Tuesday, 22 March 1988 The DEPUTY PRESIDENT (Senator D. J. Hamer) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned expresses concern that some scientists in Australia are intent on undertaking destructive experimentation on human embryos. This subject was examined exhaustively by the 1985-86 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the Senate and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlaw destructive experimentation on human embryos. And your petitioners as in duty bound will ever pray. by Senators Black (from 342 citizens), Chaney (from 187 citizens) and Reynolds (from 204 citizens). To the Honourable the President and members of the Senate of the Commonwealth in Parliament assembled. The petition of these residents of the Commonwealth of Australia respectfully showeth: That the Australian Broadcasting Corporation provides the citizens of the Commonwealth of Australia with the only nation-wide, independent radio and television service; That the independence of the Australian Broadcasting Corporation must be preserved in the interests of the citizens of the Commonwealth of Australia; That the introduction of commercial sponsorship or any form of advertising material from commercial sources, would destroy the independence of the Corporation. Your petitioners therefore humbly pray that the honourable senators will oppose the introduction of any form of sponsorship or advertising material from commercial sources into the programmes of the Australian Broadcasting Corporation. And your petitioners as in duty bound will ever pray. by Senators Beahan (from 10 citizens), Jones (from 253 citizens), McKiernan (from 244 citizens), Vallentine (from 75 citizens) and Watson (from 19 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: But for a High Court decision narrowly favouring the Federal Government, 20,000 years old archaeological cave sites near the Franklin River, Tasmania, would have been destroyed, like a United Kingdom Government unable to stop a Wiltshire authority from clearing Stonehenge for a freeway. Constitutional protection for historical and environmental assets is needed. Your petitioners therefore most humbly pray that the Senate in Parliament assembled should request the Government to hold a Referendum to amend the Constitution so that the Federal Government has the bounden constitutional duty, which any citizen may legally require it to perform and a right superior to state and local governments, to set above the commercial advantage of one generation, protect and restore all we hold in trust for the future including relics, sites, features, areas, wildlife, buildings or things of Aboriginal and other historical, cultural, architectural, scientific, aesthetic, ecological or environmental importance and to care for the maintenance of the balance of nature, manage land, marine and atmospheric use so as to avoid their degradation and act nationally and internationally in any matter seen as related to these including to prevent military and commercial use of uranium and derivatives, beach and related mining; to preserve Heritage Areas, The Great Barrier Reef Region at least as originally defined in the 1975 Act and extended into Torres Strait. And your petitioners as in duty bound will ever pray. by Senator Jones (from 74 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The Petition of the undersigned shows: The number of people protesting against the proposed closure of the post office located at 403 Magill Road, St Morris. Your petitioners request that the Senate, in Parliament assembled, should request that the post office at 403 Magill Road, St Morris remain open. by Senator Maguire (from 111 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: (1) That we oppose timed local calls by Telecom. (2) Timed calls should not be introduced in the absence of widespread community support. (3) Timed calls will seriously affect pensioners, the elderly, low income earners and other disadvantaged groups. And your petitioners as in duty bound will ever pray. by Senator Messner (from 49 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The Petition of the undersigned respectfully sheweth that you support the National Health and Medical Research Council in their quest for medical research funds for 1989. Medical research covers the whole breadth of medicine. The funds provided by your Government through the NH & MRC support your scientists and technicians whose work promotes the development and evaluation of new techniques and therapies and is essential for long term improvement in the health of the nation. Under your Government medical research funding has been increased but it still lags behind the major developed nations in terms of the amount expended per capita. Your petitioners most humbly pray that the Senate in Parliament assembled should in future provide funds to allow all projects recommended by the NH & MRC to be supported. Without a significant increase in medical research funds for 1988-89 these activities will be severely curtailed to the detriment of all Australians. And your petitioners as in duty bound will ever pray. by Senator Jones (from 243 citizens). Petitions received. Senator AULICH(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the following matter be referred to the Standing Committee on Employment, Education and Training: Education for active citizenship in Australian schools and youth organisations. Senator KNOWLES(Western Australia) —I give notice that, on the next day of sitting, I shall move, on my behalf and on behalf of all Opposition senators: The the Senate congratulate the Hon. Barry MacKinnon and the Western Australian Liberals for their outstanding result on Saturday, 19 March 1988 in the by-elections for the seats of Ascot and Balga, particularly the candidates Peter Blaxell and Reg Davies who achieved preferred swings of 15% and 22% respectively in seats that were Labor strongholds. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. Australian National Gallery-Annual Report 1986-87-including the Auditor-General's Report-section 40 of the National Gallery Act 1975 and section 63m of the Audit Act 1901. 2. Security Appeals Tribunal-Annual Report 1986-87-sub-section 83 (2) of the Australian Security Intelligence Organization Act 1979. 3. Australian Heritage Commission-Annual Report 1986-87-including the Auditor-General's Report-sub-section 43 (8) of the Australian Heritage Commission Act 1975. 4. Annual report by the Attorney-General on the operation of the Bankruptcy Act 1966-1 July 1985 to 30 June 1986-section 314 of the Bankruptcy Act 1966. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that Senator Tate is absent from the chamber for Question Time today as he is attending the funeral of Sir Guilford Young, the Archbishop of Hobart. Any questions which would normally be directed to Senator Tate in relation to his portfolio, or those he represents, should be directed to Senator Bolkus. Senator CHANEY —My question is directed to the Leader of the Government in the Senate. In light of today's call from the Assistant Secretary of the Australian Council of Trade Unions, Gary Weaven, for an easing of wage restraint, I ask the Minister whether he agrees with Senator Ray who said on Australian Broadcasting Corporation radio yesterday: The alternative to our current economic policies, if we were ever to give any thought of abandoning them, would bring absolutely dire economic consequences on this country. It can't be contemplated. We cannot change the basic thrust of our economic policies just to win the next election. That would be betraying the country. If the Minister does agree with Senator Ray, what are the implications for wages policy? Senator BUTTON —I agree with Senator Ray. What Senator Ray said has been said by other Ministers and indeed by me in a number of forums and in public. I assume that Senator Ray was making the statement which he made in the context of a general recognition that we did not have a great day on Saturday. I did not hear Senator Ray say that, but I assume that was the context in which his statement was made. In so far as the question of wages policy is concerned, I have been asked by Opposition spokesmen on numerous occasions-and I am not condemning that fact-over the five-year period in which we have been in government what the Government is going to do, for example, about wages policy in the next quarter, in the next national wage case and so on. I have never been able to answer those questions, largely because it is not always appropriate to make announcements about these matters in the Parliament but also because frequently the Government is preparing a position in relation to wages policy or there is some review of wages policy taking place in respect of which one would not want to foreshadow the Government's position. The fact of the matter at present is that the Conciliation and Arbitration Commission will be reviewing the wages system in May. The Government will be making a submission to that review. However, the review is still some time away and I think it is fair to say, as I virtually said a minute ago, that the Government is still developing its thinking in relation to the context of that submission to the Conciliation and Arbitration Commission. Of course, in the context of developing that position, the Government will look at the proposals from the Australian Council of Trade Unions (ACTU) and the views of various employer groups. I think that Senator Chaney will recall-I do not recall the exact circumstances-Mr Willis in general terms making a favourable response to the approach adopted by the Confederation of Australian Industry (CAI) in a public statement of perhaps three weeks ago. Those views will be looked at in the course of preparing the Government's position for that review. I conclude by saying-and I think it is consistent with what Senator Ray said and the passage quoted by Senator Chaney-that, whatever the system that is arrived at, it must be capable of delivering an appropriate degree of wage restraint and encouraging productivity improvements as part of any wage settlement. Senator CHANEY —Mr Deputy President, I ask a supplementary question. I thank the Leader of the Government for that answer-not least for the last sentence of his answer, which I think would command broad agreement. I ask: In light of the fact that the CAI, which apparently has some approval for its comments, has publicly come out and said that it thinks something in the order of 3 per cent might be appropriate for consideration as against the already published views of the ACTU, which refer to wage movements in line with prospective inflation to protect the standard of living-- Senator Stone —Plus. Senator CHANEY —`Plus', I am reminded by Senator Stone. I ask: Can we take his answer to indicate that, therefore, at this stage the Government sees that more restrained approach of the CAI as being closer to reality? Senator BUTTON —I am not here to endorse the CAI approach. Frankly, I do not know enough about it, apart from anything else. All I was saying in the earlier part of my answer was that Mr Willis welcomed what he regarded as a positive sort of approach from the CAI to the issues which had to be addressed in future wage settlements. I am aware of the ACTU position in so far as Senator Chaney described it. I was not sure that the `plus' part that Senator Stone contributed by way of interjection was necessarily correct. I am just saying that I am not sure about that. Let me say that both those views have to be taken into account by the Government. As I said in the last part of my original answer to Senator Chaney's question, two issues are very important: an appropriate degree of wage restraint and the issue of productivity being addressed in the context of wage restraint. Where the Government comes down in respect of those two issues, of course, it is too early for me to say. Senator ZAKHAROV —My question, which is addressed to the Minister for Industry, Technology and Commerce, refers to recent Press coverage of the substantial commitments to export from Australia made by the major multinational companies in the information industries. Most recently, Wang Laboratories Inc. has announced an undertaking to export $300m-worth of its products from Australia in the next seven years. Can the Minister report on developments in these industries and indicate the prospects for future growth in manufacture and export from Australia? Senator BUTTON —This question is important when one contemplates the current account difficulties with which Australia is faced. There is often great discussion about the contribution of coal and iron ore, for example, to the balance of payments. I do not think it should be overlooked that the computer and associated industries are currently enormous contributors to the balance of payments deficit which we have. For example, as at 1986 computer imports were roughly at a level of something of the order of $8 billion a year. The figure for exports for computers and associated equipment was in the order of something less than $200m a year. It is in that context that arrangements were reached with various companies as a replacement in time for the civil offsets program. Essentially, under that arrangement, transnational corporations that commit themselves to a degree of competitive work in Australia will be relieved of offset obligations in return for meeting agreed export and research and development targets. The Government has moved under that arrangement to initiate development arrangements in view of Australia's trade deficit, to which I referred. Agreements have been reached with companies such as Honeywell Bull Australia Pty Ltd, Apollo Domain, Hewlett Packard Australia Ltd and Wang Australia Ltd and negotiations are being concluded with a number of other major computer companies and several further announcements are imminent. Transnational corporations that enter into these agreements undertake to reach an annual expenditure on research and development in Australia equal to 5 per cent of their annual turnover by 1994 and, within the same period, reach a level of Australian value added exports equal to 50 per cent of their imports. To date, commitments have reached totals in excess of $800m per annum in exports and $170m per annum in research and development by the end of the year 1994. As I said, negotiations are continuing with a number of other major software and hardware companies. Indigenous organisations in Australia are benefiting from the agreements by the export of Australian-made products. Those that have already benefited include LSE Manufacturing Pty Ltd, IO Design, Clean Line Systems Pty Ltd, Computer Switching Systems and Cables Pty Ltd, PI Systems, Expert Systems Pty Ltd and ISR Pty Ltd. Essentially, those companies are gaining export markets by using the international marketing strength of major transnational companies to support them in markets such as the United States of America and Europe. Research and development in areas of artificial intelligence, image processing, electronic funds transfers and land information will also be performed by Expert Systems Pty Ltd, the Commonwealth Scientific and Industrial Research Organisation, the University of Queensland and other companies in carrying out the agreements to which I have referred. Senator Lewis —Tell us about the Australian manufacturers. How do they view it? Senator BUTTON —Very well, Senator Lewis. Senator Lewis —Oh! Senator BUTTON —I do not want to mention something so vulgar in the Senate, but let me tell Senator Lewis this: if he looks at the last edition of Computer World-it is very vulgar personally that I should say this-- Senator Chaney —It didn't have a photograph of you in it, did it? Senator BUTTON —Not only did it have a photograph of me in it, but also some gentleman, whose name I have temporarily forgotten, said that he felt that the program was so successful that I should be given a knighthood. Senator Stone —We think so. Senator BUTTON —Thank you, Senator Stone. It has not been offered to me yet. Senator Chaney —Especially on your retirement. Senator BUTTON —Senator Chaney says, `Especially on my retirement'. I have views about that topic. If the program to which the gentleman referred has made a contribution to Australian industry development and to the development of exports and research and development in this country, I welcome it. Perhaps Senator Puplick, who is a younger man, could say something about it in his condolence speech when I finally put the cue in the rack. Senator Lewis's interjection is very important. We had every hope of developing a cottage industry in Australia in computer peripherals and software. The opportunities which are given by the partnership-- Senator Lewis —When did the opportunities slip by? Senator BUTTON —The honourable senator should not invite me to tell him when they slipped by. Let me just make this point: the opportunities which have now been made available to Australian companies for international marketing are just enormous. I say to those who subscribe to the cottage industry view of the pure Australian software industry with no business arrangements with foreign companies or anything of that kind that we would have had a similar industry here in 10 years time. An industry such as this cannot get off the ground without international marketing presence and muscle. That is what it is all about. So I do not think the honourable senator should go about picking up the disenfranchised who have not yet taken opportunities to avail themselves of the enormous prospects that are available to them. Senator LEWIS —My question, which is directed to the Minister for Industry, Technology and Commerce, is about the loans made by the Australian Trade Commission, or Austrade, to Cuba and Nicaragua to support the sale of sugarcane harvesting equipment and spare parts. The Minister may be aware that those countries are in default on the loans and that the loss to Australian taxpayers may exceed $17m. Did the Minister direct that the original loans be made under the national interest provisions of the Australian Trade Commission Act? What aspect of the national interest was advanced by loans to Cuba and Nicaragua? Does the Minister endorse the comments of his Press Secretary today that the outstanding amount was only a relatively small amount? Finally, what would be approximately the total amount currently in default on Austrade loans around the world? Senator BUTTON —I cannot answer the last part of the question in terms of the total amount of Austrade loans in default. I will certainly get the honourable senator an answer in that respect. I do not carry that information in my head. I certainly did not direct that the national interest provisions be used in respect of these loans. I was not the Minister at the time. I am not in any sense seeking to evade the issue by saying that, but Senator Lewis asked me whether I so directed and the answer is no. I am quite unaware of what my Press Secretary said today, but let me say that, whatever he said, I have a high degree of respect for him and I am sure-- Senator Lewis —He said that $17m was a relatively small amount. Senator BUTTON —I do not know what he was asked; that is the important question. In so far as the details of the Cuban and Nicaraguan loans are concerned, together with loans to other Central and South American countries, I gave an answer to a question on notice about that matter which appears in the Hansard of 22 February 1988. The loans to Cuba and Nicaragua total $17.3m and repayments amounting to $9.1m of the total are currently overdue. Recovery action is being taken and it is expected that full recovery will be made. I should draw the attention of Senator Lewis and other honourable senators to the fact that all loans were provided by Austrade on terms which were in accord with the Organisation for Economic Co-operation and Development arrangements on officially supported export credits and did not include Australian aid funds. In extending these loans to support the export of cane harvesters by Austoft Industries Pty Ltd, formerly known as Versatile Toft, the Government was mindful of the high risks involved at the time. Austoft Industries is, I think, one of two sugarcane harvester manufacturers surviving in the world. As I understand it, there is one German firm and Austoft. At that time the Australian sugar industry was in great decline and support for Austoft was considered appropriate in order to maintain Australia's position as the world leader in sugarcane harvest technology-and, of course, in view of the significant employment benefits for the Bundaberg region at a time of depressed domestic demand. I also understand that a detailed explanation relating to the Cuban loans was provided by the former Department of Trade to a Senate Estimates committee and I refer honourable senators to the Hansard of 3 April 1987. Senator COLSTON —I refer the Minister for Transport and Communications to Press reports that Telecom Australia is considering charging at least $350 a year for home telephone rentals and 50 per cent more for local calls. Can the Minister advise me whether there is any truth in these suggestions, which have apparently been made by the Australian Consumers Association? Senator GARETH EVANS —I am happy to clarify the issue, which has been the subject of some fairly spectacular misrepresentation in the media today. I can say quite firmly and unequivocally the following: suggestions by the Australian Consumers Association that Telecom or the Government is considering raising home telephone rentals to around $350 a year and local call charges by 50 per cent are complete and utter nonsense. There is no such proposal before the Government either from the task force reviewing telecommunications policy or from anywhere else. Telecom, for its part, has already stated publicly that, in the current climate, it does not envisage any increase in charges during this financial year or, for that matter, in 1988-89. I hope that that puts to rest what I suspect has been a rather mischievously encouraged rumour which has no foundation whatsoever. Senator McLEAN —Is the Minister representing the Attorney-General aware that letters are sent from Department of Social Security offices which demand action of social security benefit recipients and that these letters do not carry a personal signature but only a typed signature? Is it the case that such letters derive their legal authority from the letterhead rather than from the personal signature? In view of the widespread use of automated correspondence, is it to become increasingly the practice throughout government departments that unsigned letters are to be used to direct members of the public? Does the Minister acknowledge that, if this is to be the case, there is grave potential for havoc, given widespread and ready access to departmental and other letterheads? If so, what action does the Government intend to take? Senator BOLKUS —I thank the honourable senator for raising this question. I have looked through the brief that has been made available to me and, even though a number of questions were anticipated today, one like this was not. I would like to take the question on notice, get more information from the Attorney-General and come back to the honourable senator. Senator CHILDS —Does the Minister for Local Government agree that migrants in country areas do not have access to the range of special services available in the capital cities? Can the Minister tell me what is being done to assist them? Senator REYNOLDS —The Government is actively extending migrant services in non- metropolitan areas. Under the grant-in-aid scheme, 11 per cent of the grants made for ethnic welfare services go to communities in non-metropolitan areas. Similarly, nine of the 32 migrant resource centres and subcentres are located outside capital city areas. Within the adult migrant education program, which is administered nationally by Mr Holding's Department under arrangements with the States and the Northern Territory, courses are provided in a significant number of provincial centres. The home tutor scheme reaches people who do not live near centres where courses are provided or who, for other reasons, are unable to go to formal classes. Correspondence courses have been enhanced with the introduction of a new course, `It's over to you', which was launched nationally at the end of 1987. The telephone interpreter service is another unique facility which, in the next few months, will switch over to a 008 number so that all callers outside the metropolitan area can use the service at the cost of a local call. The 008 system will replace the current system of provincial telephone hook-up equipment which serves many, but not all, of our non-metropolitan areas. Senator SHEIL —Does the Minister for Industry, Technology and Commerce believe that the current level of the Australian dollar at close to US74c is appropriate? I remind the Minister of the fact that he has previously expressed views on the level of the dollar. For example, he said in September 1986 that he thought the level would remain at just above US60c and in October last year, when the dollar stood at about US70c, he said he would prefer a level of US65c to US68c. Given the significance of the level of the Australian dollar to manufacturing industry, for which the Minister is directly responsible, will he now comment on the US74c level? Senator BUTTON —The level of the dollar is determined by the market. That will remain so. Concerning the comment I made last year, let me remind Senator Sheil that I said that a number of exporters had expressed the view that they would prefer the dollar at a particular level. I am sure that that is a view that some of them would hold now. It is a matter for the market to determine and my preferences are not relevant. Senator CROWLEY —My question is directed to the Minister representing the Minister for Community Services and Health. The Minister will be aware that on 2 March 1988 the first ever draft national policy on women's health was released in Adelaide. Can the Minister elaborate on the main points in the draft policy and how they fit with other initiatives by this Government in women's health? Senator COOK —The Commonwealth Government has a strong focus on the status of women's issues. That is due in part to the direct interest the Prime Minister has in the subject, by his keeping the Office of the Status of Women under his own portfolio, and to the work done by my predecessor as a Minister in this chamber, Susan Ryan, and now by Senator Reynolds. Our concern about status of women's issues is a core of our Government's position. We have focused on that area with a variety of policies and programs and we have elevated women's health matters to a proper recognition, a recognition that is shared by women in Australia. That point was illustrated after we conducted the most extensive consultation ever with Australian women, beginning in 1986. That consultation, which is now being brought forward in the form of a national agenda for the status of women, identified health as being the major priority of Australian women. It should also be said that the States of New South Wales, Victoria, South Australia and Western Australia have recognised that priority, and the demand that women have for proper attention to health needs, by developing an extensive women's health program and by funding community-based women's health services. It has not been true of Queensland and Tasmania. In view of the election result in New South Wales on the weekend, I trust that the New South Wales Government, notwithstanding the record of the Tasmanian and Queensland governments, continues with the program that the Wran and Unsworth governments established in this field. At a Federal level, Dr Blewett has recognised the major priority in the health portfolio this year and has sought to improve the health system to reduce inequities and meet the health needs of women. It is a major priority. In 1986, the Prime Minister announced that the national policy on women's health would be developed as part of the national agenda. It would establish national objectives, priorities and strategies for improving women's health and health services in cooperation with State and Territory governments. The development of the women's health policy was initiated in 1987 and a final report is expected later this year. In 1987 the Minister for Community Services and Health appointed the first ever national adviser on women's health, Ms Liza Newby, to coordinate development of the national policy. On 2 March the Minister released the draft national policy on women's health as a discussion paper to give the community opportunity to comment on and contribute to the policies. The deadline for comment is the end of May. Such comments should be made to Ms Newby at the Department of Community Services and Health. At the 1988 Australian Health Ministers Conference all health Ministers endorsed the need for a national policy on women's health and agreed to participate. Major health areas of concern to women identified by the national policy include: improving the quality of health services to women; improving health education and information to women to enable them to participate more effectively in decisions about health at all levels; and giving greater priority to women's health problems in areas such as mental health, reproductive health, preventable diseases and nutrition. Within the framework of the national policy, the Commonwealth Government has undertaken a program of specific health initiatives aimed at benefiting women, including: a commitment of $5.1m over three years to evaluate the feasibility of a national screening program, in cooperation with States and Territories for breast and cervical cancer; grants under national health promotion programs to community-based women's groups to develop models for women's health promotion; increased funding to family planning programs; sponsorship of State-wide women's health forums in Queensland, Tasmania, and the Northern Territory; the establishment of a national subcommittee of the Australian Health Ministers Advisory Council to advise health Ministers on women's health with representation from Commonwealth, States and Territories and non-government organisations; and, finally, a focus on drug abuse by women, particularly of prescribed drugs and alcohol, by the National Campaign Against Drug Abuse as a major target for 1988. Senator PUPLICK —I ask the Minister for the Arts, Sport, the Environment, Tourism and Territories whether he endorses or rejects the comments of his colleague the Minister for Primary Industries and Energy, who said: The fact that the organised conservation movement did not support Labor-despite its record-may see the end of the theory that conservation issues can be dealt with on the basis of deals for delivery of votes. Does the born-again Minister agree that Labor's unbalanced environmental policies and his own relentless and, in New South Wales, spectacularly unsuccessful pursuit of the environment vote have distanced the Government from those whom he so demeaningly referred to yesterday as `the common people'? Senator RICHARDSON —There is no prouder badge to wear than to be part of the common people or the working class. Therefore, neither I nor anyone on this side would regard it as demeaning. To answer the rest of Senator Puplick's question: I was asked whether I endorse or reject the comments of my colleague Mr Kerin. I endorse them because I was never aware that anyone in our Party was proceeding on the basis of deals for conservation votes. I certainly was not, so I have nothing on which to disagree with him. Secondly, as far as his call for a further inquiry into land use management in Australia is concerned, that is long overdue and I have supported it for a long time. Thirdly, in respect of what I think of the environment vote on Saturday, the reality is that the environment movement targeted only a few seats. In all of those seats, the swing against the Australian Labor Party was far less than it was in the rest of the State. My view that conservationists remain an important voting lobby has not changed. It should also be noted, however, that when examining these questions one should always consider the phrase `all things being equal'. I think there were a few other factors, beyond the environment, at work on Saturday. Senator PUPLICK —Mr Deputy President, I ask a supplementary question. I am pleased that the Minister endorses Mr Kerin's comments, particularly: . . . the organised conservation movement did not support Labor. Since he endorses that assessment by Mr Kerin, does he not believe that this simply shows a great deal of perception on behalf of the organised conservation movement? Senator RICHARDSON —The organised conservation movement had a number of candidates running for the Legislative Council, as is its right in a democracy. Those candidates did very poorly. However, I can only repeat what I said earlier: in those seats where the environment movement chose to alert voters to the save the forests campaign, the swings against the Australian Labor Party were far less than in any others. Senator McMULLAN —My question is also addressed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. Is the Minister aware of recent newspaper reports of scientific evidence showing further depletion of the ozone layer, not only in the Antarctic but in other regions? What action is the Government taking to protect the ozone layer? Are the Minister and the Government prepared to go beyond the implementation of the provisions of the Montreal Protocol in taking all possible steps to reduce emissions of ozone depleting chemicals? Senator RICHARDSON —I have seen those reports. Australia is a party to the Vienna Convention and will be a signatory to the Montreal Protocol to that convention very shortly. As honourable senators will be aware, that calls for a freeze on the level of production of chlorofluorocarbons at 1986 levels and for the progressive reduction over a period of eight or 10 years to 50 per cent of those levels. I have said before that Australia ought to be prepared to go further than that protocol if we deem it necessary. I am not certain I can yet endorse the comments of Minister Peter Hodgman in Tasmania who called for a 100 per cent reduction. If one looks at the refrigeration industry and a few other places that might be a bit difficult at the moment. I think the report was from the United States National Aeronautics and Space Administration. That report produced some evidence that the hole in the ozone layer over the Antarctic had become worse and what is more that ozone levels have been depleted in a number of other regions. That is disturbing news for us all. All I can say is that I have asked some Australian scientists in the field to evaluate that latest report. If, on the basis of that evaluation, we think more drastic or urgent action is required, I will take it immediately. In any event, I had intended to have the matter reviewed in 1990 and progressively, through the implementation of the protocol, to make sure that if at any time we considered we needed to do more we would be in a position to do so. Senator PANIZZA —My question is directed to the Minister for Local Government. Taking into consideration the various interferences by State governments in the affairs of local government-namely, New South Wales with the questionable sackings of councils and Western Australia interfering in building application approvals and/or refusals-I ask the Minister: What is the Government doing towards constitutional recognition of local government? Senator REYNOLDS —I thank Senator Panizza for his question because the Government is committed to constitutional recognition of local government. The Office of Local Government has prepared two submissions to the Constitutional Commission. Of course, the question of constitutional recognition of local government now rests very much with the Constitutional Commission. We have had two reports from advisory committees-one from the Economic and Trade Advisory Committee which was supportive of constitutional recognition of local government and one from the Distribution of Powers Advisory Committee which was less supportive and obviously did not see how the necessary recognition could be applied. I am certainly very optimistic that the Constitutional Commission will take into account the importance of local government. It is quite ironic that in the bicentennial year, 1988, when many local governments are actually older than the Federal Parliament, we should be asking ourselves whether local government should be recognised within the Constitution. However, I acknowledge that whatever form of constitutional recognition may be recommended by the Constitutional Commission, it is important to strike a sensible balance as to the form of that recognition. We all know that local government operates under State legislation, and the Federal Government does not wish to see any changes in that regard. What we do want to see is that the work of local government, its contribution to economic and social policy development throughout the country, is recognised; that a rationalisation process that my Department is working on in conjunction with a number of other departments is implemented to avoid certain duplication of Federal, State and local government involvement in similar procedures-in other words that we rationalise some of the duplication. We recognise that local government is the sector of government and public policy development closest to the people, and as such it does have the right to be recognised in the Constitution. As I say, we have to wait for the response of the Constitutional Commission. We all know what procedures must apply before any changes can be made to the Constitution. I believe the Constitutional Commission will consider very closely a number of representations that have been made by local government and other people in the community. I am very pleased to let members of the Senate know that the support for constitutional recognition seems to be coming from all parties. I have had letters from my National Party colleagues in Queensland. I believe I have had words of support from Senator Panizza. I have spoken to a number of my State Government colleagues in Victoria and Western Australia. I do hope, depending on what the Constitutional Commission finally recommends, that any approach that then goes to the people in the form of a referendum will be on a sensible, bipartisan basis. Senator WOOD —My question is directed to the Minister representing the Minister for Primary Industries and Energy. Is the Minister aware of allegations in the European Parliament, reported on the radio program The World Today on Tuesday, that uranium that was mined in Australia is being shipped by the French firm Eurodiff to the United States of America, where it will be enriched by the West German firm Nukem to a weapons grade standard to be used in the reactor at Grenoble? I ask the Minister: Is this not in direct contravention of Australian safeguards arrangements? If not, why not? Will the Government inform the Senate of the results of investigations being carried out by the Australian Safeguards Office? Senator COOK —I did not hear the program The World Today, but the references made in that program-- Senator Stone —It would have the same degree of authenticity as most of the rest of the Australian Broadcasting Corporation's programs. Senator COOK —I did not quite hear what Senator Stone said, but it may not be that important. As I was saying, I did not hear The World Today program, but the allegations made in that program have been brought to my attention. All I can say about them is that last week in the Senate I answered two questions on allegations made about Australian uranium, the European Atomic Energy Commission (EURATOM), Nukem, and other things of that nature. The answer to Senator Wood's question is that we have obtained copies of the Der Spiegel magazine containing the articles on which it appears the reports are based, and we have translated those articles. From those reports it is fair to say, I think, that there seems to be an entanglement of assertions, which suggests, maybe, some confusion on the part of the reporter. We are looking at each of those things. It should be said that Der Spiegel magazine is not quite what you would call in the colloquial a tits and bums magazine, but it is somewhere between that and the quality Press. It brought to us the Hitler diaries-- Senator Vanstone —That is not parliamentary. Senator COOK —It is a common colloquial expression for a type of periodical which I thought would be familiar to people in the Senate. I see Senator Stone nodding his head in affirmation of that point. If it would not offend honourable senators opposite, I would say that it is not so much a down-market magazine or an up-market magazine; it is somewhere in the middle. It brought to us the celebrated Hitler diaries expose which fell a bit on its face. I do not say those things in order necessarily to denigrate the magazine, but so that comments in the Australian Press last week that it is a highly respected magazine are put into some focus. I do not know that that is a commonly held view. However, allegations have been made. We treat all allegations seriously and those allegations are being investigated. We treat all allegations so seriously that, after reading in the Australian Press that an Australian commentator has accused the Government of lying on this matter, I intend to contact the person concerned in order to obtain from that individual the detail of his allegation so that that can also be investigated. In January and February Der Spiegel published a series of articles alleging things similar to what has been contained in Senator Wood's question. I think I said last week that our advice-certainly, it is my advice-is that nothing has happened which offends against the Australian safeguards regime with respect to that series of allegations. As I said earlier, The World Today report seems to be based on Der Spiegel. In my second answer on, I think, Thursday of last week, when I drew attention to an interjection by Senator Peter Baume to my Wednesday question, I promised that a report would be given by Minister Kerin after all the allegations have been properly itemised, documented and investigated and we are in a position to reply. We hope to do that as soon as reasonably possible, consistent with our obligation to make sure that our investigations are thorough. Senator WOOD —I ask a supplementary question, Mr Deputy President. I remind the Minister that my question was about allegations in the European Parliament, not about allegations in Der Spiegel magazine. The allegations were made by members of the European Parliament, not by reporters with Der Spiegel. Also, my question related to a report on the Australian Broadcasting Corporation program The World Today. The material in that program included material that was not in Der Spiegel magazine. I specifically asked the Minister about uranium mined in Australia going to the United States for reprocessing to weapons grade uranium. If the Minister needs to explain the tangled web of reflagging-- The DEPUTY PRESIDENT —Order! This must be a question, not an elaboration. Senator WOOD —It is a question. Can the Minister confirm that it was a shipment of uranium that was mined in this country, no matter what flag it was wearing at the time? Was it Australian uranium that the French firm Eurodiff was sending to the United States to be reprocessed into weapons grade uranium to be used in the reactor at Grenoble? Can the Minister inform us when the investigations being carried out will be completed? Senator COOK —I may have omitted to say in my earlier answer that, from what I know, it appears to me that the allegations made in the European Parliament are related to what has been published in Der Spiegel. I thank the honourable senator for asking me the supplementary question to enable me to make that additional comment. As far as has been reported to me, there has been no contravention of Australian safeguards arrangements. Where material is exchanged, the Australian flag is transferred to the new material and it becomes the responsibility of the Australian Safeguards Office to track the material to ensure that it is retained in the peaceful use cycle. Nuclear material held under an Australian safeguards agreement cannot be enriched to more than 20 per cent without Australia's formal approval. This was not sought in the Grenoble case as Australia was not responsible for the uranium enriched at that research facility. I think that that might more specifically answer Senator Wood's supplementary question. Senator REID —I refer the Minister representing the Minister for the Arts and Territories to the Government's announcement on 11 February of this year of the terms of reference for an inquiry into the social impact of a casino in Canberra. I ask: Why has the Government not yet appointed a person or persons to conduct the inquiry or made any announcement about how interested people will be able to make submissions to the inquiry? When will the Government indicate who will conduct the inquiry and when and where public submissions will be able to be made? Will the inquiry still be required to report to the Minister by 31 May, as outlined in the terms of reference, given that it appears that no appointments or arrangements have been made yet to get the inquiry under way? Senator RICHARDSON —I have in my possession a copy of the letter that has been written to Senator Reid and Senator Lewis, which I think they are getting today. This letter, in fact, announces the appointments of those who will be conducting the social impact study. I am more than happy to read from that letter if Senator Reid and Senator Lewis do not mind it being made public prior to their getting notice. The letter states: The consultants have been selected with the assistance of Dr Geoff Caldwell, Head of the ANU's School of Continuing Education, who has also agreed to lead the study. Other consultants will be: Ms Susan Young, from the consulting firm MSJ Keys Young, a firm with strong experience in social planning and impact assessments; Dr Jan McMillen, Teaching Fellow, Griffith University, who has undertaken extensive research on casinos in Australia; Dr Mark Dickerson, researcher, Department of Psychology- at the Australian National University- who has undertaken studies of compulsive gambling and related issues. It is still expected that the report will be made by 31 May. As to when and where people should put in their submissions, I do not have any information. No doubt those who have just been appointed would like to have a say. As soon as I have some information, I will make that available to Senator Reid. Senator BURNS —Has the Minister for Industry, Technology and Commerce read the article by Tim Boreham in the Melbourne Herald of yesterday, 21 March, in which he quotes authoritative management at Broken Hill Proprietary Co. Ltd (BHP) as saying, firstly, that the No. 4 and No. 5 blast furnaces at Port Kembla are now at full capacity; secondly, that the No. 4 furnace was started up ahead of schedule; thirdly, that the company had been having a good run for the last five weeks; fourthly, that, mainly through BHP's own fault, it had suffered a two-year drought on the export market; fifthly, that production levels were running at about 250 tonnes per man year and that BHP expected it to rise to 350 tonnes; and, sixthly, that industrial disputes causing lost man hours had fallen in the half-year to May 1987 from 4 per cent to less than one per cent by November 1988? If the Minister has seen that article, does he consider that this is an indication of the correctness of Government policy and that it demonstrates the constructive role played by workers and their trade unions in these improvements? Senator Chaney —Did the Minister write it? Senator BUTTON —The answer to Senator Chaney's question `Did the Minister write it?' is no. I think one has to approach this issue with some degree of caution. When the Steel Industry Authority published its report about three months ago members of the Opposition got very excited about the fact that there was a high level of disputation in the latter half of last year. Senator Lewis —It didn't worry you at all, I suppose. Senator BUTTON —Of course it worried me, and I said so at the time. Senator Walsh —What worries Senator Lewis is that it ceased. Senator BUTTON —Senator Walsh has made the point I was just about to make. Let me say a couple of things: first of all, it is a fact that the No. 5 blast furnace at Port Kembla went down in December and has only recently come back on stream. There was trouble with the No. 4 blast furnace. There were a lot of technical troubles. In the latter part of last year there was a high and unfortunate level of industrial disputation. All of those issues contributed to a bad period for the steel industry. I would like to express the hope, which is consistent with the hope and anticipations expressed by the BHP manager, Mr Hetherington, to whom Senator Burns referred in his question, that a level of productivity of 350 tonnes per man will be attained very shortly. I note with satisfaction that the level of industrial disputation has decreased from 4 per cent to one per cent. Those two issues are crucial to the long term future of the steel industry in Australia. One interesting comment made by the BHP spokesman was that it had locked itself out, as a result of its fault, of export markets in the last two years. I do not want to make any judgment about that. The management of BHP has made that judgment itself. But let me say this: I very much welcomed an announcement which was made by BHP about four or five weeks ago of a considerable investment program which would be, as the company describes it, dedicated to exports. I think the amount was something in the order of half a million tonnes of steel a year, which would be produced as a result of new investment dedicated to export. The Government very much welcomes that. It will certainly enable BHP to make a considerably better contribution in respect of its steel division to the balance of payments than it certainly made in the last year. Let me say again: there seems to be cause for some satisfaction-there is no complacency-with the vastly improved figures in respect of industrial disputation and the company's anticipations in respect of productivity and the technology at the Port Kembla mill working properly now, as it has not done for several months. I hope that those anticipations are fulfilled. The Government certainly welcomes them and regards them as being consistent with its view of the way in which the steel industry should be performing. I add that the Steel Industry Authority is currently reviewing the steel industry and will be reporting later this year on future directions for the steel industry. Senator CHANEY —The Minister for Consumer Affairs will be aware that on Friday last the Opposition asked the Leader of the Government in the Senate for the reasons for the Minister's absence during Question Time and that the Leader made a brief response after questions, a response which he did not claim to be comprehensive, particularly as regards whether the Minister's trip to Adelaide involved any campaigning. Will the Minister now tell the Senate the reason he was absent from the Senate last Friday, particularly during Question Time, whom he saw in Adelaide on Friday, when he saw them, whether during the day he was involved in any campaigning for the Port Adelaide by-election and, if so, how long he spent campaigning? Senator BOLKUS —I will gladly answer Senator Chaney's inquisitive mind. In doing so, I want to make it clear that, contrary to any suggestion that might arise out of this morning's Adelaide Advertiser, I did not meet with the Liberal Party of Australia candidate for Port Adelaide. I did in fact visit Adelaide. One of the main reasons for my doing so-- Senator Walsh —I thought it was someone else. Senator BOLKUS —Well, it was not me. One of the reasons for my going there was to have discussions with the South Australian Director-General of Consumer Affairs, Mr Colin Neave. There was another reason, and that was to have discussions with the South Australian-- Senator Vanstone —Take your hands out of your pockets. Senator BOLKUS —At least I know what to do with them. I had talks with the South Australian United Trades-- Senator Vanstone —He has taken them out now. Senator BOLKUS —Mr Deputy President, I am sure that I do not need protection from the side show here, but it would be better if Senator Vanstone were kept quiet from time to time. As I was saying in response to Senator Chaney's question, the second reason was for discussions with the South Australian United Trades and Labour Council on matters which I will go into in a second. Coincidentally, amongst other things that I did do in Adelaide on the day was to visit the K Mart hypermarket at Port Adelaide with the Prime Minister. I should say at this stage that I do not imagine that my presence in Port Adelaide in the shadow of the presence of the Prime Minister would have made any impact at all on the electoral process. I turn to the discussions I had with Mr Neave. We discussed a number of issues of common interest. As honourable senators opposite may understand, one of the basic premises of our approach to consumer affairs is a consultative and uniform one with the States. The primary matter on the agenda was the discussion of electronic funds transfer systems. Senator Puplick may very well laugh but he may not understand the complexity of the issues involved here. I have already had talks on this issue with two State Ministers, and last Friday was the last opportunity I had to meet with the South Australian officials on this matter prior to State and Federal ministerial talks with industry representatives. Such talks are to be held on Monday the 28th and Wednesday the 30th of this month. The date for these talks was finally settled last Wednesday. Because of ministerial changes, these talks have already been deferred once. The Government places great importance on achieving a satisfactory outcome to these talks and, in the light of this, consultation with State and other officials-I have discussed these matters with industry officials over the last couple of weeks-is important. A whole range of other issues was discussed, including consumer credit issues. I should note that a consumer credit forum is coming up very early in April. That is another matter of eminent importance. Senator Teague —For how long were you in Port Adelaide? Senator BOLKUS —I was in Port Adelaide for one hour of a 24-hour day. Also in the context of discussions with Mr Neave, we discussed consumer education programs, an area in which Senator Vanstone may very well understand South Australia is a noted leader. Within this area we discussed the prioratisation and allocation of resources. I turn to discussions with the United Trades and Labour Council of South Australia. I met with both the Secretary and the Assistant Secretary of that Council. We discussed the matter of extended retail trading hours and its possible price effects, but we also discussed the wider aspect of prices surveillance, the Prices Surveillance Authority and the prices watch. Senator McGauran —You should have been here. Senator BOLKUS —I will get to that in a moment. We also discussed the particular problems of disadvantaged consumers and the need for an awareness campaign tailoring the resources of this Government together with the Trades and Labour Council and the unions affiliated with that Council. As a result of these discussions, we will be conducting further meetings between me, officers of my Department and the Council. I turn now to the visit to the Port Adelaide hypermarket. I attended the shopping centre at the invitation of the Prime Minister. Senator Chaney —Now we know he has lost touch with the grassroots. Senator BOLKUS —Talking about losing touch with the grassroots, one thing that honourable senators opposite may not understand is that this supermarket is the cheapest city store in South Australia and was listed as such in the last national prices network survey. A relevant subject for discussion at the supermarket was the price impact of extended trading hours. Some sort of cynicism has been shown by the Opposition about the importance and relevance of the issues that I discussed in Adelaide on Friday, and there is an apparent lack of desire to understand the importance of at least the meeting on electronic funds transfers. I would now like to ask the Opposition whether it would apply the same sorts of principles and consistency to its own as it wishes to apply to me, despite the importance and the immediacy of some of the portfolio responsibilities. Will Senator Chaney and Senator Puplick ask the honourable member for Mitchell what he was doing in South Australia on 16 March when he was campaigning in Port Adelaide? The House of Representatives was sitting on that day and he is a shadow Minister. What about the honourable member for O'Connor, who was campaigning in Port Adelaide the following day while the House was sitting? He is a shadow Minister with a responsibility to the Parliament but he was very blatant about what he was doing. In fact, he was asked the following question on the Australian Broadcasting Corporation that morning by Mr Keith Conlon: Unhappy about not being in Parliament today? Mr Tuckey, a shadow Minister and all that, said: Well the Parliament really is my place and I love being there but it's got to be recognised that Judy Fuller's got a wonderful chance of winning Port Adelaide and if I can contribute to that I think my absence is worthwhile. Let me say in closing that my reasons for being in Adelaide were not primarily electoral. However, I did spend time in Port Adelaide and I must convey to the Senate that the wishes of Mr Tuckey and his assistance obviously will be to no avail because the Labor Party candidate in Port Adelaide, Rod Sawford, is one person whose recognition throughout the electorate has been unparalleled by any other candidate that I have spent any time with. Senator CHANEY —Mr President, I ask a supplementary question. I congratulate Senator Bolkus on preparing for a censure motion, which is obviously what he has done. My question to the Minister is: Having told us of the officials he met and since the meeting was in his home town of Adelaide, why is it that those meetings could not have been held on a non-sitting day? Senator BOLKUS —I thought that I had made it clear but, for Senator Chaney's elucidation, we are sitting this week. Senator Bishop —Not yesterday. Senator BOLKUS —In fact, there were meetings in Canberra yesterday that I had to be here for. The first EFT conference is to be held in Melbourne next Monday and there are no non-sitting days between last Friday and next Monday on which I could have been available in Adelaide. Senator BUTTON —During Question Time on 15 March Senator Lewis asked me a question about an industrial dispute involving a decision to centralise the processing of diesel fuel rebate claims in Port Adelaide and consequent delays in payments of rebates to claimants. I indicated at that time that I was aware of the dispute and that the matter was going to be referred to the Australian Conciliation and Arbitration Commission, I think the day following the day on which Senator Lewis asked his question. A formula has now been developed between the Australian Customs Service and the Administrative and Clerical Officers Association (ACOA) towards settlement of the diesel fuel rebate dispute. They appeared before the Conciliation and Arbitration Commission on 16 March. Commissioner Lewin directed that the ACOA consult with members. All bans have now been lifted. The Australian Customs Service is taking steps to pay the outstanding claims as soon as possible and it is anticipated that a large number of payments will be paid into banks and building society accounts by 25 March 1988. Senator GARETH EVANS —On 15 March 1988 Senator Panizza asked me a question without notice about Australian National and Westrail negotiations relating to the Kalgoorlie-Perth standard gauge railway line, and also a supplementary question about the issue of Australian National's stationery in the form of worksheets at a main centre along the line. I undertook to obtain information about these matters and I seek leave to incorporate a more detailed response in Hansard. Leave granted. The response read as follows- There are two AN and Westrail initiatives which have a bearing on the Kalgoorlie-Perth line. The first is a study relating to the possible integration of AN and Westrail. On 21 October 1987 the then WA Premier, Mr Burke, and the then Minister for Land Transport and Infrastructure Support, Mr Duncan, announced that the Bureau of Transport and Communications Economics would undertake a study into ways in which AN and Westrail might be integrated. The study is exploratory only, with the aim being to identify areas from which benefits might flow. There is no commitment from either State or Federal Governments at this stage, nor is there any suggestion of negotiations. Any negotiations would be based on the prerequisite that there would be no additional ongoing cost to the Federal Government. If the idea of integration appears worth pursuing all interested parties (including unions) will be consulted. The second initiative relating to AN and Westrail is the rationalisation of intersystem passenger operations. In December 1986, the then WA Minister for Transport, Mr G Troy put forward a proposal that AN operate East-West Passenger Services in WA (the `Indian Pacific' and `Trans-Australian') through to Perth under a contract with Westrail. It was agreed that officers hold discussions on a no-commitment basis and on the general understanding that the arrangements would involve no additional costs to either Government. A Working Group is finalising a set of principles for a draft contractual agreement between AN and the WA Government. The Working Group is aiming to report to Ministers seeking endorsement of a formal agreement very shortly. In answer to Senator Panizza's supplementary question, I am advised by AN that they have carried out an inquiry which indicates that as far as they can ascertain that no AN forms of any description have been forwarded to Westrail Staff for their use and no one has been authorised to carry out this action. If Senator Panizza would identify the centre at which AN's forms were alleged to have been issued AN will arrange for a more detailed inquiry. Senator ROBERT RAY(Victoria-Minister for Home Affairs) —As Minister representing the Minister for Defence I seek leave to make a statement entitled `Government Defence Policy-a Progress Report', to move to take note of the statement and to incorporate the statement in Hansard. Leave granted. The statement read as follows- A little over twelve months ago, I tabled in this House a White Paper which has set the course of development towards a self reliant defence posture until the end of the century. Today I wish to report the progress we have made over the past year in making self-reliance a reality for Australia. The White Paper committed this Government to develop a defence force which is carefully designed to meet the unique demands of Australia's strategic circumstances. Australians of all shades of political opinion have welcomed the new clarity which the White Paper has brought to defence planning. In particular they have welcomed the White Paper's affirmation that, with careful management, we can maintain a self-reliant defence posture at a reasonable and sustainable cost. It is fundamental to this Government's defence policy that our defence posture must be affordable. Australia's security will not be enhanced by making grand plans which cannot be fulfilled. This has happened before-for example in 1976. Our defence policy encompasses the largest capital investment program in Australia's peacetime history. But we can fund that program without continuous growth in defence spending, provided we manage the defence budget carefully. We have proved that over the past year. Financial circumstances have been tough. After years of strong growth under the Hawke Government defence spending has been cut this year. But through innovative management we have kept the White Paper on track. We had some confidence this could be achieved because the program-unlike the grandiose plans of our predecessors-is not based on unrealistically high funding expectations. Investment in new equipment is spread over 15 years and we have committed little more than half the funds likely to be available in that period. The White Paper also recognised that it would be possible to make better use of the funds already available to defence by concentrating spending in areas of high priority. Realistic planning and good management are fundamental to the White Paper program and realistic planning and good management have enabled it to survive the test of the last nine months virtually unscathed. The Australian Defence Force is undergoing unprecedented changes at a number of levels. Each of the three Services is progressively being re-equipped with the most appropriate weaponry available as many of the programs outlined in the White Paper have begun in earnest. However, the White Paper program is about more than equipment; it is about the people who make up the Defence Force, the command of our forces, and their deployment. I will be saying more about this shortly. It is our assessment that, in credible contingencies, operations in the sea-air gap to the north and north-west of Australia and the protection of the infrastructure in the north would be of prime importance. This would require the deployment of considerable forces in the area and in some cases could require operations further afield through our northern bases. Operations by the maritime, ground and air forces involved would require close co-ordination and extensive logistic support. In addition there would be a requirement for very close co-operation with the civil authorities. The shift in emphasis in our defence effort northwards is a key element in the Government's defence policy. Two important decisions have been made which will give form and substance to this new direction. First, the Government has decided to establish a Northern Command based at Darwin. Northern Command, or Norcom as it will be called, will be the focal point for the co-ordination of peacetime activity and will provide the nucleus for the larger organisation which would need to be quickly put in place in the event of a defence emergency. Norcom will be a subordinate formation of Land Command. It will be predominantly oriented towards the planning and conduct of land operations but will be jointly staffed. It will be commanded by a brigadier supported by a staff drawn from the present 7th Military District Headquarters in Darwin together with Navy and RAAF personnel. Norcom's area of responsibility will include the Northern Territory and the Kimberley region of Western Australia together with adjacent waters. Army units in the Norcom area will come directly under Norcom and naval and air units will be available to support Norcom activities. Additional forces will be assigned from time to time if the need arises. The new command should be operational by July this year. These new arrangements demonstrate our commitment to the defence of our north as expressed in the White Paper. They put in place a joint operational headquarters capable of conducting low level operations and other peacetime tasks and capable of expansion in the event of escalation. They also will enhance the already close working relationship with the civil authorities and the civilian community. This relationship would be vital in the event of low-level conflict or major natural disaster. The second important decision relating to the defence of the north is to conduct a major defence force exercise there next year based on the strategy outlined in the White Paper. This exercise, named Kangaroo 89, will be the biggest military activity in Australia since the Second World War, and will be the first major defence force exercise based on the White Paper strategy. It will exercise the ability of the Defence Force to respond to widely dispersed low level threats. Land force activities will extend right across the north of Australia and maritime and air activities will extend from Australia's north-western maritime approaches to Torres Strait and the new air bases at Tindal in the Northern Territory and Derby in the north west. More than 17,000 ground troops, supported by naval and air units, will participate. United States forces will make a major contribution by allowing us to exercise capabilities which shortly will be introduced into the Defence Force. For example, United States Black Hawke helicopters will provide the degree of mobility for our ground forces which we will acquire when our own Black Hawks become operational. A significant aspect of the White Paper strategy which will be exercised in Kangaroo 89 will be the deployment of selected Army Reserve units of the 1st and 3rd Divisions in their new role of protecting vital northern installations. While it will be a major event, exercise Kangaroo 89 will enable us to exercise only some of the many capabilities called for in the White Paper. These capabilities, some of which substantially exist and some of which we are in the process of development and refinement include intelligence and surveillance, strike and interdiction, enhanced maritime warfare and mine countermeasures capabilities, development of the Army's capability for dispersed operations, enhancing command, control and communication systems and streamlining administration and logistics. The strategy of defence in depth gives priority to being able to mount operations capable of defeating enemy forces in our area of direct military interest. This means we must have forces capable of tracking and targeting an adversary, which can mount maritime and air operations in the sea-air gap to our north, and which can carry out offensive strike and interdiction missions. Our forces must have a comprehensive range of defensive capabilities-including air defence, mine counter-measures, and protection of coastal trade-and must embody mobile land forces able to defeat hostile incursions at remote locations. Defence in depth gives priority to meeting credible levels of threat in our area of direct military interest. The strategic assessments in the White Paper analysis are still pertinent and remain the basis of our capability programs. The strategy of defence in depth calls on the Defence Force to be deployable and effective in the most likely areas of operation. The challenge of operating in the north demands not only investment in appropriate equipment but the establishment of a facilities infrastructure. Equipment and support facilities are an integral part of a defence capability throughout the three defensive layers we are building. The first important requirement for Australia's defence is to possess comprehensive intelligence about our region and a surveillance capacity to detect and track intruders in maritime approaches. The Government has assigned a high priority to the development of a network of operational over-the-horizon radars to enhance our ability to monitor the vast sea and air gap to our north. The upgrade of the initial over-the-horizon radar installation at Alice Springs is well underway and due for completion in 1990 at a total cost of about $60m. The upgrade at Alice Springs will assist in project definition studies for a network of up to three radars, the first of which should become operational in the mid-1990s. Within the next few weeks an invitation to register interest in the development of the first operational radar will be issued to industry. The estimated cost of the entire project is $500m, and will involve Australian industry in design development and construction. The development of the Australian defence satellite communications station at Geraldton is progressing to plan. The land for the station has been acquired and contracts are being let for the supply of services, the access road and other site related works. Construction work on the project itself is scheduled to start in September this year. Competing tenders are currently being evaluated for modern electronic support systems for the Defence Force's P3C Orion long range maritime patrol and surveillance aircraft. The successful tenderer is expected to be announced early next year. Our surveillance capability will be enhanced by the delivery of the Navy's new Seahawk helicopters, of which 16 have been ordered to equip our FFG-7 class guided missile frigates. The first of these aircraft has already flown in the United States and the first two Seahawks should be delivered to the RAN in November. This will enhance our flexibility for a range of maritime tasks apart from surveillance, as the Seahawks have significant anti-submarine warfare, and weapons targeting capabilities. Our surveillance capabilities are also being enhanced by the development of towed acoustic arrays for our new submarines and surface ships. This development will add significantly to our capability for sub-surface surveillance of our maritime approaches. A request for tender has been issued for the full-scale engineering development of the arrays based on indigenous technology developed jointly by the Defence Science and Technology Organisation and Australian industry. The full scope of the project is to design, manufacture and trial arrays for our new submarines. The Government has also recognised the importance of mapping and charting for military operations and surveillance. Recently a contract valued at $18.7m was awarded for local construction of four inshore survey ships. We have also called for tenders for the manufacture of an Australian designed laser airborne depth sounder. Bathymetry services have been transferred from the Department of Administrative Services to the Navy. Action has been taken in a number of areas to expand the deployment of our maritime patrol capabilities through co-operation with regional nations, particularly New Zealand. It has been agreed to increase the number of RAAF long range maritime patrol aircraft deployments in the South Pacific. To complement these enhanced intelligence and surveillance capabilities there is a requirement for a naval/air capability to destroy enemy forces in our approaches and to protect focal points and shipping lanes. Our strike and interdiction capabilities have been strengthened through a number of significant steps. The project with the highest profile has undoubtedly been the new submarine acquisition for which a contract was signed in June last year. The Australian Submarine Corporation will oversee the construction of six Kockums type 471 submarines at Port Adelaide. The establishment of construction facilities is already well underway and building of the first submarine should begin in 1989. The combat system should be fitted by 1992 and the vessel launched in 1994. The five other submarines will be launched in the years 1995-1999. A number of contracts worth approximately $390m have been placed for such items as combat systems, weapons discharge equipment, propulsion systems, computer software and the sonar installation. This provides substantial opportunities for Australian industry involvement as over 70 per cent of the platform work and 45 per cent of the combat system work will be performed in Australia. Another important component of the second layer will be the new ANZAC patrol frigates. This project has provided us with a valuable avenue for co-operation with New Zealand. We have signed a memorandum of understanding with New Zealand covering the purchase of a similar class of vessel for our navies. We will take eight of the vessels whilst New Zealand may purchase four. Two Australian-based consortia with New Zealand partners have been formed, each in association with a ship designer, to tender for construction of the ships in Australia. The contract for construction will be let about the middle of next year with the first ship due for delivery in the mid-1990s. An effective mine countermeasures force able to keep our major ports open and nearby ocean areas safe is a high priority for the Government. Trials of the two Australian built minehunting catamarans are proceeding and a decision on the purchase of further vessels will be made once trials are complete. A former Department of Transport vessel has been acquired to test the `craft of opportunity' minesweeping concept, using innovative Australian designed acoustic and magnetic sweeping equipment. Development work has also commenced for a mine warfare systems centre. The level of protection afforded to our surface ships is being enhanced through the collaborative development with the United States of a ship defence system. This undertaking, known as Project Nulka, is drawing upon innovative, indigenous technologies from within the Defence Science and Technology Organisation and Australian industry. A prime contract has been placed with a leading Australian electronics company with support from the Government's factories and DSTO. This is consistent with the Government's policy of expanding the role of Australian industry in such undertakings. Associated electronics work in the United States is providing an avenue for valuable technology transfers through joint project arrangements. In order to enhance our ability to deploy our maritime forces in northern and north western strategic areas, the Government has taken steps towards the creation of a genuine two ocean navy. Our planning is for half of our major surface combatants and submarine forces as well as mine countermeasure vessels and an afloat support ship to be based in Western Australia by the turn of the century. A number of developments have already taken place at HMAS Stirling, near Perth, including the home porting of the submarine HMAS Oxley in September last year. At present there are two destroyers, a hydrographic ship and two Fremantle class patrol boats also based at Stirling. A third destroyer will be home ported in Western Australia next year. Late last year an agreement was reached with the Western Australian Government jointly to support a new marine facility at nearby Jervoise Bay which will include a shiplift capability, to be enhanced as operations of naval vessels in the west increase. Broad planning has been completed for a two stage development of HMAS Stirling which will progressively cater for half the fleet's basing requirements. Comprehensive studies are also underway into the viability of a relocation of the eastern fleet base from Sydney Harbour to Jervis Bay. The first stage of the studies is an environmental impact statement. The major airborne component of our air defence capability is the acquisition of the F/A-18s. At present activation of Hornet operational squadrons is proceeding smoothly, with 38 aircraft delivered so far. Two squadrons and an operational conversion unit have been established at RAAF Base Williamtown. However, there is a lag of five aircraft in the delivery timetable and remedial action is underway. Project definition work for the upgrade of the avionics of our F-111s is now complete. Proposals to implement the major components of the update, the avionics and the avionics test equipment, will be considered next financial year. Sixty-seven PC9/A pilot training aircraft are being acquired as an eventual replacement for the present CT4 airtrainers. The first two aircraft from the Australian production line were accepted from Hawker De Havilland in December last year. As local production at Bankstown expands, so too will the level of Australian manufactured components used in the aircraft; the 21st and later aircraft will be almost entirely produced in Australia. The operations of our air defence aircraft, strike and interdiction aircraft and our surveillance aircraft are to be enhanced through the development of our northern airfields' infrastructure. The major works at Tindal are progressing on schedule and within budget. Over 75 per cent of the works have already been completed and RAAF personnel have begun to man the base, with a planned date for the commencement of F/A-18 basing in October this year. The airfield and associated works near Derby were completed in December last year and planning is proceeding for other support works to further enhance the operational capabilities of this bare base airfield. The Government expects to be able to fund this in the 1989-90 budget year. Investigations have also commenced into a Cape York Peninsula airfield site through joint consultative arrangements with the Queensland Government. Present planning is for work to begin in the 1990-91 financial year subject to the results of an environmental impact study. The final element of the Government's defence strategy calls for a flexible ground force, with air and naval support, able to react to an enemy incursion and to protect dispersed population centres and infrastructure. The restructuring of our ground forces to meet credible contingencies has progressed well. An Army force structure based on the 1st Division, two Reserve Divisions and training and logistic commands has been retained. The shift in the focus of Army operations northwards has been particularly apparent over the past 12 months. Planning for the 2nd Cavalry Regiment to move from Holsworthy to Darwin is well advanced and the regiment should be installed in its new barracks by the end of 1992. Appropriate training areas are also being acquired. An examination of the implications of relocating a brigade to the north is also underway, with a study of the strategic, operational, logistic and personnel implications scheduled for completion later this year. The emphasis on ground based surveillance has continued with the development of the regional force surveillance units in the north. Norforce participated with the 2nd Cavalry Regiment in exercises in the Northern Territory late in 1987. New regional force surveillance unit depots are planned and the raising of two new companies by 51 Far North Queensland Regiment next year will enable it to increase its presence in the Gulf of Carpentaria and Torres Strait regions. To ensure that we get the most appropriate mobility for our forces, a selected range of wheeled armoured vehicles for possible use by the 2nd Cavalry Regiment will commence evaluation trials under northern conditions next year. The introduction into service of 39 Black Hawk battlefield helicopters is progressing well, with the delivery of the first Australian assembled helicopters scheduled for April. The acquisition of the Black Hawks will contribute significantly to the combat power of the Army's operational deployment force. This capability should be fully operational within the target period of five years and full Army manning is likely to be achieved by 1993-94. The role of the Reserves has been enhanced through the introduction of call out legislation last year. The Army Reserve is now being developed as an integral part of the force rather than a component of its expansion base. This process, which has been achieved within the 26,000 manpower ceiling detailed in the White Paper, is almost complete. The reorganisation has provided the Army Reserve with a sense of purpose which is reflected in improved morale and reduced wastage. Other equipment projects, principally for the Army, include new small arms, 105mm guns, bridging, all-terrain cranes, medium trucks and radios. Other aspects of defence planning are being redirected in the light of our new policy orientation. A major review of Defence Force command and control arrangements was carried out last year. It concluded that the present system of joint force commanders should be further developed in several important directions. I will give details of these changes and make public a declassified version of this review in the near future. The new military manpower system referred to in the White Paper has been introduced to give the Services a stable trained force and supplementation of the training force to match fluctuating separation rates. Defence property holdings have been reviewed, and those not required for efficient operations will be disposed of. I have already mentioned Australian industry's involvement in several key defence equipment projects. Australian industry involvement in the supply, repair and maintenance of Defence Force stores and equipment has been increased dramatically under this Government. This comprehensive Australian industry involvement in defence procurement is a direct consequence of the Government's commitment to defence self-reliance. It is also a vindication of the Government's wider economic policies and initiatives. For example, our ability to source over two thirds by value of the submarine and ANZAC ship projects in Australia is due in large part to Australian industry's increasing ability to compete for work in the international market place. The Government also has moved to realise the potential of an increasingly competitive Australian defence industry to generate export income. In late 1986 I announced a series of practical measures to foster Australian defence exports. These measures were based in part on preliminary recommendations by my ministerial consultant, Mr Bob Cooksey. I also took up Mr Cooksey's suggestion that current defence export guidelines could be revised to enable a better balance of Australian commercial, defence and international interests in the defence export area. The Government has recently agreed to a series of principles to guide detailed revision of existing defence export guidelines. The Government also agreed to streamline existing cumbersome administrative arrangements. Substantial work is required to finalise the new arrangements which are to be in place by May this year. The Government recognised in the White Paper that the highly skilled and dedicated members of the Defence Force are our most valuable defence resource. The Opposition said a lot about our defence personnel policies, but they have offered no solutions to the undoubted difficulties the ADF faces in keeping highly-skilled people. This Government has given unprecedented attention to this issue. My colleague Mrs Kelly has been appointed to undertake a thorough overhaul of defence personnel issues, and her work in this area is both very important and very complex. Anyone who believes that the solutions in this area are simple does not understand the problem. We have allocated substantial funds to rectify deficiencies in the personnel area which have been building up over many years. The most widespread and justified complaint by service personnel relates to the quality of the defence housing stock. The Government recognised this deficiency by establishing the Defence Housing Authority, which began operation on 1 January this year. The Government is committed to spending $750m on upgrading existing houses or acquiring new houses over a 10 year period. The Government also is committed to improving living conditions for single people in the Defence Force. A $57m project will begin this year to upgrade existing barracks accommodation by the provision of 4,500 single rooms. The question of appropriate salaries and allowances for members of the Defence Force has been addressed by the independent tribunal established by the Government. The tribunal has now determined 17 Defence Force remuneration cases, four of which were national wage case flow-on increases. These proceedings have all led to Defence Force pay or allowances increases within the national wage case principles, and include the second tier increase agreed with the Commonwealth and which the Defence Force achieved on its own merits. The Defence Force Renumeration Tribunal is serving its purpose well. None of these achievements could have been realised without particularly adept resource management. When considering the terms of reference which should be given to Paul Dibb for his review of defence force capabilities, the Government recognised that financial realism would be the key to successful implementation of his recommendations. The evidence for this was clear for all to see: the Fraser Government's Afghanistan debacle had left the Defence Force confused and demoralised, and financial irresponsibility was the achilles heel of the 1976 White Paper. The firm foundation for military strength is economic strength. No matter how high it is on the Government's list of priorities, defence-in peacetime-cannot be insulated from economic realities. When the full extent of the measures which would be required to revitalise the economy became apparent, the Government had no hesitation in deciding that defence, along with other important programs such as education, health and welfare, should contribute to economic recovery. In principle, there was nothing new or extraordinary about this: Similar action had been taken twice under governments led by Malcolm Fraser. However, in the past, the absence of a coherent set of priorities within the defence program had made the management of austerity next to impossible. The existence of the White Paper meant that, on this occasion, austerity was not only manageable but, in the final outcome, it has proved beneficial. It has driven us to find ways of meeting our total objectives at less cost than originally envisaged. The realisation of substantial economies within the defence portfolio was an integral part of the White Paper strategy. Even before the White Paper was prepared, work had begun on the restructuring of the defence factories and dockyards. Williamstown Naval Dockyard in Melbourne, once a substantial burden on the defence appropriation, has now been sold to a private consortium for $100m without diminishing our vital shipbuilding capability. In October last year the Government Aircraft Factories in Melbourne were placed on a more commercial footing when they began operations as a government owned company, known as Aerospace Technologies of Australia. Streamlining of other factories and facilities is continuing with an emphasis on making their operations more commercially orientated. Significant productivity programs are being put in place, particularly at Garden Island Dockyard. More recently, the Government has instituted a review of defence logistics-an area which accounts for more than 30 per cent of the defence budget and employs 30,000 people. I am confident that it will be possible to achieve substantial savings; efficiency improvements already identified amount to over $100m a year. Honourable members might be interested in some examples of improvements that are being introduced. We have approved changes to the defence contacting organisation and contracting procedures to simplify procurement. We are looking at streamlining our decision-making arrangements for purchasing stores and are planning to make substantial reductions in administrative processes. We have looked at the size of the defence inventory, and found that many items have not been used for years. We are getting rid of those which we no longer need. We are introducing ways of making our procurement and stock distribution systems run faster-which will lead to substantial reductions in expenditure and infrastructure. Other means of improving the efficiency and productivity of defence logistics also are being pursued. We are now placing major emphasis on the use of local management and commercial infrastructure in support of the Defence Force. For example, we are examining prospects for a much closer relationship with the transport industry in the management and running of defence commercial vehicles. Apart from these specific reviews, the whole structure of the Department is being streamlined to cut out waste and duplication, to produce a less hierarchical and more efficient structure. This is the most radical restructuring of the defence organisation, and of attitudes within it, since the Barnard reorganisation in 1973-75. Government policy requires Defence to shed 3.75 per cent of its civilian staff by the end of June 1990. Savings of 3 per cent-that is 80 per cent of the target-have already been made. Last year civilian staffing was reduced by more than 1300. I should stress that these were balanced cuts spread across the defence spectrum. For example, 16 senior executive service positions have been abolished since July 1986. I expect to continue reducing civilian staff by at least one per cent a year over the next five years. Those who see the grey-suited mandarins of Russell Hill as regiments of Sir Humphreys should realise that in fact they are some of the toughest and brightest managers in the country. I do not believe we have yet reached the bottom of this barrel. It is the Government's aim not only to achieve the White Paper's objectives but to achieve them with as little cost to the taxpayer as possible. There is no merit in bringing down big defence budgets; the merit lies in what is achieved with the money. The Government will continue to seek savings through increased efficiency within the defence portfolio until it is satisfied that every dollar allocated is making an effective contribution to defence preparedness. At this stage it is difficult to quantify the overall savings which will flow from the large number of efficiency and restructuring programs which have been implemented or are being developed but I am confident that, if all planned savings are realised, about $200m a year can be freed to fund the high priority programs identified in the White Paper. Two hundred million dollars a year over the life of the White Paper program adds up to $3b. When I remind honourable members that the target cost of the ANZAC ship project is $3.5billion, it is readily apparent how significant these savings are. The White Paper objectives can be achieved without continuous real growth in the defence appropriation, provided the savings which can be obtained through increased efficiency are realised and the program continues to be managed effectively. Finally I would like to acknowledge the dedication and professionalism of the men and women of the ADF who are responding to the challenges of the White Paper to build the Defence Force we need to make self-reliance a reality, and guarantee Australia's security into the next century. Senator ROBERT RAY —I move: That the Senate take note of the statement. Senator MacGIBBON(Queensland)(3.09) —The statement that we have before us this afternoon from the Minister for Defence (Mr Beazley) continues the practice of defence by deception which has been practised by this Government. I want to develop the theme of the deception that is perpetrated by this Minister and I also want to talk about the politicisation of the Department of Defence, because never in my time have I seen the Defence Department prostituted for political aims in the way it has been under Minister Beazley. The prospect of defence by deception horrifies all of those on the Opposition side. We have the technique of the grandiose statement; we have the statement this afternoon which amounts to nothing-a statement written by two or three civilians in the Department of Defence, and the Minister did not contribute a word to it. Before that, some weeks ago, we had a similar statement put out purely for public relations reasons. We have had the development of the pseudo-authoritative reports on defence, the Dibb Review of Australia's Defence Capabilities of two or three years ago, the White Paper of last year and the Cooksey Review of Australia's Defence Co-operation Programs and Policy on Export of Defence Equipment which, curiously enough, has never been released. Why has not the Cooksey report been released? Maybe now that the New South Wales election is over some of the recommendations that I presume Mr Cooksey made about shutting down inefficient defence facilities in New South Wales can be released to the Australian public. All this business of defence by deception counts for nought. It does not fool any potential adversaries of Australia and it certainly does not fool the Opposition. We have the situation in which a Defence Minister is in the same position with respect to public esteem as Mr Hawke was before the Adelaide by-election. Just as Mr Hawke did not have the credentials to sustain that high reputation, nor has Mr Beazley. The reality is that the Beazley administration of the Department of Defence has reduced Australia to a situation where we have less capability in the Australian defence forces than at any time in my life. One point is that the resignation rates for the defence forces are at record levels. Over half the members of the Australian Defence Force have voted with their feet since this Labor Government came to power. I want to come back to that later because the loss of personnel that we have suffered has destroyed the capability of the Australian defence forces for over a generation. We now have a catastrophic situation as a consequence of these resignations. Whose fault was it? It was the fault of Mr Scholes and Mr Beazley-and more particularly Mr Beazley. The official figures put out by the Department show that declining resignation rates turned round in 1983. For the last five years they have been going up in a very steep trend line. It crossed, in 1984-85, the long term resignation rate. In the current figures, the long term resignation rate has been increased by the fact that it now incorporates as an average the high resignation rates of the last five years. So the situation in real statistical terms is worse than it appears at present. I will come to resignation rates in a bit more detail later in my speech. What the Labor Party did to protect the Minister was a cynical and almost cannabalistic act to one of its own members. The Australian Labor Party happens to be particularly bankrupt for successors. Mr Hawke thinks of Mr Keating. Everyone in politics knows that Mr Keating has as much chance as any other undertaker of being elected as Prime Minister. Quite simply, he is unelectable. Mr Hawke knows this too. He sees Mr Beazley as one of the potential candidates. So Mr Hawke, probably Senator Button and a few of the others got together after the last election. They saw the disaster that was befalling them with the defence forces and the way it would impact on the career of Mr Beazley. So, very cynically, they isolated Mr Beazley from the problem. They found a sacrificial lamb in Ms Ros Kelly. They said, `Ms Ros Kelly, would you like to be a Minister?'. Her vanity overcame her and she said, `Yes, I would love to be a Minister'. They said, `Good, you can be the Minister for Defence Science and Personnel'. From the moment she put her hand out for the Queen's shilling and signed on as a Minister she has become the source and the reason for the high resignation rates. The Senate knows very well that I carry no brief for Ms Kelly. I think her incompetence is manifest but I have a great sympathy for the way she has been made a sacrificial lamb for the shortcomings of Mr Beazley, in such a cynical way by the Labor Party. The second point I mentioned was the politicisation of the Department of Defence. In my experience this is absolutely without parallel. It must horrify my colleague Senator Stone, who is imbued with the high ideals of objectivity of the Public Service. This politicisation takes two forms: first, with the awarding of contracts; and, secondly, with personnel in the Department of Defence. What we are seeing on the award of contracts is pork-barrelling on a scale that has never before been equalled. I shall give the Senate several examples. The submarine training facility which is due to be commissioned this month in Perth is something to which I will not receive an invitation and I doubt very much whether many of my colleagues on the Opposition side will. It is a very fine facility but it should never have been in Perth. There is no reason for its being there. All the submarine and naval training facilities are on the east coast. If one talks to senior naval officers, one finds that, in a very small navy such as the Royal Australian Navy, one of the complaints they make is about the increased expenditure arising from the dispersion of training facilities. The Royal Australian Navy is so small that there is a real argument for consolidation of training facilities, having them all close together in the one geographical position. But no, to pork-barrel the Western Australian Labor electorate, the submarine training facility has been built in the west. The ship lift facility is being built in Perth at Jervoise Bay-again in a pork-barrelling exercise. We had the award to Australian Shipbuilding Industries (WA) Pty Ltd of the Pacific patrol boats-a design which has proved to be quite inferior. Those of us who took an interest knew that at the time, but the contract was awarded in the face of other good designs around the country on the basis of pork-barrelling for Western Australia. While I am discussing the Pacific patrol boat contract, I would like to reflect for a moment on the failure of this Government to coordinate the Department of Defence and the Department of Foreign Affairs and Trade. The animosity between Mr Hayden and Mr Beazley is legendary. They do not talk to one another. What is even worse, the two departments do not talk to one another. Thus, we have different conceptual goals pursued by the Department of Defence and the Department of Foreign Affairs and Trade. Mr Hayden goes off to quasi-communist, revolutionary regimes in southern Africa and gives them $10m here and $20m there, adding up to $100m, while Mr Beazley cannot get money to support people in our region-in the South Pacific, the Philippines and Indonesia-with defence cooperation programs which are so vital to our regional security. One other point is that when we gave these countries the patrol boats we did not look at the cost of running them. It did not occur to Mr Beazley that, in one particular case, the award of a patrol boat to a small Pacific nation cost more in fuel in one year than the entire gross domestic product of that state. Let us look at other examples of pork-barrelling. Let us look at what happened in Adelaide. We all knew that the award of the submarine contract to Adelaide was a pork-barrelling exercise. We lacked proof until Mr Michael Jerome Young resigned. When Mr Young resigned all his senior Cabinet colleagues came out and said, `Well, that is terrible for Mick to go; he got us the submarine contract in Adelaide'. Those of us who knew anything about the matter knew that South Australia lacked the technical heavy engineering resources to do the job and all the nonsense put out by Premier Bannon claiming that Adelaide would win the contract because of its good industrial relations record was entirely false. The only two shipbuilders that ever existed in South Australia closed down some years ago because of strikes and union problems. Yet the reason that was given for the awarding of that contract to Adelaide was that its industrial relations would be so good. Then we come to the whole concept of the two-ocean navy. It is certainly true that Australia must maintain a military presence in both the Indian and Pacific oceans. But with such a small navy as ours, with only 12 surface ships, of which probably no more than nine are serviceable at any one time, it is a nonsense to talk about developing a facility on the west coast which has permanently-based people. We must have facilities on the east and west coasts, but the concept should be that these are facilities that can be activated in an emergency. They should be similar to the bare base facilities that we have at Derby and Learmonth for the Royal Australian Air Force (RAAF) because the political situation changes. There are times when we will need to deploy ships in the Indian Ocean; there are times when we will need to deploy them in the South Pacific region. We should have the flexibility to concentrate our resources in the area. A secondary very important consideration is the need, where you have very small forces, to be able to aggregate them for training. The Navy can do no effective training if half its resources are on the east coast and half are on the west coast. Politicisation of the award of contracts has now reached a degree we have never seen before. The second point I want to turn to is the politicisation of the Department of Defence. That is probably not a very precise description because it is not politicisation by party politics. It is rather the removal of all inquiring minds of the civilian component of the Department of Defence. I think of one of my old adversaries, one of the senior personnel in the Department, Mr Wrigley. I do not know what Mr Wrigley's politics were. Obviously he had an inquiring mind, obviously he was a person who would not be pushed around; who asked why such and such a thing was being done. From innumerable contests at Estimates committees I found him a very difficult person to deal with. He was removed-sent as director of the Australian Security Intelligence Organisation. Now, all senior executive officers of the Department of Defence with service greater than three years have been removed. Mr Woods, the Secretary, has purged the Department of anyone who will oppose or come up with any critical view of what the Minister wants in the Department. I find that quite a frightening proposition. It flies in the face of the argument that the civilian component of the Department of Defence, the senior officers, are there on a long-term basis to provide continuity and stability. What are the consequences of all this? The consequences are very simple and very stark. Never in my lifetime has the Australian Defence Force been weaker than it is at the moment. It has record resignation rates and it has morale at rock bottom, particularly in the Navy and the Air Force. It is a little better in the Army but not much. More than half the members of the Australian Defence Force have left since Labor came into office. A consequence of this today is that we have lost our capability to use the defence forces in the limited roles we could before, but most importantly we have lost it for a generation ahead. It is not only the raw numbers we have lost; we have lost trained and experienced people. One cannot train a ship's captain by putting him through a ship handling school and in 18 months or two years putting him in command. One cannot train a company commander or battalion commander in the same period. Least of all can one train a fighter pilot or a strike pilot in anything under about 1,000 flying hours, something like eight to 10 years. Those are the people the Australian Labor Party has driven out of the Australian Defence Force. I have never seen morale worse in the Navy. I think the fact that in a recent period of three months five ships captains resigned after they had command speaks for itself. Career naval officers crave command. It is the high point of their careers, to command one of the major ships of the Australian Navy. It has not been my experience that any naval officer, once he has achieved command, has not gone on from captain to commodore and higher-most of them go on to rear-admiral. In recent months five resigned after they exercised command. Why are they doing this? They are doing this because their conditions of service are so poor. They know their professional abilities are not recognised by the Government. They know their professional capabilities are not developed. They have no air power at sea. They have no aircraft carrier. They cannot operate beyond the limits of the Australian coastline, otherwise they will be destroyed. They have no amphibious capability. Last year they had humiliation, as professionals, when they were asked to go to Fiji. They responded immediately with the best of their resources, but they had to take Landrovers in rowing boats from Norfolk Island to put them aboard HMAS Tobruk. No heavy landing craft could be deployed for that amphibious force that went to Fiji. We come to the Air Force. The purpose of the Air Force is to fly aircraft. Aircraft cannot be flown without pilots. There are about 22,500 personnel in the Air Force. From information given to me in Estimates committees over the years, of that 22,500 approximately 770 are pilots. The number of active pilot positions in the Air Force is about 480, although I suspect that number has been considerably reduced with regard to their nominal roles by the creative accounting that the Minister has used to cover up the deficiencies. Approximately 420 to 500 positions in the Air Force require pilots to fly aircraft. Approximately another 80 pilots are required for non-flying positions. Last year the Air Force lost 110 pilots. Already this financial year it has lost 117 pilots, and the departmental estimate alone is that this year it will lose 130. So, in 24 months it will have lost 240 pilots. The pilot loss should be balanced against the long term loss rate of pilots from the RAAF over 20 years of 42 a year. Again, the Minister and the Department are fudging the figures. They say that the long term loss rate is 47 pilots a year. The long term loss rate has gone up from 42 to 47 because of the loss of 110 pilots last year which have been included in the mathematics. However, let us not quibble about that. Essentially the Air Force has lost half of its pilots at the present time. The pilots being lost are not those who have just graduated from Pearce with their wings. The pilots who are leaving are those who have been in the Air Force for about 10 years. They have flown well over 1,000 hours, and have each cost this country somewhere between $4m and $8m to train. Their experience cannot be bought in the facile way in which the Ministers say we will train our way out of it. We cannot replace those people with eight to 10 years experience until we train a new bunch. That will take eight to 10 years and probably longer because, as the RAAF is so critically short of pilots, it does not have the number of flying instructors it needs. Even if there were a full complement of flying instructors, they could train, going full bore, only 65 pilots a year. But the pilots are leaving at twice that rate. Honourable senators should not believe any of the talk that these pilots are being bought with money. There has always been a huge disparity between what the airlines pay and what the RAAF pays. Yet we have never had the problem that we have today. We have the problem today purely because the Government treats pilots with contempt. The pilots know that the job they are doing is not appreciated by the Government, and is not appreciated by the Australian community. So, sure, the pilots are going to Qantas Airways Ltd, Singapore Airlines Ltd and Cathay Pacific Airways Ltd. For that, not only the Defence Minister but also the Treasurer have something to answer for. All the scare talk about rapacious taxes and superannuation is having a twofold effect. First, captains in the airline industry who are close to retirement are going while they can still get something from the superannuation to which they have contributed. That is increasing the employment opportunities for RAAF pilots. The second factor is the punitive taxation rates that apply in Australia. I am talking about pilots who have been in the RAAF for 10 years, who have 1,000 hours or more experience. They can go into command positions with a company like Cathay Pacific on a salary of $90,000 a year. However, instead of paying 50.25 per cent income tax, they pay 19 per cent. The Treasurer has compounded the problem with the way he has introduced cripplingly high taxation rates. What is the consequence of the loss of pilots? The consequence is staggering. There is only one operational fighter squadron in Australia today: 75 Squadron in Darwin. A fighter squadron should have a complement of 18 pilots. Today 75 Squadron has, and has had for months, seven pilots. Senator Tambling —How many aircraft? Senator MacGIBBON —It has 18 serviceable aircraft. For the first time Australia has a Mirage squadron with more serviceable aircraft than it has pilots to fly them. Usually it is the other way around, with a hangar full of unserviceable Mirages. Those seven pilots include the Executive Officer and the Commanding Officer. In practical terms, if Australia were faced with an emergency, this squadron that guards the portals of Australia could task two pilots on duty around the clock, giving it an endurance of three days. That is what the Australian Labor Party has done for Australia. That is what pacifists, such as Senator McMullan and the anti-Vietnam protesters, regard as an adequate defence policy for Australia. They have reduced us to a position from which we simply cannot recover for another decade. Manning strengths in other squadrons have been reduced. Instead of there being 18 in the FA18 squadrons that are being formed, they are down to 12 pilots. We will have great difficulty manning the FA18 squadrons. Like the Leopard tanks which are in hangars, we will have aircraft in hangars because there will not be pilots to fly them. At best, we have seven crews for the maritime reconnaissance squadrons and, again, 10 aircraft in them. I emphasise that we cannot recover from this situation in a few years. It will take a generation to get back from it. The reason for it is this Government's bungling incompetence. The reason is its lack of concern for human beings. People are important, but the men and women of the Australian Defence Force are not valued by the Prime Minister (Mr Hawke), the Ministry or this Government. The service men and women of Australia know that they are held in such low esteem by the Government and they are going because they will not put up with it. Money is not the key to satisfaction for those in the Services. The satisfaction comes from knowing that they are doing an important job; a job which is quite without parallel in the Australian community; a job that is totally distinctive from any other in the Public Service or private industry. They want simple recognition-no more than that-from the government of the day that what they do is important and valued. Since they are not getting it, they are leaving. They look at the great changes that have taken place in their conditions of service, the way they have had to fight tooth and nail for changes to their allowances and the way allowances such as the submarine allowance and the flying allowance have been delayed for years. The submarine allowance came through eventually, but only a month ago an interim decision was handed down on the flying allowance, although it has been in the pipeline for years. There is the business of removal expenses. It is not uncommon for service personnel to live in 17 or 18 different homes-perhaps Senator McLean will contribute to this-in 14 or 15 years. A lot of that is unnecessary, but it all occasions service personnel an expense. It probably costs them $2,000 or $3,000 every time they move, but we never see any recognition from the Government or the offer of an adequate return for the inevitable costs that those service men and women face from moving from Holsworthy to Lavarack, or whatever. The key to the problems we have in defence cannot be covered by papers such as that brought down by Mr Beazley today. Until this Government recognises the fact that the importance of the morale of the men and women in the Defence Force is the key to having a defence capability, we will face this incredible haemorrhage from which we are suffering. Another point I want to deal with in relation to resignations concerns the fact that nothing was done in the Department. There has been an official graph from the Department on resignation rates and there are two points I wish to make about it. Firstly, the Australian defence forces are facing the highest gross loss of numbers ever and, secondly, we are losing critical people-the battalion commanders, the company commanders, ships captains and pilots-at a record rate. When one asks the Minister, the Secretary to the Department, the Chief of Defence Force and anyone associated with defence who detected the fact that the graph had turned around at the end of 1982-83, and what action was taken, one finds that nothing at all was done; they just monitored the situation. They looked at the monthly figures with eyes that did not see. Even when the line crossed the long term trend rate, which was way below what it is today, no-one did anything. The alarm bells did not ring; they just muddled on hoping that it would get better. That is absolutely inexcusable. Senator Messner —How long ago was that? Senator MacGIBBON —It has been five years. For five years the Government sat on its hands and looked out the window. More than that, no-one said, `Listen, gross numbers are one thing, but essential people are another. What is happening with this massive resignation of pilots? What is happening with the loss of battalion commanders and ship captains?'. No-one went to that point, which anyone with the most elementary intelligence should have thought of. I go back to news release No. 38/88 by the Minister for Defence Science and Personnel (Mrs Kelly), which came out earlier this month, in which she recognised that no-one had made a critical analysis of loss rates in the Services. I find that quite unbelievable. Ms Kelly said: At present, separations are given as a single percentage figure, which is not specific enough to pinpoint where our problems lie in retaining experienced personnel in the Defence Force. In fact, it tends to mask the areas where we are experiencing problems. She patted herself on the back. Obviously she would not have thought of that; someone else would have done so. It just happens to be five years too late and, in one sense, it is 10 years too late because we cannot correct the problems that are there. That is the background against which Mr Beazley's public relations exercise has to be evaluated. Nothing in this progress report deals with the fundamental problems with Australian defence. I do not have time to go through the report seriatim, but there is one point on which I wish to comment. Right at the start, the Minister talked about the creation of a Northern Command, or Norcom. The Minister loves toys and jargon. Norcom is an utterly wrong concept. When the Joint Committee on Foreign Affairs, Defence and Trade was in Darwin a couple of weeks ago, all of us, irrespective of our party, were horrified to hear of this proposal. In fact, we did not believe that it would happen. The Minister has set up a Northern Command which will be commanded by a brigadier. But that is irrelevant; the important thing is that this Northern Command, to deal with the Northern Territory and the sea and the air around it, will be an Army command-it will be a development of the land force operations. Nothing could be more stupid than that. In the north the Army is the minor force; it is a very small force. Admittedly, it has a full colonel, but I think that the members of the permanent army in the north probably number 50 at the most. The Air Force is the biggest unit up there; it is a very big operation at Darwin and it will be bigger when it is at Tindal. The Navy also has a sizeable presence there under a captain with the patrol boat facility. All the activities that are involved, in an operational sense, in the north involve both the Air Force and the Navy. They are the important services. Now we have this fatuous scheme to put in a brigadier to coordinate the whole thing. It is not a joint force concept, with which I would have no quarrel. If it were a joint force structure, which rotated between the Services it would be one thing; but to put the Army, as the junior service, in this theatre strikes at the heart of morale in the other Services. That, more than anything else, typifies the lack of depth of perception in the present Minister and the way he handles his Ministry. We are now defenceless. We will never get out of it while we have a Minister who resorts to a public relations machine to try to deceive the Australian public as to the gross deficiencies in his command. Senator VALLENTINE(Western Australia)(3.39) —I can agree with some of the points that Senator MacGibbon has made, but I feel it is important to put a different perspective into this debate on the defence paper. I appreciate, basically, the drift of the report of the Dibb Review of Australia's Defence Capabilities and the Defence White Paper, except for the enormous contradiction that is inherent in both those documents. They talk about Australia's self-reliant defence capabilities being within the framework of an alliance with the United States of America. To me, that is a contradiction in terms. How can we be self-reliant and independent in our defence thinking if we are tied in with one of the major superpowers, if we buy most of our equipment to suit the superpower's needs rather than our own and if we continue with very expensive joint exercises which, again, suit the requirements of the United States military command rather than the real defence needs of Australia? I think that to talk of independence and self-reliance is good, but it must be pointed out that the statements of the Minister for Defence (Mr Beazley) are absolutely contradictory. We cannot be independent while we are tied in with that alliance. I am not arguing for an isolationist position for Australia. I believe that we need to have good relationships with our neighbours and that we need to have some sort of defence co-operation with the other partner in the ANZUS Treaty, that is, New Zealand. We need to be co-operating closely with the New Zealand Government so that there is a feeling of security in this region. However, we do not make ourselves more secure by being tied in to an alliance with the United States when, in fact, we are doing the dirty work for the United States in making sure that we provide all of the intelligence gathering operations it needs for its military operations, whether they be nuclear or conventional, interventionist or genuinely defence. I think that we should have no part in that whatsoever. It is time that we really took very seriously this notion of independent self-defence capability. For too long we have had a notion of grovel- ling subservience to the United States. For too long successive Australian governments have allowed Australia to be used. There is a lot of argument in Australia about how much money we should be spending on defence. We have just heard Senator MacGibbon say that we are not able to defend ourselves. I believe that, if we spent our defence dollars more wisely and really looked at the genuine defence of Australia rather than buying the long-range offensive weapons systems which suit the military purposes of the United States but which have nothing to do with the defence of Australia, our defence dollars would go a long way further and we would also be proceeding towards independence. This bicentennial year is very embarrassing to some people because we have not yet acknowledged the Aboriginal people's prior claims to this land. At least the Australian Government has now done that officially, but the Australian people have a lot of catching up to do in that regard. Perhaps it is due to the fact that it is 200 years since non-Aboriginal people invaded this country that we are still beset with an invasion paranoia. This is something that is very deeply rooted in the Australian psyche and something that I think we need to eradicate, because we are not about to be invaded. Even people in the Defence Department acknowledge that generally. However, the Australian people still have this very strong invasion paranoia which is actually fed by the Cold War warriors and the sorts of people who organised the `red orchestra' conference that was held in Melbourne over the weekend. What I find really disturbing in this latest paper from the Minister is that security is still viewed only in terms of military hardware and the joint war games that we play with our allies. We have heard a great deal about all the equipment we are to buy from the United States in the years ahead. It is worth making the point that these purchases contribute a great deal to our trade imbalance. I note too the increase in the price of the Hornets referred to recently. Although they were costed at $2.43 billion in 1981, they are now likely to cost $5.5 billion by the time the last aircraft is delivered in May 1990. That is hardly healthy for our balance of payments. In the Asia-Pacific region security can chiefly be measured in economic terms. I believe that it is a grave error to continue this reliance on military hardware rather than considering the real security needs in this region, which invariably underlie the causes of war in the second half of the twentieth century. There was a very interesting article in the Weekend Australian last Saturday about wars in today's world. I have worked out that only 15 per cent of wars fought since 1945 have involved one country actually declaring war and invading another country while only one war has been fought in the First World-that is, if we count the crushing of the Hungarian people by the Soviet Union in 1956 as a war. Yet the Australian people remain obsessed by scenarios of invasion whipped up by the Cold War warriors. We have to realise that the nature of modern warfare has changed and that most of the wars that are taking place around the globe at the moment-and there are anything up to 40 conflicts raging right now; so we can hardly call our world peaceful-are to do with wars of liberation, internal conflicts or repression by oppressive regimes keeping their own people under the thumb. Sadly, there is still no reference in the Minister's statement to avoiding the conditions that make for wars or ways in which Australia can strengthen conflict resolution mechanisms at the international level. I believe that this is where we should be putting a lot of our energies. Australia could have a very real role as a peacemaking nation if we concentrated on non-violent conflict resolution mechanisms and actually taught such skills to our diplomats and promoted that kind of resolution of conflict rather than arming ourselves to the teeth and being ready for this invasion which I do not believe is about to happen. Australia's contribution could be far more constructive if we were to develop a strategy of non-offensive or defensive defence for this country. This must be done outside the framework of a global strategy of the United States with its dangerously offensive and provocative strategies at sea such as the fleet exercises off the Siberian coast since 1982 and, of course, the predictable Soviet responses. The United States maritime strategy is very provocative and destabilising. We contribute to that by allowing Australia to be used as a listening post and information gathering post by that United States command. What worries me about the emphasis on hardware and the whole militaristic approach to security is the chain reaction it starts off. India gets an aircraft carrier and nuclear submarines. Immediately there is talk here in Australia of acquiring nuclear submarines. Of course, there has always been hope for an aircraft carrier to replace HMAS Melbourne since it went to the scrapyard. I hope that the Government persists in refusing to bow to this pressure. I await the Oppositions's proposal on how it proposes to reconcile a cut in government expenditure with its suggestion to go for nuclear submarines, which I believe are totally unnecessary in the Australian situation. Of course, the Opposition is still considering aircraft carriers costing several billion dollars apiece. What I am talking about here is the role of threat perceptions in today's strategic environment and the dangers of escalating a regional arms race which already involves a number of countries in South East Asia because of the situation there, especially in regard to Vietnam and Kampuchea. Our neighbours in South East Asia are arming themselves at an alarming rate. We do not need to buy into that model by trying to do the same. A lot of tension is created internationally by one country's perceptions of another country as a threat to it. We can reduce that threat perception by not arming ourselves to the teeth and by being seen as good neighbours and spending more money on foreign aid rather than on expensive and sophisticated weapons systems which actually suit the United States' purposes more than they suit us for the defence of Australia. Australia has always had the problem of trying to flesh out a defence strategy when there is no threat to contend with-although, as a former air vice-marshall remarked not so long ago, if there were not a threat Australians would invent one. This continued emphasis on military hardware to cope with non-existent threats rather than using the almost unique security of our strategic environment to develop alternative models of conflict resolution is what concerns me most. We could spend, say, one per cent of our defence budget on conflict research to find better ways of resolving problems internationally rather than buying hardware. I am certainly concerned about reports that, having knocked off the Ambassador for Disarmament and our specialists on peace, disarmament and arms control in the Department of Foreign Affairs and Trade, leaving that section of the Department grossly understaffed with the kind of expertise that is necessary, the hard men on the Right are now out to close the Peace Research Centre at the Australian National University (ANU). This is despite the important program it is developing this year on promoting security and arms control in the north Pacific and trying to hold back the escalating arms race at sea. It is most important that Australia contribute to this debate because at the moment we are, I believe, contributing to the destabilisation of the Pacific by our very close involvement with one of the major players in that arms race at sea. Therefore, the Peace Research Centre at the ANU has been doing a great deal of good work in promoting ways to find security in the region of the Pacific. This follows on from Bill Hayden's speeches in August and October last year. They were fine words but we really need some action to back them up. I have also noticed the ridiculously inadequate budget set aside for the coastwatch program, which particularly affects Western Australia. Here there are day to day threats to Australia's security such as quarantine problems, illegal immigration and drug running. In one year we allocate only a fraction of the cost of one FA18 to that program. That is what we should be spending our defence dollars on. We really should be attending to the immediate security needs, to the reality of the situation, which is illegal immigration, drug running and quarantine problems. I believe that the Defence Department should be dealing with the Australian Customs Service and taking a great deal more action in regard to the protection of our western and northern coastlines, thus protecting our security from threats such as those. I have never really been able to understand why there has been the necessity for such a big argument about the coastwatch program. It seems to me that that is something that should be undertaken by the Department of Defence and not farmed out, at great expense to the taxpayer, to a private contractor. I also want to comment on the $1.1 billion allocated for the transfer from Sydney of part of the fleet to Jervis Bay, a proposal which I consider to be quite ludicrous when no-one, particularly the Navy personnel and their spouses and families, wants to move from Sydney to Jervis Bay where there will not be jobs readily available for their families and, of course, where the social life cannot compare with that of Sydney. It seems that only a handful of bureaucrats in the Department of Defence want to make that move. If the Government is concerned about the loss of defence personnel, it might save the $1.1 billion, probably multiplied five or six times over in the next 20 years, by scrapping that unnecessary move to Jervis Bay. One wonders what the reason is behind such a decision. I suspect that it has something to do, again, with our alliance with and subservience to the United States. Jervis Bay would be a very useful place for the United States naval fleet to call into. Of course, it would not be quite as accessible to people who are concerned about the entry of nuclear weapons and nuclear powered ships, which at the moment go to the more heavily populated centres such as Sydney. Jervis Bay would be well out of the way. It would be very convenient indeed for the United States navy to be able to use the very sophisticated facilities at Jervis Bay which Australia does not need at the moment. So that is another worrying aspect. By not moving to Jervis Bay the Defence Department could save itself some money and keep some of its personnel happy. We have heard a lot in recent times about the wastage rates, the huge resignation rates, in the armed services. This is one thing that the Government could do to keep one section of the services happier than it is at the moment. There has been a lot of complaining about that proposed move. I note that the Minister's statement refers to the recommendations of the Cooksey report. I cannot help but be aware of the contradiction of recommending a doubling of our defence exports with the speeches made by Australia in international fora on the subject of the global arms trade. Bill Hayden has made some very fine speeches on the subject of the global arms trade. He has said that Australia should not be flogging weapons to countries which are either at war, preparing for war or repressing their own peoples. That just about cuts out everybody that Australia is dealing with at the moment in terms of the arms trade. We should not get involved in that. I think it is totally immoral for the Government to buy into the arguments that Cooksey has put forward about doubling Australia's exports in armaments to reduce our balance of trade deficit. Interestingly, I can agree with Senator MacGibbon who said about this report that it had never been made public or debated in this Parliament. Yes, I understand that recommendations that Cooksey made have been put in place by the Government. But, as I said, the report has never been discussed in this place. I think this is something which the Australian people ought to be aware of; they ought to have some input into that decision making process. Of course, Australia is not one of the big players in the international arms bazaar. But by doubling our defence exports, we would be moving in that direction. We really need to think about whether this is the direction that we want Australia to move towards. Do we want to become involved in flogging weapons, the end result of which is to kill other human beings? I believe that this is an immoral and quite untenable position. It is not any answer for getting Australia out of its Budget crisis. In the last few years there has been an alarming increase in new countries entering the global arms trade in order to help boost their domestic economy. The result can be seen in places like the Persian Gulf or some of the 25 bush wars referred to in an article in the Weekend Australian last Saturday. Again, we have to be aware of the ongoing effect of this-the whole process which is set in train with great competition between arms suppliers being prepared to sell their weapons indiscriminately and regardless of who is arguing or fighting against whom in any of the many conflicts which are raging in the world at the moment. This is not an area which I think Australia should be moving towards. I have outlined on several occasions in this place proposals for a strategy of transarmament. I am sorry that the Government feels obliged to address itself today primarily to the thunder on the right rather than the constructive proposals for an alternative security and defence strategy given from the opposite perspective. I do, however, accept that until public opinion on this matter changes in Australia, it would be quite difficult for a government to put in place some of the more radical and yet sensible proposals which I have put forward. But I think the Government has an important job to do. It has to explain to Australians that we have a natural air-sea gap defence, that we are not about to be invaded and that we have natural defences. Even the people in the Defence Department are not talking about an invasion scenario at the moment. But this sort of thinking is fed by people in the extreme right wing lobby and it certainly needs to be countered. We need to look towards the low level and medium level threats which ought to be resolved by talking out way out of trouble rather than by being prepared to fight our way out of trouble. Australia actually has no natural enemies. We are only on the Soviet Union's nuclear target list because of the presence of American bases on Australian soil. We ought to be able to get along with our neighbours in the Asian and Pacific region. I put forward most strongly the suggestion that we teach our diplomats conflict resolution mechanisms which involve talking our way out of trouble, rather than having to expend an enormous amount of money on weapons, most of which have nothing to do with the defence of Australia but which suit the United States. If we can spend money on community education in respect of drugs and the acquired immune deficiency syndrome, I believe we can develop public thinking about security as well. I believe that security means freedom from fear. Of course, one of the fears we need to address is the invasion paranoia. But we also have to address the fears that people have about the things which our defence forces could make a genuine contribution towards, things like illegal immigration and drug running on our northern shores. So we have to consider what security really means. As I said, security means an absence from fear. We should not have as the highest priority the ridiculous fear of invasion which is not at all realistic. If every country were to treat security purely in military terms and to build worst case scenarios as their rationale, and follow the recommendations of the Cooksey report by doubling their defence exports, the world would become an infinitely less secure place than it already is. I believe that Australia is in a very good position, with no natural enemies and as an island continent, to be a leader, as a peacemaker in the world. Of course, we have to start doing that by improving our relationships with our immediate neighbours and by discontinuing our grovelling subservience to the United States in terms of the nuclear alliance which we have with that country. Senator TAMBLING(Northern Territory)(3.57) —In addressing ourselves today to the defence policy statement made by Mr Beazley, I am reminded of a similar statement which was made by Mr Beazley only several weeks ago and which was tabled in this place. That statement looked at defence relationships in its region. I was very critical at that time of the way in which Mr Beazley approached regional defence and attitudes. What has changed in the progress report that has been tabled today, which follows the Dibb Review of Australia's Defence Capabilities made 12 months ago? I think all that has happened is that Mr Beazley has changed his speech writer. Nothing else of any great import has come through. The statement that we have been given today is nothing but a shopping list-a list of supposed achievements; a list of reminders of things that still have to be done and have to take place. The statement is not particularly intellectual; it is not particularly detailed. It is really just a regurgitation. I believe that on this occasion the speech writer has probably been drawn from the Department of Defence itself rather than from someone else's private staff. My attention was recently drawn to a quote that was made by Sir Winston Churchill in 1904. Sir Winston said that the armed forces: . . . is not like a limited liability company, to be reconstructed from week to week as the money fluctuates. It is not an inanimate thing like a house, to be pulled down or enlarged or structurally altered at the caprice of the tenant or owner; it is a living thing. If it is bullied it sulks; if it is unhappy it pines; if it is harried it gets feverish; if it is sufficiently disturbed, it will wither and dwindle and almost die; and when it comes to this last serious condition, it is only revived by lots of time and lots of money. The situation in which the Labor Government currently looks at the defence forces of Australia draws us to some very interesting comparisons with that quotation. Mr Beazley's statement today does nothing to give us any confidence or to give the members of the Australian Defence Force (ADF) any confidence that they can rely on this Government to underpin and support their important function as part of our Australian lifestyle and community. The shopping list that we have here is, as I said a little earlier, only just a list of things that may still be done and a few things that we expect to be put out any time that Budget papers are looked at or incorporated. There is no mention in this paper of our relationship with the United States of America, the ANZUS Treaty or our alliance. It does not even feature, yet this is supposedly a major defence statement by Mr Beazley. Senator Vallentine takes a very contrary view to the policies of both the Australian Labor Party and this Opposition. At least she has the courage to stand up here and put those views, which are very different from mine and from those of the Opposition, but Mr Beazley does not even acknowledge the area in which Senator Vallentine and many of her peace movement group hold very fundamental and strong views. Similarly, the views that I hold, which are very different from those of Senator Vallentine, are that we do need to have a very close relationship with the United States, we need to be able to put in place very strong Budget and defence compacts and treaties; we need to be able to work in a total partnership with America; and we ought not to share Senator Vallentine's paranoia in this area. The fact that Senator Vallentine speaks for only such a small percentage of the Australian electorate highlights the fact that a large number of people in Australia are looking to the Labor Party, the Government of Australia at this time, to come out with policies on which they can rely. Certainly, the Liberal and National parties have a very proud record both of past performance in this area and of present policies which look to the future. Senator Vallentine also drew some comparisons about submarines. I think she said that we were looking at nuclear submarines because India was doing the same. What is wrong with looking to the Indian Ocean and to the defence changes and things that are happening in the Asian area and in India? India enjoys a very close relationship with the Soviet Union and, if there are important defence build-ups in India in which the Russians have their hand, we, in cooperation with America, should be looking to develop in those areas and to counter those build-ups. Beazley's statement makes no mention of this area. The ACTING DEPUTY PRESIDENT(Senator Giles) —Order! Senator Tambling, it is customary to refer either to Mr Beazley or to the Minister for Defence, if you would be so kind. Senator TAMBLING —I shall certainly do so, Madam Acting Deputy President. The Minister makes no reference in his statement to what these proposals ought to be and to what our relationships should be in this area. The policy deals in some detail with developments for northern Australia. That interests me because my electorate is the Northern Territory. But if we compare the statements that are made in various parts of the paper we cannot find any real degree of consistency. In one part of Mr Beazley's statement he talks about the planning of the 2nd Cavalry Regiment to move from Holsworthy to Darwin and the fact that it is well advanced. He says: . . . the Regiment should be installed in its new barracks by the end of 1992 . . . An examination of the implications of relocating a brigade to the north is also underway, with a study of the strategic, operational, logistic and personnel implications schedule for completion later this year. That is, the examination is scheduled for completion later this year. Earlier in his statement the Minister said: . . . the Government has decided to establish a northern command based at Darwin . . . It will be commanded by a brigadier supported by a staff drawn from the present 7th Military District Headquarters in Darwin together with Royal Australian Navy and Royal Australian Air Force (RAAF) personnel. He said further: The new command should be operational by July this year. I find a number of those statements basically inconsistent. As Senator MacGibbon said earlier in the debate, the Minister seems to have concentrated on one particular sector of the ADF -the Army. He has not looked at the necessary integration and come forward with the way in which this should be properly planned with the other forces. If we go further, it should also be very carefully planned and integrated with the civilian needs of northern Australia. What negotiations are under way with the Western Australian Government, with the Queensland Government, with the Northern Territory Government? If this type of a force is to be located in northern Australia, it needs very careful forward planning and a great deal of consultation. The Minister is not honest enough to give us any direction as to his thinking or as to what is happening in that regard. I am aware that certain discussions are taking place at various levels of the Defence Force in these areas, but obviously they have not yet flowed through for the Government to react to them or to set the conditions and the parameters in which the policies in this area ought to be developed. Similarly, radical new policies need to be drawn up at this time with regard to coastal surveillance. The references in this statement do not draw us to any conclusions or to any firm basis on which coastal surveillance should be properly integrated with the defence forces. It certainly should be taken over by the defence forces. With the build-up of good bases across northern Australia that are planned and are to be put in place, it is a logical extension that coastal surveillance, with all of its civilian and military advantages, ought to be fully drawn in in that regard. Okay, they are the sorts of policies that are being looked at, but what about the people who constitute the Australian defence forces, the men and women who make the Defence Force their career? What are they looking for and what can they expect from this statement. Other than the concluding paragraph, where the Minister acknowledges the dedication and professionalism of the men and women of the ADF, he makes no real substantive commitment to supporting the people who have made the defence force their life's work. I recently had a letter from a serviceman which looked at this issue. This serviceman was well aware that I sit on the defence subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, inquiring into wastages and why people are leaving the defence forces at the moment. This serviceman says: Most employment groups of people tend to identify themselves, their circumstances and the peculiarities pertaining to their jobs as different. Servicemen are no different. However, there are a number of fundamentals which do make the lives and jobs of servicemen markedly different from most of their peers, within the community. In this respect the ADF is really no different from the experiences of Armed Forces in other countries . . . these fundamentals are seen to be: High incidence of managerial imposed turbulence affecting families. Imposition of a strict code of discipline. Exposure, during some postings, to varying degrees of arduous working and living conditions. Inability to effectively demonstrate dissatisfaction, other than by leaving the ADF. Acquiring service-orientated qualifications (some attracting a compulsory Return of Service) which are broadly not transportable. Constantly training and practising skills which are rarely (thankfully!) exercised in a real situation. An oft voiced rejoinder to the above list is that people are aware of those factors when they join the ADF. There is some doubt in my mind that our recruiters are indeed that comprehensive in their discussions and at 16-18 years of age, it doesn't matter as much, as it does when you have a family and responsibilities. We are dealing with thousands of Australians working in the Australian defence forces. These factors have to be properly recognised in the commitment that they give to the jobs they have chosen as a career for which they have been recruited after being solicited by the Australian Government. Basically, servicemen are conservative and loyal and demonstrate a high degree of tolerance and dedication to their jobs. They need to know that the Government stands behind what they are seeking to do and the sorts of jobs and situations that they are looking at. Given the fact that the wastage rate is currently causing so much concern and people are paying so much attention to it right round Australia, it was interesting to sit in on the hearing last week of the Subcommittee of the Joint Committee on Foreign Affairs, Defence and Trade when senior officers of the Department of Defence and the chiefs of the defence forces were present and answered a series of questions relating to this whole matter. What they presented us with in the form of tables and graphs of where it all stood showed that the senior administrators of the Department just did not understand the intricacies of why people were leaving. The graphs and the tables that were presented just showed the broad separation lines over a 10-year or 12-year period and they just drew on factors such as whether the separation categories involved cadets and trainees, involuntary or temporary employees, reservists, people eligible for a pension or people ineligible for a pension. That was the sort of information that was presented to a parliamentary committee. It was totally inadequate to enable the Committee looking at this important issue to try to fine tune the areas where there were major problems with wastage. Whilst one can cite a current separation rate of 12.8 per cent, which is dramatically higher than the 10-year average or the average over the last few years, there was no attempt by the Government or the Department to try to look at the wastage by rank and seniority, by age or by the length of service of servicemen, or to look at the wastage rate according to their specialisations and rank or the average time they had been forced to remain in a posting or serve in a job at any point so that the Committee would be able to sit down and look at that area. I find it most disturbing that the Minister for Defence Science and Personnel, Mrs Kelly, has not insisted that her Department present this sort of case. Senior personnel were sent to the Committee with a hopelessly inadequate case for argument and the Committee has had to call on many other people from the defence forces or from academia to come in and actually do the Government's work and identify the problems. I draw to the attention of honourable senators the submission that was made public last week by Dr Cathy Downes, a research fellow from the Research School of Pacific Studies at the Australian National University. The submission that was made by Dr Downes was far more comprehensive, far more analytical and far more objective than anything that was presented to the Committee by the Government, through the Department of Defence. It is important that we consider Minister Beazley's statement in its totality but, in so doing, we should also look at all the holes and all the weaknesses. I do not want to be presented with a shopping list of equipment. I do not want to look just at statements that I would see as being complementary to a Budget statement, and that is really all that the Minister's statement is. It does not address adequately policies; it does not address adequately the issues relating to the people who work for Australia through the defence forces. Senator McLEAN(New South Wales)(4.15) —I rise briefly to speak to a document entitled `Government Defence Policy-a Progress Report'. I am rather teased by the irony of the term `a progress report'. Indeed, if this ministerial statement were an honest progress report, I suppose that one could facetiously say that it should have 27 blank pages. There has been no progress in Australia's defence for a long time; yet, for the second time in two sitting weeks, we have been treated to a ministerial statement which I can only assume is designed quite deliberately to deceive the Australian public about where we are at in Australia's defence. As I have said, this is the second statement in three weeks-I think the last statement was actually made on 23 February-and it is designed to boost our confidence and tell us that all is well. It is an `all is well' statement. In that respect, of course, it is laughable and it stands in absolute contradiction with statements which are coming from other sources. I suppose that we have to give the Government credit for trying. It is certainly trying to convince the Australian public that all is well in Australia's defence. It takes up the promises in the report of the Dibb Review of Australia's Defence Capabilities 12 months ago. I suppose that in that respect it is a first birthday statement, celebrating one year after the Dibb report and purporting to suggest that some progress has occurred. Yet, in reality, that year since the Dibb report was presented has been one of the most disastrous years in Australia's peacetime defence history. In the last few months the Opposition, with the support of the Australian Democrats and Senator Vallentine, has responsibly been revealing the realities about Australia's defence. The realities are that we are defenceless. Things are not getting better; they are getting dramatically worse. I do not have the precise words in front of me, but a couple of months ago Senator MacGibbon said that Australia's defence forces could not defend Bondi Beach on a Saturday or Sunday afternoon. That was a fairly colourful statement of their inadequacies but it pretty well captured the inadequacies of our defence forces. Yet today we are confronted with a statement from the responsible Minister that is attempting to convince the Australian public, yet again, that all is well. I will not repeat the statistics that have been very adequately advanced in the debate this afternoon by Senator MacGibbon and Senator Tambling. They have documented the fact that, in the last few months, there has been report after report from responsible charged individuals and groups of individuals about the gross inadequacy and the dire circumstances of Australia's defence forces. One report which has not been quoted and which stands in stark contrast with the statements of the Minister for Defence (Mr Beazley) is the report of the Joint Committee on Foreign Affairs, Defence and Trade about the management of Australia's defence forces. It was tabled several weeks ago and it stated that there is a considerable view that all is not well in the management of our defence forces, yet we are confronted today with comments from the responsible Minister, such as are to be found on pages 3 and 4 of his statement, that all is well and that the management of the defence forces could not be better. I quote from page 4 of the statement: However, the White Paper program is about more than equipment; it is about the people who make up the Defence Force. On page 3 of the statement we find: Realistic planning and good management are fundamental to the White Paper program and realistic planning and good management have enabled it to survive the test of the last nine months virtually unscathed. Yet the report tabled by the Joint Committee on Foreign Affairs, Defence and Trade details the gross inadequacies, mismanagement and dissatisfaction with the management of Australia's defences. One cannot help but be staggered by the contrast between, on the one hand, what this responsible Minister has been telling us in recent weeks about how well things are going and, on the other hand, statements from recently retired Air Marshal Evans. He says that the surveillance of our north coast is grossly inadequate. We are being treated to reports in the Pacific Defence Reporter by Commodore Alan Robertson who says that the state of our defences is laughable and to recent reports and statements by Admiral Guy Griffiths, who is stating publicly around the country that the defence forces and the defence of our country are grossly diminished and inadequate. The recent resignation rates and the expressions from retiring and outgoing serviceman about the conditions of service, their gross feelings of irrelevance and the poor state of morale simply serve to cite the absolute contradiction between what we are being told in two recent ministerial statements and what the realities are. The ministerial statement tabled today purports to cite how well we are moving and progressing in relation to the goals of the Dibb report. I have already quoted from pages 3 and 4 of the ministerial statement. It reports the shift in emphasis of our defence northwards, the establishment of a new northern command, projected major defence exercises, the establishment of new and viable defence industries and so on. This is a superficial analysis which is designed simply to deceive us. The fact is that the Dibb recommendations of 12 months ago were flawed. They were based on conventional thinking, equipment biased, outdated, obsessed, as Senator Vallentine mentioned earlier, and pre-occupied with threats of invasions-which are purely imaginative. They were downright dangerous because they were so far removed from the realities of what we require in forward defence planning. Several months ago Senator Ray, as the Minister representing the Minister for Defence, asked us to provide him with alternative ideas. He said, `Start giving us some alternative ideas'. That was an admission of the fact that his Minister and Government are sterile, unimaginative and incapable of coming up with anything new about the defence of Australia. They cite models which are based on the First World War, the Second World War and the thinking of Vietnam. In recent weeks we have attempted, as has Senator Vallentine already this afternoon, to project some new thinking and to challenge the Government and the Opposition to think dramatically differently, to think laterally about what is required in Australia's defence and to revise our thinking about what constitutes security and insecurity. We should also move towards new models such as I have suggested in the past, integrated models of defence which are based on civil defence thinking and not on outmoded military defence thinking, models which would provide for increased and substantially improved morale within the Services, models which would provide relevance and for the defence Services to be more visible and relevant-and perhaps even models on which we could suggest such things as the re-introduction of voluntary national service. We do not believe, as Senator Vallentine suggested earlier, that we need necessarily delay such thinking. It would take perhaps two or three decades to shift the emphasis dramatically, but the emphasis could begin to change immediately. I have recently drawn attention to the fact that Senator Coulter and I have made submissions to the Joint Committee suggesting that by the purchase of aircraft such as the CL125 we could dramatically change and render effective in a year or two from now, if not within months, the surveillance of our north coast. Our present Minister and Government are sterile in their thinking about our defence. They are lacking imagination or courage. It is possible for us to improve dramatically our defence forces and their morale, reverse the resignation rates and make our defence forces more visible and more relevant to our community-and to do this fairly quickly. I am suggesting that this is the second ministerial statement in two or three weeks which has emanated from somewhere outside the Minister's office. It is the product of public servants who have sat back for a few afternoons and churned out their statutory 20-odd pages of platitudes, because the statement is little more than that. Alternatively, if that is not the situation, we are confronted with a government and a Minister hell-bent on deceiving the public and without any ability to take us forward in our defence thinking or to come to grips with the extraordinary problems which are confronting us. This paper is deceptive, irresponsible and dishonest-in that it does not disclose the realities but tends to paint them as something else-and it reflects the locked in, unimaginative and sterile thinking of our Minister for Defence. Senator MESSNER(South Australia)(4.27) —Senator McLean quite rightly has drawn our attention to the fact that the document before us really is a repeat performance of the document which was presented to the Senate only two or three weeks ago by the Minister for Home Affairs (Senator Robert Ray). It seems that we could have saved a great deal of money because we could merely table it and have incorporated in Hansard the speeches we made the last time round. It seems as though Senator McLean is right in his conjecture that somewhere over in the bowels of the Department of Defence there is a person sitting at a word processor with an already stored set of facts and phrases which are merely pumped out whenever the Minister for Defence, Mr Beazley, feels he should say something about defence. One wonders whether there are good reasons for that at the present time. The Government has little to talk about in terms of its record. It has faced election defeats of very momentous proportions in the last few days. Consequently, it is unable to grasp the realities and is saying to dear old Kim, the Minister for Defence, `You rush to the barricades. We will add another defence statement so that we can keep everybody from talking about something we do not want to have talked about for the time being'. It also raises the situation with the leadership of the Australian Labor Party where there is a challenge to the authority of the Prime Minister (Mr Hawke) by Mr Keating. Senator Bolkus —Madam Acting Deputy President, I take a point of order. Senator Messner is addressing a statement from the Minister for Defence. I cannot for the life of me work out how any fantasised leadership problems in the Labor Party have any relevance to the subject under discussion. The ACTING DEPUTY PRESIDENT(Senator Bjelke-Petersen) —Senator Messner, will you please keep to the report. Senator MESSNER —I was just going to make the point that one of the contenders for the potential leadership of the Labor Party is none other than the Minister for Defence, Mr Beazley, the author of this document. It seems to me to be quite fortuitous timing that two defence statements have emerged in the last couple of weeks, one immediately following the election defeat in Adelaide and one immediately following the defeats in New South Wales and other places in the last day or two. If that is not an interesting conjuncture of timing, I will go `he' for the rent. It is quite clear that Kim-as well as Paul Keating-is making his run for the leadership. It is quite clear that in this defence debate mark 2, the Government has again failed to address some points which it also failed to address during the earlier debate three weeks ago. These matters have been well and truly canvassed by my colleagues Senator MacGibbon and Senator Tambling, but I would like to draw the Senate's attention again to the situation of wastage in the armed forces, which, of course, is the great tragedy of this Government's administration. Senator MacGibbon drew our attention to the statistics that show that since this Government came to power five years ago the forces have had a personnel turnover of about 55 per cent. I will come to the specifics of that in a moment, but we should fasten that fact in our minds and realise, as Senator MacGibbon so ably pointed out, that the people who have mainly been the subject of resignations in that period include the most trained personnel within our forces-the people who have served 10 or more years and who have been brought to the peak of their experience and their educational background. It is those people who have left the forces over that period on whom we would chiefly rely in the event of an emergency. I stress that this has occurred in the period since the Hawke Government came to power in 1983. There is no way that the factors that have driven such people to resign from the forces can be attributed to any former government, which it is the wont of this Government to say. It is relevant to recognise one or two points which are paramount at the moment in causing people to resign from the forces. Certainly, one is the overall uncertainty which causes people to wonder about their future in the defence forces in this country. That stems, firstly, from the Government's inaction and its inability to address itself to the proper issues in defence and, secondly, from the Government's causing a great deal of confusion and concern amongst people in the forces over their retirement security. Of course, we know of all the speculation being generated at present, both within and without the Government, on the question of superannuation for the community generally. This affects people in the forces no less-probably more-than those in the general community. People in the forces are required, by convention or practice, to leave somewhat earlier than those in other occupations outside. That puts them in a unique position to suffer the slings and arrows of this Government's retirement income policy, which of course does not exist. What does exist is taxation on their superannuation, which has also been the subject of a review leading up to the May statement by the Treasurer (Mr Keating) later this year. These matters concern not only people in the forces but also those in the private sector whose jobs might be complementary to those which people in the forces might seek once they leave the armed forces. I refer particularly to airline pilots who may be subject to the superannuation taxes that this Government has in mind. Consequently, this could lead to a draining from airlines of those people who might be about to receive superannuation but still have some years to serve as pilots in an airline. Should those people take early retirement they will leave gaps in the airline companies. Consequently, those gaps are filled by people from the defence forces being attracted to high incomes in the private sector. We see a dramatic decline in the number of pilots available at present within the armed forces. For instance, we read that in 1987 some 170 pilots in the Royal Australian Air Force (RAAF) submitted their resignations, 117 of whom resigned in the last six months. This is a fantastic attrition rate-failure rate-of people within our forces. Earlier I heard Senator MacGibbon mention that at the 75 Squadron air base near Darwin there were about 18 Mirage aircraft ready to be flown and maintained in proper order but only seven pilots available to fly them-seven pilots available to service a full squadron of aircraft. Surely this is a matter of crisis for the armed forces and this Government. The drastic failure of this Government's responsibility or its ability to address problems is really the central issue of this mealy-mouthed statement today. It is that kind of issue which basically is at the bottom of the Opposition's concern on defence issues at present. Let us take one other example of the kinds of decisions which are referred to in this paper and which have been taken by this Government. One which is mentioned on page 15 concerns the introduction of a new training aircraft for personnel in the RAAF-the PC9-A pilot training aircraft. These aircraft-and 67 of them will be introduced-have added a new dimension to pilot training. The PC9-A aircraft apparently prepares people to fly jet turbine aircraft, but does not fit the requirements of the Air Force to train people for jet aircraft, particularly of the FA18 type. We have a situation in which the Government is blundering along, making wrong decisions about the purchase of new aircraft and new capital equipment, yet not addressing the real needs. We need a capacity to train people to take up the slack in the forces caused by the rapid rate of resignations of pilots. That requires the introduction of a more basic trainer aircraft such as the CT4, some updated version or a new version of a similar type. But no, the Government chooses to buy an inappropriate aircraft. Consequently, the Government is not properly addressing the problems that it is generating and that are causing such great concern in the community about our defence preparedness. I will touch on one or two other matters. The matter which is of the gravest concern is the fact that, as in the previous statement two to three weeks ago, the Government has failed to concern itself with any of this nation's real worries about the developments of naval power in the Pacific and Indian oceans. Of course, we know of the increased presence of the Soviet Navy in this part of the world and of the development and use by the Soviet Navy of the former American base on the coast of Vietnam at Cam Ranh Bay. Of course, that brings the availability of servicing facilities for the Soviet Navy to a far more southerly latitude than was previously available at Vladivostok on the Pacific coast. That means that there is greater concern in this part of the world about the movements of the Soviets in this vicinity. That question, which has not been addressed in any way in either of these two statements, should demand our attention and that of the Government, particularly when the Government sets down statements of the direction in which its defence thinking is taking this country. One other area that has been touched on by my colleagues in this context is the question of the submarine project. I want to say on behalf of the Opposition that there is certainly total commitment by the Liberal and National parties to the submarine project at Port Adelaide and of course if will continue under the Liberal and National parties. Senator Maguire —Tell us what Mr Aldred said. He tried to scuttle it. Senator MESSNER —That is an assurance given by the Leader of the Opposition (Mr Howard) and the Opposition defence spokesman, Mr White, and is the commitment of the Liberal and National parties. Some politics have been made of that in South Australia as Senator Maguire is only too ready to acknowledge. The Australian Labor Party is spreading false rumours that the Liberal and National parties will somehow take this grant project away from Port Adelaide and from South Australia. That is not the case, that is not true and Senator Maguire knows it. He has been generating concern among the people of South Australia in the light of this failure to generate any other issues in the Port Adelaide by-election campaign. He will fail on this issue just as badly as he has failed on other issues. Let me just close with one other example where I think Australia's defence shortcomings are dramatically manifest. In the past year or so we have seen the coups in Fiji. We are not suggesting that it was necessary for there to have been armed intervention by the Australian forces in Fiji but if they had been called upon to serve in that area the problem the forces would have faced would have been beyond them totally. That is simply because we have no capacity to deliver forces into those kinds of beachheads, those kinds of areas in such a way as effectively to involve ourselves in any armed conflict. Of course, that does not suggest there should be or was any intention to do so. It merely raises the question that if we are called upon to deal with any situation in this part of the world, with the Pacific islands so close to us, we simply do not have the naval capacity to deliver our troops and other personnel and materiel to those parts to take part in any situation. I think that dramatises entirely the shortcomings of this Government's defence thinking. The priorities are simply not there and clearly we are not getting leadership from this Government in defence policy, generally speaking. Senator COULTER(South Australia)(4.43) —I would like to make a couple of brief points. The basis of what I want to say is the identification of the threat or threats to which Australia is exposed because I think these have been wrongly identified hitherto. In the 1890s and the early part of this century the Western industrial world went through a period of enormous technical development. We developed a view of the world which said that if we faced a problem, that problem could be rendered into a technical problem and therefore we could find a technical solution to it. That thinking, certainly in the universities and in academic institutions, has been questioned and I think exploded since the end of the Second World War when we saw that there were really no defences to nuclear warfare. Unfortunately, in political life and in the area of defence that sort of thinking has continued. This paper provides a good example of that thinking and the problems it poses for us. The problems are these: if one conceives political, social and economic problems in technical terms and seeks technical solutions to them, by and large one makes the problem worse. Certainly each technical solution to the problem of military defence has called forth greater technical innovation and defence on the part of supposed enemies which has rendered the problem more expensive to solve and more intractable. We are now spending something like $6m a minute worldwide in an attempt to guarantee security and in the past 40 years the world has become increasingly less and less secure. So, we should be seeking political and social solutions to what are essentially political and social problems. I give a couple of examples to underline what I have been saying. Senator Vallentine pointed out that we have locked ourselves into an American alliance, a dependence on the American style of defence which is certainly based on a technical type of defence. I have in front of me an article from the journal Science of 27 November 1987, which points out that the American defence system to which we are wedded has come to depend heavily on the use of radar-very expensive radar systems. This article points out that the smart weapons that are being developed now are weapons that will track along radar beams so that the instant a ship, a tank or a plane sends out a radar signal it is identifying what it is, where it is, and a missile can simply fly along that radar beam and destroy it. The article begins by pointing out: After serving for four decades as the primary shield against attack from the air, radar, is losing its defence power. With the advent of radar-seeking missiles and the military equivalent of the ``fuzzbuster''- this term refers to the ability to detect radar speed traps on roads- the combatant who relies heavily on radar will be in peril. The sinking of the British destroyer HMS Sheffield with an Exocet missile during the Falkland War was a striking demonstration of how smart weapons have changed the rules of modern warfare. An Argentine fighter flying 20 miles away was able to destroy a $50-million warship with a single shot. Under slightly altered circumstances the target might have been one of two British aircraft carriers-a blow that could have reversed the outcome of the war. The article goes on to point out that the large radar carried on the top of the line United States F15 fighter, for example, has a weight of 10,000 pounds, if its associated generators and air conditioners are added, or about one-fifth of the total weight of the plane, yet the Americans are going to spend an enormous amount of money on even more expensive radar. The article says: . . . the Air Force and Navy are spending billions on radar jammers. For example, a $300-million program is under way to upgrade the jammers carried on 36 F-111 bombers . . . It goes on further to point out that the airborne self-protection jammers are being developed at a cost of $5.5 billion. So our principal ally, the country that supplies the umbrella under which we are supposed to shelter, is finding that one of the key planks in its defence system not only has become no longer a defence but is aiding its vulnerability in the sense that anyone who uses radar in future wars is simply setting themselves up as a target. The second example I would like to give is the example of electromagnetic pulse. Again, we have locked ourselves into the American defence system, which is based substantially on a nuclear defence. Most of the warships that visit Australia are nuclear powered and nuclear armed. The American defence literature states quite clearly that in the event of war the Americans would have to come quite quickly to depend upon nuclear weapons because that is the basis of their military strategy and technical hardware. It should be known in the Senate that one nuclear weapon, exploded at approximately 200 kilometres above the atmosphere, would destroy any radio or communication system which involved the use of transistors. This is because of the considerable electromagnetic pulse that passes through the atmosphere. This means that a war that became a nuclear war would rapidly escalate into total nuclear war, because one would lose the ability to fire retaliatory weapons. So, rather than lose them, one would use them. That would be the effect of that dependence upon a technical solution. I return to the point made by Senator Vallentine that if in the area of defence we choose to rely more and more on technical solutions, we go down a road that makes us more vulnerable and less defensible. At the same time, that process soaks up large sums of money which could be better spent in creating conditions of peace rather than of war. I should like now to pick up a point that Senator McLean made about the interlinking of civil defence with the idea of military defence. Many of the significant hazards faced by countries throughout the world involve the expenditure of large amounts of money on civil defence programs. For instance, every few years in Australia we have bushfires which cost this country hundreds of millions of dollars. Yet, to the extent that the military becomes involved, often it is brought in as a last resort. Moreover, the military is not specifically trained in the area of bushfire fighting. It would be extremely useful if the military were equipped for and had as one of its tasks the job of helping to defend this country against bushfires. In that connection Senator McLean mentioned the CL215 Canadian amphibious aircraft, about which both Senator McLean and I have made a submission in relation to northern surveillance. Northern surveillance is another area in which we desperately need better civil defence. We need defence against fisheries incursions, drug runners, and problems of quarantining, particularly in the Torres Strait region. We need to have the ability to move people in quickly to intercept those who are breaking the law or imposing a threat to this country. Those matters are simply not being addressed at the present time. That is a task for the military, which could be well tackled by the purchase and use of this amphibious aircraft, which can transport fully equipped landing parties; and that aircraft can be used also in fighting bushfires. It can scoop up six tonnes of water in 10 seconds and repeatedly fly low over a bushfire and drop that water, with or without retardant. The notion that comes through this paper that military and civil defence are separate is one that I think needs to be seriously questioned. Great benefit would flow to Australia if our defence forces were to participate principally in a civil defence role, and hopefully never had to be used in a military role. I believe, like Senator McLean, that that would not only increase the morale of the defence forces because they would be involved in activities which were seen by the community to be useful, but also improve the economics of the military operation because those activities would be useful. Exercises should be more than merely military exercises, and perhaps never to be used activities. From the point of view of the acceptance by the community of military forces, the community would have a much better attitude towards them because of their extreme usefulness. I return to the primary point which I wish to emphasise. That is that there are problems which by their very nature are not technical. The attempt to render them as technical, and to seek technical solutions to them, usually compounds the problems, and makes them more intractable. It does not help to advance the solution. I believe that is what has happened particularly since the Second World War in the area of military preparedness. There is a misconception about the nature of that problem. The attempt to find technical solutions has made the solutions more expensive, and has not guaranteed safety. On the contrary, it has guaranteed greater vulnerability. Senator NEWMAN(Tasmania)(4.57) —Once again we have had the Minister for Defence (Mr Beazley)-the Minister for Defence Equipment, as we on this side of the chamber prefer to call him-rush out and try to make a name for himself by putting out a defence statement when he sees that things are going pretty badly in his area of responsibility. Quite clearly the Minister is starting to get a bit rattled by the constant barrage of criticism that finally we have been able to mount against his handling over five years of the Defence portfolio. At last people outside this Parliament are starting to realise just what a parlous state this Minister has presided over during that time. He has tried to do something about that by having the responsibility for the hard stuff passed off to a junior Minister, the Minister for Defence Science and Personnel (Mrs Kelly). She sounds willing. She says she is investigating things, and has put on a consultant, Mrs Mayer. That one is another job for the girls. She is investigating to see what she can do to make sure that State governments co-operate with the Federal Government to make life a bit better for our servicemen and women. What her expertise in this area is I do not know. However, I suppose it helps to be a failed member of the Labor Party. Nevertheless, the Minister for Defence seems to have a second purpose in bringing down his statement today, because the statement contains nothing exciting and new, which we could all be very interested in and supportive of; it is really a rehash of things we have read before. The Minister regularly puts out his bits of paper to keep the chooks fed. Most of the stuff that he has already fed to the chooks is in this statement. However, as we all know, the Government is on the nose out in the electorate, and I suppose the Minister wanted to do something to try to deflect some attention from the self-flagellation of the Labor Party and the criticism of it that is universally gathering around the nation. Perhaps he felt he was doing his bit for the Labor Party by trying to divert attention and having the Parliament talk about defence. If so, I think it is a very misguided action. If there is one area in which this Government is deficient and vulnerable, it is its handling or mishandling of the defence portfolio. That is one area about which the Government can no longer say that everything that has happened today was brought about by the so-called deficiencies of the previous Government. This Government has now been in power for five long, hard years. If ever anyone should have to take responsibility for their actions it should be the Minister for Defence-because he has simply spent five years making sure-- Senator Robert Ray —The Minister for Defence has not been Minister for more than three years. Senator NEWMAN —He has spent that time presiding over a defence force which has declined in capability and morale, and which has a whole lot of contracts on its books for equipment which some day we will see whether the Australian unions get around to fulfilling. Not long ago the Parliament passed legislation providing for the sale of the Williamstown Dockyard. The people of Australia can see what has happened to that facility-continuing more of the same until it reached the point where even the Labor Government felt the need to privatise it. Nobody was prepared to criticise that action. I believe that the taxpayers of Australia are sick and tired of subsidising the Williamstown Dockyard. The workers there who have had it cushy for so long under the Government finally have been made to pay the piper for their actions. That is the sort of thing that is happening. We are having problems with the submarine contract in the same area-demarcation disputes. This Government seems unable to deal with and come to grips with the problems because they involve its union mates. These contracts will cost us a lot of money before they are finished. Please God they will get finished eventually because the country needs the equipment which the Government has been ordering. I have no quibble with the fact that the Government is re-equipping the defence forces. My complaint is that it is doing so solely at the expense of personnel. The Government has not only presided over the greatest separation rates that this country has ever seen but also it is presiding over manpower ceilings which it has introduced in order to be able to fund its defence budget. It was not very long ago that we in this chamber were presented with, first of all, the report of the Dibb Review of Australia's Defence Capabilities, which we studied very carefully. We noticed that it contained practically no comment about personnel matters. Then we had the Defence White Paper. Madam Acting Deputy President, you will recall that many people on this side of the chamber spoke in supportive tones about the White Paper generally but pointed out, once again, that personnel matters accounted for about three paragraphs. I see that the Minister has not learnt much. I did not get time to count the number of pages in this defence statement that the Minister used to recount matters relating to equipment but, as I said earlier, much of the statement is simply a rehash of the Press statements which he has been putting out for the last few months. Be that as it may, most of the pages relate to equipment. There are a couple of passing references to service men and women and finally we end up with the Minister's last paragraph which says: Finally I would like to acknowledge the dedication and professionalism of the men and women of the ADF who are responding to the challenges of the White Paper to build the Defence Force we need to make self-reliance a reality, and guarantee Australia's security into the next century. I suppose we must be pleased that at last the Minister has realised that he has men and women in the Defence Force. If he takes a deep breath or shuts his eyes, there may be none left when he finishes breathing or opens his eyes. The situation is becoming desperately serious. It is not as if he has not been warned over many months in this place. At last he mentions the men and women in the Defence Force. Somebody has told him that he has to make a statement. I have been telling him for some time that he has to make a statement. I did not expect it to be by way of the last paragraph of a 27-page statement. I suppose it is a start. He is a bit of a slow learner. Nevertheless, the statement shows that this Government is not coming to grips with the entrenched problem it faces with the Australian defence forces. I do not intend today to go into all the detail of actions which I believe the Government could take to deal with the problem because I am making a very detailed submission to the Joint Parliamentary Committee on Foreign Affairs, Defence and Trade. I am very glad to think that the Parliament was so concerned and incensed about this problem that, when the Government would not take action, the Committee forced the Government to face the problem through having an inquiry. Hopefully, that will bring the reality of the situation home to the people of this country-those who have not yet realised what is happening-and also, very seriously to the Government. The Government, urgently, has to do something meaningful to reverse the situation. I wish to flick through a few pages because the statement contains some things on which I wish to comment. On page 2 the Minister says that he wants to report the progress he has made over the past year in making self-reliance a reality for Australia. I do not know what he intends to do. Does he intend to park all our mothballed equipment across, perhaps, the Tropic of Capricorn and see whether that will keep the invading hordes out and keep us self-reliant? I do not think that he has enough people to man it. He certainly cannot get his planes in the air. His only strike squadron in Darwin has something like 18 planes and seven pilots. I think that it is a load of rubbish to talk about making any progress at all towards self-reliance in the last year. He has been going backwards. He talked about the new clarity which the White Paper has brought to defence planning. It might have brought clarity, but it has not brought any action. He said that it is fundamental to the Government's defence policy that our defence posture must be affordable. Of course that is so, but honourable senators will recall that we had a great deal of palaver about what proportion of gross domestic product he would spend each year and what sort of real growth he would have in his defence budget each year. He has gone slowly backwards. I think that this year he is going backwards even faster. God knows what will happen in the May mini-Budget. The Minister is very ready to talk about this sort of thing having happened before in 1976, but he does not have the guts to acknowledge that the same thing has just happened to him. As I have said, the Minister gave a huge emphasis to his capital investment program and claimed that he has kept the White Paper on track. How can he expect us to believe that when, quite clearly, equipment purchases are being slipped, despite the fact that he will not acknowledge it; ceilings are being cut in manpower in order to be able to afford to keep going, and he is wasting parts of the defence budget by the grossly inflated training costs that the nation is having to face in order to replace the men and women we are losing? I have spoken at length on that many times in this chamber and I do not intend to go on about it again today. But it is on the record that costs from losing these people and having to recruit, select and train new people are enormous. What we have left is still an inexperienced Defence Force. So we are in no way able to replace what we are losing. The Minister is not prepared to come to grips with that in his 27-page statement. The Minister said that Norcom would be operational by July this year. That has been in the pipeline for a long time. He talked at some length about Kangaroo 89-a major Defence Force exercise which will take place in the north next year. I was interested to see that the Minister said that it will exercise the Defence Force's ability to respond to widely dispersed low level threats. If ever a statement could attract a sad, hollow laugh, that is it. Quite clearly, what we will see from that exercise-if that is what the Defence Force is to do-is our inability to respond to widely dispersed low level threats happening at the same time. That is the enormity of what the Minister is presiding over. The Minister said also in the statement: Our forces must have a comprehensive range of defensive capabilities-including air defence, mine counter-measures, and protection of coastal trade-and must embody mobile land forces able to defeat hostile incursions at remote locations. Sadly, the Government rejected Project Waler. It has not come to grips with the decision about the M113. We do not have the ability to get our land forces over the sort of terrain with which we have to cope in northern Australia. The Government will not make a decision on the matter. It has been in the pipeline for far too long. The Minister said also that his Defence Force needs to be deployable and effective in the most likely areas of operation. We recognise that that is very much likely to be northern Australia, but we have a difficult coastline. We have to be able to get our forces across the shore or resupply them across the shore. We have little or no amphibious capacity in this country. We have heavy landing craft laid up in Cairns because the Navy does not have the manpower to bring them out of mothballs. If our forces are to be effective in the most likely areas of operation, we have to improve our intelligence gathering capability. It takes us days to discover that we have trochus gatherers off Broome and up our creeks. It takes so long that by the time we get anybody there to intercept them, we have lost some. We do not know exactly what they were doing. We believe that they were only gathering trochus. We have had a number of debates in this place about coastal surveillance and the contract for that. We have heard Major-General Grey, the recently retired head of the Australian Federal Police, talking about the inadequacies of our northern surveillance. We certainly need to have the command and control of that northern surveillance put into the hands of the Defence Force with a special, clearly defined vote for the purpose. There is no reason why the Department cannot employ civilian contractors to do part of the work. This is an area that in wartime would be required to be covered by the Defence Department and it is quite nonsensical for that Department not to be getting the peacetime experience of coordinating the very many ships and planes that are needed to do the job for the various departments. We are really totally inadequately protected from the north. I think that it is in today's Australian that Air Marshal Evans is reported as being pretty trenchant about the lack of surveillance of our northern approaches. I know that in November last year in the Australian Air Commodore Tex Watson was reported to have said that 80 per cent of our high level airspace and 99 per cent of our low level airspace in the north was not watched at all. That is just a desperately worrying thing. Recently when I was in the Northern Territory I found that the question of defence was uppermost in people's minds. They understand just how vulnerable this country is. We sit down here in this part of Australia and perhaps do not take defence as seriously as we ought. Those people realise that Cam Ranh Bay is closer to them than are the three guided missile destroyers in Sydney Harbour. There are 40 Soviet guided missile destroyers in Cam Ranh Bay and these are closer to Darwin than the three in Sydney Harbour. We have only an air traffic control radar and an air defence radar in Darwin. They cannot see over the horizon because they have a range of about 30 kilometres only. Shortly we will have an air traffic control radar at Tindal but that will hardly extend our watching capacity at all. It takes four days to get a patrol boat to steam from Perth to the north-west corner of Australia. We have a total inability to keep a watch on and to patrol around our northern coast. We have to do something urgently about it. The Minister for Defence talked about a network of operational over the horizon radars. He talked about the vast sea and air gap. I recognise that in fact action has been taken in this area to try to achieve something-but not enough. I believe it is a matter of the highest priority. In my book, it is more urgent than some of the equipment on order, which is much more expensive. I think that in priority terms I would have to put our intelligence gathering capacity, along with the maintenance of an experienced manpower in the Services at the very top of the list. I could not find any reference in the Minister's statement to airborne early-warning and control aircraft-once again, something which the Government has been delaying making a decision on. The Minister referred to the basing of half the fleet in Western Australia. He trots that out every time he makes a defence statement. However, I am acutely aware of the fact that we cannot put half our fleet in Western Australia because at this stage the DDGs and the FFGs are not able to be lifted by the ship lift which is being installed in Western Australia. I acknowledge that in a year or so that ship lift will have an expanded capacity to take the larger ships. From reading the Minister's statements on this matter, one would not realise that in fact Western Australia is not presently capable of handling half the fleet. There are other inadequacies that have not been addressed in planning to put half the fleet in Western Australia, but I do not intend to go into detail of that now. It takes quite a time just to turn the pages of the Minister's statement because it is pretty thick. As I mentioned earlier, so much of it is a repeat of previous material issued by the Minister. However, on page 21 of the statement, in relation to defence personnel, the Minister says: This Government has given unprecedented attention to this issue. My colleague Mrs Kelly has been appointed to undertake a thorough overhaul of Defence personnel issues and her work in this area is both very important and very complex. Anyone who believes that the solutions in this area are simple does not understand the problem. We have allocated substantial funds to rectify deficiencies in the personnel area which have been building up over many years. I recognise that the problems of manpower are not new, but never have we seen them in the catastrophic proportions that we are now facing. I draw attention to the fact that some of these manpower problems are directly Government-instigated, partly because of the break-up in the defence budget whereby far too high a proportion of the budget has not gone into equipment purchases and far too small a percentage is now in manpower. Only 42 per cent of the defence budget now relates to personnel. That should be at least 50 per cent if the Government is to do anything meaningful in that area. Secondly, the Government just in the last year has introduced ceilings on Defence Force manning levels which have dramatically reduced its capacity to do the job that the Government requires it to do. Therefore, in a very real sense the Government is making the problems. I do not believe that the Government really is grasping the nettle in doing something meaningful about it. Anyone who has followed the progress of this matter over the last few years would realise that the Government is actually going to the Defence Force Remuneration Tribunal time after time and arguing against increases in wages for the defence forces. The defence force personnel do not have a union. They do not have the right to strike. When the government of the day, their employer, takes advantage of them in that way, by going to the Tribunal set up with such a flourish to try to improve the arrangements for paying them, it is clear why the morale of the defence forces has plummeted as it has. The Government has in its own hands several ways to immediately improve the morale of the forces-for example, in regard to Defence Force ceilings and not fighting the forces when it comes to claims in regard to pay and conditions before the Tribunal. One thing that concerns me is that the Government has just recently taken the Remuneration Tribunal out of the Defence Department and placed it in the Department of Industrial Relations. That was supposed to show that the Department of Defence was not fighting itself and thereby disheartening service men and women who felt that their own leaders were arguing against their case. All that has happened is that we have little secret visits by senior officers of the Department of Defence to the Department of Industrial Relations for consultations with officers of that Department who will conduct the case for the Commonwealth against the defence forces in the Tribunal. Therefore, all that has happened is that the Government has sent it underground in a very deceitful manner. I cannot imagine Bill Kelty being too happy if the Government were to deal with trade union claims before the Conciliation and Arbitration Commission in that way. It seems to be okay to do that to service men and women because they are not unionists and, therefore, presumably, are not mates. This Government seems to care only about its mates. I cannot accept the Minister's statement that the Government is giving unprecedented attention to the issue, that it is doing anything meaningful or that the solutions are not simple. The Minister said that anyone who believes that the solutions in this area are simple does not understand the problem. Of course, it is a very complex matter, but there are several ways in which the Minister himself could by decree tomorrow improve things quite meaningfully. For instance, had he reversed the proportion of his statement going to equipment vis-a-vis personnel-had he had a page devoted to equipment and 20 pages to personnel-we might have been able to start to believe that he really was committed to doing something for service men and women. Once more the Minister is just putting out his same old list of toys that he is so very proud of. But there is a lot which he should not be proud of. There is a lot for which he should be condemned. The Minister has presided over the diminution of capability and experience in the Australian Defence Force which will stand as a lasting condemnation of his handling of the defence portfolio. Increasingly, the Australian people are starting to realise just what this Minister for Defence and this Government have presided over. Our ability to defend ourselves and all of the talk about self-reliance will be for nothing if we cannot keep the professional and highly trained men and women in the Defence Force. The Minister's progress report is just more of the same. We should give him a good shake to make him realise the seriousness of what he has presided over. But I fear that he is unteachable. He has been long enough in his job to know that he has been going down the wrong track. He was interested in the question of defence long before he got the defence portfolio. If anyone should have seen the dangers in the action that he has been taking, it should have been this Minister. That is why I am all the more disappointed that someone with such a background in this area should have let the defence forces down so badly. They had extremely high hopes of this man. We all know that the Australian media was touting the Minister as the best Defence Minister that this country has ever seen. Sadly, he has forfeited all that. He has not been strong enough in Cabinet to keep the Defence budget at the level at which it should have been kept. There has been an inability or unwillingness on his part to see that the amount spent on personnel did not go down to a point where it would damage the Defence Force and its capability. He has not carried out his responsibilities properly and the country is the worse off for it. God help that we do not suffer from some unforeseen happening. We have to remember that we live in a very uncertain world and in a very unstable part of the world. We cannot trade on the fact that nothing will happen to us. We cannot afford to lose the experience and expertise that we have. Therefore, I am astonished, disappointed and quite disillusioned that these 27 pages of repetition could still come from a Minister who should know better. Senator SHEIL(Queensland)(5.23) —I wish to make some brief remarks. Surely the Government must realise from the reception that the statement has received that there is grave concern in the country about our defence system. A prime responsibility of any government in any country is to provide defence. I think this Government thinks as much about our defence forces as it does about our rural communities. It has been claimed that the report is repetitious, and I can confirm that it is. I am particularly concerned about the morale of our forces today. The resignation rate is going beyond the pale. The average number of resignations used to be something like 4,000 a year. They are now up to 10,000 a year and climbing. The situation with regard to Royal Australian Air Force pilots has been brought out, particularly in this debate. It is something which was pointed out to the Government months ago. But nothing has been done to stem the tide. Our highly trained and highly skilled pilots are leaving our forces in droves. We cannot afford to have that sort of thing happen. The Air Force is not the only service which is being affected by resignations. It is happening in all of the forces. The coalition Government had a Defence Minister and three sub-Ministers who looked after the Army, Navy and Air Force. That number was reduced to one when Labor took office. Subsequently, a junior Minister has been appointed to look after personnel. But this move was made too late. A deluge of resignations has already occurred, people are leaving the services and morale is down. When I say that defence is a prime responsibility of the Government, I mean just that. This Government has not only neglected defence but it has let it run down to a point where we are actually in a dangerous position. I read in one of today's newspapers that surveillance around Australia is an impossible job for our forces to carry out. We cannot look after the whole of our coastline; we can look after the portion we can handle only during the daytime to the extent of the range of a person's eyes. This is a primitive way to defend a country that is supposed to be a middle power. I just rise to add my voice to the parlous state that our forces are in. It is shocking that a government should allow its defence forces to run down to this level. We should reverse the trend by taking immediate action to restore the situation. Senator WOOD(New South Wales)(5.27) —It is interesting that this statement on defence comes on the same day as Mr Brzezinski is reported in the Press as asking Australia whether self-reliance is a code word for `cop out' or is a starting point for participation in collective security. That is the same question that I would ask. I suggest that Mr Brzezinski did not need to ask that question because this defence statement, like the last statement on defence policy, highlights the fact that Australia's defence programs are not geared towards a defence of Australia but towards what Mr Brzezinski calls a participation in collective security. Mr Brzezinski talks about the importance of the American relationship with Japan. He says that the most important partnership for America in the coming decades will be with Japan as the fundamental outlook of American foreign policy changes from an Atlantic to a Pacific orientation. The United States of America is looking to the Pacific; it is building its forces in the Pacific. The American nuclear build-up in the Pacific is quite substantial. What I would like to see from this Government and from the Minister for Defence (Mr Beazley) is some sort of statement of Australian independence and sovereignty. It looks as if the United States wants Australia to do its part militarily for the protection of United States interests in this region and for Japan to do the economic part of the protection of the United States interests in this region. So it is an economically armed Japan, rather than a militarily armed Japan, which will economically secure the countries in this region to the Western alliance. Senator Puplick —This was in Brzezinski's book 15 years ago. Have you just woken up to it? Senator WOOD —No. It may have been in Brzezinski's book 15 years ago. I was just commenting on the fact that he made these statements yesterday, the day before Mr Beazley presented his statement to the Parliament. It would seem to me that things have not changed in 15 years. The only change in 15 years is that Australia is being encouraged to participate, and it is doing so willingly, in building its forces to bear the economic burden of the protection of United States interests in the region. My remarks will be very brief because I do not want to repeat what I have said on other occasions. I just remind the Senate that I believe that the real protection of the region comes not from spending on military toys-not from more toys for the boys to play with-but from more solid relationships with our neighbours. We have to see Australia not just as nearby South East Asia and the Pacific but as part of Asia and the Pacific. We have to see ourselves as being of the same bloc, at one with our neighbours in security for the region. I am not talking about collective security on behalf of the United States. I believe that the way to go about that is not, as I have said, to provide more toys for the boys but to build closer ties and cultural, economic and other exchanges-not militarily economic exchanges-with our neighbours so that we have a strong regional neighbourly relationship within which neither our neighbours feel threatened by us nor we feel threatened by them. In that way it will become unnecessary to build a defence force against a foreseen enemy from our own neighbourhood, because our relationships with the people in our neighbourhood will be such that there is no threat, as indeed there is no threat at the moment. I think we should stop looking at what is called the expansion of Soviet forces and stop seeing the Soviets as a big threat in the Pacific, because the big threat in the Pacific is militarisation and the arms race. It seems to me that we have to end the arms race, and we can do that most effectively by getting out of the nuclear war fighting capability that we are currently part of. Question resolved in the affirmative. Senator PUPLICK(New South Wales)(5.33) —I move: That the Senate take note of the paper. The annual report of the Australian National Gallery brings into focus a couple of matters arising from both the Gallery's operation and the Government's response to the support of the arts in Australia. I think it is important to understand that a gallery such as the Australian National Gallery is not only a significant national resource but also a very important resource for Canberra as such. During the 12 months which this report covers, the Gallery claims that it had some 25 million visitors and that the three major exhibitions attracted something like 400,000 tourists and visitors to the Australian Capital Territory and produced an additional $25m in tourist expenditure in the ACT. Undoubtedly, that is much to be desired. Nevertheless, the Government has in recent months apparently undertaken a number of policy decisions which are effectively crippling the capacity of the Gallery to develop the sort of collection which it wants. In particular the Government has recently thwarted a bid by the Gallery to buy a prize Picasso painting. This not only raises fears that the Gallery funds are to be further cut but also makes impossible the strategic decision which the Gallery apparently has made to shape its collection in such a way as to allow it to concentrate its purchasing policy on a few important works rather than spreading its budget over a large number of smaller items. I think the Government has some explanation to offer to people who are interested in the arts in Australia if it is now interfering in the purchasing decisions which the Gallery is making. The next point that I want to raise is one which is of very considerable disappointment to me. Some people will already have had the chance to see the extraordinary exhibition which is here from the Hermitage collection in the Soviet Union. The masterpieces from the Hermitage exhibition are the primary gift which is being made by the Soviet Union to the Australian Bicentenary celebrations. It is a disappointment that the reciprocal exhibition which Australia will send to the Soviet Union is, of all things, a collection of European works of art held in Australian galleries. We will take European works of art from the Australian National Gallery, from the Art Gallery of New South Wales and from other galleries and send them to the Soviet Union so that it can look at a collection of European art which is otherwise held in Australian collections. I must say that I find that terribly disappointing. Senator McKiernan —Who made the decision? Senator PUPLICK —I presume that that may well have been quite simply what the Soviet authorities asked for by way of a reciprocal arrangement, but it seems terribly sad to me that our Bicentennial activity should reciprocate by sending European paintings from Australia back to the Soviet Union to be looked at. When one considers the unique collection of cultural material held by the Australian National Gallery and by other art galleries around Australia, and the opportunity to parade not just our Aboriginal art but also the work of Australian painters, whether they happen to be contemporaries, from the Heidelberg School or whatever else they happen to be, it is very sad that that should be the reciprocal operation as far as we are concerned. Nevertheless, the report of the Gallery this year is a good one. It is informative. I am glad to see that Mr Mollison, the Director, is one of the people who have been appointed to the new Board of the Australian Exhibition Touring Agency, which is being set up under the auspices of the Australia Council to ensure that a greater organisation of exhibitions of contemporary arts and crafts is taken on tour to all parts of Australia and particularly regional and remote areas. I think that is a fitting appointment and I am glad to see that an experienced corporate executive such as Mr Dean Bunney has been asked to be the Chairman of that Agency. I believe that the matters of which I have spoken, minor as they are compared to the defence statement, are nevertheless worth putting on the public record at this stage. Senator JENKINS(Western Australia)(5.38) —I also rise to speak on the Australian National Gallery annual report 1986-87. At the beginning of the report is a letter by the current Chairman of the Council of the Australian National Gallery, the Hon. Gough Whitlam, who replaced on 1 January 1987 the former Chairman, Mr L. Gordon Darling. The letter is very informative. It gives a lot of introductory information, such as that the Gallery was opened five years ago in October 1982. Throughout those five years the principal goal for the Gallery has been that of establishing the finest collection of Australian art, the collection having to represent every aspect of significant artistic endeavour in this country, whether in painting, sculpture, photography or film. It is also appropriate for us to note that the obligations to the Australian taxpayer are being served and that the words `Australian National' in the title are coming true. The letter states: The Gallery's `block-buster' exhibitions from overseas museums always visit a State Gallery as well: the Twentieth-Century Masters exhibition went to Brisbane, while the Phillips Collection will also visit Perth and Adelaide. The forthcoming Fred Williams exhibition will go to all the State capitals and Darwin and to many regional centres around the country. Our recent Arthur Boyd exhibition went to ten venues in three States, attracting over 25 000 visitors. Time permits me to turn only briefly to the actual collections in the gallery. There is a collection of Australian art, that is, the art of Australia, and The Australians covering the eighteenth, nineteenth and twentieth centuries, expressing how we have changed over the years, and culminating in the magnificent Fred Williams exhibition this year. There is also a fine collection of Asian art, that is, the art and expression of our neighbours, and especially noteworthy are the Chinese silks and the Asian textiles. As I have previously mentioned, we also have a fine collection of international art, but I would like to spend a little more time discussing the exhibition of Aboriginal art, in which Western Australia is particularly well represented by artists such as Jimmy Pike, who has made a name for himself as a printmaker, Sally Morgan, who is a young and outstanding painter, printmaker and author from Perth, Joe Nangan, who is an elder of the Nyikina people from the Beagle Bay area, and also the artists Paddy Jaminji and Rover Thomas of the Turkey Creek area of the eastern Kimberleys. Not mentioned in the report, but I would like to mention him, is Martin Dougal, whose dramatic red and purple landscapes were painted while he was being taught by the art department of Fremantle Prison. The achievements of the gallery are also noted and some of the statistics in the report are very interesting. To June 1987 there have been some 2.5 million visitors; 270,000 booked school students from all over Australia; and membership of the Gallery Association exceeds 12,000, of which 30 per cent live interstate, showing that it is a national gallery for this country. Two million dollars have been given by Australian corporations and individuals towards purchases for collections and profits from merchandise sold at the gallery have produced a further $520,000 for acquisitions. We are supporting local craftspersons by selling their work through the gallery shop. There is no doubt that, along with the new parliament building, the High Court of Australia and the National Library, the Australian National Gallery has established Canberra as the nation's capital. The National Gallery is sometimes regarded as an easy target for philistines but it is part of the national capital, it is part of Australia, it is something to be proud of, and I commend this report. Question resolved in the affirmative. Senator SANDERS(Tasmania)(5.43) —I move: That the Senate take note of the paper. We are debating the annual report of the Australian Heritage Commission. We have heard a lot about the Australian Heritage Commission in the last few days because it has been central to the issue of the wet tropics. As Senator Richardson is the Minister on duty in the chamber I would like to point out that page 13 of the report, under the heading `Staffing', states: A continuing difficulty for the Commission is its lack of sufficient staff to carry out its functions at what it considers to be an acceptable level. With a staffing level of only 26.05 in 1986-87 and a budget of $1.8 million, the Commission remains one of the smallest Commonwealth statutory authorities, yet it has responsibilities that require it to keep informed of and provide advice on national estate issues Australia-wide. If it is to give Government the best advice, a significant increase in resources is needed. The Minister for the Arts, Sport, the Environment, Tourism and Territories (Senator Richardson) nods his head in agreement. I am sure that he will go to Cabinet with a plea for greater funds. The Australian Heritage Commission would be at the top of my list of unsung heroes and heroines in the fight to save the Franklin River. If I get the time-perhaps I will soon when I leave these panelled halls-- Senator Puplick —Make it soon. Senator SANDERS —I think many honourable senators would join Senator Puplick in that sentiment, including me. I would like to write a book on how the Franklin really was saved. The media, of course, being simple-minded, always talks about Bob Brown and, to a lesser extent, perhaps me and others, but there were a number of people involved. One of the main pivotal points in the salvation of the Franklin was Professor John Mulvaney of the Heritage Commission. He bought into this fight and actually discredited Harry Butler who was brought in by the Holgate Government of that day to try to find a little critter under a rock and say that it was okay to dam the Franklin because, after all, it was not wilderness anyway. Professor John Mulvaney and the Heritage Commission moved in with facts and figures and, at that time, of course, the issue was about Fraser or Kutikina Cave and Harry Butler was forced to retreat in some disarray. In fact, he has not emerged from under his rock since. Senator Zakharov —He has not emerged from Kakadu. Senator SANDERS —And he lives in Kakadu. At this time I would like to express my appreciation to Professor Mulvaney and all those on the Heritage Commission who have worked so hard behind the scenes to save the Franklin and other areas of the nation's quiet places because the quiet places are the ones that are disappearing and are under threat. Senator Richardson —Then we have to save the Senate as well. Senator SANDERS —The Senate is a quiet place, Senator. It should not be, but it often is. I notice that the farmers are getting into the act. They are spending $150,000 to amend the heritage deficiencies. According to the Mercury of today, Tuesday, they say that they have a fighting fund and they wish to join with the mining and forestry groups to investigate the Act. They say that, if the legislation is passed as it presently stands, Australia will be handing over control of its land use to the World Heritage Committee of the United Nations Educational, Scientific and Cultural organisation. What utter rubbish! We do have control of our own destinies. The problem is that, in general, we in Australia are firmly engaged in shooting ourselves in the foot when it comes to our heritage and I think we should welcome anybody who will stop us from doing so. I noted during the late, unlamented New South Wales election that the pro-woodchippers and people like that have been saying, `We beat the greenies. There is nothing in the conservation vote'. They are chortling and saying, `Woodchipping will now start and the State will be levelled', and they are very proud of themselves. It is very much like when the Hobart bridge fell down. Honourable senators might remember the picture in the papers of a man and two cars parked right on the edge of the bridge. A man had jumped out of one of the cars and was waving his arms trying to wave down the other cars to get them to stop. They asked, `Who is this crazy man waving his arms on the bridge?', and they drove around him and into the water. It is the same thing with the environmental movement. We are trying to get these people to stop before they drive off the edge of this bridge. The woodchippers, the miners-and nearly everybody else-are saying, `We have a finite resource and we must maintain it'. They are laughing. They have now dodged around us and they are driving into the abyss. I am not laughing and I do not think they should be either. Senator BJELKE-PETERSEN(Queensland)(5.49) —This evening I wish to say a few words about the annual report of the Australian Heritage Commission because I believe it is very important that we look after our heritage in every area. Apart from the world conservation area in far north Queensland there are very many areas where we can see, on reading the report, that quite a lot of work is being done to preserve our heritage. From our young people's point of view it is very important that they know what happened in earlier days. As I read through the report I was very interested to see the national estate grants program this year and quite a large list of projects in Queensland. Sometimes, when we listen to the Minister for the Arts, Sport, the Environment, Tourism and Territories (Senator Richardson) and other people speaking, we would think that nobody had preserved anything in Queensland. But there most certainly are lots of very worthwhile projects there. This is really very important. Our mall in Brisbane has just been extended. One important part was the facading that was done. Page 28 of the report talks about facadism. It says: `Facadism' is a term used to describe the practice of retaining the facade of an old building while demolishing the rest of it to make way for modern development. The report says that there has been a deal of debate on whether this is a good idea for preserving buildings. The modern Myer store is there and the facades of quite a number of old buildings have been retained. I hope that in future years, as young people grow up and look at these buildings, they will realise what the buildings looked like earlier. There are many other areas involved in keeping our heritage. We also read on page 37 about the historic environment many years ago in the Palmer goldfield in far north Queensland. It is even further north than our rainforest area that we talk about so much these days in the Senate. The Palmer area is the area where the Chinese came to, many years ago to find gold. This goldfield contains mines, settlements, roads and Chinese workings dating from the 1870s onwards. On one or two occasions when I have been in Cooktown I have found a Chinese proverb in the museum there. I am sure Senator Puplick would be very interested in the proverb, which went like this: To be happy for a day, take a wife. To be happy for a week, kill a pig. To be happy all your life, plant a garden. Senator Puplick —I am very big on gardens. Senator BJELKE-PETERSEN —I thought Senator Puplick would be. I thought I would read that into the Hansard this afternoon. Many areas in Brisbane, indeed in Queensland, are important for our heritage. In Kingaroy on 9 April we are going to open a heritage museum. Signs of what has been done in the area over the past years will be kept for the future. There will be machinery and a history of the peanut industry, how it started in the early days and how it has grown. Looking around Brisbane, there is Newstead House, the home of Queensland's first Governor and there are three houses in the Expo site area which people are very anxious to protect and preserve after Expo has gone. Senator Richardson —There were a few hotels they wanted to conserve too but they got knocked down. Do you remember? Senator BJELKE-PETERSEN —There have been other areas. When one looks around Brisbane and sees the tremendous growth and development taking place, one has to admit that some of the buildings had to go. If the honourable senator is thinking of the Bellevue Hotel, that hotel was falling to pieces anyway. The verandas were falling down. That is the whole story about that building. Senator PUPLICK(New South Wales)(5.54) —I am indebted to Senator Bjelke-Petersen, in particular for the wisdom of the Chinese proverb. I will spare her the one I know, which is an Arab proverb dealing with women, boys and sheep. I might enlighten her on that at some later stage. There are one or two matters arising from the Australian Heritage Commission annual report which need to be brought to the Senate's attention. The first is that when I was reading the section on page 40, I was staggered to see a figure given that there had been 1,368 removals from the register of interim list or rejected nominations. It was only when I found the errata document floating around in the report that I realised that figure is not 1,368 but only 368. I think there should be some responsibility on organisations to ensure that the proofreading of their reports is sufficiently up to scratch that the little errata slips that get put into annual reports, which most people manage to lose at some stage, do not confuse the whole position. I am glad that Senator Richardson is in the chamber because I want to draw attention to the fact that this report is signed by Mr Pat Galvin, the Acting Chairman of the Commission. Mr Galvin made a speech to the Fourth World Wilderness Congress held in Colorado in September last year, which was recently reprinted in the Australian Heritage Commission's newsletter of December 1987. One of the things Mr Galvin said is: In Australia we have not found it easy to put into practice the principle of conserving living natural resources for sustainable development. In our experience this has and will continue to be a difficult and challenging assignment. I fail to be convinced that development and conservation are natural bedfellows. That is a point of view which I reject. It is a point of view which fundamentally the national conservation strategy for Australia rejects. It is therefore very important, given all the qualifications which Mr Galvin subsequently makes in the article, that we understand that this presumably is to become the underlying philosophy of the Heritage Commission in this matter. Mr Galvin goes on to say: They can be brought together in appropriate circumstances with deliberate effort . . . Nobody disagrees with that. But the idea that development and conservation are not natural bedfellows seems to me to be quite wrong. It may be that preservation and development are what Mr Galvin has in mind, because there is a difference between preservation and conservation. I think there needs to be some greater clarity. If that is what the Acting Chairman means, that is what he should say in his public statements. Two other matters arise from the report. The first is that when one looks at the increasing pace of nominations, which is referred to on page 11 of the report, many of the arguments which were canvassed in the debate on the Australian Heritage Commission (Notification of Owners) Amendment Bill, introduced by Senator Walters the other day, are given some additional force in terms of the rights of people to be consulted in these matters. The second is that when one looks at the section headed `Tax incentives for heritage conservation' one's attention must be once again drawn to the quite contradictory policies that the Government has pursued in relation to the imposition of the fringe benefits tax on heritage properties and on the payments made to conservators, curators and resident caretakers as far as national trust and heritage properties are concerned. I see from the smile on Senator Richardson's face that he undoubtedly believes in pectore that he will be able to solve this matter in the mini-Budget or the next round of Budget negotiations. I wish him the best of luck in that respect with Mr Keating and Senator Walsh. Nevertheless, assurances have been given to people that the Government has this matter under consideration. But those assurances have been given now for a prolonged time and there has really been no satisfactory resolution of what has been an outstanding and significant problem for the Heritage Commission in the protection of heritage properties. I hope that in the next couple of months that matter will be resolved in a more satisfactory fashion. The ACTING DEPUTY PRESIDENT(Senator Giles) —Order! The honourable senator's time has expired. Senator JENKINS(Western Australia)(5.59) —I also wish to speak to the Australian Heritage Commission annual report 1986-87. The Australian Democrats are committed to attempting to establish a sustainable economy and ecology and, therefore, it is essential to know what we have, where it is, how much of it there is and by whom it is owned. Associated with this is our attempt to establish a register of foreign ownership, as nobody quite knows who owns Australia, so that if we can buy back the farm, if we have the political will to do this, we will at least know how we can start to set about it. The Australian Heritage Commission is concerned with identifying places of National Estate significance and compiling a Register of the National Estate and, to quote page 3: To further public interest in and understanding of the National Estate . . . The National Estate registers places which are regarded as significant. It is worth looking at the Commission's objectives for this Register. I seek leave to incorporate those objectives on page 78 of the report in the Hansard. Leave granted. The objectives read as follows- The Commission's objectives for the Register are for it to: be a comprehensive list of places in Australia which have significance heritage value; alert Australians to the presence of places of heritage significance; give all decision makers, non-government and government, objective information about places of heritage significance to help them make better informed decisions; educate Australians about the natural and cultural history of their country; ensure that due consideration is given to the national estate values of listed places before Commonwealth decisions and actions are taken; and provide a focus and direction for the National Estate Grants Program and Australian Heritage Grants Program. Senator JENKINS —These objectives apply to a number of different aspects of our heritage-that is, our natural environment, built or historic environment, the Aboriginal environment and our history. There are areas of conflict, and I refer to page 16 of the report under the heading of `The woodchipping question'. The areas dealt with here in some detail are Tasmania, Eden-Monaro-where the new New South Wales Government has said that logging will start immediately-and the Denmark area in south-west Western Australia. Although the McLean's woodchip proposal has been rejected by the Western Australian State Government, page 18 of the report states: While some of the places listed in or nominated for the Register are designated as future national parks in the strategy, others are designated as State forests and, under current proposals, will be subject to intensive forest management by WACAP- Western Australia Chip and Pulp- an operation which will largely destroy their national estate value. A familiar tactic in the battle to preserve areas of beauty and significance from so-called development is to destroy that beauty as quickly as possible so as to take away any chance of its recognition as potential National Estate. Of course, that is one of the reasons why the conservation legislation is currently before the Senate. Whilst Fremantle in Western Australia is a partial success and has survived the razzamatazz of the boat race virtually unscathed-there is mention of this on page 35-the city of Perth has been turned into a nightmare of lost heritage. We now have a pathetic facade of the Palace Hotel paddling at the foot of Alan Bond's 48-storey phallic symbol. However, there is some good news-the 1910 Perth Technical College building in St George's Terrace has just been put on the interim list of heritage listing, so the Castle Keepers and others who have fought for some three years to save that building can take some hope. In fact, it is very sad to read of the losses from the National Estate during the 1986-87 year. In Western Australia these include the Cheriton Arch in Gingin, part of the Trigg-Karrinyup Reserve in Stirling and the former Sons of Gwalia mine headframe and winder, Gwalia. I commend this report and urge the Government to take note of the Commission's hopes and fears for the future. The ACTING DEPUTY PRESIDENT(Senator Giles) —The time for the consideration of Government Papers has expired. Motion (by Senator Tambling for Senator Reid) agreed to: That leave of absence be given to Senator Archer for the period from 22 March 1988 to 21 April 1988, inclusive, on account of absence overseas on Parliamentary business. Motion (by Senator McKiernan for Senator Cooney) agreed to: That the time for presentation of the report of the Standing Committee on Legal and Constitutional Affairs on the Cash Transaction Reports Bill 1987 be extended to 30 April 1988. Debate resumed from 25 February, on motion by Senator Cook: That the Bill be now read a second time. Senator LEWIS(Victoria)(6.07) —The Senate now turns to the debate on the Textiles, Clothing and Footwear Development Authority Bill 1988. At the beginning I draw attention to the name and intention of the Bill-to create a statutory authority called the Textiles, Clothing and Footwear Development Authority; it does not introduce the Government's plan for the textiles, clothing and footwear industries. The Opposition does not oppose the Government's plan for the textiles, clothing and footwear industries. We support the broad thrust of the restructuring proposed. We believe that the plan moves in the right direction as it gradually reduces barrier protection to the industries and eliminates the quantitative restrictions while encouraging firms to be more competitive internationally. The plan has been accepted by the industries and their council and it has been accepted by the union movement; we wish it well. There are some modifications which we would have made to it had we been in government, but we support it and when we get into government we will continue with it. I say that so that industries can understand that they can make decisions confident in the knowledge that after the next election, when the Liberal and National parties are in government, their plan will continue. Textiles, Clothing and Footwear Bill When I first saw this Bill and examined the nature of the proposal which the Government had put before the Parliament I was quite horrified. The Bill is inquisitive, intrusive and contains such draconian powers that I could not support it in the form presented by the Government. I therefore determined to recommend to my colleagues that the Bill be opposed because of the draconian powers. Although I have a limited time for this speech I may get time to go into this matter later. I draw attention to the fact that the Law Council of Australia has written to me and others, urging the Senate to refrain from passing the Bill in its present form and to provide an opportunity for the Law Council's concerns to be appropriately considered. Those attacks by the Law Council and Mr Garry Downes, QC, the Chairman of the Council's Administrative Law Committee, could probably be considered by the Senate. Similar attacks are contained in the report of the Senate Standing Committee for the Scrutiny of Bills. I will deal with that very quickly by saying that as a result of the representations I have made to Senator Button the Government has agreed to introduce a large number of amendments which in many ways deal with the draconian powers, although in my view not fully enough. However, they will be a matter for debate in committee. Senator Cook, on behalf of Senator Button, tabled a speech in the Senate in which he circulated the Government's amendments. He said that the purpose of the amendments was to clarify the meaning of some clauses where there may be some confusion or concern and to reduce the formality in the conduct of inquiries by the authorities. That paragraph, those sentences, are a euphemism for Senator Button acknowledging that it is the Government's intention to gut the draconian powers from the Bill. As I say, it does not go far enough and if we reach that stage I shall be moving further amendments. I might say also that the first time there was any mention of this plan back in November 1986, the then Opposition shadow Minister, Senator Chaney, indicated that there was concern on our side with the creation of a Textiles, Clothing and Footwear Development Authority. I refer to his Press release of 28 November 1986 when he said: Important questions remain unanswered about a number of things including the role, size and cost of the TCF development authority. Having this view about this draconian measure-I would recommend to my colleagues that they oppose it because of its draconian powers-we went further and looked at the whole purpose of the Bill. We could see immediately that the establishment of the development authority was not necessary for the Government's plan. I shall now devote some attention to explaining my reasons for saying that it is not necessary, therefore there is no need to have this authority. For that reason the Opposition parties will be opposing the second reading of the Bill. As I said, right from the word go, Senator Chaney, on behalf of the Opposition parties, indicated some concern about the creation of another statutory authority. I have to say that the Government and some people in the industries seem to have mixed up restructuring and structures. Some people seem to think that an authority will solve the problem of these industries. I draw the attention of those people to the parallel example of the Steel Industry Authority, from which there have been warnings that have been ignored in the past. I draw attention to the fact that the Steel Industry Authority has not resolved the problems of the steel industry in Australia. I say to the TCF industries that they ought to be very wary about this particular authority. Quite frankly, in the Opposition's view, more bureaucratic controls are not the answer. The industries consider it is important to have a single body monitoring the impact of the TCF plan, but we say to the industries a new statutory authority is simply not the answer. The creation of another body would result in four separate bodies providing advice to the Minister and the Government on TCF industries matters and various aspects of the TCF plan. These bodies would be the TCF section of the Department, the TCF Industry Council, the Australian Customs Service and the proposed new statutory authority. I shall come back to those later. The coalition believes firmly that the interests of the industries and the Australian community in general will not be advanced by the establishment of this Authority. It is not necessary to create a quango to implement the plan. This quango would be burdensome and expensive. The Bill's explanatory memorandum only gives the costings for the remainder of the financial year 1987-88. It gives those costings as $1.2m for the part year. This Authority is to operate until 1996. I point out to the industries that this authority could be the vehicle for substantive changes to the plan as they understand it. The safeguard mechanism the industries are so concerned about is not detailed in the Bill. I might add that I do not think it will ever be used because Senator Cook has already warned the industries that there could be changes to the plan. I draw attention to the second reading speech of the Minister, in which he said: I should say however that the industries cannot expect the plan to be immutable and that industry planning should take into account other factors such as macro-economic circumstances. If ever I have heard a warning to industries that when the Government introduces its across the board tariff cut in May it will suffer an across the board tariff cut, it is in that paragraph: The industries cannot expect the plan to be immutable . . . As if that is not bad enough, he actually spells it out when he says: . . . industry planning should take into account other factors such as macro-economic circumstances. I draw attention to the fact that the industries wanted a monitoring authority. As Senator Cook says in his second reading speech: The establishment of such a body was recommended by the TCF Industry Council in its consideration of . . . assistance . . . The council saw the need for a specialised monitoring authority with responsibility for identifying the nature of changes occurring under the plan and with the provision for advisory powers to remedy any deficiencies in the plan's operations. So, that is what the industries wanted. Senator Cook went on to say: I see the role of the Authority as being broader than that envisaged by the Council. He then went on to say that the main function of the body will be to administer the industries' development strategy but he had already said in his second reading speech: The main function of the Authority will be to implement the industries' development strategy. So, its main function will be to implement and administer the industries' development strategy. Where in this Bill is the discussion about the monitoring role? Only in one clause, where the Bill provides that when the Authority conducts its review, which is to occur not later than 30 June 1992, it may then recommend in its report, if it considers that the industries have contracted too much, that the operations of the policies be suspended for such period not exceeding one year as specified in the report or, if it considers it is necessary to revise the policy, that the Commonwealth call for an inquiry to be conducted for the purpose of examining and recommending changes to those policies. The protective mechanism is as weak as water. All the Authority can do is recommend to the Government deferral for up to one year of the plan. The Government will not have to accept that recommendation, if the Authority ever gets around to making such a recommendation. If the Authority thinks that the industries have contracted too much and there is great concern about the contraction, all that it will do is recommend to the Government that the Government conduct an inquiry. However, the Authority has been conducting an inquiry right from the moment of its commencement. The Authority will have draconian powers, which the Minister will not totally do away with, and may, as provided in proposed section 7 (m), prepare and maintain a database on the TCF industries, and, as provided in proposed section 7 (n), conduct such inquiries as it considers necessary for the proper performance of its functions. So, the Authority will keep a database on the industries, it will monitor them, and it will conduct any inquiries that it considers necessary for its purposes. However, when it comes to seeing that the industries are in real trouble, instead of being able to tell the Government to do something, all that the Authority will be able to do under those proposed subsections is to suggest to the Government that it inquire into its policies and consider whether some changes should be made. I advise the industries that there is no industry safeguard mechanism within this Bill. The industries will be totally reliant on what Senator Button has said in his various speeches, and on his honouring the promises he made in those speeches. There is nothing in this legislation which will really give assistance to the industries if Senator Button decides that he will allow the industries to contract to a greater extent than they expect. The industries wanted someone to keep an eye on the plan. However, the Government will only establish a massive quango to implement the plan, and organise and restructure the industries, with powers of investigation which are quite substantial even despite their having been gutted by the Government. I add also that the Authority will be an administering an industry development strategy body which will dispense less than $100m over a period of eight years. So, it will provide about $12m a year in financial assistance to the industries. I point out that there are sections in the Minister's Department, supported by external boards, not statutory authorities, which administer grants and funding assistance packages of a similar magnitude to, or even greater than, $12m. I refer to the Industries Research and Development Incentives Board, the Management and Investment Companies Licensing Board and the Shipbuilding Consultative Group. A simple industry advisory committee-the sort of body the Opposition believes could have been established-could provide the consultation and monitoring mechanisms envisaged by the Industry Council. Alternatively, that council could perform those functions as part of its normal activities. The Industry Council, with the assistance of the Department, would have been able to do all that was required. I mentioned the duplication of functions, including the overlapping of functions of the Australian Customs Service, the Department and the Industry Council. I draw attention to departmental officers. They should administer the grant of financial assistance, particularly as other external bodies, for example, the Australia Industry Development Corporation, are checking the viability of business plans as part of the sectoral plan. Further, departmental staff will continue to monitor overseas developments. However, the desire for the establishment of the Authority is a statement of the lack of confidence which the Government has in the Department's ability to monitor developments in Australia. The Opposition parties say that the implementation and monitoring of the plan can be adequately done by the Department. We give a commitment that when we are in government this will occur. However, the Opposition parties are in the business of reducing government expenditure and not increasing it. A statutory authority is simply not necessary for the successful implementation of the plan. The Government refers to other sectoral plans as justification for a statutory authority for the TCF industries. However, experience in those industries confirms our view that a statutory authority is not necessary or appropriate. The steel industry and other authorities have not hastened results in their industries. In fact, last week there was a very timely example of why the community and the industries do not need an authority, and why the existence of such a body will not be in the best interests of everyone. I refer to the response by the Minister for Science, Customs and Small Business (Mr Barry Jones) in the other place with regard to the report of the House of Representatives Standing Committee on Finance and Public Administration on the Australian iron and steel industry. I should preface my remarks by saying that the House of Representatives Committee made recommendations that all sorts of things should happen, take place or be done in relation to this plan. The Minister said: Members may be aware that the Steel Industry Authority is presently conducting a review of the Steel Industry Plan. He said further: It would not be appropriate therefore to respond at this stage to the specific findings and recommendations of the Parliamentary Committee's report. That is exactly the sort of thing that concerns me about this industry. The stage will be reached where clearly something has to be done desperately. However, instead of the Government being required or pushed into taking some action the Minister will say that the Government cannot do anything because the Authority is currently examining the matter, and the Government will have to await its report. That has been happening with the steel industry over a period of about two years or a little more with regard to the disasters that have been occurring at Port Kembla. The Minister has been putting that off by saying that the steel industry is doing this, or looking at that. Now, when the industry has had a three-month period during which things have begun to go right at Port Kembla, the Government says that the Steel Industry Authority is about to report on this matter. Really! Governments will use quangos to avoid doing things which are difficult for a government to do, but which have to be done. I believe that Mr Jones's response to the House of Representatives Committee report was quite cavalier. It indicates the Government's intention to manipulate the Authority to enable discussions to replace decisions, and to distance itself from responsibility. The Government intends that the Authority will have a broad involvement in determining what are responsible labour management plans and in allocating financial assistance based on its decisions. To me it seems that the Government intends to stick its nose into matters. One would have to be very worried about that because it will intrude into management's plans. Further, of course, the Authority will determine who receives what grants. That is really intrusive. I warn those companies which are concerned about their future that they will find this Authority not to be of real value to them. Proposed section 10 (4) gives the Authority the power to report on any instance that it considers is one of failure by a person involved in any of the TCF industries to act consistently with the policies of the Commonwealth Government with respect to those industries. That is an extraordinarily intrusive power. This Authority will be able to report any person who has failed to act consistently with the policies of the Commonwealth Government with regard to those industries. If, for example, the Commonwealth Government has a policy of equal employment, any person not acting in accordance with that policy may be reported by the Authority to the Minister. Sitting suspended from 6.30 to 8 p.m. Senator LEWIS —Before the suspension of the sitting for dinner I referred to clause 10 of the Textiles, Clothing and Footwear Development Authority Bill but, in view of the limited time left to me, I will return to that clause during the committee stage of the debate. The Opposition parties have a great concern for the textiles, clothing and footwear industries. We recognise the great contribution which those industries have made in the past and continue to make to Australian industry. Indeed, before I became a member of the Senate, I was a director, and ultimately chairman of directors, of a textile company. I recognise the contribution which that company made to the industry and to the country town in which it operated. The contribution which those industries make not only to Australia in general but to rural towns especially is very significant. Our concern ought to be contrasted with the supposed concern of the Minister for Industry, Technology and Commerce. The second reading speech, which was made by Senator Cook on behalf of Senator Button, said at page 5 that this plan is about restoring dynamism to industries which have lost their competitive edge. Quite frankly, that is not true. There have been massive investments in these industries in recent years. I quote from page 2 of the Minister's second reading speech: The TCF industries have grown up behind significant import barriers and as a consequence have been insulated from the realities of operating in the international environment. I say to the Minister that many TCF companies in Australia are at the leading edge of technology in the world. They are as efficient as any TCF industry in the world. Massive investments have been made in those industries in recent years. Their problem is the whole structure of industry in Australia-wages, hours of work, oncosts and government costs. That is their problem; it is not that they are inefficient. On the contrary, as I have said, they are technically efficient. They may be economically inefficient in some aspects in the international world market, but that is not their fault. The conditions under which those companies are required to operate are this Government's fault-Australia's fault. We are desperately concerned about these industries. We recognise that, as a consequence of this plan, some companies will go to the wall. If we really believed that this plan could not be implemented without a Textiles, Clothing and Footwear Development Authority, we would have approved of the Development Authority. The simple truth is that this plan can be implemented without this Authority; the Authority is not necessary. The Authority is a bureaucratic, inquisitive, intrusive and dictatorial organisation which is totally unnecessary. In out view, it will be just another massive bureaucracy and will create problems for companies. There are many reasons, which I have already outlined, why we are totally opposed to the Authority, but fundamentally it is for the benefit of the TCF industries that we are opposed to the creation of a Development Authority, as proposed by the legislation, which will have powers to implement and administer the Government's plan but no powers to do anything real for the industries if there is a need for the safety mechanism to operate. The Authority may only report and advise; it will not be able to take any real action. It is for those reasons that the Opposition will oppose the Bill at the second reading stage. Senator McKIERNAN(Western Australia)(8.05) —I listened with great care to Senator Lewis's contribution to the debate on the Textiles, Clothing and Footwear Development Authority Bill. I might say at the outset that I am disappointed that the Opposition has taken it upon itself to oppose the Bill at the second reading stage, despite the very comprehensive alterations of which notice has been given by the Government. In my opening comments I wish to address a couple of matters that Senator Lewis raised. A couple of minutes ago he referred to the efficiency of the industry. I do not argue with that specifically, but there are huge inefficiencies in many factories in the industry. The issue is not confined to workers' wages. It is about time that members of the Opposition benches got off the tack of continuing to attack the living standards of workers in this country. They have picked a very poor mark on this occasion because they would know that wages in the textiles, clothing and footwear industry are about 28 per cent below the average paid in the manufacturing industry generally. As all honourable senators would know, that is not a very highly paid area either. It is unfortunate that that furphy has been tossed into the debate tonight. There is no doubt that there are many entrepreneurs in the industry who have sought to get into the marketplace, to capture it for themselves and to compete with imports from Third World countries. Some have done a very good job, but others have sat back and enjoyed the protection offered through the various tariffs available to the industry. The question of tariffs-Senator Lewis also spoke about tariffs-is a cause of concern to me. There have been a number of rumours in the media that the Government intends to cut tariffs across the board, perhaps in the May economic statement or in the Budget Statement which is due in August this year. It would be unfortunate for the textiles, clothing and footwear industry if that came about. Across the board tariff cuts may be good for the economy and for bolstering the confidence of international money markets, but they would hit sectors of Australian industry. We have historical examples of across the board tariff cuts and we know the consequences they had on a number of industries, particularly the manufacturing industry. Certainly, the textiles, clothing and footwear industry was one of those industries hit. I am sure that honourable senators present will know that I am referring to at least one decision made during the life of the Whitlam Government to bring down an across the board tariff cut. I hope that the Government will see fit to examine closely the ramifications of such an across the board tariff cut, if indeed the media reports are true and the Government is looking at that. What we have in this industry, together with a number of others, are plans that are evolved specifically for those industries. Those industries need to have confidence in the future. The majority of the industries which we have talked about, such as the steel industry-Senator Lewis did not mention the heavy engineering industry, but he certainly mentioned steel-the shipbuilding industry and so forth need to have confidence in the future. We cannot have a plan evolved in one year and then changed by across the board measures the next year. That will not do anything to assist the confidence of the industry or the future of that industry. Senator Cook's second reading speech outlined in detail the objectives of the Textiles, Clothing and Footwear Development Authority Bill 1988. It is not my intention here and now to repeat those matters because I think that we get too much repetition in this chamber. I merely seek to give a background to the history of the Bill before us tonight. In 1982 the Industries Assistance Commission, commonly known as the IAC or colloquially known, in some circles, as the industry assassination commission, reported to the Federal Government on the state of the textile, clothing and footwear (TCF) industries. The IAC came to the conclusion that the trade protection measures enjoyed by the TCF industries were severely hampering the ability of other sectors of Australian manufacturing to compete internationally. This was something that the industries concerned did not deny. This Bill in itself is a recognition of the agreement in the TCF industries that change was not only inevitable but also necessary. At this point I would like to give credit to all sides of the industry-to the manufacturers, the owners of the enterprises we are talking about, the Government, the various Government committees and boards that investigated the industry, the trade unions and the workers on the job-for the job they have done in reaching a rational solution to the problems that are confronting them now and those that will confront them in the future. They had to do this. It was a must, because adoption of the recommendations of the IAC could have meant the death of the TCF industry in Australia. We need to look at what the IAC recommended. It suggested that tariffs be cut by 50 per cent by 1996. It suggested that there be no labour adjustment measures, no investment incentives, no monitoring authority and no review of the effects of the recommendations on the TCF industries. Perhaps it was as a result of reports such as that that the IAC rightly earned its colloquial description of industry assassination commission. What would have been the result if the IAC recommendations had been implemented? I do not believe that it would be any exaggeration whatsoever to say that it would have been disastrous to the industry, to the nation and, most certainly, to the workers who depend on the industry for their livelihood. There is no question about that, because some 60,000 people would have been retrenched. With no labour adjustment programs, which was an IAC recommendation, there would be little chance of their finding re-employment. This would have been all the more tragic when we remember that the vast majority of workers in these industries are women, often of ethnic backgrounds, earning meagre wages. I have mentioned before that in the clothing industry those wages already are 28 per cent below the average in the manufacturing industry. These are women whose only income is what they get from employment in this industry. Their income is only enough to keep their heads above water and in many cases their wages are used to support single income families. Confronted by these possibilities, workers in the industry launched a massive campaign against the IAC recommendations. They took to the streets and marched. They attended rallies. They approached their local members and senators. Possibly most importantly, they themselves put forward a rational, alternative strategy. They did not just rely on slogans; they went out and investigated the situation for themselves and came up with recommendations which they themselves knew would hurt them as well as their employers and the Government. However, they knew that something had to be done. The strategy they evolved did not call for an increase in protection. It did not even demand a retention of the present rates of protection. It called for manageable change, not the inevitable chaos implicit in the IAC recommendations. The basis of the unions' alternative strategy was: one, a 75 per cent out of quota rate of duty to be phased in, over seven years, by 1996; two, a comprehensive package of work force arrangements; three, investment incentives within the industry development agreements; four, a monitoring authority; and, five, a review of how the plan was working before the end of the plan. I think that most of us would agree, certainly those of us in this chamber, that the proposals were sensible, unselfish and reasonable. The result of their presentation is the alternative strategy before us today. The Government did not accept everything that the unions put forward, so it cannot be accused of kowtowing again to the union movement. It did not accept everything. One of the things the Government did not accept was the union proposal for a 75 per cent out of quota rate of duty. Instead, it accepted a 60 per cent rate. Many of the unions' recommendations are embodied in the Bill. Firstly, the proposed Textiles, Clothing and Footwear Development Authority is required to monitor and implement the Government's strategy for the industry. As Senator Cook's second reading speech stated, this Authority will be required to report to the Government on the success of the strategy by 1992. Although it sounds a long time in the future, it certainly is not. The Authority must also report annually to the Parliament. In line with the intention of making the organisation flexible, it can also report to the Minister, either on its own volition or on his request. Secondly, the Government has instituted a number of incentives to enable the industry to become more effective and competitive. The incentives mean that the firms in the industries which can show a genuine commitment to the strategy in terms of increased production of exports and import replacement, which is, of course, all-important, and of increased processing of raw materials will have a real chance of succeeding. As an aside, the amount of processing of raw materials in this country is pretty deplorable. I am sure that with a will and the successful culmination of this plan and the establishment of this Authority this side of things will certainly increase. If there is a general increase in the competitiveness of the overall industry such firms will also have a real chance of succeeding. Thirdly, the Government has accepted the great need for labour adjustment measures. All participants in the industries are aware that undoubtedly there will be job losses as a result of the implementation of this strategy. This is something that the Government is not necessarily proud of. We do not believe in putting people out on the streets, but it is inevitable in some industries. Change happens; it cannot be stopped. Our Government has a great commitment to training. With such a commitment we could not permit retrenchments without providing the means for those retrenched workers to find alternative employment. There are four aspects of the labour adjustment assistance package, all of which are available to workers who have been employed in the industry for at least 20 hours a week for 24 weeks or more out of the last six months. Firstly, retraining: retrenched TCF workers will be immediately eligible for labour market training for 12 months. Workers can enter a program within 12 months of being retrenched. They will be provided with income support of $100 a week. This will not be means tested on the family income. Married women will be eligible and it will not affect a spouse's social security payment. The program will receive high publicity through the ethnic media and community organisations and Outreach, and specialist Commonwealth Employment Service staff will be recruited to provide advanced information to workers of the availability of the scheme as well as dealing sympathetically and expertly with the applications. The program will also include English language training, which is vital to so many workers in these industries. Secondly, I wish to deal with re-employment. Immediate re-employment through Jobstart is an alternative to retraining. For employment in industries outside TCF, the new employer will receive a wage subsidy for six months of $75 a week for 18-to 20-year-olds, $100 a week for 21-to 44-year-olds, and $125 a week for those over 45. This is in line with Government recognition that older unemployed people have greater difficulty in finding employment and are, therefore, in the greatest danger of becoming long term unemployed statistics. It will be possible for a retrenched worker to mix retraining and Jobstart up to a maximum of 12 months. For example, a worker may undertake formal training for six months, then present himself as a Jobstart worker for a further six months. Thirdly, let me deal with relocation. The relocation assistance scheme will be modified for TCF workers. Assistance of $1,500 for renting or buying a home will be available within 12 months of relocation. The fourth point I wish to make refers to delivery mechanisms. Small and mobile retrenchment teams will provide advice and assistance to retrenched workers. Where a significant number of retrenchments are to take place, a re-employment committee with union and employer representatives may be set up to establish and implement a re-employment program. There is, thus, a great mood of confidence in the TCF industries. As the Minister has informed the Senate, it is very encouraging that a number of firms have already undertaken major investment programs since the announcement of the strategy. Just as encouraging, in my opinion, is that workers who face retrenchment have a very real chance of finding re-employment. It is also encouraging that the overall strategy will drastically reduce the number of workers who find themselves in this position than would have been the case if the Government had adopted the IAC proposals. While there will be a decline in the number of workers through improvements in productivity, and while some workers who leave their jobs will not be replaced, jobs will be created in the new areas of investment that are part of the strategy-for example, raw material processing. Senator Watson —Where? Senator McKIERNAN —The raw material processing side of things. Senator Watson —Such as? Senator McKIERNAN —Such as leather goods, for example. Senator Watson —Leather goods? Senator McKIERNAN —Yes. The Minister and other speakers have already referred to the specific aspects of the four programs under the strategy-that is, raw material processing, industries efficiency, industries infrastructure and export development programs. I do not intend to go into these in any detail, but I believe that they constitute a very positive step towards making our TCF industries efficient and internationally competitive. The Minister referred to the fact that the success of the strategy is dependent on the ability of the Authority to change attitudes and practices. While I agree that changes must occur in these areas, I think it should be recognised that the participants in the TCF industries have already proved their willingness and enthusiasm for the strategy. Without this enthusiasm on the part of the workers, for instance, we would not be here talking about the TCF Development Authority. Unions have admitted that the strategy cannot guarantee the future of any particular firm, industry sector or region. No level of industry protection could do this either. What the strategy can do, however, is give firms and workers a fighting chance, at the same time easing the burden on other sectors of Australian manufacturing. The high levels of protection have not ultimately been to the benefit of workers in the TCF industries. The most highly assisted industries have shown some of the poorest returns to the stake holders. I mention again for the third time, because I think it is worth reinforcing, that the average wage in the clothing industry is 28 per cent below that applicable to all of the manufacturing sector. But to have adopted the Industries Assistance Commission proposal would have meant the death of the industries. These days, once an industry dies in this country it is very difficult to regenerate that industry. In conclusion, I congratulate the unions on their approach to the problems that confronted them on behalf of their membership. I again congratulate the Government on the approach that it took in developing the plan and the Authority, which is the subject of this Bill. I congratulate members of the Government's Caucus committee and the specific subcommittee from the industry committee under the chairmanship of the now Minister for Aboriginal Affairs, Gerry Hand, who put in a lot of work, effort and consultation in bringing people together in order to come forth with some consensus approach to a very difficult situation which confronted workers. I do not think it would serve any purpose in again appealing to the Opposition to reconsider its opposition to the Bill. But I ask the Opposition to have another look at the Government's amendments that have been circulated in the chamber. For what it is worth, I ask the Opposition to do that so that hopefully we can proceed down a path that will be in the interests of the workers in the TCF industries, in the interests of the States and the regional areas where the TCF factories are established and, ultimately, in the interests of the nation. I commend the Bill to the Senate. Senator COULTER(South Australia)(8.27) —I must say that I was a little puzzled this evening when Senator Lewis addressed us on the Textiles, Clothing and Footwear Development Authority Bill 1988. The honourable senator seemed to begin by saying that he was in favour of the Bill and then concluded by saying that he was going to oppose it. The Bill proposes the establishment of a Textiles, Clothing and Footwear Development Authority for the purposes of better managing and restructuring this significant industry which is potentially of much greater significance to Australia. I think, in view of what Senator Lewis said, it is worthwhile pointing out that the industry itself is quite strongly in favour of this Bill. Perhaps the industry will be quite disappointed to hear that the Opposition, I take it, is actually going to oppose the Bill. I have in front of me a letter from Mr Keith Purcell, who is the Executive Director of the Textile, Clothing and Footwear Council of Australia Ltd. Among other things, he says: We believe it is important that an authority with monitoring and administrative functions be established for the purposes of effectively implementing the Post 1988 TCF Sectoral Plan. On balance, we regard it as most important that the Authority be legislated for and would be concerned if the legislation was rejected. He goes on: As mentioned to you, we attach particular importance to the safeguard mechanism which is referred to in the Minister's Second Reading Speech. Sections 3(2) and 12 seem to provide for safeguard action to be taken if that becomes necessary. Accordingly you will appreciate the importance we attach to the passage of this legislation. He further goes on: Without detracting from this `on-balance' position, we consider it would be desirable if powers such as those set out in Sections 46, 47, 49, 51 and 53 were deleted from the legislation or appropriately amended. It is our understanding that Senator Button is agreeable to this. Honourable senators will know that in fact the Government has agreed to do just that so that any substantial objection which the industry had to this Bill in its original form has now been quite adequately addressed by the Government. Having said that, one may have a bad Bill which is supported by the industry for reasons which may relate to the industry's inability to understand exactly what the Bill does or which is bad in some other respect. But I do not believe that this Bill falls into this category, so the Australian Democrats will be supporting it. There are a few matters we would like to raise with the Senate. They relate first of all to something which Senator Lewis said in relation to the hands-off approach that he was extolling. The second reading speech of Senator Cook for the Minister for Industry, Technology and Commerce (Senator Button) mentions that in the case of wool-I remind the Senate that Australia is one of the world's major wool producers-only 5 per cent is processed in this country and, in the case of cotton, only 10 per cent is processed in this country. I was not aware, but I will take the Minister's word for it, that we are also a producer of high grade cotton. One might note in passing that the cotton area in New South Wales happens to be one of the most heavily contaminated with organochlorin pesticides in the world and many people have been poisoned in that area. Leaving that aside, apparently we produce high quality cotton of which only 10 per cent is processed in this country. As honourable senators will know, the processing of hides into leather and the further processing into high quality goods is carried out in this country to a very small extent. That is the situation that we have with an industry which has been operating largely under a free enterprise competitive system. It has brought us to a situation in which we export large amounts of unprocessed primary products and then import back the finished goods to be made up into suits, clothing and leatherwear. I find it difficult to believe that with a Development Authority such as that outlined in this Bill and with the combination of planning and guidance by such an Authority, and by the Government, together with private industry, if intelligently conceived, cannot do better than that. There is no a priori reason why an unfettered free enterprise system should serve the interests of a country. The idea of Adam Smith-that somehow or other an invisible hand is going to guide competitive greed towards serving the common good-has certainly been around for a long time, but that is merely an assertion and it should have been laid to rest long since. Moreover, there is abundant evidence that, again from purely theoretical considerations, the competitive system does not continue for very long but tends rapidly towards a monopoly. That can be shown in mathematical models quite easily. One needs only to look at what has happened in practice. The market-again, quite quickly-tends towards a monopoly situation in which the common interest is not served. So I believe that the guidance of a Development Authority such as that outlined in this Bill will serve Australia better. Hopefully, it will get a lot more of the processing of raw materials into value added goods within this country. The Bill is divided into areas to which the Authority will be directing its attention as outlined a moment ago. As to the processing of raw materials, there is again no particular emphasis in the Bill on increasing the value of raw materials produced in Australia. One hopes that that will be a high priority. The industry's efficiency program is provided for in division 2, the industry's infrastructure is dealt with in division 4 and the export development program is covered in division 3. As to the export development program, I again lay emphasis on the desirability of import replacement, which was briefly mentioned in the second reading speech. It seems to me that far too little attention is given to it in our national policy. I believe that a great deal more can be done by increasing the efficiency of the use of items within Australia and replacing imports. I emphasise that that is a far more effective and cheaper road to take than to go into foreign countries and compete on markets with which we are not necessarily familiar. I point out that, while this is clearly mentioned in the Bill, it does not develop that point particularly broadly. Nor does the Bill lay much emphasis on the training and retraining of people within the industry. This is not left out of the Bill in the sense that it can come within the purview of the Development Authority, but neither is it specifically mentioned. I would like the Bill to have placed greater emphasis on that matter as a responsibility of the Authority. It is not brought out as one of the specific areas for attention and highlighted as an area to which the Authority should address its concerns. Quite clearly, as this industry adopts new technology there will be a need for a great deal of retraining within the industry and, to the extent that workers are displaced and find other work in either this industry or elsewhere, retraining or further training will be required. I would now like briefly to discuss clauses 54 and 58, which are the clauses dealing with sanctions to be brought against those who infringe an aspect of the Act, as it will be. Honourable senators will note that clause 54 provides in the case of a natural person for a penalty of $1,000 or imprisonment for 12 months or both; and, in the case of a body corporate, $5,000. The point I wish to raise is a general one. I choose to flag it now because I think it is one that needs a great deal more discussion in relation to a lot of legislation that goes through this place. There is no natural connection between the penalty as expressed in dollars and the penalty as expressed in a term of imprisonment. Nobody these days, not even a person on the dole, gets as little as $1,000 in 12 months. A natural relationship between those two amounts might be the average wage, or it might be the wage which a person earns. Senator Button pointed out to me in discussion on this very point this afternoon that many of the people penalised under this legislation might be quite well off. They may earn $50,000 in 12 months. There is no natural relationship at all between a $1,000 fine and 12 months in gaol or both. These sorts of penalties mean that those who are poor go to gaol and those who can afford to pay, pay the fine. I will move later, and I will do this consistently with other legislation when it comes before me, that there should be a natural relationship between penalties. I think Senator McKiernan would support me in this. Working on an average income of, say, $20,000 a year, if one regards a fine of $1,000 as adequate, the gaol term might be as little as two weeks. That would be a fair relationship. In further support of that, I draw attention to the pictures which appeared on tonight's television of the lad in New South Wales who went to gaol for non-payment of a fine and who is now essentially a human vegetable with very serious brain damage from which he almost certainly will never completely recover. I also point to the excellent Australian Broadcasting Corporation program of a few months ago on Australian gaols and imprisonment which pointed out that the early term of imprisonment is the significant one and that extending terms of imprisonment does not necessarily serve any further useful purpose. I point out also, of course, that in the case of a corporation the penalty of $5,000 bears no relationship to the fine of $1,000 for an individual-that that really is quite a minuscule amount for a corporation. Finally, I would like to point to an issue raised by the Standing Committee for the Scrutiny of Bills. I do not think it was mentioned by Senator Lewis. The Scrutiny of Bills Committee has raised the question whether the delegation of power provision contained in this Bill is too wide; in other words, the Authority is given the power to delegate authority and there is no requirement that the person to whom the power is delegated need have any particular qualification. Clause 66 (1) (c) goes so far as to state that, with the approval of the Minister, authority may be delegated to any other person or body-in other words, any person at all. The only check in there is the ministerial approval which is required. If the Minister is sufficiently careful about assessing these things when they pass across his desk, I guess that that is some sort of safeguard. I take it that the Scrutiny of Bills Committee did not regard that as necessarily a sufficient safeguard and flagged it for the attention of the Senate. I think we should perhaps look at that when we get into the committee stage. Senator WATSON(Tasmania)(8.42) —The Senate is debating the Textiles, Clothing and Footwear Development Authority Bill 1988. The Minister for Industry, Technology and Commerce, Senator Button, detailed in the second reading speech delivered for him by Senator Cook the perceived effects that the establishment of this Authority will have on the industry and the benefits that are designed to follow. I believe that these benefits are largely illusory. Senator McKiernan, in responding to a question that I asked, indicated that there would be further jobs in leather processing. I know that the Government is very keen to increase the volume of scouring in this country, but I would like to remind the Government that there is already an oversupply in that area. I believe that a lot of the benefits that allegedly will occur as a result of the restructuring of this industry and the new jobs that will be found will not be in the raw material processing area. The Bill before us tonight merely defers a political decision that must inevitably take place in the 1990s. This Bill will have the effect of just deferring a problem until the 1990s. The industry seems to be quite happy with that deferral. I am not sure whether it will really be in the best interests of Australia, or even in the best interests of the industries under consideration, merely to act as an intermediate step. I believe that all this legislation is doing is creating that situation. However, I would like to acknowledge that the Government has gone quite a long way towards removing some of the problems that we highlighted earlier in regard to the extent of the powers with which the Authority was endowed. I thank both the shadow Minister, Senator Lewis, and Senator Button for agreeing to those sorts of amendments. I feel sure that these amendments will be welcomed by the industry. Obviously, they will also be welcomed by the legal authorities who were concerned about the repressive nature of those original provisions which have now been withdrawn. The functions of the Authority include the monitoring of the volume and the value of local production; the production costs in the textile, clothing and footwear (TCF) industries; the changes in industry employment levels; the level of direction of investment in those industries, both in terms of Australian equity and Australian TCF investment abroad; and the productivity improvements, especially in regard to catering for the export market. However, I believe that there are compelling reasons in our present economic climate for a reduction of government expenditure. Therefore, the Government's desire to create yet another statutory authority to oversee the implementation of the plan is not particularly compatible with that aim. I believe and people on my side of politics believe that the monitoring of the plan can be adequately carried out by Senator Button's Department. The Liberal Party of Australia has indicated that, in government, this could easily occur. That implies that, in government, we would provide adequate resources directed towards meeting that undertaking. All Senator Button really had to do was to give a commitment to the Parliament and to the industry that there would be adequate resources within his Department to monitor the plan properly and carry out all the work of that Authority. I believe that the plan could be monitored in a most cost-effective, efficient and appropriate fashion by Senator Button's Department, particularly if he was prepared to give this resource commitment, as the Liberal Party is prepared to do. I feel sure that all parties would be far better served because, after all, the Department can work a lot quicker than a statutory corporation if things go wrong. It has much more ready access to the Minister's ear; and it does not have to rely on formalities, red tape or the production of reports. I am also concerned that some of the people who may be appointed to the TCF Authority may be overcommitted to the restructuring of the industry. We have heard Senator McKiernan acknowledge tonight that there will be restructuring. There will be substantial job losses; it will not just be a case of natural attrition. Factories will close and there will be a redirection of that investment. Employers and the unions, in agreeing to the plan, have acknowledged that the industry will have to undergo some fairly dramatic changes if the implementation of the plan progresses. I suppose that one of the redeeming features of the plan-it is only an intermediate feature-is this safety net provision that if the industry contracts at too fast a rate a process will be put into effect. I suggest that the monitoring of the plan by the Department of Industry, Technology and Commerce, which I believe is more attuned to the needs and problems of the industry, would result in a more sensitive appraisal of the impact of the plan upon the industry. I think an appraisal by a statutory authority tends to be rather impersonal and slow; it is not as sensitive as an appraisal the Department could well do. I believe that the Department would have a greater commitment to the ongoing wellbeing of the industry than an independent quango that could walk away from the plan after it was implemented and have no further ties to the industry. As I said earlier, the Department is naturally closer to the Minister and is more likely to ensure the survival of the basic components of the industry. I therefore have some doubts that the proposed Authority will be in a position to achieve its stated objectives. After all, it can only report to the Minister if the impact of the plan is having an adverse effect on the industry-and the numbers have been spelt out in the plan-which will result in the contraction of TCF operations ahead of the agreed schedule. If this happens, the plan may be suspended for 12 months and the matter referred to the Industries Assistance Commission. I add a word of warning because, given the attitude of the Industries Assistance Commission to the textiles, clothing and footwear industry, the conclusions in its report are not likely to be very supportive of the industry. The Authority, therefore, under its present charter appears to provide a very much short term solution or a palliative to the problems the industry may face as it progresses. I suspect that those people who are interested in the preservation of the industry, albeit in a smaller and more viable form, would naturally have to agree with me on this issue. The Authority appears to have gained a measure of acceptance in the absence of a more suitable alternative. This Authority virtually has been forced upon the industry on a take it or leave it basis. Even under these circumstances I still think there are good grounds for supporting the Opposition's contention that the establishment of the TCF Development Authority to oversee and monitor the implementation of the plan is therefore unnecessary. I submit, however, that there is a real need for an informed source that will work with industry and will have the capacity to liaise constantly with the Minister and to act promptly for the benefit of the TCF industry where necessary. Therefore, one could not just hand this monitoring authority to another body such as the Textile, Clothing and Footwear Council Ltd because it would lack the teeth and commitment. This industry differs from other industries which come under particular plans or authorities, namely, the Automotive Industry Authority or the Steel Industry Authority, because the TCF industry has a multitude of players. So good communication is not always easily or readily achievable. A concerted effort must be made to ensure that the communication lines are fluid enough to allow expeditious action where necessary. I do not believe that an authority gives this quick line of communication as closely as a department would. Closer links between the industry and the Minister will be very important during the implementation of the plan. As I mentioned earlier, the Department has the capability to fulfil and could well fulfil this function provided it is given adequate resources. This Bill before us tonight is the first tangible evidence in the Parliament of the TCF plan which has now been around for something like 18 months. It would have been more appropriate if it had been presented when the plan was announced in, say, June 1987 or thereabouts although I know we were not sitting at that time. But a lot of time has intervened since that announcement. The Minister said in his second reading speech that it should be read in conjunction with the statement on the TCF plan which was made to the Senate on 5 June 1987. So I will include in my remarks some comments on that plan. Senator Cook's second reading speech was largely an outline of the work of the proposed Authority. But there is one sentence hidden away on page 6 which I regret that Senator McKiernan did not comment on because that reference on page 6 is most alarming. I would have thought that Senator McKiernan, as a good union man, should have been aware of that provision. If he had read it, it brings shame on him that he did not draw attention to the problems that could give to the industry. Being a good union man, he should join with some of his union colleagues and be somewhat appalled at the temerity of the Minister to include those remarks on page 6 of his second reading speech. I would like to quote them: I should say however that the industries cannot expect the plan to be immutable and that industry planning should take into account other factors such as macro-economic circumstances. That is an extraordinary statement when the whole basis of the plan is to create some certainty in the minds of those people who are investing millions of dollars in new technology, getting state of the art machinery and entering into new export markets. What a new exporter does not want is to find suddenly that the rules to the plan have been changed. Senator Button is giving notice to the industry and saying, `Look out industry. We are prepared to change the game rules after the game has started'. In other words, Senator Button is saying, `Here is the TCF plan. This is what the Government wants the TCF industries to aim towards and yet we might change the plan at any time because of perceived so-called economic circumstances'. There is a concern in the textiles, clothing and footwear industry that the Government will introduce some cuts in assistance in the May economic statement. This concern already has severely undermined the effectiveness of the plan and the confidence of the industry in the Government's intention. I am surprised that Senator Coulter did not refer to this matter. Despite the fact, which the Minister accepts in the first paragraph on page 6, that the industries are accepting the reduction in assistance and responding to the resulting changes in a positive manner, he is cutting the ground from under their feet. The TCF plan makes provision for a review. But I am most interested in what Senator Button would regard as the macro-economic circumstances. There is a real danger perceived in the industries, both by management and the unions, that the Hawke Government will use the macro-economic bluff to slash assistance regardless of the success of the TCF plan and of the expensive restructuring that is going on to accommodate that plan. The blame for this eerie vagueness in the Minister's speech cannot be laid entirely at his feet. It is clear on this side of the chamber and also in TCF circles that some senior Cabinet Ministers are keen to slash assistance to the TCF sector and to other industries. They are the Treasurer (Mr Keating), the Minister for Finance (Senator Walsh), the Minister for Trade Negotiations (Mr Duffy) and the Minister for Foreign Affairs and Trade (Mr Hayden). They are pressing Senator Button into agreeing to further and more immediate cuts to the TCF sectors to satisfy their specious macro-economic master plan, completely discounting the improved competitiveness of the industry and the hundreds of thousands of people who have been employed in this sector. It took one Labor government, led by Gough Whitlam, to all but destroy that industry. I fervently hope that it is not another Labor administration that ignorantly completes the job. Senator Button has received bipartisan support for endeavouring to improve the competitiveness of the TCF sector. It would be tragic if a split in the Cabinet led by economic and trade Ministers, who do not really appreciate the complexity or fragility of the industries, leads to further cuts. I ask Labor Party members to take that back to their Caucus. On 28 November 1986 I asked a question of the Minister for Industry, Technology and Commerce, Senator Button, concerning the mooted Textiles, Clothing and Footwear Development Authority. I will repeat that question. I asked him first whether: . . . the production contraction safeguards of 15 per cent for the industries overall and 10 per cent, 20 per cent and 20 per cent respectively for the textile, clothing and footwear sectors are central elements of the plan? He replied yes. Secondly, I asked whether the new Authority would: . . . closely monitor developments and anticipate any need for policy revisions designed to ensure that the maximum production contraction provisions of the plan are not exceeded? Honourable senators will note in that question about policy revisions that he would anticipate any need. He said yes. We intend to hold him to that answer because the emphasis there was on anticipating moves rather than on waiting for event to occur. Thirdly, I asked the Minister to ensure that the Authority was provided with adequate resources to meet its vitally important role and that it be composed of appropriately qualified and experienced people. Again, the Minister replied yes. I am repeating these questions and the unequivocal replies by the Minister for two purposes: first, to remind the Senate what the Minister said and, secondly, to remind the Minister that he made a clear commitment not only to assistance levels but also that the new authority would be able to anticipate policy revisions required by changed circumstances. I call on the Minister to reaffirm this anticipatory element of the TCF plan in the light of his worrying general remarks about immutability of the plan in his more recent speech. I ask the Senate: Is the Minister trying to ease the Government away from its previously more responsible stance to a new position in order that assistance can be slashed? I am sure that many executives in the industries and factory workers-particularly those in New South Wales this week-would welcome a clear affirmation of the hitherto consistent application of the plan from the Hawke Government. In the context of this Bill I turn to a general speculation, which the Government has done little to damp down, regarding across-the-board reductions in assistance, not only to the textiles, clothing and footwear industries, but also generally. The textiles, clothing and footwear industries have responded positively to meet the objectives of Senator Button's new plan. In 1986-87 new capital expenditure on buildings, plant and equipment increased to more than $232m and is expected to reach more than $283m this financial year-an increase of 22 per cent. That is quite a remarkable achievement. The textiles, clothing and footwear industries were assured, firstly, that action taken in the multilateral trade negotiations would take into account and be consistent with domestic industry objectives and, secondly, that references made by the Prime Minister (Mr Hawke) to phased elimination of quotas would be consistent with the new TCF program. With this background, it would not be responsible for the Government to take further action to reduce assistance, despite the course that the Department of Foreign Affairs and Trade and the Treasury might be urging their respective Ministers to pursue, particularly because of attitudes limited to their own departmental objectives and not in keeping with consistent national economic growth. Industries other than those in the TCF sector should also be concerned about Senator Button's comments about the TCF plan not being immutable. This is because assistance for the chemical industry, the paper industry, the electronics sector and the communications industries was all determined after the fall in the value of the Australian dollar and they too, like TCF, should be protected by the Minister from any further cuts. There was certainly an argument before the realignment of the currencies. My comments are made in view of the fact that all industry assistance was determined after the realignment of the currencies and therefore there should not be further cuts. There is little evidence that the major TCF trading nations-the United States of America and the nations of the European Economic Community-are committed to any real action to dismantle or even reduce their quotas in the long term, and so the cuts which have been sought by the Australian Government and accepted positively by the Australian textiles, clothing and footwear industries make our producers even more vulnerable to trade pressure. This is further evidence that more cuts would be totally irresponsible. TCF industries representatives have expressed their concerns to the Government and also to the Opposition about unfair trading practices. The Government approach to the TCF sector, encompassed in the plan, relies on fair trading. There is grave concern in these industries that as the tariff quotas are reduced and eventually removed, and other assistance is downgraded, unfair trading practices will seriously undermine the Government's objectives. There is an important need for anti-dumping machinery, with the force of legislation of this Parliament, which will be not only efficient but also effective. Although this is not part of the current legislation, it is appropriate to raise these concerns and seek the Minister's view on the Government's attitude towards re-establishing such anti-dumping provisions without delay. Senator Cook in his second reading speech made some remarks about the attitudes in the industry. I quote: . . . the Authority's major function will be to administer the industries development strategy in a coordinated and cost effective manner, as it is the strategy which will promote those changes in attitudes necessary to the reinvigoration of the industries. The Senate should be reminded that the industries have been built up by private money and private expertise, and that it is investment, technical and managerial skills, production and marketing expertise, the skills and commitment of the work force, and fashion design anticipation and judgment which sustain TCF industries' existence-not handouts from this Federal Government or any other government. Unfortunately it is becoming popular for the Minister and several of his colleagues, notably the Treasurer and the Minister for Finance, to don their `hair shirts' and say that Australian industry is hopeless and they have such a huge task to make it work. This argument is becoming tired and worn, if it ever had any application-apart from political rhetoric-and attention should be drawn to certain facts: 95 per cent of clothing comes from developing countries which have a huge low wage cost competitive advantage. There is a very significant and growing capital investment in the Australian TCF industry, despite the reductions in tariff quotas, and no similar steps have been taken by overseas competitors. For example, Pacific Dunlop's Holeproof division last month demonstrated its continuing confidence in the Australian garment making industry when it opened a new factory in Victoria. It must be remembered that conditions have been difficult for the TCF industries for some time. The devaluation of the Australian dollar has been of little benefit to the industries because, while the Australian dollar has gone down against the US dollar, the German mark, the yen and the Swiss franc, we have not devalued against the currencies of Taiwan and other countries which export textiles and related goods to Australia. These currencies have gone down as Australia's currency has gone down. The efforts of the industries in weathering the storm have been commendable and it is time that the Government acknowledged its commitment to their future economic efficiency. In conclusion, I would say that the Government had the general thrust of the TCF plan right, but it is using the wrong mechanisms to implement it. The Government is also undermining the effectiveness of the plan by saying in the second reading speech that it is not immutable. The establishment of yet another statutory authority with all the attendant costs is not necessary when the Department of Industry, Technology and Commerce could carry out the same function in a more cost-effective way. I am also most concerned about the macro-economic caveat that has been placed across the legislation by the Minister. I would be pleased if Senator Button, in his further comments to the Senate, would reaffirm the integrity of the plan. Senator MICHAEL BAUME(New South Wales)(9.08) —The Opposition, which supports the principle of the textiles, clothing and footwear industries plan, is simply concerned about the need in this Textiles, Clothing and Footwear Development Authority Bill for yet another quango to administer this plan. The Opposition takes the view that there are already so many quangos around with so many powers that have not performed adequately that this is not an appropriate method to use in implementing the proposals generally to improve the efficiency and competitiveness of the textiles, clothing and footwear industries in Australia. The Opposition totally supports the view that there is a need for the industry to be encouraged to restructure and to become more competitive internationally. That does not deny that in many instances the companies in these industries have gone down the right track. In recent times there has been an increase in exports as a result of some of the more alert and competitive companies adopting the sort of approach that both the Government and the Opposition favour. The big question is the extent to which government intervention by way of this proposed quango is the ideal way to go about it. The case against the quango has been stated by Senator Lewis. Clearly, it would be another burdensome and expensive mechanism. One can look at the steel industry plan to see how the best of intentions can be defeated by the failure of one participant in the plan to stick by his obligations under it. Without dealing too much with the comparable situation in the steel industry, I would like to point out that despite the existence of the steel industry plan since 1984, productivity has been down continually in the steel industry at levels totally unacceptable. The industry is no more competitive-in fact it has become less competitive over recent years than it was before the beginning of the plan. The Government says that there is a special reason for that: it is due to the technical problems that Broken Hill Proprietary Co. Ltd (BHP) has had with some of the new items of plant and equipment and the No. 4 blast furnace at Port Kembla where some of these major problems have arisen. The point is, and it cannot be argued, I believe, that that plan created obligations for various participants. There was an obligation on the Government-that is on the taxpayer-to provide large amounts of bounty. There was an obligation on the company to provide large amounts-multimillions of dollars-in investment in new plant and equipment and at the same time there was an obligation on the unions to abide by dispute-settling agreements. We all know that the unions thumbed their noses at that. Despite the cheerful sounds being made today by Senator Button in response to a dorothy dix question about the expected improvement in productivity at Australian Iron and Steel at Port Kembla, what Senator Button clearly and carefully omitted from his response was that BHP is only confident about its productivity increasing if in fact there is no return to the levels of industrial disruption which have been a feature of this industry ever since the plan gave a feeling of protection to the unions, to enable them to misbehave behind the screen of a governmental plan of a government authority. That is exactly what has happened. I believe it would be disastrous if the unions in the textiles industry, for example, were to take the view that because there is a plan involving considerable investment both by the Government and by the companies, that this should be some kind of protective device behind which the unions could then use any tactics to increase their share of the cake. The fact is that unless this plan works, unless this industry can be made even more competitive, there will not be a cake at all. What I am massively disheartened about is that at Port Kembla we have seen the risk of the company ceasing any further investment because of the disgraceful industrial relations record since this plan began. I would be most concerned if that experience were to be reflected because of the existence of this plan in the textiles industry. I should mention that probably this week an interesting judgment will be handed down on a dispute at Port Kembla which could once again result in further industrial disruption. I hope it will not but it seems to me there is no guarantee that participation in this kind of industry restructuring scheme in which the Government plays a key role is of necessity a guarantee that all participants in the industry will pull their weight. Of course, as many of these textile companies are in regional centres where the industrial relations record has been good, there may be a better chance of this scheme not being sabotaged by disruptive union practices. I must say, I hope that is so. The reality, in our view, is that instead of having another quango like the one proposed in this legislation, we could have an industry advisory committee that could provide the consultation and monitoring mechanisms envisaged by the Textile, Clothing and Footwear Industry Council or that body could even do it as part of its norman activities. In addition, it is quite clear that this new body will involve the duplication of functions, including overlapping with the functions of the Australian Customs Service, the Department of Industry, Technology and Commerce and the Textile, Clothing and Footwear Industry Council. There is no reason, it seems to me, why departmental officers could not administer the grant of financial assistance involved in this legislation, particularly as other external bodies like the Australian Industry Development Corporation are checking the viability of business plans as part of the sectoral plan. In any event, departmental staff will continue to monitor overseas developments. I wonder whether the desire for the establishment of the authority as a quango is a statement of the lack of confidence in the ability of departmental staff, and other people involved in governmental roles in this industry, to monitor developments in Australia. The whole response by the Opposition to this proposal is one of support limited only by its opposition to the quango. I remind the Senate what Senator Messner said in June last year in a very brief response because he did not have much time to study the details of the plan at the time. When the proposal was outlined generally by Senator Button on 5 June 1987, Senator Messner while outlining the general support had this to say: We note that the Government has brought forward the planned reduction of the tariff from 1988 to 1992 in a very significant fashion. It will be a substantial change. Of course, we in the Opposition have supported the principle of phased, gradual and predictable change in the tariff structure. Consequently, this would fit into our normal approach to such changes. However, I have to note that there does not appear to be any accompanying relief for business from the cost burdens imposed on it as a result of this Government's taxes. We note the existence still of things like the fringe benefits tax which have imposed enormous cost on businesses operating not only in this area but also generally. If the Government is serious about reducing tariffs and protection, it ought also to be serious about reducing the burdens on industry. One of those burdens is the taxes it has introduced in recent times. Of course, Senator Messner, by mentioning the level of tax that has to be paid, also noted the high rate of corporate tax in Australia compared with corporate taxes overseas. I agree with everything that Senator Messner said at the time. It seems to me that if there were a more competitive tax structure in Australia, that would do much more to help industries such as these than would creating yet another quango with powers to intervene and, it has been held, powers to influence the structure of the industry significantly. As was pointed out earlier by Senator Lewis, the Authority originally was to have draconian powers, which were reduced, as I understand it, only as a result of strong pressure from the Opposition. Certainly there are other things I should like to see being done to improve the competitiveness of the clothing, footwear and textile industries in Australia-basically changes relating to costs imposed by the Government on this industry. Of course, it is not only governments that impose these dreadful pressures on this industry. There is also the considerable problem of continuing cost rises of other production factors, such as labour. This industry is one of those that clearly demonstrate that if their employees are to continue to demand the maintenance of their standard of living, either their jobs will be destroyed, or the rest of the community will have to pay an increasing proportion of wages to employees, either by way of direct government assistance or tariff protection. That will add severely, significantly and increasingly to the cost burden on the rest of the community to benefit the employees in these particular industries. I seek leave to incorporate in Hansard a table, subject to the Minister's sighting the document, which I must say I have not had the opportunity to raise with him. It is prepared by Werner International, Brussels, and sets out the ratios of hourly labour costs in the primary textile industry in a group of countries including Australia, the United States of America, Japan and others. The ACTING DEPUTY PRESIDENT(Senator Giles) —Is leave granted? Senator Bolkus —Subject to seeing the document, leave is granted. The ACTING DEPUTY PRESIDENT —Leave is granted. The table read as follows- INTERNATIONAL COMPARISONS OF HOURLY LABOUR COSTS Ratios of Hourly Labour Costs Primary Textile Industry Australia ... 100 * U.S.A. ... 110 | main Japan ... 87 } trading U.K. ... 70 | partners West Germany ... 96 * Hong Kong ... 21 * Korea ... 24 | main clothing Taiwan ... 21 } and footwear India ... 9 | competitors China ... 3 * Source: Werner International, Brussels Spring 1984. Senator MICHAEL BAUME —The table demonstrates that Australia's ratios of hourly labour costs in the primary textile industry had by 1984 become worse than all of our main trading partners, with the exception of the United States of America, although not by a disastrous amount. However, of interest is the ratio of our new competitors. For example, China had a ration of three, as against 100 for Australia. So, Australia will face major competitive problems, particularly with the newly emergent industrialised countries of Asia, with whom it is absolutely vital that we maintain friendly relations. I acknowledge that this is a major problem. Whilst stressing that it underlines the need for restraint in seeking continuing increases in rates of pay, there is no doubt that the figures in the incorporated table demonstrate quite clearly that even if there were massive restraint-I am sure the Minister would be aware of this-the differentials are so enormous that Australia would still be at a massive disadvantage. I am not pretending that wage restraint is the only factor, or that it will bring some automatic success in this area. All that I am stressing is that the figures clearly show the sort of pressures and problems that the industry in Australia inevitably faces and will continue to face. Indeed, the problem will worsen if our wage rates continue to rise at a rate faster than those of our competitors. The point has been made that wage rates in South East Asia have been increasing at a faster rate than have rates in Australia. I do not have the statistics available. Even so, it will take many years before the wage rates in South East Asia will be anywhere near the rates paid in Australia. There is no doubt that as part of the package of restraint and changed attitudes that is necessary in this industry we will have to recognise that for the industry to survive there will have to be a level of restraint with which many may feel uncomfortable and which of itself could provide a degree of restructuring. The extent of the problem that could take place in Australia was evident at a series of meetings held in recent times in the Illawarra region, which has a considerable number of textile factories largely employing migrant women. The meetings were held to discuss concerns about future employment prospects in the industry in that region. The first meeting was held in June 1986. At those discussions the Government official said something that the Opposition strongly supports; that one of the Government's objectives was to cut back on negative measures such as quotas and tariffs, and to shift the emphasis to positive measures. The Opposition totally agrees with that and is eagerly awaiting the reduction in, for example, income tax and other taxes of various kinds imposed on the industry. That would be a positive measure. It seems extraordinary to me that we are talking about $100m or $200m being provided to assist the industry at a time when the industry must be paying hundreds of millions of dollars in taxation. I suppose it could be argued, of course, that because so many firms in the industry are not making profits, the level of corporate tax is almost immaterial. At one of the meetings reference was made to the concern I expressed of how Australia can compete with, for example, Chinese industries which have the advantage of a relatively low wage rate. I believe it was a local textiler who asked, `How do we compete with Chinese industries which pay wages of only $37 a month?'. The response from the Government official at the meeting was, `With difficulty'. I accept that is the reality. Then the question was asked, `How can we continue to restructure when most firms already have restructured during the past seven years?'. That is a sound point. There has been an enormous volume of restructuring in the textile industry during the past years. No other group of industries other than clothing, textiles and footwear has been subjected to so many Industries Assistance Commission inquiries, and has so often been put at risk. The result has been, as I have said, enormous restructuring. The response from the Government official was that restructuring had not occurred across the board and that there was still scope for restructuring of the clothing and footwear industries in particular. This matter is of some concern because whilst it is true that many of the big groups have restructured, some of the smaller firms apparently have not. At the meeting a union official said that he believed local equipment in the Illawarra region was as modern as anywhere in the world and, in that situation, where would the restructuring take place? The clear implication was: what further restructuring can be done? The Government representative confirmed that it was only the major firms, not the smaller firms, that had been significantly involved in restructuring. One of the big firms said: Government needs to understand the concern for the industry . . . The firms already have modern machines. There is no other way to cut costs and therefore save jobs. . . . We employ many married women and this helps many families maintain the house, car, etc. Without that income many families will need to leave the Region. This is one of those dreadful problems. Another big manufacturer, who has three plants in the region, employs 700 people and makes 15 million garments a year, asked what will happen if the plants close down. He said that the plants will close down and move overseas if it becomes evident that they simply cannot continue. There is no doubt that in this industry one of the main things firms want is confidence in government involvement in the future. Whether it is right out or right in, they want to know. They do not want to have to hang on or not know whether to make investment decisions. Certainty of the Government's role is absolutely vital. That manufacturer said that many firms have already moved overseas. In fact, all they do is put the major firm's labels on garments which are actually made overseas. The garments still have the well-known Australian label on them. One of the manufacturers did ask about what seems to me to be one of the key problems: Do the many industrial disputes create an atmosphere where Government has to take steps such as that now facing the TCF industries? Certainly, something similar occurred, unsuccessfully, in the steel industry. What interested me then was that the local union leader, who has since retired, claimed: Since the accord, the number of disputes has declined. I agree there is a need for better industrial relations; we cannot afford job losses in the region. He wanted to set up an industry plan for settling disputes. I raise that because that was the atmosphere behind the creation of the steel industry plan. That same union leader who made the statement that he agreed there was a need for better industrial relations and who said that we cannot afford job losses in the region, nonetheless was leading, and continued to lead until his recent retirement, continuing industrial disruption destroying the effectiveness, to a large extent, of the steel industry plan. It seems to me to be absolutely vital that in these arrangements every effort should be made to lock in the related unions to any of the changes that are to be made. As I have said, the thrust of the Government's approach is totally supported by the Opposition. I quote with total approbation Senator Button's statement in June 1987: The Government has been concerned to encourage the development of industries which are more internationally competitive and export oriented, innovative and better able to adapt to changing circumstances and capable of operating in the longer term with low levels of community support. In pursuit of these objectives industry policy is moving away from over reliance on protection as an industry assistance measure and focusing more on improving the efficiency and competitiveness of Australian industry. I guess it is like motherhood to say that one agrees with that, but it is an ideal objective. In that context, the Opposition has agreed in general with the textiles, clothing and footwear approach. But our approval and support, as expressed by Senator Messner in June last year, in no way indicated that we favoured the creation of this interventionist authority-yet another authority. On the other hand, I suppose that we must recognise that someone has to make ultimate decisions. That is another reason why the Textiles, Clothing and Footwear Development Authority does not appear to be an appropriate body. It will not make decisions. It is simply another organisation which will recommend to the Government what to do. For example, I think that its role is to recommend that the Government hold an inquiry, which I think is dealt with under clause 12 (3) of the Bill. Senator Lewis —It is 12 (3) (d). Senator MICHAEL BAUME —It is clause 12 (3) (d). Why do we want another body which will end up recommending things when, in a sense, in several directions-at least three-we have bodies spread around which have exactly that capacity? I do not know whether having an authority is a means by which a Minister can duck responsibility for making a decision, perhaps saying, `It is an unpopular decision, but it has been recommended to me by this Authority and, therefore, somehow I am not involved in that decision making'. This industry is still a major one in Australia. It employs about 120,000 people and accounts for 7 per cent of manufacturing value added. It is massively important in country or provincial areas. I believe that it is up to the Government to administer the outline of this plan. I believe that the best interests of the industry will not be served by creating yet another quango, another authority, which it seems to me, will do nothing to add to the source and range of information available to the Government on this very important industry. Of course, it is particularly important to the region in New South Wales that I seek to represent-the Illawarra region. I only hope that the restructuring that is involved in this plan will bring the sorts of benefits that both the Government and the Opposition believe will come from it. The ACTING DEPUTY PRESIDENT(Senator Giles) —Order! The honourable senator's time has expired. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.38) —I am grateful to honourable senators for their contributions to the debate. They have been diverse and, in some cases, interesting. By way of reply to the second reading debate, I will try to deal with some of the main arguments which have been put. I heard some of those arguments not in the chamber but over the magnificent system which we have here. I just want to try to put them in some perspective. Senator Michael Baume, towards the end of his speech, asked why there should be an authority, a quango. That is a question which I would quite happily ask myself in another context. I am not addicted to more quangos, more authorities. I think I am on public record as saying that the last thing I would want in this country would be wall to wall industry authorities. I want to say something about the textiles, clothing and footwear industry generally in relation to that. It is a very diverse, complex industry, a large employer of labour and, traditionally, highly protected. The process of unscrambling that, of simplifying the tariff structure, of trying gradually to reduce the levels of protection and dealing with the very many facets of the industry, which are very diverse, ranging from boutique shoe making to hobnail boots and Senator Puplick's bow ties to industrial overalls-the very complex questions involved in dealing with those diverse industries-I think distinguishes it considerably from other industries. The other point I would make is that it has always been an industry in which, because of its high levels of protection and diversity, there has been a strong measure of government intervention. For example, the Fraser Government established something called the Elix Committee-the Commonwealth Textile, Clothing and Footwear Advisory Committee-which was in almost continuous operation assessing likely trends in the market, likely trends in imports, et cetera, and making recommendatons to the Government on at least an annual basis and sometimes more frequently about the appropriate size of quotas, market predictions and things of that kind. The industry has always had that sort of level of government intervention and, in some sense, some sort of guiding hand. I share Senator Baume's view about the undesirability of what he described as interventionist authorities. However, I make the point that I think this is a particular case, particularly in light of the Government's proposal for the industries where there are a lot of things which require detailed coordination of administration-things such as skills training for the industry and market training for small firms in an effort to facilitate restructuring in a desirable way rather than an undesirable way and things which, in the circumstances we were faced with, justified an approach of this kind. I just make the point that the industry asked for such an authority. That does not mean that the Government should accede to that view. The industry asked for such an authority. That is important and has a lot to do with the history of developments in this industry. My colleague Senator Lewis indicated that he opposed the Authority for a variety of reasons. I think that he saw it as not being necessary to implement the plan and said that there were too many bodies giving advice and that it might be costly and intrusive to the industry. The industry's answer to that is, `Thanks, we want to be intruded on. We would like the Authority'. Senator Lewis said that the Authority could be replaced by the Department. Of course it could. I think that there would be very little cost difference. If the Department is trying to manage an industry such as this it is arguably much more government interventionist, much more public sector interventionist, than an authority which is largely composed of people from the private sector with particular degrees of expertise. I have not yet announced the names of members of the Authority. Let me say that, apart from perhaps two people, if one analyses the composition of the Authority properly one will see that there is not a significant government presence on the Authority. It is very much a private sector presence with a knowledge of the industry and of the industry's needs-not, however, of the industry. I think there is a case for saying that it is more bureaucratic to have departments trying to manage these things rather than there being policy advisory bodies and so on. In those sorts of circumstances it is better to have an authority of this kind. Senator Lewis was very flattering to the Department when he said that it could be faster and give more sensible and sensitive recommendations. Of course, as Minister for Industry, Technology and Commerce, I share that view. Of course, public servants in my Department would give sensitive recommendations. Nonetheless, they would be recommendations that would have the characteristics of bureaucratic recommendations rather than the characteristic of recommendations of a group which is a little detached from the bureaucratic process. I want to add some other reasons why I think it is desirable to have a monitoring advisory authority of the kind suggested in this legislation. Other alternatives were considered. The form proposed in the Bill was decided on because it had that complex range of functions, from monitoring the industries to advising on barrier protection issues-the function which used to be performed by the Elix Committee-and the development and administration of the industry's development strategy. That Authority will be independent of the Minister of the day, still responsible to him of course, and he responsible for it. I thought it was the unkindest cut of all for Senator Baume to say that in some ways the establishment of the Authority was an abdication of ministerial responsibility and that the device of appointing an authority was a way of getting me off the hook in here. Senator Baume has been unrelenting over the last 18 months or so in relation to the steel industry, where we have an authority. He ought to know better than anybody else that the mere existence of an authority does not get the Minister off the hook. I thought that was-how shall I put it?-uncharitable, coming from Senator Baume. The Authority can be seen as more impartial and free from the day to day political pressures. It is accountable to Parliament. It will have a cross-section of capable people on the board. It will be assisted by a small secretariat expert in textiles, clothing and footwear (TCF) matters and will have a finite life. I think that all those things are important. The form of authority proposed in the legislation is the form which the Government thought would be the most appropriate organisation to meet these needs. I have not heard in detail all the speeches made in respect of this Bill. Senator Watson, if I might say so, with commendable consistency criticised me, as I understand it, for saying that the TCF plan is not immutable and that the industry should take into account other factors such as macro-economic circumstances. I can understand Senator Watson saying that, but this is a plan for a fairly long period into the future. Senator Watson —I indicated that it was merely an intermediate step. Senator BUTTON —Senator Watson, if one learns by experience, which I certainly do, one will appreciate that in 1984, when we announced the motor vehicle plan, the pressures on the local industry at that time, which caused all sorts of falling about all over the place by the industry with company closures, large-scale sackings and all those sorts of things, were from Japan, the largest automotive manufacturing country in the world. There have been all sorts of changes since 1984, particularly the devaluation of the Australian dollar, which has changed those pressures significantly. The value of the yen as against the Australian dollar has perhaps removed most of those pressures. One has to have an opportunity of saying, `There have been enormously changed circumstances. We are entitled to look at that again'. For example, if things happen in the course of the multilateral trade negotiations which result in changes to the multi-fibre agreement, those changes will have an impact on the Australian industry because they will be significant factors in probably taking pressure off the Australian industry. All these things are matters which possibly we will have to look at. That is why we have provided for mid-term review, and so on, which will also give the industry some assurance in the general context of the plan. That is what I mean by saying that the industry cannot be immutably protected, as it were, from the pressures that exist in the wider world. Certainly if there is a general change in tariff policy in Australia implemented by a government of any political persuasion, this industry would have to be considered in that context. Senator Watson —Some industry plans were after the realignment and some were before the realignment. This one, plus chemicals and plastics, are after the realignment of the currency. Therefore it would be unfair to group them with the other group whose plans were made prior to the realignment of the currency. Senator BUTTON —I have not only permitted the honourable senator to interject; I have permitted him to make a speech. Indeed, if I may say so, it is a speech that I have heard before. Let us leave the currency argument aside. I think the honourable senator has made an important point; it is one which I essentially go along with. But supposing the average level of barrier assistance for all industries in Australia, including motor vehicles and TCF, is something of the order of 18 per cent tariff equivalent and the total environment changed. Would it not be appropriate to look at the question of TCF and the input costs and so on which it incurs? Supposing some levels of tariff protection for costs of inputs into TCF industries were removed completely. Would it not be appropriate in that circumstance to look at the TCF package? I think my answer to that question has to be yes. I think if, for a moment, Senator Watson ignores his past experience and his perceived constituency in Tasmania, and thinks about it in a rational way, he will agree with that. As I said, I welcome the contribution which honourable senators have made to the second reading debate. Before I do anything else, I just want to indicate that in the course of the committee stage I will be introducing a number of amendments. Those amendments, which I will refer to in detail at the time of the committee stage debate, will be basically related to representations made by the industry to the Government. The industry made representations to the Government, the Liberal Party of Australia and the Australian Democrats. Those proposals of the industry have been accepted by the Government and the amendments which I will move during the committee stage will reflect that fact. I want to conclude by making some general observations about the TCF industries. I am very optimistic and hopeful about the future of the TCF industries in Australia. But if any industries can be singled out, bar perhaps one which I have in mind and which I will not mention tonight-- Senator Michael Baume —Steel yourself to do so. Senator BUTTON —No, it is not steel. The industry I am thinking about is closer to the mouth. But if any industry can be singled out-and I am not seeking to make a political point about this-as having been allowed to develop in a bad policy environment by governments in the past, the TCF industries are examples of this. These industries perhaps did best in times of tailor-made protection on demand from governments. The solution to the problems was seen as not to push them into a greater level of international competitiveness, not for them to be seen in comparison with international industries, not for them to be aware of what was taking place in the international marketplace and in similar industries overseas, not to be conscious of all these things-- Senator Watson —Are you saying that output per employee is not comparable with the Europeans or even the Taiwanese? Senator BUTTON —I did not say that at all. I am not talking about that. Senator Watson —Competition really comes back to relative wage levels, does it not? Senator BUTTON —If the honourable senator thinks that, we all have a long way to go. If he thinks it just comes back to relative wage levels, we all have real problems. To the extent that some of these industries are highly labour intensive, the answer to his question is yes. But not all of them are highly labour intensive. I would have thought that in terms of policy settings it was not good practice for governments of the past-and, again, I am not making a political comment-to encourage industries to go ahead in areas where they are highly labour intensive in competition with countries like Korea, Taiwan, Japan 15 or 20 years ago and so on. I do not think that was a good policy environment for industries to be encouraged to invest in and pretend that they could grow in in Australia. The fact of the matter is that these sorts of industries have got to move. That is what the structural adjustment process is about. To where do they move? In my view, they move into two areas. They move into areas where we have been particularly neglectful in the past-that is, into the areas of adding value to raw materials which we produce very successfully in this country. The low level of wool fully processed in Australia is a disgrace. Again, it is something which developed here in the 1960s when this country just tried to do these things in a totally uncompetitive environment and so on. It is a disgrace in respect of wool, it is a disgrace in respect of cotton-and I heard Senator Coulter mention some of the figures and some of these things in his speech-and it is a disgrace in respect of hides. We can make a significant contribution to national export income and import replacement by further processing these raw materials. It is now competitive for Australia to do that. We have to give a lot of encouragement for that to be done. The planning and strategic proposals for the development of the TCF industries gives a lot of emphasis to that. We can do those things now and we have to do them in terms of the economic problems which this country faces. Secondly, like many other industries here, a considerable degree of talent is not being used by the TCF industries. This is particularly so in respect of clothing and textiles. There is a need to better use the talents of Australian people, whether they be designers, printers or even computer operators. The application of computers to textile design and so on is a development which has almost been ignored here by comparison with what happens in other countries. For example, Senator Watson could go into Marks and Spencers in London and say, `I want that shirt but I would like it purple instead of green'. His request would be punched into a computer in a store such as that and within two hours a shirt in his size and colour-exactly as he specified-would be ready for him. I have not seen that in Australia. Senator Watson —It is a bigger market, though. It is all relevant to the size of the market. Senator BUTTON —The honourable senator should stop making excuses for Australian industry. All the time the honourable senator wants to treat Australian industry like children and say, `You can never be in the real world, fellas, because you are babies'. That is what the honourable senator is saying to them all the time. That is not what it is about. I do not believe that. There is always some excuse. A couple of weeks ago Professor Wannecke from Stuttgart University and an industry economist gave a number of lectures to several Australian industries. He said to them, `You keep telling me that you cannot do these things because you might get a high valued dollar; you cannot do these things because you have high wages; and you cannot do these things because you have four weeks annual leave. I just remind you that Germany is the leading exporting country in the world. We have a highly valued currency. We have high wages-higher than in Australia. We have four weeks annual leave'. The simple point he was making to those audiences was: Do not all the time concentrate on the excuses; for a little while try and concentrate on the opportunities. The point I was trying to make is that the opportunities are now there. They have to be grasped by industries such as these. The Australian community cannot go on bailing them out. It cannot forever go on saying to them, `Put out your hand to the Government and we will look after you', because that is not an economic activity for this country to be involved in. I appeal to Senator Watson to lift his sights and not carry on in this mode of making excuses for people. One does not make excuses like that for the Australian cricket team when it loses; one says that it is no good. Senator Lewis —What are you saying about the Labor Party last Saturday? Are you making excuses for it or are you saying that it is no good? Senator BUTTON —I am not here to make a judgment on the Australian Labor Party tonight, but I have not made any excuses. I am not seeking to make any excuses now. Senator Lewis, as Opposition spokesman on industry, should not be lulled into the seductive, lazy, old-fashioned ways of his backbench colleague Senator Watson, who is sitting there giggling because he knows that what I am saying is correct. Senator Lewis knows as well as I do-he has on numerous occasions said it to me-that Australian companies are less imaginative than they ought to be. Senator Lewis —Be careful with what you are saying when you are quoting me. Senator BUTTON —Does the honourable senator deny that? There is nothing wrong with saying that. He ought not be ashamed of it. He should not fall into the trap of kidding Australian industries that they are good when they are not. Senator Lewis —They certainly need a great deal of encouragement, which you are not giving them at the moment. All you are doing is kicking them. Senator BUTTON —I am trying to encourage them at present. If Senator Lewis had been listening to me instead of dozing off, he would have appreciated what I was trying to say. One could go on with this discussion for a long time. The important point about this package of proposals is that we have to give these industries a bit of encouragement, a bit of initiative, a bit of a kick along to try to improve their performance in the direction I have indicated. I believe that honourable senators on both sides of the House can play a role in that. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time. Clauses 1 to 3-by leave-taken together. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.03) —The Government intends to move a number of amendments. I table a supplementary explanatory memorandum relating to the amendments and new clauses to be moved by the Government. Senator LEWIS(Victoria)(10.04) —The Minister has tabled the Government's amendments and proposed new sections, together with a supplementary memorandum, but we have also had distributed a speech entitled `Tabling Speech'. I wonder whether the Minister is going to make it. It contains the following marvellous euphemism: The purpose of the amendments is to clarify the meaning of some clauses where there may be some confusion or concern and to reduce the formality for the conduct of inquiries by the Authority. That is a euphemism for what the Minister is really meaning to say-that he is going to gut the inquiry provisions of the Bill. I thought he might like to tell us a little more about that, or will he save it until we get to clause 5? Is he going to incorporate this tabling speech? How is he going to handle it? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.05) —Senator Lewis has provoked me into leaping to my feet. I concede that the second paragraph of the tabling speech may in some ways be described as inelegant, but I think the elegance appears later on. I refer Senator Lewis to the reasons given in the second part of the tabling speech and particularly to the third paragraph, which reads: . . . the Government noted that the TCF industries have been subject to inquiries of a more informal nature for many years. An example is the TCF Advisory Committee which lapsed at the end of 1986. I seek leave to have the whole of the speech incorporated in Hansard. Leave granted. The speech read as follows- I move the amendments circulated in the Government's name. The purpose of the amendments is to clarify the meaning of some clauses where there may be some confusion or concern and to reduce the formality for the conduct of inquiries by the authority. In relation to inquiries, Part V of the Bill was based on similar legislation, for example the Steel Industry Authority Act, where that authority has the power to conduct inquiries. It may be necessary for the Textiles, Clothing and Footwear Authority to hold inquiries on a wide range of issues, particularly in relation to the mid-term review of the TCF plan. The Government wished to place the TCF industries on a similar footing with industries covered by related legislation. However the Government noted that the TCF industries have been subject to inquiries of a more informal nature for many years. An example is the TCF Advisory Committee which lapsed at the end of 1986. That committee did not have the power to summon witnesses or to compel attendance at its regular hearings. The Government now wishes to revert more to that form of inquiry. There will be some differences however. The TCF Development Authority will generally take evidence on oath or affirmation, but there will be no penalties for a person refusing to attend or to be sworn or to answer questions at inquiries. The other amendments proposed relate to clauses 10, 38 and 63. They are designed to give more safeguards for a person's rights and confidential business information. Senator BUTTON —In my response to the second reading debate I said, more bluntly than the tabling speech does, that the industry made representations to the Government, to the Liberals and to the Australian Democrats, and it is as a result of those representations that we made these changes. I do not regret that. I do not feel upset about it or anything like that. I think the changes are quite sensible. Senator COULTER(South Australia)(10.06) —As Senator Button has just pointed out, the industry has made representations on a number of clauses, which the Government has picked up and is amending, having spoken to the various parties. I believe that the Opposition would be in favour of all the amendments. Would it not expedite matters if the Government's amendments were taken en bloc and incorporated into the Bill and we just dealt with the other amendments? It might speed things up. I think the Opposition would accept all the amendments that the Government is moving. Senator Lewis —We would rather deal with them clause by clause. Clauses agreed to. Ordered that consideration of clause 4 be postponed. Clauses 5 to 9-by leave-taken together. Senator LEWIS(Victoria)(10.08) —I refer the Minister to clause 9 (9), which states: Where a variation of a plan is approved by the Minister after the plan has come into force . . . I wonder why there is no subclause (10) to the effect that the Minister should then table the plan. One thing that is quite unfortunate about this chamber is that from time to time governments tend to think that the Houses of Parliament are not very important, but it is important that we know what decisions the executive government has made. We know that this Government has a propensity to tell us what the law is or what it is going to be by issuing Press releases. I do not want to move an amendment to clause 9 because I would have thought it was a matter for the Government, but I ask why there is not an additional subclause to the effect that, after this plan has been approved, it will be tabled in the Houses of Parliament. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.10) —I am not terribly upset about that point; I would do that anyway, Senator. Senator Lewis —That's what I thought, you see, but we might make a parliamentarian out of you afterwards. Then we would have one on your side of the chamber. Senator BUTTON —That is less than charitable to my colleagues. I am sorry that the honourable senator intruded that dreadful note into the debate. I presume that the plan would be under the eyes of an astute and alert opposition-in my experience a concept which is almost a contradiction in terms, looking at the last four or five years. But now I assume that it would be under the eyes of an astute and alert opposition which would take an interest in these matters. That is the way Parliament functions. I do not mind indicating on a public basis that the Authority will report each year publicly and the report will be tabled in Parliament. If there are any variations to the plan within that year I think it would be very remiss of the Authority if it did not report on those variations. The opportunities are there in a variety of ways including, as Senator Lewis has pointed out, in Press releases but also in the annual report and things of that kind. Senator LEWIS(Victoria)(10.12) —I accept that. Perhaps someone might draw the attention of the parliamentary draftsman to this point. Frankly, the executive government ignores the Parliament and its responsibility to report to the Parliament from time to time. Senator COULTER(South Australia)(10.13) —I would like the assurance of the Minister in relation to clause 9, subclause (6), which reads: A plan, whether or not it has come into force, may be varied by the Authority with the approval of the Minister. I am sure that the Minister would concede that, in a situation like this, where possibly quite large sums of money will be invested, plans, because of their very nature, will be relatively long term. In relation to the possible displacement of workers and retraining schemes, plans will also need to be fairly long term. Clearly, it is not desirable for the Authority, with or without the approval of the Minister, to chop and change around. I do not want to amend this clause in any way. I would just like the Minister's assurance that plans, once approved, will be stuck with for a reasonable period and will not be changed lightly. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.14) —I assure the honourable senator that I believe the Authority and the Minister will be so locked in by conflicting interests in this industry that that will be the case. Clauses agreed to. Clause 10 (Report on TCF industries' matter etc.) Senator LEWIS(Victoria)(10.15) —I move: (2) Page 7, subclause 10(4), lines 29 to 36, leave out the subclause. Let me explain to the Committee what clause 10, subclause (4) does. This is the dob-in clause. This clause provides that the Authority may prepare and give to the Minister a report on any instance that it considers is an instance of failure by a person involved in any of the TCF industries to act consistently with the policies of the Commonwealth Government with respect to those industries. This Authority could report to the Minister that a company, for example, Bloggs Textiles Ltd, is not acting consistently with the Government's policies with respect to those industries. I do not really know in what way the Minister had anticipated that this might be dealt with. The Government has all sorts of policies with respect to industries. The Government might have some policy whereby some industrial relations arrangements would be made or priority would be given to unionists on the question of employment. That might be this Labor Government's policy and this clause would require the Authority to report to the Minister that Bloggs Textiles Ltd, or whatever the name of the company is, is not acting consistently with the policies of the Commonwealth Government with respect to those industries in this matter. I say to the Committee that this is an extremely powerful clause. For some reason or other there is no requirement to publish the report. The Authority may recommend to the Minister that the whole or part of the report referred to in the subclause be published. I take it that the Minister may then accept or not accept that advice; in other words it will then be a matter for the Minister as to whether that part of the report is published. Quite frankly, I am unable to see why we would want to have the power for the Authority, in effect, to dob in someone for not acting consistently with the Government's policies. That is different from someone not obeying the law or the Act in some way or other. I find this general reference to the Government's policies quite an extraordinarily wide power. I might also mention that under subclause (3) the Authority may prepare and give to the Minister a report on any TCF industry matter anyway. So the Authority has an extraordinarily wide power there. I suppose that if the Authority wanted to report to the Minister that someone was not acting consistently with the Government's policies it could do so under subclause (3). Senator Button —That is a subterranean sort of dobbing in, isn't it? Without any legislative authority it is dobbing in in a way which I think you would find more reprehensible. Senator LEWIS —I would certainly find it reprehensible; I agree with the Minister. But the point I am making is that if the Minister wants this Authority to have the power to dob in people, it already has this power under subclause (3). It is the Minister's Bill; it is not my Bill. So he wants the Authority to have this power and he cannot escape that by talking about subterranean dobbing in or anything else. It is his Bill. He brought the Bill into the Parliament and it has this power in it. I have pointed out that, under subclause (3), the Authority could report if it wanted to. But under subclause (4) of this Bill the Minister has directed the Authority specifically to go to this area. Subclause (4) opens up with the words: Without limiting the generality of subsection (3) . . . So the Bill, by its wording, acknowledges that under subclause (3) the Authority would have the power to do what the Minister wants it to do. The Minister specifically included this power in the Authority. The Minister has indicated in his amendments that he proposes that the Authority, before it dobs someone in or reports in this manner, would, firstly, give that person or that company notice that it intended to do so. How on earth would that help the company concerned? The explanatory memorandum says: In clause 10 add: That the Authority shall, before recommending to the Minister that a report be published, notify any person to whom the report relates of the contents of the report and that it may be published. In other words, if the Authority wants to report to the Minister that someone is not complying with the Commonwealth Government's policies and that that not be published, the person need not be notified. But if the Authority thinks the matter ought to be published, glory be, the Minister, very kindly, will notify that person that he will be reported to the Minister and that the Authority will recommend the report be published-in other words, be made public. I draw the Minister's attention to what the Law Council of Australia said in relation to its concerns: It is not proper for Government to seek to impose obligations to comply with Government policy-it involves uncertainty and smacks of totalitarianism. I thoroughly agree with the Law Council's report. I draw the Minister's attention to what Mr Garry Downes, QC, Chairman of the Administrative Law Committee of the Law Council of Australia, said in his memorandum which the Law Council sent to me and I am sure to the Minister and other honourable senators. Mr Downes says: The most disturbing part of the Bill is cl.10, and, in particular, cl.10 (4). He then explains what that clause does and he says: Although there is at least one precedent for the granting of such a power to a Commonwealth Authority, that instance can be described as a special case. It seems to me that powers of this kind ought only very rarely to be granted, if at all. Persons subject to Australian law have an obligation to abide by that law. That seems to me, however, generally, to be the proper limit of legislative interference. It does not seem to me that it is proper for Government to seek to impose obligations to comply with Government policy. Firstly, such an attempt smacks of totalitarianism. Why should a person acting within the law be under pressure to conduct himself in accordance with the wishes of the Government. Secondly, such a proposal suffers from great uncertainty: after all, what is Government policy; what is a failure to carry it out? I think that it would be appropriate for the Parliament to at least pause before it enacts a provision such as cl.10. My concerns prompted by the far reaching nature of this clause are only heightened by the provisions governing enquiries by the Authority which are contained in Part V of the Bill. Just at the moment I am unable to put my hands on the report of the Standing Committee for the Scrutiny of Bills. But I would be very surprised if that Scrutiny of Bills Committee allowed this matter to pass without reference. Perhaps Senator Coulter will speak on this matter and refer to the Committee's report while I am looking for it. I say to the Minister quite frankly that the amendment proposed by the Government simply is not adequate. The best thing that could happen would be for the whole of clause 10 (4) to be deleted. In fact, the implication of Mr Downes is that the whole of clause 10 ought to go. Senator Button —He did not say that. Come on! Senator LEWIS —He says that clause 10 is his concern. He says: I think that it would be appropriate for the Parliament to at least pause before it enacts a provision such as cl.10. I thoroughly agree. I will look forward with interest to the Minister's explanation. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.25) —I am not particularly excited by this provision in the legislation. I do not think that it is absolutely crucial. But it is not sufficient for Senator Lewis to describe it, as he says, as a dob in clause. That is a colloquialism which is understood outside the Senate, but perhaps not as well understood as it ought to be in the Senate. It is not sufficient just to characterise the clause as a dob in clause and then say it is bad for that reason. If the industry were concerned about the dob in clause, as Senator Lewis characterises it, it certainly would have told us. It has not done that because it understands the policy framework within which the development plan was put together. It understands, as I hope Senator Lewis understands, that this Parliament is here to represent the community and the TCF industries are very costly to the community. One has only to buy a shirt or a pair of shoes in Hong Kong to recognise that the cost to the Australian community of the TCF industries is very considerable. It is because the Bill and the program confer rights that they also confer obligations on the parties involved. The simple point is that this is important because the industry receives very high levels of protection. Accordingly, it has an obligation to the community and, in particular, an obligation to act responsibly in the climate of the Government's restructuring of industry assistance for it. It is a case where to act against Government policy would be contrary to the community interest. The Bill provides only for the Textiles, Clothing and Footwear Development Authority to report to the Minister on any such instance. I assure Senator Lewis that there are such instances. They have occurred in the industry over a period of time. No penalties are to be imposed. The provisions which the Law Council report refers to regarding the method of dealing with people under these proposals have been deleted by Government amendment. The Minister may decide not to publish a report. The virtue in the fact that any report to be given has to be presented to the person about whom the report is made is simply that if the person is alerted he can come running to the coalition, the Australian Democrats, a newspaper or whatever about that so it can become a matter of public knowledge if the person is fully aware what the Authority is proposing. I quite understand Senator Lewis's view that the Parliament should pause before enacting provisions of this kind. Having paused, gained breath and a little wisdom in the process, it should proceed with the clauses of the Bill, particularly as the environment for those clauses is considerably changed since the opinion produced by the Law Council was given. Senator HARRADINE(Tasmania)(10.29) —I have listened carefully to what the Minister has said in response to Senator Lewis. I particularly understand the last point that was made that the person or company about which the report is made must get a copy of the report. I just wonder whether the global power, as it were, of the Authority to report to the Minister in respect of almost anything that it wishes, as contained in the legislation, is necessary-and perhaps this question should be addressed by Senator Lewis-if we acknowledge that this legislation enables the Authority to report to the Minister about anything it so desires including, presumably, matters that are the subject of clause 10. Is it not appropriate in that event to have an amendment which requires the Authority to notify the person about whom the report is made and to provide a copy of that report to that person? I am somewhat concerned, as was Senator Lewis, about the philosophy of this particular measure. The TEMPORARY CHAIRMAN(Senator Bjelke-Petersen) —Order! It being 10.30 p.m., under sessional order I put the question: That the Temporary Chairman do now leave the Chair and report to the Senate. Question resolved in the affirmative. The Temporary Chairman having reported accordingly- The DEPUTY PRESIDENT(Senator Hamer) —It being 10.30 p.m. under sessional order I put the question: That the Senate do now adjourn. Senator McKIERNAN(Western Australia)(10.31) —I will not delay the Senate very long tonight. In drafting a notice of motion this afternoon it had been my wish to ask my Whip, Senator Jones, to move it on my behalf tomorrow morning in my absence from the chamber. Senator Jones considered the electoral ramifications of so doing and declined. The notice of motion that I intend to move concerned the magnificent victory of the Western Australian cricket team today at the Western Australian Cricket Association ground in Perth when it outclassed and outsmarted Queensland yet again. Senator Walsh —That is not hard to do. Senator McKIERNAN —It may not be hard to do, because Queensland certainly has a habit of running second in the Sheffield Shield competition. Western Australia won for the eleventh time in some 20 years. Senator Jones was cautious-and perhaps rightly so-in not agreeing to move the motion in the spirit of bipartisanship and sportsmanship in which I understand this particular game was played. It must be put on the record that it was a magnificent achievement for a new State in this competition to win this trophy for the eleventh time in 20 years. The Queenslanders have been trying now for 61 years. On the last 10 or 15 occasions they have reached the final but have not managed to get over the line. The team that played in Perth during the last five days was captained by Graeme Wood, and did a magnificent job in coming from behind in the early part of the season to overtake the other teams and ensure that the final was played in Perth. The rest of the team comprised Marsh, Veletta, Andrews, Alderman, MacLeay, Matthews, Zoehrer, Mullally, Hughes and Brayshaw. Senator Crichton-Browne —Why don't you name the spectators? Senator McKIERNAN —There were more than 10,000 people there on Sunday, Senator. We could not get into the ground when we tried after attending a meeting in the country. Perhaps it was a wee bit too hot, anyway. Of course, if it is the wish of honourable senators I can delay the Senate even longer, but I am sure that Senator Crichton-Browne will join me in congratulating the team, captained so magnificently by Graeme Wood, on bringing yet another honour to our State. We can have bipartisan support on this matter. Senator REID(Australian Capital Territory)(10.34) —Since 12 March this year Canberra has celebrated its seventy-fifth birthday and the birthday celebrations organised in this bicentennial year by the Canberra Festival Committee have been truly enjoyable. The great Australian balloon spectacular-a focus of this year's festivities-and the presence in Canberra of the wonderful contingent of veteran and vintage motor vehicles have contributed enormously to the atmosphere of the celebrations. There have been a host of other events and exhibitions which Canberrans have enjoyed during this time. Tonight I particularly wish to speak about an event which, over three nights, had the people of Canberra enthralled-the son et lumiere production Versailles hails Canberra. Any honourable senators who were fortunate enough to be able to join the thousands of Canberrans who witnessed this event would agree that it was one of the most unique and impressive entertainments ever staged in Canberra, if not Australia. I take the opportunity to express my thanks and, I am sure, the thanks of the thousands who enjoyed the spectacular entertainment to the people responsible for the organisation and staging of the event. The spectacle had its origin four years ago with the proposal that the cities of Canberra and Versailles be twinned. At that time, an approach was made to have the two cities twinned and this was pursued by the then leader of the Australian Capital Territory (ACT) House of Assembly, Mr Jim Leedman. He visited Versailles in the Department of Yvelines and the proposition was put by the County Council of Yvelines that the two cities should twin. This in turn was put by Mr Leedman to the ACT House of Assembly and it was endorsed by that Assembly. It was about that time that the Federal Government abolished the House of Assembly. Recognising the importance of keeping the twinning plans in train, the House of Assembly decided to pass the matter over to a community committee which would continue the work which had been started. Mr John Kirby was appointed the chairman of that committee and the plans were modified slightly to twin not the cities, but the communities of Versailles-Yvelines and Canberra. Mr Kirby visited Versailles in October 1986 to discuss the nature of the twinning arrangements and when reciprocal visits would be made by the representatives of the respective cities. It was agreed that a delegation from Canberra would visit Versailles in May 1987 for the first part of the twinning and that March 1988-our bicentennial year and on the occasion of Canberra's seventy-fifth birthday-would be an appropriate time for the reciprocal visit. In May 1987, 65 people from Canberra visited Versailles-Yvelines. An open invitation had been extended by the committee to anyone in Canberra wishing to be part of the delegation. A broad cross-section of people-all of whom paid their own fares-took the opportunity to be part of the visit. In Versailles a twinning ceremony took place and the delegation was entertained for four fabulous days-as I am told-by the County Council of Versailles-Yvelines and the people of that county. In September 1987 Mr Kirby returned to Versailles to confirm the plans for March 1988. In response, Versailles-Yvelines sent six officials to Canberra in November of last year to finalise arrangements for the spectacular which was presented over the weekend. They discussed the logistics and indicated in detail the nature of the event they proposed to present. It became clear that it would be a major production-and it certainly was. The cost of staging the production was $1m. It involved 55 artists, dancers, actors and technicians. There were also 12 delegates from Versailles-Yvelines accompanying them and a number of Australian subcontractors involved in the staging. One may speak in superlatives to describe the lighting, the acting and costumes, the fountains, the music and the fireworks, but the total production left many absolutely speechless and feeling very emotional. It was a truly generous gift to Canberra on our birthday and to mark the twinning of our communities and the Australian Bicentennial. It was paid for largely by the Conseil General des Yvelines, but was also supported by a number of commercial sponsors including Grand Marnier, Le Notre Paris, Matra Espace, Technip, B.P. Rop, Cogema and Club Mediterranee and local sponsors included Canberra Building Society, Matrix and Price Waterhouse. The benefits for Canberra from our twinned relationship with Versailles-Yvelines do not end with the enjoyment the production gave so many of us. The relationship is being developed to promote further exchanges between our communities because twinning of a community is a form of diplomacy. It is a means of people getting to know others. The Canberra Twinning Committee has been formed into an incorporated association-the Canberra-Versailles-Yvelines Twinning Committee Association-which is now raising funds to provide scholarships for Canberra students to study in Versailles-Yvelines. Student exchanges are already taking place. Cultural exchanges involving the Canberra City Band and the Canberra Symphony Orchestra are also distinct possibilities. While in some respects our cities are very different, they have a number of important similarities, such as their relationships to government. Canberra is a modern capital; Versailles was once the capital of France. As a resident and representative of Canberra I look forward to seeing this relationship develop and our two cities prosper. I hope that Canberra may be able, in some measure, to return the generosity of the County Council of Versailles-Yvelines when the people of Versailles celebrate the 200th anniversary of the storming of the Bastille in 1989. The entertainment Versailles hails Canberra was said in the program to be proof of friendship. The event, the culmination of a splendid idea-the twinning of Canberra and Versailles-Yvelines-carried through by the communities of Canberra and Versailles-Yvelines and their citizens, is for the mutual benefit of the communities. I would seek leave to incorporate in Hansard a list of the names of those in Canberra who have been part of the Twinning Committee, and to table the program of the event. Leave granted. The list read as follows- MEMBERS OF THE CANBERRA-VERSAILLES-YVELINES TWINNING COMMITTEE ASSOCIATION John Kirby (President) Jim Leedman (VP) Dr Geoff Caldwell (VP) Michael Gaughan (Treasurer) Prof. Bede Morris Henri Deniaud Francis Kau Ros Loftus Rene Ederle Richard Kemp Liz MacKenzie Bev Porteous John Wells David Dixon Barry Brogan Question resolved in the affirmative. Senate adjourned at 10.41 p.m. The following papers were tabled: Acts Interpretation Act-Correspondence and Statement relating to an extension of a specified period of time for presentation of the Canberra Retail Markets Trust 1986-87 Annual Report. Telecommunications Act-By-laws- Telecommunications (Community Calls) Amendment No. 52. Telecommunications (Charging Zones and Charging Districts) Amendment No. 81. GOVERNOR-GENERAL'S PROCLAMATION-COMMENCEMENT OF AN ACT: A Proclamation by His Excellency the Governor-General was tabled, notifying that His Excellency had proclaimed the following sections of an Act to come into operation on the day specified: Nuclear Non-Proliferation (Safeguards) Act 1987-Sections 23-26-31 March 1988 (Gazette S.68, 7 March 1988) The following answers to questions were circulated: (Question No. 102) Senator Macklin asked the Minister representing the Minister for Foreign Affairs and Trade, upon notice, on 27 October 1987: (1) Is the Minister for Foreign Affairs and Trade aware that January 1988 is the closing date for submissions to the independent Commission of Inquiry established by the Government of the Republic of Nauru. (2) Does the Minister believe that the Australian Government has a responsibility to assist with the rehabilitation of areas of Nauru which were mined by the British Phosphate Commission while Nauru was under Australian administration. (3) Is it true that, during the nearly fifty year period when Australia administered Nauru under the League of Nations Mandate and then under the United Nations Trust, Australia bought phosphate from Nauru for about one quarter of the world market price. (4) Has the Australian Government made a submission to the Commission of Inquiry established by the Government of Nauru; if so, will the submission be made public; if not, why not. Senator Gareth Evans —The answer to the honourable senator's question is as follows: (1) Yes. (2) and (4) No. The Australian Government together with the other Partner Governments of the former British Phosphate Commissioners (New Zealand and British) regards the comprehensive phosphate agreement concluded in 1967 prior to Nauruan independence on 31 January 1968 as a just settlement that cleared the Partner Governments of any responsibility for the rehabilitation of Nauru. The Australian Government has therefore not made a submission to the Nauru Commission of Inquiry, which has no legal standing in Australia. Further to Senator Macklin's question of 24 November in the Senate, the Government has under consideration what access to information can be granted to the Government of Nauru. (3) No. The cost of phosphate varied over the period. It was generally lower than market prices because the British Phosphate Commissioners operated on a cost recovery rather than profit basis. (Question No. 112) Senator Macklin asked the Minister representing the Minister for Foreign Affairs and Trade, upon notice, on 3 November 1987: (1) Has the Australian International Development Aid Bureau completed its review of Australia's international aid programmes; if so, will the Minister for Foreign Affairs and Trade be making the findings of this review public; if not, why not. (2) Is the Minister aware that Australia is the only Organisation for Economic Co-operation and Development (OECD) member country of the agricultural fund which has not yet honoured its pledge to make a grant to the International Fund for Agricultural Development (IFAD-2), the second stage of the fund. (3) Will the Australian Government fulfil its pledged second replenishment to the International Fund for Agricultural Development (IFAD-2) amounting to $8.48 million; if so, when will this replenishment be made; if not, why not. (4) Does the Minister agree that through the International Fund for Agricultural Development there is an important contribution made to assisting the rural landless and low income small farmers in developing countries; if so, will he give an assurance that Government funding for the International Fund for Agricultural Development will continue after IFAD-2; if not, why not. Senator Gareth Evans —The Minister for Foreign Affairs and Trade has provided the following answer to the honourable senator's question: (1) I assume that the honourable Senator is referring to the in house review by AIDAB of Australia's membership of International Financial Institutions (the IFI Review) carried out by Cabinet direction. This review focused on Australia's participation in the World Bank, the Asian Development Bank and the International Fund for Agricultural Development. As the IFI Review was prepared for and considered by Cabinet it is classified Cabinet-in-Confidence. In keeping with the conventions and principles of Cabinet confidentiality, the IFI Review will not be released publicly. (2) As the honourable Senator will be aware from my press release of 8 November 1987 and from my answer to his questions of 20 October 1987, Australia will be honouring its pledge of $A8.48 million to the second replenishment of IFAD. An instrument of contribution will be lodged with IFAD once the enabling legislation has received Royal Assent. (3) Yes. See answer to question 2 above. (4) No. The second reading speech which accompanied the International Financial Institutions appropriation bills, provided details on this decision (see House of Representatives Daily Hansard, Thursday 19 November 1987, pp 2361-2364). In particular, I draw the Honourable Senator's attention to an article in the Canberra Times of 24 August 1987 ``Shortage of aid funds points up IFAD inefficiencies'' by Professor Helen Hughes of the Development Studies Centre at the Australian National University. (Question No. 159) Senator Coates asked the Minister for Transport and Communications, upon notice, on 17 December 1987: (1) Is the Minister aware of the advertisement in the Public Notices column on page 25 of The Age on 17 September 1987 headed ``Notice of Cancellation of Passport'' and signed by S. C. Moon, Secretary, Telecom Australia. (2) Why did the Consul of the People's Republic of China request that the advertisement be published, and why did Telecom need to comply with the request. (3) Who is Ma Yin Ping and what is the connection between that person, the passport and its cancellation, and Telecom. Senator Gareth Evans —The answer to the honourable senator's question is as follows: (1) Yes. (2) and (3) Mr Ma Yin Ping is the Deputy Director, Design Division, Fourth Engineering Corporation in Zheng Zhou's Ministry of Posts and Telecommunications of the People's Republic of China. Under the terms of Memorandum of Understanding between Telecom Australia and the Ministry of Posts and Telecommunications of the People's Republic of China, Mr Ma Yin Ping was in Australia from 13 September 1987 to 24 October 1987, on a work experience tour visiting Telecom Australia establishments to study optical fibre systems. Mr Ma Yin Ping's passport and personal effects were stolen from his hotel room on 15 September 1987. The Consul General of the People's Republic of China informed Telecom that their policy required that a notice be placed in daily papers at least one week before a passport could be issued to replace one which had been lost or stolen. As Telecom was responsible for the visitor under the Memorandum of Understanding and naturally wished to assist in the replacement of his passport, it complied with the Consul General's request.