Friday, 15 April 1988 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 9 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 of the Commonwealth Parliament assembled. The petition of these residents of the Commonwealth of Australia respectfully showeth: that the Australian Broadcasting Corporation provides the citizens of the Commonwealth of Australia with the only nation-wide, independent radio and television service; that the independence of the Australian Broadcasting Corporation must be preserved in the interests of the citizens of the Commonwealth of Australia; that the introduction of commercial sponsorship or any form of advertising material from commercial sources, would destroy the independence of the Corporation. Your petitioners therefore humbly pray that the Honourable Senators will oppose the introduction of any form of sponsorship or advertising material from commercial sources into the programmes of the Australian Broadcasting Corporation. And your petitioners as in duty bound will ever pray. by Senators Brownhill (from 472 citizens), Cook (from 29 citizens), Cooney (from 10 citizens), Giles (from 80 citizens), Maguire (from 207 citizens) and Vanstone (from 150 citizens). To the Honourable the President and members of the Senate in Parliament. The petition of the undersigned shows: Our deepest concern at the plight of Mordechai Vanunu, who revealed details of the nuclear weapons arsenal of Israel; Our belief that Vanunu's actions were a service to humanity-including to the people of Israel-and were in fulfilment of his duty under international law; Our belief that the unlawful abduction of Vanunu from Rome, his imprisonment since then, his prison conditions, and his conviction on charges of espionage and treason are denials of his fundamental human rights. Your petitioners ask that the Senate, in Parliament assembled should: Resolve to ask the Australian Government to appeal to the Government of Israel to release Mordechai Vanunu immediately and without conditions. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 155 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Tasmania respectfully showeth that: The introduction of the 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. Your petitioners humbly pray that the Senate, in Parliament assembled, urge the Government to: Reject out of hand any plans by Telecom to time-charge local telephone calls and prevent the Australian people from being seriously affected by yet another ludicrous charge. And your petitioners as in duty bound will ever pray. by Senators Calvert (from 38 citizens) and Panizza (from 91 citizens). To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that. 1. The Watsonia Army Barracks contains a satellite communication dish, that sends to the United States the information, gathered by the ``joint high frequency stations'' in Australia and New Zealand, indicating the position of the Soviet naval ships and submarines. This information from Watsonia is combined with data from satellites and underwater sensors to calculate the location of the Soviet vessels with great accuracy. 2. This would make it possible for the US nuclear naval ships and submarines to destroy all nuclear Soviet naval ships and submarines, while the US nuclear submarines, naval ships and bombers launch their missiles in a ``first strike'' attack. 3. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 4. The ``joint U.S.-Australian'' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the ``Joint Australian-U.S.'' electronic communication facilities in the Watsonia Army Barracks. by Senator Zakharov (from 36 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The Petition of the undersigned respectfully showeth: That we consider the 2% discounting of Commonwealth Occupational Superannuation Scheme pension adjustments on 10 Oct 86 to be a serious breach of trust by the Government. The Commonwealth has reneged on an established commitment as incorporated in Commonwealth legislation and benefit promise pensions are not being paid in full. In particular we resent the long-term effect of the discounting. The pension loss is compounded throughout the life of a pensioner and surviving dependants-into the 21st century for many. We consider this Government-indeed penalty to be out of all proportion to the short-term ``extraordinary circumstances of the economy'' given as the reason for the discounting. Your Petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Government to: 1. limit the pension discounting effect of the Superannuation and Other Benefits Legislation Amendment Act 1986 to the period 10 Oct 1986 to 1 Jul 1987 so that pensions are restored to the 9 Oct 1986 level as a base for the 1987 pension adjustment; and 2. consult with organisations representing pensioners before changing the terms and conditions of Commonwealth Occupational Superannuation Schemes. And your petitioners as in duty bound will ever pray. by Senator Michael Baume (from 21 citizens). To the President and Senators in Parliament assembled, your humble petitioners showeth that the proposed Australia Card will have a dramatic impact on the lives of all Australians, and your petitioners therefore request a national referendum on the Australia Card Bill before the proposal is resubmitted to Parliament. As in duty bound your petitioners will ever pray. by Senator Michael Baume (from 39 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: 1. That we are totally opposed to the introduction of a compulsory national identification system under the control of the Federal Government. 2. That we reject the identity card proposal because it will involve massive expenditure of taxpayers funds while being ineffective in combating the problems of tax evasion, illegal immigration and abuse of the social security system. 3. That we are deeply concerned at the invasion of each Australian's privacy and the loss of their freedom that would occur if the identity card was introduced. Your petitioners therefore humbly pray that the Senate should: Reject the identity card or allow for a national referendum so the Australian people can decide themselves whether they want the costly, ineffective and intrusive un-Australian identity system. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 15 citizens). To the Honourable the President and the members of the Senate in the House assembled. The petition of the undersigned respectfully showeth: That we most strongly oppose the process of `food irradiation' by Cobalt 60, Caesium-137, Caesium-134 or any machine sources. That we oppose the introduction of regulations that will facilitate the food irradiation process being permitted by State Governments. Your petitioners humbly pray that the Federal Government ban the importation of any radio-active substances or machinery for the purpose of food irradiation, disallow regulations permitting the irradiation of food in Australia, and ban the irradiation of food in this country. We also call upon the Federal Government to withdraw from the Asian Regional Co-operative Project on Food Irradiation and the International Consultative Group on Food Irradiation. And your petitioners as in duty bound will ever pray. by Senator Childs (from 17 citizens). To the Honourable the President and the members of the Senate in Parliament assembled. The Humble Petition of the undersigned members of the War Veterans' community and concerned citizens respectfully showeth: That there has been continuous, substantial and damaging erosion of war veterans' benefits and services since May of 1985 in the areas of: the deletion of the dependants' pension; the removal from the Department of Veterans Affairs repatriation schedule pharmaceuticals of war widows, their dependants and service pensioners; a reduction in dental benefits; the deletion of the ten percent disability pension assessment previously allowed when glasses were prescribed; the restriction on the issue of glasses and other associated losses in benefits to partially blind veterans; the lack of protection in the Veterans Entitlements Act 1986 for intermediate or special rate pension rates disability pensions; the loss of benefits in respect of reimbursement of substantial costs incurred in obtaining medical opinion in support of a claim or an application; the means testing of the war veterans' children education scheme; the deletion of the intellectually handicapped dependants' allowance; the freezing of the social security portion of pensions paid to war widows; the restriction of travelling and mileage allowances; the termination of the defence re-establishment agricultural and loans schemes; the loss of the automatic right of admission to private hospitals without prior approval of a DMO; the imposition of a nursing home patient contribution rate for war veterans who are resident in nursing homes or who are receiving psychiatric treatment for war related disabilities; the abolition of the defence service home loan scheme; reductions in the of skin care, podiatry and physiotherapy treatments; and abuses in the use of information supplied by war veterans in responses to lifestyle questionnaires; That it is cruel and cynical of the Government to treat war veterans, many of whom are now advanced in age, in declining health and vulnerable, as expendable and unworthy of optimum care and benefits, when they and their comrades gave of their utmost to this country in its times of greatest need; Now, therefore your petitioners request that the Senate in Parliament assembled pass appropriate legislation to reverse the decisions of the Government which have brought about the erosion of war veterans' benefits and services. by Senator Maguire (from 18 citizens). To the Honourable the President and the 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 1985-1986 Senate Select Committee on Senator Harradine's Human Embryo Experimentation Bill which received 270 submissions and more than 2,000 pages of evidence. The report of the Senate Committee recommended in October 1986 that the Commonwealth Government make unlawful any destructive experiment which frustrated the development of the human embryo. Your petitioners therefore request the Senate and the Government of the Commonwealth of Australia to: Implement without delay the major recommendation of the Senate Select Committee to outlaw destructive experiments on human embryos. And your petitioners as in duty bound will ever pray. by Senator Boswell (from 223 citizens). To the Honourable the President and the members of the Senate in Parliament assembled: We, the undersigned, (i) are alarmed that many sporting, cultural and community groups have been made to feel that they can attract sponsorship only from promoters of unhealthy products; (ii) call for a National Health Promotion Foundation to be established through an increase in tobacco excise of 10 cents per packet; and (iii) urge that the National Health Promotion Foundation provide national sporting, cultural and community groups with alternative sponsorship funding so that these groups can flourish without the taint of accepting money from tobacco companies and assisting in the promotion of their unhealthy products. And your petitioners as in duty bound will ever pray. by Senator Maguire (from 20 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 waters 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 Maguire (from 21 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we express grave concern about the public release of confidential medical information by the Government, sufficient to enable the public identification of Doctors and their patients and calls upon the Parliament to censure all those involved in this gross abuse of the privacy of all Australians. And your petitioners as in duty bound will ever pray. by Senator Michael Baume (from 34 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens, respectfully showeth: That we express grave concern about the public release of confidential medical information by the Government, sufficient to enable the public identification of Doctors and their patients and calls upon the Parliament to censure all those involved in this gross abuse of the privacy of all Australians. And your petitioners as in duty bound will ever pray. by Senator Walters (from seven citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That we express grave concern about the public release of confidential medical information by the Government, sufficient to enable the public identification of Doctors and their patients and calls upon the Parliament to censure all those involved in this gross abuse of the privacy of all Australians. And your petitioners as in duty bound will ever pray. by Senator Watson (from 107 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia requests that broadcasts of the proceedings of the Senate and House of Representatives on the ABC National network be continued as a matter of utmost importance to the people of Australia. These broadcasts are the only means for the Australian public to be made aware of the Parliamentary debates without possible mis-interpretation or bias on the part of the media. And your petitioners as in duty bound will ever pray. by Senator Walters (from eight citizens). To the Honourable the President and members of The Senate in Parliament assembled: The Humble Petition of the undersigned members of the Wynnum R.S.L. Services Memorial Club and concerned citizens respectfully showeth:- ``That the automatic increase in Excise Duty on beer, wine and spirits at six monthly intervals on a C.P.I. basis would increase prices to what is an exorbitant level. Secondly, in the interests of road safety and Club viability, consideration be given to lowering the Excise Duty on low alcohol beer to a level where it will be more financially advantageous to drink in preference to full strength beers.'' Now, therefore, your Petitioners request that The Senate and Parliament assembled pass appropriate legislation to reverse the decisions of the Government which have brought about this six monthly automatic Excise Duty increase. by Senator Boswell (from 56 citizens). Senator JENKINS(Western Australia) —by leave-I present to the Senate a petition from 101 petitioners which is not in conformity with the Standing Orders as it is not in the correct form, praying that the proposed Telecom charge for local calls on a metered time basis be rejected: This petition from certain citizens of Western Australia requests that representations be made to Telecom advising it to immediately abandon its reported proposal to charge local telephone calls on a time basis. We petitioners believe that such a proposal, if implemented, would seriously inconvenience charity groups and community organisations in Western Australia and would force many citizens to dispense with their private telephone because of their inability to pay their accounts. Senator COULTER(South Australia) —by leave-I present to the Senate a petition from 258 petitioners which is not in conformity with the Standing Orders as it is not in the correct form, praying that the Senate support legislation to restrict the use of chlorofluorocarbons: Dear Dr. Coulter, We are very concerned about the destruction of the stratospheric ozone layer and the detrimental effect this will have on life. We support your action to present legislation to Federal Parliament to restrict the continued use and escape to the atmosphere of chlorofluorocarbons. Your sincerely, Petitions received. Senator TEAGUE(South Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that Australia's first private university, the Bond University on the Gold Coast, has announced that it will open in 1988 with as many as 1,000 students; (b) acknowledges that Australia can only benefit from increased provision of higher education opportunities; (c) believes that private universities maintaining and exceeding existing academic standards will be able to respond effectively and rapidly to the needs of business and the community; (d) welcomes the significant role that private universities can play in the education of Australian and overseas students and in the close relationship between industry and university research and teaching; (e) calls on the Federal Government to take a more constructive approach to private universities than did the former Education Minister, Susan Ryan; and, (f) congratulates the university's founder and patron, Mr Alan Bond, and the university's vice-chancellor, Professor Don Watts, on this initiative. Senator JENKINS(Western Australia) —I seek leave to make a brief statement and to withdraw Business of the Senate notice of motion No. 1 standing in my name for today relating to the disallowance of the Schools Authority (Amendment) Ordinance 1987. Leave granted. Senator JENKINS —On Monday, 22 February, I gave notice of a motion to disallow the Schools Authority (Amendment) Ordinance 1987. I did so because of the unacceptable changes which this Ordinance would have produced in the Schools Authority of the Australian Capital Territory (ACT). When the ACT. Schools Authority was first constituted in 1974, it was widely praised as introducing a new era in education, and a new pattern of democratic involvement in education by parents and educators, as well as ministerial nominees. This was not just another government department responsible to a Minister, but a self-standing and representative Authority, with an independent chair. This system came into being in response to the needs of the community expressed during years of intense community discussion and debate. It was in marked contrast to the big, centralised, bureaucratic and authoritarian education systems of the other States. Some of the main features of the ACT system were: an independent statutory authority, rather than a government department responsible to a Minister; community and teacher participation-mechanisms which guaranteed parent and teacher representation in the governing body and in local school councils; and a decentralised and flexible school system. The decision by the Government last year to abolish the Schools Authority Council and to vest authority in a Chief Education Officer undermined everything which had made the ACT system unique and successful. Parent participation was reduced to a meaningless level. The powers of the Council were all placed in the hands of one man, a bureaucrat who, however virtuous, is not accountable to the community. The ACT community did not accept this decision. Representative groups from all over the ACT made their views clear to me and, I believe, to other senators. It was as a result of this overwhelming public response that the Australian Democrats moved to disallow the Schools Authority (Amendment) Ordinance. Senator Chaney —Mr President, I take a point of order. This appears to be not a notice of motion but far more in the nature of a speech on the subject. It is a long des- cription-- The PRESIDENT —I understand that Senator Jenkins sought leave to make a short statement before she withdrew a notice of motion. This is an explanation. I must say that it is not necessarily brief, however. Senator Reid —If I may speak to the point of order: the agreement between the Democrats Whip and me was that, if leave were granted to make a short statement, it would take about two minutes and that we would make a statement of about two minutes as well. Senator JENKINS —Mr President, I have about half a minute left. The PRESIDENT —I suggest that you continue. Senator JENKINS —It was as a result of this overwhelming public response that the Australian Democrats moved to disallow the Schools Authority (Amendment) Ordinance. A month later, at the last minute, the Minister for Employment, Education and Training (Mr Dawkins) produced a Press release in which he suggested a number of compromises. These were clearly inadequate, but they indicated that the Minister was at least amenable to argument. In response to a further letter, in which I spelled out the minimum requirements put to me by community representatives, the Minister announced a further series of modifications to his original statement. I believe that these statements were made in good faith, and that the ACT community will be satisfied with them. For this I commend the Minister, and I look forward to a similar clear-sightedness on his part concerning the ordinances dealing with technical and further education and the Canberra Institute of the Arts. I withdraw the notice of motion. Senator REID(Australian Capital Territory) —by leave-The facts have been outlined. The Liberal Party would not support a situation in which the Authority was changed so that only one person ran the Authority, with no community input at all. We put it to the Minister for the Arts and Territories (Mr Punch) that at the very least there should be an advisory council set up with some status and function in this. It is not what most people interested in the school community really wanted, which was the larger authority that previously existed. This is a compromise which the Minister has agreed to. It was confirmed again last night at a Senate Estimates committee hearing that the legislation would be in place in May and this authority established in relation to the ACT Schools Authority and the Institute of Technical and Further Education. I seek leave to incorporate in Hansard a letter written by the Minister for the Arts and Territories, Mr Punch, to Senator Vanstone in which he indicates that he will make these changes. Leave granted. The letter read as follows- Senator A Vanstone Parliament House CANBERRA A.C.T. 2600 Dear Senator Vanstone In view of the representations I have received, should the motion to disallow the Schools Authority (Amendment) Ordinance 1987 be defeated, I have decided to make changes in the advisory arrangements for the A.C.T. Schools Authority and A.C.T. Institute of Technical and Further Education. In the case of the Schools Authority, the Ordinance will be amended to introduce a statutory advisory committee with the features set out in this letter in place of the committee established by the Schools Authority (Amendment) Ordinance 1987. This advisory committee will have 7 members: an independent chairperson appointed by the Minister, 2 school board chairpersons, 1 Ministerial member and 1 representative each from the Parents and Citizens Association, the A.C.T. Teachers Federation and the Pre-Schools Association. The functions of the committee will be as set out in the attachment to this letter, and will be specified in the Ordinance. The committee will report to the Minister and will have not less than 8 meetings a year. The Chief Education Officer will be required to take account of the committee's advice in the performance of the Authority's functions. Similar arrangements will be made for the A.C.T. Institute of Technical and Further Education where the Ordinance will be amended to establish a statutory advisory committee with 7 members. The independent chairperson of the committee will be appointed by the Minister and the committee will have 3 Ministerial nominees and 1 representative each of the Teachers Federation, students and industry. Appropriate functions of the committee will be based on those developed for the Schools Advisory Committee and will be specified in the Ordinance. The other features as listed above for schools will also apply in the case of the TAFE advisory committee. These changes will require amending ordinances which will be made and tabled in Parliament in the near future. Meanwhile interim arrangements consistent with the proposals outlined in this letter will be established. Yours sincerely GARY PUNCH Senator PATTERSON(Victoria) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes the extensive concern in the nursing home industry, and amongst residents and residents' families which has arisen as a direct result of the Federal Government's so-called age care policy; (b) notes that 1,700 Victorians have attended public meetings in the past 2 weeks to express their concern that the quality of nursing home care in Victoria is in jeopardy if the Government continues with the implementation of its plan for nursing home funding, and to express their concern that such funding will result in a loss of staff in nursing homes throughout Victoria, which will result in a decline in living standards for many nursing home residents; and (c) supports the call upon the Federal Labor Government to put a halt to the proposed changes until it has adequately assessed and tested the viability of the proposed new funding procedures. Senator CHANEY(Western Australia-Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move: That the Senate calls upon the Federal Government to delay the introduction of the Aboriginal and Torres Strait Islander Commission because of: (a) the short period which has been allowed for consultation with the Aboriginal and Islander communities, and the resultant failure of the Government to ensure that there is real understanding of the major changes proposed; and (b) the doubts which exist that the revised arrangements will ensure more effective delivery of programs for Aboriginal and Islander advancement. 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 Capital Territory Radiation Council-Annual Report 1986-87-sub-section 74 (2) of the Australian Capital Territory Radiation Ordinance 1983. 2. Fresh Fruit and Fruit Products Industries-Industries Assistance Commission Report No. 410-24 February 1988. 3. Royal Australian Air Force Veterans' Residences Trust-Annual Report 1986-87-including the Auditor-General's Report-sections 10 and 10a of the Royal Australian Air Force Veterans' Residences Act 1953 and section 63m of the Audit Act 1901. 4. Australian Safeguards Office-Annual Report 1986-87. 5. Norfolk Island-Annual Report 1986-87. 6. Australian Council for Employment and Training-Report on Activities-November 1986-June 1987. 7. Research Councils' Selection Committee-Annual Report 1986-87-sub-section 30 (5) of the Rural Industries Research Act 1985. 8. Report on Telecommunications (Interception) Act 1979. 9. Law Reform Commission-Annual Report 1986-87-including the Auditor-General's Report-section 35 of the Law Reform Commission Act 1973 and section 63m of the Audit Act 1901. 10. Fourteenth International Trade Law Conference-Canberra, 16 October 1987-Report. 11. Australian Institute of Aboriginal Studies-Annual Report 1986-87-including the Auditor-General's Report-section 30 of the Australian Institute of Aboriginal Studies Act 1964. 12. Occupiers' Liability-Law Reform Commission Report No. 42-section 37 of the Law Reform Commission Act 1973. 13. Parole Board of the Australian Capital Territory-Annual Report 1986-87-Seat of Government Administration Act. 14. Commissioner for Employees' Compensation-Annual Report 1986-87-section 122 of the Compensation (Commonwealth Government Employees) Act 1971. 15. The Wheat Industry-Industries Assistance Commission Report No. 411. Motion (by Senator Powell) agreed to: That the following Bill be introduced: a Bill for an Act to amend the Broadcasting Act 1942 in relation to television licences, and for related purposes. Motion (by Senator Powell) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator POWELL(Victoria)(9.13) —I move: That the Bill be now a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- I introduce this Bill which will have the effect of amending the Broadcasting Act 1942 to reduce the limit on television ownership to 43 per cent of the total national audience from the present figure of 60 per cent. This is an issue of utmost importance for Australia, with the almost daily increasing concentration of all sections of the media. We have one overwhelmingly dominant print media owner, Rupert Murdoch, whose metropolitan papers account for 62 per cent of the total sales. That one person has been allowed to build up such an empire is a tragedy for this country and a reflection on this Government's lack of adequate media regulation. That radio ownership laws are more stringent is in no small part the result of pressure by the Australian Democrats in that area. If not for the Democrats, the national limit in radio of 16 stations would be much higher and there would be no State limit. However, nowhere is the concentration of the media a more serious problem than in television ownership. There are now three people dominating the television industry. This is the result of the historic backroom deal between Labor and the Nationals which was done just prior to the last Federal election when the National Party was running around loose, having broken out of coalition. So the big three were given a free go to buy up 60 per cent of the television media in this country, effectively forcing several medium level players out of the game. The Australian Broadcasting Tribunal had already awarded the third Perth television licence to Kerry Stokes after an exhaustive inquiry, costing the taxpayer millions of dollars. But no sooner had the ink dried, and before the station went to air, than it was sold at massive profit to Frank Lowy's Westfield, who was now allowed to push his audience share to 60 per cent. So the Labor and Nationals deal, which was blatantly designed to improve their media coverage during the election, saw another media proprietor bow out. The move has so far seen the number of metropolitan television owners drop from nine to five. But that does not seem to be enough, either for the Government or the largest media owners. Despite the fact that the present limit is 60 per cent, at least one owner has ignored this by moving his market share beyond this. Rather than taking steps to ensure compliance, the Government is prepared to change the laws to accommodate its media mates. At a time when the Labor Party claims it has heard the electoral message that the Australian people want the Government to look after their interests rather than those of big business mates, this is quite an amazing decision. The Government has failed its first test dismally. Clearly, however, Government ranks are split on the issue and it remains to be seen whether the Cabinet line will prevail. If it is hard to predict which way the Labor Party will jump, then it is even more difficult to work out where the Opposition stands. Last time the Liberals held a definite position was last year when they favoured a 43 per cent limit. Senator Chris Puplick, in his dissenting report from the Senate Select Committee on Television Equalisation, said: `for all these reasons I reject the premise of this Bill in relation to the 75 per cent audience reach rule and would limit any such level of domination to no more than 43 per cent as originally proposed by Minister Duffy'. And Ian Macphee has publicly committed himself to supporting a reduction in the audience reach limit. The question now is whether these reasonable views will prevail or whether we will once again see an unholy alliance of the ALP and the Liberal and National parties as we so often do-acting against the interests of the ordinary people, succumbing to pressure to support the vested interests of big business. What exactly will a move to a 43 per cent limit achieve? Firstly, it will reduce the enormous social and political power of the present big three: Bond, Skase and Westfield. It is quite wrong to deliver the political future of this country into their hands and in these days of electronic presidential-style elections that is what the reality is. As the Treasurer himself said only last week: The importance of television in formulating and developing public opinion is unquestioned . . . . . . . Secondly, it will encourage new players into television ownership. The greatest protection we have is in the widest possible ownership of our media. The Government stated this as its aim, and this legislation will bring that about. Thirdly, it will prevent regional television being engulfed. If the limit is raised to 75 per cent it will allow those who presently dominate the metropolitan scene to carry on and buy up major regional media holdings as well. Fourthly, it will redress the imbalance in negotiations between the major networks and regional groups aligned with the network. Effectively they are told what will be produced, what they will buy and even when they will show it. By lowering the limit to 43 per cent this wide disparity in power will be reduced. Moving to 43 per cent will mean that Sydney and Melbourne will not be the sole considerations in production and programming decisions. It will mean at least six commercial operators with large enough networks to finance significant production, and greater localism of program content is more likely. This Bill will involve divestment by those currently exceeding the 43 per cent level. Obviously if three are already above that level divestment is necessary. A three-year period is allowed so that the present owners will have adequate time to find buyers. The United States Federal Communications Commission has used divestment orders in media ownership questions. Both Mr Keating and Mr Mick Young have in the past advocated divestment in this context. Similarly, Senator Chris Puplick has stated: `I believe that a policy of divestment should be put into place . . . . . .'. Throughout this whole debate the interests of the viewers have been completely ignored by the Government and Opposition parties. The Australian Democrats believe the freedom and diversity of our media is of utmost importance and the current trend away from this is of deep concern to most Australians. We therefore urge other senators to support this Bill which is aimed at diversifying ownership in the influential television medium. Debate (on motion by Senator Gareth Evans) adjourned. Motion (by Senator Coulter) agreed to: 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 Coulter) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator COULTER(South Australia)(9.14) —I move: That the Bill be now read a second time. I seek leave to incorporate my second reading speech in Hansard. Leave granted. The speech read as follows- Probably no threat to the global environment involves such widespread, serious and long lasting damage as the reduction in stratospheric ozone being brought about by the release of chlorofluorocarbons (CFCs) or freons. CFCs are a class of hydrocarbon chemicals in which some or all of the hydrogen atoms have been replaced with chlorine and fluorine. TABLE 1 Freon 11... CFCl3 Freon 12... CF2Cl2 Freon 22... CHF2Cl Freon 113... C2F3Cl3 Freon 114... C2F4Cl2 Freon 115... C2F5Cl History CFCs were first synthesised in 1928 and came into use as refrigerant gases. They had an advantage over earlier gases being less toxic, non-flammable and apparently inert. In 1974 two US chemists, Molina and Rowland posed a simple question, `What had happened to the millions of tons of CFC which had been released in the previous 46 years?' The only `sink' they could hypothesise was the stratosphere where these otherwise stable compounds would be bombarded and degraded by the intense short wave ultra-violet (UV) light which comes from the sun. They quickly realised that if they were right, stratospheric breakdown of CFCs by UV would release atomic chlorine which would catalyse the destruction of ozone. Ozone or O3 is the gas which protects the lower atmosphere and earth's surface from very damaging short wave UV. Rowland and Molina warned that this hypothetical model should be checked out, for if correct, the consequences for life on earth were serious indeed. Studies were done and by 1976 the US National Academy of Science (NAS) was confirming these earlier predictions and recommending restrictions on the use of CFCs. In 1979 CFCs, which by then had come into very widespread use as pressure pack propellants, were banned from this application in the US, Canada, Sweden and Norway. Other countries, including Australia, continued to allow their use for this purpose. As well as continuing in use as refrigerant gases, throughout the 70s and 80s CFCs were used increasingly as the expanding gases in the manufacture of both rigid and soft plastic foams. Most recently CFCs have been extensively used as solvents for degreasing electronic chips. Ozone Formation The primitive earth's atmosphere contained large amounts of carbon dioxide and was reducing rather than oxidising. Consequently the earth's surface was not protected from short wave UV by a stratospheric ozone layer. Indeed, life possibly began through the action of UV light on molecules in a reducing environment. Thus life evolved in and remained in the seas for a long period. Water protected it from the sun's lethal UV radiation. Not until green plants produced oxygen by photosynthesis and some of this oxygen formed ozone in the stratosphere could plants and animals survive on dry land. The oxygen to ozone conversion occurs in the stratosphere and is also caused by UV. Long Term Damage to Ozone CFCs released at the earth's surface take about 5 years to rise through the atmosphere to the stratosphere where they catalyse ozone destruction. Once there the two freons in widest use (F11 and F12) remain in the stratosphere for between 75 and 150 years before being degraded and removed. The best available evidence shows between a 1% and 3% reduction in global stratospheric ozone in the last ten years, lower reductions near the equator, greater near the poles (Cicerone, 1987). In this 10 years ozone has been cut by 50% over the South Pole during spring. In 1987 research in the Antarctic confirmed the presence of chlorine oxide, an active intermediate in the catalysis of ozone, and it is now widely accepted that the most probable cause of the Antarctic ozone hole is release of CFCs to the atmosphere. While a number of chemical pathways have been hypothesised and many intermediates detected the major catalytic path may be summarised as: Cl + O3 ClO + O2 ClO + O3 Cl + 2O2 Eventually chlorine is washed out by conversion to hydrochloric acid. 2Cl + H2O 2HClO 2HCl + O2 The enhanced ozone depletion in the Antarctic spring may be due to reactions involving chlorine nitrate and hydrochloric acid, catalysed by the presence of ice and nitric acid crystals in the stratosphere (Molina et al, 1987 and Tolbert et al, 1987). Consequences Short wave UV is destructive to all living cells causing damage to both DNA and proteins. It increases skin cancers and cataracts, changes immune responses and damages the laval forms of sea life that spend time in the top few millimetres of the seas. These organisms form the base of most aquatic food chains. Their destruction has the most serious consequences for all marine and fresh-water life. All other species suffer variable damage. A quantitative indication of consequences is given by the following: a 3% reduction in ozone gives about a 6% increase in relevant short wave UV which gives about a 12% increase in skin cancer (see numerous references in USEPA, UNEP Vol 1 Overview, 1986). Ozone is a very selective filter of shorter wave UV, i.e., the most biologically active. A 10% reduction in stratospheric ozone gives a 20% increase in UV penetration of 305 nm, a 250% increase at 290 nm and a 500% increase at 287 nm. DNA and proteins absorb maximally at about 260 nm and 280 nm respectively. Frequencies in this region are particularly damaging. (nm = nanometre, a measure of wavelength) (See figure 1.) Because of CFC's long residence time in the stratosphere Hoffman of the US Environmental Protection Agency (EPA) has calculated that ozone will continue to disappear unless CFC release is cut by 85% immediately and this 15% level or less is then maintained. This conclusion has been generally accepted by the scientific community. Figures 2 & 3 are from Hoffman's paper in USEPA, UNEP Volume 1, Overview, 1986. Although UV increase as a consequence of ozone destruction is the most immediate concern it should not be forgotten that CFCs are also very effective greenhouses gases, far more effective than carbon dioxide. Their role as greenhouse gases is only overshadowed by carbon dioxide because of the latter's much higher concentration in the atmosphere. Nonetheless while carbon dioxide will provide about 47% of the greenhouse warming between 1980 and 2030, CFCs will contribute as much as 27%. Moreover, while the atmospheric concentration of carbon dioxide is increasing at about 0.5% p.a., CFC 11 and 12 are increasing at 5 and 7% p.a. respectively. As shown in Figure 4, under the conditions of the Montreal Protocol, if all nations limit their production to 0.3 kg/head (and limit population to its present size) CFC 11 and 12 in the atmosphere would still increase sixfold over the next two centuries. (See Figure 4.) The Vienna Convention and the Montreal Protocol For several years the United Nations Environment Program (UNEP) has been bringing nations together to discuss this threat to the global ozone, the most recent meeting being in Montreal in late 1987. It was there agreed that a protocol will come into force on 1 January 1989. Six months later nations are to set CFC consumption at 1986 levels, between 1993 and 94 to cut consumption by 20% and by 1999 by 50%. The 1986 production is calculated by multiplying the actual production of each freon by its Ozone Depleting Potential (ODP) and totalling the resulting figures. Developing countries whose consumption of `controlled substances' (the term used in the protocol) is less than 0.3 kg per capita per year may delay their compliance with the control measures for up to 10 years provided their annual consumption does not exceed 0.3 kg per capita. For comparison, Australia's 1986 consumption was about 1.1 kg per capita. Table 2 compares the US, Australian and Chinese absolute and per capita consumption of CFCs 11 and 12. Table 2 Country Total consumption Population Per capita consumption US... 238,100 t 232 m 1.03 kg Australia... 13,100 t 16 m 0.82 kg China... 18,000 t 1,000 m 0.018 kg These figures underscore two important points: 1. An average Australian uses CFC at 45 times the rate of an average Chinese. This places a heavy personal responsibility on individual Australians to reduce their use of CFCs. 2. On the other hand China's population is very large and the absolute impact which China would have on the earth's ozone were she to adopt the pattern of CFC use found in the US and Australia would be enormous. It is therefore imperative that alternative technologies be found and implemented quickly. Extending the Chinese example it should be noted that 1986 production/release was approximately 0.16 kg/head averaged over the whole planet. Bringing all people to 0.3 kg/year consumption, while cutting industrial countries' production by 70-80% would, nonetheless, mean a doubling of global production. (See Figure 4.) TABLE 3 1986 Australian Production by Sector Sector CFC Amount in tonnes Ozone Depleting Potential Contribution Aerosols ... CFC 11 CFC 12 CFC 114 2,400 t 2,700 t 100 t 1 1 1 2,400 2,700 100 Refrigeration and Air Conditioning ... CFC 11 CFC 12 CFC 115 CFC 22 2,100 t 2,200 t 300 t 1,600 t 1 1 0.6 0 2,100 2,200 180 0 Plastic foam Production ... CFC 11 CFC 12 1,700 t 1,800 t 1 1 1,700 1,800 Solvents and Dry Cleaning ... CFC 11 CFC 12 CFC 113 100 t 100 t 700 t 1 1 0.8 100 100 560 Fire Extinguishers ... Halon 1211 Halon 1301 600 t 200 t 3 10 1,800 2,000 Total ODP ... 17,740 Comments on Table 3. 1. CFC 11 and 12 contributed 13,100 (74%) of Australia's 1986 ozone depleting potential. 2. CFC 22 use in refrigerators and air conditioners was 26% of all CFC's used in refrigeration. The ODP of CFC 22 is very low. 3. Contribution by sector to Australia's 1986 ozone depleting potential: Aerosols 29%, Refrigeration and airconditioning 25%, Foams 19%, Solvent 4%, Halons 22% (the actual release of halons only contributed 2%) 4. Considering CFC alone the removal of CFCs from pressure packs, the exclusive use of CFC 22 in refrigerators and an 85% recycling of CFC used in foam manufacture and as solvents could cut the ozone depleting potential by 96.5% As of April 1988 only the US and Mexico have ratified the Montreal Protocol. Halons 1211 and 1301 are CF2BrC1 and CF3Br respectively. They are widel y used in fire extinguishers. The provision of an extinguisher is a precaution one hopes will never be needed. Therefore most of these halons will never be used. It is estimated that in 1986 only 30t of halons were actually released to the atmosphere. However in the absence from Australia of a high temperature incinerator to dispose safely of these stable and persistent chemicals and in view of their very high ozone depleting potential the halons must also be rapidly phased out of use. By the very nature of their application they cannot be recycled. Too Little Too Late Recognising that: a. the Montreal Protocol falls far short of the 85% immediate reduction that is required. (Since 1986 actual ozone depletion has always exceeded computer predictions.) b. the problems relates to CFC release to atmosphere, not in use c. bringing in new gases and new technology in, say refrigeration, requires fairly long lead times, on behalf of the Australian Democrats I introduced a motion in the Senate last year to achieve two things: i. Eliminate the trivial and non essential uses of CFCs, i.e. in pressure packs. ii. Insist on recycling of CFCs in all other applications. Both Government and Opposition in speaking to this motion recognised that global ozone depletion caused by CFC release was the most important environmental problem. References 1. Cicerone, Ralph J. `Changes in Stratospheric Ozone.' (1987) Science 237:35-42 2. Molina, Mario J. et al. `Antarctic Stratospheric Chemistry of Chlorine Nitrate, Hydrogen Chloride, and Ice: Release of Active Chlorine.' (1987) Science 238: 1253-57 3. Tolbert, Margaret A. et al. `Reactions of Chlorine Nitrate with Hydrogen Chloride and Water at Antarctic Stratospheric Temperatures.' (1987) Science 238:1258-60 4. USEPA, UNEP (1986) Volume 1: Overview ``Effects of changes in Stratospheric Ozone and Global Climate''. This, and its companion volumes contain a wealth of information. Several of the papers contained in this volume are referred to in the text. The Bill It is clear that much more needs to be done to reduce the release of ozone depleting substances than is incorporated in the Montreal Protocol. The Protocol specifically allows nations to proceed with CFC reduction faster than the mutually agreed 20% then 50% reduction by the end of the century. This is not only desirable it is both necessary and possible. CFC use in pressure pack cans can not be defended and should be phased out quickly and completely. This is a non-essential use of CFC's. Twenty five percent of pressure packs on Australian shelves still contain CFC's. Trivial applications, such as use in cosmetics appear to be expanding in Australia. It would be disastrous if China were to follow this path! In all other applications CFC's could be recycled. When a refrigerator requires regassing or gets to the end of its life the CFC could and should be collected, cleaned and recycled. At present it is merely bled to the atmosphere. Table 3 shows that freon 22 has an ozone depleting potential near to zero. CFC's with unsubstituted hydrogens appear to be much less stable. Replacing CFC 11 and 12 with CFC 22 in refrigerators (where possible) would substantially reduce the ODP. If CFC's continue to be used in foam expansions and solve applications, these processes could and should be carried out in closed systems, the CFC sucked off, condensed and recycled. Already Unifoam AG, Glarus, Switzerland, a plastic foam manufacturer has developed a process which is achieving 85% recycling. (Modern Plastics International, November, 1987, p66). There are foaming gases other than CFC's in widespread use. Hydrocarbons have been used extensively but, as with pressure packs, they pose a risk because of their flammability. It's clear that our ultimate aim should be to eliminate CFC use entirely. However, with CFC's a part of so many aspects of our industrial life style this can not be achieved as quickly as necessary. The lead times for change are too long. But the achievement of 85%+ reduction is possible by elimination of unnecessary uses (pressure packs) and recycling in others. 1. The title of the Bill avoids reference to chlorofluorocarbons and uses the term ``Ozone Depleting Substances''. There are a number of non-chlorofluorocarbon substances which have ozone depleting characteristics, e.g. the 1,1,1,-trichloroethane used as a solvent in typist correcting fluid. At present these are not major contributors to ozone depletion. However the Bill leaves the way open to control the use and release of any of these agents should future research show that to be necessary. 2. The definition of ``ozone depleting substance'' (O.D.S.) in 3. (1) is in two parts. Part (a) adopts Group 1 of Annex A to the Montreal Protocol while part (b) allows the declaration of any other substance to be an O.D.S. It should be noted that part (a) does not include CFC 22 which has an ozone depleting potential of 0.03 compared with CFC 11 or 12 which have an ozone depleting potential of 1.0. As 26% of the CFC used in refrigerators in Australian in 1986 was CFC 22 rather than CFC 11 or 12, CFC 22 will almost certainly need eventual control. However, this Bill, which is designed to make the most rapid reduction in ODS release at the earliest opportunity, allows the uncontrolled use of CFC 22 to continue at present. Halons are also not included at this stage. As mentioned earlier the ozone depleting potential of halons is large but, at the moment, release of halons is small. It is anticipated that halons will be quickly brought under this legislation but that twelve months, the ``period of grace'' allowed in this Bill, may be insufficient for the transition to alternatives for extinguishers. As the nature of their use precludes recycling of halons the only course open is total abandonment of their use. 3. The Bill sets a ``period of grace'' of twelve months after which the controls on substances, equipment and practices outlined in the Bill will become operative. The Bill contains no retrospective element with respect to equipment although, of course, bulk stocks of ODS's held at the end of the period of grace will become subject to control. 4. Clause 5 bans the use of ODS's in aerosols. 5. Clause 6 requires that all new refrigeration equipment, including air conditioners, be so constructed that contained ODS's can be collected, safely stored and recycled. Clause 8 requires that ODS's in equipment manufactured or sold after the end of the period of grace be collected and not allowed to escape when the equipment is serviced. Clause 9 requires that before disposal at the end of its useful life such equipment will be drained of its ODS's so that no ODS escapes to atmosphere. 6. Clause 7 covers other uses of ODS's such as foam blowing and solvent degreasing. It requires that these operations be carried out in closed systems in such a way that ODS vapours can be removed safely, stored and not allowed to escape to atmosphere. Recognising that total recycling in such applications is clearly impossible, the clause sets a minimum of 85% efficiency in this recycling operation. Both the major uses of ODS's covered by this clause are fairly large scale commercial operations for which the measurement of efficiency in recycling should be straightforward. In both applications there are non-CFC alternatives and some use of CFC 22. I reiterate that equipment is available and in use in Switzerland for the manufacture of plastic foams which achieves an 85% efficiency of recycling of ODS's. 7. Clause 11 prohibits the exportation from Australia of equipment which does not conform to the new requirements imposed by this Bill. While Australia can have no control over the manner of use of this equipment in foreign hands, this requirement should act as an encouragement to behave responsibly. 8. Clause 10 controls the safe storage, transport and handling of ODS's. Once it becomes illegal to release ODS's to atmosphere those holding used ODS's collected from serviced or scrapped equipment or recycled solvent or foaming agents will have only two methods of disposing of these materials. Either they may be destroyed in a high temperature incinerator, which Australia does not yet possess, or they may be cleaned, redistilled and recycled into use. It is anticipated that this Bill will force this latter course. In some quarters fears have been expressed that substantial diminution in CFC manufacture in Australia will lead to unemployment in that industry. Recycling of CFC's with a need to redistill or otherwise purify used, mixed or contaminated CFC almost certainly in the same facilities now involved in manufacture of CFC, will accommodate some of this potential unemployment. 9. Clauses 15-18 create the mechanisms for inspection by identifiable authorised persons of places and equipment and the taking and keeping of records. 10. Clause 21 enables the creation of regulations which require the keeping of records by appropriate persons and the specification of which records should be kept. Regulations will also require the labelling of refrigeration equipment and set the manner in which processes involving ODS's are to be carried out. 11. Clause 20 has the effect that the Bill will operate in relation to natural persons or bodies corporate who manufacture etc., in the course of or for the purposes of trade and commerce among the States and Territories or overseas. Debate (on motion by Senator Gareth Evans) adjourned. Senator ALSTON(Victoria)(9.15) —by leave-I move: That leave be given for the Joint Parliamentary Committee on the National Crime Authority to sit in private, for the purpose of taking evidence, during the sitting of the Senate this day. I wish to speak briefly to that motion because I think the matter has given rise to some justified concerns in this chamber. The sessional orders which were passed on 22 September last now provide that all committees of the Senate and joint committees of both Houses of the Parliament may sit during the sittings of the Senate for the purpose of deliberating in private session `but shall not make resolutions or take votes unless all members of the relevant committee are present, and shall not otherwise sit during the sittings of the Senate unless by special Order of the Senate'. The view was taken by the Committee that, because of the security requirements pertaining to the matters under investigation by that Committee on the National Crime Authority, the session investigating the future performance and current performance of the Authority should be in private and evidence should be taken from a series of witnesses. Accordingly, it was resolved that various witnesses be invited from interstate to give evidence today in private session. It was only, I think, yesterday or even this morning that a contrary view was taken: that, despite the wording of the sessional order, a private session did not extend to allowing evidence to be taken during a private session. That seems to be an ambiguity or an omission that needs to be clarified. In normal circumstances I think one would be justified in taking the view that great caution should be exercised before allowing evidence to be taken in public by a device. So I am simply seeking that the Senate authorise this move in no way as a precedent of the future and pending the clarification of the position on the matter. Question resolved in the affirmative. Bill received from the House of Representatives. 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)(9.18) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill proposes amendments to the Excise Tariff Act 1921, to incorporate into that Act various excise tariff proposals tabled in this Parliament during the last sittings and early in this sittings. These proposals concern the excise duty on liquefied petroleum gas (LPG); adjustments to the excise duties on refined petroleum products. Following movements in the import parity price; an increase in the Excise duty on aviation gasoline; and an adjustment to restrict the total excise duty increases as a result of consumer price index (CPI) indexations for the 1987-88 financial year to 6 per cent. Liquefied Petroleum Gas The excise duty for naturally occurring LPG is adjusted six-monthly on 1 April and 1 October each year in accordance with the Government's LPG excise policy announced in April 1980. The excise rate is calculated as 60 per cent of the amount by which the realised price for naturally occurring LPG exceeds $147 a tonne. The realised price is based on the weighted average of the prices received from exports and local sales of LPG during the immediately preceding six months. Before 30 June 1987 the Excise applied to LPG from all fields in production in August 1977. However, under the new petroleum excise arrangements introduced from 1 July 1987, LPG produced from onshore fields is exempt from excise, so the excise now only applies to offshore fields-that is, Bass Strait. No excise is payable on refinery-produced LPG. Clause 3 of the Bill will amend the excise rate with effect from 1 October 1987, from $5.02 to $13.21 a kilolitre, an increase of $8.19 from the previous rate set on 1 April 1987. The increase reflects an increase in export prices of LPG in March 1987 and the stability of prices at the higher level for the six month period since then. Import Parity Price adjustments The import parity price adjustments for 1 October 1987 and 1 December 1987, at clauses 4 and 5, reflect movements in world oil prices during the respective preceding month. The reduction in the import parity price for 1 October directly results in a decrease in excise and royalty receipts for crude oil, while the increase in the oil price for December will increase excise and royalty receipts. Since March 1986, the Government's policy has been to fully offset changes in its revenue from crude oil excise and royalty by across-the-board changes in excises payable on petroleum products. The net result of this decision has been that, as crude oil prices change, government revenues remain the same overall. Consistent with this Government's policy, excise rates on refined petroleum products were increased on 17 October 1987 and decreased on 15 December 1987. These changes are expected to be the final adjustments of this kind, as the Government has decided, with the deregulation of crude oil marketing from 1 January 1988, to discontinue the practice of offsetting changes in crude oil revenue by changes in product excise rates. In the absence of the import parity pricing mechanism from 1 January, a continuation of the practice would have been difficult and inappropriate in a free market environment. However, the Government will continue to monitor oil prices closely and will consider variations in petroleum product excise rates, to counter inflationary or revenue effects, in the case of a substantial change in world oil prices. Aviation Gasoline Clause 6 of the Bill will increase the amount of excise duty on aviation gasoline with effect from 1 January 1988, to cover the cost of terminal navigation-that is, air traffic control-and rescue and firefighting services at Essendon, Coolangatta and Launceston airports. Aircraft using Avgas ceased to be charged for those services with effect from the 1 January commencement date, and the additional charge of half a cent per litre will offset the cost of those services. These revised arrangements were introduced after consultation with the aviation industry had revealed that, under the previous charging arrangements which came into effect last July, general aviation Avgas operators who used the three airports, and incurred landing charges as a result, were disadvantaged compared with their competitors operating at the general aviation secondary airports, who were not faced with any landing charges in respect of their use of those facilities. The extent of the disparity was not foreseen by either the industry or the Government at the time the changes were made last July. The Government reconsidered the position of AVGAS excise charging arrangements in respect of these three airports following its consultations with the major industry associations, and the proposal to replace the Commonwealth's landing charges-that is, the terminal navigation and rescue and fire fighting service charges-at these airports with an additional 0.5c per litre surcharge on Avgas excise has been introduced to remove the disparity occasioned by the charges which users of these three airports were encountering. Limitation of Excise Indexation to around 6 per cent Clause 7 of the Bill will effectively limit the total excise indexation increases for the 1987-88 financial year to 6 per cent. These amendments fulfil the commitment made by the Prime Minister (Mr Hawke) during the inaugural Ruby Hutchison Memorial Address at the National Press Club on 13 March 1987. The amendments decrease the rates of excise duty applying immediately prior to indexation on the February 1988 adjustment date, so that when the legislative provisions for indexation are applied-which require the use of the published CPI-the resulting indexation is 2.5 per cent. This increase, when combined with the August 1987 indexation adjustment of 3.5 per cent, yields a total indexation of 6 per cent for the 1987-88 financial year. Financial Impact Statement (A) Liquefied petroleum gas: The 1 October 1987 increase in the excise rate for naturally occurring LPG is estimated to result in an increase of $9.5m in excise receipts in 1987-88; (B) Import parity price: The alterations in refined petroleum product excise rates due to the changes in the import parity prices effective from 17 October 1987 and 14 December 1987 are expected to have the following impact on revenue in 1987-88: The increase in refined petroleum product excise rates effective 17 October 1987 is expected to increase revenue by about $121m; and the decrease in refined petroleum product excise rates effective 14 December 1987 is expected to decrease revenue by about $66m. These changes in the excise rates following the above changes to import parity prices are intended to exactly offset the forecast changes in revenue from crude oil excise and royalties; (C) Aviation gasoline surcharge: The measure has no direct financial implications, as it has been designed only to recover the revenue which will be forgone by the Commonwealth as a result of the removal of the terminal navigation and rescue and firefighting components of the landing charges levied at Essendon, Coolangatta and Launceston airports; aircraft using aviation gasoline ceased to be charged for these services from 1 January 1988, the date of effect of the surcharge; (D) Limitation of total excise indexation to 6 per cent The financial impact of imposing a 6 per cent ceiling on excise duty rate increases for 1987-88 is estimated to result in revenue forgone of $25m for that financial year. I commend the Bill to the Senate and present the explanatory memorandum to the Bill. Debate (on motion by Senator Reid) adjourned. Debate resumed from 13 April, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator TEAGUE(South Australia) —I rise under standing order 410 to explain myself in regard to the misrepresentations of my speech in this debate by the Deputy Leader of the Australian Democrats, Senator Macklin. On Wednesday I spoke in this debate and made certain references to the approach taken by the Australian Democrats to nuclear issues. I at no time made any personal attacks on any member of the Democrats; however, I certainly directly and comprehensively criticised the arguments and claims put forward by several honourable senators of the Australian Democrats because I strongly disagree with them. It very much appears that my speech hit the mark, judging by the emotionally disturbed and frustrated speech that followed my own. I was followed in the debate by Senator Macklin, who appeared aroused by my wholesale rejection of the Australian Democrats' approach to nuclear policies. In particular, Senator Macklin turned to false allegations and personal abuse. He accused me of claiming that I was the sole founder of an important initiative for peace in this Parliament. Senator Macklin said-and I quote from Wednesday's Hansard: I discovered in Senator Teague's comments-he can look at the Hansard record if he wants to-that he characterised himself as the founder of the nuclear disarmament group. I note, by the way, that Senator Macklin, who professes to know much about this, did not even know the correct title of the parliamentary disarmament group. The DEPUTY PRESIDENT —Order! In making a statement on a matter of misrepresentation, Senator Teague, you must confine yourself to the matters which have been misrepresented. You must forbear from criticising the person who made them. Senator TEAGUE —Thank you, Mr Deputy President. In his emotional outburst, Senator Macklin went on to say: Senator Teague should look at the Hansard record. I am quite happy for him to look at the Hansard record on that matter. In fact, it was Senator Colin Mason of the Australian Democrats who alone initiated the exercise and then invited others to act as co-chairmen because he wanted the exercise to be broad based. Senator Macklin went on to accuse me, without any foundation at all, of big-noting myself and engaging in personal attacks. I have looked at the Hansard record of my remarks on page 1451. His charge is completely contrary to that record. I am reported as saying-and I recollect this myself-that I was: `a founder and co-convenor of the parliamentary disarmament group'. This is entirely correct and indisputable. I am quite entitled to make this remark. I was a founding member and original co-convenor of the parliamentary disarmament group, a position that I still hold. In particular, the other co-convenors strongly supported my initiative in organising the parliamentary disarmament group's forum, held here in Parliament House in 1986, the International Year of Peace. That meeting brought together members and senators of all parties, as well as senior disarmament and arms control officials from the Soviet Union, the United States of America, Britain, China and France, as well as nearly 100 community representatives from all over Australia. It was also attended by many members of this chamber and the five ambassadors from those countries I have already mentioned. Had I been big-noting myself, as Senator Macklin suggested, then surely I would have mentioned this and other initiatives that I have taken in the disarmament and arms control area. As for personal attacks, I challenge Senator Macklin to scour Hansard in this debate and point them out. I find Senator Macklin's remarks bizarre and I suggest that he apologise to me in the Senate for his intemperate comments during this debate. There were plenty of people listening to the parliamentary broadcast last Wednesday and they would have heard the Australian Democrats-- The ACTING DEPUTY PRESIDENT(Senator Burns) —Order! Senator Teague, I understand that you are making an explanation of misrepresentation. I do not believe that you are entitled to call for an apology. Senator TEAGUE —I hear what you say, Mr Acting Deputy President, and I note that you have not asked me to withdraw my remarks. My remarks in this statement stand and I have only two sentences to conclude my speech. The ACTING DEPUTY PRESIDENT —I just ask that you do not repeat them. Senator TEAGUE —The only explanation I can find for Senator Macklin's emotional personal attack is that the comments I made about the Democrats hit a raw nerve. In responding to my comments, as to those of any senator, I suggest-and I am sure that you will support me, Mr Acting Deputy President-that Senator Macklin, and all of us, stick to the facts and the arguments and refrain from any false and personal accusations. Question resolved in the affirmative. Bill read a second time. The Bill. Senator SANDERS(Tasmania)(9.25) —In the discussion on this Bill a number of honourable senators have spoken-- Senator Lewis —Mr Chairman, I take a point of order. In this Bill, which deals with certain patents aspects, the Democrats have really drawn a long bow. I think every Democrat in this chamber has spoken on this Bill at great length about nuclear disarmament. The Bill has nothing whatsoever to do with nuclear disarmament. I ask as a matter of principle, Mr Chairman, that you make sure that during the committee stage of the Bill the honourable senators who are involved in the committee debate stay strictly within the rules of debate in relation to committee debates. The CHAIRMAN —Order! The second reading debate is over. Whatever transpired in it is not relevant to this committee stage debate. The committee stage debate, as always, will be confined to the clauses of the Bill. Senator SANDERS —The Bill is entitled the Nuclear Non-Proliferation (Safeguards) (Consequential Amendments) Bill. Senator Button —Speak on the title, then. Senator SANDERS —I am speaking on the title and I am talking about safeguards. The Australian Democrats may have discussed nuclear disarmament issues, but speeches by members of the Opposition have also ranged very widely over these issues. Senator Teague —The second reading debate is over. Senator SANDERS —The debate continues. I am sure that the honourable senator will feel moved to enter it. We are talking about safeguards. Safeguards are essential, as the Hawke Government has said over and over again and as every reasonable person would say. The CHAIRMAN —Order! Senator Sanders, in response to Senator Lewis's point of order I told the Committee that we are discussing the clauses of the Bill-and, if necessary, the title of the Bill, because the whole Bill is before the Committee. The Bill is for an Act to make amendments to the Patents Act consequential upon enactment of the Nuclear Non-Proliferation Treaty. You must confine yourself to that subject-the amendments to the Patents Act consequent on the other Bill. Senator SANDERS —Consequent on the Nuclear Non-Proliferation Treaty? The CHAIRMAN —You cannot discuss the Nuclear Non-Proliferation Treaty in the committee stage of this Bill. Senator SANDERS —Patents. This will be an exercise in mental acuity. I am sure that I will be called if I do not toe the line. Patents controls in this Bill will make it impossible to pass on information about safeguards in some instances or about any other aspect of the nuclear non-proliferation system. Thus, safeguards are a part of this discussion. Safeguards are what most concern this Parliament, the Government and the people of Australia. The safeguards regime, then, is part of the Bill. One of the reasons the original Bill and the subsequent Bills were drafted was to involve safeguards, the safe use-if there is any such thing-of nuclear power. Over and over again we have seen that although legislation such as this can be drafted with the intention of ensuring the safe use of nuclear power, the legislation has not worked. Recently we have heard the Euratom statements that safeguards are merely something to be circumvented so that the sale of uranium can continue in spite of its origins in South Africa and Namibia-- Senator Button —Mr Chairman-- The CHAIRMAN —Senator Sanders, you are getting wide of the Bill again. You must come back to the subject of patents. Did you wish to make a point of order, Senator Button? Senator Button —Mr Chairman, I think you have covered the point of order I wanted to make. I say to Senator Sanders that these are very clever exercises in being a smartie in the semantic sense but they are not relevant to the clauses of the Bill. The CHAIRMAN —The questions of safeguards and uranium exports are not relevant to this Bill, Senator Sanders. You must confine yourself to the question of patents. Senator SANDERS —I am sorry that the Government and the Opposition are so sensitive on this point. Safeguards are central to this issue. If they wish to continue to gag me in this debate-- Senator Lewis —Mr Deputy President, on a point of order: I do not think the Government is sensitive on this issue. Certainly the Opposition is not. What we are anxious to do is to get on to the taxation Bills for which there is a long list of speakers. The Australian Democrats have had plenty of opportunities to express their views on nuclear disarmament during a wide ranging second reading debate. I agree with you, Mr Chairman: I think you should rigorously apply the point of order that this Bill deals with patents. Senator MacGibbon —Mr Chairman, on another point of order. The DEPUTY PRESIDENT —Before another point of order is raised, I will deal with the one before the Chair. The point of order that I have already ruled on will, of course, be enforced. Speeches made during the committee stage of the debate must be relevant to the clauses of the Bill. This Bill covers the subject of patents, not other aspects of nuclear safeguards. Senator MacGibbon —Mr Chairman, I take a point of order. It is a long established tradition in the Senate that senators do not reflect upon or debate rulings from the Chair. Senator Sanders is flagrantly debating your last ruling. The CHAIRMAN —There is no point of order. Senator Sanders was really criticising the Government and the Opposition rather than the Chair. Nevertheless, the Chair will enforce the ruling. Senator Coulter —I understood that Senator Button had raised a point of order. Speaking to that point of order-- The CHAIRMAN —That point of order has been ruled on. There will be no further discussion on that point of order. Senator SANDERS —I recognise the fact that I have been impeded in my attempts to bring up the safeguards issue. I will merely have to reserve my remarks for a later time, perhaps until this afternoon when we are dealing with the Australian Safeguards Office paper. But the remarks are relevant. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Button) read a third time. Debate resumed from 18 February, on motion by Senator Tate: That the Bills be now read a second time. Senator SHORT(Victoria)(9.32) —The Senate is debating the Taxation Laws Amendment Bill (No. 5) 1987 and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. The purpose of the first Bill is to amend the income tax laws in various ways, particularly the Income Tax Assessment Act. (Quorum formed) The Hawke Government has brought in more taxation Bills and imposed more taxes on this nation than any other government in our history. The Taxation Laws Amendment Bill (No. 5) and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill, which is complementary to the first Bill, are not opposed by the Opposition. The Taxation Laws Amendment Bill (No. 5) will amend various taxation laws to give effect to a range of policy decisions of the Government. The more important amendments to be made relate to the provisions of the Income Tax Assessment Act. They include measures to encourage the development of offshore banking in Australia through a withholding tax exemption for interest paid to non-residents by offshore banking units. Capital gains tax roll-over relief is being given for certain reorganisations of resident unit trusts. There are amendments to correct certain deficiencies in the taxation of lump sum superannuation and similar payments. The Bill will also remove special concessional treatment for expenditure on buildings for scientific research or other research or development purposes and on the development of certain computer software. Other amendments include further concessions to permit shelf companies to satisfy common ownership tests contained in the income tax law, modifications to thin capitalisation provisions and measures to extend the coverage of the income tax law to a range of activities in offshore areas and external territories. There are also a number of technical amendments to correct anomalies and deficiencies in the taxation law. In other words, the Taxation Laws Amendment Bill (No. 5) is a highly technical Bill. It contains some points of principle which, as I have said, the Opposition does not object to. The complementary Bill-the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill-will give effect to the Government's decision, announced on 1 July 1986 and expanded in April last year, to provide an interest withholding tax exemption to facilitate offshore banking in Australia primarily for dealings in foreign currencies with non-residents. It will apply to interest and payments in the nature of interest paid by offshore banking units on specified borrowings contracted for after 1 July 1986. To preserve our national withholding tax base and in recognition of the practicalities of tracing and monitoring the application of particular borrowings, any misapplication of funds that attract the concession provided is to bear a special income tax rate-a penal rate-of 300 per cent. That penal rate will be imposed by way of the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill. Whilst not opposing the Bills, the Opposition will be moving an amendment to the motion for the second reading to highlight the general taxpayer's total dissatisfaction with the heavy burden of the Government's taxation policies. It is not only a heavy and onerous burden but one which is becoming increasingly heavy and onerous as the Government inexorably takes an ever-increasing share of our total national product in taxation year by year. I will be circulating an amendment along the following lines: At end of motion, add ``, but the Senate notes that: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue- I note that that is a Budget estimate; the latest figures for the first eight months of this year suggest that that figure will be well exceeded- (c) there will be an estimated $71 billion in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; (e) sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than any other of its record breaking taxes- that point is worthy of emphasis- (f) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.77 billion foreign debt strait jacket without further reductions in our standard of living''. This proposed amendment contains some very important points that must be got across to the Australian electorate. The electors know the net effect of those points, and that net effect is that Australians are being hurt, and hurt increasingly, as a result of the policies of this Government. More and more throughout this Government's five years in office it has become the highest taxing government in Australia's history. That burden has fallen on every Australian. There has been some suggestion in Australian Labor Party circles that the reason the electorate has swung so massively against Labor in seats like Adelaide, Port Adelaide and Groom, as well as in the New South Wales State election and State by-elections in Victoria and Western Australia, is that Labor has failed to communicate its message to the electorate. Senator Reid —It has communicated it all right. Senator SHORT —As Senator Reid quite rightly points out, it has communicated its message effectively; the problem is that the message communicated is one that the Australian elect- orate can no longer tolerate. That is why it is turning away from the Hawke Government and from the Labor Party in ever-increasing numbers. The simple message is that the Australian public can no longer tolerate and live with the continual attacks on its living standards that have been the hallmark of this Government. It is almost unbelievable that 25 per cent or more of our total gross domestic product this year will be collected in tax revenue. The Government talks about the need to increase productivity and restore competitiveness to the Australian economy. It seems to find only one way to do that. It seems to believe that, if we allow the exchange rate to depreciate far enough, somehow continual depreciation will solve our problems. What it ignores absolutely and totally is the fact that unless we give people and businesses, small and large, an opportunity, a reason and an incentive to work, produce and grow, living standards will inevitably fall. Nothing that is happening in this economy in terms of Government policies is designed to pursue that essential course. Coupled with an absolute mishmash of fiscal policy, wages policy and external policy in a way that is totally inconsistent with the needs of the Australian economy in the longer term, that is why Australia's productivity is abysmally low. That is why this financial year, 1987-88, productivity in this country will actually fall-at a time when the future of our country depends essentially on an increase in productivity because that is the only way, in an increasingly competitive world, that we can grow and maintain, let alone increase, our living standards. The Government's policies, particularly but not exclusively in the area of taxation, are seemingly designed to frustrate that essential requirement. A $5.5 billion increase in taxation this year-an increase in excess of 8 per cent-at a time when the whole thrust of policy must be to reduce the burden of tax, is perhaps the most stark demonstration that one can give of the inadequateness and in appropriateness of the Government's policies in terms of total tax collections. But when we look at the Government's savage attacks through increases in consumption taxes, the position becomes of even more concern. Sales tax, which is Australia's main consumption tax, is growing faster in terms of its revenue take than any other of the Government's taxes. So far this financial year sales tax collections in Australia have risen by 18 per cent. That is three times faster than this year's forecast inflation rate and it is even faster than the huge 14 1/2 per cent rise in the total income tax take to be collected this year. Since the Hawke Government came to office sales tax collections have increased by 110 per cent. They have more than doubled in the five years since this Government came to office, to a yearly rate of $7.5 billion. That rise in sales tax represents almost three times the rate of inflation and double the increase in Australian wages, salaries and other benefits under the Hawke Government. Those figures, coupled with the increases that have occurred in the income tax burden of average Australian families, demonstrate very clearly the enormous problems that families in this country have in staying above the breadline. An increasing number of them are living below the proverty line. There are now three-quarters of a million more Australians living below the proverty line than there were when this Government came to office. That is, 750,000 more Australians are living in poverty now than was the case in 1983. Let us look at the effect this Government's taxation policy has had on family income earners. Let us take a single income family on average weekly earnings. The average tax rate that that family paid in March 1983, when this Government came to office, was 17 1/2 per cent. By July last year it was 20 1/2 per cent. In that time the Government's marginal tax rate went up from 30 per cent to 40 per cent. In numerical terms, tax payments went up from $65 a week in March 1983 to $102 a week in July of last year. Taking into account the December 1986 and July 1987 so-called tax cuts-and they were nothing of the sort in real terms-single income earners and families are now paying 42 per cent and 57 per cent more tax respectively than when the Hawke Labor Government came to power in 1983. Even though that is cold and stark statistical information, it is a very clear demonstration of what has happened to the choices that individuals might otherwise have been able to make and the ability of families, particularly those around and below the average weekly earnings level, to bear those increases. Putting it another way, for a single income family on average weekly earnings the tax burden has increased in the last five years by 95 per cent in contrast to an increase in wages of about 40 per cent. Increasing numbers of Australians are moving into the higher income tax bracket and now a substantial proportion of the full time work force is paying 40c in the dollar rather than something like 30c in the dollar. In effect, the basic standard rate tax applicable to the full time work force has been increased under this Government by 25 per cent. Indeed, it has increased from 30c to 40c in the dollar-a one-third increase. Company tax has moved in a similar direction. At a time when the Government has been talking about reducing the burden on companies and making them more competitive in an increasingly competitive world, it has increased company tax from 46c in the dollar to 49c. That trend in corporate taxation policy is completely opposite to that which has occurred in virtually every other country in the western world. I think I am correct in saying that there is almost no other country in the western world-there would be few exceptions-in which the corporate tax rate is higher than it is in Australia. I will come back to the point, because it should never be overlooked, that we are in a world which is becoming increasingly competitive, increasingly interdependent, and if we do not pursue domestic policies which will enable our producers to compete on an equal footing with the rest of the world we will slide increasingly down the scale of real living standards. That slide has been occurring progressively over the years, and the five years of the Hawke Government have accentuated it. That is why the people of Australia are hurting, that is why they are rejecting the Labor Government. Despite all the hype and the rhetoric, the net result of this Government's policies has been more hurt, hurt, hurt to the low and average income earners and families of this nation. The increasing tax take has been carried out in a totally dishonest manner. Appropriate adjustments have not been made to the income tax rates to take account of the inflation boosted increases in money wages, and that has pushed people progressively into higher tax brackets-what is known as bracket creep. We, as a nation, face a very fragile and uncertain future. The economic outlook in this country and internationally is still more fraught with danger than it has been in virtually any postwar period. One has only to look at Australia's balance of payments to get the most striking example of our fragility. There is great talk by the Government about our balance of payments situation having improved in recent months. I do not deny that the current account deficit has, on trend, been decreasing. But we are talking about a decrease from a deficit ranging up to $1 1/2 billion per month, to figures which vary from month to month between about $500m and $800m. That might be a movement in the right direction, but we are still faced with an absolutely enormous, intolerable and totally unsustainable balance of payments situation. This year the current account deficit-the amount we buy from the rest of the world compared with what we sell to it-will again be about $11 billion to $12 billion. Therefore, our external debt is growing at the rate of about a billion dollars per month. It is no wonder that in the five years since the Hawke Government came to office, our debt to the rest of the world has quadrupled. When Mr Hawke became Prime Minister in March 1983, our debt to the world was about $28 billion. Today that debt in gross terms is approximately $112 billion, and in net terms it is about $84 billion, as we have mentioned in the proposed amendment to the second reading motion. Those figures are not only staggering; they are the very reason why virtually every economist and businessman in Australia says that our economy is unsustainably fragile. There is another aspect of that debt burden which has not received a lot of attention as yet but which adds to that fragility and concern. In 1983, of all our foreign debt to the rest of the world, 8.2 per cent had a maturity date of less than 12 months. By 1986 that figure had risen to 24 per cent; almost one quarter of our total debt had a maturity date of less than 12 months. In the last year or so, 90 per cent of all new foreign borrowings have been for periods of less than one year. With a situation like that, the slightest downturn in the world economy and in terms of our external situation, and any dint to confidence internationally, can have a profound effect on the situation here. What we need to be doing is shoring up our position to cope with the vagaries and uncertainties of a very uncertain international economic climate. The forecasters of the Organisation for Economic Co-operation and Development and those elsewhere in the world are almost universally predicting a slowdown of growth in the world economy in 1989, probably starting later this year. That slowdown may well have a profound effect on the prospects for the Australian economy because our prospects depend so essentially on our ability to sell overseas. If the rest of the world is not buying from us in the same order of magnitude, because of its slower economic growth, the significance for the Australian economy is profound. We should be adopting policies to take account of those uncertainties in the period ahead and also putting ourselves in a position of productivity and competitiveness that will enable us to take the advantages that exist today in many areas of the world economy and hopefully in the years ahead. Unless this Government realises that the essential prerequisite for that to occur is a reduction in the overall tax burden-not just a shuffling of the tax burden from one part to another, but getting a reduction in the total tax burden which can be achieved only by fiscal restraint of a nature that this Government seems incapable of producing-the prospect for this country, which should be great and bright and one of full opportunity for the future, will be frustrated and lost and people will continue to hurt as they have hurt and bled badly in the last five years. The policies of this Government must be changed immediately. In respect of the Taxation Laws Amendment Bill (No. 5), I move: At end of motion, add ``, but the Senate notes that: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue; (c) there will be an estimated $71 billion in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; and (e) sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than any other of its record breaking taxes; (f) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.77 billion foreign debt strait jacket without further reductions in our standard of living''. Senator POWELL(Victoria)(10.02) —The Taxation Laws Amendment Bill (No. 5) 1987 will be the subject of the majority of my remarks but, of course, we are in an allied debate on the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. The first of those Bills introduces a withholding tax exemption for interest paid to non-residents by offshore banking units. The aim is to encourage the development of offshore banking in Australia. The legislation also extends roll-over relief; that is, deferral of liability from capital gains tax for certain reorganisations of resident units trusts. It also implements measures announced on 12 January 1987 to amend the taxation status of certain eligible termination payments, especially deferred annuities. I would like to note that this legislation will be voted on more than a year after the Press release announced that changes would be made to the taxation of deferred annuities. This is yet another reminder of the problems created by government that legislates by Press release. This Bill will close a loophole which allowed persons who were not dependants to receive superannuation and other termination payments tax free on the death of a taxpayer. Death benefits paid after 12 January 1987 will be exempt from the tax only if paid to dependants. With regard to deferred annuities, the Bill will introduce a range of measures to ensure that annuities purchased with roll over eligible termination payments do not qualify for tax concessions unless they provide genuine retirement incomes for the taxpayer and dependants. The Government tells us that there will be a revenue gain of some $30m in a full year. The Australian Democrats acknowledge that these changes present some problems to people who have recently purchased variable income annuities. Again we point to problems with this sort of change in legislation which arise given a time gap between an announcement and legislation-problems which the industry and individuals attempting to plan their financial arrangements have found. But the need for governments to take this sort of action must be seen in the context of statistics, particularly from the Economic Planning Advisory Paper (EPAC) entitled Economic Effects of an Ageing Population, which was released on 1 February this year. Some of those statistics include the facts that the proportion of our population aged 65 years and over has increased from 4 per cent in 1901 to 10.5 per cent in 1986 and is projected to reach 16 per cent by the year 2025 and that the proportion of people aged under 15 has fallen from 35 per cent in 1901 to 23 per cent in 1986 and is projected to decline by 19 per cent by the year 2025. The benefits of superannuation tax concessions accrue largely to the better off sections of the population. Only 15 per cent of employees earning less than $280 a week in 1986 had superannuation cover, compared with more than 70 per cent of people earning $520 or more. Tax concessions given to the superannuation industry have been estimated to cost over $3 billion. It is worth looking in some detail at other aspects of the provision and impact of superannuation because this is an issue on which we should be spending some time, when the Parliament is grappling with the provision of financial support for an increasingly ageing population. The superannuation funds argue that with this ageing population superannuation concessions must be maintained to avoid a massive increase in social security pension payments to the aged. This is the challenge. However the question really is whether the current concessions give all Australians an equal chance to retire comfortably without receiving social security payments. At present, superannuation coverage is greatest for males, full-time workers, government employees and people with high incomes. The Social Security Review discussion paper Occupational Superannuation Arrangements in Australia found that in August 1986 only 3.1 per cent of employees earning under $120 per week were covered, compared with 71.7 per cent of those earning $520 a week or more. Going back to the EPAC report, it found that superannuation concessions would contribute $54,000 to the retirement lump sum received by a person earning the then average weekly earnings-which was a little over $22,000-for the next 30 years compared with $123,000 for an individual receiving twice that income. We should recognise that for low income people current consumption is always likely to be a higher priority than saving through superannuation. Even if they wanted it to be a priority, hand to mouth existence would make that impossible. In 1982, fewer than 6 per cent of retirees received lump sums of more than $75,000. In 1986, 49.2 per cent of all male employees, but only 25.2 per cent of all female employees, were covered by current employer-arranged superannuation. Among managers and administrators the number of women with superannuation is particularly low. When we add to that the fact that the number of women in those positions is particularly low, that exacerbates the inequity. In 1986, 21,100 females had employer-sponsored superannuation in that sector compared with 185,100 males. In 1986, 7 per cent of all part time employees were covered, compared with 46.5 per cent of all full time employees. This is a particular concern when we recognise that one of the major growth areas of employment is part time employment. Young people and mature aged women, because of the labour market oriented policies of the Government which have reduced access to social security benefits for a great many of them, are finding their way, if they are lucky, into the paid work force through part time work. Given the changes in employment patterns-part time work is becoming a greater feature-it is, of course, an enormous challenge to raise that level of superannuation cover for part time employees, if we are looking at any sort of system of equity in terms of retirement incomes. In 1986 only 16.8 per cent of salespersons were covered, compared with almost 60 per cent of managers and administrators. At the top levels of management, executives with an average salary of $300,000 a year before retirement are eligible to receive a lump sum payout of $2.1m. Such executives have an incentive to receive their salary as payment into a superannuation fund, which is not taxed, rather than as income, which is taxed. The Australian Financial Review printed a supplement for those people entitled `Setting up a Million Dollar Nest Egg'. The first sentence of the article is very revealing: For the executive with foresight superannuation offers a chance to make one salary dollar do the work of two. On the one hand highly paid executives can arrange to contribute sums of over $100,000 a year to a superannuation fund, giving themselves a tax benefit and reducing their employers' on-costs-workers compensation, payroll tax, holiday pay, and so on. A self-employed person, on the other hand, receives a tax deduction for only the first $1,500 that he contributes to a superannuation fund. Of course, this is a major disadvantage for many small businesses. According to EPAC, most superannuation benefits are taken as lump sums, not as annuities. Furthermore, most lump sums are presently taken by persons who retire early and very often are dissipated by the time, or very soon after, those people reach pension age. It is quite clear from the EPAC study why it is the case that women, in particular, are not very well covered by superannuation. It is a function of the inherent discrimination and inequities which still exist in work patterns. I referred to the figures regarding salespersons as opposed to managers and administrators. It is purely and simply a fact that, while more women are entering the paid work force, the distribution of women within the paid work force is still in the lower paid areas, not in the decision making, managerial, administrative areas. Their superannuation cover is, as a consequence, much lower. This legislation attempts to address some of the issues in a very minor way. The big issues of what happens regarding superannuation are still before us. The Democrats acknowledge that, in those provisions of the legislation, the Government is going some way towards tidying up some of the loopholes. Certainly, we place on the record our concern for equity within the system. We support a national portable contributory superannuation scheme. We recognise that that is some distance down the track. But those issues of equity, in the decisions that we will make regarding further moves by Government in this area, will always be at the top of our agenda. Other measures in this legislation cause us some concern-in particular, the measure which extends the eligibility of shelf companies to take advantage of tax minimisation concessions. The Democrats have been alone in opposing these sorts of systems which are still available to the corporate sector. Last time this type of provision was before us we attempted to amend it. The unholy alliance of Labor, Liberal and National parties defeated that amendment. It seems to have become an exercise in futility for the Australian Democrats to attempt to do anything which will reduce the rip-offs that are available to the corporate sector. It is very interesting, in the context of the tax debate-and, since we are debating two taxation Bills, it is extremely relevant-to look at what is happening. I will give some indication as to the reasons why the Australian Democrats will not support the second reading amendment of the Opposition, an amendment which refers to the Government being a high taxing government, incentives, the need to invest and work productively, and so on. Neither the Opposition nor the Government is really attacking, as I say, what amounts to a corporate tax rip-off. We have, as I believe Senator Short pointed out, reached a situation where personal taxpayers are shouldering more of the tax burden. Nobody can disagree with that; it is a matter of record. What we should do about it is really the issue. The income tax share of total tax receipts rose from 34.3 per cent in 1965 to 45.1 per cent in 1985, while at the same time the corporate tax share fell from 16.2 per cent to only 9.2 per cent over the same period. Measures such as those contained in this legislation to which I have referred do not help. I totally endorse the headline of an editorial in the dear departed Times on Sunday of 9 August 1987 which read `Corporate tax avoidance a major scandal'. I remind the Senate-it ought to need no reminding-of what is happening in that area. The statistics which I will cite are taken from an article, whose headline I heartily agree with, in the Sydney Morning Herald on 31 October 1987, headed `Why we desperately need the Government's tax review'. I must say that I was enormously relieved that the tax review continued subsequent to the stock market crash. I recall that at that time I and some other politicians-and, to their credit, some Australian Labor Party backbenchers-pushed for a wealth inquiry in Australia. I recall that during the weeks after the stock market crash people were virtually saying, `Well, we don't need a wealth inquiry now; the poor things hardly have any money left'. I assume that we were supposed to feel sympathy for someone whose wealth may have dropped from, say, $17m to about $7m. I did not share that sympathy. At least the Government has gone ahead with its tax review. If the corporate tax review is properly conducted, it seems to me that it will answer many of the questions which were being asked by those of us who believe that we need an inquiry into wealth in Australia-subsequently that issue has been taken up by the Roman Catholic Church; I am very pleased to see that that is happening-and reveal some of the issues surrounding the accumulation of wealth in Australia and the maldistribution of income in this country. Some statistics in the Sydney Morning Herald deal with this matter. I do not have with me the statistics for the year before last, but I do know that in that year the Adelaide Steamship Co. Ltd was able to manage to pay more than one per cent in tax, but in the last financial year it was able to pay only 0.18 per cent in tax. That was the lowest corporate tax payment among Australian companies. It is interesting to look at the list of the lowest taxpayers among companies. Industrial Equity Ltd is mentioned in the list as paying 4.08 per cent in tax. It is interesting that Westfield Capital Corporation paid 4.24 per cent; Northern Star Ltd, 4.40 per cent; and News Ltd, 12.22 per cent. These companies are all part of a certain industry-the media industry. They are having a fairly good time at the moment at the hands of the Government. Of course, the Opposition is keeping very quiet about it at the moment. The Bond Corporation, which is also in that industry, paid 8.95 per cent in tax. Yet the corporate sector is screaming about disincentives. It is screaming, `We aren't able to be competitive', and, `This is a high taxing government.' But as far as it is concerned, that is just a myth. That is why the ordinary pay as you earn taxpayer and, I might add, people on social security pensions and benefits-people dependent on the community as a whole for any income at all-are in fact paying out more by way of tax, or effective tax in the case of social security beneficiaries. We should recognise that, because of the low level of the tax threshold, even aged pensioners with minimal extra income, usually from a meagre investment of their total life savings or an investment representing their total life's work, are at the moment having to pay tax at a very early stage after they receive some additional income. These are issues which are not addressed by measures such as that to extend the eligibility of shelf companies which can then get involved in transfer pricing, which is one of the measures available to companies to enable them to fall so far below their actual 49 per cent tax rate. We hear that Australia is a country which is highly taxed. However, once social security levies are borne in mind and excluded, Australian companies actually enjoy the second lowest tax burden of Organisation for Economic Cooperation and Development countries. The only other country in which overall corporate taxes are lower is Turkey. It is for this sort of reason that we really cannot support the attachment by the Opposition. I have not mentioned in my list of corporate non-taxpayers Elders IXL Ltd, the company headed by John Elliott. We should note that that company not only is doing well, but is also doing well in comparison with the past. Elder Smith Goldsbrough Mort Ltd in 1981, when it was still a pastoral industry based company with a net profit after tax of $34m, paid more tax than the newly-restructured Elders IXL did recently when it had a net profit after tax of $209m. The extension of eligibility in the area of transfer pricing in this legislation really is one issue about which we are very unhappy. I would like also to mention something else which has not attracted either any action by the Government or negative attention from the Opposition but which has cost Australian taxpayers a lot of money in recent times. I refer to the Broken Hill Proprietary Co. Ltd (BHP) takeover madness. One would not particularly want to single out just one company. The whole issue of takeovers and the negative gearing available to corporations on their overseas borrowings is one which is costing us all dearly and about which nothing is being done. I might add that takeovers characterised as investment, which is mentioned in the Opposition's attachment, are certainly not productive investment. The BHP takeover issue was thoroughly canvassed by the Leader of the Australian Democrats, Senator Haines, at the beginning of February this year. She pointed out that the series of transactions that have taken place added probably over $9 billion to Australia's overseas debt and have cost the taxpayer $680m in revenue. Bell and its associated companies have been buying BHP shares since 1983. Assuming an average cost to Bell of $8 a share, its recent holdings of some 466 million BHP shares in January 1988 would have cost the Bell group approximately $3.7 billion. Elders paid $1.7 billion for BHP shares in April 1986. Of course, this deal was to counter the Holmes a Court push. In the same deal BHP purchased $1.2 billion worth of Elders shares. It is all rather incestuous, is it not? In January 1988 there was the announcement which required BHP to spend at least $2.8 billion to buy back BHP shares from Bell and Elders. And on it goes. It is this kind of exercise which is not being addressed, which, as I say, is costing Australian taxpayers a great deal of money, and which is increasing our foreign debt, about which we are all concerned. Unless something is done in regard to these sorts of moves we will continue to face an enormous foreign debt. What concerns the Australian Democrats is the way in which that problem of our foreign debt, and of taxation issues generally, is approached by both of the majority conservative parties in this place. Perhaps the latest of the rather amazing exercises in that area is, of course, the renewed debate on a consumption tax. The arguments are all there. I must say that I am aghast at the gall of the President of the Liberal Party of Australia, Mr John Elliott, in presenting himself as the leading proponent of the introduction of a consumption tax. When we look at the situation in regard to his corporate entity and his corporate colleagues and the impact they are having on our foreign debt, which they use as an argument for restructuring our taxation situation, it seems to me-and words almost fail me-to be quite extraordinary that someone in that position should be promoting such a tax which is totally regressive and which impacts with most damage on the low income people in our community. Some of those people, including Michael Short in the Melbourne Age yesterday, argue in favour of a consumption tax. In the first of the Melbourne Age series of articles on consumption tax Michael Short said. Adjustments in the social security system can easily compensate the poor. That is an argument which is so full of holes that it carries no water; certainly those people who are on social security benefits can be identified-and goodness knows where the proponents of this tax think the Government will get the money from-and perhaps they could be compensated. They would have a special card or, again, maybe a tattoo on their foreheads so that they could line up in the poverty line and be compensated! I question the morality of that sort of approach. However, there is an enormous sector of hidden poor in our community. That is beginning to be recognised. Low income people in the paid work force, particularly single income families with children-and the more children, the more difficulty-are difficult to identify as poor, because poverty involves more than simply the amount of money that comes into a household or into an individual's hands. Poverty is determined by far more factors than that. Just last weekend the Institute of Family Studies held what I believe was a very successful and important two-day conference in Melbourne addressing the issue of children in poverty and raising these very important issues about the poor in our community. One of the key features of that two-day conference was the recognition that poverty extends through a wide range of people's experience and impacts on people in a number of ways and that it is more than simply the amount of money listed as income for a family or individual. Poverty is also related to their access to community infrastructure supports such as education, health, transport, child care and community services generally. At that conference, at which there was presented a series of very important papers which I would urge all in this Parliament to look at closely, there emerged the recognition that for a great many people, in particular children but not only children-although the majority of these people are women and their children-the lack of access to public education, child care, health, transport and community services generally or, if they have access, the very low level of such facilities and the inability of those public services to serve their needs because of funding cut-backs or because of lack of commitment by the community, or by the Government representing the community, to high quality in those areas means that they are more disadvantaged, even though they may appear not to be below the Henderson poverty line or any other poverty line. When one adds together all the disadvantages that exist in the community one sees that a great many people are disadvantaged. For them the outrageous suggestion of a consumption tax would be the last straw. We need to recognise that it is these people-the number is growing, to our great discredit-for whom the consumption tax is insupportable. We have to realise that consumption means spending. Almost 100 per cent of the spending of these people is on essentials such as food, clothing, shelter and transport-the very necessities that they need to conduct their daily lives. For the John Elliotts of this world a consumption tax would simply mean that their families or their colleagues would have to cough up only a little more cash, not only for the essentials of their lives but also for their luxuries. It is interesting to see where everybody stands in this debate. This tax should be rejected out of hand as the Australian Democrats reject it out of hand. It is totally regressive. There can be no moral basis whatsoever for it. Whenever this debate arises in this chamber and on other occasions it is rather sickening to hear members of the Opposition complaining about the current sales tax regime and saying that we should not have tax on juice and milk and all those things. However, when those things were taxed in the Budget they were the ones who sat with the Government and allowed those taxes to be implemented, against the lone voice of the Australian Democrats. We stand firm against that sort of iniquitous taxation. We do now and we always will because we understand that there are hidden poor out there in the community and we are not prepared to go with the John Elliotts of this world against those people who are struggling in a hand to mouth existence. Senator WATSON(Tasmania)(10.32) —The Senate is debating two Bills, the Taxation Laws Amendment Bill (No. 5) 1987 and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987. They are essentially patch up Bills. What we are seeking to do today is to get something partially right which the Government has previously got manifestly wrong. The title of those Bills acknowledges that there have been mistakes. the Taxation Laws Amendment Bill and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1987 are, by their titles, manifestations of the previous mistakes of this Labor Government. What we have before us is merely bandaid treatment to patch up something which has gone wrong. If the Australian Labor Party listened to some of the debates and read some of the reactions in the newspapers to the legislation it proposes it would not get it so wrong and legislation such as that before the chamber today would not be necessary. It puts taxpayers in great difficulties when legislation is passed which is incomplete and inaccurate and which has unintended consequences. The legislation we are dealing with today acknowledges the haphazard approach to the preparation of tax laws by the Australian Labor Party. Taxation laws in Australia, unfortunately, have become intolerably complex. The legislation before the Senate today is an acknowledgment that the labyrinth of legislation is continuing to grow at an alarming rate. Let me give some of the figures. At the beginning of 1985-86 the Income Tax Assessment Act had grown to almost 1,500 pages from only 81 pages when the Act came into force. Not only has the legislative content increased but also the taxes on the ordinary person, including the lower income earner, have risen at unacceptably high rates to such an exorbitant level that the ordinary working men are now deserting the Labor Party in droves because of the taxation imposed upon their pockets. Keating's hand is in the ordinary working man's pocket. Let me give an example. Only a few weeks ago when I was talking to a shearer he was complaining about the high tax rates. In fact, he was advocating a move towards a flatter rate of taxation, Madam Acting Deputy President-something that your husband had been advocating some time ago. I do not necessarily go 100 per cent along the way of a single flat tax but we do need lower rates of income tax. This shearer said, `Mate, I can no longer afford to vote for the Labor Party'. So the backbone of the Australian Labor Party, the Australian shearing movement, has a representative saying that he can no longer afford to vote for the Australian Labor Party because of its taxation policies, because Keating's hand is now so deep into all their pockets. I think the legislation should be so written that it can be understood by the ordinary person in the community, but this is not the case. Senator Robert Ray —Don't you understand-- Senator WATSON —I would challenge Senator Ray, with all his intelligence, to explain a few provisions of the Income Tax Assessment Act. I defy him, with his intelligence, not to have difficulty comprehending some of the changes. I will give some examples for him to respond to later in the debate. At the time of the Tax Summit back in 1985 there was a lot of enthusiasm for the Tax Summit, tax reform and simplified income tax laws. In fact ideas of dramatic changes to the Australian taxation system and a simpler tax system that more Australians could understand were warmly applauded at the time, and rightly so. I remind the Senate that here we have another area of broken promises because three years down the track all we have is an intricate and ambiguous system of taxation that ordinary Australians cannot hope to comprehend. But what they do know is that they are paying more tax than they did then. Time and again the Liberal-National Party Opposition has had cause to condemn the Labor Party because of its attitude in creating a maze of taxation legislation which is excessively complex. Let me remind the Senate of a few statistics. Between January and December of last year innumerable tax Bills, amounting to hundreds and hundreds of pages of new legislation, were brought before the Parliament. This meant more and more taxes and the deeper and deeper Keating's hand went into all our pockets. Yet today we are again faced with another package of Bills that include over 20 significant amendments-change upon change. We are looking down the barrel of yet another year of Mr Keating's so-called tax reforms to make the system more complex, whereby the ordinary person cannot hope to understand it. The Labor Party is at least starting to acknowledge that company taxes are too great. There is a lot of money that should be invested in Australia but, since we have about the highest corporate tax rates in the world, the funds are staying out there when they could quite well be used productively here. Senator Maguire —That is rubbish and you know it. It is one of the lowest in the world. Senator WATSON —I ask Senator Maguire to say what the Government is going to do. It is going to tax superannuation funds to fund reductions in company tax. It is quite immoral to do that simply to reduce the tax burden of the corporate sector. It would be taking the money from one entity, the ordinary individuals who plan long term savings and put money into superannuation, in order just to give the companies much needed tax relief. That is quite immoral and that is the whole approach of the Government's discussion in relation to so-called tax reform. No wonder the ordinary working person, the ordinary Australian, is rebelling against its taxation reform. As I said, we are faced with 20 significant amendments to legislation. The Government has set the ball rolling. Keating has started the so-called softening up process. It is true that company tax rates are far too high. There is a need to reduce the company tax burden from the current 49 per cent, but the Government's methods of financing such a reduction are quite corrupt. Such statements as the Government has been making only cause further damage to sound investment programs which are so vital and necessary to the recovery of the Australian economy. We speak of high taxation rates under this Government. Already under this Hawke Labor Government we pay more tax as a proportion of the rewards for the Australian productive effort than we have ever paid before. That is very significant. What has that meant? It has meant a high cost of living for ordinary, average wage earners. It is not surprising that there is a constant demand out there in the community-a community which is ignored by this Australian Labor Party Government-for lower and lower taxes. We must protect the standard of living and bring about a significant restructuring and lowering of taxes in Australia. Recently I have noted with interest that a correspondent from the Australian Taxation Office has brought out a sparkling new slogan-`Taxes-building a better Australia'. In other words, higher taxes. Here again is another manifestation from an arm of government-the Australian Taxation Office-acknowledging the Labor Party's philosophy that higher taxes are better for the people and better for Australia. The ordinary working man says that this is not the case. The ordinary working man says that not only has the Taxation Office got it wrong, but also the Australian Labor Party has got it wrong. Higher taxes do not necessarily build a better Australia if they reduce the living standards and the disposable incomes of ordinary people, who cannot afford to pay. I think that it is quite intolerable. I believe that the Treasurer (Mr Keating) and the Minister for Finance (Senator Walsh) should start talking about rewriting the income tax Act in order to make it work more efficiently and so that it is more understandable. The tax Act is now riddled with so many unintended consequences. One is required to refer not only to the Act but to a whole myriad of regulations and rulings put out by the Australian Taxation Office. These Bills are an attempt to try to patch up some of the difficulties. The amendments before us testify to the inability of those who attempted to frame the laws in the first place-that is, this Labor Government-to get them right. There are now in excess of 2,500 taxation rulings and that is in addition to the 1,500 pages of complex income tax legislation. More and more people have to pay more and more money to tax accountants just to find out what is going on. Even the professionals have trouble in isolating the true meaning of the law. Senator Robert Ray is not alone in his problems of comprehending some of the intricate details, because even the tax professionals cannot understand the myriad of details. We have to look beyond the tax law, the case law, the regulations and so on. Let me give the Senate a fairly simple example. A lot of people invest in what are known as 10-year investment bonds. Because of the changes in negative gearing and so on, it is possible to finance this through negative gearing. We all know that if the bond remains invested for 10 years, it is cashed tax free. If it is cashed earlier, there is a taxation element. This is commonly understood by those investing in such bonds and such investment is a commonplace practice. Unfortunately, neither the tax accountants nor the Taxation Office can say whether the interest paid on this negatively geared financial arrangement is tax deductible. So common are the problems in the implementation of our highly complex laws that the Taxation Office has again found it necessary recently to establish a `problem resolution program'. That in itself is a mouthful. This program has been established within the Taxation Office so that one section of that Office can liaise with another section on behalf of those hundreds of thousands of taxpayers who are now desperately in trouble because they cannot understand and do not know what the law is. As a result of this situation they are paying penalties. I am sure that everyone in this chamber and everyone who is listening to this debate has some experience of the long waits and problems in this area of taxation. One of my constituents, whose accounts for the 1986-87 period have been recently subjected to a taxation audit, has yet to receive his assessment for three years earlier. I must say that I do not like this approach. If the Australian Taxation Office is going to investigate, it should investigate; if it is going to audit, it should do so. It should not leave people hanging, waiting for up to three years before they can find out what is happening. Another small-businessman had to wait up to six months between an official notification from the Taxation Office that he would be audited and the time that the job was eventually done. That is not a particularly good situation to be in. In the interim such people are prevented from making many decisions which are necessary for their survival in the business world as a result of this audit hanging over their heads. So other inequities in the taxation system also place considerable burdens on small business people. I turn to the prescribed payments system which now requires a contractor to deduct 15 per cent for tax. This 15 per cent is not only deducted from the wage component but also from the material component of a subcontractor. This may occur where there is a set legal contract to supply materials and labour and there is no separate contract. The separate account appears to be insufficient evidence of an individual contract as such. Thus, there are problems with the Taxation Office in the nature of the contract. The effect of all this is that the supplier of the goods loses 15 per cent, not only of the cost of the labour he provides but also of the cost of the materials he provides. In addition, he is also caught with provisional tax bills as well as the prescribed payments tax. In the area of prescribed payments, assessments are being issued in certain circumstances which do not have a full legislative authority. I refer to situations where the taxpayer is in receipt of small salary income, from which instalment taxes have been deducted, in addition to prescribed payments. This is a situation where the Taxation Office is working ahead of the legislative requirements. I believe this is fairly serious. Far more serious is the fact that the Taxation Office has adopted the tactic of deducting provisional tax instalments from refunds that are due to the taxpayer even before the due payment date. Again, that is not right; it is quite wrong. What is needed is a thorough examination of this whole field of taxation legislation with a view to streamlining and consolidating the law rather than accepting the current practice of tacking on unsatisfactory amendments, as the Government is trying to do in the Bill before the Parliament today. The administration of the tax law has now become so cumbersome and the Australian Taxation Office resources are so stretched that the system is near to collapse. I am not indicting the Taxation Office because it has some very dedicated officers. I am concerned about the intolerable position in which the Government has placed the Australian Taxation Office in making it a vehicle for its own propaganda and stretching its resources to such an extent that the Office is near to collapse. Let us look at this so-called taxation reform that we have before us. Just look at all the new imposts-fringe benefits tax, capital gains tax, company dividend imputation, quarterly provisional tax. It all leads to the creation of chaos and intolerable backlogs because the Australian Taxation Office has difficulty in administering the law. There are also difficulties with the administration of returns caused by this complex legislation the Government is putting through. I am not blaming the Australian Taxation Office because it has been put in a intolerable position. We have to acknowledge as an Opposition-it is our responsibility to point it out-that there are major difficulties with the processing of returns, largely because of the strain on departmental resources. Let me describe some of the problems. Final notices are being sent out after assessments have been paid. Assessments are also being sent out for amounts which are not yet due for payment. Refunds are being held to be offset against future instalment fees. The problem is that the Taxation Office needs a new computer. Its computers are incapable of handling the myriad of changes. But the consequences fall on the ordinary taxpayer. The explanation that all these problems are the fault of the computer is not good enough. The problems must be sheeted home to the Australian Labor Party. It has failed to provide the necessary resources. I acknowledge that the Taxation Office is re-equipping its computer system. The Joint Committee of Public Accounts, of which I am Vice-Chairman, is assisting in this process in such a way as to make sure that the rights of ordinary individuals are not sat upon. Difficulties arise in regard to the location of suitable computer personnel. Surely the Government has to acknowledge this difficulty rather than just trampling on people's rights. We are now beginning to feel the burden of this Government's haste to implement its so-called tax reform-tax reform which is biting deeper and deeper into ordinary people's pockets. Hasty decisions have been taken without due regard to their final consequences. The haphazard drafting of legislation has meant that time and again legislation has had to be reintroduced into this place to get it right. In December last year over 60 pages of amendments to fringe benefits tax legislation were passed by this Parliament simply to get right what the Government had earlier got wrong. In that month also a Bill was passed to remedy technical and drafting defects in the Occupational Superannuation Standards Act which had been in the Senate only a few weeks before. Why the amendments were not made before the legislation was passed by both Houses is unexplainable. Senator Messner —How many pages in the tax Act? Senator WATSON —There are 1,500 pages of legislation and over 2,500 rulings. I can put it down only to the haphazard approach this Government has taken towards taxation legislation. We have seen the decision to reverse the negative gearing measure, which followed its disastrous impact on housing, particularly in New South Wales. It is interesting to note that the 1987 decision to increase company taxation is now under review-another acknowledgment by the Government that it got it wrong in the past. These changes are welcome. However, they would have been unnecessary if the Government had got it right in the first place. The Government was warned by the Opposition and by the ordinary man in the street, but it would not listen. It has deaf ears. That is the price this Government has to pay for its so-called taxation reforms. One of the objects of the Taxation Laws Amendment Bill (No. 5) 1987 is to remedy taxation of lump sum superannuation. The changes to consolidate the tax concessions available to someone who has benefited from a deceased person's superannuation entitlements are reasonable and, naturally, will be supported by the coalition. We support these amendments because they are an attempt to get the situation right, but we do so with an amendment, reminding the Government of its responsibilities to the electorate. In the near future there are to be even more changes. The Prime Minister (Mr Hawke) has assured us that any changes in taxation relating to superannuation funds and benefits will not be retrospective. That is a great promise, a great undertaking. Senator Robert Ray —You voted for retrospectivity in 1982. Come on, come clean. Senator WATSON —Not in relation to superannuation. The honourable senator knows that it was an entirely different thing. That is how hypocritical Senator Ray is-he tries to put the whole matter out of context. He tries to confuse this area of taxation and muddy the water so the ordinary person out there believes that there is some confusion. If there is any confusion, any misunderstanding, it comes from the Australian Labor Party because its members are hypocrites of the first order. The Treasurer said the other day that it is reprehensible to talk about extending consumption taxes. But what is the Government's record in sales tax, which is a consumption tax? It has extended it sinisterly. It is getting more money from this form of consumption tax and it is going to extend it to an even greater range of goods. Yet it will piously say, `We are not doing anything about a consumption tax' when all the time it will be moving in the direction of getting more and more money from indirect taxation, it is using the consumption tax lie to get more money from sales tax. It is on the Government's secret agenda. Let its members get up and deny that the Government is not going to extend it further, and to services as well. What has this Government done in relation to petrol excise indexation since it came to office? The ordinary motorist knows full well that this Government has taken more from the petrol pumps than any previous government. It is responsible for increasing the price of petrol through its indirect system of taxation, quarterly indexation and so on. So let us not hear pious statements from the Government that it is against forms of indirect taxation, that it is against consumption taxes. It is using the vehicle that already exists-the sales tax legislation-to get more and more money. Government members should not be the hypocrites that they are. They really have soiled linen in the consumption tax area. There are to be even more changes. There is no justification for taxing superannuation funds or benefits to finance cuts in ordinary company taxation rates. The benefits of superannuation funds flow primarily to individuals, and they should remain with individuals and not be transferred to the corporate sector. It is nothing short of immoral that the Government has collected $1.2 billion in taxation over and above the original Budget estimate. It deliberately understated its figures when it put the original fringe benefits legislation through. The Government is now contemplating taxing retirement benefits to fund reductions in the company tax rate. Despite Treasurer Keating's claim back in September 1985 in his speech on the reform of the taxation system that `the Government's tax reform exercise is completed', we have continued to see legislative change after legislative change, month after month, year after year. How much longer will the Australian people be hoodwinked by statements such as the Treasurer's statement on tax reform? All the time the tax system is becoming more complex and the Treasurer is taking more and more money, both by direct and by indirect methods. It is time that Australia woke up. It is time that we had a simplified taxation law. It is time that the Government started putting money back into the pockets of ordinary Australians. The Labor Party must come clean. With the Taxation Laws Amendment Bill (No. 5) we are faced with another element of retrospectivity. Whilst the changes in the rules relating to roll-over annuities are on the surface quite acceptable, they are yet another example of the Treasurer's penchant for legislation by Press release and an indication of the Government's contempt for the power of the ordinary parliamentary processes. We have seen plenty of examples of that. The facts are that many people do not have access to the original Press statement so that they have to go running to their tax accountants to get details of this complex area of tax legislation. Their plight is merely brushed aside by the Treasurer. But he is not alone in his behaviour. On the other hand, if the taxpayer puts a foot wrong, albeit quite innocently, heavy penalties fall upon him. We seem to have moved to a situation where the ordinary person of Australia is guilty until proven innocent in regard to taxation law. I recently became acquainted with a case involving a 78-year-old man who suddenly got a tax bill which was quite out of line and character with his income. A mistake had been made as a result of the keying in of certain figures. He wrote to the Australian Taxation Office and objected. Instead of receiving an apology, he was sent a letter saying that if he did not pay the specified amount of money, which he did not have and which was about 10 times his true assessment, he would be subject to a harsh range of penalties. This was cold comfort for a 78-year-old gentleman with a heart problem who had never been subject to a traffic fine in his life. I must say that to the credit of the Taxation Office it speedily rectified the situation when I brought this matter to its attention. But just think of the hundreds of thousands of people who find themselves in the position of having to pay a tax because of an error for which they are not responsible but is a result of a keying error made by someone else. Our tax laws are in a shambles and the Labor Party has to take responsibility for this. I would have liked to have spoken on a number of problems surrounding changes proposed by the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill. Unfortunately, my time has almost expired. The Government must move away from tinkering at the edges with the corporate tax review and make clear its intention to reduce significantly all tax rates in Australia to put more money back into the pockets of ordinary Australians. Senator MICHAEL BAUME(New South Wales)(11.02) —I rise to support Opposition speakers, particularly Senator Watson, who has just resumed his seat. The Senate is examining yet another package of Government tax legislation. It seems impossible for one parliamentary session to pass without the Government fiddling with the tax structure which it has already imposed upon Australians. As Senator Watson said, we now have a tax Act of something like 2,000 pages. Senator Watson —One thousand five hundred and 2,500 rulings. Senator MICHAEL BAUME —I thank Senator Watson-a tax Act of 1,500 pages and 2,500 rulings. Under this Government, printing the tax law is probably the biggest growth industry in Australia. Senator Short has, quite properly, moved an amendment to the Taxation Laws Amendment Bill (No. 5) 1987-this latest piece of tax law to be introduced by this Government. The amendment, which I strongly support, states: At end of motion, add ``, but the Senate notes that: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue; (c) there will be an estimated $71 billion in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; and (e) sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than any other of its record breaking taxes; (f) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.77 billion foreign debt strait jacket without further reductions in our standard of living''. That amendment sums up precisely the sorts of problems that this Government has imposed upon the Australian people through its booming tax laws, through its booming tax collections and through its imposition on ordinary Australian families of an intolerable tax bill. Unfortunately, Senator Short's amendment understates the seriousness of the problem. Senator Short, as an honourable man, has taken the Government's word for it when he talks about how much more tax will be collected this year. In fact, we now know that Senator Short's amendment massively understates the amount of tax rip-off this year. This can be established clearly by looking at the latest release from the Minister for Finance (Senator Walsh) which reveals that tax collections this year are far ahead of the Budget forecast. It reveals that the Government was pulling our legs when it said in the Budget that taxes would rise only by a modest amount and that, as a result, we would find that taxes as a proportion of gross domestic product (GDP) would fall from last year's record level. All of that is now absolute bunkum. The statement released late last month by the Minister for Finance, which I might say got very little Press coverage, reveals that tax revenue for the month of February was 13.4 per cent higher than in February last year and that brings total revenue for the first eight months of 1987-88 to $46.6 billion. That amount is 13.4 per cent higher than for the corresponding months of the previous year. Tax revenue increased by 14.5 per cent. These outcomes are far higher than the Budget forecast that income tax would rise by something like 9.2 per cent this year. Instead, so far it is up 14.5 per cent. If you like, this is another broken promise. As Senator Watson said, there is no doubt that this Government has a hidden agenda of secret tax rises which it is not prepared to face up to honestly in its Budgets but with which it hits the consumer and the taxpayer in a way that is supposed not to be noticed. So the statement in Senator Short's amendment that tax will equal 24.5 per cent of gross domestic product is, of course, not so. Tax collections will at least exceed last year's record taxes. Last year 24.8 per cent, or just under one-quarter of gross domestic product in this country, went in taxes. That record level will be exceeded this year. The Australian Labor Party has managed to have record levels of tax collections every year. It is sneakily doing so again this year, although it proudly said that it would not. As I said, this is part of the Hawke Government's secret agenda of belting the ordinary people of Australia with the highest tax bill that they have ever had in their lives, not only in money terms but also as a proportion of their incomes, as a proportion of the domestic product of this nation. What are the facts as we now see them? As I have said, the Government's trilogy of promises to reduce the tax burden has clearly been broken over and over again. Promises made at the last election have been broken again. The commitment that was made in the last Budget has been broken again. Of course, we are now hearing the greatest hypocrisy that is possible from any government in the discussion about consumption tax. So far I have spoken only about income tax and how the Government has sneakily increased the income tax burden. Everyone is used to the situation where income tax seems to go up sneakily all the time because inflation pushes taxpayers into a higher tax bracket. Suddenly people find that their pay rise results in a far greater tax rise. This Government, in particular, quite enjoys inflation which increases its tax revenue and helps to solve some of its problems. We keep hearing that the Government has been terribly clever in cutting the Budget deficit. Let us recognise this: it is not the Government that has cut the Budget deficit; it is the taxpayers of Australia who have done so. After one takes account of inflation, there has still been a 13 per cent real rise in government spending under this Government. In other words, despite all of the rhetoric about cuts, under this Government government spending has gone up by something like 13 per cent. This means, of course, that the poor old taxpayer not only has had to pay for this increased spending in increased taxes, but also he has had to pay for cutting the deficit. In other words the Government, instead of doing the right thing and cutting the deficit as a responsible government would by cutting its own spending, has belted the taxpayer over and over again. There has been something like a 25 per cent real increase in tax collections-an intolerable burden on the Australian people. Let me get back to the Government's hypocrisy about consumption taxes because it is there that the most insidious, the most secret, tax rip-off has taken place. As I have said, we all know and expect, particularly under this Government, that if we get a pay rise we get pushed into a higher tax bracket and, therefore, the Government's tax collections go up. As the Niemeyer statement said, that so far this year tax revenue is up about 14 1/2 per cent as against last year. I remind the Senate that the Government says that inflation will go up by only 6 per cent this year. Taxes are going up at more than double the inflation rate. Senator Messner —The Budget estimate was only 8 per cent. Senator MICHAEL BAUME —As Senator Messner says, the Budget estimate was only about 8 per cent. The Government has clearly set out on a course of understating what the tax effect of its Budget will be and is secretly belting Australian taxpayers in a dishonest and dishonourable way. How dishonest and dishonourable is it on consumption tax? The way in which the Government's Prime Minister (Mr Hawke), Treasurer (Mr Keating) and Minister for Finance (Senator Walsh) talk, one would think that there was no such thing as a consumption tax in Australia now. Let me tell the Senate that consumption taxes already exist, as everyone knows, and that they are Australia's fastest growing taxes under the Hawke Government. So far this financial year, revenue from sales tax-sales tax is the biggest of the consumption taxes that have spread throughout Australia-has risen by 18 per cent, which is three times as fast as the inflation rate. The consumption tax rise, through the sales tax, has been faster than for all the other booming taxes under the Hawke Government. Senator Short —That takes some doing. Senator MICHAEL BAUME —As Senator Shorts says, it takes some doing to outpace the booming rise in income tax, for example. Income tax has gone up by 14.5 per cent. Sales tax-the consumption tax which the government pretends it does not have-has gone up by 18 per cent. There is no doubt that a little of that 18 per cent rise is due to the fact that that consumption tax has been extended to some government instrumentalities. But who ends up paying the consumption tax that government instrumentalities pay? Of course it is the people of Australia. Senator Parer —The average weekly earner. Senator MICHAEL BAUME —The average weekly earner. That burden is certainly on the Australian people. What hypocrisy it is when not only is this Government pretending that it does not have a consumption tax but that tax is increasing at an even faster rate than the rip-off that all Australians are paying through their hip pocket in income tax. Senator Short —A lot of it is indexed too. Senator MICHAEL BAUME —As Senator Short says, many of those increases are indexed, so they happen automatically. As every beer drinker knows-- Senator Patterson —It creeps up. Senator MICHAEL BAUME —Senator Patterson makes the appropriate point that the tax keeps creeping up. This style of government has meant that this 18 per cent sales tax rise is about 50 per cent higher than forecast by this Government in its Budget. In the Budget the forecast was 12 per cent. It is now running at about 18 per cent-a 50 per cent difference. It takes a lot of effort to make a 50 per cent mistake in a Budget forecast. The Government is half wrong. We on this side of the House wonder whether that mistake was not terribly convenient and whether it did not dress up the fact that this Government was setting out on a secret agenda of increasing consumption taxes while it was protesting that it did not have any. Sales tax, a consumption tax, will now total about $7.5 billion, whereas the Budget said that it would be only $6.3 billion. The honesty of this Government is being exposed by the figures of its own Minister for Finance. As a result of the disgraceful performance in the current year, sales tax-sales tax is the biggest consumption tax among the many this Government has-has more than doubled, largely by stealth. It has gone from $3.5 billion in the last year of the Fraser Government to $7.5 billion this year. It has gone up by $4 billion-more than doubled. In fact, it represents a 110 per cent increase in the consumption tax which this Government says it does not have and is opposed to. This 110 per cent boom in sales tax is almost three times higher than the inflation rate during that period, which was about 39 per cent. The Government cannot say that that increase is due to inflation only; it has increased three times faster than the inflation rate. No wonder many unions take the view that, if it is good enough for the Government to increase its income at a rate faster than that of inflation, why should some trade unionists not seek to try to maintain their income with the inflation rate? If the Government is genuine and honest in its approach to unions asking them to impose restraint, why has it not imposed the same sort of restraint on its own rip-off of the people? As I have said, under this Government, consumption taxes have risen three times as fast as inflation. In that time, wages, salaries and supplements have gone up by about 50 per cent as against the consumption tax rise of 110 per cent. The rise in this sales tax rip-off is more than double the rise in wages. If one looks at the official statistics on the level of consumption in Australia, one will find that private sector consumption spending rose by about 60 per cent. So sales tax has risen by almost double the level of consumption. Is that not extraordinary? How can consumption taxes rise at almost twice the level of consumption? The answer is simple. It is because this Government has a secret agenda of ripping off Australian consumers with a sales tax while pretending that it is totally opposed to consumption taxes and that it does not have them. This is the most arrant and arrogant hypocrisy of which any Government could be accused. While the Prime Minister, Mr Hawke, expresses synthetic horror at any proposal to introduce a consumption tax, his Government has hit Australians with the highest level of sales tax-of course, sales tax is the ultimate in consumption taxes-in our history. In the Fraser days, sales tax made up only between 6 and 7 per cent of the total tax burden. Now, under the Hawke Government, instead of 6 or 7 per cent, it is about 10 per cent of the total tax burden, having risen at a far faster rate than all of the Hawke Government's other booming taxes. Sales tax is only one of the very wide range of consumption taxes which Australians have to pay. Excise hits beer drinkers and motorists. Anyone who fills up his car with petrol recognises that the greatest proportion of the price of a litre of petrol goes in tax to the Government. In addition, there are import duties and tariffs. Recently I noted that a report suggested that the level of import duties and tariffs in Australia equals another $7 1/2 billion in a secret tax on Australian consumers. However, I have not included that in my concern about that 110 per cent increase in sales tax. So we have import duties and sales taxes hitting the buyers of cars, refrigerators and televisions, adding in these particular instances something like 30 per cent or more to their cost. This Government does not agree with consumption taxes; it says they do not exist. Yet it makes these extraordinary secret additions to revenue by way of these consumption taxes. At the same time as this secret consumption tax rip-off has been taking place, income tax has also gone up. Under the Fraser Government income tax totalled about $28 billion. Under this Government it is now about $50 billion. This lifts the overall tax bill under the Hawke Government by something like $30 billion, to well over $72 billion. This income tax increase as well as the Government's indirect taxation, including its consumption tax, all taken together have meant a far faster rise in taxation than the rises in either inflation or wages. It represents a real increase in the total tax burden, after we take inflation into account, of about 25 per cent. As I said earlier, taxpayers are called on not only to pay for the Hawke Government's 13 per cent rise in real spending but also to carry the entire burden of reducing its deficit from the Hawke Government peak in 1984 of $8 billion. In passing, the last Fraser Government deficit was about $4 1/2 billion. The taxpayers have to pay for this 1984 Hawke Government $8 billion deficit as well as paying, on top of that, for a 13 per cent real rise in government spending. Even worse than that, this secret rip-off sales tax or consumption tax is grossly unfair. A consumption tax is imposed on food, despite the absolutely nonsensical answer of the Minister for Finance to a question here the other day. His Government happily imposes sales taxes on food. Not even Senator Walsh can pretend that orange juice is not a food. I know it would very seldom pass his lips-other beverages seem to, but certainly not orange juice. Orange juice is clearly a food, yet this Government has imposed a consumption tax on it. We do not hear the Government admitting that; we do not hear Government senators even trying to talk about it. It does not exist as far as they are concerned. There is simply a mental block because of the basic dishonesty of this crooked Government, which has introduced a tax-a tax which did not exist under the previous Government on foods such as ice-cream. Is this Government saying that-that ice-cream is not a food? Try telling that to the parents of the millions of Australian children who now regard ice-cream, quite properly, as part of their basic diet. Kid's iceblocks and snack foods have all been hit with a consumption tax by this Government. This Government apparently thinks it is fair to introduce such a tax. It does not speak about this situation; it pretends it does not exist and has said nothing about getting rid of it. While introducing taxes on foods like orange juice, ice-cream, snack foods and kids iceblocks, it has no consumption tax whatsoever on luxury items like $1,000 ball gowns. This Government has no consumption tax whatsoever on pornographic magazines. Perhaps this Government has as a priority putting taxes on food but not on pornographic magazines. I wonder whether taxes on other items, such as the boots people wear while playing polo, are sacrosanct while of course orange juice gets taxed? Maybe Mr Hawke's friends prefer to play polo than drink orange juice. Everyone knows that the income tax rip-off keeps on sneaking up, but I think very few Australians are aware of Mr Hawke's huge hidden rises in consumption taxes-hidden rises introduced by a Government that has pledged itself not to introduce any consumption tax. It is intriguing that last week this Government even boasted that it had managed to raise more in consumption taxes, more in indirect taxes, than it would have raised had its broadly based indirect tax proposal of 1985 been implemented. There was a little item in the Australian Financial Review this week in which the Government effectively boasted about the fact that it had got in through the back door what it decided it should not try to get in through the front door. The great Keating indirect tax plan of 1985 was sabotaged by the Prime Minister in a dirty deal done in a motel room in Canberra. We now see that that proposal would have raised less money than this Government has now managed to sneak in through the back door as a result of its 110 per cent increase in consumption taxes. I remind the Senate once again: this is a Government which says it does not have consumption taxes. It is a Government which said after the Taxation Summit of 1985 that it would not change the tax system to `introduce' a consumption tax. It did not have to introduce it; it could see that it could make even more money, it could rip even more out of the Australian people, by not introducing the consumption tax because all it had to do was, I think the expression is, remove anomalies and make adjustments. That is the way it has hidden, that is the way it has deceived the Australian people and got away with, these massive increases in consumption taxes-a 110 per cent rise in the period it has been in government. So Labor has done by stealth what it was not prepared to do honestly in regard to consumption taxes. Certainly in my view and the view of many, this whole system clearly needs reforming so that this secret spread of consumption taxes is brought to an end. My own view, of course, is that there should be an honest and fair system of consumption taxes which would end this taxation by deceit that we have had under this Hawke Government. Naturally any reform of this dishonest system should be part of a genuine reduction in this massive total tax burden we face under the Hawke Government. The major contribution the Hawke Government has made to the discussion of tax is to increase it to record levels while at the same time pretending that it has been showing restraint and cutting taxes. We know from the figures that what the Government has had to say about its role in reducing taxes is a total lie. Taxes are at record levels, not only in relation to everyone's pay packet but also as a proportion of this nation's gross domestic product. The share of this nation's wealth that is being ripped off by this Government is now higher than ever in our post-war history. Yet this is a government which pretends that it will show restraint and that people will be better off under it. There are so many quotations that one can take from Mr Hawke which show either that he was recklessly indifferent to the truth and had no intention of keeping the promises or that his level of incompetence was so great that he has now, after the event, been proved totally wrong. Let us look at some of the statements by Mr Hawke, who misled the Australian people about the sort of tax future which faced them under a Labor government. I exclude from the present discussion the absolutely dishonest nonsense of recent days when Mr Hawke has said that the Australian Labor Party does not support a consumption tax. As I said, it is the fastest growing tax under the Labor Government. Let us go back to Mr Hawke's address to the National Press Club in 1984. He said: In our next three year term of government the overall level of taxation will not increase as a proportion of gross domestic product. That was a lie. There is no way that man could possibly have achieved that objective, and he did not. Over that period tax as a proportion of gross domestic product went up considerably. We have had the introduction of more and more taxes. Even worse, we have had the sneaky and dishonest introduction of a massive increase in consumption taxes in this country, hypocritically backed up by the pretence that this Government is opposed to them. What this nation desperately needs is an immense cut in the overall tax burden. The ACTING DEPUTY PRESIDENT(Senator Burns) —Order! The honourable senator's time has expired. Senator McGAURAN(Victoria)(11.32) —I follow my colleagues Senator Michael Baume and Senator Watson in giving support to Senator Short's amendment, which clearly points out the burden imposed by this Government upon the real contributors to Australia, the working man and woman, the farmer and the small business person. That amendment reads: At end of motion, add `, but the Senate notes that: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue; (c) there will be an estimated $71 billion in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; and (e) sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than any other of its record breaking taxes; (f) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.77 billion foreign debt strait jacket without further reductions in our standard of living'. I give my full support to that amendment. This Government and honourable senators opposite must realise that any change to the Income Tax Assessment Act-we have No. 5 in front of us-will have strong repercussions throughout society. It will have a resounding effect upon ordinary Australians, the working man and woman, the small businessman and the farmer. We are being told today that we have before us a mere technical adjustment to fix up unintended consequences. This Government should realise, and it probably has realised, that its constituents believe that the main issue today is the burden of tax upon Australians. They are fed up with paying their hard-earned money to a government with absolutely no direction whatsoever and with no beg your pardons. While the Taxation Laws Amendment Bill (No. 5) gives some relief from the capital gains tax to resident unit trusts-and that is something not to be opposed-the question must be asked: Why has relief from capital gains tax not been given to small business, to owner operators, to the one or two person or, indeed, family, operation? Families often better themselves by selling one business and moving on to another. More often than not, this betterment or increase in the value of their business is in the form of goodwill. Goodwill in essence is the main part of the wealth of any owner operator. It is an asset that all Australians can buy into. It is basically defined as talent, hard work and entrepreneurship. That is the formula for goodwill. It gives every Australian the opportunity to share in this nation's resources. Small business is at the cutting edge of competition. It is the best vehicle for new entrepreneurial talents and inventions. At the heart of the wealth of any small business operation is goodwill. It should be remembered that small businesses starting up are not asset rich-they often lease their premises-but they are talent rich. So in essence the capital gains tax is a tax on talent. It prevents new businesses starting up, particularly in the business sector, protecting the already well-established, the asset rich. No wonder this Government is setting up committees to look into the Trade Practices Act because of the now too-late concern about unhealthy moves towards monopolies or market domination by a few firms. We have heard recently the announcement of a small business inquiry to look into certain aspects of small business. One of its terms of reference, No. 3, is: The ultimate extent of policies on small business compared with larger business. The Government has suddenly woken up, albeit too late, that there is a difference between small and large business, that certain policies have to be tailored differently for small business. But it is too late, because the business tax review that this Government is undertaking at the moment will probably be finalised before this committee even sits. Before the small business inquiry even sits the Government will have already laid down its new tax requirements for corporate Australia. So it is all too late. The agenda for the past five years has been centred on big business with no concern at all for small business. That is why we have this new market concentration-the mergers, the takeovers and the monopolistic practices in the marketplace. Unless we unleash the ability of one person, the owner-operator, who begins asset poor but talent rich, unless we give him or her a chance to create wealth through the goodwill of a business-unless we rekindle that spirit-and unless governments allow the great potential of all Australians to be unleashed, we can expect no more than the development of a corporate state led by big government, big corporations and big unions which will at best preside over a very selective recovery for this nation. We have had the Button steel plan and we have had the Button car plan. What about the Button small business plan? Does Senator Button not realise that we have 800,000 businesses employing 2.3 million people? The great disappointment in this Government's long awaited business tax review is that it does not target small business. Rather, all we have heard from the Treasurer, Mr Keating, is that the Government intends to flatten the playing field in this business tax review. It is neither here nor there that it intends to flatten the playing field because it has already flattened the main players, the 800,000 small businesses that employ 2.3 million people. The Government can use that in vogue term-flatten the playing field-but it is a waste of time if it does not concentrate on the different needs of small business. Will this business tax review take into account the special requirements of small business in the area of sales tax burdens? I doubt it. What is likely, as has been reported, is that new rules governing the administration of sales tax will be introduced that will effectively increase sales tax by about 10 per cent on a much wider range of goods than is already affected. One outstanding feature of the sales tax method of collection that discriminates against small businesses and affects their cash flows, particularly those of new businesses, is the requirement for small businesses to pay the sales tax for the preceding month's sales on the twenty-first day of the month. The Small Business Council, which operates under Senator Button's own Department, has stated: In fact, it is likely that less than 50% of the debts would have been received by this date. So they are paying out tax before they get money in. The solution recommended by the Small Business Council is that the date for payment of sales tax should be extended by 30 days to the twenty-first day of the second month following those credit sales. That means that the sales tax would not be paid by businesses until they get the money in. That is fair. That is what small businesses need to improve their cash flow. The history of the Hawke Government has not been one of cooperation with the business sector. Big business has been high on the agenda, and I instance the Business Council of Australia. From the start of the Hawke Government's term five years ago the agenda of both Hawke and groups of big business has been anti-small and medium business. Their agenda has included the centralisation of wage fixing policies, a greater concentration of unions, and proposals to centralise company law-making in Canberra. In relation to the centralised wage fixing system in this country-better known as the industrial relations club-it should be pointed out that for years industrial relations in this country were allowed to run amuck. No attempt was made to check the misuse of power and irresponsibility of the union bosses. It was peace at any price. It took small business operators to show courage and fight back against absurd work practices. I particularly refer to the Dollar Sweets case in Victoria, which was a landmark in industrial relations in this nation. Every small business group and every chamber of commerce condemns the manifesto of the Australian Council of Trade Unions, Australia Reconstructed, as they condemn the proposal to centralise the national companies code in Canberra. The intent of this Government is quite clear; it wants to centralise company law. This is particularly evident if we take the word of the honourable member for Barton, Mr Punch. He describes the transfer of power over company legislation from the States to the Federal Government as a move towards a `deregulated corporate environment'. That is a fancy term for centralised power in Canberra at the expense of the States and of our federal system. That may not be a revelation given the platform of the Australian Labor Party, but it is a policy and a philosophy that is directly pitched against small business. Also included in the main Bill before us is an amendment to tax superannuation payments, upon the death of a superannuation contributor, to the deceased contributor's non-dependent adult children. This amendment, it is claimed, is necessary on the grounds of equity, but if equity is an issue in the taxation treatment of superannuation, attention must focus on the position of the self-employed-a vital part of small business. The self-employed, as well as the non-sponsored employees, are grossly discriminated against under the current arrangements. The larger companies may claim up to the full maximum superannuation benefit allowed by the Australian Taxation Office. For employees at the prime of their working life, for example, this may be up to $5,000 per annum. The company which employs them may claim that full amount as a tax deduction. On the other hand, a self-employed small business person, earning over his working life a similar amount, may claim only up to $1,500 as a tax deduction. That is $1,500 for the self-employed compared to $5,000 for a company. This represents clear discrimination against self-employed small businessmen. The issue of superannuation is also vitally related to the greatest single economic problem facing Australia today-our $110 billion foreign debt. If Australia's foreign debt is to be tackled, we have to increase the savings of this nation. The latest Economic Planning Advisory Council (EPAC) paper, Australia's Medium Term Growth Potential, holds some hope that Australia's foreign debt may level out by the 1990s. This is primarily based on two very important assumptions: firstly, that there is no change in Australia's terms of trade over the next few years-that is utterly unrealistic; secondly, and directly relevant to the taxation of superannuation with which the Bill before us is concerned, that domestic savings will increase and consumption will decrease by 2.5 per cent by 1992. It is clear that the Government is considering increasing tax on superannuation. So it is at loggerheads in meeting the great challenge of reducing our foreign debt. It will be a direct disincentive for Australians to save for their retirement. An increased tax on superannuation may push many financially independent people into the welfare state. That is the last thing Australia needs today. The Government is showing itself to be incapable of delivering the taxation reform that the populace demands-real tax reform that reduces the overall tax burden. We do not want any new taxes; we want a reduction in existing taxes. The Government's tax policy, like the two Bills before us, is at best only an exercise in shifting the deck chairs. It is behaving like a stunned rabbit at the moment after its quite stunning electoral defeats. It is almost frozen with inaction. It is not willing to tackle Australia's greatest problem-foreign debt. In fact, we do not hear members of the Government talking about it much these days. Look at the way the Government has taxed the hopes and dreams of Australians in small business, the working man and woman and the farmer, through its capital gains tax, its superannuation tax. It has never got down to tackling Australia's foreign debt. Government members need a good 20 years in opposition so they can learn how to be Australians again. The real contributors to Australia's growth have been forgotten. They are now expressing frustration and distaste for the politics of this Government. This can best be illustrated by a letter received by the Ballarat Courier recently. I will not name its author, but obviously he is from the heartland of a Labor constituency. He sums up that existing frustration, particularly in the area of taxation. I will quote the greater part of the letter: I am 37 years of age, born to a labourer who indoctrinated me that under Labor I would lead a better life. Therefore, for 18 years as a voter I have always voted Labour. What a great mistake! Quite correct. The letter goes on: In 1969 as a single person I earned $40 a week and paid $4 a week tax. The government then took one-tenth of my weekly earnings in tax. Today under a Labor Government I earn $500 per week and pay $120 per week in tax, thus more than one-fifth goes to the tax man. I am now married with two children but we are a single income family. In 1973 I borrowed $10,000 to build our own home. The State Bank charged me 6.75 per cent interest so my quarterly repayments were $174, now in 1988 I have paid back $14,000 yet I still owe $8,000 on my principal. My quarterly repayments are $316 and the interest rate has risen to 13.75 per cent. And so he goes on. He gives a clear warning to the honourable member for Ballarat from the Labor Party, Mr Mildren, that the Labor Party has lost its bearings. All he can say is that it should watch out at the next federal election. That is a fair warning which is already coming through the ballot box. It seems to me that if Labor does not get into a hands-on situation very quickly, that message will wipe it out of this Parliament completely. One would think at least the newest member of the Senate, Senator McMullan, would bring that fresh approach into the Senate straight from the electorate and would be able to convince his colleagues that there is a feeling out there that the Labor Party has got to tackle the real and serious issues. One would think that Senator McMullan could convince his colleagues of this. But that is not so. Senator McMullan has come from the bear pit, from the party machine itself, and he is about as unrealistic as the others. There is fair evidence of that from his letter to the Australian that the Government's record on economics is just fine. He said `We have produced falling unemployment, falling interest rates, falling inflation, a falling balance of payments and a balanced Budget'. He is not willing to face reality either-falling from very high levels that Labor created, but they are just not falling enough. It worries me that Senator McMullan is probably the last hope that we have that at least the senators in the Labor Party will realise just how much they are rubbing in to ordinary Australians, their erstwhile supporters. I think Senator McMullan should spend his time looking for a few of the old-time Labor parliamentarians who used the hands-on approach. It would not hurt him to check up on a few of the old Democratic Labor Party parliamentarians that have left. They were good hands-on people. We have only to look at their vote in Victoria, which doubled, and which no doubt came from the Labor heartland. Perhaps the Labor Party should consider looking for better candidates than it has at the moment. I again give my full and strong support to the amendment moved by Senator Short. As I have said, it clearly outlines the burden placed upon the real contributors to this country, the working man and woman, the farmer and the small business person. Senator Colston —Mr Acting Deputy President, in accordance with standing order 364, I move: That the document quoted from by Senator McGauran be tabled. Question resolved in the affirmative. Senator McGAURAN —I table the document. Senator PARER(Queensland)(11.53) —We are debating the Taxation Laws Amendment Bill (No. 5) and the Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill, and I rise to support the amendment moved by my colleague Senator Short to the motion for the second reading. A few years ago, because of an election throw-away line on talkback radio, the Prime Minister (Mr Hawke)-who, incidentally, has become an embarrassment and a liability to his Party-promised to have a tax summit. The aim was presumably to make taxation more equitable and simpler. As everyone knows, it was an abject failure on both counts. From a simplicity point of view, it certainly encouraged a growth industry, and that industry was in the area of tax accounting, because the system has now become so complex that almost everyone must consult a tax accountant before submitting a tax return. It is beyond the knowledge of ordinary Australians, and even of most people in small business, to be able to get themselves around the mess that we have through our taxation laws. Everyone in our society, particularly that foundation stone of Australian society, the battling family, is worse off than they have ever been in Australian history. There are some on the Labor benches who, because of vociferous statements made by loony groups, would argue about whether the family is the foundation stone of Australia; but in fact, it is. It is for this reason, which everyone knows except the out of touch Prime Minister and his equally out of touch Labor Government, that Labor has been rejected politically in South Australia, New South Wales and, very recently, in the seat of Groom in my State of Queensland. It should be remembered that the very hard core Labor primary vote in Groom that has, year in and year out, stuck to the Labor Party, for whatever reason, decreased by about 8 per cent. People are fed up with the level of tax that they must pay and with the purchasing power of the few dollars that they have left after the Government has raided their pay packets. The only people who are not complaining are the few rich mates of the Prime Minister. Together with the leaders of the Australian Council of Trade Unions, they are the de facto government of Australia. This callous Government, as pointed out recently by Mr Eric Risstrom in the Taxpayer, is politically cynical and `devoid of any caring for people or the economy'. I think even Senator Robert Ray would agree that Mr Risstrom will criticise either of the major political parties if he believes the taxpayer is being overburdened and taken to the cleaners. Out of a possible $27 a week pay rise, this Government will take $11 a week in tax. This is a great disincentive for, for instance, people working overtime. I think that anyone who gets around the electorates, whichever State he or she comes from, will realise that this is probably one of the greatest common complaints. What is the use of working a few hours overtime to increase the amount of money to come to the family when it will be raided by a rapacious government? A one-income family with two children now needs about $42 a week more to restore its real disposable income to the level it was when this discredited Prime Minister and this discredited Labor Party got into power in 1983. Tax paid by that family has increased by 30 per cent to $117 a week. This rip-off by the Government, coupled with an inflation rate which has increased the costs of goods and services, has made life for the average family unbearable and intolerable, as shown in recent election results. Surely that message must eventually sink in. This Government has financially crippled middle and low income earners in Australia, the big, silent majority which has its say at election time-or those Sir Robert Menzies referred to as the forgotten people. The root of the problem, as everyone knows, is the size of government and, in particular, the growth in government programs. The Government now spends around 45 per cent of the national product compared with 30 per cent in 1968. Taxation on average earnings has risen from 11 per cent in 1958 to 24 per cent today. I believe it is worth quoting from the editorial of the 26 March edition of the Taxpayer, which reads in part: . . . the out-of-touch people forget that Australia is made up of more than employees. Such a policy ignores many on fixed incomes, many who received their last tax cut in November, 1985. Facing such a four-year tax-cut drought is frightening for anyone caught in such a political web. I've never urged revolt before, but perhaps I've never been so moved before by such blatant political manipulation. The time has come for a tax revolt. Write to the press and politicians, ring their offices, write to the Treasurer and the Prime Minister, ring your local radio station-and yell! Remember: In just four years, the CPI went up 35%, Canberra spending rose by 38%, with a 65% jump in taxation. The PRESIDENT —By arrangement, I propose that Question Time conclude just before 1 p.m. to enable Australian Broadcasting Corporation commitments to be met. If Ministers have answers to questions asked earlier in the week these answers may be given at 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that Senator Richardson is absent from Question Time today as he is in Cairns where he had a commitment to make a major announcement. Any questions which would normally be directed to Senator Richardson in relation to his portfolio or those he represents should be directed to Senator Ray. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I wish to acknowledge that the Leader of the Government in the Senate (Senator Button) advised me yesterday that Senator Richardson would be away. I simply wish to put on the record the Opposition's general concern that Ministers should be available for Question Time. The Leader of the Government in the Senate explained the circumstances leading to Senator Richardson's going to Cairns. After consultation with the shadow Minister, the Opposition does not want to make an issue of the matter on this occasion. The only reason I am saying anything is to stress to the Government our general view that Ministers should be available when the Senate is sitting. Senator NEWMAN —My question is directed to the Minister for Justice. I refer to the spectacular revelations before the Fitzgerald Commission of Inquiry into Possible Illegal Activities and Associated Police Misconduct, centred on prostitution and vice. Prior to the Fitzgerald inquiry, was any Minister alerted by a senior officer to the special need to investigate the incidence of vice and its links with organised crime and corruption? If so, what action has been taken in response? Senator Tate —I am having difficulty in understanding. Does the honourable senator mean vice and organised crime in Queensland which was brought to the attention of a Federal Minister? Senator NEWMAN —By way of explanation, was any Minister alerted by a senior officer to the special need to investigate generally, throughout Australia, the incidence of vice and its links with organised crime and corruption? Senator TATE —It is such a very general question. Of course the links between organised crime and the sorts of activities which have been revealed in the Fitzgerald Commission of Inquiry are well known and have been the subject of consideration by governments-and indeed by this Parliament-over many years. No doubt Ministers and members of this chamber will have considered those links that have been pointed out by many authoritative voices over many years. That is one of the matters which led to the establishing of the National Crime Authority, after the reception of a report from the Senate committee. As I recall it, part of the terms of reference of the National Crime Authority as set out in the statutory charter point to that whole question of vice and its links with organised crime. There has always been a general awareness amongst Ministers, based on well-sourced information, of the sort of link to which the honourable senator is referring. I am sorry if I am being a bit obtuse but I cannot grasp the particularity of what the honourable senator is seeking. Senator DEVEREUX —I refer the Minister for Consumer Affairs to an article in a recent edition of the Australian Financial Review suggesting that some firms are to issue unsolicited credit cards to consumers. In view of the already high level of consumer debt in Australia, can the Minister indicate whether the Government can take any steps to ensure that this method of providing easy credit does not continue? Senator BOLKUS —Senator Devereux rightly refers to an article in the Australian Financial Review where it was mentioned that Country Road Clothing Pty Ltd was going to be issuing, unsolicitedly, credit and debit cards to its customers. This issue is a major concern of the Government at a time when the availability of easy credit seems to be on the rise. Our concern is reflected by the fact that next week we will be holding in Canberra, under the auspices of the National Consumer Affairs Advisory Council, a forum on consumer credit. The two problems the Government has with easy credit such as this are, first, that often interest rates are excessive and, secondly, there is often an inadequacy in credit rating assessment procedures. So the issue that Senator Devereux raises is of concern to us. With particular reference to the instance mentioned in the Australian Financial Review relating to Country Road, the Trade Practices Commission has investigated the report and is satisfied that the retailer in this instance has no such intention as indicated in the article. So no further action needs to be taken with Country Road. However, it is worth while mentioning-and in response to Senator Devereux's question-that part V of the Trade Practices Act, and in particular section 63a of that Act, refers to and specifically prohibits the unsolicited distribution of credit and debit cards to prospective customers and any contravention of this section could result in criminal and civil liability. In short, the answer to Senator Devereux is yes, we have seen the article. In this instance, because of the intentions of Country Road not to issue customers with cards unsolicitedly, there is no contravention of the Trade Practices Act but if a corporation or individual were to issue cards in an unsolicited manner, that could very well be a breach of the law. Senator TEAGUE —My question is directed to the Minister for Industry, Technology and Commerce and concerns the announced changes to the Government's car plan. I note my own State of South Australia's critical dependence on the now strongly developed car manufacturing plants of Mitsubishi Motors Australia Ltd and General Motors-Holden's Ltd. Given that the car industry is currently producing about 100,000 units a year fewer than what is regarded as its traditional base of production, what is the Government going to do to help the industry recover that base, or does the Government expect production volumes to remain at current levels? Senator BUTTON —The Government does not expect production volumes to remain at current levels but everybody in this country is fully aware that two factors were operating in 1986 and 1987 in the car market which had a very depressing effect on that market. The first was the depreciation of the Australian dollar particularly against the yen and the fact that that increased the price of imported cars and imported componentry that went into locally manufactured cars. The second factor was that because of the current account problem which this country had, because we were borrowing more than we were earning, the Government introduced policies which restrained and suppressed wages. There has been a significant reduction in wages in the last few years. Those two factors, operating together, had a depressing effect on the car market. Senator Teague —And the fringe benefits tax. Senator BUTTON —The honourable senator always interjects about the fringe benefits tax. Certainly that had an effect on the market in 1986. I think the long term effect is marginal. A motor vehicle, for those people who do their sums, is still a good fringe benefit compared with other things which were used in the past as fringe benefits. We had the same argument about the restaurant industry, that the abolishment of the entertainment concession was going to ruin the restaurant industry in Australia. Senator Newman —But it put a lot out of business. Senator BUTTON —Senator Newman interjects that some of them went out of business. I would hope so. Having had to dine at some restaurants I hope a lot of them went out of business-they were terrible. That is a factor in a dynamic market. The Opposition sees the world as some sort of static model where everything remains the same, where all the restaurateurs and car manufacturers remain in business forever. Senator Chaney —Stop heaping it up. We will all need four-wheel drive vehicles to drive over the nonsense you are going on with. Senator BUTTON —That is the quality of interjections one hears from honourable senators opposite, including the Leader of the Opposition, who, to his disgrace, was wandering around the chamber talking to people before he made that silly interjection. He can do much better than that. By Opposition standards he is a very capable politician. I say to Senator Teague that the industry derived some encouragement from the car market situation in February. I think that the changes made by the Government which were announced this week will help the car market. I do not expect any dramatic change in the next few months, but I think there will be an improvement. Senator Teague's question proceeded from his view of a static model of an industry. Next year, 30,000 built up cars will be exported from Australia. It is the first time that that has happened for many years. It means volume for the industry, employment for people working in the industry and dollars earned for this country. Senator Lewis —We are talking about the macro-economic policies of your Government. Senator BUTTON —Senator Lewis interjects because he does not like the answer that I am giving, so he tries to divert the topic to one which is totally different. I understand the technique, but it is pretty old and tired. I say to Senator Teague that I expect some improvement in the market. In so far as he asked the question as a South Australian senator, let me say that I am very confident about the medium and long term stability and success of the motor vehicle industry in South Australia-both the two companies that he mentioned and the component sector of the industry in South Australia-provided that it keeps at the task of improving its quality, its production techniques, and so on, which it must do. Senator BURNS —Is the Minister for Local Government aware of the concerns expressed by local government across Australia about rumoured reductions in the level of funding for local roads? Can the Minister advise what the Government intends in this area? Senator REYNOLDS —I am aware of the widespread concern by local governments about possible changes to road funding. I have been working very closely with my colleague in the other place, the Hon. Peter Morris, who has direct responsibility for the funding of local roads. Since early March I have visited a number of councils in four States-metropolitan and rural -and I am very well aware of their extreme concern that they may be overlooked in some way in regard to road funding issues. I have reassured them that this is certainly not the Government's intention and that everything possible will be done to maintain the appropriate levels of local government road funding within the constraints of Senator Walsh's plans in terms of the forthcoming economic statement and Budget. I have also spoken with New South Wales local government engineers. Of course, they are very concerned about the infrastructure needs of this country in terms of economic development. It is not good enough to look at the road funding question purely in terms of local community needs, although, of course, that is of fundamental concern to many people. We must look at it in terms of the fundamental infrastructure needs of the country, export opportunities and the maintaining of our assets. Enormous amounts have gone into road funding over many years. Of course, the levels of funding must be maintained in terms of good assets management. Senator Walsh —Not all roads. Senator REYNOLDS —I am sure that Senator Walsh does not disagree with me. I would like to take this opportunity, in responding to Senator Burns's question, to read from Life Has Never Been Easy, a report of the survey of women in rural Australia which was undertaken by the Office of the Status of Women in consultation with the Country Women's Association. Senator Bishop —How about tabling it. Senator REYNOLDS —I am happy to table it. In regard to the importance of road funding issues, I quote from page 17 of the report: Transport and communications are central to the quality of life in rural Australia . . . It is also supported by the survey findings, where 11.3 per cent of respondents indicated that long distances, public transport, road conditions and communications were their biggest problems. Senator Vanstone —You did not need a survey to tell you that. Senator REYNOLDS —I inform Senator Vanstone that women were asked to indicate their personal preferences regarding government spending in rural areas, and that 69 per cent of respondents believed that roads should be a priority. I say to Senator Burns that obviously it is very important that we keep in mind the high priority that is placed on road funding issues generally in both rural areas, as I have indicated, and metropolitan areas. I am sorry that Senator Stone is not in the chamber at the moment. He represents a country party. I am not quite sure which country party Senator Stone may represent in the future, Mr President, because, as you are probably aware, the former Premier of Queensland has announced his intention to form a new party. I am sure that Senator Stone will welcome some of the views that have been expressed by rural women and will keep them well in mind when he is involved in targeting cutbacks, as proposed by Opposition policy. Senator McLEAN —Is the Minister representing the Minister for Defence aware that a serviceman of 28 years standing, when being interviewed recently by his superior officers, was advised that there was an entry on his file stating that he is a member of a subversive organisation, the HMAS Sydney and Vietnam Logistical Support Veterans Association? Is it true that the HMAS Sydney and Vietnam Logistical Support Veterans Association, which belongs to the kindred organisations of the Returned Services League, is classified by any Australian security organisation as subversive and, if so, why? Are any other ex-service organisations classified as subversive by any Australian security organisation and, if so, why? Senator ROBERT RAY —Since this matter has been brought to my attention efforts have been made to establish the circumstances alleged by Senator McLean. The Minister for Defence is not aware of the incident. The Chief of the Defence Force and the Chiefs of Staff of Navy, Army and the Air Force have no knowledge of such an incident. Investigations to date have not provided any evidence that the statements were made. Naturally, of course, these investigations would be hampered by the fact that no essential detail has yet been provided. I can understand the reluctance to specify the particular case, but it does make it fairly hard to investigate. I assure the honourable senator that the Minister for Defence is anxious to pursue the substantive matters that he has raised. I would be happy to pass on any information that the honourable senator has to facilitate that inquiry. In relation to the allegation that the HMAS Sydney and Vietnam Logistical Support Veterans Association is regarded as a subversive organisation, I point out that this Government has amended the Australian Security Intelligence Organisation Act to remove the definition of `subversion', and that such action would seem to me to run counter to the claims that lists of subversive organisations have been compiled and maintained. Certainly, as I am informed, no such list exists in the Defence Department or within the Australian Defence Force. Finally, I have been assured that the aims and aspirations of the association referred to by Senator McLean are commendable and are pursued in an undisguised, forthright and tenacious manner. The Government respects the Association, as it does all the others that pursue veterans' interests. The final part of Senator McLean's question asks for a list of subversive organisations. I know of none. I know of none in the Defence Department, and I also believe there should be none there. Senator McLEAN —I ask a supplementary question: Can the Minister undertake to advise the Senate regarding procedures by which this serviceman, without resigning, can determine whether such an entry exists on his service file? Senator ROBERT RAY —I will pursue that matter on, let us say, a confidential basis if the honourable senator gives me the information. I would imagine that in certain circumstances we could have that file made available to that individual. However, I think that is a matter we can proceed down the track with. I might just say that it would be very unfair to such a serviceman if there were such a file entry and if it in any way inhibited his career in the Services. I would take a very dim view of that. Maybe at some stage we can get to the honourable senator advice as to the serviceman's rights in pursuing that matter. If that does not get us down the track further we will look at other methods that we, in government, can take, rather than those that that serviceman can take, to facilitate that end. Senator COONEY —I ask the Minister for Transport and Communications: What are the Government's plans for Essendon Airport and, if the airport is to continue, on what basis will it be financed? Senator GARETH EVANS —I welcome the opportunity to clarify this matter because it has been the subject of some public misunderstanding and concern. The situation is that the Federal Government will not seek the rezoning of residential land around Essendon Airport. We have never had any plans to do so and this remains firm policy. Nor does the Government intend to relax the current night curfew or expand the airport or the range of aircraft operations it supports. The view that has been taken by both the Federal and State governments-and this was agreed last year-was that Essendon Airport should remain open, as it does form an important component of Victoria's airport strategy. The Federal Airports Corporation, which has assumed control of Essendon, is of course looking to improve the airport's performance, but it will be seeking to do so through cost containment and by expanding non-aviation commercial development on the airport itself, not through promotion of expanded aircraft activity. The Corporation will make its own provision for funding of any development, as is provided for under the Federal Airports Corporation Act. The Essendon Airport role review study, which has been the subject of much recent public debate, has made a number of recommendations aimed at reducing the effects of aircraft operations on the Essendon community. These recommendations cover issues such as tightening the existing night curfew, excluding operations by larger aircraft, excluding some noisy aircraft which currently use Essendon and restricting the maintenance running of aircraft engines to minimise, again, noise pollution. The Federal Airports Corporation will continue to liaise with local government and resident groups regarding Essendon's future. Because of Essendon's close physical relationship with Melbourne Airport at Tullamarine, the report of the role review has also been incorporated into the Melbourne Airport strategy process which is being conducted in conjunction with the Victorian Government. Senator MacGIBBON —My question is addressed to the Minister representing the Minister for the Arts, Sport, the Environment, Tourism and Territories-a question which I had hoped to ask the Minister today. As the Minister would be aware, the committee investigating the World Heritage listing of the northern rainforest has arrived in Australia today. Will the Minister inform the Senate today of the itinerary of the committee that is investigating the World Heritage listings? What attempts will it be making to canvass local opinion in the region? What is the cost of the visit to Australia? Senator ROBERT RAY —This matter was first raised by Senator Boswell some time ago. Senator Richardson the other day very kindly induced a backbencher on this side to ask him a dorothy dixer in reply to which he then outlined very extensively what the itinerary was and all the local groups to be consulted. I do not remember all those details but they will be in the Hansard of either Wednesday or Thursday. I know it is easy to miss these things, but the Minister went into great detail as to where the committee was going and who it was seeing and convinced at least me that a wide cross-section of those people in north Queensland who have concerns in this area, from local governments to mill owners, to timber workers and the tourist people in Cairns-the whole spread of the community-would get exposure to the committee. I know initially there was some concern as to whether this committee would be squired around and given, if you like, the high road tour. No, it will get to see everything and everyone will have access to it so that all points of view can be put forward. Senator ZAKHAROV —My question is addressed to the Minister representing the Treasurer. Has the Minister's attention been drawn to an article by Michael Short in yesterday's Age newspaper which dismisses in one sentence the argument that a consumption tax is regressive by stating, `Adjustments in the social security system can easily compensate the poor'? Is it possible to easily compensate the poor through adjustments to the social security system? Senator WALSH —It is certainly not easy to compensate social security recipients if they are classified as the poor-and I suppose that is about as good a definition as any other-and certainly not easy to compensate social security recipients for any indirect tax which adds substantially to prices and the consumer price index. For example, option C which was being considered by the Government three years ago had within it a proposal to fully compensate pensioners and other social security recipients for the price increases which would be caused by the contemplated consumption tax. That would have cost well over $1 billion in 1986 prices. It would be considerably more than that today. However, that does not tell the whole story. Any change to the taxation system which adds to the price level becomes a capital levy for people who are living on lump sum compensation or for any retiree who derives income from a fixed capital sum or who has been compensated in some way with a capital sum which is supposed to last a lifetime. Of course, included in that group is anybody who is, or is likely to become, a superannuation recipient. Any indirect tax which adds, let us say, 6 per cent to the price level is a de facto capital levy of 6 per cent on everybody who has had a superannuation lump sum payment, anybody who has had a compensation lump sum payment or, indeed, anybody who holds any assets in cash at all. It is a capital levy. Senator Chaney —A reduction in income tax is a capital gain. Senator WALSH —I am glad that Senator Chaney mentioned a reduction in income tax. John Elliott and his mates could get a reduction in income tax while they were guzzling their Vat 69 in the tax deductible box at Princes Park, gobbling their free lunch with their free tickets to the footie, while the people down there in the outer who were munching their pies and who paid for their tickets to the footie would get taxed on both. That is exactly why John Elliott wants the consumption tax. Income tax is not a major problem for social security recipients. Indeed, a large number of social security recipients pay no income tax at all. I think that that is the point of Senator Zakharov's question. An increase in indirect tax, a broadly based consumption tax, a VAT-not the Vat 69 that John Elliott and his mates guzzle up in that tax deductible box at Princes Park-or some other broad-based consumption tax, would impose higher prices on everybody, which obviously would seriously disadvantage social security recipients unless they were fully compensated for the increased prices. As I said, that would cost well over $1 billion for a tax of between 6 and 7 per cent. Such a tax also disadvantages people who are not social security recipients and who have received or are about to receive a lump sum, because it is in fact a capital levy. Senator BROWNHILL —The Minister representing the Minister for Primary Industries and Energy may be aware of a recent Sydney District Court ruling that resulted in two people, both of whom are involved in the commercial avicultural industry and who pleaded guilty to a charge of bird smuggling, being convicted without penalty and released on a small good behaviour bond. Given that the Act under which the two men were tried has penalties of some tens of thousands of dollars and given that bird smuggling is a most serious threat to Australia's disease free status, what comment does the Minister, who is responsible for quarantine, have on the matter? The Minister would also be aware that there has been some question of an appeal being lodged against the leniency of the penalty. Can the Minister advise whether an appeal has indeed been lodged? Senator COOK —The question invites me to comment on a decision handed down by a judge who heard a case and determined on the evidence before him a particular penalty. I must say that I do not think it is appropriate for me to do that. The second part of the question was whether I could say whether an appeal is to be lodged. That matter would be sub judice and it is not appropriate for me to deal with that. In the generality, of course, the Government is concerned to guarantee the quarantine laws of the country. The Australian Agricultural Health and Quarantine Service is extremely active in this regard. The costs to the country should our quarantine laws be breached could be quite horrendous, depending on what exotic diseases or pests were brought into the country by such a breach. I believe the Quarantine Service goes about its tasks as zealously as one would expect, given its responsibility. I do not think it is appropriate for me to express a view about a judge who has made a decision after he has heard the evidence. Senator GIETZELT —Did the Minister representing the Minister for Aboriginal Affairs hear the Australian Broadcasting Corporation news item this morning in which it was said that the Aboriginal Development Commission (ADC) spent approximately $100,000 on its own consultation concerning the Government's proposed Aboriginal and Torres Strait Islander Commission (ATSIC)? Does this not appear to be at odds with the explanation provided by the ADC in its documentation to Senate Estimates Committee E that increased expenditure on administrative costs for the financial year to date was `principally' due to expenditure incurred on additional Commission meetings called to discuss the Government's ATSIC proposal when the increase was in the order of $800,000? Can the Minister please provide details of the ADC's administrative expenditure for the 1986-87 financial year and the expenditure for 1987-88, both actual and planned? Can the Minister also provide details of expenditure by the ADC related in any way to the ATSIC? Senator TATE —Honourable senators will be aware that some of these matters were canvassed in the Estimates committee at which I was actually the Minister at the table last night. I have not had a chance fully to check the Hansard of the hearing but I do recall that evidence was given by the Chairman and the General Manager of the Aboriginal Development Commission that they had spent in the order of $90,000-it was expressed in terms of one and two-thirds of a home-being the opportunity cost, on the consultation process. Exactly how that ties in with the Senate Estimates Committee booklet which indicates that the ADC was seeking some $800,000 in increased expenditure for administrative purposes and that, concerning that $800,000, principally the moneys were required to fund meetings called to discuss the Government's Aboriginal and Torres Strait Islander Commission proposal, is a little unclear. I will certainly take Senator Gietzelt's question back to the Minister for Aboriginal Affairs, Mr Hand, and try to obtain the details sought by him. Senator LEWIS —Is the Minister for Industry, Technology and Commerce aware that yesterday the Prime Minister confirmed that further tariff cuts were on the way? Is the Minister aware of the report in the Australian Financial Review of today that the `Structural Adjustment Committee of Cabinet last night agreed in principal to a ``tops down'' reduction in tariffs, which would phase in a single maximum tariff for most industries'? Is the Minister aware of reports in today's Daily Commercial News that `investment projects worth tens of millions of dollars of investment are being put on ice because the Federal Government refuses to end the massive speculation surrounding tariff reductions to industry prior to the May statement' and that `the ongoing speculation threatens to divert multi-million dollar projects away from Australian industry'? Is the Government really going to wait until 25 May or thereabouts before ending this speculation? Are the Prime Minister and the members of the Structural Adjustment Committee of Cabinet, which I presume includes the Minister, so naive and out of touch with commercial reality that they really believe that the commercial world can afford to wait another month before these decisions are announced? Senator BUTTON —I am aware of the various reports to which Senator Lewis referred, including some comment by the Prime Minister and an article which appeared in today's Australian Financial Review. The other journal quoted was the Daily Commercial News, a paper which I assure Senator Lewis I read avidly. Let me first make this point: sure there is speculation and comment about possible tariff cuts in the 25 May statement. Senator Lewis —Being stirred by your Ministers. Senator BUTTON —I understand the point Senator Lewis was trying to make. Sure there is speculation about that. I think it is important to distinguish between tariff cuts which are introduced precipitately and tariff cuts which might be made over a period. If tariff cuts are to be made precipitately I think it is very important that there should be no public speculation about it. If tariff cuts are to be made over a period I do not think it is a bad thing for industries to be addressing their minds to the issue, particularly the relevance of high tariffs in a floating exchange rate environment. I still think tariffs are very relevant but they are less relevant than they might have been in circumstances where there was a fixed exchange rate. Let me make this point: Senator Lewis quoted from the Daily Commercial News about millions of dollars of investment being postponed and people sitting on their hands and all that sort of stuff because of speculation in the newspapers. The most competitive sectors of Australian industry are not protected by tariffs at all. Is the aluminium industry sitting on its hands worrying about tariff reductions? It does not have any tariffs. Is the computer software industry sitting on its hands agonising about tariffs? It does not have any tariffs. Senator Chaney —They are more worried about tax. Senator BUTTON —Of course they are more worried about tax. It might not be a bad idea to speculate about tax too. Senator Lewis —Some of them are more worried about your partnership with Ray. Senator BUTTON —Senator Lewis is what used to be called at the time of the Vietnam war a `threat expert'. He luxuriates in anxiety, not only having it himself but also engendering it in other people. Sure, there are sectors of Australian industry which might be thinking about investment and which are highly protected at the moment and, therefore, have to take account of levels of protection-both those which apply at present and those which might apply in the future-in their investment plans. However, if we are to create a dynamic industry economy, we have to look to those sectors of Australian industry which, by and large, are in the low protection category. These are the sectors which are in the international trading environment, which are heaviest into exports, which relate to developments in world trade and so on. These are the long term growth sectors because they are the most naturally competitive. I do not think the picture the honourable senator paints, fortified by some article in the Daily Commercial News, is correct. I concede that a few companies which are operating behind high tariffs might have to take this sort of debate into consideration in their investments, but I do not regard that as a disaster of long term duration. Senator McMULLAN —My question is directed to the Minister for Justice and relates to the policing of underage drinking here in the Australian Capital Territory (ACT). Is the Minister satisfied that amendments made to the ACT Liquor Ordinance in December 1987 have provided a satisfactory basis for the policing of underage drinking? Senator TATE —I appreciate this question from Senator McMullan as a senator representing citizens here in the ACT. I am advised by the Australian Federal Police (AFP) that the amendments to the ACT Liquor Ordinance of 1975 which were made in December last year have greatly assisted the police in their ability to properly enforce incidents relating to the consumption of alcohol by juveniles. The new laws give police the powers to demand the name, age and address of persons they suspect of being involved in the underage drinking and the right to detain juveniles and issue written cautions without proceeding to arrest. I understand from the Australian Federal Police that early indications are that juveniles are presently heeding the new laws, as the evidence of young persons drinking in public places has declined. Since the amendments became effective on 22 December 1987 the AFP has reintroduced a special underage drinking squad. Figures for enforcement action taken by the AFP from 2 December 1987 to 14 April 1988 are as follows: 21 summons applications for offences including stating false name, address or age, and adults sending juveniles to purchase liquor; 14 summons applications for licensed premises selling liquor to persons under the age of 18 years; 178 cautions issued for buying, possessing or consuming liquor, supplying liquor to persons under 18 and for persons under the age of 18 entering licensed premises without a responsible adult; in addition, 21 cautions issued during the Food and Wine Frolic in relation to underage drinking. I believe that those statistics support the general contention of the AFP that the new Liquor Ordinance has proved successful in curbing the displays of underage drinking which were of great concern to the residents of the ACT generally, particularly in the latter part of last year. When one links that innovation with the very productive discussions held between the Australian Federal Police Commissioner, Mr McAulay, and my ministerial colleague Mr Gary Punch only a few days ago, which have led to the further bolstering of police resources available for community policing duties in the ACT, one has reason to believe that very good progress has been made. Senator BISHOP —I address my question to the Minister for Transport and Communications. Last Wednesday I received the Minister's answer to a question upon notice which I asked concerning the amount of money spent by Telecom Australia on promoting time charged telephone calls. In his answer, the Minister said that approximately $608,900 was spent on: seeking community input to its- that is, Telecom's- proposed consultation process on the timing of local calls. He went on to say that the money was expended on `task preparation, research, printing and media coverage'. I ask the Minister: What did he mean when he said he was `seeking community input to its proposed consultation process'? Secondly, was there a consultation process and, if so, with whom? Thirdly, of the $608,900 how much was spent on the said task preparation and what was the nature of it? How much was spent on research and printing and, indeed, what was printed? Finally, how much was spent on media coverage, how was it obtained and where was it spent? Senator GARETH EVANS —I readily acknowledge that that was not one of the more successful community consultation processes of all time, unless one adopts as one's measuring stick the achievement of an early decisive result. As to the detailed parts of the question, seeking a further break up of the cost items, I will take that on notice and give Senator Bishop an early reply. Senator CROWLEY —My question is directed to the Minister representing the Minister for Immigration, Local Government and Ethnic Affairs. Is the Minister aware of reports that Yiannis Kouros, the three-time winner of the Sydney-Melbourne ultra-marathon, has decided to call Australia home. What can the Department do to assist people of such outstanding sporting calibre to migrate to Australia? Also, can the Minister reassure other prospective migrants that they will not be required to reach such levels of excellence or run from Sydney to Melbourne in order to get into Australia? Senator REYNOLDS —I am aware of various media reports that Mr Kouros has indicated that he and his family would like to use the $30,000 prize money from his latest win to settle in Australia. Naturally, all Australians applaud his magnificent win and hail this superb sportsperson. There is provision in Australia's migration program for people with special creative or sporting talents to settle here. These people must possess very high skills by international standards and intend to use those skills in Australia. They must have a record of outstanding achievement in their field, and although they need not necessarily be at the peak of their careers they should still be in the top rank of artists or sports persons. In the event that Mr Kouros should lodge an application to settle here, the Department would give such a request every consideration and attention. However, it is not possible to determine the outcome unless and until an application has been made. I understand that Mr Kouros was personally congratulated by the Prime Minister on 25 March at the Antipodes Festival. Senator CHANEY —My question is to the Minister representing the Minister for Industrial Relations. Is the Minister aware that bans placed by the Transport Workers Union on the delivery of concrete in Canberra on 30 March are threatening to close down the Australian Capital Territory building industry, which is now entering a stand down phase because of those bans? Is the Minister further aware that the drivers involved in the dispute have failed to obey an Australian Conciliation and Arbitration Commission recommendation to return to work to allow negotiations to take place? Does the Minister agree that this action is but the latest example of defiance of the Arbitration Commission within the Australian Capital Territory building industry and once again demonstrates the need for effective compliance provisions which would enable the Commission to issue directions to terminate industrial action which are legally enforceable? Senator BUTTON —I am aware of the situation described by Senator Chaney, but only because he told me about it five minutes ago. In terms of supplying a detailed answer to Senator Chaney's question, I will seek further information from both the Minister for Industrial Relations and the Minister responsible for the Australian Capital Territory and try to provide a fuller answer on this matter. If the circumstances are as Senator Chaney describes, I would regard that as a reprehensible activity. However, I would like to have some check of the facts before I rush to any judgment on the issue. Senator Chaney's question was phrased, I think, in terms of the defiance of the Arbitration Commission by the building industry. It is always difficult to determine what is an industry. This is clearly a transport industry. Building workers will be adversely affected by this action. That is a very serious aspect of the allegation which has been made. Senator MACKLIN —My question is directed to the Minister representing the Prime Minister. Is it a fact that the Prime Minister, Mr Hawke, stated to the media this morning his satisfaction with the existing safeguards for Australian uranium? Did he not say that there was nothing new in the allegations that had been made by my colleague Senator Sanders and that there was no evidence to support such allegations? Does not this fly in the face of the recent evidence which has been provided about the failure of safety procedures in Euratom? Moreover, does it not conflict with the statement made by the Minister for Resources, Senator Cook, in this chamber yesterday when he said that he was treating the matter very seriously? Senator BUTTON —I am not aware of what the Prime Minister said this morning. If Senator Macklin's suggestions about what the Prime Minister said are factually correct, I certainly will undertake to obtain from the Prime Minister some explanation of those comments. I thought we had pursued this issue at some length in the Senate with questions to Senator Cook, but if there is any inconsistency I am sure that it can be explained. Senator MACKLIN —Mr President, I ask a supplementary question. I thank the Minister. The exact words used by the Prime Minister, which I understand are on a tape, are that `there is nothing new in these allegations and there is no evidence to support these allegations'. That seems to me to be contrary to the proposition put yesterday by Senator Cook. Senator BUTTON —I will ask the Prime Minister about it, but probably what he was saying was that Senator Sanders is back on his treadmill. He was probably not adverting to the detailed questions but, rather, to Senator Sanders's persistence in this matter over a long period. Senator VANSTONE —Has the Minister for Justice seen an article in the Australian of Monday this week headed `Call to Abolish Sex Crime Squads'-referring to a report by the Independent Police Complaints Authority in Victoria about the sexual offences squad in the State-and the allegations contained therein, namely, that the all-woman squad has been an unsuccessful exercise in tokenism, in part because the police assigned to that unit and others around Australia were inadequately trained? Does the Minister agree that, in order to ensure that victims of sexual assault are handled in a compassionate and understanding way, the allegations in this report must be investigated? Does he agree that if the allegations are incorrect, not only has the good reputation of such units been unfairly called into question, but also that unless the allegations are put to rest as being incorrect, or the alleged inadequacies are remedied, victims will be discouraged from reporting their plight? Has he been asked by the Minister Assisting the Prime Minister for the Status of Women or the Office of the Status of Women to refer this matter to the Australian Police Ministers Council (APMC) conference in May this year? If he has not been so asked, will he refer the matter to that conference? Senator TATE —In the latter part of Senator Vanstone's question lies the key to my response, namely, that in so far as she raises a matter to do with a unit of the Victorian police force, that is entirely outside my portfolio responsibilities, quite outside the jurisdiction of any Federal law enforcement agencies with which I am concerned. The Australian Police Ministers Council may well be a forum in which the general matter of the compassionate, timely and adequate dealing with victims of sexual assault, female victims of sexual assault in particular, might be addressed. I will certainly seek to talk with the Chairman of the Australian Police Ministers Council, Mr Gunn of Queensland, to see whether it might be raised within that forum. I cannot undertake to investigate that report myself, but that forum may well be utilised. Senator VANSTONE —Mr President, I ask a supplementary question. Am I to understand from the Minister's answer that the comments on page 66 of the National Agenda for Women are not being put into practice, namely, that the Office of the Status of Women would liaise and coordinate with other Commonwealth departments and with State and Territory governments? Is that the explanation for the Minister not having been made aware of this matter by either Minister Reynolds or the Office of the Status of Women? Senator TATE —I doubt it very much. Apparently, the Press report Senator Vanstone refers to was on Monday of this week. Is that correct? Senator Vanstone —Yes. Senator TATE —It may well be that the matter is still being put into the form of a brief within the Office of the Status of Women for consideration by Ministers, but I guess that its primary objective is to maintain an overview of what is happening within Commonwealth jurisdiction. It may be that this State matter is still to be looked at by the Office from the point of view of its briefing relevant Commonwealth Ministers. I will certainly look forward to its assistance in taking any matter before the APMC. Senator AULICH —Has the Minister for Industry, Technology and Commerce seen a letter in the Australian Financial Review dated 12 April 1988 from an independent cement producer, whose name is supplied but not published? The letter alleges that sections of the industry are developing a campaign of misinformation about the cement industry and, further, that unions are being used by management in this campaign. The letter further alleges that this campaign is intended to reduce, if not destroy, competition in the cement industry. Can the Minister inform the Senate whether this is what is happening within the industry? Can the Minister inform the Senate of the relative danger of import penetration of the Australian market and the steps the Government has taken to see that the industry is prepared to meet this competition? Senator BUTTON —I have seen the letter to which Senator Aulich refers. It is rather unsettling because it reflects the views of some relatively small and independent operators in the cement industry of which the author of the letter is clearly not the only one. It is unsettling because it appears from statements being made by some union officials and others that they are being used as part of a propaganda campaign by the cement industry. I would very much regret it if that were so. Let me put some of the points Senator Aulich made in context. It is true that unions and the cement industry have lobbied this Government extensively to ban imports of cement into Australia. I met with a group of unions which came along with the manufacturers in about October, I think, last year. The request they put to me was that we ban imports of cement into Australia. I said no. I have said no ever since and I will continue to say no. As the Australian Broadcasting Corporation is taking us off the air, perhaps I can give Senator Aulich the rest of the answer next week. Sitting suspended from 1 to 2 p.m. Senator SANDERS(Tasmania)(2.01) —I move: That the Senate take note of the paper. It is really quite appropriate that the Australian Safeguards Office submitted its 1986-87 annual report to the Parliament at this time because of the ongoing debate that we have been having about the safeguards in respect of Australian uranium. Especially noteworthy is paragraph 53 under the heading `Assessment of the Effectiveness of Safeguards' on page 11 of the report. It states: The principal method used at present by the IAEA- the International Atomic Energy Agency- for assessing the effectiveness of its safeguards program is to compare inspection activities actually carried out with a set of deterministic criteria. The results of these assessments are presented annually by the Director-General to the Board of Governors in the form of a report which records that criteria were either met, not met or partially met. This reported method does not evaluate the probability that undetected diversion might occur or identify the most probable ways in which attempts at diversion would be made. Such information would be useful in determining needs for improvement of the system and the optimum allocation of resources in the safeguards program. Here we have the Australian Safeguards Office admitting that there are deficiencies in its safeguards practices. This is exactly what we have seen in the documents leaked from Euratom and released in the European Parliament and now in Australia. A new type of departure from the safeguards regime has been created which has not been foreseen or assessed by the Safeguards Office. The most recent Euratom documents that we have-no-one has ever disputed their accuracy-show that Euratom wants further to weaken the safeguards conditions of Australia, the United States of America and Canada by furthering a program of what it calls `flag swaps'. This is basically a means by which uranium from, say, South Africa or Namibia can be given an Australian label, an Australian flag, and thus be allowed to be processed or used in countries which would not normally use South African or Namibian uranium. This information is of the most serious nature because it shows that not only does Euratom not function as a nuclear watchdog, but also it is trying actively to get around the safeguards agreements. Today our Prime Minister, Mr R. J. Hawke, said that these documents were not at all important, that they were mere allegations and that they had no substance. This is not good enough. They do have substance. These are not allegations. They are facts which show that Australian uranium cannot be safeguarded, that Australian uranium can in fact end up anywhere. We have no knowledge of where it will end up. The Government is fond of saying, `Well, we can trace it on paper. It is a matter of equivalency. We know that an equivalent amount of uranium goes to France, for instance, and it comes out of France'. But let us look at France. France has a totally integrated civilian and military nuclear capacity. Our uranium from the Ranger mine is enriched in France. There is no way that this Government can prove that the uranium that is enriched in France does not end up in Mururoa, in French bombs that are tested in our backyard. It is said that an equivalent amount may be transferred on. That is not good enough. If, say, one's grandfather dies and one goes through a funeral procedure and the body is cremated, one wants to know that his ashes are truly in that urn. One would want verification and proof of that. One would not want any doubt that it might be somebody else's ashes. It is the same with our uranium. We want to know where the physical uranium is going. At the moment there is no way of tracking it. Euratom is actively moving against tracking uranium and our Government does not seem to care where it goes. I say to the Hawke conservative Government that it had better pay attention to where the uranium is going. We do not know where it is going; it could be going into bombs. We have no control over it. The people of Australian demand that uranium be kept in the ground where it can be safeguarded with the utmost certainty. Senator WOOD(New South Wales)(2.06) —I support the comments of my colleague Senator Sanders, although I will not repeat them. I know that it is unusual in the Senate not to repeat what has been said many times, but I will not do that, only to point to that section of assessment of the effectiveness of safeguards referred to by Senator Sanders and tender it as evidence of what we have been trying to say in the Senate for quite some time; that is, the safeguards are not adequate and the Australian Safeguards Office itself needs more power and resources to look adequately at safeguards. I would go further than the Department and say that it is impossible to safeguard uranium. When fallout turns up in food and Australian farmers cannot sell their produce overseas because it is radioactive, there is no way of knowing whether it was a French atom, a Namibian atom or an Australian atom. I reinforce what Senator Sanders said: the best thing to do with uranium is to keep it in the ground, thus stopping the proliferation of weapons and the dangers associated with nuclear technology. Question resolved in the affirmative. Senator MICHAEL BAUME(New South Wales)(2.08) —I move: That the Senate take note of the paper. The annual report of the Commissioner for Employees' Compensation reveals, yet again, another great success for the Opposition's Waste Watch Committee. Early on in the career of the Waste Watch Committee, we pointed out the extraordinary rip-off involved in workers compensation payments within the government service and its agencies. We revealed the extraordinary proportions of successful workers compensation claims in some areas. For example, the year before last 60 per cent of employees of the Canberra Fire Brigade had successful workers compensation claims. In some of the defence factories, about 30 per cent of employees had successful workers compensation claims. There was the extraordinary situation that it was 10 times riskier, in terms of workers compensation claims, to work in a defence factory than to be in the Army. I am glad to say that as a result I believe of the Waste Watch Committee's publicising of this dreadful situation, and also as a result of some pressures from within the Government to improve the system, we have had a dramatic reversal of that trend of an ever-increasing number of workers compensation claims. The number of claims had reached a ludicrous level. I am glad to say that this report reveals that changes in the administration have meant that for the first time in recent years there has been a significant reduction in the rate by which expenditure was growing. It is now down from 27 per cent for the last five years to a rate of about 9 per cent in the latest year. The report says: . . . the impact of the change in administration brought about by bringing a large proportion of the total claims processing under direct control was the main reason for the reduction. This reduction meant that, had the old system persisted, claims for this year would have been increased by something like $35m more than was actually the case. I am glad to say that the Opposition's Waste Watch Committee played a major role in saving $35m of taxpayers' money by bringing very strong pressure to bear to change the system. I am told changes had been under consideration for something like five years but had not actually been introduced. Let us see what has happened under the Hawke Government. There has been a ludicrous blow-out in workers compensation claims. Back in 1982-83, the last year of the Fraser Government, something like 9.5 per cent of Commonwealth employees made successful workers compensation claims. By last year this had increased to 13 per cent. Why on earth should there be this sudden blow-out? Has it become so much more dangerous to work for the Commonwealth? Why has there been this increase from 9.5 to 13 per cent? I suggest it is because of lax governmental control. This blow-out has resulted in an $83m increase in expenditure-a 63 per cent blow-out in workers compensation spending. We notice this year, according to the annual report, a doubling of workers compensation claims disallowed, either totally or partially. A total of 3,824 claims were rejected. I am overjoyed, as I said, that the Waste Watch Committee has been successful in this matter. We are talking about very large amounts of money. The report points out that an examination of Public Service employees who have been receiving compensation shows that 26.6 per cent, or 2,000-odd, of those who won long term compensation cases received more by way of their combined superannuation and compensation payments than they received before retirement. So there are some very large amounts of money going out. There is also some criticism by the Commissioner about some elements of the changes. However, I do want to say that still all is not well. Excessive levels of workers compensation payments within government authorities remain. For example, 40 per cent of workers at the Williamstown Naval Dockyard made successful workers compensation claims last year. That is intolerable. Of course, that facility is now being sold. Some sections of government still have workers compensation claims at a level of 23 or 24 per cent. For example, the Territories Department had a 10.5 per cent level of workers compensation claims, while the level for the Australian Capital Territory Fire Brigade was down to 16.8 per cent. There are still some excessive rates, but certainly there has been a dramatic improvement in the Government's workers compensation area. As I say, this is a great record of success for the Opposition's Waste Watch Committee. Question resolved in the affirmative. Senator PANIZZA(Western Australia)(2.15) —I move: That the Senate take note of the paper. The Industries Assistance Commission report on the wheat industry is a long report that has been awaited by the industry for a long time. I am certain that on it will hinge the future of the Australian wheat marketing system. That system, which has been in operation since 1947, is very good and strong and I am sure that it will continue for many years to come. In the short time available I would like briefly to touch on three areas relating to this long report. The first is the size and importance of the Australian wheat industry. The wheat industry is still a great contributor to Australia's export income. In the years 1972-73 to 1982-83 the industry's contribution averaged 17 per cent of the gross value of rural products or $2.578 billion, which compared very favourably with the contribution of the wool industry of 18 per cent and of the beef industry of 16 per cent. Bearing in mind that the mining industry produces roughly 40 per cent of Australia's income, we see that the wheat industry produced about 8 per cent of Australia's total exports. I now move to a matter that has been very much in the news of late-levels of assistance to different industries around Australia. I mention briefly the assistance that has been given to the wheat industry over the years. That industry has been regarded for many years as a receiver of a low level of assistance. Assistance has averaged out at 6 per cent. In the period 1973-74 to 1985-86 the figure ranged from minus 9 per cent to plus 11 per cent, giving an average of 6 per cent, which certainly can be regarded as low. Only in 1986-87, with the downturn in world wheat prices, did the Government have to put up the money for the triggering system under which, if the price of wheat falls below the guaranteed minimum price, the Budget allows a certain amount to be made available to the industry. In that year assistance amounted to $220m and the assistance level shot up to 16 per cent. The nominal average assistance level is now back to 6 per cent. The other point I would like to make concerns the criticism around Australia of the domestic price of wheat. It has been taken for granted by many people who wish to take it that way that the Australian end user of wheat pays a lot more for it than he should be paying, thereby subsidising exports. That is not correct, as this report very firmly points out. The report states: The legislation and AWB arrangements for domestic wheat pricing were outlined in Section 3.4.2. . . . Wheat used for human consumption is priced according to a formula which averages fob forward export price quotations for the two most recent quarters for comparable wheats, to which is added $16 per tonne margin to cover the additional cost . . . That margin of $16 a tonne includes a levy of $1.90 per tonne on freight to Tasmania and the rest covers additional expenditure by the Australian Wheat Board. It covers additional fees to the bulk handling authorities to give domestic flour millers the pick of the wheat over overseas buyers; the cost of reserving stocks of grain for up to 13 months; the cost of reserving the best quality wheat at the fixed administered price; and the cost of giving Australian millers credit for an average of 45 days. These costs quite easily account for the $16 per tonne that Australian flour millers and other consumers must pay above the export price. It certainly is not a subsidy. Mr Deputy President, I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator POWELL(Victoria)(2.20) —I move: That the Senate take note of the paper. The report from the Australian Council for Employment and Training (ACET) deals with a very important area to which the Senate needs to give some attention. I particularly want to address my remarks to an area which comes under `Other Issues' in section 11 of the report. That section states: The Minister stated in his letter that the issues he had identified in no way represented an exhaustive or prescriptive indication of the areas in which ACET should become involved, particularly in the longer term. Other matters which ACET and its committees have identified as warranting attention include employment training opportunities for women and the scope for the local delivery of programs and services by organisations other than Commonwealth or State governments, including community organisations, the private sector and local government. These are possibly two of the most important areas which need to be looked at, particularly in the context of the concern we all have for getting particular groups of people into paid employment. Women are very much uppermost in our minds in that area. My motivation to make these comments came from spending two days last week at a conference in Melbourne organised by the Australian Institute of Family Studies and the Australian Council of Social Services which addressed the issue of child poverty. One of the major conclusions arrived at by that conference was that unless we can get more women into the paid work force, particularly women who are sole parents, we will not be able to solve fully the escalating problem of child poverty. Certainly there is a multi partisan commitment to solving this problem. I suggest that while labour market orientation, structured training programs and so on, have their place, we need to remember that there are special problems for some people, in particular for mature age women who have been out of the paid work force for many years, exercising their parenting role and who in increasing numbers have had the expectation of being in the paid work force thrust upon them through the removal of the class B widow's pension and the reduction in access to the sole parent's benefit. Many of the structured programs that exist are unsatisfactory for these women and such programs are of little value to women who live in remote areas. It is important that we do some lateral thinking to help these women and also the younger long term unemployed women for whom the structured programs of education and subsequent training are inappropriate. Many of the informal programs which are available in the community through, for instance, neighbourhood houses and through some very basic training courses which are generally seen as hobby courses are very important to these people because they build self-esteem and reinforce people's attitudes about themselves before they go into a structured program, assuming that such a structured program is available to them in their communities. Here I express particular concern about people in remote areas. The scope of local and community organisations and local government is one that I think very much needs to be explored. The Australian Democrats have made proposals over the years on this. I hope that the Council will look at those and other similar proposals in addressing this problem. Question resolved in the affirmative. Bill received from the House of Representatives. Motion (by Senator Reynolds) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator REYNOLDS(Queensland-Minister for Local Government)(2.26) —I move: That the Bill be now read a second time. I seek leave to incorporate the second reading speech in Hansard. Leave granted. The speech read as follows- Section 66 of the Constitution prescribes, subject to the Parliament otherwise providing, a maximum annual sum for the payment of salaries of Ministers. Amendments to the Ministers of State Act which sets this sum are from time to time thus required to cover changes to Ministerial salaries. In its 1987 review, the Remuneration Tribunal recommended that ministerial salaries be increased by 3.8% with effect from 1 July 1987 as the first step towards resolution of the agreed anomaly which the Tribunal found has existed since 1984. The Tribunal has also recommended that parliamentary salaries be increased by a further 2.2% from 1 July 1988. The anomaly arose as a result of the Government's consistent demonstration of wage restraint. The percentage increases awarded to ministers are the same as those awarded by the tribunal to parliamentary office-holders and other parliamentarians. In addition, the maximum number of Ministers of State has been increased from 27 to 30. It is therefore necessary to raise the upper limit on the amount appropriated for ministerial salaries to accommodate the 3.8% increase of 1 July 1987 and the expansion of the Ministry. The purpose of this Bill is to amend the Ministers of State Act to increase the maximum annual sum from $680,000 to $745,000. I commend the Bill to the Senate and present the explanatory memorandum to the Bill. Debate (on motion by Senator Messner) adjourned. Bill received from the House of Representatives. Motion (by Senator Reynolds) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator REYNOLDS(Queensland-Minister for Local Government)(2.27) —I move: That the Bill be now read a second time. I table the supplementary explanatory memorandum and seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill is an omnibus measure proposing amendments to various bounty and subsidy acts. The major proposals contained in the Bill are: (i) The implementation of the Government's decision announced in the 1987-88 budget to, terminate the Bounty (Agricultural Tractors & Equipment) Act 1985 as from-15 September 1987 and (ii) The amendments to the Bounty (Books) Act 1986, to effect changes to the book bounty scheme as a result of the Government's consideration of the Industries Assistance Commission's report on the Pulp, Paper, Paper Products and Printing Industries. In addition, the Bill makes a number of technical amendments to clarify certain eligibility criteria and administrative features in other bounty and subsidy schemes, as well as repealing certain expired bounty schemes. These amendments are set out in detail in the explanatory memorandum to this Bill, which has been circulated. I shall now briefly outline the two major proposals which are contained in the Bill. (I) Bounty (Agricultural Tractors and Equipment) Act 1985 When the agricultural tractors and equipment bounty scheme was introduced in mid 1985, the government believed that it would assist the local agricultural tractor industry and strengthen its position in the domestic market and become economically viable in the longer term. However, since that time, production by the major manufacturer in Australia has virtually ceased, and it has become clear that the scheme has not been effective in maintaining an internationally competitive tractor manufacturing industry in Australia. In the circumstances, and balanced against other budgeting constraints, the government decided in the context of the 1987 budget to terminate the scheme as from budget night last September. I should like to emphasise that tractors and parts in stock at the time the decision was made are eligible for bounty payment in the usual way, provided applicants can demonstrate the goods satisfy the normal end use preconditions of the legislation. Finally, I should like to point out that agricultural tractors and equipment are incorporated in the reference on mining, construction and agricultural equipment currently with the Industries Assistance Commission. It is therefore open to people to put forward their views to the commission on what they consider to be the appropriate level of assistance for this industry sector. (II) Bounty (Books) Act 1986; This Bill also proposes amendments to the Bounty (Books) Act 1986, which will extend bounty assistance to the book producing industry to 31 December 1993, and implement various related administrative arrangements as a result of the Government's consideration of the Industries Assistance Commission's (IAC) Report No. 401, dated 25 February 1987 on the Pulp, Paper, Paper Products and Printing Industries. Bounty has been paid on certain Australian book production since 1969 in order to assist the Australian printing industry to compete with overseas book printers. This particular industry is assisted by means of a bounty because, although not a signatory, the Government adheres to the spirit of the Florence Agreement which precludes the imposition of tariffs on books containing educational, scientific or cultural material. In its 1987 report, the IAC concluded that the book producing sector should continue to be assisted by bounty until at least 31 December 1991. It recommended that the bounty of 20 per cent of net selling price be phased to 18 per cent after one year and to 13.5 per cent after two years. Further it was recommended that no changes be made to the bounty criteria which applied from 1 January 1987. The Government accepted the IAC recommended reduction in book bounty rate to 13.5 per cent, which is equivalent to a 15 per cent tariff. However, as the industry had already suffered rapid bounty reductions over recent years, it was decided to phase in the reductions over four years rather than two years with an extension of the scheme to 31 December 1993, thus producing a more stable assistance environment allowing the industry to confidently make long term plans. Accordingly the book bounty will remain at 20 per cent until 31 December 1988. Bounty will then be reduced to: 18 per cent from 1 January 1989 16 per cent from 1 January 1990 14 per cent from 1 January 1991 13.5 per cent from 1 January 1992 The Government will again review assistance to the book industry prior to the 31 December 1993 expiry of the existing scheme. The Government has also decided that although existing administrative procedures should generally continue, certain changes should be made to facilitate more efficient administration of the scheme. In brief, the Government has decided that: a minimum claim of $500 per title per production run will be introduced for all claims for book bounty, replacing the current $200 minimum claim limit; bounty will be paid on a production run of 1000 copies or more which includes more than one type of eligible binding of the same book, so that hardback and paperback editions of the one book produced together will be treated as having been printed in the one production run; packaging used for promotional purposes and sold with a book eligible for bounty will now be bountiable; all children's books over 16 pages when the text is not less than 3 mm, irrespective of whether or not the book contains pictures, will be bountiable; and self-financing government publishing enterprises producing and marketing books in substantial competition with the private sector will now be eligible to receive bounty. With regard to these proposed administrative changes it is considered that raising the minimum claim from the existing $200 per title per production run to $500 will assist administrative efficiency by reducing the number of book bounty claims while not disadvantaging small bounty printer claimants. The national book industry review committee has maintained that claims between $200 and $500 account for less than 5 per cent of these claimants' output, and usually involves specialist work not subject to overseas competition. The proposed change relating to the binding of books will remove the present provision in the act which prohibits variations to book binding material when the production run of a particular book is assessed for eligibility. This means that the same book printed in both casebound and paperback form cannot be combined in the same production run. Representations from the industry argued that this discriminates against casebound books. Production runs of casebound books are often less than 1000 copies, and therefore ineligible for bounty. The exclusion of these books because of binding variation represents too fine a distinction and defeats the intention of the book bounty. The government has therefore decided that a production run be defined as including more than one type of eligible binding of the same book. This change is proposed to be made retrospective to 1 January 1987, the date of commencement of the current act. Similarly, the proposed amendment relating to packaging will remove an impediment under the existing Act which allows packaging for the purpose of transport to be eligible for bounty, but not if the packing is used for promotional purposes. Packaging for an imported book is not dutiable as it forms part of the imported product. The use of packaging for promotional purposes is common in the book industry, and when used in this way for an imported book does not attract duty. To draw a dichotomy between this packaging and packaging used in advertising a book which is locally produced is therefore inconsistent and discriminates against the local book production industry. For these reasons the Government considers it appropriate that bounty be now paid for packaging used for promotional purposes. The proposed amendments relating to children's books are intended to remove both an anomaly in the present legislation, and an administrative problem which has arisen. The Act provides for children's picture books over 16 pages to be eligible for bounty while other children's books are required to have a minimum of 49 pages to become eligible. Children's picture books containing a continuous narrative are also excluded unless the minimum size of the text is not less than 3mm, and the pictures form the principal interest in the book. It is anomalous that children's picture books are eligible for bounty while other children's books are not. It is considered that administration problems relating to children's story books and adult story books can be resolved by establishing a standard minimum text size for children's books. It is generally accepted within the industry that 3mm is an appropriate minimum size. By allowing all children's books over 16 pages when the text is no less than 3mm, and children's books over 16 pages with pictures only to be eligible for bounty, it is considered both the anomaly and administration problems will be resolved. Finally, the proposal to make bountiable certain work produced by a Government instrumentality is intended to address two problems being encountered in the present legislation. Currently, when an eligible process is sub-contracted to a Government Printer this renders the book ineligible for bounty. The Tasmanian Government Printer has requested that as bindery facilities are only available in Tasmania through the Government Printing Office, private sector printers be permitted to sub-contract bindery work to the Tasmanian Government Printer without forfeiting their eligibility to claim book bounty. In order to solve this difficulty, the Government has decided that when an eligible process is subcontracted to a Government Printer or other authority of the Commonwealth, of a State or of a Territory, this will not render other eligible processes undertaken by the private sector for that book ineligible for bounty. Bounty will continue to not be payable to the Commonwealth, a State or Territory or an authority of the Commonwealth, a State or a Territory for book production. However it has been decided that self financing Government Publishing Enterprises, when they are producing and marketing in substantial competition with the private sector, should not be unduly disadvantaged relative to the private sector. Accordingly it is proposed by this Bill to give the Minister for Industry, Technology and Commerce the power to determine exemptions from bounty exclusion for such self financing Government enterprises. The detail and mechanics of this exemption process, together with the previously mentioned administrative changes, are further discussed in the explanatory memorandum to this Bill. Financial impact statement Bounty payments to the book industry under the Bounty (Books) Act 1986 will be $18.4 million during the 1987-88 financial year, and are expected to be $21.4 million during financial year 1988-89 and $19.3 million in financial year 1989-90. The termination of the Agricultural Tractors Scheme is expected to save $900,000 in the 1987-88 financial year. The other proposed Amendments in the Bill have no direct financial implications. I commend the Bill to the Senate and present the explanatory memorandum to the Bill. Debate (on motion by Senator Messner) adjourned. Debate resumed. Senator PARER(Queensland)(2.28) —We are debating the Taxation Laws Amendment Bill (No. 5) 1987. When the debate was adjourned earlier today I was referring to remarks in the editorial of the 26 March edition of the Taxpayer. The final part of the quotation from that document was: Remember: In just four years, the CPI- the inflation rate- went up 35%- that is high enough in itself, high enough compared with the rest of the world; it is an enormously high figure- Canberra spending rose by 38% with a 65% jump in taxation. For Canberra to spend more, it bled the States, and lined you up for a double-whammy in State charges. Hence the suggestion by the writer of the editorial of the Taxpayer that whilst he had never urged revolt before, he had never been so moved by such blatant political manipulation. The average weekly income of a family has been cut to pieces by this Government with its taxation regime, the inflation rate that it has allowed to continue, high interest rates, and so on. Yet in the other place we have a Treasurer who is daily lining himself up for the job of the discredited Prime Minister (Mr Hawke) and who himself did not even put in his own tax return for two years, and suffered a friendly reminder from the Commissioner of Taxation-`Dear Mr Keating'-which benefit is not available to any other person. So he has discredited his own position. A person who is Treasurer should be above that sort of nonsense. Now the Minister for Health (Dr Blewett) is again discrediting this Government when he releases confidential information to one of his own back bench lackeys, not to pick up a few errant doctors, but to discredit the whole medical profession. That was the aim of that little exercise. This was a threat to the privacy not only of the medical practitioners concerned but to all Australians. I seek leave to table a legal opinion on the actions of the Minister for Health, which was tabled in the House of Representatives on 15 March. Leave granted. Senator PARER —Thank you, Madam Deputy President. On 1 May 1985 Senator Cook, now a Minister in this Government, was quoted in the Sun newspaper as saying: The Labor Party is a high-taxing Party. It needs to be to carry out its reforms. That is an ominous statement which should have received more attention, because he was entirely correct. Let us look at some of the statements and the record of this shabby, cynical, out of touch Government. The Prime Minister, Mr Hawke, in his election speech in February 1983, when he was Leader of the Opposition, said: Labor will reduce the price of petrol . . . by the order of three cents a litre. That was the statement before the election. What happened? Petrol went up 300 per cent in the next three years. The same man, the same Mr Hawke, at the Australian Labor Party conference in 1982, said: A Labor Government must be committed to an effective capital gains tax. In his election speech, in February 1983, he said: And here let me make one point so that even our opponents can understand it; and let me make it beyond all their powers of misrepresentation and distortion. There will be no new capital gains tax. What happened? There was a capital gains tax. We had the Treasurer, Mr Keating, in November 1984-and it is worth comparing the words-saying: Around the world they- capital gains taxes- never raise much money . . . If the principal reason for a government wishing to introduce a capital gains tax were to raise a lot of revenue, we would be damned to fail from the start, because they never raise very much revenue. The Prime Minister again, in his rural policy speech of 20 February 1983, said: Labor has pledged not to impose a sales tax or an excise tax on wine. What happened? A wine sales tax was imposed in August 1984. On 15 April 1983, the same Prime Minister said: There has been no basis for the speculation (that lump sum superannuation tax payments would be increased). Lump sum tax increased in May 1983, one month after that statement. I will quote further comments because it is important that we see the duplicity of this quite discredited Prime Minister and his Government. The Labor Health Minister, Minister Blewett, in the House of Representatives in August 1984, said: Let me make it quite clear- I might say that one starts to get suspicious these days when Ministers on the other side say, `Let me make it quite clear', but I will quote from Dr Blewett- that the Government has absolutely no intention of increasing the one per cent Medicare levy. That is an absolute commitment by this Government. That was said in August 1984 and in August 1986 the Medicare levy went up. The Prime Minister on the Australian Broadcasting Corporation PM program on 11 December 1984 said: . . . let me make it clear- again the same sort of language- that this is not a country which needs an increase in the tax burden and under my Government it's not going to get it. That will be a surprise to the average weekly earner-the family man out there. Mr Hawke continued: It's also a country which doesn't need an increase in interest rates and it's not going to get it and that means its appropriate that we reduce the deficit. In the following year after that statement was made by the Prime Minister the effects of excise, capital gains tax, fringe benefits tax, assets test, negative gearing and higher interest rates were felt. People are fed up because they cannot make ends meet. They are demonstrating this, as they have over the past few months, in every ballot box at every chance they get. A discredited Prime Minister has shown that he cannot be trusted. The people are now doing to him what he has done to them for the past few years and, with respect, from a great height. I support the amendment to the motion for the second reading of the Taxation Laws Amendment Bill (No. 5) that has been moved by the coalition. It reads: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue; (c) there will be an estimated $71 billion increase in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; That increase in collection did not come from nowhere; it came from the average weekly earner, the family person, the person at home trying to make ends meet under most difficult circumstances. The amendment continues: (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; Some might say, `Let's hit the companies'. There are still a few people in the community who think that maybe companies are making profits that the Government should grab. They do not understand that once one introduces that disincentive to the wealth creating sector of the economy, one stops or slows down investment. When that occurs one slows down employment. The amendment continues: (e) sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than any other of its record breaking taxes; This gives the lie to comments made by those who would oppose any discussion of a consumption tax. We already have a consumption tax. We have it in a most surreptitious and sneaky way. Senator Maguire —We do not. Senator PARER —I am pleased that Senator Maguire interjected. We have indirect taxes, which are indexed, on some goods, be they beer, cigarettes, or whatever. We have taxes on milk and flavoured milk. Finally, the amendment states: (f) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.77 billion foreign debt strait jacket without further reductions in our standard of living. I think it is patently obvious to everyone-I do not have to say it-that people in the community, particularly young married people starting families and buying homes, have had enough. Their pay packet is continually being robbed at enormous rates by this Government. For instance, average weekly earners today, in receipt of $23,000 or $24,000, whatever the figure is, pay $117 a week in tax. At the same time they are trying to pay off a mortgage. If they have small children they have to bear that additional cost. When they go to the supermarket they find that the pay packet that has already been carved off at the top by this Government is just too small for them to be able to cope adequately with purchasing the ordinary necessities of life. This Government has to be condemned for its attitude on tax. It offered a lot of promises at the time of the taxation summit but produced nothing. Actually I am not correct when I say that it produced nothing, because what it did was to add additional burdens to the average person, whom it has neglected. Hence, the story that one hears all around the country today-`We have a government that is out of touch'. This has been proved in recent times at the ballot box. Let us hope that the Government recognises the damage it has done to the average weekly earner, particularly the average weekly earner in a single income family, and will do something about it in the May mini-Budget. Senator MESSNER(South Australia)(2.41) —We have listened with interest to my colleague Senator Warwick Parer's remarks on taxes because we know how well informed he is about that. He has drawn our attention very clearly to the broken promises of the Hawke Labor Government. We know they are extensive. I think that it does well to remind ourselves of some of the new taxes that have been introduced by this Government since it came to power in March 1983, just five years ago. Let me remind honourable senators first of the introduction of the lump sum superannuation tax in July 1983. Of course, that is the main subject of the Taxation Laws Amendment Bill (No. 5) 1987. I will return to that in some detail later. A month after the lump sum superannuation tax we saw the automatic indexation of traditional excises and taxes applied to petroleum products, beer and cigarettes. They go up automatically every six months and drive up the price of fuel, drive up the price of beer at the bar and drive up the cost of packets of cigarettes. In February 1984 we saw the introduction of the Medicare levy-an extra levy of one per cent on everyone's taxation. That was followed in July 1984 by a resource rent tax applied to minerals. In the same month we saw the introduction of an excise on new oil. A month later a 10 per cent tax was introduced on wine produced in Australia. In July 1985 we saw the total abolition of concessional expenditure rebates for income tax purposes. People will remember that there used to be deductions for things such as payments for rates and taxes, and insurance. They do not get that any more; that was ruled out by the Hawke Labor Government in July 1985. In the same month we saw the abolition of negative gearing for investment in real estate properties. That was reversed only a few months ago, just in time to try to help save the skin of the Unsworth Labor Government in New South Wales. Of course it failed dismally to save Mr Unsworth and his discredited Government. Again in July 1985 we saw the removal of the Medicare levy limit with the result that everybody had to pay more for his health insurance. In September 1985 we saw the introduction of the disallowance of entertainment expenditure. In the same month we saw the introduction of the capital gains tax, the one we were supposed never to see. We were promised by the Prime Minister (Mr Hawke) in the 1984 election: `There will not be a capital gains tax introduced by the Labor Government'. Of course, sure enough within nine months along it came. In July 1986 we saw the introduction of the fringe benefits tax. In the same month we saw the introduction of the heavily bureaucratic substantiation provisions which, I read in the financial statements for the month of February, seem to have added very significantly to the tax burdens of individuals in this country. In fact, it is hard to work out just how much people have been charged in extra taxes, but it is obviously in the hundreds of millions of dollars. In August 1986 the Government raised more than $100m extra from its new consumption taxes applied to things such as ice-cream, snack foods, bathroom fittings-all the common things that people spend their money on. This is a perfect example of the Government's extension of its consumption taxes as it is stealthily going about its business every month. In the same month the wine tax was increased from 10 per cent to 20 per cent, with devastating effects on Senator Maguire's home State of South Australia in the Riverland. We do not recall him being on the platform at Renmark when the grape growers were protesting that episode. No Labor members were there to defend their Government. They were ashamed to go there to defend their Government. Only Liberals and Australian Democrats were there on that occasion. In the same month there was a huge increase in petrol excise-again an inflationary tax driving up the cost of travelling on the Australian roadways. In December 1986 the Medicare levy was increased by 25 per cent. Again, there had been a promise from the Government. `We will not increase the Medicare levy,' said Bob Hawke, Prime Minister of Australia, in the election campaign in 1984. Sure enough, in December 1986 the Medicare levy was raised by 25 per cent. Six months later, in July of last year, the corporate tax rate was increased from 46 per cent to 49 per cent and a devastatingly difficult and complex and very penal system of foreign tax credits was introduced. These are just some examples of what this Government has done to tax and to impose new taxes on the Australian people, notwithstanding that from time to time when it suited its electoral purpose the Hawke Government said, `No, we are not going to introduce new taxes. No, we are not going to increase taxes'. But it just goes on doing it and the people of Australia are getting absolutely fed up with it. This was demonstrated very clearly by the results of the by-elections in Adelaide and Port Adelaide recently. They demonstrated the trend of people's thinking on this. The Government has not just applied taxes; it has a deliberate policy of driving interest rates on people's house mortgages up and making them pay more for their ordinary goods in the supermarket. It is making them pay more to buy a new car by imposing fringe benefits taxes and higher sales taxes and by allowing interest rates to go up so far that hire purchase payments become so devastatingly difficult. All those things are reducing the quality of life in Australia and they are, of course, a direct result of this Government's policies and in particular its broken promises. The Government has acted in this way because it is totally out of touch with the Australian people. It has lost contact with the wishes, aspirations and desires of Australians and it is now quite clearly arrogantly standing by and imposing taxes at will for what it deems to be its own best purposes. Having detailed all those taxes, I return to the first one on the list which is the subject of one part of this legislation: the lump sum superannuation tax that was introduced in 1983. The Government is entering a new period of internal debate to impose higher taxes on people's superannuation. I will now detail the approach the Government has to raising funds to pay its bills. A person may expect to receive a superannuation payment in 20 or 30 years time when he retires. A lump sum superannuation tax has already been imposed on those amounts when he retires. Now, instead of waiting until he actually retires, this Government proposes to impose taxes on the superannuation funds themselves so that he will never be able to accumulate as much as he expected upon retirement. This will have devastating effects upon people's expectations and their ability to survive into retirement. It is devilishly clever because the Government is saying that the people of Australia will not know the cost of the taxes until they actually retire, 20 or 30 years from now. That means that they will never find out what this Government has done to them until it has long since gone and has been buried in the avalanche of some election victory for the Liberal and National parties. That is what this Government is about. It does not care about the living standards of ordinary Australians. It is only feeding its avaricious need for new taxes and stuffing them down the Treasury's throat as fast as it possibly can. One might say that this is a fair way of balancing up the tax laws and making sure that tax exempt bodies such as superannuation funds bear their reasonable proportion of tax in the same way as other business enterprises. Let us look at the effects that these kinds of taxes have in due course on people's accumulated benefits. I will take an example from information provided by the Life Assurance Federation of Australian Inc. Let us assume that the Government imposes a tax of a mere 20 per cent-about half the corporate rate of tax-on the income of superannuation funds, which are currently exempt from tax. We are not talking about what a benefit will generate today, but what it will generate in 20 or 30 years time. If a tax were applied to an average wage earner at this time upon the earnings of his contributions and those of his employer at the rate of 20 per cent, the eventual benefit would be $140,000 less-more than a third less-than the amount that would otherwise have been received. In other words, a tax of 20 per cent applied to the income of a superannuation fund would reduce by a third the money eventually received by the superannuant when he retires. That will have a devastating impact upon people who have been saving and looking forward to their retirement. The money that they thought would be there will not be there because of this Government's taxation measures. That is the impact of the Government's proposals at the present time. In the case I have just mentioned, those extra taxes of $140,000 over the lifetime of an individual mean that that money, instead of going to the individual and his family, goes into the Government's Treasury. Of course, the Treasury will spend it according to this Government's priorities in the running of government. But this means that the amount of money eventually received by the family when the person retires will be reduced. As a result, that family will be less independent. It will be less capable of looking after itself in retirement and, as a result, will be forced to take social security benefits from the Government. So we see here the futility of the whole exercise. On the one hand the Government will impose a tax that reduces people's capacity to be independent and, on the other, because they will not be as independent as anticipated, they will eventually be forced to go onto social security benefits paid by the Government. Consequently this will add more expenditures to government through the social security bill. It is plain stupid. It is the kind of nonsense the Government goes on with continually in dealing with its various tax measures. It is the kind of poor thinking and analysis of problems that has been the hallmark of all this Government's tax legislation. Our colleague Senator Watson gave examples this morning during this debate that clearly showed the errors on which the Government has embarked in particular tax legislation. I instance the fringe benefits tax and the capital gains tax. Only last year another 60 pages of legislation was introduced into the Parliament to correct the Government's mistakes in setting up the capital gains tax. In other words, the Government had no idea of what it was doing when it established the legislation. It was done out of blind ideology, with no regard for the consequences-- Senator Maguire —You won't abolish it, though. Senator MESSNER —The honourable senator knows that the Liberal and National parties are committed to the abolition of the capital gains tax. That was fought out in the election campaign in July last year. Senator Chapman —And Labor's fringe benefits tax. Senator MESSNER —Yes. Those are the sorts of stupidities Senator Maguire goes on with. Senator Maguire sits there in his glory and accuses the Liberal and National parties of having some agenda about what he calls consumption taxes. Let me turn to some of the Government's consumption taxes, the taxes which it applies to ordinary food items, such as orange juice and ice-cream. Senator Maguire —And bread? Senator MESSNER —And bread, flour and other ordinary household products. To the Government that is not a consumption tax, it is something else. But it is only a rose by another name, as the Government knows. The Government imposes consumption taxes on goods that are purchased every day by the ordinary people of Australia yet it will not admit it. Let me cite the figures, the financial statements, for the month of February. They are revealing. Sales tax collections for the first eight months of this current financial year were $4,956m-nearly $5 billion in eight months. That is an extra $700m a month accruing to the Government from this tax over the last year. Senator Maguire —A 66 per cent rise in-- The ACTING DEPUTY PRESIDENT(Senator Bjelke-Petersen) —Order! Senator Maguire, you may speak in this debate if you wish to after Senator Messner has finished. Senator MESSNER —Thank you, Madam Acting Deputy President. The sales tax increase-a positive part of this Government's measures both to extend the tax to more ordinary products which people buy, and to impose higher rates on products-has amounted this financial year to 18 per cent compared to last year. That is an 18 per cent increase in the Government's consumption taxes this financial year. This is the socialist Government that says it does not believe in consumption taxes. Yet its taxes are going up by 18 per cent a year on consumption items. That compares with the Budget estimate of this current financial year laid down last August. The percentage increase over all taxes, including income tax, that was supposed to be budgeted for was only 8 per cent. But this Government is imposing an 18 per cent increase in sales taxes-taxes on the ordinary goods that ordinary Australians have to buy. This hypocrisy on the part of the Labor Government must cease. Let us have some rational debate on this issue. It is just another piece of politicking this Government indulges in from time to time. It has such a list of broken promises it is impossible to keep track of them. Let us remember the solemn promise the Prime Minister gave us during the 1984 election campaign when he said, `We will not allow taxes to increase over and above that percentage of gross domestic product which was to apply in the 1984 year'. In other words, in every subsequent year there would be no increase in taxes as a proportion of the total tax take. That, of course, is the biggest broken promise of all. Every year since 1984 the Hawke Government has increased taxes more and more. This Government is the highest taxing government since Federation in 1901. It remains so. For as long as the Government continues in this way, the living standards of the Australian community will continue to be devastated. As Australians we will not be able to breathe easier and feel as though life is worth living again until we get rid of this Government and get some rational thinking back into our approach to taxation policy. Madam Acting Deputy President, I would like finally to remind you about the actions of Mr Keating. You might recall that around 1980-it is a long while ago, but we in the Liberal and National parties remember it well-Mr Keating campaigned strongly on behalf of the Labor Party against taxes on petrol. You will remember the famous phrase that he used about every petrol bowser being a branch office of the Australian Taxation Office. This Government is not only using petrol bowsers as the main branch office of the Taxation Office, but it is using every supermarket, every corner store and every professional services office in the community to impose consumption taxes through stealth. This Government is imposing more and more taxes on goods and services than has ever been seen in this country and this is causing people to find it more and more difficult to live. I conclude by strongly supporting the amendment to the second reading motion that was moved by my colleague Senator Short. Let me just repeat that amendment so that people understand exactly what it includes. Firstly, it refers to the fact that the Hawke Government is the highest taxing government in post-war history. Secondly, it points out that the Government is going to collect 24.5 per cent of gross domestic product in taxes this year. Thirdly, it indicates that taxation revenue this year will total $71 billion, an increase of an estimated $5.5 billion over that of last year. Fourthly, it points out that the Government has increasingly burdened not only individuals but also business with new incentive sapping taxes such as the fringe benefits tax and capital gains taxes. Fifthly, it refers to the fact that sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than has been the case under any other government as a result of its record breaking taxation moves. Sixthly, the amendment points out that, without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.7 billion foreign debt straitjacket without further reductions in Australia's standard of living. If nothing else encapsulates the essence of the debate before us today, that amendment does. It has my strong support and the support of other members of the Liberal and National parties. Senator CHAPMAN(South Australia)(3.04) —The Taxation Laws Amendment Bill (No. 5) 1987 is a continuation of Labor's attack by stealth on the superannuation provisions of millions of Australians. It is yet another example of this Hawke Labor Government being completely out of touch with the people of Australia and of its lack of responsibility. The legislation emphasises the arrogance of this Government in governing by Press release rather than through Parliament. A significant part of the Taxation Laws Amendment Bill (No. 5) purports to give legislative effect to statements from the Treasurer (Mr Keating) in a Press release of 12 January 1987. It is absolutely outrageous that people have had to wait over 13 months to learn the specific way in which the Government decisions will apply to them. In this respect I refer particularly to superannuation annuities, which are dealt with in this Bill. An annuity may be described as something that allows an investor, usually a retiree, to buy a future stream of income with a current capital sum. Annuities have been used as eligible deposits for roll-over purposes as lump sum superannuation payments made to retirees as a legitimate means of deferring the tax on lump sum superannuation payments. The most profound change to retirement planning in recent memory was the introduction of lump sum taxation and the closely related move to established roll-over funds. These funds allow the tax free environment that has long been accepted as desirable for the efficient accumulation of meaningful retirement capital to continue undisturbed by individuals changing employment or going into semi-retirement. The initial legislation sought to establish approved deposit funds as the vehicle for this accumulation process, but the Government subsequently recognised deferred annuities as an alternative vehicle. The recognition of deferred annuities and the fact that that had the effect of creating two somewhat different but parallel vehicles meant that some substantive revision was inevitable. The revision came on 12 January 1987 in yet another example of this Government's legislation by Press release. Now, more than 13 months later, the Government has introduced, and today 15 months later we are debating, the actual amending legislation. For all that time, retirees have had to base their investment decisions on a Press release. The only additional source of advice has been income tax ruling reference 87/1856/3 issued by the Australian Taxation Office. However, that was not issued until 23 December 1987. It is now assumed that the legislation we are debating today, in part, purports to implement and therefore supersede that ruling as well as supersede the January 1987 Press release and also implement and give effect to that statement. These facts point to a range of matters which emphasise the Government's incompetent handling of this issue which is of such great importance to ageing people. Over the past year thousands of people reaching the age of 65 years have had to make one of the most important decisions of their lives, usually involving the largest amount of money they have ever had to handle, simply on the basis of interpreting a Press release. The Press release left a degree of uncertainty as to the nature of annuity contracts eligible for roll-over concessions. This resulted in a range of interpretations being offered to retirees by investment advisers, generally in good faith but largely in a vacuum as a result of the absence of specific legislation or a Tax Office ruling. Retirement planning is now more complex than ever before, compounded by the confusion the Government has created over this matter. It is easy to understand the fear and insecurity felt by elderly people in this climate of uncertainty. Can there be any doubt that the Hawke Labor Government is out of touch with the Australian people? Sadly, this fear and insecurity has been shown to be fully justified by both the draft tax ruling and this legislation. A substantial body of informed opinion is of the view that, in relation to the treatment of annuities, this Bill is at variance with the December 1987 tax ruling and is also at variance with the January 1987 Press release. The Government's whole attitude to people's investments in annuities is frightening. The Government's guidelines, issued on 23 December, are inconsistent with the Press release of 12 January last year and are inconsistent with this legislation. Yet this Bill is intended to be the legislative basis of the Treasurer's statement of 12 January last year. The relevant part of that statement reads: To be eligible for roll-over purposes, an annuity contract will be required to be such that the payments expected to be made over the anticipated term of the annuity (including any period during which a residuary annuity may be payable) are reasonable-having regard to the expected earnings of the issuer on the purchase price, the expected term of the annuity and any variation on the level of payments over that term-and are not, in aggregate, less than the income expected to be earned by the annuity issuer (and passed on to the annuity purchased) on the amount rolled over at the time of roll-over. This paragraph concedes two things: first, that the actual mechanics by which annuities operate result in a measure of deferment of the derivation of income; and secondly, that the reasonable deferment was a necessary element to make annuities attractive and consequently help the Government attain its objective of having retirement lump sums, in particular, invested in income producing areas. However, the December 1987 draft income tax ruling examined the legal definition of an annuity and argued that a variable annuity product was not an annuity at law. In this event, the ruling argued, the product was not an eligible annuity and eligible termination payment amounts rolled over into such products would not escape lump sum tax at the time of roll-over. This Bill sets out criteria with which annuities have to comply in order to be given favourable treatment for income tax purposes. The criteria with which the annuities must now conform, and they are contained in the Bill, go well beyond the Treasurer's statement of 12 January 1987. The Bill also interprets the meaning of the word `annuity'. Specifically, it provides that, unless certain restrictions of payment amounts on commutation and termination, and with respect to deferment of derivation of income, are complied with, the annuity will not be annuity for the purposes of the Act. This interpretation implies retrospectivity. The impact of retrospectivity, if the Bill proceeds, will be to occasion severe hardship to people who have in good faith invested their retirement savings in annuities-something which the Government has gone to some lengths to encourage. As well, the elimination of variable annuities would result in a large portion of retirees forsaking annuities and taking lump sums-again something which this Government has gone to some lengths to discourage. The reason annuities did not achieve widespread acceptance in the past was that they were too much of an actuarial gamble. The investor, or annuitant, gave his capital to an insurance company in return for an agreed stream of income for life, with the size of that income being determined partly by the insurance company's expectation of how long the annuitant would live. If annuitants lived longer than expected, they won. If they died earlier, the insurance company won-or, more correctly, the short-livers subsidised the long-livers, and the beneficiaries of the short-livers missed out. It has never surprised me that most people preferred alternatives to this situation. A central factor in the old-style annuity was the giving up by annuitants of all claims to their capital and the returns earned on it in return for a stream of income. The provider of an annuity, usually an insurance institution, has no certain knowledge of what returns will be earned in the future on capital placed in its hands today. If the institution must provide a guaranteed income return, as this legislation appears to require, it will obviously err on the conservative side when projecting the expected income returns on which the annuity payments will be based. The effect of this will be to consign the annuity market to providing a less than full rate of return to people on what is usually the largest single accumulation of capital they ever have to handle-their superannuation lump sum. The Government has appeared to be concerned that, once annuities are able to offer returns over time that reflect the underlying earnings performance of the pool of investments on which the payments are based, the way is opened up for people to take advantage of the tax concession that exists in the area of annuities. Rather than tackling the issue of putting guidelines in place to ensure that the tax position is satisfactorily controlled, the Australian Taxation Office has issued a draft ruling, which this legislation may confirm, destroying the attractiveness of annuities and returning them to their position in the past when they were largely overlooked by Australians as a source of retirement income. Can this be what the Treasurer intended in his January 1987 statement? According to that statement, it was intended that the income stream from an annuity be absolutely related to the investment returns earned by the annuity fund manager. One difficulty with the January statement was that it did not specify how the future rate of return could be accurately estimated at the time of entering an annuity contract. But that is far from an insurmountable problem. A variable annuity is designed to provide a facility whereby the investment returns can be accurately reported and annuity withdrawals adjusted from time to time to reflect these earnings. The December ruling and this legislation deem contracts involving such arrangements to be ineligible annuities and such roll-overs to be ineffectual. The December ruling and the legislation deem contracts involving such arrangements to be ineligible. It is not surprising that insurance companies claim that they have legal advice that this statement is not legally supportable. Further, the legislation casts doubt on annuities which have an investment account maintained by a life office in the purchaser's name. This is clearly a departure from the spirit of the January 1987 statement because it is necessary to have such arrangements if the income stream from an annuity is to reflect the earnings of the annuity fund. So the measures in the Bill go much further than the valid objective of preventing tax avoidance through unreasonable deferral of income. It is an outrageous infringement of individual liberty for these measures to prohibit greater than the annuity purchase price being paid at termination or commutation. Under these provisions the individual depositor may retain the right of sight of capital only to the extent of the purchase price, and in some cases the reduced purchase price, of an annuity, otherwise the investment will not be accepted as an annuity for tax purposes. By forbidding the investor to retain full sight of capital, this Labor Government is forbidding retirees from obtaining the optimum income stream year by year as well as the optimum capital payout on commutation, termination or death. To prevent tax avoidance it is reasonable that the investor be prevented from determining the amount of annuity income year by year. However, it is completely unacceptable to prevent investors from having annual variations in income according to the earnings of that investor's capital investment. It is also completely unacceptable that an above average capital appreciation performance by the funds invested should be prevented from benefiting the investor or his or her beneficiaries in the event of termination, commutation or death. Through this legislation this Labor Government is condemning retirees who invest in annuities to a lower standard of living than ought to be the case for any given superannuation sum rolled over into annuities. Quite simply, if sight of capital is to be denied, an insurance company cannot limit liability to the balance of the amount invested. This will deter annuity funds from being invested in other than fixed interest securities. Why is the Government so opposed to annuities based on a capital guarantee? It is a proven fact that the best returns for retirees would be obtained from a mixed portfolio of investments, including equities and fixed interest, incorporating a capital guarantee. By banning the retention of sight of capital, this Labor Government is limiting annuity income to that obtainable from fixed interest investments. It is nonsense to talk about security of capital in these circumstances. The capital will be all gone, used up unnecessarily because of this legislation, in supplementing the interest income year by year in an attempt by retirees to eke out a very modest lifestyle. Furthermore, if sight of capital retention is lost, on what basis can a commutation payment be made to beneficiaries in, say, the fifth year of a 10-year term certain annuity contract in the event of the investor's death? It appears that the rapacious desire of this Labor Government for tax revenue, which reflects its complete inability to discipline its own spending, has overruled its desire to see retirees convert lump sum superannuation into annuities. This legislation is therefore a clear demonstration of the incompetence of this Government and the extent to which it has lost touch with the aspirations of the Australian people. It is throwing out the baby with the bath water. Or is it part of Labor's hidden agenda to deny people the opportunity to accumulate assets on their retirement to pass on to their children? Part of that hidden agenda as leaked by the Minister for Community Services and Health, Dr Blewett, is an attack on the right to private property. Let me remind the people of Australia about this Labor Government's opposition to private property by quoting the unambiguous statement of the Minister for Community Services and Health, Dr Blewett, a senior Cabinet member and strategist for this Government. In 1986 Minister Blewett said: We shouldn't get too hung up as socialists on privacy, because privacy, in many ways, is . . . very much associated with the right to private property. Senator McGauran —True to his word. Senator CHAPMAN —Very true to his word. This is a clear denigration of private property and hence asset accumulation by a senior Minister on behalf of the Government. No wonder the Government seeks to deny people the right through this legislation to maintain a capital asset from their superannuation. No wonder we are now hearing rumours that subsequent to this legislation, which removes the attractiveness of annuities by denying retention of sight of capital and hence the likelihood that people will voluntarily enter such investments, that the Government will remove the right to lump sum superannuation and force people into annuities. It is the only way after this legislation is passed in which people are likely to enter into annuities. This would leave people with inadequate income in their retirement but would deny them the right to adequate assets. That is the rule of this Labor Government. So not only have we waited for more than 12 months for some clarification of the uncertainty created by the January 1987 statement, but now that we have it it is inconsistent with the original statement and will cause the Australian people much further worry and uncertainty-uncertainty which has plagued retirees for more than a year, uncertainty as to what constitutes an eligible annuity, uncertainty as to what a surviving spouse or children will be able to recoup from an annuity in the event of death, and uncertainty as to the assessable and non-assessable components of an annuity for pay as you earn tax deduction purposes. The certainty is this Government's hostility to people maintaining assets. The certainty is that this Government wants to get its hands on a bigger slice of people's lifetime savings-revenue at any cost, as long as the cost is not to the Government itself. Through no fault of their own thousands of Australians about to retire or planning for their retirement have been thrown into confusion. Having been given one set of rules to play by, they are now finding out that just before the final siren sounds the rules have been changed and they are not as far in front as they have been led to believe. Now the Prime Minister (Mr Hawke) is on record as refusing to rule out the possibility of taxing the investment income of superannuation funds or employer contributions in its review of business taxation. But superannuation should not be the subject of discussion on business taxation. Superannuation is the property of the individual. It is the way in which people use their incomes to provide for their future happiness and welfare and the future of their children. Any taxes in this area are direct disincentives to Australians to make provision for retirement. The Government must come clean on options it is considering such as retrospective tax on lump sum payouts, blocking access to lump sums, removing tax deductions from employer contributions, including superannuation as part of fringe benefits tax arrangements, or introducing a levy to fund the basic pension. On 9 February the Opposition confirmed its total rejection of any proposals resulting in retrospective taxation of superannuation benefits and called on the Government to clarify its position. On 18 February, after repeated questioning by the Opposition, the Prime Minister announced that the Government was not contemplating changes which would damage already accrued benefits but that it would not stop people from taking lump sums and superannuation would continue to be treated on a concessional basis. However, the Prime Minister did not rule out taxing the investment income of superannuation funds nor the possibility that employer contributions would be taxed, nor did he say that the existing tax on lump sums would remain the same. The coalition policy is constant; Government policy depends on which Press release one believes, and even then there are many holes. For the Government to wait until the May economic statement is made by the Treasurer, subjecting the Australian people to further worry and uncertainty, is irresponsible and uncaring. It is another indication of the arrogance with which this Government operates, which has cost it dearly at the polls and cast such an unnecessary extra burden on the Australian people. How can we hope for social justice from people such as the Minister for Social Security (Mr Howe), who believes that anybody who has superannuation or sells it is a tax cheat? Senator McGauran —Or that Minister asleep over there. Senator CHAPMAN —He has a similar view, I am sure. The fact is that this Government is the greatest tax cheat in the history of Australia. It has cheated by pilfering people's pockets so much that their standard of living has eroded, incentive has been removed from the work force and the population rendered dependent on the goodwill of the state. Now we have a Prime Minister meekly beating his breast, after getting loud and clear electoral messages, explaining that it is not so much Labor's policies and actions that are not wanted by the people, it is just that the poor dears have not understood that the Government knows what is best for them. So the Government has to explain it to them better. Well, I have got news for the Prime Minister. The very great majority of Australians, including traditional Labor supporters, are sick and tired of handouts to trendy and vociferous minorities, pandering to the power brokers, adherence to the old mates Act, and sly pocket picking through more and more inventive forms of taxation. Australians are prepared to tighten their belts day by day and to live a little more frugally if the Government can be trusted to look after the future and if its long range plans are acceptable. But the public can now see that Labor is not the slightest bit interested in the future well-being of the individual. It is the state which matters to Labor, particularly the state's financial ledgers. The real message from the polls is a clear and simple one. The message from Australians to those politicians who have set themselves apart from mainstream Australia, while they pander left, right and centre about them, is `We do not want the future that you want for us'. Temporary belt tightening and a loss of living standards is one thing. Wrecking their plans for the future is another. How many more indicators are needed before this Government of blind Freddies will accept direction from the people it purports to represent? Here is the latest message on the subject of superannuation. The following points are taken from a survey conducted in Sydney, Melbourne and the Australian Capital Territory by Arbes and Hall. Fifty-seven per cent of people surveyed said that while some form of old age pension would be maintained in future years, they believed the Government would reduce the level of pension paid. Ninety-one per cent said that taxation incentives should be given for people to prepare for their retirement through a superannuation scheme. Eighty-nine per cent of respondents said that superannuation was not just for the working partner in a marriage but should also be provided for the non-working spouse, and that any new taxes would represent a double tax as both marriage partners are affected. Eighty-seven per cent believe taxes should not be introduced on superannuation fund investment income, and a staggering 92 per cent did not want an increased tax on lump sum superannuation payments. The survey indicated that if new or increased taxes were introduced, only 34 per cent would keep paying into a superannuation scheme. The majority of the remainder would reduce the amounts they paid into schemes, try to get out of their current schemes, or see whether they could invest more safely elsewhere. Seventy per cent said that this issue would cause them to change their vote. I believe we have seen that reflected in the recent by-elections in Adelaide, Port Adelaide and Groom and in the New South Wales State election. Two more significant points emerge from this survey. Firstly, political affiliations had little influence on responses. Secondly, 69 per cent of people thought that superannuation was of general value to all income earners and not just to so-called high income fat cats. The survey draws the conclusion from the available facts that politicians, stressing their concern about further taxes on superannuation, are clearly in touch with grassroots sentiments out in the community. Conversely, this Labor Government, which is considering such further imposts on superannuation, is again demonstrating that it is completely out of touch with the Australian people. In the light of community attitudes and needs, this Government must abandon its plans to impose further taxes on superannuation. In relation to this legislation, the Government must change its current attitude that a variable annuity is not an annuity as regards taxation treatment, and instead define appropriate conditions so that tax is not unduly deferred. I venture to say that this is too much to hope for from a Government that has revealed a totally rapacious desire for revenue. It is too much to hope that this Government will take these wholly reasonable steps, because the Hawke Labor Government is the highest taxing government in Australia's history. That is why I wholeheartedly support the Opposition amendment in regard to this legislation. It highlights the general taxpayers' complete dissatisfaction with the increasing taxation burden imposed by this Government. It is hoped that passage of the Opposition's amendment will encourage the Government to wind back this excessive tax regime. The first points of the amendment relate to the fact that this Government is the highest taxing government in post-war history and that in 1987-88 some 24.5 per cent of gross domestic product will be collected as tax. This is an increase of about five percentage points, in effect, an increase of one-quarter in the last 20 years and most of that increase has occurred during the period of two Labor governments-the Whitlam Labor Government and the Hawke Labor Government. The bulk of this increase over the period has been in personal income tax collections. This is borne out by the fact that personal income tax, as a percentage of average weekly earnings, has increased by 10 per cent over the last 20 years. Again, most of that increase has occurred under Labor governments. Lower income earners, along with everybody else, suffer from this increase. Middle income earners find that they are the hardest hit of all in terms of personal income tax. Not only are they not able to enjoy the benefits of any significant tax deductions but they find that because of bracket creep they are paying an excessive rate of tax on every extra dollar that they earn. This last point is of national economic significance as it directly affects an individual's incentive and, consequently, the level of efficiency and productivity in the economy. The net result is a lower than optimum level of economic activity. It also has the effect of turning people into possible tax cheats, by encouraging non-disclosure of income. That in turn has a detrimental effect on the economy. As we see illustrated in this Opposition amendment, this Government is hell-bent on increasing tax revenue collections with an increase of some $5.5 billion in this current 1987-88 financial year. The Government has hindered not only individuals but also businesses with new incentive-sapping taxes such as the fringe benefits tax, the capital gains tax and additional excises and sales taxes. As my colleague, Senator Michael Baume-whom I welcome to the chamber-has ably put it, Australia's tax burden has increased phenomenally in the last few years, putting the lie to the Government's proposition that it opposes a consumption tax. The problem with this Government's consumption tax is that it is totally inequitable and causes a misallocation of resources. As Senator Baume has said, as long as one prefers ball gowns and other luxury items to basic foods such as orange juice, there is no problem. A low income earner cannot afford expensive ball gowns but might regard orange juice as very vital for his health and his children's health-and also flavoured milk is a benefit to children. A low income earner, as Senator Baume says, has to pay tax on those things but a high income earner who can afford an expensive ball gown for his wife does not pay a cent of tax. As the last point of the Opposition amendment states, this Government has put us all into a foreign debt straitjacket sucking us into the whirlpool of ever decreasing standards of living. Unless this rapacious desire of government stops, we will never extricate ourselves from this straitjacket which Labor has created for us. That is why I support the amendment that has been moved by the Opposition and I seek leave to have that amendment incorporated in Hansard. The ACTING DEPUTY PRESIDENT(Senator Bjelke-Petersen) —It is already in Hansard. Do you wish to include it again? Senator CHAPMAN —Yes, please. Leave granted. The amendment read as follows- At end of motion, add ``, but the Senate notes that: (a) this Government is the highest taxing government in the post-war history of Australia; (b) an estimated 24.5 per cent of GDP in 1987-88 will be collected in tax revenue; (c) there will be an estimated $71 billion in taxation revenue in 1987-88, a $5.5 billion increase on the previous year's collection; (d) the Government has increasingly burdened not only individuals but business with new incentive-sapping taxes like the fringe benefits tax and capital gains tax; and (e) sales tax, which is Australia's main consumption tax, is growing faster under the Hawke Government than any other of its record breaking taxes; (f) without the incentive to invest and work productively, Australia will find it increasingly difficult to extricate itself from its $86.77 billion foreign debt strait jacket without further reductions in our standard of living''. The ACTING DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator KNOWLES(Western Australia)(3.34) —Today we are debating the Taxation Laws Amendment Bill (No. 5). It is worth taking the time, in the brief amount of time that is left prior to the adjournment, to talk momentarily about the Australian Labor Party's economic record. It is a rather devastating record when we look at the list that quite clearly states that this Government has achieved the highest interest rates ever, record bankruptcy rates, the highest current account deficit ever, the biggest government spending, the biggest tax take, the biggest drop ever in the Australian dollar, the longest public housing lists, record levels of home loan repayments, real disposable income has been down by 10 per cent, tax per week has been up by between 40 and 60 per cent, the average level of unemployment is up, inflation is twice as high as that of our trading partners and hospital waiting lists are growing longer and longer. That is the Government's economic record. Yet the Treasurer, Mr Keating, is prepared to travel around the country bleating that he is achieving great heights for this country. There is no doubt that the Australian economy is now in a worse state than at any other time in the past 50 years. Under this Government Australia now has far less, and many more people are the victims of an unequal society, than was the case five years ago. We now have over 150,000 young Australians unemployed. There are 25,000 young Australians locked out of tertiary institutions. There are 100,000 low income Australians who are condemned to the hospital waiting queues of the nation because of Medicare, which has been an unmitigated disaster. There are 60,000 people living on the verge of homelessness and 40,000 people sleeping in the open or in refuges. After five years of this Labor Government an additional 700,000 Australians have fallen below the poverty line. Single income parents with two children have suffered a $42 a week decline in their living standards. Some record! I think it is absolutely frightful that this Government should pretend that it has been doing a good job. This legislation, which puts into effect a number of minor changes to our massive corpus of tax laws, does not greatly alter the taxation outlook for Australia. It does, however, remind us of the failure of this Government to tackle the whole tax question with imagination and real leadership. It is all to the good that the legislation includes a measure of financial deregulation to encourage offshore banking. This small benefit, however, must be offset against the practical record of the taxation policies of this Labor Government for both the corporate sector and the private sector. There is not a great deal of value in encouraging offshore banking when at the same time this Government provides a powerful disincentive to business investment through a 49 per cent company tax rate. It should not be forgotten that the down side of Labor's so-called tax reforms was an increase in the corporate tax level from 46 per cent to 49 per cent. Tax at this level needs to be compared with corporate tax rates overseas. When it is, we see that Australia is faring particularly badly. The spectacular change to a 28 per cent level in New Zealand is only one part of the picture. For some time now company tax levels in the United States and Great Britain have stood at 39 per cent and 35 per cent respectively. Yet our rate is 49 per cent. In Canada this year corporate tax rates will fall to 28 per cent, with a 23 per cent level for manufacturers and a 12 per cent level for small business. I suppose that it is blind hope, but we can only hope that this Government will have the sense to look hard at these developments rather than persist in the attitude that Australia has gone as far as it can on the path of tax reform. New Zealand, as Senator Walsh said last December, has not simply fallen for a supply-side hoax. The Government would do well to consider whether there may not be a very strong causal connection between the high rate of Australian corporate tax and the fact that private investment constitutes no more than 16 per cent of gross domestic product whereas in 1981-82, under a coalition government, it was 19 per cent of GDP Taxation reform, however, is not something that can be confined to the corporate sector. It is significant that the Confederation of Australian Industry, in its recent submission to the Treasury regarding corporate tax, makes it clear that personal income tax also needs to be reduced. We have already heard from a number of speakers in this debate about the high levels of personal taxation that Australians are currently suffering. We have also heard from a number of speakers about the high levels of consumption taxes with which this country's residents are being hit. Let us look, for example, at the fuel tax. In 1983, prior to being elected, the Prime Minister (Mr Hawke) trotted around this country, saying that Australians could expect cheaper fuel. What rot! It was just like the time he went round the country saying that there would be no capital gains tax. Equal rot! Cheaper fuel, to this Government, means raising its take from 6c per litre in 1983, when it came into government, to the current 21c per litre. That is supposedly decreasing the price of fuel. All Australians know, without being told, what they are paying at the bowser now by comparison with what they were paying in 1983. Let us look at the tax on Australian wines and ciders, which has gone to 10 per cent. Very low alcohol beers have been subject to a 20 per cent sales tax. The tax on alcoholic wine has gone from 10 per cent to 20 per cent. Previously exempt non-alcoholic beverages are now taxed at 10 per cent. We have taxes on snack foods, iceblocks, ice-creams, flavoured milk, fruit juices and all of those other things that families use. When we say that families have gone backwards we are not just making a snide comment for the purpose of the exercise. It is hard, cold fact that their disposable incomes have been greatly reduced. We go even further down with regard to motor vehicles. Tax on certain motor vehicles has increased from 20 per cent to 30 per cent. There has even been a 20 per cent increase in the tax on salt for swimming pools. Once again, these are all family items. This Government keeps telling us that it has reformed personal income tax and that we are all better off. There are not too many people who would find that they are better off. The fact remains that a single person on average weekly earnings had an average tax rate of 26 per cent as of last August compared with a rate of 23 per cent when this Government came to office. Tax per week has risen from $85 to $132. But still we are being told that we are better off. For the single income family dependent on average weekly earnings, which, as I have mentioned, is paying all these additional taxes, the average tax rate has risen from 17 1/2 per cent to 22 per cent. The family is now paying $112 per week in tax compared with $65 in 1983 when this Government came to office. In both cases, both for the single income earner and the single income family dependent on average weekly earnings, the marginal rate has risen from 30 per cent to 40 per cent. Since this Government came to office the single person is paying 55 per cent more tax and the single income family 72 per cent more tax. Over the same time, average home loan repayments, as a percentage of not average but medium family income, have risen from 19 per cent in 1983, under the coalition Government, to nearly 27 per cent as of last year. Subsequent reductions in interest rates, whether sustainable or not, still leave these families with a long, long way to go. I think that it is a very cheap political trick of this Prime Minister and the Treasurer (Mr Keating) to keep saying to the people of Australia that they are now better off under this Government than they were previously under a coalition government. It is very much relevant to the taxation policy of this Government that the ratio of household savings to consumption has declined from 15 per cent in 1975 to only 10 per cent currently. This Bill incorporates another minor adjustment to the capital gains legislation by giving reorganised unit trusts roll-over relief. A notional realisation of capital gains would have been unfair, and the Liberal Party supports this move. However, it is again relevant to this debate to note the fact that, some 20 months after the capital gains legislation was passed and 2 1/2 years after it was announced, the Government is still ironing out the bumps that have caused confusion and unpredictability in the business world. Of course, this Bill does not include any relief for the investors who, in the wake of the stock market crash, find that capital gains realised before the crash of 20 October often cannot be offset against subsequent capital losses. That is absolutely outrageous. There are many people who simply will not be able to afford to pay their tax bills as a result of the crash. But this Government has made absolutely no provision for them whatsoever. While I have to conclude my remarks now and carry on on Monday, I am particularly concerned that this Government is trying to whitewash the situation so that the people of Australia believe that they are better off now than they were five years ago. The PRESIDENT —Order! It being 3.45 p.m., pursuant to sessional order I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 3.45 p.m. until 2 p.m. on Monday, 18 April The following papers were tabled: Fisheries Levy Act-Regulations-Statutory Rules 1988-No. 51. Remuneration Tribunals Act-Determinations 1988- No. 1-Remuneration payable to full-time and part-time holders of public offices-Public Service Commissioner and others, dated 5 February 1988. No. 2-Remuneration payable to part-time holders of public offices-Australian Public Service Management Advisory Board and another, dated 4 March 1988. Seamen's War Pensions and Allowances Act-Regulations-Statutory Rules 1988-No. 49. Superannuation Act-Regulations-Statutory Rules 1988 No. 48. Veterans' Entitlements Act-Regulations-Statutory Rules 1988 No. 50. World Heritage Properties Conservation Act-Regulations-Statutory Rules 1988 No. 47.