Thursday, 14 April 1988 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned and citizens of Australia respectfully showeth: That the introduction of time-charging for local telephone calls by Telecom Australia would seriously disadvantage thousands of elderly and disabled people and families, and would add a further burden to the already prohibitive cost of living borne by every Australian. That accordingly the Senate and Parliament should reject any plans by Telecom to time-charge local telephone calls. And your petitioners as in duty bound will ever pray. by Senator Knowles (from 84 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 13 citizens). To the Honourable the President and members of the Senate of the Commonwealth Parliament assembled The petition of these residents of the Commonwealth of Australia Respectfully showeth: that the Australian Broadcasting Corporation provides the citizens of the Commonwealth of Australia with the only nation-wide independent radio and television service that the independence of the Australian Broadcasting Corporation preserved in the interests of the citizens of the Commonwealth of Australia. that the introduction of commercial sponsorship or any form of advertising material from commercial sources would destroy the independence of the Corporation. Your petitioners therefore humbly pray that the honourable Senators will oppose the introduction of any form of sponsorship or advertising material from commercial sources into the programmes of the Australian Broadcasting Corporation. And your petitioners as in duty bound will ever pray by Senator Messner (from 30 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: we wish the legislation introducing the ID card, known as the Australia Card, to be rejected. Your petitioners most humbly pray that the Senate, in Parliament assembled, should not vote for this legislation as it will affect the civil liberties of every Australian. And your petitioners as in duty bound will ever pray. by Senator McLean (from 679 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Senator McLean (from 84 citizens). To the Honourable the President and members of the Senate in Parliament assembled; The humble petition of the undersigned citizens of Australia respectfully showeth; That we, the undersigned, having great concern because of the threat to personal freedom posed by the introduction of The Australia Card, call on the Government to withdraw the enabling legislation on the following grounds; 1. Expert opinion does not agree ``that a National Identification Card system for all Australians'' would necessarily ``combat tax evasion and fraud''. 2. Once established at enormous cost to the taxpayer, the system would be here to stay. 3. The potential for the invasion of individual privacy by persons unknown to the private citizen is so great as to be unacceptable to us. Your petitioners therefore humbly pray that your Honourable House will protect this society by rejecting the Bill outright; And your petitioners as in duty bound will ever pray. by Senator McLean (from 105 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows that; they are concerned that the valuable social function of the A.B.C. as a broadcaster independent of censorship, editorial bias or reliance on other than public funding should be threatened. Your petitioners therefore ask Parliament to disallow the passage of any legislation that would render the A.B.C. subject to such forces and in particular resist any change to the present principle of the A.B.C. receiving sufficient public funding to enable it to carry out its Charter. And your petitioners as in duty bound will ever pray. by Senator Lewis (from 28 citizens). To the Honourable the President and members of the Senate in Parliament assembled: Whereas the Hon. Brian Burke whilst serving as Premier of the State of Western Australia was also fulfilling the position of State Treasurer: Whereas the State Treasurer is the Officer of the Parliament responsible for the oversight of Building Societies and Credit Unions, and the Superannuation Board in Western Australia: Whereas investigations appear to be suggesting at least maladministrations and possibly illegalities in the affairs of the Superannuation Board and some Building Societies and Credit Unions: Whereas Section 25 (Subsection 2) of the Superannuation Act states that no loans shall be made by the Superannuation Board without the approval of the State Treasurer: And whereas it would appear that investigations to be complete would require the presence of the principal officer involved: We would therefore humbly request that the Senate, in Parliament assembled, in the interests of justice and good government, should seek to have the appointment of the Hon. Brian Burke as our Ambassador to Ireland deferred until such time as these matters are fully investigated and proved. And your petitioners as in duty bound shall ever pray. by Senator Knowles (from 45 citizens). Petitions received. Senator POWELL(Victoria) —I give notice that, on the next day of sitting, I shall move: That the following Bill be introduced: a Bill for an Act to amend the Broadcasting Act 1942, and for related purposes. Senator COULTER(South Australia) —I give notice that, on the next day of sitting, I shall move: That the following Bill be introduced: a Bill for an Act to regulate the use of certain substances that can significantly deplete or otherwise modify the ozone layer in a manner that is likely to have adverse effects on human health and the environment, and for related purposes. Motion (by Senator Maguire) agreed to: That Senators Foreman and McKiernan be granted leave of absence for the period from 12 April to 29 April 1988, inclusive, on account of absence overseas on parliamentary business. Motion (by Senator Stone) agreed to: That Senator Sheil be granted leave of absence for the period from 12 April to 29 April 1988, inclusive, on account of absence overseas on parliamentary business. Motion (by Senator McMullan) agreed to: (1) That the paper entitled The Canberra Leasehold System prepared by Professor Max Neutze at the request of the Joint Committee on the Australian Capital Territory be referred to the Standing Committee on Transport, Communications and Infrastructure for investigation and report. (2) That the Standing Committee when considering this matter be empowered to sit as a joint committee with the Standing Committee on Transport, Communications and Infrastructure of the House of Representatives when that Committee is considering this matter, under the same provisions as the joint committee empowered by Resolution of the Senate of 3 November 1987, concurred in by the House of Representatives on 5 November 1987, to examine proposed variations to the plan of lay-out of the City of Canberra. (3) That nothing in paragraph (2) be taken to affect the power of the Senate Committee to consider the matter referred to in paragraph (1) or its duty to report to the Senate on this matter. (4) That this Resolution be communicated by message to the House of Representatives requesting the concurrence of that House in paragraph (2). Motion (by Senator Gareth Evans) agreed to: That the following Bill be introduced: a Bill for an Act to amend the Broadcasting Act 1942, and for related purposes. Motion (by Senator Gareth Evans) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator GARETH EVANS(Victoria-Minister for Transport and Communications)(10.05) —I table the explanatory memorandum and move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill replaces the Broadcasting (Ownership and Control) Bill (No. 3) 1987 which was introduced in the Senate towards the close of the 1987 Budget sittings of Parliament. That Bill has been withdrawn because of the extensive drafting changes required to implement an adjustment to the policy for the grandfathering (i.e. protection) of certain interests which contravene relevant ownership and control limits. The Bill provides for a major new package of commercial radio ownership rules and will provide an efficient and equitable framework for the future development of commercial radio services in Australia. The opportunity has also been taken in the Bill to accomplish a substantial rearrangement and consolidation of existing ownership and control provisions in broadcasting legislation. These new rules, which implement the policy announced on 28 October 1987, will substantially complete the Government's unprecedented reform of the ownership structure of the Australian media. The Bill presents the results of the review of ownership limits for commercial radio. It also completes the review of cross-media ownership by addressing this issue in the context of revised radio rules. The new cross-media limits will effectively mean that media proprietors will have to choose between a major role in television or radio or newspapers. The existing radio limits in the Broadcasting Act 1942 are: one metropolitan radio licence in any State; a total of four metropolitan radio licences; a total of four radio licences in any State; a total of 8 licences. The factor that triggers the application of these limits is the holding of a prescribed interest in a commercial radio licence or the holding of a directorship in a company in a position to control a commercial radio licence. Broadly speaking, the threshold for attribution of a radio prescribed interest is the holding of more than a 15% direct or indirect shareholding in a licensee company. This Bill does not propose changes either to this threshold level for radio prescribed interests or to the methods of tracing indirect interests. A change in the current 5% prescribed interest level for commercial television licences is proposed, for the purpose of the revised television/radio cross-media limit. I will explain this change in addressing the provisions of the Bill in more detail. Since the inception of the radio limits in 1935, the number of commercial radio licences has more than doubled, and more new services are in the pipeline. In February 1987 the Government announced the plans for twenty-seven additional commercial FM radio stations in regional areas. In October 1987, I added to this list so that, by 1922, commercial FM radio services will be available to more than three million people living outside the mainland State capitals. This expansion of commercial radio services represents a radical change in the commercial radio environment in non-metropolitan areas which is not catered for by the existing radio ownership and control limits. The Government believes that the public interest will best be served if commercial radio services are competitive. A competitive industry will strive to present the best in commercial radio programming in order to attract audiences and, consequently, advertising revenue. Competition within radio markets will also promote diversity of programming in terms of news, information, opinion and entertainment. In summary, the new package of ownership rules introduced by this Bill will consist of: A national limit of 16 commercial radio licences; A State radio licence limit of no more than half of the service areas in that State; A limit of one radio licence to a service area; and New and revised cross-media ownership limits. National Limit The new national limit for commercial radio licences is to be 16. The number of these licences has more than doubled since the eight-station limit was introduced in 1935. To maintain the ratio of permitted licences to the total available today (that is 139) would require a new limit of seventeen. If one takes into account the 37 new commercial or supplementary radio licences in the pipeline, the number may need to go as high as 21 to maintain that ratio. When the new services are in place the new limit could represent just over 9% of licences as compared with 6% under the current eight station rule. In this context, the new 16 licence limit is both realistic and conservative. State Limit The present State limit of four licences impacts unevenly upon the States because it takes no account of the differing numbers of licences among them. The new limit in the Bill will prohibit a person from holding prescribed interests in more licences within a State than half the number of service areas in that State. For this purpose, service areas that are substantially coextensive with each other will be counted only once. If the revised State limit were to come into operation today, the maximum number of licences in the States would be: NSW (including ACT)...17 Victoria...7 Queensland...11 South Australia...3 Western Australia...7 Tasmania...3 The principle underlying the State limit is that no-one should be able to exercise too great an influence within a State. The combined effect of this limit and others included in this Bill will achieve this result. Local Limit The Government believes that diversity and quality of programming is best ensured by the provision of competitive services at the local level. Under the current rules, there is a prohibition against holding two or more radio licences serving any State capital city. Only a few cities outside the State capitals have more than one commercial radio service and these are not commonly owned. However, with the planned expansion of commercial services in non-metropolitan areas, it is necessary to give the metropolitan area prohibition general force. The general application of the one-to-a-market limit is consistent with the one-licence-to-a-market rule for commercial television. The intent of the new rule is that, where licences are in direct competition, they should not be commonly owned. There are many services that are not in direct competition but whose service areas, for historical or other reasons, overlap. The ``one-radio-licence-in-a-service-area'' rule therefore has a built-in margin of tolerance of 30%. That is, if two service areas overlap to the extent that more than 30% of the population of one is also within the service area of the other, then the licences serving those areas will not be able to have common ownership links. There will, of course, remain the case of supplementary licences. These will be granted only where the service area concerned is judged to be unable to support a competitive service. As at present, supplementary radio licences will not be subject to the radio ownership rules. Cross-Media Limits In early 1987 the Government introduced cross-media limits in connection with changes to the television ownership and control rules. Those limits restricted, for the first time, holdings across media-in that case, television/radio and television/newspapers. Since then there has been a considerable realignment of interests within the industry with a significant uncoupling of cross-media linkages. The present Bill extends the cross-ownership restrictions to radio/newspaper holdings and amends the application of the existing television/radio restrictions. In the case of television/radio, the current restriction is that prescribed interests may not be held in both a television licence and a radio licence if, anywhere within the television service area, there is a monopoly for the commercial radio service. The new rule will prohibit the holding of prescribed interests by one person in both a television licence and a radio licence if more than 30% of the population within the service area of one of those licences is also within the other's service area. For this purpose a prescribed interest in a television licence will be attributed to interests of more than 15%. This television/radio limit will mean that there is uniform application of the prescribed interest levels to radio and television for the cross-media rule. The rule will apply universally across Australia-not just in monopoly radio markets. For radio/newspapers, cross-media holdings will be limited in an equivalent manner to television/newspapers; that is, a person will not be permitted to hold prescribed interests in both a radio licence and a newspaper if that newspaper: has fifty per cent or more of its circulation within the radio service area; is published, in English, on four or more days per week; and is sold, as a newspaper, to the extent of fifty per cent or more of its circulation. The threshold for a prescribed interest will be fifteen per cent for both radio and newspapers, as already defined in the Act. The effect of these rules will be that media proprietors will essentially have to choose between a major role in television, or radio, or newspapers. Directorships The existing radio directorship limits in the Act has also been changed to make them consistent with the revised radio prescribed interest limits. The existing television/radio cross-media directorship limit has also been amended to reflect the changes made to the corresponding cross-media prescribed interest limit. The new radio/newspaper cross-media prescribed interest limit is also supported by a corresponding directorship limit. The changes made to the cross-media directorship limits include an exemption to cover the circumstances where a person holds more than one directorship within a corporate group which has grandfathered cross-media interests. Administration and Enforcement For the purpose of the new radio rules, the Minister will be required to determine the percentage service area population overlaps between radio licences (to give effect to the one-radio-licence-to-a-service-area limit) and to determine the number of discrete service areas in each State (to give effect to the revised State limit). The Minister will also be required to determine percentage population service area overlaps between commercial radio and television licences for the purpose of the new television/radio cross-media limit. The determination of service area population overlaps is to be based on Census Count results published by the Australian Statistician. For the purpose of the new radio/newspaper cross-media limit, the Australian Broadcasting Tribunal will be required to determine those newspapers having more than 50% of their circulation within the service area of particular commercial radio licences. The Bill will ensure that these determinations made by the Minister and the Tribunal are available to the public in the form of Ministerial Gazette Notices and the Tribunal's Associated Newspaper Register. The Notices and the Tribunal Register must also be updated to take account of new circumstances such as new Census Count results, changes in service areas and changes in newspaper circulations. The administration and enforcement system closely follows the scheme which applies at present to the 60% population reach television limit. Investors in the media will thus be able to ascertain those investments that would contravene the new limits through reference to the Gazette Notices of the Minister and/or the Associated Newspaper Register of the Tribunal. Contraventions of the new limits will be treated in the same way as contraventions under the existing Act. Grandfathering As already indicated, this Bill implements a revised approach for the grandfathering of interests than that which was provided in the Broadcasting (Ownership and Control) Bill (No. 3) 1987. In my Second Reading Speech for that Bill I indicated that, following consultation with broadcasting industry representatives and other interested parties, amendments of the grandfathering rules would be considered when debate on the Bill was resumed in these Sittings. In particular, I foreshadowed that consideration would be given to the application of grandfathering to inadvertent contraventions of the new radio and cross-media limits caused by changes in Census Count population figures for relevant commercial radio or television licences. Following this consultation process, it has been decided to amend the provisions in the previous Bill by extending grandfathering protection to: (a) eligible prescribed interests or directorships held before the date of Ministerial announcement not only if they contravene as a result of a subsequent change in service area, but also if they contravene as a result of a subsequent change in population distribution between service areas or a subsequent minor change in the circulation of a newspaper; and (b) prescribed interests or directorships acquired after the date of Ministerial announcement, if they contravene as a result of a change in population distribution between service areas or a change in service area, not including television service area aggregation. These adjustments to grandfathering policy are designed to provide protection from inadvertent contraventions of the new ownership and control limits caused by circumstances beyond the legal control of licensees or media investors. This protection does not apply, however, to prescribed interests or directorships acquired after the date of Ministerial announcement where they contravene as a result of television service area aggregation. This is because such prescribed interests or directorships have been acquired in full knowledge of the new ownership rules and the impact of aggregation on those rules. Similarly, no protection is provided under the adjusted grandfathering rules for prescribed interests or directorships acquired after the date of Ministerial announcement which contravene the relevant cross-media limits because of a change in the circulation of a newspaper, or other changes in the circumstances of newspaper publication sufficient to cause a contravention of those limits. This is because such circumstances are ultimately within the control of newspaper publishers and because the extension of grandfathered protection in this way could allow a fundamental change in the character of a newspaper which would not be caught by the cross-media rules. The new grandfathering rules also maintain the requirement in the previous Bill that, to be protected for prescribed interests or directorships held before 28 October 1987 which contravene a revised radio or cross-media limit, a person must not have contravened the corresponding existing limit immediately before that date. For example, if a person contravened the existing State limits (four commercial radio licences) by holding prescribed interests in five commercial radio licences in South Australia before 28 October 1987, that person would, if the revised State limit for South Australia is three licences, be grandfathered for the holding of a prescribed interest in only four of those licences. On the other hand, a person who was grandfathered under the existing television/radio cross-media limits would continue to be grandfathered for contraventions of the new television/radio limit. The revised grandfathering rules will apply not only to the new radio and cross-media limits introduced by the Bill, but also to the existing television limits and television/newspaper cross-media limit. In particular, there is special provision in the Bill for the application of grandfathering rules to the 60% population reach television limit to provide protection in the circumstances where that limit is contravened as a direct result of a change in service area or a change in population distribution between service areas. This is subject to the requirement that additional or new television interests are not acquired after the grandfathered date. Again, television service area aggregation is not included within the scope of grandfathered protection. Consequential Drafting Changes The Bill provides for consequential amendments of the licence grant, renewal, and transfer provisions of the Act to take account of the new limits. A cursory glance at the Bill will also reveal that significant structural changes have been made to the arrangement of the ownership and control provisions to accommodate the new limits. The existing and new cross-media provisions will be contained in a separate Division of the Act. The existing and new grandfathering rules have been consolidated in a new Division to avoid the need to refer to the transitional grandfathering provisions in recent broadcasting amendment Acts. The Parliamentary Draftsman has also taken the opportunity to provide a more logical and coherent arrangement of the ownership and control provisions and to streamline the ownership and control rules by deleting duplicate radio and television provisions. I am sure that these improvements will be welcomed by lawyers and representatives of the broadcasting industry. Financial Impact The new measures will place some additional administrative burden on the Department of Transport and Communications and on the Tribunal. These will be absorbed within current resources, although some reordering of priorities may be required. Conclusion This Bill marks the culmination of a process of reform for radio that commenced when my predecessor, early in 1985, asked the then Department of Communications to inquire into future directions for commercial radio. That process has resulted in two major advances. Firstly, there is the program to provide additional radio services in regional areas, which was announced in 1987. Secondly, there are the rules provided for in this Bill. These new radio and cross-media rules and the new radio services, together with the television rules and the television equalisation scheme, will usher in a new era of broadcasting that will increase the quality and quantity of broadcasting services available to the public at all levels and in all areas. This new era has not been brought about by new technology or outside or overseas influences. It is a direct consequence of the Government's policy initiatives. I present the explanatory memorandum to this Bill and commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Motion (by Senator Macklin) agreed to: That when next an Order of the Day for the resumption of debate on a motion moved by a Minister for the second reading of a Bill for an Act to alter the Constitution is called on, the General Business Order of the Day relating to the consideration of the Constitution Alteration (Electors' Initiative) Bill 1987 shall be called on at the same time, that Bill shall be considered together with the Government Bill at every stage, and the questions for the remaining stages for the passage of the Bills shall be put separately in respect of each Bill. Senator PETER BAUME —Can the Minister for Transport and Communications assure the Senate that there will be no further relaxation of the rules on concentration of media ownership which could permit any further narrowing of the already narrow base of media ownership in Australia? In any case, will the Minister outline for the Senate the approach the Government is taking to the present moves by Mr Skase to have the rules relaxed to suit the needs of his proposed acquisitions? Senator GARETH EVANS —I would be interested in getting a similar assurance from the Opposition, the Liberal and National parties, whose media policy at the moment seems in a condition of some disarray, not unusually for those two parties. So far as the situation in relation to any possible change in the television ownership reach rules is concerned, the position is exactly as I described it in a public statement made last week; that is to say, the Government's position in terms of decisions both by the Cabinet and by the parliamentary Party remains one of preference for a 75 per cent rule. That was the decision we came to last year. As a result of opposition in this place a lesser figure of 60 per cent was in fact agreed to in the Parliament. If it should become apparent that it is appropriate to reconsider that, we will do so. The only point I would make about the policy aspects of this at the moment is that there is no obviously rational ground for preferring 60 per cent to 75 per cent. Senator Chaney —Or 75 per cent to 60 per cent. Senator GARETH EVANS —I suppose there is something to be said for preferring 75 per cent to 60 per cent because it would enable a certain critical mass to be accumulated in the television industry in that it would enable stations to be commonly owned across the five mainland capital cities. There is an argument to that extent. The only point I wish to make at this stage, because this is a matter for ongoing consideration and discussion in the Parliament and, of course, outside the Parliament, is that there would not appear to be anything that has changed in the circumstances which now exist as compared with the circumstances which existed last year when these various decisions were arrived at. I think any further comment on this whole complex and sensitive subject is better left until a later stage. Senator CHILDS —I draw the attention of the Minister representing the Minister for Foreign Affairs and Trade to an article in the Sydney Morning Herald on 28 March which referred to Mr Howard's recent visit to Japan, in which he discussed defence policy. Can the Minister comment on Mr Howard's views in urging Japan to increase military spending, to abandon its `anti-war' constitution and to acquire a nuclear capability? Senator GARETH EVANS —There have been continuing calls, mainly from the United States, for Japan to increase its military capability and to play a greater regional defence role. The emphasis in Japanese defence policy is on self-defence in accordance with the constraints laid down under Japan's Constitution. Within that context, there has been a marginal increase in military expenditure in recent years following the decision in 1987 to lift the self-imposed limit of one per cent of gross national product. There is no indication that Japan has any intention to develop a nuclear capability and, in particular, as a party to the Treaty on the Non-Proliferation of Nuclear Weapons, Japan has committed itself not to manufacture or otherwise to acquire nuclear weapons-an assurance and a commitment which we welcome in the region. It is the case that an expanded regional role would arouse sensitivities in many Asian countries, sensitivities of which the Leader of the Opposition, in his recent excursion-which one can only describe as bumbling and heavy-handed-into this area, appears to be largely ignorant. The Japanese are aware of these sensitivities. I think it is fair to say that Japan is uncomfortable with the idea of a greater military role. It is hard to imagine circumstances in which it would be in Japan's interest to depart from its current defence policies, the cornerstone of which is the security treaty with the United States. We believe that the most effective way in which Japan can enhance regional security and stability is through its capacity as an economic power to act as an engine of growth for the region through trade, investment and aid programs. We believe that it would be far more in the national and international interest for that particular line of approach to be adopted rather than for us to see the kind of excursion into the military area and defence cooperation area that the Leader of the Opposition embarked upon. Senator CRICHTON-BROWNE —I ask the Minister for Resources: Is he able to give an undertaking that the Government will not introduce a tax on gold in either the May economic statement or the August Budget? Senator COOK —This question was answered by the Prime Minister, who gave a letter, I understand-- Senator Stone —That is why we are asking you. We want the truth. Senator COOK —There is absolutely no doubt that the Prime Minister gave a letter, prior to the last election, saying that there would be no introduction of a gold tax. I have no reason to inform anyone in this chamber of anything different. Senator CALVERT —Is the Minister representing the Minister for Social Security aware that the current eligibility criteria for the receipt of a Department of Social Security mobility allowance clearly discriminate against disabled women who are undertaking household duties and, therefore, giving valuable support to the family and the community? Further, is the Minister aware that these same guidelines are serving as a barrier to unemployed disabled persons who are being prevented from looking for a job simply because they are unable to use public transport? Where are this Government's much touted commitments to reducing unemployment and assisting the disabled? With these facts in mind, is the Minister prepared to state that these restrictive guidelines will be amended to ensure that significant portions of the disabled community are no longer prevented from receiving a mobility allowance? Senator BOLKUS —There are two responses to Senator Calvert's question. He questions the Government's commitment to reducing unemployment and our commitment to redressing the plight of the unemployed. I could probably spend the whole of Question Time going through the Government's record in this area, but suffice it to say that over the term of this Government, since 1983, one million new jobs have been created. That is a fact Senator Calvert should understand. In the five years to 1987-88 this Government spent $5.3 billion on public housing, once again a policy commitment to redress the problems Senator Calvert is concerned about. As I said, I could go on with respect to the record of the Government's commitment to the unemployed. In respect of the part of the question that relates to the mobility allowance, I undertake to get more information for Senator Calvert. Senator MAGUIRE —Is the Minister representing the Treasurer aware of proposals put forward recently by certain business groups and certain individual spokespersons for business interests that a broad-based consumption tax or value added tax (VAT) should be introduced in Australia? Would such a tax in all probability be the first tax on food in this country? Is the Government persuaded by the merits of such proposals and, if not, why not? Senator Messner —You have got it on ice cream and orange juice. The PRESIDENT —Order! Senator MAGUIRE —I will just ask the second part of my question again. Is the Government persuaded by the merits of such proposals and, if not, why not? Can the Minister give the Senate a firm assurance that the Government has made a firm decision on this matter of a consumption tax? Senator WALSH —In response to the last part of the question, the Government has made a firm decision-there will be no consumption tax while this Government is in office. I noted Senator Messner's interjection while Senator Maguire was asking the question. On the subject of taxes on food-and, by the look of him, Senator Messner would be a large consumer of food-he said that there already is a tax on food, if I heard him correctly, which draws attention to definitions of food. There has long been a tax on confectionery in Australia, for example-a 20 per cent tax for a very long period. Senator Boswell —What about bird seed? Senator WALSH —The honourable senator would probably know a lot about food as well, judging by the look of him. Senator Patterson —Mr President, I raise a point of order. On an occasion during this sitting of Parliament an honourable senator withdrew statements when he alluded to the size of senators in this Senate. I ask the Minister to withdraw that statement. The PRESIDENT —Order! There is no point of order. There are too many interjections. I ask the Minister to reply to the question. Senator WALSH —I am quite happy to withdraw, Mr President. I notice that neither Senator Messner nor Senator Boswell is as sensitive as Senator Patterson apparently is. As I was saying, there has long been a tax on confectionery and some confectionery-type products, but there is no tax on what most people would regard as food, nor has there been, to the best of my recollection and, as I said before, there will not be while this Government remains in office. There have, of course, been calls for broadly-based consumption taxes or VATs from a number of notable people-Mr Elliott being one, of course. It is on the Liberal Party agenda, as we all know. Senator Chaney —Mr Keating. Senator WALSH —That is right. Mr Keating considered this very seriously, as the Government did, and decided for a whole heap of good economic reasons not to proceed with it. Senator Stone —He was overruled by the ACTU. Senator WALSH —Has Senator Stone been given permission to speak about the Australian Council of Trade Unions (ACTU)? Please note for the record that it is all right for Senator Stone to talk about the ACTU, but he is not allowed to say anything about consumption tax, at least not until he spits out that dishcloth that was pushed down his neck last week. But apparently he has a licence to speak on the ACTU. He has Mr Howard's permission to speak on the ACTU. As someone who has always believed in free speech, I welcome that concession from Mr Howard to Senator Stone's freedom of speech. Mr Elliott is probably the most publicised advocate of a consumption tax or VAT. He was once described by Max Walsh in an article published in the Sydney Morning Herald, I think it was, as an Olympic class tax avoider. As far as I know, no writs were issued, so apparently he did not want to have the matter ventilated in court. It is a bit ironic, I suppose, that he should be one who is advocating a consumption tax or VAT. Another irony, of course, is that Mr Elliott in his position as President of the Carlton Football Club was either misleading the public in sponsoring an advertisement or, alternatively, promoting tax avoidance schemes to firms through the sale of business boxes at Princes Park-it is the home of the Carlton Football Club, in case there are some people here who do not know that. So Mr Elliott is advocating a consumption tax on the footie tickets that the people who sit in the outer area buy to get into the ground. He wants them taxed. He wants to tax the pies that they munch while they are in the outer watching the footie, while he and his mates sit up in the business box at Princes Park with the VAT-guzzling their tax deductible Vat 69-and gobbling their free lunch, having already got free entry into the ground. Mr Elliott, of course, is playing the role of a reverse Robin Hood, and as usual Mr Howard is playing Little John. Senator Chaney —Mr President, I raise a point of order. I just wonder at what point you will regard the Minister as having entered into debating the subject. He is engaging in very tedious and repetitious comments. It seems to me, certainly on my description of debating, that he is debating the question and I think you should call him to order. The PRESIDENT —I ask the Minister to conclude his answer. Senator WALSH —Certainly, Mr President. I was provoked by the vast number of disorderly interjections from the other side. But I have given the assurance that there will be no broad-based consumption tax or VAT from this Government. In response to one of the interjections about the reasons why the Government has made that decision, which Senator Stone apparently thinks is reprehensible-Senator Stone apparently believes that we should proceed with any sorts of taxes which increase the consumer price index without-- Senator Chaney —Mr President, I raise a point of order. There is a clear misrepresentation going on here, Mr President. Senator Stone interjected with respect to the intervention of the ACTU in the debate on tax and its overruling of option C. It is a total misrepresentation for Senator Walsh now to be turning that into something quite different. I ask you whether you are able to give any protection to such an obvious misrepresentation being made in the face of what has been said in this chamber in the last few minutes. The PRESIDENT —There is no point of order. I have no powers as to how the Minister answers the question, but I have asked him to conclude his answer. Senator WALSH —I was about to do so, Mr President. The principal reason why the Government has ruled out any tax which would vastly increase the consumer price index is that, unless there is agreement or at the very least a firm assurance that there will not be across the board attempts to recover, through the wages system, the increased prices which would result from the application of such a tax, it would be stupid to do so because to do so in the absence of such assurances would boost the consumer price index by something like 5, 6 or 7 per cent, depending on the size of the tax. In the absence of a firm assurance that there would not be across the board attempts to recover those higher prices through higher wages, instead of having a blip in the inflation rate we would move to a new plateau of inflation. Had it been done under those circumstances at the time it was seriously considered in Australia in 1985, we would have had a short term inflation rate of the order of 15 per cent, which would probably have become a plateau rate for inflation in the absence of such an assurance or agreement on wages policy. Senator SANDERS —My question is addressed to the Minister representing the Minister for Primary Industries and Energy. I refer to two European Atomic Energy Community (Euratom) documents passed by me to the Minister last night. One is the minutes of a Euratom Supply Agency meeting held on 27 May 1986. The other is notes for a Euratom Supply Agency Advisory Committee meeting held on 3 December 1987. I ask the Minister: First, do the documents show that Euratom is trying to facilitate the entry of South African and Namibian uranium to the world market by promoting new relabelling procedures? Secondly, does the 1986 document show that European utilities have exchanged Australian uranium for South African uranium? Thirdly, what has been the Government's response to Euratom's pressure for it to accept international flag swaps? Fourthly, given that the 1987 document states that `Euratom Safeguards do not verify, record or track the origin of nuclear material', is the Australian Safeguards Office unable to track Australian-origin nuclear material once it reaches the European Economic Community? Fifthly, can the Government have any confidence in Euratom? Senator COOK —I must thank Senator Sanders for his courtesy in giving me last night those documents which form the basis of his question today. Senator Stone —That is usual from the left wing of the Labor Party, is it not? Senator COOK —I beg your pardon? Senator Chapman —You now get the Democrats to ask you dorothy dixers. Senator COOK —Senator Sanders took the trouble to give me the documents which are the basis of his question, obviously in the hope that I would be able to respond to his question. I can say to Senator Sanders that I have referred those documents to the relevant authorities in the Department and to the Australian Safeguards Office. Senator Puplick —Vain hope. Senator COOK —What else would Senator Puplick have me do other than to respect the inquiry that Senator Sanders makes and to refer the documents to the Department for comment before I reply? That is what I have done. I indicate to Senator Sanders, as I have indicated in answer to several questions on the issue of flag swaps asked by various senators, that the Government will be making a statement dealing with all of those issues raised in those questions, including those raised in the question asked today. Senator Macklin —When? Senator COOK —I expect next week some time. I am not quite sure what day it might be. A decision has to be made on its scheduling. That statement will deal with statements made in Der Spiegel, statements made by members of the European Parliament and the documents that Senator Sanders gave me last night. I might also say that some weeks back now Senator Sanders was reported in the Canberra Times as having said that he had in his possession documents that had been leaked from Euratom and they showed that the flag swaps were going on in a way which contravened Australian safeguards, or words to that effect. It is probably useful for me to say and have recorded on the Senate record that when I saw that report I wrote to Senator Sanders asking for a copy of those documents so that I could include them in the report when it is presented to the Senate. Senator Sanders obliged me almost instantly and made those documents available to me. They will be responded to in the statement. I say that in contrast-- Senator Lewis —Sit down. You are not answering the question. Senator COOK —Senator Lewis should just wait. I say that in contrast to a statement that appeared under the name of another senator which was to the effect that the Government was lying about the issue of flag swaps. I wrote a letter to that senator asking whether they were accurately reported and, if they were, would they say where we were lying. I have received no reply from that particular senator. I hope they will reply so that the allegation of lying can also be dealt with. Senator Chaney —Is this `they' a he or a she? Senator COOK —Come on! I shall deal with that matter at the appropriate time. Obviously the safeguards are a critical issue to the Australian Government. Allegations made about their effectiveness should be treated seriously and answered seriously after due and proper investigation. We do not in any way resile from or cringe in the face of the possibility of questions being asked or challenges being made about the safeguard, because at least that has the effect of maintaining healthy scrutiny of the effectiveness of those safeguards, and that in itself is a good thing. However, to summarise my answer, for which I again thank Senator Sanders, we will be making a full statement next week. Senator HARRADINE —My question, which is directed to the Minister for Transport and Communications, refers to the recent visit from England of Alison Davis, who was in Australia lecturing on the right to life of the disabled unborn. In travelling from England to Australia and from Perth to Adelaide-she is confined to a wheelchair and has spina bifida-she was required before she could fly to obtain a medical certificate stating that her condition would not be an inconvenience to other passengers. Is it a fact that able-bodied persons do not have to obtain such a certificate? I could think of a certain English cricketer, for example, who did not have to obtain such a certificate. Is it not a fact that such a requirement by overseas airlines and, indeed, Australian airlines is discriminatory against the disabled? Senator GARETH EVANS —I have no personal knowledge of the matters to which Senator Harradine refers, and I prefer not to comment on the policy issue until I have considered the issues concerned. I shall reply appropriately as soon as I can. Senator LEWIS —My question is to the Minister for Industry, Technology and Commerce, and is about yesterday's announcement of changes to the Government's car plan. I refer to the Minister's statement last night on the 7.30 Report that the Government will not allow a flood of cheap imports. Given that there are now no quantitative restrictions and presuming that such imports are not dumped, will the Minister tell us what he has in mind? Does the Minister not agree that it is about time that the Australian consuming public had an opportunity to purchase some lower priced vehicles? Senator BUTTON —The answer to the second part of the question is yes. I thought I made that quite clear yesterday. With regard to the first part of the question, quotas certainly have been removed and the tariff regime announced yesterday should restore and increase the market share of imported cars, probably in time to above 20 per cent of the market, which is where it has always been. If, on the other hand, import pressure was such that the market share of imports grew very quickly to something in the order of 30 per cent, 40 per cent or 50 per cent, I am sure that the Government would have to reconsider that matter, just as governments have throughout the history of this and other industries where that sort of pressure has arisen very quickly. That is all I meant. Senator SCHACHT —My question is directed to the Minister for Finance. Has the Minister's attention been drawn to the transcript of an interview with the National Party member for Gilmore, John Sharp, on 2CA yesterday? What would be the approximate cost of reintroducing a system of fuel freight equalisation subsidies and of abolishing the assets test as proposed by Mr Sharp? Is the Government contemplating either or both of these moves? Are Mr Sharp's calls for this additional spending consistent with demands for restraint by groups other than the National Party? Senator WALSH —I have seen the statement. The policies advocated by Mr Sharp are inconsistent with the demands for restraint on government expenditure advocated by anybody at all. As ought to be self-evident, even to the duller members of the National Party, this is a very clear demand to increase government expenditure and, therefore, a very clear demand for an increase in taxation. What Mr Sharp is demanding is an increase in taxation. I am surprised that he has not been denounced by Senator Stone for so doing. People who are, I suppose, cynical about, or even aware of, the internal contradictions and the ongoing humbuggery and hypocrisy of the Country Party, or the National Party as it calls itself these days, might not be so surprised. It is an inescapable fact that the level of expenditure, at least in the long term, is determined by the level of taxation. In the short term that fact can be escaped from, as of course Mr Howard escaped from it in 1982 when he brought down the most irresponsible Budget of all time, with an impending Budget deficit of 5 per cent of gross domestic product which, as Senator Stone pointed out to Mr Howard, was the highest Budget deficit in Australian history. One can escape for a while from the reality that the level of expenditure is determined by the level of tax, but in the long term it cannot be escaped from. Therefore, Mr Sharp is demanding an increase in taxation-for what policies? Senator McGauran —Rubbish! Senator WALSH —Senator McGauran says, `Rubbish'. At the Estimates Committee hearings two nights ago, Senator McGauran put forward the proposition that Australia would be a better place if there were no taxes. If there were no taxes, obviously there would be no money to fund pensions for millionaires and petroleum freight subsidies. Senator Chaney —I take a point of order, Mr President. It appears that again we have moved into a debate. Could you call the Minister to order? The PRESIDENT —Order! I ask the Minister to answer the question he was asked. I ask the Opposition to cease interjecting. Senator WALSH —Certainly, Mr President. I was asked to cost the tax increases proposed by Mr Sharp. I have not asked for a precise figure on the cost of a pre-1983 type fuel and petroleum products freight subsidy scheme, but by now it would be of the order of $160m to $180m. In regard to paying pensions to millionaires, which was the other demand for increased taxation put forward by Mr Sharp, the Government published some time ago a figure of $160m-that is the cost of abolishing the assets test. More recently the Department of Social Security has published a figure of $300m, which I regard as extremely conservative, for the following reasons: The proportion of people in the relevant age group in receipt of a pension declined from 84 per cent to 78 per cent, on the last occasion I looked at the matter. That decline has an implicit saving of the order of $500m, or a little more. I believe that the figures that the Department of Social Security has published have been extremely conservative and that the real cost of abolishing the assets test would be of the order of $500m. Mr Sharp has put forward a proposition for an extra $700m or thereabouts in taxation. Senator Maguire —Where is the money to come from? Senator WALSH —Where is the money to come from? Obviously from a consumption tax-where else? One National Party backbencher, grandstanding before his own electorate, demands a $700m increase in taxation. When one adds to that the demands of all the other backbenchers and others in the Queensland National Party for handouts all round, it would add up to a demand for a very much larger increase in taxation. I find it ironic that the National Party should be the most vociferous in demanding cuts in taxation, while simultaneously the most vociferous in demanding increases in government expenditure and, therefore, increases in taxation. I recall a comment made by Senator Puplick many years ago in his incarnation as President of the Young Liberals, which I thought put very succinctly the National Party's attitude to handouts from the public purse. He said of the National Party, `If the sun shines, they want drought subsidies; if it rains, they want flood subsidies or flood relief; and if it grows, they want a subsidy'. Senator HAMER —My question is directed to the Minister representing the Treasurer, and it follows his rather confused and confusing answer to Senator Maguire's question on consumption tax. Is the Labor Government totally opposed to consumption taxes as such, and, if so, will it return to the Australian public the $17,000m raised in consumption taxes this financial year, an 18 per cent increase on last year? Senator WALSH —The Government is, for the reasons Senator Hamer himself drew attention to, not opposed per se to indirect taxation, and nor did I say or have I ever said that the Government is opposed to indirect taxation. I said 10 or 15 minutes ago that this Government will not introduce a broad-based consumption tax, a VAT or whatever one likes to call such a tax. Senator Walters —What is the difference between an indirect tax and a consumption tax? Senator WALSH —Evidently Senator Walters cannot tell the difference between imposing an excise on, for example, Bass Strait crude oil and putting a tax on food. I would have thought that almost anybody, even Senator Walters, would understand that. Senator Walters —I raise a point of order, Mr President. Senator Walsh misunderstood me. He thought I was referring to excise; I was referring to the sales tax on flavoured milk, orange juice and ice-cream. The PRESIDENT —Order! There is no point of order. If I am correct, it was Senator Hamer who asked the question and not Senator Walters. Senator WALSH —The figures Senator Hamer cited would have contained the excise revenue on Bass Strait crude oil. He is nodding his head, so my assumption is correct. As I am sure Senator Hamer understands, even if Senator Walters does not, that is qualitatively very different from imposing a tax on food. It is very different in a number of ways, which I will not go into now. I repeat: this Government will not introduce a broad-based consumption tax, be it a value added tax or some other form of broad-based or universal consumption tax. The reasons for that are numerous but the principal reason, which I have stated many times before, and it was the principal reason why the Government did not proceed with such a proposal in 1985, is that without any doubt it would in the short term substantially boost inflation. The 1985 proposal would have boosted the consumer price index by some 6 1/2 per cent and in the absence of a firm assurance or agreement that that one-off increase in prices would not be recovered in higher wages, we could anticipate a continuing inflation rate some 6 1/2 per cent higher than it was prior to the introduction of such a tax. Senator GILES —Has the attention of the Minister representing the Treasurer been drawn to a Press release put out by the shadow Treasurer, Mr Peacock, alleging that the Federal Government plans to tax superannuation fund earnings in the company tax review and purporting to provide examples of the effects such taxes would have on the final benefits to be obtained by fund members? Will the Government introduce a tax on superannuation fund earnings in the company tax review? Are the effects of a tax on superannuation fund earnings on benefits described in Mr Peacock's Press release accurate? What is the major threat to the value of superannuation fund benefits in Australia today? Senator WALSH —In response to the second part of the question, concerning whether the Government will introduce a tax on superannuation fund income, I have nothing to add to answers that I have given on a number of previous occasions-that is, essentially, we will have to wait for the outcome of the review. The main part of the question concerns the statement put out by Mr Peacock two or three weeks ago, which was either a pure fabrication or a product of the dabbling of yet another Liberal Party innumerate. It demonstrates, if it was the latter, that Mr Peacock, as shadow Treasurer, is not likely to be of any assistance to the Liberal Party in getting together prior to the next election a set of figures which are arithmetically sound. His statement contained numerous false assumptions and arithmetical errors, some of which I will detail. First, he assumed that a 15 per cent tax on superannuation fund earnings would generate a tax liability equal to 15 per cent of those earnings. That is wrong because it ignores the income which would be eligible for imputation credits, plus the fact that the funds could deduct a range of expenses for taxation purposes and would be liable for tax only on realised capital gains. Those are a few errors, to start with. On present indications a 15 per cent nominal rate would generate an actual rate, an effective rate, of about 10 per cent. To the extent that superannuation funds move their investments into equity holdings and therefore receive franked dividends, the rate would fall. Mr Peacock used several salary ranges and ages to present examples of the supposed effects of a tax on benefits. While the final benefits were calculated correctly-that is, according to his false assumptions-there were arithmetical errors in calculating benefits as a proportion of final salary. I will give an example of the outcome of some of those calculations. For a 22-year-old in receipt of a salary of $22,000 with a tax rate of 15 per cent, Mr Peacock calculated a reduction of 40 per cent in final benefit. The realistic figure, given the present distribution of superannuation fund investments, is about 19 per cent. Likewise, for a 28-year-old in receipt of a salary of $24,000 with a tax rate of 15 per cent, the figure calculated by Mr Peacock was about double what the correct figure should have been. The same applies to a 35-year-old on a salary of $35,000. For the benefit of honourable senators, I table an evaluation of the arithmetic and assumptions underlying Mr Peacock's statement, prepared by the Department of Finance. Finally, I note that the real threat to the value of superannuation fund benefits is the consumption tax being contemplated by the Liberal Party, which would erode the value of whatever lump sum was received because of the increases in prices on the application of such a tax. Unfortunately, the pure fabrication or product of innumeracy, whichever it was, which Mr Peacock put out a few weeks ago, was widely published by the Press. So far it has shown no interest in publishing the corrections. Senator Button —It seems endemic in the Liberal Party. Senator WALSH —Yes, although at least the Press published the corrections for the endemic innumeracy which the Liberal Party displayed before the last election. It has yet to publish the corrections of the innumeracy, or pure fabrication, whichever it was, of Mr Peacock, which is a defect which I trust will be corrected so that facts will be given at least equal prominence and paid at least equal attention by the media as fiction has been in the past. Senator WATSON —My question is directed to the Minister for Industry, Technology and Commerce. I refer to the reductions in protection for the Australian car industry and the effect of penalty changes to the 85 per cent local content requirement. The Minister will be aware that while the 85 per cent local content requirement remains, the penalties will effectively lower the practical effect of having an 85 per cent requirement. What will be the consequences of the quite significant reductions in protection for the component industry which were announced in the Minister's statement yesterday afternoon? Will the Government take positive steps to safeguard such industries from the economic difficulties which will inevitably ensue? Senator BUTTON —It is difficult to predict what the consequences will be of what Senator Watson describes as a significant reduction in protection for the component industry. Hope springs eternal in the politician's heart, I suppose. I hope that the consequences will be that the component industry will start to improve its performance in terms of quality and production techniques, that it will start to invest more in better plant and equipment, and that it will not be as complacent as it has been in the past. That is what I hope the consequences will be. If it does not do that, some sections of the industry will not remain and they will get no further assistance from this Government. Senator COULTER —My question is directed to the Minister for the Arts, Sport, the Environment, Tourism and Territories. In view of the call by the National Farmers Federation and others for cost-benefit analysis of heritage, park and other conservation proposals-I guess I could put in parenthesis here Senator Stone's call for a level playing field-does the Minister recognise the inadequacy and misleading nature of present national accounting procedures which record expenditures, that is flow, but not stock for addressing this important task of cost-benefit analysis of conservation proposals? Does the Minister recognise that a comprehensive system of national accounts which included both stock and flow components would record the cutting of mature forest, or exploitation of other natural resource, as merely a shift of dollar value from stock to flow with no net benefit if no value is added to the cut timber or other resource? Does the Minister agree that the only economic net benefit from exploitation of natural resources arises from the value added to those resources in processing? Finally, will the Minister recommend to his colleagues a comprehensive and rational system of national accounting so that in cost-benefit analyses of proposals for exploitation of natural resources we are not misled into believing we can develop bank accounts by withdrawing money from them? Senator RICHARDSON —National accounts are primarily the responsibility of the Treasurer and I will not attempt to answer all of the question that relates to him although Senator Coulter has raised a number of issues within the environment portfolio and I will attempt to address them. In the last 200 years Australia has managed to lose half of its forest and to degrade half of its land mass. Also our air and water are still being polluted. In the Murray-Darling Basin alone, it is estimated, we lose $220m a year because of land degradation and the figure for soil erosion throughout Australia is calculated at something like $700m per year. Cost-benefit analysis is important, but not just in relation to heritage and park proposals: it has to be remembered that only 4 1/2 per cent of Australia is within parks or World Heritage areas. So over 95 per cent of Australia's land is outside national parks but nonetheless subject to environmental degradation. National accounting procedures are designed to provide information so that we can analyse the performance of our economic system, and our economic performance obviously depends to a large extent on the continuing and sustainable use of our resources, including soil, water, minerals, fisheries, forests, plants and animals. As I understand it, manufactured assets such as buildings are valued as productive assets and their depreciation is written off against the value of production. That shows up in national accounts, but much of our national resources are not so valued and consequently they are not shown up in looking at depreciation against current income. I understand the point that Senator Coulter is trying to make; that is, that in considering stocks and flows in national accounts the example of cutting down a native forest is a good one. If we simply export most of the forest as woodchips we may lose an extremely valuable asset for a sum of dollars. National accounts then do not show up the effect of the destruction of the forest such as the loss of plants and animals and the general degradation of the land and water catchments. With respect to value adding, it has always been the policy of the Government to encourage as much value adding as possible to resources in processing; otherwise, we would be missing out on the best return from our natural assets. Nevertheless, I do not think Australians regard all of our natural resources simply in dollar terms. There are some values that go beyond mere economic measurement. As to recommending changes in national accounts, their preparation is obviously the responsibility of the Treasurer and the Australian Bureau of Statistics is the relevant agency. Nonetheless, the Australian Environment Council has been addressing this problem and is to produce a paper on it. It has been working with the Bureau of Statistics to investigate ways in which the depletion of our national resources could be taken into account in looking at our national accounting procedures. I welcome those advances. Nonetheless, we should not be misled into believing that dollar values can be placed on all aspects of the environment that we care for. Even considering the suggestions made by the honourable senator, cost-benefit analysis will not provide all the answers. I suggest that, rather than applying cost-benefit analysis to the exploration of that 4 1/2 per cent of Australia that is protected within national parks, processes should also be developed to estimate more thoroughly the costs and benefits associated with the use of resources in the 95 per cent of Australia that is outside national parks and outside protection. Senator BLACK —Is the Minister for Finance aware of the reported attack by the Deputy Leader of the National Party of Australia, Bruce Lloyd, in Toowoomba last week on the Commonwealth's natural disaster relief arrangements? What are the Commonwealth's constitutional responsibilities for disaster relief? Can the Minister estimate the cost of the National Party's disaster relief policy which, according to Mr Lloyd, would require no State government contributions? Finally, is the Minister aware of a further claim by Mr Lloyd that the existing disaster relief arrangements could be threatened in the May mini-Budget? Senator WALSH —To deal with the questions in reverse order, Mr Lloyd's Press release did say that the natural disaster relief arrangements would be threatened by the May mini-Budget or economic statement, or words to that effect. There are not any plans to do that but it is typical of National Party members to run scare campaigns in their own electorates and everywhere else where they think they can get a run. I was asked whether I could cost Mr Lloyd's apparent alternative policies. His alternative policy appears to entail no threshold contribution from the State before it attracts a Commonwealth subsidy. If that is correct, the cost of the change he is proposing in Queensland alone would be around $14m and for Australia as a whole it would be around $77m. So what Mr Lloyd was proposing, like Mr Sharp, is in fact a $77m increase in taxation. I was asked whose constitutional responsibility it is. The answer is that the constitutional responsibility rests with the States. However, the Commonwealth Government for some time has maintained arrangements to assist States in periods of unusually high levels of damage caused principally by drought, flood and fire, given that the risks of such occurrences can be carried more effectively by the larger, that is, the Commonwealth Government, than by any State government. That arrangement has been maintained for some time at considerable cost from time to time to the Commonwealth Budget. Finally, I wish to repeat that Mr Lloyd's proposition is to increase taxation by $77m and it should be correctly identified as such. Senator PANIZZA —My question is to the Minister representing the Minister for Primary Industries and Energy. Now that the McColl Royal Commission into Grain Storage, Handling and Transport report has been with us for at least a month, what measures has the Government adopted or does it intend to adopt to implement the findings in the report? Senator COOK —That issue is a matter that the Minister for Primary Industries and Energy will speak on but, in case there is something that I can say in the interim, I will put the issue on notice and come back to Senator Panizza. Senator BEAHAN —My question is to the Minister for Resources and it relates to the recent visit to Australia by the United States (US) Energy Secretary, John Herrington. What were the purposes of Mr Herrington's visit and can the Minister comment on any productive outcomes of that visit? Senator COOK —Secretary John Herrington visited Australia early this week. I think he may still be in the country, in the Northern Territory, looking at the Ranger uranium project and later going on to Borneo. Secretary Herrington was confirmed in the position of US Energy Secretary in 1985 after having served in the White House as an adviser in other areas. Since he has been US Energy Secretary he has pushed in the US Administration an interest in developing alternative liquid fuels. He has raised the issue of alternative fuels in the International Energy Agency (IEA), a sub-agency of the Organisation for Economic Co-operation and Development. More recently he has been, in part, responsible for backing an Australian initiative in the IEA for getting full transparency in terms of protection for coal as an energy source. In the third coal round of the IEA the United Kingdom, the Federal Republic of Germany and Japan resisted Australian overtures to quantify the level of protection for coal in those countries. The US supported us. We now have quantification of levels of protection for coalmining in those countries through the IEA. We are pushing for full transparency. The main purpose of Secretary Herrington being in Australia was to sign on behalf of his Government-with me signing on behalf of the Australian Government-a memorandum of understanding (MOU) between Australia and the United States on alternative energy supplies. That memorandum of understanding says in its introduction that its purpose is to expand and enhance both countries' efforts to improve energy security. That is the emphasis this Government puts on energy-to ensure security of energy supply, not, as Senator Parer said yesterday, simply self-sufficiency in oil. Our approach to that matter is the same as that of the United States because both countries are in a similar situation. Our recoverable reserves of crude oil will decline, as opposed to our need for crude oil, as the end of the century draws near. It is our belief that we should enhance our strategic supply while bolstering research into alternative energy sources, in particular, alternative liquid energy sources. As I have said, that is also an interest of Secretary Herrington. The MOU that we have signed reflects that. It also reflects a joint understanding by Australia and the United States on three projects in particular, the first two in which Australia will have access to ongoing research in the US on alternative fuels and, in particular, research on alternative liquid fuels, specifically into methanol. The MOU reflects the access by Australia to US research in those areas. The US, for its part, will take advantage of what we can inform it of in terms of the energy chemistry division of the Commonwealth Scientific and Industrial Research Organisation and the activities it is conducting in oil shale research in this country. So the MOU consolidates the international initiatives Secretary Herrington has taken in the IEA on alternative energy sources. It brings Australia into that picture, enabling both countries to share in it-a considerable achievement. The Executive Director of the International Energy Agency, Madam Helga Steeg, arrived in Australia today, which will enable further talks between this country and the IEA on alternative energy sources. The significance of the $1 increase in the price of a barrel of crude oil reported yesterday and an analysis of other trends in world energy demand lead me to indicate that Australia is one of the few net exporters of energy. Between now and the end of the century Australia will export, in net dollar terms, energy to the value of $63 billion. Thus it is important that we have the talks we will have with Madam Steeg today. The exercise undertaken by Secretary Herrington is also very valuable for this country. Senator Button —Mr President, I ask that further questions be placed on notice. Senator Teague —I take a point of order, Mr President. Given the length of answers by Ministers, may I ask a question? The PRESIDENT —There is no point of order. I can assure Senator Teague that he is second on the list for tomorrow. Senator BOLKUS —I wish to add to an answer to a question asked by Senator Devlin in the Senate yesterday. In answer to a question from Senator Devlin on the advertising of wine coolers, I indicated that a food standard covering wine coolers governing the level of alcohol content and the size of the container was ready for adoption. The food standard covers the naming and labelling of certain alcoholic beverages, including wine coolers. An agreement, however, on the level of alcohol content and the minimum size of the container was also reached between Federal and State Health Ministers and the industry late last year. At the end of my answer I mentioned that Lindemans had agreed to change the labelling of the wine cooler. What Lindemans informed me was that it would no longer use the words `Government Endorsed' in its advertising campaign. I again thank Lindemans for its constructive response to my inquiries on this matter. Senator GARETH EVANS —Yesterday in Question Time Senator Knowles accused me of misleading the Senate in a matter relating to Amann Aviation Pty Ltd. Having now checked, as I said I would, the relevant materials, I rise to set the record straight. Senator Knowles initially asked me on 18 March whether the then Department of Transport had released confidential financial information which it had obtained from Amann Aviation Pty Ltd to Mr Graeme Campbell, the honourable member for Kalgoorlie, who subsequently disclosed that information to Skywest Airlines Pty Ltd. I replied that I had no information whatever about these matters but would be glad to follow them up if Senator Knowles had any evidence to back up her assertions. I have nothing to add to the answer I gave on 18 March except to draw to the attention of the Senate that the honourable member for Kalgoorlie, in a personal explanation in the House of Representatives on 23 March, described Senator Knowles's suggestion as a total falsehood, with no substance whatever, and stated that the information he had on the proposed financing of Amann Aviation's aircraft had been provided by Mr Robert Amann himself for the express purpose of responding to certain allegations that had been put to Mr Campbell by Skywest. Senator Knowles, yesterday, on 13 April, claimed that my answer of 18 March misled the Senate because, she said, this matter was raised in a letter to me by Mr Vanda Gould of Amann Aviation of 9 February to which I had replied in a letter sent on 1 March, dated erroneously-I acknowledge-`30 February'. I deny absolutely that I misled the Senate in any way. Senator Knowles's question of 18 March was not about my knowledge of some particular allegation that may have been made but whether I had knowledge of certain matters of fact, that is, communication supposedly made by the Department to Mr Campbell and by Mr Campbell to Skywest. My answer remains as it was on 18 March-that I had no such knowledge-and I note that Senator Knowles has not provided any evidence in regard to this matter. The most that Senator Knowles could possibly claim is that I had knowledge, as a result of the Vanda Gould letter, of allegations made by Amann Aviation along the lines of her question. However, having refreshed my recollection of the contents of this 16-page letter, I find it very difficult to construct such allegations, and suggest that any other senator would find likewise, from the relevant two paragraphs which I table and seek leave to incorporate in Hansard. Leave granted. The paragraphs read as follows- By March 24, 1987 Bill Meeke was fully aware of Amann Aviation's association with the Westpac Banking Group. When Mr Graeme Campbell, the Federal MP for Kalgoorlie, spoke to Bill Meeke on that day, Mr Campbell said that Amann had arranged his finance with Westpac to which Bill Meeke replied that this was incorrect, that Amann was still hunting around to put together his financing arrangements and that Westpac had not approved the loan finance. In view of the actual experience of Amann Aviation with respect to finance with lenders being ``warned off'' (as outlined in my previous letters) I point out that Skywest was fully aware at an early date of these confidential details which were provided by Amann Aviation only to the Department of Transport. Senator GARETH EVANS —These paragraphs are very imprecisely expressed, and at best convey implicit allegations. Moreover, there is nothing in them inconsistent with Mr Campbell's explanation of what occurred. I point out, finally, that the letter of 9 February was but one of four which I have received from Mr Vanda Gould in recent months. Together they total some 57 pages, make a very large number of allegations and assertions, and generally are not missives of a kind such as could be expected to long detain the personal attention of any Minister in any government. I should perhaps add to that, in view of any possible misunderstanding, that there can be no suggestion that the Vanda Gould letters were not responded to in a proper way. I initially referred the matters raised by Amann Aviation to the Commissioner of the Australian Federal Police (AFP) in November 1987, when it appeared that Mr Vanda Gould was making allegations that might involve breaches of Commonwealth law. I similarly referred Mr Vanda Gould's letter of 9 February to the AFP to take such action as it considered appropriate in response to such allegations as it could identify. I have also urged Mr Vanda Gould, in my replies to him, to himself place any information he may have in relation to these matters before the Australian Federal Police. I am advised that Mr Vanda Gould has declined to be interviewed by the AFP on his legal counsel's advice pending the completion of current civil proceedings. The very last thing I would say is this: it is no light matter to accuse a Minister of misleading the Senate. I suggest that Senator Knowles think long and carefully about the weight and the credibility of the information in front of her before she makes similar accusations in future. Senator KNOWLES(Western Australia)(11.11) —by leave-I move: That the Senate take note of the answer. I am very concerned about the Minister for Transport and Communications (Senator Gareth Evans) not answering my question. I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Button) agreed to: That the Senate do now adjourn. The PRESIDENT —Order! Before the Senate adjourns, I advise honourable senators that Estimates Committee D will meet in committee rooms 1 and 2; Estimates Committee E will meet in the chamber; and Estimates Committee F will meet in committee room 6. The bells will be rung for three minutes prior to the commencement of sittings of the committees. Senate adjourned at 11.12 a.m. The following answers to questions were circulated: (Question No. 103) Senator Jenkins asked the Minister representing the Minister for Administrative Services, upon notice, on 28 October 1987: (1) Is the Federal Government aware of: (a) the Western Australian Environment Protection Authority's recommendation relating to the Buckland Hill area contained in the ``System Six Report'', that ``The Commonwealth of Australia and the Mosman Park Town Council, in consultation with the Department of Conservation and Environment and the University of Western Australia, should prepare a management programme, giving consideration to: (a) encouraging the growth and regeneration of indigenous flora; (b) retaining the open character of the area, through careful planning of any future development''; and (b) community concern about the proposed development of the Buckland Hill area; if not, will the Federal Government suspend negotiations of the disposal of the site until the recommendations can be considered and community concern assessed. (2) How much did the Federal Government pay the University of Western Australia for the land. (3) For what sum does the Federal Government propose to sell the land to the Western Australian Development Corporation (WADC). (4) Does the Government recognise that 30 per cent of the area is inadequate to meet the System Six Report recommendations. (5) Is the Federal Government aware of community concern at the concept plan released by the WADC on the ground that, while it may meet the letter of the requirement to retain 30 per cent open space it does not meet the spirit because the 30 per cent includes a long narrow median strip and 2 small parcels and the linear shape of the remainder will make it impossible to regenerate effectively, and to maintain, the indigenous flora and fauna. (6) What were the conditions of sale or gift attached to the disposal by the Commonwealth of the Wireless Hill site at Applecross in Western Australia and the Defence Reserve on Sydney's North Head. (7) Did the Federal Government give consideration to the suggestion that the land be given to the people of Western Australia as a bicentennial gift. (8) Is the Federal Government aware of increasing community concern for proper regional planning of the Mosman-North Fremantle peninsula before any further development or subdivision occurs; if so, for this reason also, will the Government refrain from finalising any arrangements with the WADC until such regional issues have been properly addressed. Senator Robert Ray —The Minister for Administrative Services has provided the following answer to the honourable senator's question: (1) (a) Yes; (b) Yes. (2) The land was compulsorily acquired from the University of Western Australia in 1949 at its then market value of $38,750 plus $2,248 interest. (3) A legally binding contract of sale has been made with the Western Australian Development Corporation (WADC) which acted as the Western Australian Government's Representative. The contract is subject to WADC receiving planning approvals from the relevant State authorities and I understand that this process is currently underway. The Commonwealth has received $8.837 million for the property. This amount is held in trust pending the outcome of the planning process. (4) Consideration of and decisions concerning the recommendations of the System Six Report are the responsibility of the State. (5) In the contract of sale the Commonwealth stipulated that at least 30 per cent of the site be established as an ``A'' class reserve for public recreation purposes. While a concept plan was developed by the WADC for the purposes of negotiation, I understand that consideration is being given to adjustments to the configuration of the open space shown on that plan and that any amendments will be advertised for public comment as part of the planning process. (6) Wireless Hill, Applecross, Western Australia was sold to the State Government on the understanding that it would be used for public open space. The Defence Reserve, North Head, Sydney is to be transferred to the New South Wales Government as part of the Commonwealth/New South Wales Land Exchange Agreement for inclusion in the Sydney Harbour National Park. Two areas of the Reserve have already been transferred and the remainder of the site will be transferred once the Department of Defence has relocated its facilities. (7) No. (8) See answer to (1) and (3) above. (Question No. 243) Senator Reid asked the Minister representing the Minister for Industrial Relations, upon notice, on 22 February 1988: Can the Minister provide details of how many employees of the Department are presently listed as unattached (to a substantive position within the Department). Senator Button —The Minister for Industrial Relations has provided the following answer to the honourable senator's question: There are presently fifty seven (57) employees of the Department listed as unattached.