion for the second reading moved by my colleague Senator Lewis, that insufficient recognition in recent times has been given to the work that has been done by previous governments of all political persuasions in terms of the River Murray situation. It is important not to lose sight of that work. Although I totally support the gist of Senator Brownhill's comments, a great deal more could well have been done in the past to improve the River Murray situation, and certainly a great deal must be done in the future because, as Senator Brownhill said, the River Murray system is one of the great river systems of the world. It is a major provider of irrigation water for 75 per cent of Australia's total irrigated land. It supports, as Senator Brownhill mentioned, one-quarter of Australia's cattle and dairy farms and also about 50 per cent of the sheep, lambing and cropping land of our nation. It is a very important source of water supply. It is a major and growing recreation area. It has been a fundamental part of our nation's history. The historical events that have occurred in the Murray River region form a major part of our history. A great deal of work needs to be done to improve this river system. In view of the timing arrangements for the Senate tonight, I seek leave to continue my remarks at a later time. Leave granted; debate adjourned. Senator HAMER(Victoria)(10.21) —by leave-I move: That the following matters be referred to the Standing Committee on Legal and Constitutional Affairs: (a) whether the War Crimes Amendment Bill 1987 should apply to all wars rather than only the Second World War; and (b) whether the definition of serious crimes in clause 6 of that Bill is appropriate, and that the Committee consider these matters in conjunction with the other matters relating to the Bill referred to it. The motion provides for the terms of reference of the Standing Committee on Legal and Constitutional Affairs, in its consideration of the War Crimes Amendment Bill, to be broadened to cover the question of whether `war crimes' should cover all war crimes rather than just those that occurred in the war that ended 42 years ago; and that the Committee also examine the suitability of the definition of war crimes. To explain the importance I attach to these matters it is necessary to go back to the antecedents of this Bill, which is intended to deal with the possible nazi war criminals identified by the Menzies Review of Material Relating to the Entry of Suspected War Criminals into Australia. It is a peculiar Bill, but not nearly as peculiar as the War Crimes Act of October 1945 which it will replace. That Act set up military courts to try war criminals, most of whom were in Allied hands as a result of the unconditional surrender of Germany and Japan. There were a number of notable features about these military courts. First, they had a nice flexible definition of war crimes as `a violation of the laws and usages of war', supplemented by a list of 35 specific war crimes ranging from planning wars of aggression, murders and massacres to wanton destruction of property, cannibalism and mutilation of the dead. The second notable feature was that the death penalty could be imposed by a two-thirds majority if the court had more than three members. Thirdly, it had extra-territorial application. Fourthly, the offences had to be committed against persons who had at some time been resident in Australia, although this provision was extended to cover Allied citizens. Finally, up to half the court could be non-Australians. The real intention of the Act was to deal with Japanese war criminals; it was assumed that German war criminals would be dealt with in Europe. There was no thought of such people migrating to Australia. Between 1945 and 1951 the military courts tried 924 war criminals-all Japanese-of whom 644 were convicted and 148 executed. There have been no trials since 1951. Everyone thought that the Act was dead, although there were occasional allegations of war criminals living in Australia, until last year when the Australian Broadcasting Corporation produced radio and television programs that made sensational allegations that United States, British and Australian intelligence organisations had collaborated to settle large numbers of nazi criminals in Australia, with the connivance of the Menzies Government. These sensational allegations led to the inquiry by Mr Menzies, formerly of the Attorney-General's Department. He could find no basis for the allegations. As so often happens, however, an inquiry clears one target but hits another. Mr Menzies found that there are perhaps 70 people in Australia who might be guilty of serious war crimes on Germany's behalf. He did not investigate whether there were any other war criminals in Australia because that was not within his terms of reference. In view of the very large number of migrants taken by Australia, including many displaced persons, it is astonishing that more war criminals were not able to slip through in the post-war confusion. What are we to do about these war criminals? Although the crimes are more than 40 years old, there is general agreement that we must take action now on the serious crimes-murder and so on. It has been suggested by Dr Knopfelmacher, among others, that pursuing war criminals now, 40 years later, will cause a rise in anti-semitism. It may, but it certainly should not. The Jews were by no means the only victims of the nazi death camps. There were also large numbers of homosexuals, communists and gypsies murdered, to name only the largest groups. To blame the 60,000 Jews in Australia for the pursuit and bringing to justice of these war criminals would be absurd. The offences are outrageous-murder and mass exterminations-and no responsible government could fail to investigate and, if necessary, punish such offences by its residents. Time does not absolve murder or mass extermination. The only way we could increase anti-semitism would be if we gave the impression that the only war crimes we were concerned about were war crimes against Jews. The Bill has peculiar features. It purports to amend the War Crimes Act, yet it is really an entirely new Act. All that remains of the original Act is the title and the commencement date. Apparently, this was done so as to pretend that the Bill is not retrospective. But of course it is. In concept it is a total reversal. The original Act dealt with foreigners who had committed crimes against Australian residents. The new Bill deals with Australian residents who have committed crimes against foreigners and applies to wars in which Australia was not involved. Another debatable feature of the Bill is the definition of `serious crimes'-the war crimes which could be prosecuted in our courts. They range from murder and rape to wounding and `being, by act or omission, in any way directly or indirectly, knowingly concerned in, or party to, the commission of' murder, wounding, et cetera. The war criminal can also be prosecuted even if what he did `was required or permitted by the law in force when or where the act was done'. These seem to go far beyond what could usefully or properly be prosecuted in an Australian court under a retrospective law. They may be necessary to bring criminals to justice but surely they should be closely examined to see whether they are really essential, for they are very draconian. Finally, there is my fundamental objection to this Bill as it stands. We are producing what is really an entirely new War Crimes Act, recognising the fact that there may be Australian citizens or residents who have been guilty of serious war crimes and recognising that the ordinary processes of extradition do not cope with the special nature of war crimes. Yet we deal with only one war, which ended 42 years ago. What has happened to all the other wars? Since 1945 there have been 70 wars. Ten are still going on now. To take one example, the Pol Pot blood-bath in Cambodia was worse than anything that went on in Hitler's Germany. We have taken in nearly 14,000 Cambodian refugees. Are any of them war criminals? The Government does not know. Mr Menzies certainly does not know. He investigated only World War II war crimes by Germany and its associates. What would we do if we got credible evidence that one of the Cambodian refugees was a war criminal? Would we send him back to be tried by Vietnamese-dominated courts? Would we ignore the evidence? Or would we pass another special retrospective War Crimes Act? One argument that has been advanced for the limited coverage of the Bill is that one should pass such laws only after an inquiry such as that by Mr Menzies has identified possible war criminals. But that is not what this Bill does. It covers war crimes in Africa, Asia and the Pacific, which were certainly not investigated by Mr Menzies. In the House of Representatives an effort was made to amend the Bill to cover the Soviet occupation of Latvia, Lithuania and Estonia, which again were not investigated by Mr Menzies. We have taken in many migrants from areas where war crimes were committed. We owe it to Australian citizens and residents-and future migrants-to make it clear how we intend to handle war crimes. One can make a case that Australian trials of alleged war criminals for crimes committed overseas are simply too difficult and too socially divisive and that they should therefore be left to the ordinary extradition processes, provided that a prima facie case has been made out and we are satisfied that the trial would be fair. Alternatively, one can say that because of the special nature of war crimes and the obvious shortcomings of the extradition process we have to try them in Australia lest serious criminals go free. But this would surely have to apply to all war crimes. In my view the present Bill falls between these two stools. I strongly believe that we should consider very carefully the reason for the limitation of the Bill to Second World War crimes and the proposed definition of war crimes, but I accept that at this stage of the session the Senate is not prepared to have a prolonged debate on these complex and emotional issues. The Opposition has no wish to delay the prosecution of any World War II criminals who can be identified. We also owe it to our citizens not to act in any way that stirs up community bitterness. For that reason I do not intend to force my motion to a division. I have raised the matter now so that the Senate and the community can consider the complex issues involved, the balance of difficulties, so we are ready to deal with the problems when the Legal and Constitutional Affairs Committee reports back to us next year on the Bill. Question resolved in the negative. The PRESIDENT —Order! It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator WOOD(New South Wales)(10.30) —Before I commence my remarks on the intermediate-range nuclear forces (INF) treaty, I would just like to say a few words about the way in which legislation is being processed in these last days of the session. It is one thing for senators to play games and manage legislation almost by attrition, but I am conscious of the fact that as a result staff have been keeping the sorts of hours that I do not believe they should be working. It is one thing for us as politicians who want to change the world to work whatever hours we like, but I do not believe that whatever penalty rates the staff are getting justify the extended hours, separation from families and so on that they have to endure. I am not trying to point the finger at the Government in terms of its management of Government business, but at all of us as senators who played silly games and wasted the time of the Senate earlier in the session when we could have been addressing some real issues and thus avoided this sort of backlog. I turn now to the INF treaty that was signed earlier in the week, to which I did not get a chance to speak during Senator Teague's urgency motion. I would like to put the point of view that that treaty is a victory not for deterrence and the Western alliance but for ordinary people who have come together in their local areas around the world in what is loosely described as the peace movement. That peace movement is not an homogeneous, organised, centralised group of people but a vast mass of people concerned about the existence of nuclear weapons, their cost and their dangers. Had it not been for ordinary people around the world creating a climate for disarmament, disarmament would not have occurred. Had President Reagan not felt that he could salvage a place in history by signing such an agreement, he would not have done so. Had Gorbachev not felt that he would get the support of his people in such an agreement, he would not have signed. It has been the peace movement throughout the world, on both sides of the Iron Curtain, which has pushed this matter, sometimes at great cost. Peace activists in the Soviet Union have been imprisoned. Peace activists have been imprisoned in Israel, the United States, Tibet and elsewhere for their peace work. People have been imprisoned everywhere for working for peace. It is a tough struggle. It has not had the sort of recognition it deserves. The other night honourable senators tried to say that there had been a victory for deterrence and the Western alliance. It may be a victory for the Western alliance or the super-powers in that there has not been a nuclear conflict since 1945, but that does not mean that it has not had a cost. As I pointed out some time ago, the very existence of nuclear weapons and their deployment leads to the impoverishment of the Third World and political oppression around the world. The sorts of global strategies that are necessary to maintain the control one needs over one's allies lead to political oppression. The diversion of wealth from human need to military need costs the lives of hundreds of millions in the Third World. To say that deterrence is somehow a victory or has somehow worked is a lie. It ignores the horrendous cost that is being paid mainly by the Third World but also in the developed world in the form of economic instability. The Ambassador for the United States in Australia said to us, when we went to nail an eviction notice to a door outside his place, that the United States had gone into deficit to police the world. He confessed that the United States deficit was largely the result of its military spending. Of course, the United States deficit is one of the major sources of instability, economically, in the world, and that is a cost of the nuclear military strategies that are being conducted around the world. Deterrence has had social, economic and political costs, and is continuing to have those social, economic and political costs around the world, which are not taken into account when we argue over whether we should try to match weapons around the world-whether missiles such as SS20s should be matched by Pershings, or the other jargon of the nuclear game. We seem to ignore what it takes to have them, to keep them and to deploy them. We need to be cautious about the INF treaty. I think it is a significant breakthrough. I am not trying to deny that there is something significant about that treaty. It represents the first occasion on which there has been an agreement to disarm-an agreement to dismantle nuclear weapons. Unfortunately, it may not lead to a reduction of nuclear weapons. On the very day that the treaty was signed, concerned scientists were pointing to the fact that the weapons would be recycled-that many of the warheads that will be taken out of the European theatre will be recycled and put on other missiles elsewhere. The other place to which the nuclear arms race is going is the sea. The nuclear arms race may be being pushed back on land, but it is certainly going ahead at a rapid rate at sea. One of the places which we are most concerned about is the north-west Pacific. At this stage there is very little hope, very little light at the end of the tunnel, of seeing some sort of disarmament agreement about sea-based missiles in the north-west Pacific. I do not think that we, and especially the peace movement, can relax. The peace movement in the United States has still to convince the legislators that they should ratify this treaty. Five of the six hopeful replacements for Ronald Reagan have admitted publicly that they disagree with the INF treaty, and there is a strong feeling in some circles that the United States Senate may not ratify it. So it is largely the peace movement of the United States which will to have to carry its leaders the rest of the way from the signing to the ratification. I hope it has greater success than it had with the SALT II treaty. Having listened to these wonderful statements about disarmament coming from all sides, I wish to give a couple of brief quotes. Kenneth Adelman, who was the Director of the United States Arms Control and Disarmament Agency at the time, said: . . . a primary role of the arms control process is to reassure the public that somehow, some way, its government is grappling with the nuclear issue. Richard Birt stated: The purpose of this whole process- that is, the arms control process- is maximum political advantage. It's not arms control we're engaged in it's alliance management. So the disarmament process, at least in the United States, is seen as a way of pacifying its allies, such as Australia, and convincing them that it is doing something about disarmament. That will allow it to carry on with building its nuclear net. Another thing we have seen in recent times is our own Prime Minister (Mr Hawke), with the ink hardly dry on the paper, using the INF treaty to justify Pine Gap and its role in verifications, and to cement the US presence on Australian soil. The verification argument is an important one. I am not suggesting that verification is not important; I am suggesting that what is required is not on-site verification by the countries involved, by both the super-powers. In fact, another breakthrough in the INF treaty was an agreement on on-site verification. The United States baulked at it for a while, but then came to the party, and both super-powers have agreed to on-site verification. That is a very important and significant breakthrough. The fact that we have not got proper verification has often been misused as a reason why either side has not been able to conclude watertight treaties. I am suggesting that we should internationalise the verification process. Verification needs to be independently and reliably done. It is not a pipe dream. There have been all sorts of proposals for internationalised verification processes. Scientists and others around the world have proposed methods of verification which take away the verification monopoly from the super-powers. The problem with internationalising verification, and the reason why the super-powers have opposed on-site verification by international bodies, is that it takes away their monopoly on certain types of intelligence. For example, at this stage, information and intelligence about space monitoring of nuclear tests and missile firing is available only to the super-powers. While the super-powers have a monopoly on that sort of intelligence, they have a monopoly on the propaganda war. The United States, for instance, complains about a large radar system which apparently breaches the anti-ballistic missile treaty. Who knows? I would like to know; we would all like to know. The only people who do know are in the Soviet Union and the United States, and if there were not such a monopoly on such intelligence, neither side would be able to beat the drum and say, `Look what those people over there are doing. We ought to arm ourselves to protect ourselves against what they are doing over there'. With an international arms verification process, they lose a great deal of the propaganda value that enables them to increase their weapons development. In the United States, every year at around about Budget time, we hear more scares about the Soviets being dominant in this field, that field or the other field and that is used as a reason why the United States should develop this or that. I would not be surprised if it goes on on the other side too. The point is that if the verification process were internationalised by the use of something like a United Nations agency, or some international process, we would all know what was happening and we would have real information with which to make some sort of judgment. I would like to make many other points, but I would also like to make some concessions to the complaints I made earlier about going late. Therefore, my last point concerns the question of multilateralism and unilateralism. Whenever there is a debate in this place, or in any place, about disarmament, the peace movement is usually accused of being unilateralist and people say that we want one side to disarm itself of everything and leave the other side with all its weapons. Unilateralism may have some relevance in the context of the United Kingdom, which has its own involvement in the whole process. There is a debate about whether Britain should come in or come out or do its own thing on disarmament and there may be some substance to the unilateralism or multilateralism debate there, but it certainly has no substance here and I do not believe that unilateralism could work anyway and I do not think that anyone else does either. Mr Lange, Prime Minister of New Zealand, in his much publicised debate, said that multilateralism and multilateralist disarmament policies do not prohibit unilateral initiatives. The whole point is that someone has to make the first move. Every step forward, every agreement begins unilaterally, in that one person or one power takes the initiative to talk to the other power. That is a unilateral initiative. As far as I can see, the whole question of multilateralism or unilateralism is just a false debating vehicle in that successful world-wide disarmament, as the peace movement believes in it, means that absolutely everybody gets rid of nuclear weapons, that nobody has nuclear weapons. Total worldwide nuclear disarmament is what we are all on about. The question is basically one of process and any process has to begin with someone taking the initiative. If that is unilateralism, I am a unilateralist. It is a pipe-dream to believe that either side is going to throw its nukes in the ocean and say, `OK, we are getting rid of our weapons'. That is a dream. No one is going to do that. The road to disarmament comes through negotiation, the sort of negotiation that has been going on recently. I believe in unilateral initiatives that lead to multilateral disarmament. I once again congratulate the peace movement around the world, which has been struggling for many years to achieve disarmament. There has been a breakthrough and I do not think the role of the peace movement in that has been sufficiently recognised. The role of the peace movement in securing the future of the treaty, to see it is carried through with arms being dismantled, will be important. The peace movement around the world will need to take the initiative-not pause and rest on its laurels-and try to push the current situation further along the road to total disarmament. Senator PUPLICK(New South Wales)(10.52) —Despite the occasionally irritating behaviour of Senator Wood, I trust that when the High Court of Australia makes its pronouncement at 2.15 p.m. tomorrow he will find himself still with us. On the basis of my current knowledge, were the High Court to pronounce otherwise those who have been irritated by Senator Wood do not know the half of it should they get a potential replacement as has been suggested in proceedings before the High Court. Mr President, with you in the chair and Senator Richardson as the Minister on duty, I also confess a certain degree of vested interest in hoping that the High Court is possessed of the wisdom of Solomon on this occasion. If it is going to do anything particularly nasty, at least I hope it arranges to do it to as few people as possible. Before I make my other remarks, I reiterate yet again that members of the Opposition would entirely reject the thesis which Senator Wood has put forward this evening about the role of the peace movement as the primary initiator of the success of the current intermediate-range nuclear forces negotiations. I reiterate the point which my colleague Senator Robert Hill, in an extraordinarily well informed and sophisticated presentation the other evening, made about the progress towards disarmament from a position of strength. I remind honourable senators that the historical position has always been that those who pretended that this can be achieved from the position of weakness and neutrality suffered the same fate that Belgium suffered during the First World War and the Scandinavian countries suffered during the Second World War. In terms of appreciating who is responsible for the current situation, I remind my honourable colleagues of the quotation from Dante which effectively proposes that the hottest place in hell is reserved for those who in the hour of moral crisis choose to remain neutral. Nevertheless, if I might briefly pass from the sublime to the ridiculous, I come to the Australian Sports Commission. My purpose in rising this evening is simply to indicate to the Senate that, following the dissenting comments which Senator Reid, Senator Vanstone and I entered into the report of Senate Estimates Committee F about the processes which that Committee adopted in coming to a conclusion about the participation of certain senior public servants in the last Federal election campaign, I have received correspondence from Mr A. E. Harris, the Chairman of the Australian Sports Commission, which he wishes me to place on the public record, defending the role of the Australian Sports Commission and senior officers of the Commission for what he believes to have been an attack upon them which, in his opinion, was unjustified. I simply seek the concurrence of the Senate to table the correspondence which I have received from Mr Harris on that matter. Leave granted. Senator PUPLICK —I table the correspondence. Senator CALVERT(Tasmania)(10.56) —I apologise for being one of the adjournment speakers who are keeping people here late tonight, but this is the only time at which I can raise a matter that has been a major concern of mine since coming to this place. I refer to the effect of the new funding arrangements for local government and in particular its effect on my State of Tasmania-in other words, what has been the effect of the change from the Local Government (Personal Income Tax Sharing) Act 1946 to its replacement Local Government (Financial Assistance) Act 1986. Those people who have been following with some interest my passage from Tasmania to this place-and there are one or two of them-would have noted that I have asked a series of questions. On numerous occasions the Minister for Local Government (Senator Reynolds) has said in answer to those questions that the new system of payments is operated on a more equitable basis. This may have been the intention of the Government but the fact is that, in practice, it is not working and my State of Tasmania is receiving a reduction in real terms of 5 per cent this year. Next year it will face a similar reduction of 5 per cent. We know that this year the total funding for local government in Australia has risen in line with inflation, yet this year and next year Tasmania will receive a reduction of 10 per cent. Is this equitable? The Minister, in answer to a question by Senator Knowles concerning loss of income to local government by the substitution of annual payments with quarterly payments, said: . . . when I was speaking to some 13 local authorities in south-east Queensland I received an assurance from them that they were prepared to do their bit in terms of exercising this restraint. Is it then expected that Tasmanians show restraint when we know that the rest of Australia will be receiving Commonwealth financial assistance that has been updated in accord with inflation? Instead, the Minister continues to say that funds are allocated on a more equitable basis. On 29 October, in answer to my colleague Senator Panizza, Senator Reynolds again stated: It is true that this year, and following the Self National Inquiry into Local Government Finance, a new system of distribution throughout the country on a much more equitable basis, a needs basis, was introduced. On 2 November, Senator Reynolds, in answer to a question asked by me, stated following an interjection from my good friend Senator Boswell-who is not with us tonight; he is probably home in bed: If Senator Boswell would care to have some information about the number of councils in north Queensland which will benefit over the next six years by between a 20 per cent and a 40 per cent increase in local government funding, I would be happy to provide that answer. She went on to say: I repeat to Senator Calvert, and to other Opposition senators who have suddenly displayed an incredible interest in local government, and I welcome that interest, that it is a procedure that involves partly per capita and partly needs. It is a new system which the majority of local authorities have welcomed because it is a more equitable process of distribution. I do not believe that it is on a more equitable basis. How can this be when north Queensland will benefit over the next six years with increases of some 20 per cent to 40 per cent and, at the same time, as far as can be ascertained, our State of Tasmania will be facing a reduction of 10 per cent? Senator Puplick —You have been involved in local government for longer than Senator Reynolds has ever had an interest in it. Senator CALVERT —That may be so. I am just stating the facts and I want to roll them all together, if I can. Senator Peter Baume —For how long were you a warden? Senator CALVERT —Four years. Again, on the same day, Senator Reynolds said in answer to a question from Senator Chaney that funding is on a part per capita and part needs basis. She stated: Looking at the per capita basis we are looking at a 30 per cent figure, but the remainder of funding is distributed on a needs basis. I repeat that it is a very complex procedure; it is a procedure which I do not propose at this stage to outline in detail to the Senate. How can the Minister continue to say that it is on a more equitable basis when she says that north Queensland will be getting a 20 per cent to 40 per cent increase and Tasmania as a whole will be reduced by 10 per cent in the next two years? It could be seen by some confused people that the money is being handed out on a climatical basis. The fact is that the Government tried to devise a scheme to favour the western suburbs of Melbourne and Sydney for its own political gain. It has not worked, and I think Senator Reynolds is as confused as everyone else. On 23 November I again asked a question as to why Hobart, the capital of Tasmania, and another major city, Glenorchy, were going to lose over $1m in funding in the next two years. The answer was as confusing as before. In her polite way, the Minister again invited me to a briefing and continued her explanation. She stated: What happens in the process of Commonwealth funding going to the States is that each State has to submit a set of broad principles for the more equitable distribution of Commonwealth fundings. She then went on to explain, once again, how fair the new funding was. She stated: Some councils, especially those in growth areas and a number of rural areas, have not been getting the attention they deserve. The focus of the Self inquiry was to try to bring about a more equitable system throughout Australia. Finally, the Minister decided it was time to shift the blame. The final piece of advice was given to me when she said: It has to be remembered that it is the State Grants Commission to which Senator Calvert should be directing his concerns, because it is the State Grants Commission that ultimately determines the distribution. The Commonwealth only accepts the broad principles. The saga continued and I was more interested to see that three days later, on 26 November, the Minister was asked a dorothy dixer by Senator Childs. He asked, God knows why: Can the Minister for Local Government inform us of the effects that the Commonwealth's new general purpose financial assistance arrangements for local government are having on rural local councils? Is it true that the new system discriminates against councils outside the capital cities because the grants are now determined on the basis of population and the needs of councils are not taken into account? Senator Reynolds stated in answer: It is not true that the new system discriminates against rural councils. The Minister may believe that, but how can we in Tasmania believe that when we see promises of increases to other States and prospects of reductions to our own State? We certainly have plenty of rural councils, but on investigation I found that five of the 46 councils in Tasmania this year will get increases in real terms and 41 will receive reductions. We have every right to ask questions on this important matter because there is no doubt that this Government is attacking Tasmania financially as no other government has ever done. Following reductions to the State Government of $270m, we now see that local government is being attacked. Finally, the Minister has tried to shift the blame to the State Grants Commission. When I looked at its annual report I was very interested to see that it pointed out the inequities. On page 5 we found that Tasmania's share of funds for 1987-88 is $19,161,106, a paltry increase of only 2.4 per cent compared with the previous year's funds. The significantly less than average increase is explained by the movement towards a straight per capita distribution between States as provided for in the new legislation. On page 7 of that same report we find the truth of the matter. The report states: The Commission firmly considers that the previous basis of allocation has resulted in an equitable distribution of the funds, a distribution which has found the general acceptance of the great majority of local government authorities in Tasmania. However, the new principles of allocation proscribed in the Commonwealth Act, together with a desire for uniformity between States have led the Commission to the inescapable conclusion that significant changes would have to be made, notwithstanding the substantial effect on some existing grants. In this respect, the best that the Commission can do to cushion the fairly considerable loss of funds by some municipalities- I think I have proved tonight by most municipalities- is to ensure that the new methodology is phased-in over as long a period as possible. For the Minister to say, as she has on many occasions, that finally it is the State Grants Commission which is to blame for the reductions is, of course, not true at all. My investigations find that the Commonwealth has insisted on not only having draft principles but also a rough calculation of the amounts involved. In other words the Grants Commission has been blackmailed into accepting reduced funding from the Commonwealth and on top of that the Minister has tried to blame it for the unfair treatment handed out to our State in an attempt to gain votes in the big cities. Finally, it is also a fact that the Minister has said that she has consulted with local government in Tasmania. That may be true and my colleagues in local government in Tasmania welcomed that initial consultation and they were very pleased with it. But it is interesting to note that once funds became available and the figures were made known, no input has been asked for and none has been given. Senator REID(Australian Capital Territory)(11.07) —Tonight I wish to refer to two matters. The first relates to the program which for some years has been part of the rehabilitation section of the Woden Valley Hospital and that is the teaching of English to migrants who are part of that program, migrants for whom English is a second language, a difficult language, and one in which they have few skills. In particular it has been a part of the adult migrant English program. I refer to a letter, a copy of which I have received from Mrs Jane Wingfield, who has been a teacher in that program, addressed to the Minister for Immigration, Local Government and Ethnic Affairs (Mr Young). She states: Can you help? After happily teaching in the AMEP- that is, the adult migrant English program- for twelve years I have now been given a task that I cannot bring myself to do. I have been associated with the English classes held at Woden Valley Hospital on and off for most of these years. When I started there the classes were already established as the result of an innovative program . . . There were classes on five mornings and two afternoons. When the mainstream classes moved to Woden TAFE the rehabilitation classes continued at a maximum of four afternoons and with four teachers in the class giving a high teacher/student ratio . . . Over the years, with successive cuts to the program, these classes have been greatly reduced. In 1987 I was the sole teacher there for only two hours on two afternoons each week despite the fact that the need is as great as ever. She enclosed for me a sample of some of the work that the students have done. She explained that one of the people whom she has been assisting has had two brain tumours and takes a considerable time to write his own name. Another is a quadriplegic who speaks using a head wand and a spelling board but others have much greater skills. Apparently the program is to come to an end. The men in this program have been injured in industrial accidents and are now in hospital being rehabilitated. The hope of improving their English skills is really the only hope they have of ever finding a new job or of becoming a part of this society again. With their injuries and without English they are doomed to be institutionalised for virtually the rest of their lives. This program is not a luxury as far as they are concerned. Mrs Wingfield stated: I have now been given the task of telling these men and women that with the reallocation of existing DILGEA- that is, the Department of Immigration, Local Government and Ethnic Affairs- funds the class which holds out their last chance of self-sufficiency has been totally axed. She poses this question to the Minister: How can I break this devastating news to them? Mrs Wingfield sent this letter to those of us who represent the Australian Capital Territory and to a number of others on whom she calls for help to assist in maintaining this program. This Government boasts of being a caring government and of running programs for the benefit of people who need help. If an alternative program is to be put in place instead of the adult migrant English program, why is it that Mrs Wingfield does not know about it and is not able to tell those whom she teaches? How is it that a program that now has so little left in it cannot continue for the sale of those in that rehabilitation program? For those who have almost no English, what is the point of trying to rebuild their lives if they are not to have the opportunity to obtain these skills? These people have been working hard and they have not had the opportunity to attend English classes previously. They need that help now. I hope that this matter will be drawn to the Minister's attention and that the means of teaching these people English will be restored. I do not want to hear some argument about one program or another; it is a matter of a need which should be met within the rehabilitation system. The other matter to which I wish to refer relates to the parking of motorcycles in the vicinity of this building. A group of staff wrote to Madam Speaker on 6 November 1987 and subsequently they followed up that letter with another dated 14 December 1987. Without going into great detail, I point out that in the new parking area there are no dedicated parking spaces for motorcycles. Motorcyclists either park illegally-some of them have run into difficulties with ACT parking inspectors as a consequence-or they take up a whole parking space for each motorbike. This matter should be able to be resolved quite readily. In fact, the staff suggests that no more than two, or perhaps three, motor car spaces would be sufficient for the number of motorcycles in the area. Mr President, it is a matter in which you may be able to give some assistance, or perhaps use your good offices with the relevant Minister to see that this quite silly problem is solved quickly. Perhaps one lunchtime we could go and paint in the motorcycle spaces ourselves. The PRESIDENT —Thank you, Senator Reid. I am aware of this problem and I have taken steps today-I hope-to alleviate it. Senator BROWNHILL(New South Wales)(11.13) —Very quickly, I wish to pay a tribute to all the spouses of the people who work in this place for the fact that they have been waiting at home a lot because we sit late. I pay tribute to the wives of politicians who support their husbands and work behind the scenes to help them get into this place. I also wish to thank the spouses of the women who are in this place, either as politicians or as attendants and so on. All these people behind the scenes are never thanked. It is interesting to note that Senator Peter Baume, who is in the chamber at the moment, celebrates his twenty-ninth wedding anniversary today. I congratulate him on that because his spouse has obviously stayed behind him a long time in order to make sure that he got where he wanted. I wish to quote a little homily which I dedicate to those people behind the scenes who have done so much at different times for everyone who works here. This is an extract from an article entitled `That's country life' and it is subtitled `The 12 days of harvest', by Christina Hindhaugh. It is a tribute to the men who work on properties and perhaps the wives as well-I am not being sexist in saying this. The tribute goes like this: On the first day of harvest, my true love said to me, with the kids home from school to help, he wouldn't need me. On the second day of harvest, the kids all laughed in glee, because all the jobs around the house would now be up to me. On the third day of harvest, my true love said to me: `Could you whip this sample over to the local silo for a moisture test, and while you're there, check it for protein content and find out if they're working on Sunday. Then, when you get back, could you dash out on the bike and check all the ewes, `cause we're too busy?'' On the fourth day of harvest, my true love said to me: ``About lunchtime we're moving to another paddock. Could you bring out the ute, fill up the diesel tank and hook it up behind? And don't forget to bring the toolbox the grease gun and the tin of spare bolts.'' On the sixth day of harvest, he called on the CB: ``The portable silos are both full and I can't get the truck unloaded! Could you bring the old tipper out to the far crop paddock fast as possible, but make sure the fuel, oil and water are okay?'' On the seventh day of harvest, my true love said to me: ``We've got a bit of damp wheat which we'll have to store in mesh bins! Could you have some new plastic liners delivered, then show the kids how to erect the bins down by the silo?'' On the eighth day of harvest, my true love said to me: ``This belt is badly frayed. Could you dash into town and pick up another as fast as you can? We need some more bearings as well. But please bring the lunches out to the paddock before you go, and this time for goodness sake don't forget the tea.'' On the ninth day of harvest, in a flat and wet gully, my true love got the truck and tractor bogged, so he called on the CB: ``Get the old David Brown out of the shed! Find the drag chain! Drive on out here to the paddock as fast as you can and pull us out!'' On the tenth day of harvest, my true love snapped at me, as I stood by the header handing his tools up to him, very nervously. On the eleventh day of harvest, my true love roared at me: ``Could you auger out the next load of wheat while we eat, then fill the header with diesel, then dash home and get two tarps and re-fill the water bottles `cause it's stinking hot out here when you're working?'' On the last day of harvest, my true loved grinned at me: ``If all goes well, we'll finish about five. Aren't you glad this year we didn't need your help, hon-ey?'' Senator TAMBLING(Northern Territory)(11.16) —I wish to add to the artistic comments of Senator Brownhill by commenting on the annual report of the Australia Council, which, of course, looks after a much wider cultural field in Australia. In particular, I draw the attention of honourable senators to that part of the report that relates to the Aboriginal Arts Board. I believe some areas of that report highlight some very fundamental problems at the moment of direction in a number of areas of Aboriginal policy and our relationships with Aboriginals in Australia. Obviously, the Aboriginal Arts Board sees its role as very diverse, and I commend it for that. But I do not believe it goes far enough in drawing the distinction between the arts of the tribally oriented Aboriginals in Australia and those of the Aboriginals who are much more urbanised and settled in a traditional Australian community. The Aboriginal Arts Board is very unfair in the way it distributes its funds with its stated objectives. For example, if we are talking about arts as they relate to Aboriginal culture, the top and priority program ought to be the total preservation of traditional Aboriginal culture. I draw the Senate's attention to the activities over the past 17 years of the Aboriginal Cultural Foundation Inc., which is a body that has enjoyed very wide support and is the only national organisation totally owned and controlled by tribal Aborigines. The problems that I see arising from the Aboriginal Arts Board are that it is dominated in its membership by Aboriginals who are urbanised and part Aboriginal in descent and does not have an adequate simpatico with the full cultural Aboriginals. If one looks at the Budgets for the past three years and the allocation of funds to the Aboriginal Cultural Foundation, one sees that its funds have in effect been slashed by some 50 per cent. Of course, this threatens the very existence, and the continued existence, of the Aboriginal Cultural Foundation, which is very significant, particularly to the ceremony leaders, and the Aboriginal practitioners in the Northern Territory and in the tribal areas of Queensland, Western Australia and parts of South Australia. We need to look at this report very closely together with the proposals that are currently being mooted by the Minister for Aboriginal Affairs, Mr Gerry Hand, in a document that he tabled in the House of Representatives last week entitled Foundations for the Future, which the Government has not yet had the guts to table in this place. Obviously, it is leaving it until the last day of the sitting of the Senate to avoid an open debate on that issue. If we look at Mr Hand's report, we will see that many of the weaknesses in the direction that he is taking relate to the fact that insufficient attention is given to tribal Aboriginals as opposed to the other members of the Australian community who are of part Aboriginal descent. We need to be very careful in looking at how all of these matters are put together. The proposals to which the Government will turn its attention in 1988, after Australia Day-because it does not want any decent consultation with the non-Aboriginal community in the meantime-need to be very carefully watched because of the implications of groups such as the Aboriginal Arts Board that are not giving adequate priority and recognition. I believe that many of the problems that are arising from that Board are inherent in the proposals that Mr Hand has flagged, and therefore require very careful consideration. We need to ask very serious questions, such as what tribal representation is proposed on the various boards of the new Aboriginal and Torres Strait Islander Commission and its subordinate bodies, and what tribal representation there is on the Aboriginal Arts Board, which slashes funding to traditional, cultural, ceremonial Aboriginals in such a heartless manner. When we look at future Budgets, how can we be sure that there will be a continuation of funding that recognises programs that have already been set in place? The report of the Australia Council lists all of the grants that have been made for the current year, but gives no comparisons, as is normal in Government budgeting and estimating, with the previous year. One tends to overlook a body such as the Aboriginal Cultural Foundation, whose budget has been slashed from $286,000 in 1985 to $180,000 in 1987. Similarly, if the Minister is proposing a number of new bodies that will have wide and embracing effects on ceremonial, cultural Aboriginals, I believe we need to be sure that there is adequate protection in all of the new programs that will eventuate, that they will be fully accountable to parliamentary scrutiny, and that the appointments to the various boards properly reflect true Aboriginal heritage and the priorities that need to be given to those communities. Senator RYAN(Australian Capital Territory-Special Minister of State)(11.23) —Contributions to the adjournment debate have been made by Senator Wood, who spoke about unilateral initiatives leading to multinational disarmament; Senator Puplick, who tabled correspondence; Senator Calvert, who spoke about local government and funding in Tasmania; Senator Reid, who was concerned about cuts to programs and constituent matters; Senator Brownhill; and Senator Tambling, who spoke about the need to recognise the claims of Northern Territory Aboriginal people in the bicentennial year. I will ensure that all of those remarks are referred to the appropriate Ministers. I commend the remarks to the Senate. Question resolved in the affirmative. Senate adjourned at 11.24 p.m. The following papers were tabled: Commonwealth Borrowing Levy Act-Regulations-Statutory Rules 1987 No. 280. Compensation (Commonwealth Government Employees) Act-Statutory Rules 1987 No. 281. Customs Act-Notice 1987-No. 9-Specified rate in respect to the diesel fuel rebate, dated 9 December 1987. Defence Act-Determinations 1987- No. 80-Travelling Allowance and others. No. 81-Overseas Living Allowance and others. No. 82-Travelling Allowance and others. Excise Act-Notice 1987-No. 9-Specified rate in respect to the diesel fuel rebate, dated 9 December 1987. Seamen's Compensation Act-Regulations-Statutory Rules 1987 No. 282. The following answer to a question was circulated: (Question No. 51) Senator Macklin asked the Minister representing the Minister for Primary Industries and Energy, upon notice, on 15 September 1987: (1) Is it true that Australian produced powdered milk is, or has been, shipped in bulk to Singapore, and then mixed with powdered milk from other countries, before being tinned and shipped to Bangladesh. (2) Is it possible that Australian milk powder could have been mixed with milk powder from European countries with high radiation levels originating from the Chernobyl nuclear disaster; if so, does the Minister for Primary Industries and Energy accept that by not permitting a nuclear industry on Australian soil, there would be a definite commercial advantage to the value of Australian products on the international market. (3) To what extent did New Zealand's overseas exports increase in quantity and quality as a result of the effects on primary production in Europe of the Chernobyl nuclear disaster. Senator Walsh —The Minister for Primary Industries and Energy has provided the following answer to the honourable senator's question: (1) and (2) Reports from both local and overseas sources indicate that Australian milk powder has been shipped in bulk to Singapore and repacked and shipped to Bangladesh from there. The jurisdiction of the Australian Quarantine Inspection Service in export control extends only to point of export from Australia, and the question of whether or not Australian milk powder is being mixed with product of other countries in Singapore, for export to Bangladesh, is appropriately a matter for the authorities in those two countries. However, in response to allegations in March that Australian milk powder had been mixed with radioactive product from Europe, four representative samples of product labelled ``Made in Australia'' were obtained from Bangladesh for testing. Results showed no detectable levels of radioactivity. The Chernobyl nuclear disaster appears to have affected the demand for and marketing of some agricultural products from areas where the effects of the Chernobyl accident have been detected. Although it would be difficult to quantify because of other parallel factors affecting supply and demand for agricultural commodities, exporters unaffected by the Chernobyl accident may have benefited. Such benefits would have arisen from the absence of the effects of Chernobyl, not from the absence of any nuclear industry in the exporting countries. (3) It is not possible to provide any estimates of the effect, if any, of increases in quantitative or qualitative terms on New Zealand's exports of milk powders as a result of the Chernobyl accident. However the following table shows the levels of New Zealand's exports of powdered milk over recent years. New Zealand exports of powdered milk (000's tonnes) 1980 1981 1982 1983 1984 1985 1986 Wholemilk Powder... 70.4 120.4 116.9 95.1 106.9 133.8 166.3 Skim Milk Powder... 163.4 157.6 155.7 201.1 194.1 172.3 185.0 Source: Australian Dairy Corporation.