Thursday, 28 April 1988 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate of the Commonwealth in Parliament assembled. The petition of these residents of the Commonwealth of Australia respectfully showeth: that the Australian Broadcasting Corporation provides the citizens of the Commonwealth of Australia with the only nation-wide independent radio and television service. that the introduction of commercial sponsorship or any form of advertising material from commercial sources, would destroy the independence of the Corporation. Your petitioners therefore request 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. by Senator Giles (from 26 citizens). To the Honourable the President and members of the Senate in Parliament assembled; the humble petition of the undersigned citizens respectfully showeth: that while having some reservations on individual aspects of the Constitutional Initiative (Electors Initiative) 1987 your petitioners wish to express our strong support for the concept of people's democracy implied in that Bill. Your petitioners therefore humbly pray that the Senate in Parliament assembled will Refer the above mentioned Bill to an appropriate Parliamentary Committee and will examine the operation of direct democracy procedures overseas with the intention of passing legislation granting such facilities to your petitioners during the Bicentennial year. 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: Whereas the Hon. Brian Burke whilst serving as Premier of the State of Western Australia was also fulfilling the position of State Treasurer: Whereas the State Treasurer is the Officer of the Parliament responsible for the oversight of Building Societies and Credit Unions, and the Superannuation Board in Western Australia: Whereas investigations appear to be suggesting at least maladministrations and possibly illegalities in the affairs of the Superannuation Board and some Building Societies and Credit Unions: Whereas Section 25 (Subsection 2) of the Superannuation Act states that no loans shall be made by the Superannuation Board without the approval of the State Treasurer: And whereas it would appear that investigations to be complete would require the presence of the principal officer involved: We would therefore humbly request that the Senate, in Parliament assembled, in the interests of justice and good government, should seek to have the appointment of the Hon. Brian Burke as our Ambassador to Ireland deferred until such time as these matters are fully investigated and proved. And your petitioners as in duty bound shall ever pray. by Senator Knowles (from six citizens). Petitions received. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I give notice that, on the next day of sitting, I shall move: That, unless otherwise ordered and notwithstanding anything contained in the Sessional Orders- (a) the Senate meet on Tuesday, 10 May, from 2 p.m. to 6.30 p.m. and from 8 p.m. to 10.30 p.m.; (b) the hours of meeting on Wednesday, 18 and 25 May and 1 June be as follows: 10 a.m.-12.45 p.m. 2 p.m.- 6.30 p.m. 8 p.m.-10.30 p.m.; and (c) Government Business take precedence of General Business for the remainder of the Autumn sittings. Senator TATE(Tasmania-Minister for Justice) —I give notice that, on the next day of sitting, I shall move: That there be a Call of the Senate on Thursday, 26 May 1988, for the purpose of considering the third reading of Constitution Alteration Bills received from the House of Representatives. Senator GARETH EVANS(Victoria-Manager of Government Business in the Senate) —I give notice that, on the next day of sitting, I shall move: That the following Bill be introduced: a Bill for an Act to amend the Commonwealth Electoral Act 1918 and the Referendum (Machinery Provisions) Act 1984, and for related purposes. 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. Consular Relations-text of a statement by the Minister for Foreign Affairs and Trade. 2. Australian Environment Council-Summary Record of Proceedings-Nineteenth Meeting-Perth-11 November 1987. 3. Council of Nature Conservation Ministers-Summary Record of Proceedings-Sixteenth Meeting-Perth-12 November 1987. Motion (by Senator Gareth Evans) agreed to: That, unless otherwise ordered, the order of General Business for consideration this day pursuant to Sessional Order be as follows: (a) consideration of Government Papers; and (b) General Business, Notice of Motion No. 77 standing in the name of Senator Hamer relating to coastal shipping. 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)(10.03) —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- In line with the Government's commitment to ensure that the National Crime Authority has all the necessary powers at its disposal to fulfil its functions, ss. 219A-K of the Customs Act 1901 are being amended to provide the NCA with the same powers as the AFP to apply for a judicial warrant for the use of a listening device in the investigation of narcotics offences. The abuse of both legal and illegal drugs is acknowledged as one of Australia's most serious social and law enforcement problems. As exemplified by the National Campaign Against Drug Abuse, the Commonwealth Government, together with the State and Territory Governments, is committed to fighting drug abuse on both fronts. The National Crime Authority's primary function is to assemble and furnish admissible evidence to Commonwealth and State prosecuting agencies. Its concern over drug trafficking, as a major profit earning activity of organised crime, is reflected in the fact that the majority of its eight references and of its general investigations involve drug-related offences. In order to perform its functions effectively and efficiently, the National Crime Authority, as with any law enforcement agency, needs to have at its disposal the most effective investigative techniques. Over recent years it has been recognised that traditional methods of detecting and investigating criminal activity are rarely successful against the increasingly sophisticated techniques of organised crime. Electronic surveillance techniques such as telephone interception and listening devices have now emerged as an invaluable investigative tool in this area. Overseas experience, particularly in the United States, has confirmed that such a useful tool should be available to all agencies investigating organised crime, especially in relation to drug trafficking. If we are to be successful in our efforts to attack major drug trafficking networks, it is important that the NCA be put in the same position as the AFP and State police in having available the most appropriate, up-to-date techniques. Listening devices have made key contributions in a number of major narcotics investigations undertaken by the Australian Federal Police, for example in the Paltos case. The amendments to sub-sections 219a-k of the Customs Act 1901 also clarify the disclosure provisions for information obtained by use of a listening device under warrant for the purpose of conducting legal proceedings, in particular to ensure that prosecution authorities and defence counsel are able to be provided with the necessary information for the conduct of the proceedings. The amendments will also extend the disclosure of such information to applications for orders in confiscation proceedings under the Proceeds of Crime Act 1987 and to extradition proceedings. This is consistent with the current provisions relating to confiscation proceedings under the Customs Act, and will contribute to law enforcement agencies' ability to effectively deal with major drug importation and related offences. Part III of the Bill effectively makes five amendments to the Mutual Assistance in Criminal Matters Act 1987 (``MA'' Act). That Act provides the legislative basis for Australia to enter into and give effect to treaties and arrangements with other countries whereby it can request or grant assistance in criminal matters. The assistance relates both to the investigation and prosecution of crime. The range of assistance covered by the legislation includes provision of evidence, documents and articles, location and identification of witnesses, execution of requests for search and seizure, and tracing, freezing and seizure of proceeds of crime. A number of implementation problems with the MA Act emerged during recent treaty negotiations with other countries. All but one of the five amendments proposed in this Bill are to redress those problems. The first amendment is for the purpose of expanding the current definitions of ``Australian forfeiture order'' and ``foreign forfeiture order'' in the MA Act. These amendments are consequential upon amendments to the statutory forfeiture provisions of the Proceeds of Crime Act ``PC Act'' whereby an Australian court can make a declaration that automatic statutory forfeiture of property has occurred. Under section 30 of the PC Act statutory forfeiture occurs where a restraining order made against property of the defendant is still in force six months after the defendant's conviction of a ``serious offence'' as defined by the PC Act. Such a declaration can then be recognised for enforcement purposes by a foreign court pursuant to a request by the Attorney-General under section 32 MA Act as a judicial order for the purposes of executing an MA request by Australia. A further amendment will enable a similar declaration by a foreign court, where the law of the particular foreign country has equivalent ``automatic'' forfeiture procedures, to be registered and enforced by an Australian court pursuant to an authorisation by the Attorney-General under section 34 MA Act. The second amendment is to include a definition of ``political offence'' in an MA Act. Offences of a political character are excluded from those for which assistance may be granted under Australia's extradition and mutual assistance legislation. Until recently it was left to the courts to determine whether an offence was of a political character. The Extradition Act 1988 now limits the offences which may qualify as political offences for extradition purposes. That limitation was to declare Australia's clear abhorrence of terrorist conduct and our unwillingness to withhold extradition to other countries seeking to bring to justice criminals whose serious or violent crimes have been allegedly perpetrated for ideological reasons. The amendment is intended to achieve the same objectives in the field of international mutual assistance. Clause 13 of the Bill inserts a limiting definition of ``political offence'', and substitutes that expression for ``offence of a political character'' in the operative refusal of assistance provisions of the MA Act. The definition excludes from political offences crimes which have been recognised by the international community in multilateral treaties as being extremely serious (hijacking, safety of aircraft, genocide, torture, taking of hostages and the protection of internationally protected persons). The definition also permits crimes to be excluded by way of regulation, such as crimes recognised in future multilateral conventions to which Australia becomes a party, crimes against Heads of State or Heads of Government and crimes of violence committed in circumstances where a collective danger to innocent life is created. The third amendment deals with the foreign law testimonial immunities of persons who give evidence in Australia as a result of a request by a foreign country or by Australia. Where a person gives evidence in Australia as a result of a request by a foreign country, the amendment confers on the person the testimonial immunities the person would have if giving evidence in the requesting country. Where a person consents to come to Australia temporarily to give evidence as a result of a request by Australia the amendment preserves the foreign law testimonial immunities which apply in the requested country. The amendment ensures that the person may refuse to answer a question or produce a document in the Australian proceedings on the grounds of a privilege, duty or obligation which does not apply before Australian courts, but which would enable or oblige the person to so refuse in proceedings in the person's own country. This is to remove concern that such a person, upon return to his own country, could be liable to civil or criminal action for breach of the duty or obligation on which the privilege is based. The amendment also provides for a certificate procedure to facilitate proof of, and application of, foreign law immunities in particular proceedings, together with a definition of ``foreign law immunity certificate''. The fourth amendment is to clarify the ambit of immunity from civil suit of a person when in another country to give evidence or assist in an investigation at the request of that country. The intention of the existing provisions is to ensure that advantage is not taken of the presence of the person for the purpose of civil proceedings in the requesting country. In particular, the intention is to protect the person from the commencement, continuation or enforcement of civil proceedings, which could not occur but for the presence of the person in that country. A number of countries have also expressed concern that the Act arguably protects the person even from suits which do not depend upon the person's presence. The proposed amendment will clarify and limit the immunity to that which was originally intended. The final amendment will ensure that the Attorney-General is able to grant a request where the foreign government gives an adequate undertaking of civil suit immunity, even though it falls short of an unconditional guarantee. Several foreign governments had doubted whether their authorities had the practical or legal competence to give what they regarded as the unconditional guarantee of civil suit immunity on their reading of the Act as presently worded. Parts IV and V of the Bill contain amendments of the National Crime Authority Act 1984 and the National Crime Authority (Status and Rights of Chairman) Act 1984. The primary purpose of the amendments to the National Crime Authority Act is to enable the National Crime Authority to disseminate information relating to criminal activity or to security matters, in a proper and timely way. The Authority's significant achievements to date in combating organised crime in Australia has resulted in a growing amount of unsolicited information relating to criminal activity being provided to the Authority by members of the public and other agencies. Under the present provisions of the National Crime Authority legislation the Authority has prescribed to it as one of its general functions, the dissemination to law enforcement agencies and designated persons, criminal information and intelligence related to `relevant criminal activity'. The Authority also has a clear discretion to furnish to law enforcement agencies any information that comes into its possession in the course of an investigation conducted by it, concerning the commission, or possible commission of a Commonwealth, State or Territory offence. The Authority has a similar discretion in respect of passing information to authorised authorities and persons responsible for taking civil remedies action arising out of offences against Commonwealth, State or Territory laws. Much of the unsolicited information now being received by the Authority, however, falls outside the definition of `relevant criminal activity' in the Act and is not relevant to any investigation by the Authority. This has resulted in the Authority being unable to pass such information to the relevant law enforcement agency. This is clearly an undesirable situation. Accordingly, the amendments proposed to sub-sections 59 (7) and (8) are designed to enable the Authority to disseminate unsolicited information relating to criminal activity in a proper and timely manner. A similar defect in the present Act has been highlighted in respect of the receipt by the Authority of information relevant to security (as that word is defined in section 4 of the Australian Security Intelligence Organization Act 1979). At present the Act does not provide the Authority with the power to transfer such information to ASIO. Clearly it is desirable that such information when it is received should be passed by the Authority to ASIO in accordance with ASIO's functions. The proposed new sub-section 59 (11) is designed to overcome this difficulty. Similar provisions exist in the Telephone (Interception) and Customs legislation. The amendments will also enable the Authority to delegate, by signed instrument, to a member or acting member or to a member of the staff of the Authority, its powers to furnish information under sub-sections 59 (7), (8) and (11). At present section 59 of the Act requires the Authority to meet to determine when information should be provided to another agency. It is appropriate that such decisions be delegated to ensure that where information is to be transferred, that action occurs with a minimum of delay. The Government is also proposing an amendment to the National Crime Authority (Status and Rights of Chairman) Act 1984. This amendment is consequential upon the Government's recent announcement of its intention to recommend to the Governor-General in Council that the Chairman of the National Crime Authority Mr Justice Stewart, be re-appointed for an additional year. The amendment is required to ensure that the provisions of the Status and Rights of Chairman Act will apply to Mr Justice Stewart for the period of his re-appointment. Part VI of the Bill amends the Telecommunications (Interception) Act 1979 to enable a certified copy of a warrant authorising the interception of telecommunications to be received in certain proceedings as if it were the original warrant. This provision will help to reduce the cost and inconvenience arising at present in connection with the secure transmission of original warrants. The amendment does not alter any rule of evidence which may apply in relation to proof of the issue of a warrant, except that the original warrant will not be required to be produced. Part VI also amends the Telecommunications (Interception) Act to enable the National Crime Authority to obtain, for a purpose connected with its investigation of serious offences, information in the hands of Telecom obtained as a result of lawful interceptions. I present the explanatory memorandum to this Bill. Debate (on motion by Senator Knowles) adjourned. Debate resumed from 14 April, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator MESSNER(South Australia)(10.05) —In the State of Pennsylvania in the United States of America there is a community of people called the Amish who live on their own without affecting others and without adopting any of the practices and community benefits the modern state. They live as their forebears did in the nineteenth century. That is exactly the situation that the Government is existing in in the area of telecommunications and broadcasting generally. Here we have a golden opportunity for the Government to adopt a new approach with broadcasting, a deregulatory approach, which would allow new operators to come into the field, but the Australian Labor Party Government is bogged down in nineteenth century thinking and is shunning the whole new world of technology. That is the reality of the Government's approach to the Opposition's proposal to deregulate the broadcasting industry in such a way as to lead to greater and better services for the average television viewer in this country. The Government refuses to take up the challenge and refuses to accept a deregulatory approach that the Opposition is offering it. Senator Schacht —What have you been doing for the last five days? Senator MESSNER —I repeat, for Senator Schacht's benefit, that the Government has a golden opportunity to present the viewers of Australia with a service far superior to that which they are now getting, by adopting the Opposition's proposals, as outlined last night by the Leader of the Opposition (Mr Howard), and taking positive steps towards that direction. This horse-and-buggy approach to the broadcasting industry is just typical of the phoney approach by the Labor Party to deregulation and privatisation generally. Yesterday we saw the Minister for Transport and Communications, Senator Gareth Evans, after all the regurgitations and the period of gestation through his party committees, finally emerge as a mouse. He declared that Australian Airlines was to be turned into a public company. Where does that take airline consumers in this country? Absolutely nowhere, of course. I put it on record that the Liberal Party and the National Party of Australia support the total privatisation of Australian Airlines, rather than the kind of halfway approach which this Government is prepared to hand out. This Minister, this Government, this Cabinet, do not have the support of the ALP Caucus to get into a full-blooded deregulation and privatisation program. That is the simple reason why they cannot take Australian Airlines any further, and that is why they are faced with a situation over broadcasting where they will not adopt proposals which are reasonable and which are going to enhance services to the Australian consumer by the deregulation of the broadcasting industry. That is a challenge which we give them and which we have proposed in a very reasonable fashion, and which they have refused to pick up for all the most obtuse, stupid and absolutely silly reasons which I will outline a little later. All that this shows is the weakness of Senator Evans's position in dealing with his Caucus, and we will come to that a little later as well. I return to the point about the horse-and-buggy era that we are locked into with this Government in this area of telecommunications. Firstly, more reviews of policy are being undertaken by this Government than are run in the Follies Bergere on a Saturday night. We have no fewer than nine reviews going on. Let me outline these reviews. Where is the action? We have nine distinct reviews. One that has something to do with telecommunications is described as the managerial environment of government business enterprises. We have a review of international telecommunications regulations. We have a series of interrelated reviews on broadcasting policy matters, commercial, national and Special Broadcasting Service (SBS) matters. There are no decisions. All we get is reviews-and that is precisely what we had about a month ago when the Government brought out this weak little statement about what it intended to do with the crisis in the Australian Broadcasting Corporation. The Government even failed to tell us what it was going to propose to the SBS so that it could consider the matter. It has another inquiry on metropolitan radio, one on public television and one on a whole rethink of the broadcasting legislation. It has an inquiry into radio frequency spectrum pricing. Policies are being reviewed on the governing and allocation of frequencies for radio-and God knows what else. The fact is that there is no action from this Government and no decision. Let us now turn to the point about broadcasting policy. It is now something like eight months since Senator Evans became the Minister for Transport and Communications. He proudly announced that he was going to review broadcasting policy, particularly for television. He set up an inquiry to undertake that. We were going to have the results of that inquiry by last Christmas. Nothing came forward. Then it was to be put off until March or some time like that. We still have not seen it and March has come and gone. We are now being told that in this area and in the telecommunications area we will perhaps hear something in Mr Keating's May statement. After the very disappointing burst that was produced yesterday on Australian Airlines we have to assume that we will not hear very much at all about the privatisation or deregulation of either of those areas. The PRESIDENT —Order! Senator Messner, there are two Bills before us. Do you wish to speak to them cognately? Senator MESSNER —I am quite happy to speak cognately or to either. Senator Gareth Evans —To formalise it, I suggest, Mr President, that it may suit the convenience of the House for the debate to proceed cognately-even though it would suit Senator Messner for the debate not to proceed at all. Debate interrupted. The PRESIDENT —Order! Before I call Senator Messner again, I draw the attention of honourable senators to the presence in the gallery today of members of the Western Australian Parliamentary Joint Standing Committee on Delegated Legislation, whose Chairman is Mr Robert Hetherington, MLC. The Committee is a new committee of the Western Australian Parliament and a very welcome addition to the ranks of Australian legislative scrutiny committees. The Committee is visiting Canberra for consultation with the Senate Standing Committee of Regulations and Ordinances. As honourable senators will acknowledge, the Regulations and Ordinances Committee is a committee in which this Senate takes a particular interest and a certain pride. Our Western Australian colleagues could not have chosen better tutors to help them become what we hope will be an enduring and effective bipartisan scrutiny committee. Honourable senators-Hear, hear! Debate resumed. The PRESIDENT —I call Senator Messner. Senator Powell-Mr President, I am not sure whether this is a point of order or whether I am seeking clarification from the Chair. Do I understand that we now have a cognate debate? The PRESIDENT —Yes, we are now debating the Broadcasting (Ownership and Control) Bill 1988 and the Communications Legislation Amendment Bill (No. 2) 1987. Senator Powell-I would simply like to point out that this arrangement has been made in the middle of a second reading debate on one of the Bills. I would like to object to that and also express an understanding that neither the Government nor the Opposition probably wants to address the specific issues in either of the Bills, and I want to make a comment on the changing of the Order of Business at this point. The PRESIDENT —There is no point of order. Senator Messner-Why didn't you speak when he got up? You had your opportunity. Do you want to undo it? Senator POWELL(Victoria) —I seek leave to make a statement on Senator Messner's interjection. Leave granted. Senator POWELL —I did rise when the Minister agreed to the suggestion. Unfortunately, the President was then drawing attention to the presence of guests in his gallery and obviously did not notice that I had stood at that point. The PRESIDENT —There was no objection, so we will debate the two Bills cognately. I call Senator Messner. Senator MESSNER(South Australia)(10.15) —Last night there was issued a statement of the position on the question of broadcasting legislation which this Government is going to move amendments to at a later stage today. The Liberal and National parties have considered very closely the Government's proposal to increase audience reach limits for television from the present level of 60 per cent to 75 per cent. As we all know in this place, there has been a long debate on this matter over the past couple of years. I will not go into it too much, but we observe that it was an arrangement between the parties in the Senate last June that brought about the 60 per cent limit, whereas at that time the Government wanted a 75 per cent limit. I want to put it quite clearly that the reason the Liberal and National parties oppose the Government's increasing the audience reach limit from 60 per cent to 75 per cent is simply that there has been no attempt by the present Government at the same time to introduce new operators into the field of television or to ensure that there is a speedy introduction of pay television in this country. In other words, the Government is maintaining the monopoly position of those players who are currently in the field and who will benefit from an expansion of the audience reach limit to 75 per cent, but it is not taking the next step to allow more operators to come into the field and to provide for pay television to allow the total service to the Australian consumer to be expanded and improved. That is the fundamental objection of the Liberal and National parties to the Government's proposal. The legislation, which covers a multitude of matters other than the audience reach limit for television, will be supported, but I shall move an amendment to the second reading motion which draws attention to those aspects on which the Liberal and National parties disagree with the Government. In committee, we will oppose the Government's amendments from the floor to expand the audience reach limit to 75 per cent. In the event of the Government succeeding in getting support for that proposal from the Democrats, we will need to consider the situation more carefully, although I understand that that is not a likely proposition. The fact is that this issue is about deregulation of the broadcasting industry. The Liberal and National parties want to establish a 100 per cent audience reach, on the basis that there is to be expanded competition with new operators coming into the free to air broadcasting area and, in addition, the speedy introduction of pay television. Pay television is a feasible proposition in Australia. It is an opportunity to expand diversity, through which there will be more information sources available to Australians. The Government is delaying that process purposely, Senator Evans cannot go back to Caucus and put forward the proposition that we should be expanding into pay television, because he knows that he will be rolled on that. The matter of pay television is a key factor in the Liberal and National parties' approach to diversity and the expansion of information sources in this country. There is about a 50 per cent utilisation of pay television in the United States of America, with very creditable and beneficial results for the consumers. It obviously provides diversity of information and, consequently, leads to a far better informed democracy in that country. We want to see that happen, because in this country-and in the United States, for that matter-there are five established networks, but they produce programs that not everyone wants to see. Other programs which can be provided on cable or pay television provide that diversity and freedom of choice. We believe it is fundamental that it is introduced as quickly as possible and, if the Government accepted that as a proposal and removed the moratorium on pay television which applies until 1990, we would have something to talk about in terms of the expansion of audience reach limits. I remind the Government that without the introduction of those new methods we will not support its 75 per cent proposal. There has been much talk recently about the Liberal and National parties developing media policy, so let us run over the history of the Australian Labor Party (ALP) in recent years and the question of its media policy. It first came to the attention of the Press in December 1985 when the then Minister for Communications-the present Minister for Trade Negotiations (Mr Duffy)-proposed an audience reach limit of 43 per cent for national television; but because no-one seemed to go along with that, Cabinet set up a committee which decided on 35 per cent. At that point the Prime Minister (Mr Hawke) intervened and persuaded the committee not to adopt that Caucus committee proposal because, if the Packer and Murdoch stations were sold, the new owners would have to comply with that 35 per cent rule. During those Cabinet discussions the Prime Minister is reported to have referred to the Packer and Murdoch organisations as `the only mates we have in the ALP'. At that time Cabinet referred reconsideration of this matter to a committee of Ministers which included the Prime Minister, the Minister for Industry, Technology and Commerce (Senator Button), the Treasurer (Mr Keating) and Mr Duffy. In October 1986, about a year later, Mr Keating emerged with a new scheme for television ownership to take an owner's newspaper holdings into account in respect of the purchase of television stations. This was supposed to be an alternative to the conflicting proposals put forward by Mr Duffy and Mr Hawke. Under Mr Keating's proposal any owner could have had an unlimited proportion of national television audience provided that the owner did not have a print outlet of more than 50 per cent of the circulation in the same area. I maintain that that is an unlimited proportion-which is exactly what the Liberal and National parties propose at the moment; yet the Government is now casting aside Mr Keating's proposal of 1986 and refusing to take it into account. In November 1986, apparently as a result of some kind of deal, Cabinet settled on a further compromise-a Keating compromise-of 75 per cent, and it is significant that that proposal was opposed by Mr Duffy. All that confusion continued in the ALP, over not two days, three days or even four days-it took 2 1/2 years to work it out. The ALP squibbed on the only sensible decision, which is to increase audience reach limits to 100 per cent with new entrants coming into the marketplace. That is the position of the ALP Government opposite. The most significant feature of the history of this matter is that in the end it came down to who was going to best look after the ALP. It has been said that Mr Packer and Mr Murdoch are mates of the ALP and that is why this compromise decision was arrived at at that time. It comes down to that. Having dealt with that matter, let us look at the Minister for Transport and Communications (Senator Gareth Evans) and the comment he made last night on the Liberal and National parties' proposals. If ever there was a squid statement, that was it. It was a phoney statement drawn up in the heat of the moment and no doubt it was dictated to his secretary over dinner. It was a kneejerk reaction to quite sensible discussion. Only yesterday the New Zealand Labour Government announced total deregulation of its broadcasting industry by the end of the coming year-not to the point where new licences are being called; the whole system of broadcasting is being thrown open to new operators. Yet this Government again squibs on proposals to introduce new operators to the field. The key question is: Why will the Government not face up to decisions in this area and adopt a practical policy for broadcasting in the twentieth and twenty-first centuries. I will not go through all the self-serving nonsense that Senator Evans mentioned in his Press statement released last night. It was just designed to protect his position so that he would not have to go back to Caucus and argue his case again. Let us turn for a moment to pay television because it is really an important part of our proposals. Senator Evans says that we will have to go through another one of his famous reviews to determine what kind of policy we will have on pay television. A moratorium has already been placed on pay television until 1990. Yet there would have to be an absolute plethora of information around the place on pay television, and the Minister knows it. First and foremost, an Australian Broadcasting Tribunal report commissioned by the Fraser Government in 1982 brought down an outline of what kind of system could be implemented in this country. That report has been ignored; we have heard nothing at all. It has been hanging about ever since this Government came to power in 1983; yet the Government refuses to take action in this area, which is, of course, one of the very significant developments in this country. One might ask whether such a system is likely to be viable in this country. Many of us would have to rely on fairly subjective evidence about that. But let us remind ourselves that there has been a huge explosion in the use of video cassette recorders (VCRs) in this country since 1980, to the point where more than 50 per cent of Australian homes now have video cassette recorders. In other words, people want an alternative to the normal television broadcasting system and VCRs are one element of that choice. Yet they are quite clearly another form of pay television. Why will not the Government immediately move to adopt pay television as a national proposition so as to take advantage of that trend and set it up on a more diverse basis? We await the Minister's comment about that. On the question of diversity in a society such as ours, certainly as a nation and as a Parliament we are looking to far more diverse information sources so that the widest possible range of views can be provided to the Australian people. This is, of course, what the Liberal and National parties are concerned with at the moment. But what is the Government doing? It has a golden chance to pick up the Opposition's proposal for 100 per cent audience reach limits, yet it refuses to accept it. What, for instance, is it doing about the possible decline of competition which may occur as networks develop across this country and take over more and more smaller television stations in the far flung parts of Australia? There are some very significant issues at stake here. There is the question of what proportion of network time being broadcast will go to local production; in country areas, how much time should local television stations be required to set aside for local news services, sports services, weather services and local information services to the population of that area, rather than having those wiped out by a network which seeks to impose itself over those local stations. There is no attempt by the Government, in its proposal for 75 per cent ownership, to protect people in that situation. There is no proposal to require a minimum amount of local content to be provided on the network stations. There are no safeguards whatsoever for local people. I believe that that is a serious omission. It is another reason why we in the Liberal and National parties will not support the Government's proposals. How committed is the Government to Australian-made drama? Obviously, an Australian local network is developing in television-the three networks are expanding rapidly-yet there is no requirement for an increase in, or even the maintenance of, as I see it, the present level of drama produced in Australia. Where has the Government stated its guarantees on that? Where are its requirements that that be maintained by the networks? In other words, these essential points which are critical to the development of the Australian industry and to the development of a far better service for Australians are being ignored by this Government. Why will it not pick up our proposals? Why will it not say to us, `Look, you have the best idea, which is to expand the networks, thus providing more competition in such a way that a better service will be offered to the Australian consumer.'? Surely that is the only direction which any government should be taking. The only conclusion to which we can come after all this is that we return to the first point: Mr Hawke made it absolutely clear at the very beginning when this debate started within the Labor Party 2 1/2 years ago that the Government had to look after its mates. It has decided who its mates are and it is going to look after them. We have heard the descriptions of Labor Party back bench members during the debate in terms of their attitudes towards some of those people. So there is not a universal approach in the Labor Party. Mr Allan Morris, a New South Wales backbencher, speaking in support of a 35 per cent option, as opposed to the Government's present 75 per cent, said that the then two-station rule was a sleazy deal created by former Prime Minister Menzies to protect the Fairfax and Packer groups; but this has been taken up by the Hawke Government. Back bench members and leading Government members have made similar statements. Their remarks have led us to the conclusion that these sleazy deals are being maintained. At one stage Senator Button was reported as having said to the Prime Minister in the Cabinet room, `Mr Prime Minister, why don't you just tell us precisely who you want us to help in the media?'. The Government's approach is not about developing a rational system that will provide a broader and better service for all Australians; it is about looking after mates. That is what the Government's approach basically is about. That is the key to this piece of legislation. It does not provide any safeguards or guarantees for the development of the industry in Australian hands. It does not provide for localism. It does not provide for pay television to be introduced. It does not provide for the future introduction of new television networks to provide greater competition. Therefore, it leaves the Australian television viewer out in the cold, back in the nineteenth century, where this Government is rooted in its thinking on all telecommunications matters. For that reason we oppose the Government's amendments. I now move: At end of motion, add: ``, but the Senate expresses its view that all television audience reach restrictions be removed to allow a potential 100 per cent audience reach for all competitors on the conditions that: (a) the Government's moratorium on the introduction of pay and cable television be removed; (b) the existing television licensing procedures be substantially streamlined; (c) cross-media rules between pay and cable television and existing free-to-air broadcasters be introduced subject to `grandfathering' of existing holdings; and (d) when the process of aggregation has been completed, the Australian Broadcasting Tribunal conduct an inquiry into issuing new television licences in metropolitan markets, subject to a final decision being made by the Government''. Senator SCHACHT(South Australia)(10.34) —What an amazing opportunity one is given today to speak in this debate. This is a cognate debate on the Broadcasting (Ownership and Control) Bill and the Communications Legislation Amendment Bill, but, more than that, it marks the death of the leadership of John Howard in the Liberal Party of Australia. My colleague in another place last week described him as the `living dead'. Over the last four or five days John Howard's parliamentary colleagues have certainly proved that true. Mr Howard, accompanied by the shadow Minister for communications, Senator Messner, has taken the Liberal Party through one of the most amazing performances in recent political history. One only has to see-- Senator Chaney —Mr Acting Deputy President, I rise on a point or order, which is twofold. It concerns firstly the issue of relevance but, more seriously, the offensive House of Representatives reference to the Leader of the Opposition which has been repeated in this place. It is no defence of the use of unparliamentary language that one is merely quoting the Treasurer, whose reputation in that respect is, of course, abysmal. I ask that the honourable senator withdraw his reference to the Leader of the Opposition. I do not intend to dignify it by repeating it. The ACTING DEPUTY PRESIDENT(Senator Colston) —I ask Senator Schacht to withdraw the comment. Senator SCHACHT —I withdraw, Mr Acting Deputy President. The leadership of the Liberal Party has been destroyed by the events of the last four or five days. This has been portrayed openly in the Press. Members of the Liberal Party could not restrain themselves from going to the Press with various stories about what happened to the leadership of John Howard and, if one could call it the leadership, of the shadow Minister for communications, Senator Messner. Let us look at what has been said in the Press recently. In an article in today's Sydney Morning Herald, Alan Ramsey says: At 5.30 pm yesterday, the Canberra Press crowded into John Howard's office to see what seven meetings in 32 hours of embarrassing confusion had produced. What had it produced? It had produced the destruction of John Howard's leadership. Alan Ramsey goes on: How to make no look like yes. How to make the party of free enterprise and deregulation look less restrictive than its opponents. So we have yesterday's formula. In rejecting 75 per cent, John Howard and his colleagues have now dressed up a policy that disguises 60 per cent to look like 100 per cent. That is all it is, pretence. John Howard the Flim Flam Man. I do not think there could be a more precise description of what has happened to the Liberal Party over the last few days than that written by Alan Ramsay. What else have we had in the Press in the last few days? An article in the Melbourne Age was headed `Opposition in disarray on TV ownership policy'. In the Canberra Times an article was headed `Opposition TV chaos deepens'. The headline `Howard expected to lose TV ownership issue' appeared in the Australian Financial Review. Other headlines were `Peacock backs decision to block TV audience move' and `Top Liberals rolled on TV reach'. Finally, I draw the attention of the Senate to an article in the Australian of 14 April, headed `Coalition backs higher TV limit', which stated: The Opposition's draft communication policy signals support for a Cabinet proposal to increase television ownership limits, allowing proprietors such as Mr Christopher Skase and Mr Alan Bond to retain their national networks. That article was written over a couple of weeks ago. Since then, presumably, either Senator Messner or someone from his staff has leaked this information to the Press to get some publicity, not realising that-- Senator Messner —Mr Acting Deputy President, I rise on a point of order. I ask Senator Schacht to withdraw that statement. I had nothing to do with the leaking of that document. Senator SCHACHT —I withdraw, Mr Acting Deputy President. I am glad that Senator Messner has cleared that matter up, that he did not leak it. Obviously someone in the Liberal Party did because it is a Liberal Party document. It clearly exposes the fact that two weeks ago Senator Messner and Mr Howard made it quite clear to Mr Skase and others, `It is okay; we made a blue last year when we opposed 75 per cent, but'-with a wink, a nod and a nudge-`you will be okay; it will go through'. Of course, accounts of what happened last Thursday night in the shadow Cabinet meeting indicate that Mr Howard and Senator Messner were left like shags on a rock when they put this position to their colleagues. That has been the effort of the Liberal Party over the last week. As I say, it is not often in politics that what is supposedly not major legislation-it is significant, but it should not be a major political event-has turned out to be a significant political event because it has destroyed the credibility and the leadership of the present Leader of the Liberal Party. It has certainly destroyed the credibility of the shadow Minister for communications. Whether Mr Howard survives one day, one month or another year before he is rolled, he will have to replace the present shadow Minister, who has been so inept at trying to explain to his parliamentary colleagues the difference between 60 per cent, 75 per cent, 43 per cent, 100 per cent and 15 per cent. About the only thing he has not proposed is that we have an audience reach of 115 per cent. Of course, that would defy mathematics, but that is the position the Liberal Party is in at the moment. Another problem for the Liberal Party is that the Howard-Messner view has been completely disowned by the four major State leaders of the Liberal Party, including the Premier of New South Wales, the new hero of the Liberal Party, Mr Greiner. They have made it quite clear that they think it is crazy not to go to an audience reach of 75 per cent. We also see in the Press today that Messrs Peacock and Sinclair, Senator Chaney and Senator Stone all oppose the policy put forward by Mr Howard and Senator Messner. It really does emphasise the fact that the present Liberal leadership is in such terrible disarray. The Bill before us is based on a decision of the Government, reached without the extraordinary confusion evident on the other side over the last couple of weeks. It is based on a decision reached overwhelmingly by our Caucus. In discussion between the Minister for Transport and Communications (Senator Gareth Evans) and our Caucus policy committee, we considered rationally all the aspects of this important issue of media policy, and especially television broadcasting in Australia. The three elements on which the Labor Government has based its decision are important. First of all, we agreed to support an increase in audience reach from 60 per cent to 75 per cent. Those who say this will increase monopoly ownership or control of the television networks in Australia do not understand the difference between ownership and network operation in Australia. Many years ago the Liberal Party Government agreed to allow a 43 per cent audience reach, or the two-station ownership rule, which meant that if a person owned a station in Sydney and Melbourne he effectively controlled the network. That is when the genie was let out of the bottle; that is when we allowed this network development to occur. If Opposition senators are really serious about getting rid of networks, or control by one company, they have to be fair dinkum and say that they want to have less than 43 per cent; that we should have 30 per cent to stop someone owning a television station in both Sydney and Melbourne. When someone owns a network in Sydney and in Melbourne, he runs the rest of the network-whether it is the Nine, the Ten or the Seven network-around the rest of Australia. There was an example some years ago, I understand with the Nine network, when Kerry Packer owned Sydney and Melbourne, and Alan Bond owned Perth and Brisbane-a much smaller part of the network. Apparently Alan Bond had a couple of programs produced which he wanted shown on the Nine network. When he put them forward to Kerry Packer, Packer said, `No, I am not interested. We will not show them in Sydney and Melbourne; you will have to show them on your own stations'. That made the programs uneconomic and stopped that production taking place. That indicates that when a person gets Sydney and Melbourne together, he has control of the network. All that an increase from 60 to 75 per cent will do is ensure that one last station-one out of five in the mainland capitals-will be part of the network. It has been put to members of the Government, and I am sure it has been put to members of the Opposition, that if we want a diversified network, if we want some decentralisation and if we want regional production in the outlying State capitals, stations should be owned by the same network so the investment can be made. Of course, this is of particular concern in South Australia. I am sure Senator Messner has been lobbied by Channel 7 staff in Adelaide, as I have. It has been pointed out that if that station is part of the Seven network, owned by the Skase organisation, it would be expected that Channel 7 in Adelaide would become the centre of a number of local productions, including children's television productions, for that network. If Channel 7 in Adelaide is left as a separately owned station, it will just be the tag end or the dag end of the network, merely relaying programs with no local production. As a senator from South Australia, I am more than surprised that Senator Messner is not supportive of local production being decentralised to South Australia under the 60 to 75 per cent proposal. He is acting against the interests of television production in his own State. A second aspect of the decision that the Government made in the last two weeks is that, in allowing the networks to go from 60 to 75 per cent of audience reach, we also decided to strengthen the powers of the Australian Broadcasting Tribunal (ABT). One should remember that it was the Fraser Government in 1981 that gutted the powers of the ABT to make sure that it did not have the strength or the powers to control the networks or the media owners. The Fraser Government did this because the ABT was stopping Rupert Murdoch from buying, as it then was, Channel 0 in Melbourne. The Fraser Government put legislation through to gut the powers of the ABT so as to allow that purchase to go ahead. I must say that it is really extraordinary to find that members of the Liberal Party of Australia, such as Mr Macphee, are now saying, `Oh, that was one of Malcolm Fraser's most dreadful mistakes'. I know that Senator Chaney chided Mr Macphee only two days ago when Mr Macphee gave credit to the Labor Government over industrial relations. But Mr Macphee is now, in a lame duck way, saying, `The Fraser Government should not have done it'. It did do it; it wrecked the powers of the ABT. The Federal Labor Government, through the Department of Transport and Communications and the appropriate House of Representatives standing committee, is investigating the ways in which the powers of the ABT can be increased and strengthened to ensure that the three major networks are appropriately controlled in the public interest and that they are made responsible for what they broadcast. I think it is important to give the ABT a medium range power to penalise networks if they do not carry out their public function. I remember in the late 1970s going to some public hearings in South Australia on the renewal of television licences. A promise of performance was tabled by each of the television stations in which they said what they were going to do in the next three years if their licences were renewed. This was wonderful stuff; no one could disagree with it. Of course, three years later, when one went back to see what they had carried out, one found gaping holes in what they had done to meet their promises of performance. I think the ABT should have medium range powers to penalise stations which do not carry out their promises of performance. Such stations or networks should suffer not necessarily the sledgehammer effect of having their licence taken off them, which would be almost impossible to impose, but some financial penalty or some other effective penalty to show them that they cannot ignore their promise of performance. Also, I would like to see the ABT, of its own volition, have the powers from time to time to investigate a station which is the subject of public complaint that it is not carrying out its particular public performance. For example, Mr Skase and the Seven network might promise to decentralise children's television production in the network to Adelaide if this Bill is carried. I believe that there should be a public requirement that this promise should be carried out. If it is not carried out they should suffer some penalty that is effective in a financial way. So, the second aspect of the Government's decision was to strengthen the ABT. I do not see Senator Messner, anywhere in any of his confused statements over the last week, or anybody in the Liberal Party, supporting the Government in its proposals to strengthen the ABT. The final decision which the Government took in the last week as part of the overall decision was to stop any move to increase the cross-ownership of television stations from 5 to 15 per cent. I think everyone would agree that the Government has maintained that position. I have not heard any comment from Senator Messner about it, but I presume he agrees that it would be wrong to allow newspaper owners or companies in Australia in particular to have up to a 15 per cent ownership in the present television networks. This decision means that the Murdoch Press and the Fairfax Press will have to divest some of their shares that they hold in the Ten and Nine networks. That is an excellent decision. When that decision was reached, after considered debate in the Labor Party, and not this mad, stupid chaos-- Senator Messner —Over 2 1/2 years of struggle in the Labor Party, back and forth. Senator SCHACHT —The only thing I give Senator Messner credit for is his gall in speaking here today. After his efforts of the last six days, I would have thought that he would have disappeared out of this place for at least six months because of his appalling performance. I am glad the honourable senator has mentioned the Government's decisions. Let us look at some of the Press statements that Senator Messner has issued over the last week. They are really riveting stuff. They are apologetic, ducking and weaving. One was issued on 19 April stating: `Government review of pay TV-Opposition's response'-a lame duck statement. The honourable senator has been going on about pay television here today as though it is the only thing he knows anything about, as though the Opposition has a consistent view about it. Senator Messner made another statement on 19 April-that must have been a pretty busy day for his office: `TV ownership limit charges-Opposition comment'. That is all he could make, a comment. He could not say yea or nay on it-another lame duck statement from the shadow Minister. He made another statement on 22 April: `Coalition's decision on television ownership'-an extraordinarily lame duck explanation of what was, a few days ago, the coalition's decision, which decision of course has now been ripped up. We now have a different one. Then on 25 April there was a statement: `Government should act immediately to expand television services for Australian consumers'. Of all the stupid hypocrisy, that must take the cake. By opposing an increase in the percentage from 60 to 75, the Opposition is clearly preventing the rural people of Australia from having the advantages of aggregation, from having three networks broadcasting to them. Senator Messner is proposing the exact opposite of what he says he is proposing in his bizarre opposition to this Government Bill. He is denying rural and regional people a wider choice of television services. I must say that, for a party and a coalition that go around claiming they represent rural interests, that really is an extraordinary performance. We in the Australian Labor Party will have great pleasure over the next couple of years explaining to rural and regional Australia that they have not got a wider choice of television services because of the bizarre circumstances in the Liberal Party in the last three days. Senator Messner —You won't be in government. We will be doing it. Senator SCHACHT —I do not believe Senator Messner will be doing it. He will be made shadow Minister for country abattoirs, or something, because the only thing he has done in the last week is butcher communications policy in Australia. Senator Messner has made a number of comments as though pay television is the major point. He says, `Let us get on with pay television and introduce it. Why is the Government delaying its introduction for another two years? Why is there a moratorium and why is the Government holding another inquiry?'. But in all the statements Senator Messner has made, he has not once explained what sort of pay television system he wants in Australia. He just says, `Let it rip', whether it is transmission by cable television, optic fibre or copper cable or whether it is the ultra high frequency (UHF) system or whatever. He has not explained once what sort of system should be used. He wants people, in a deregulated way, just to go berserk. Of course, that could happen, but if that was the policy that was introduced, in five or seven years time we would have an unholy mess in Australia in cable television. It would not be serving, or working to the advantage of, the Australian people. We are waiting for Senator Messner to explain whether he wants it on the UHF system. If he does, does he want the people who have the frequency also to be the programmers? How does he want the receivers to operate their devices to account for pay television? None of that has been raised by Senator Messner. He just wants to let it rip. The Government has done the correct thing and set up an inquiry. If Senator Messner does have any ideas which can stand up, which I am extremely doubtful about, he can put those forward in a submission. But this is the way communications policy has to go in Australia-in an orderly, planned way. It is expensive and it has enormous social impact, something that Senator Messner is not interested in. Senator Messner then said that the Opposition would deregulate the existing television broadcasting system and let further players come in. How many more players does he want in the system? Does that mean that the Opposition will allow individual people to start a channel up wherever they like? Is there going to be an abrogation of the control or the licensing of the broadcast band? Is just anybody going to be able to run a television transmitter and start jamming others? Deregulation in broadcasting is just not on. There has to be government control and planning of the broadcast spectrum. If we have deregulation, we will have madness. We will not have a system at all. We have not heard from Senator Messner any explanation about what he means by `deregulation'. It is about time we did; but of course we will not because he will have to go back to the party room or the shadow Cabinet to get it approved, and he will get rolled because he is incapable of explaining it to his colleagues. The situation with broadcast policy in Australia is complex. It is very difficult to draw up a policy that is going to satisfy everybody. The Government recognises that, and it does Senator Messner or the Liberal Party no good to disparage the number of reviews that the Government has had. The only way in which we are going to get decent public participation at all levels in the sort of broadcast system we need in Australia is to have the reviews and the inquiries. Whether Senator Messner and the dills in the Liberal Party make submissions, or whether the present operators or the general community do so, that is the only way we are going to end up with a comprehensive broadcast system. In the broadcasting field we are dealing not just with television; we are dealing with radio and, as I have said before, with pay television and with the new elements of communications, some of it dealing with computers, some of it dealing with data information, and all of it interconnected. It is just extraordinary to me that we have a major plank announced today by Senator Messner that the Opposition is in favour of deregulation. It will not work in Australia. It will create chaos. Not even in America, the home of world capitalism, is there the level of deregulation that Senator Messner is trying to impose upon the system in Australia. Australia, a big continent with a sparse population, has to have a regulated communications system in which the public feel confident that the Government is acting on their behalf and in which they can put their views forward. In conclusion, I want to come back to the point I started on. The circumstances of this debate today are extraordinary. This debate is really about the funeral oration for the leadership of John Howard in the Liberal Party. It is certainly the funeral service for Tony Messner as the shadow Minister for communications in the Liberal Party and in the coalition. As I said in earlier remarks, whether he lasts one day, one week or one month, Tony Messner has no credibility left anywhere with anybody in the communications industry. If they read his speech today opposing this Bill, they will see why his standing would have no credibility. It was one of the worst performances I have seen from a shadow Minister. Admittedly, I have been here only about nine months, but it was an appalling performance to try to explain why the Government Bill should be defeated. A former senator in this place, though not a member of my Party, once said of a Liberal leader, `He could not go two rounds in a revolving door'. One is of the opinion today that Senator Messner is perpetually trapped in a revolving door on communications policy and does not know how to get out of it, and he has taken with him Mr Howard and helped destroy his leadership. As we are talking about communications, the media and entertainment, after listening to Senator Messner one cannot help but be reminded that maybe the Marx Brothers are writing the Liberal Party's communications policy. Many years ago I had great enjoyment from seeing a classic Marx brothers' comedy called Monkey Business. I believe Senator Messner and Mr Howard could take over the roles of Chico and Harpo Marx in that movie, because they have the same level of logic in putting forward their policy today. I believe they made such a mess of it that, if there was any integrity in the Opposition parties in this place, they would support the Government's Bill and allow it to go forward to ensure the continued orderly development of communications policy in Australia. I commend the Bills to the Senate. The ACTING DEPUTY PRESIDENT(Senator Colston) —Before I call Senator Powell I just make the remark that the previous speaker referred to a member of this place by his first name only. For the dignity of the Senate we should use the correct titles of members of this place. I call Senator Powell. Senator POWELL(Victoria)(11.01) —Contrary to what the previous speaker, Senator Schacht did, I think I should point out what this debate is really all about. Senator Schacht concluded his remarks by saying that the debate was all about the leadership of the coalition. Of course, that is a significant sideshow to this exercise. But we are here engaged in a cognate debate on two significant Bills, the Broadcasting (Ownership and Control) Bill 1988 and the Communications Legislation Amendment Bill (No. 2) 1987. In particular, the Broadcasting (Ownership and Control) Bill 1988 represents a significant milestone in the ongoing debate on media regulation and ownership in Australia. I do not think that that should be forgotten in all the rhetoric and invective that is flying around the place clearly as a result of disarray and discord on media policy within both the Opposition and the Government. This legislation is significant for what it does. Amendments are to be moved at the committee stage which, if passed-either the Government's amendments or my own-would go further to making significant changes to the current situation. The decisions we must make basically boil down to whether we will put first the interests of ordinary Australians, the 15 million viewers of television, or whether we will look after the mates; that is, the select few major media owners-and getting fewer-who wish to extend their domination of television still further. Later, in the committee stage, as I have said, I will be moving, on behalf of the Australian Democrats, two amendments. One is to reduce the limit on television ownership from 60 per cent of national audience reach, which is the current position, to 43 per cent. This, the Democrats say, would halt the increase in concentration of television ownership and ensure that the political and social power which comes with major media ownership is more widely distributed in the interests of the 15 million ordinary Australian television viewers, less three. The other amendment which I will be moving is to reintroduce the prior approval powers of the Australian Broadcasting Tribunal for media ownership changes. The recent purchase by Christopher Skase, when he went well beyond the 60 per cent limit, is probably the best but certainly not the first example of why we need those powers back in place. Over the past few weeks-and even this morning we have seen some great theatre in Canberra-we have seen media proprietors exerting pressure to get the laws changed to accommodate them. The Minister for Transport and Communications (Senator Gareth Evans) seemed to believe and be convinced that now is the time to push things through the Caucus. However, fortunately, the back bench was a bit sensitive about blatant pandering to corporate mates, due to recent electoral disasters-and the Australian people have certainly made their voices heard on those issues. So Senator Evans has been able to extract agreement to his proposed amendment to raise the audience reach limit to 75 per cent only on the condition that he drop moves to raise the prescribed interest level, which would legalise the Murdoch and Fairfax moves to remain significant television operators in spite of the cross-media rules-rules which I must point out the Democrats very strongly support-and allow television proprietors such as Bond, Skase and Lowy to achieve, in effect, above the 60 per cent ownership level. Fortunately, that has been knocked on the head. The Minister has also had to agree, and Senator Schacht has referred to this, to additional powers for the Australian Broadcasting Tribunal-another move which the Australian Democrats heartily endorse. The possibility of an inquiry into the print media has also been part of the debate within the Caucus. However, the wining and dining continued. I would like to place on the public record the fact that Christopher Skase is a very competent business person. He judged, quite rightly, that it would be an absolute waste of his dollar to wine and dine the Australian Democrats. So I have not had a free meal in the last couple of weeks. The petitioning of backbenchers by Christopher Skase made the other media players, interestingly enough-Bond and Lowy-extremely nervous about the attention he drew to their favours which, frankly, were on the edge of being accommodated. Fortunately, some people within the Opposition, too, had the sense to kill that idea, although it did take, as we have heard this morning, several days for it to lie down and die. It remains to be seen whether any of those people on both sides of the chamber who have argued in the past in party forums and even in the media against the high level of concentration of television ownership will have the courage to vote for the Democrat amendment which reduces the level to 43 per cent. I remind the Senate that 43 per cent is the level of the mighty Packer and Fairfax television empires of the 1960s and 1970s. It is a figure that would allow at least 10 significant television owners in this country, all with a resource base for significant production, either independently or as part of a network by affiliation. I think it is important to point out that I am not the only one, on behalf of the Democrats, who is pushing for a 43 per cent figure. I have a list of some of the other people who have argued for it, in particular in evidence before the Senate Select Committee on Television Equalisation last year, of which I was a member. The Bond media group warned that a situation could arise under the 75 per cent rule that three groups could control most of the available markets. The Bond media group said that this is more a theoretical than practical possibility, because Australian commercial television at that stage already had five or six vigorous and ambitious operating groups. Northern Star Holdings Ltd now features prominently among the media moguls. Senator Chris Puplick's dissenting report points out the Northern Star position of last year. I will read from paragraph 146 of his dissenting report: If one needed further evidence of the cynicism of certain media proprietors to this question of cross-media ownership, one needs to look no further than the evidence of Northern Star Holdings Ltd to the Committee. We received from them a submission favouring the 43% coverage option . . . Between the lodging of the submission and their appearance as witnesses, the company acquired controlling interest in the Channel 10 stations in Sydney and Melbourne. As a result of this, the Company asked us to disregard all its previous arguments of principle and substitute a view in support of the 75% option, as they had acquired- and this is a quote from the secondary submission- `a different perspective in relation to some of the matters in the original submission'. I point out that Senator Puplick made the following comment as a consequence of that Committee's hearings: For all these reasons I reject the premise of this Bill in relation to the 75% audience reach rule and would limit any such level of domination to no more than 43% as originally proposed by Minister Duffy. The former Minister of this portfolio, Mr Duffy, is also amongst those people who in the past have supported the 43 per cent figure. I put it on the record at this point that my move to a 43 per cent limit is not based on the fact that I believe it is the ultimate or even most desirable limit, but it is based on all that past support for the 43 per cent limit, because that is a figure which ought to be at least politically possible. In the great bastion of free enterprise, the United States, the upper limit is 25 per cent. I have mentioned that when Minister Duffy held this portfolio he was also in support of a 43 per cent limit; of course, he was shunted out of that job as much for that reason as any, because he was not prepared to go to the higher level and look after the media mates. So, he was given the flick because he was interested in taking into account the interests of the Australian public. I think it is worth considering what a move downwards would achieve, to show, as much as anything, what the issues are. It would of course reduce the enormous social and political power of the big three-Bond, Skase and Lowy. The Democrats believe that it is quite wrong to deliver the political future of this country into their hands in these days of electronic presidential-style elections-as that is the reality of the situation. As the Treasurer (Mr Keating) said only a couple of weeks ago in a major contribution that he made to the debate on this issue: The importance of television in formulating and developing public opinion is unquestioned. The Democrats agree with the Treasurer, and therefore we want to see the ownership of this enormously important form of the media in as many hands as possible. Secondly, a reduction in the ownership limit level would encourage new players into television ownership. The greatest protection we have is in the widest possible ownership of all of our media. The Government has stated that that is its aim and, of course, it is what the amendment that I will propose would bring about. Thirdly, lower audience reach levels would prevent regional television from being engulfed. If the limit was raised to 75 per cent, as the Government proposes, it would allow those who presently dominate the metropolitan scene to carry on and buy out major regional holdings as well. At this stage I think it is important to consider this issue further. In his contribution, Senator Schacht referred to the remaining South Australian channel, NWS9, as being in a pretty invidious position as a result of a decision of this Senate to have the level remain at 60 per cent. In fact, I wrote down what Senator Schacht said-it was a bit poetic; he said, `It would leave them the tag end of the dag end of the network'. I submit that if we go to the 75 per cent level-and it is bad enough now at 60 per cent-the remaining Adelaide and other metropolitan stations would not be left as the tag ends of the dag ends of the networks-because they would be bought up, as would many of the other regional groups; but not all stations would be. We would have scattered around Australia more of what Senator Schacht calls tag ends of dag ends of networks, without any potential influence whatsoever on the media bosses and network owners. The networks would not be there as has been the case in the past, as a result of affiliation-and we need to remember that. At a 43 per cent level, an ownership group of at least 10, and possibly more, of relatively the same size would be better able to put the case for the smaller capital cities or the regional areas that they serve. There is another aspect of this debate which I think reflects very badly on the Government, and I refer to the scare tactics aimed at regionally based Australians and the matter of aggregations. The Government's saying that blocking a move to 75 per cent would hold back aggregation is absolute rubbish. The only way that that can occur is if Northern Star decided to spit out the dummy because it did not get its own way in relation to the 75 per cent level and not cooperate in the southern New South Wales aggregation. If so, it will be the media owners who are responsible for holding this proposal up, and no one else. If that happens it will be a classic example of commercial interests coming first, with the interests of viewers receiving no consideration. I think we could expect retaliation here in Canberra. We have become used to that sort of industrial action happening in Canberra, and we must remember that on the business side industrial action is also possible-although perhaps by another name. We must remember that there are significant media groups out there in regional Australia that are interested in building up their ownership levels, but they would not be able to do it to any significant degree. It is difficult enough now at 60 per cent; it would be virtually impossible at 75 per cent, and we would have lots of Senator Schacht's dag ends hanging around in regional Australia, and we do not think that is good enough. The issue of the imbalance of power in negotiations between major networks and regional groups is very important in this. The only way that we can ensure any balance at all is to reduce the limits-certainly not lift them. I stress that I am not arguing against networking as such but I am saying that networking can take place and indeed should take place by affiliation, not by ownership. That is how it happens in the United States of America and it is the way that it was happening in Australia before the dramatic changes that have taken place in the past couple of years occurred, with confusion arising due to those changes and with advantages being taken by the business interests involved because of the political and legislative vacuums and the lack of teeth of the Australian Broadcasting Tribunal. As I have said, in the United States, the home of probably the mightiest networks in the world, there is a 25 per cent ownership limit, and for 30 years it worked here in Australia. I think it is somewhat unlikely that a reduction of the ownership level to 43 per cent will occur at this point, but at least the defeat of a rise to 75 per cent and a rise in the prescribed interest level would be major achievements in the television area. The Broadcasting (Ownership and Control) Bill 1988 lays out all the media ownership limits, and the fact that within this legislation the radio ownership laws are more stringent than were first proposed, as well as those in legislation that was passed at the end of last year, is due in no small part to the pressure that the Australian Democrats-joining with certain members of the back bench of the Government, as well as community interest groups-were able to exert in this area. Perhaps we should remember that in the radio broadcast area the initial proposal was that new FM stations should be auctioned to the highest bidder. The outcry that occurred after that time, of which the Democrats were a part, indicated that the community was really saying that enough is enough. Fortunately, the Government took heed of that message. Subsequent to that, the licensing system was proposed, and amendments made to the legislation at the end of last year by the Australian Democrats set the limits at reasonable levels, designed to enable as many players as possible to obtain in the first place new licences and, also, through negotiations, to provide the sorts of limits that are in this legislation. I do not think it would be overstating the case to say that without those negotiations having taken place, there would be no State limit in radio ownership. There would be a far higher national limit in this legislation, and the auctioning of radio licences would prevent smaller operators from competing. All those things are major achievements and that is why at the beginning of this debate I wanted to stress that what we are talking about here involves far more than an exercise in the execution of the coalition leadership-although, as I say, if that has happened as a sideshow along the way, it should not be ignored either. The Government has made quite a song and dance about cross-media laws and aspects of that relating to this Bill. Senator Evans has placed great stress on that in his second reading speech. I think that is really because that is the only major achievement that the Government can point to in its media legislation to date. But the fact remains that in the space of just two years the Government has successfully caused a dramatic reduction in the number of television owners, a dramatic reduction in the number of radio owners, and a dramatic reduction in the number of newspaper owners. There has been an overall contraction in relation to media ownership, with it being placed in fewer and fewer hands. There are now fewer publications, and one recalls the demise of the Times on Sunday, the Western Mail, the Brisbane Telegraph and the Daily Mirror. There is less variety in the print media and other media. Independence has been reduced across all forms of the commercial media. By any standards, and certainly by standards of diversity, the Government's media policy is failing. It is a matter of great concern to an enormous number of Australians that there is an increasing concentration of our media in few hands. Of course, we need to look at what the coalition Opposition would do. We have seen, as has been clearly stated already in this debate and probably will be again, a circus performance over the past few days as a result of a vacuum of policy. Our attention is drawn to what the coalition Opposition would do by the second reading attachment, and I will address myself to that for a moment. We have the extraordinary situation of an Opposition saying, `We will not support a rise to 75 per cent because we want 100 per cent audience reach, we want a wide-open slather'. I assume that that means deregulation. After looking at the attachment, some questions need to be asked. I will shortly address the question of pay television, the first item in the attachment, but I point out that there is a conflict between what is expressed here and what was expressed in the statement put out by those in the Opposition yesterday; that is, they talk about removing audience reach restrictions, they talk about 100 per cent audience reach and they talk deregulationist terms, yet I do not see in print whether they would actually go as far as to say, `Let us do away with licensing altogether'. Of course, that would mean that anyone who wanted to get into television ownership would be able to get in; there would be no restrictions. I assume that the Opposition is saying that it is fine to have 100 per cent reach, but only for the people who are in charge, the media moguls and network bosses. While we retain our present licensing system, that must be the deduction. So we have a party which says that a two-airline policy is not good but a three television owners policy is all right. It is an argument which really does not stand up. I am pleased that the Opposition, by its attachment, supports a cross-media rule between pay and cable television and existing free to air broadcasters. The point that needs to be made about that is that there is considerable doubt about whether pay television will be viable and whether it will ever get off the ground here. At this point perhaps I should comment on pay television. Recently it has become quite a furphy and has been raised by both the Government and the Opposition. Obviously Mr Keating's 500 per cent ownership argument was not getting very far so, to create the impression of greater diversity and to bury the story about Caucus backing 75 per cent, pay television came up on the agenda. As I say, there is considerable doubt about whether pay television is viable and whether it will ever get off the ground. We should recall that there was a similar fanfare about pub television, which has now collapsed fairly dramatically. If pay television ever comes about, I suggest, it is still a fair way down the track. I refer to the Opposition's statement last night which was headed, `More competition not less' but which I think ought to have been headed, `More competition and less', and in which the Opposition first committed itself, as it has also done in the second reading attachment, to cross-media rules between pay television and existing free to air broadcasters. This raises the question of who will be the pay television proprietor. Bond is the only possibility now-and the Opposition seems to be promoting pay television at this point-yet its own attachment, its own statement, says that it would have cross-media rules in respect of those two forms of media. It seems to me to be a cloud cuckoo land proposal altogether and places a cloud over the Opposition's claim that it has some sort of media policy. If those in the Opposition were to put up arguments about diversity, they would have to talk about real options. Some real options are available to us now and not at some possible distant time when someone else is available other than Bond, who cannot be the pay television proprietor as he has pub television, and so on. Senator Messner talked a lot about the United States and pay television over there and so on, but he did not mention community television, or public television, as it is sometimes known. The United States has had public television for 35 years. There are 320 public television stations serving viewers in that country and some of its territories, if you like, each of them being independent but affiliated with a public broadcasting service. Their budgets come largely from local, foundation and educational institution funding, with a small amount from local, State and federal governments. I raise this because I think that public television is a real alternative and I point out that a public television group, the Melbourne-based Television Unlimited (TVU), after a two-year campaign in which I have had great pleasure in participating, has been granted a test licence. It will broadcast throughout the western suburbs of Melbourne from 5 to 11 June on UHF channel 47. Television Unlimited is a local, non-profit group which has 100 per cent local content. It will offer all sorts of community groups the opportunity to have their programs beamed out to Melburnians over this important and influential medium-remembering Mr Keating's words. TVU coordinator Jenny Wilkins has said in the TVU newsletter: The existing television networks, because of their centralised structure and national programming policies, cannot and do not cater to anything other than mainstream tastes. The Opposition is simply offering us more of that. The programming policy of TVU is different in that it favours Australian programs, encourages experimentation and traditional formats and aims to demystify the television process for the viewer. Senator Evans has made some moves in this area which have been helpful and I hope that the Government will continue to assist and promote public television. The Metro Group in Sydney is keen to begin and the Broadcasting Tribunal is looking at its application for a permit. Melbourne has led a 10-year campaign for the introduction of community television and a consultant with the Public Broadcasting Foundation, Mr Brian Walsh, a former Chairman of Open Channel where production work is done for community television in Victoria, has said that the prospects for community television were brighter now because the groups could use low power services and even share frequencies to cut costs. Issues such as frequency sharing, community television, and so on must be on the agenda of any political party, as they are on the agenda of the Australian Democrats. We profess to want to give more genuine diversity and localism to people in television viewing. I have not heard today anything about the possibility of a narrowcaster for Australia on the channel 4 model which would provide an opportunity for specialist broadcasting and would attract specialist advertising, which is about the only way that we will get any more for broadcasting out of the advertising sector at the moment, if we listen to what the advertising sector is telling us. It is all very well to say that we should have more channels and more proprietors through a licensing system under the old tunnel vision network model, but it must be supported with advertising and that looks difficult at this time. Let us remember what is happening. This is significant legislation. Let us look at who are the winners: the viewers; certainly the Democrats, in that we are able to have it at 60 per cent; Ian Macphee in the Liberal Party; and, on the other side, the Caucus committee, which has made achievements in all of this. The losers are the network bosses; Senator Evans, who has not even been able to get up to 15 per cent; and, of course, as has been well canvassed in this debate and no doubt will be further canvassed, the leadership of the Liberal Party of Australia and in particular Mr Howard and Senator Messner. Senator MICHAEL BAUME(New South Wales)(11.30) —So far in this debate on the Broadcasting (Ownership and Control) Bill 1988 and a related Bill we have heard two issues. First, we have heard some discussion on the merits of the legislation, but only some. The main points that were made by the Government's only speaker so far bore little relationship to the merits or otherwise of the proposal to change after the event the ownership limits of television stations in order to suit a particular purchase by a particular entrepreneur. The Government's only speaker so far has preferred to deal with prescribed disagreements within the coalition over the general issue of the level of ownership which should be permitted in an endeavour to brush aside the reality of the massive and major divisions which have existed and which continue to exist today in the Australian Labor Party over the question of media ownership. We have seen one Minister shunted aside, out of this portfolio, by the Labor Government because he would not toe the line on the dictates of the Prime Minister (Mr Hawke) about which of his mates would be looked after in which way by this Government. To hear the hypocrisy coming from the Government on this issue today is quite sickening, particularly when it comes from one of the key operatives-the Government's only speaker-within the quaint power groupings, the factions, of the Labor Party. It is sickening that he should have had the capacity to spout this hypocritical nonsense. Let us look, as I intend to, at the actual merits of the issue. I know that it will distress members of the Labor Party that the merits should be discussed, but that is the approach of the Opposition because it is on the merits of the issue that our amendment is based. I want to restate the amendment moved by Senator Messner, which says: At end of motion, add: ``, but the Senate expresses its view that all television audience reach restrictions be removed to allow a potential 100 per cent audience reach for all competitors on the conditions that: (a) the Government's moratorium on the introduction of pay and cable television be removed; (b) the existing television licensing procedures be substantially streamlined; (c) cross-media rules between pay and cable television and existing free-to-air broadcasters be introduced subject to `grandfathering' of existing holdings; and (d) when the process of aggregation- that is, of course, of rural television stations to provide competition- has been completed, the Australian Broadcasting Tribunal conduct an inquiry into issuing new television licences in metropolitan markets, subject to a final decision being made by the Government.'' In other words, the coalition is presenting the clear, free market alternative to the proposal by the Government which, in fact, is restrictive of the marketplace and limits the capacity of new entrants by limiting the number of television stations that exist and having a moratorium on cable television. We can now see which party has the coherent, positive and proper approach to allowing the consumer to dictate what should happen in the television markets of Australia. This Government persists with the view that it, and the bureaucracy in Canberra, should dictate to the people who actually watch the programs on television what sort of competition should be allowed, how it should be limited and how those limits should, after the event, be changed to suit the requirements of individual entrepreneurs. That is what this Government is all about. It is not interested in protecting the interests of consumers. We have not yet heard a word from the Government's only speaker so far about the interests of the consumer. We have only heard the tirade about perceived problems within the coalition. Let us look at this from the point of view of the consumer-the Australian, the person whose interests we are representing but who has received no attention whatsoever from the Government, which makes decisions based not on what is good for the consumer but what is good for individual media magnates. There are only two coherent positions that a government can take on the issue of ownership of television stations. One can go to a total free market; in other words, allow 100 per cent access to the market. If a television group wants to have access to compete in every market in Australia-not monopolise, but compete-it should have it, provided that there is much freer access than there is now to new participants and to more competitors who come into the marketplace to provide whatever the consumer wants. That is one position. The alternative, soundly-based position which can be argued is that no one should have access to more than, say, 25 per cent of the market. I can understand that position, but in the end I do not favour it as against 100 per cent. But I understand the 25 per cent position and the merit of limiting ownership to 25 per cent because in this way one would prevent any one operator dominating or controlling networks that exist around Australia in such a way that other members of that network will be unfairly treated or dominated, not only to their disadvantage but also to the disadvantage of the viewing public. The one thing that has escaped the notice of the Government and many of the skilled-I use the word `skilled' in inverted commas-commentators in the media, judging from this morning's response, is that there is such a thing as networking in Australia. The bright sparks from the Press Gallery have apparently not recognised that there is networking and that when someone owns either 60 per cent or 75 per cent of that network that person dominates it and is in a position to impose his views and, in effect, his programs on many of the smaller groupings within those networks. I would not be surprised if some of the smaller members of those networks would be quite happy to see the 100 per cent ownership rule, which we support, introduced so that they could sell out and cease being in that dominated position. But, as I said, the existence of networking, which is here now, renders the debate for between 60 per cent and 75 per cent ownership largely ludicrous. In terms of the benefits to the consumer, it is almost immaterial whether it is 60 per cent or 75 per cent ownership. It means nothing to the consumer because it does not change the essential networking system. Despite Mr Skase's arguments about the need to have what he described as a `critical mass'-in other words, a basic audience-if one is to provide more and better Australian-made services, there is no evidence to indicate that one needs 75 per cent ownership to achieve that critical mass. It has not been established, nor do I believe it is capable of being established, that there is any increase in benefit to the consumer, the Australian television watcher, in moving from one artificial number, 60 per cent, to another artificial number, 75 per cent-or, as the Democrats say, to another artificial number, 43 per cent. Under the Australian Democrats' proposal, if one has control of Sydney and Melbourne, in effect one has potential domination over one's network. It is the network that is the issue; networking exists. Why should consumers be in favour of increasing the audience reach from 60 to 75 per cent? There is no clear benefit to them. But there is a clear benefit to the Australian Labor Party. The clear benefit to the Labor Party is that, once again, it will be seeking to demonstrate to a media owner that the Labor Party is pliable to the requirements of media owners and that that pliability should be rewarded appropriately at election time. Why have we had a succession of Labor Government legislative changes which have been of specific benefit to specific people and, I might say, of specific disadvantage to other specific people? There is no doubt in my mind that the cross-media legislation was aimed largely at destroying the viability of the Fairfax group because the Fairfax group was seen, particularly by the right wing of the Labor Party of New South Wales, as an enemy of the Labor Party. That legislation has succeeded. We have seen legislative change over and over again to bring benefit to individual people and, in this case, after the event-after a media owner has expanded beyond the limits set by legislation. There are no benefits to the customer, but there are to the Labor Party and there are, of course, to the person who, if the legislation goes through, will be able to retain a television station which he would not be able to retain under the present legislation. Whether anyone else stands to benefit from the proposed change is a question that has to be answered in the negative. In fact, the legislation will disadvantage other people in this area. Had other participants in the marketplace known before the event that the 60 per cent level was to be increased by the Government to 75 per cent, they may have wanted to bid for the South Australian and Western Australian licences. But there was no knowledge of the Government's intention. The Government obediently responded to change the law only after the bids had been made, after the purchase had taken place. One of the essential elements of good government is that governments should ensure there is a level playing field in the marketplace. Governments should ensure that one operator, one purchaser, does not have special access to, or special knowledge of, changes, or potential changes and that all participants should have the opportunity of knowing what the ground rules are. There may be people who have every right to be angered that they were denied the opportunity to make a bid for those stations because they did not know that the law was to be changed and they took the view that it would be illegal to acquire and hold those stations because that is what the law said. Those people may not have realised that this Government is purchasable, not necessarily for money-the Harris-Daishowa (Australia) Pty Ltd affair showed that it does not even honour those debts-but for other benefits, apparently. When a government responds consistently to the pressures of people from whom it sees the possibility of an ultimate benefit, that government is innately corrupt. This legislation is all about a level of corruption within this Government-not a corruption in terms of money, but a corruption in terms of morality. In my view, on those grounds alone, there is a sound case for saying that either one goes to 100 per cent now, which would enable Mr Skase to acquire these television stations, or one does nothing about it-one does not go down the Government's track; one reminds the Government that its position is intolerable and disgraceful, and one rejects the legislation. There is no doubt that in the absence of freeing up the marketplace there can be no argument for increasing the ability to hold a larger capacity of access Australian television markets. Yet this Government is not interested in doing that. It is not interested in the benefits to the consumer that would emerge from genuine competition in the marketplace. That is in total conflict and contrast with the Government's public statements. The Government has claimed to be the arch-deregulator. In recent days Mr Keating has, quite absurdly, attacked the coalition, which has come out with the most deregulatory policy on the media that has ever been seen in Australia. Mr Keating accuses the Opposition of saying in its party room: `No, we will not have a sensible, logical network in television. We will not have a sensible, logical basis driving our industry policy. We will not let market forces determine anything. We will decide it'. Let Mr Keating put his vote where his mouth is. If he does not want the Government to decide it and he wants the marketplace and the people of Australia to determine things, let him vote for our amendment which seeks to allow 100 per cent access and increase the real competition in the marketplace. But, of course, Mr Keating behaves with the same hypocrisy that we are seeing from other members of his Party in this place today. Mr Keating claimed that the shadow Ministry and the coalition say that a fragmented market with no economies of scale and no logical structure is preferable to a sensible, viable network. Apparently, Mr Keating does not realise that networks already exist and that it is not a question of ownership that creates networking. At this level of control it is a question of domination of the network already. Once one gets to 60 per cent control one dominates that network. Senator Powell —Even if you have 45 per cent control you dominate the network. Senator MICHAEL BAUME —Despite that interjection, one also heavily dominates it when one has Sydney and Melbourne at 43 per cent. As I said, 25 per cent is the only other coherent position. That is the ratio that is allowed in the United States, where-for Mr Keating's benefit-there are networks which are effective and which work. So, as I say, though, I prefer the 100 per cent option to the 25 per cent option, but I can understand the logic behind the 25 per cent position. We have here the Labor Government claiming the clothes of deregulation while refusing to go along with our amendment which would genuinely deregulate the market. I also have some concerns about the manner in which this issue has come to us. The sixth report of the Senate Standing Committee for the Scrutiny of Bills, brought down on 27 April 1988, also expresses concern about this continuing tendency to govern to Press release. That report stated: The Committee noted that it would be undesirable if information as to the Government's intention on such questions as ownership and policy were either the subject of rumour and speculation, or available only to a privileged few in the community while legislation was in the course of preparation and drafting. Equally, the Committee is concerned to point out that the two principal problems for the Parliament which were highlighted in the above reports in the practice of `legislation by press release' are again illustrated by this Bill. Firstly, by indicating that the legislation changes in ownership rules, such as broadcasting, is to be retrospective to the date of a Minister's announcement, a degree of uncertainty as to the status of the law during the period between the announcement and the passage of the necessary legislation by the Parliament is created. The ability of Parliamentarians to assess the merit of proposed legislation may be prejudiced by the realisation that people have altered their position (for example by making large investments) in reliance on a government's prior media announcement that the legislation is to be introduced. To that extent such announcements are a matter of concern. Second, by the time the Parliament considers the Bill, the Parliament may be placed in the invidious position of either agreeing to the legislation without major amendment or upsetting transactions which may have taken place during the intervening period in reliance on the Minister's announcement. The Committee accordingly draws the clause to the Senate's attention in that by reason of its retrospective effect it may be considered to breach principle 1 (a) (i) and trespass unduly on personal rights and liberties. According to that bipartisan Scrutiny of Bills Committee, there is no doubt that the Government is doing the wrong thing in a bad way in regard to this issue. I have another concern regarding the way this matter has been handled in the media itself. In particular, I think the sort of headlines that we have seen, particularly today, justify the sort of comment that Mr Howard made about the media being extraordinarily selective and having incredible double standards in its handling of this matter. It is extraordinary that on the very issue of media control the continual governmental disagreements seem to have been forgotten by reporters and commentators at this time. In a newspaper report of last night's Press conference Mr Howard said of the media: `I think you, in the main, as a group, have a double standard. Duncan and West, with monotonous regularity- I point out that one of them is a member of the inner Cabinet and the other is a Minister- are publicly bucketing the Hawke-Keating position on privatisation. Almost every weekend they are doing it.' The newspaper article continued: When a reporter interjected, `Mr Howard, almost every weekend you've got a bunfight going,' Mr Howard said: `That's a bunfight?- that is, what is going on in our Party- The other is an orderly discussion process.' That is, what is going on in the Australian Labor Party. The double standards of the media in handling this matter concerning the Opposition and the matter of the continual governmental disagreement and factional warfare are, I believe, extraordinary. As an ex-journalist I raised this problem with a former colleague in the Gallery. His response was: `Yes, it is true that we tend to concentrate more on disagreements within the coalition when you are forming policy because we are so accustomed to brawling and disputation within the Labor Party that it is no longer news. But it is unusual and therefore newsworthy when we see evidence of disagreement within the coalition'. There is a double standard there. In other words, because Opposition disagreement is worth reporting only because it happens so rarely, this means that it gets enormous publicity. I believe that this is an admission of incompetence by members of the Press Gallery. I believe the reality is largely as it was reported by Paul Kelly-another member of the Press Gallery-in this morning's Australian newspaper. He says quite clearly that what we have ended up with now is: an Opposition television policy of more competition, more players and more deregulation in the run-up to the next election. Perhaps we could thank the Government for maybe hastening the development of what I believe to be an outstanding, deregulatory and proper policy-unlike the ad hoc, disgraceful, bowing to pressure policy of the present Government, a policy which bears no relationship to the needs and requirements of the consumer but continually kowtows to the demands of media magnates. I think that Mr Paul Kelly is right when he says that Mr Howard now has a policy that `he feels he can champion. Indeed, the actual policy seems quite clever'. I think that the policy is far more than quite clever. I think it is outstanding, particularly in the vacuum created on the Government side. What is the Government's real policy? Does it favour deregulation, or does it not? To use Mr Keating's own style of words, he says, `You have to free it up, and the Government is doing it'. If the Government is doing it, why is it limiting ownership to 75 per cent? Why is it prohibiting new competitors from coming into the television area? I must say that I can think of better ways for the birth of this sound and proper coalition policy. It could have had a more comfortable birth, but the reality is that now we have a policy as the coalition which will be an effective and coherent one when we are in government. It is a policy which will not allow a situation whereby a government can continually make special concessions at special request as a result of pressure from people who have in fact extended their ownership beyond the limit set by the law, and whereby it can make a special fellow of itself, to be owed a favour, by making those kinds of changes. Alan Ramsey, a Sydney Morning Herald reporter, who is not unknown for having some political associations, has said that the Opposition has imposed conditions in going to this free market because it knows the Government almost certainly will reject them. The reason is that the left wing of the Labor Party will not let the Government go to the free market because it is opposed to the free market. The left wing is opposed to allowing 100 per cent access. It is opposed to having new media players. It is interesting that neither Mr Ramsey nor any other journalist in the Press Gallery has noted that the only reason our amendment will not be accepted by the Government is the internal dissension which made it so hard for this particular proposed amendment to get through the Labor Caucus. For Mr Keating to plead purity on this issue is a hollow sham. The Government stands condemned. The ACTING DEPUTY PRESIDENT(Senator Bjelke-Petersen) —Order! The honourable senator's time has expired. Senator McMULLAN(Australian Capital Territory)(12.00) —Before I turn to the key themes of the debate on the Broadcasting (Ownership and Control) Bill and the Communications Legislation Amendment Bill I feel I need to comment briefly on the remarks made by poor old Senator Michael Baume in his attempts to pretend that somehow or other-- Senator Michael Baume —What's this `old' business? We are both losing our hair. Senator McMULLAN —I thought the honourable senator was much less poor than old. It seems to me that Senator Baume made only four points in his speech. First, Senator Baume, at least, opposes the cross-ownership rule, the one thing which did something to change substantially the nature of media ownership in Australia. The second point is that he does not understand that nobody in Australia, no television owner anywhere near the 60 per cent limit, could have bought the stations in Adelaide and Perth. The only two owners near the 60 per cent limit already own stations in Perth and are not eligible to buy the stations up for offer and purchased by Mr Skase. So all that stuff about there perhaps being other people wanting to buy it who were deprived because they did not know about any forthcoming change in Government policy is absolutely specious. Thirdly, Senator Baume has a problem with his short term memory. He thinks that the 75 per cent policy is a new Government policy, whereas it was announced in November 1986. He also seems to have a problem with his memory when he complains about media bias. One of the things which I and all my colleagues in the Australian Labor Party find most amusing is Liberal Party representatives complaining about media bias. I do not want to be diverted to that for too long; I merely note with amusement the irony of it. The other interesting point is that Senator Baume, in a brief aside about the Labor Party taking donations from companies, said that we do not even honour our undertakings in that regard. That seemed to me to carry some implication that people who donate to the Liberal Party do expect undertakings to be honoured in return, and the Opposition's attitude to matters raised concerning Harris-Daishowa (Australia) Pty Ltd is more understandable in that light. I turn to the key themes I want to raise in this debate. First, are we to have any consistency and rationality in policy on television ownership and media ownership in general, or are we just to have a hotch potch? That applies both to the ownership of television and-more importantly if we look at the broader question of ownership of the media-to the development of pay television. I was also very interested to hear Senator Baume ask whether we were going to have a policy that provided, in the interests of the viewers, for the development of localism and local production, or a policy that gave us the domination by Sydney and Melbourne that the old 43 per cent rule used to mean. Senator Powell —The two-station rule is different from the 43 per cent rule. Senator McMULLAN —The two-station rule was actually worse than the 43 per cent rule, but the 43 per cent has the same effect. Senator Powell —No, it doesn't. Senator McMULLAN —I know the honourable senator likes to pretend it does not, but she does not comprehend that that is its effect. That is perfectly understandable. We must also ask whether the interests of the viewers, and particularly those who are constituents of mine, will be influenced by an effective denial of aggregation. Of course we must also consider the interests of the workers in the industry, who have been lobbying various senators, particularly those from South Australia and Western Australia-I understand why they have not been to the Australian Democrats or to members from New South Wales and Victoria, such as Senator Baume and Senator Powell-on localism and local production. Fundamentally we have here a debate about 60 per cent as against 75 per cent. We have had a couple of red herrings drawn across, and we have this fig leaf of 100 per cent-a fig leaf to try to cover the embarrassing exposure of the defeat of Senator Messner and Mr Howard. It is a very small fig leaf trying to cover a very large embarrassment. They could well be guilty of indecent exposure. Certainly they want to impose a large number of irrational requirements as pre-conditions for the extension to 100 per cent. They say, `Let's quickly get in and change the policy on pay and cable television before we find out the facts about it'. They know nobody would do that, and they would be horrified if we did. They also say that we should let the existing television licensing procedures be substantially streamlined. That may or may not be a good idea; no-one knows what they mean. What they do not say is that those procedures need to be strengthened. After considering these matters the Labor Party Caucus made the very appropriate decision that the Australian Broadcasting Tribunal needs effective strengthened powers. Senator Messner and Mr Howard want to do something with cross-media rules for pay and cable television. I will come back to that because I am sympathetic to that proposal, but it does not make sense to deal with it before we have an inquiry and establish the facts. However, as I say, I do not totally disagree with the thrust of that proposal. They want to have an inquiry into issuing new television licences in metropolitan markets, when they know or they should know-certainly the shadow Minister who is supposed to be responsible for communications policy should know-that it cannot and will not work because of the nature of the Australian advertising market in contemporary circumstances. So we have this 100 per cent fig leaf or we have the 43 per cent proposal, which I acknowledge is different from the two-station rule and better than that rule but which has the same effective impact of concentrating production in Sydney and Melbourne. That is what the 60 per cent rule will do, as well. They are the places from which the networks will be totally dominated and in which production will be concentrated, because if a company cannot sell its program to Sydney and Melbourne it cannot make a profit. In 1982 the Australian Broadcasting Tribunal noted that the two-station rule, which effectively gave owners 43 per cent access, had largely contributed to the concentration of power and influence which it was originally designed to prevent, and the structural imbalance had caused domination by the Sydney and Melbourne stations. It noted that such dominance was out of proportion to their population size. So it was not just their 43 per cent coverage but also their dominant position in the market that led to the two-station rule not working. That is why the 43 per cent rule will not work, even if it were possible to unscramble a scrambled egg-which it is not. We now have an effective choice between 60 and 75 per cent. What is wrong with 60 per cent? It can fundamentally be summarised like this: Government policy should not be like a pair of kid's shoes. We should not just be able to grow out of it. That is what will happen with the 60 per cent rule. Current owners, consistent with the present laws and without any change of policy, and without any action by them, will grow out of the existing policy unless they deny aggregation to people in rural Australia. Senator Powell —All they have to do is sell Capital 7. Senator McMULLAN —Exactly. So the policy is saying that these owners have not done anything that they should not do but because of very good and appropriate government policy to introduce aggregation to this area of southern New South Wales, to south-east Queensland and to north Queensland they have to sell, and sell from a position of weakness because they are required to sell. We would be imposing a forced sale upon them through no fault of their own. The impact of this forced sale provision is different for Mr Skase in Adelaide and Perth. That is his risk. He took the risk; I do not debate that. But the forced sale of the far north Queensland stations, the south-east Queensland stations and the Canberra station is not caused by any breach of the law by the Seven, Ten or Nine networks; it is caused because somebody has imposed a silly policy that we can grow out of. That is, firstly, an unfair, unreasonable and nonsensical policy that ought to be amended as soon as possible but, secondly, it will deny for at least 12 months, until that forced sale is finalised, services to the people of southern New South Wales and, effectively, the south-eastern and northern parts of Queensland. I think that is an entirely inappropriate outcome. It is not surprising that we get a silly outcome from a silly process like that which the Opposition went through in formulating its policy. If I thought we would be better off under 43 per cent or a two-station rule I might have agreed. Dealing with the Nationals is a very bad idea. Dealing with the alternatives is worse. It is a bit like Winston Churchill's comment about democracy-it is the worst form of government except all the others. The deal with the Nationals was the worst conceivable proposal except all of the others that were before us, including the Australian Democrats proposal. Let me turn briefly to the Opposition's so-called policy. I notice that everybody who gets up to defend the policy does not spend much time talking about it, and they never actually say why they are going to vote in this place for a 60 per cent rule, because it never logically follows from the other comments they make. The Opposition was described by the Prime Minister (Mr Hawke) as a bunch of wimps, and certainly that summarises the longer comments that other people have made concerning the leadership of the Liberal Party. What I am trying to find out is whether, having heard Senator Michael Baume, the Opposition is actually deregulating regulators or regulating deregulators. It is doing one or the other, because it is saying that it wants a free market and deregulation, but it is actually going to vote for the 60 per cent rule. I would be fascinated to hear the intellectual contortion that gets the Opposition through the eye of that particular needle so that we can understand, because it is not supporting 100 per cent. It knows that that fig leaf is very insubstantial. Its objective is really 60 per cent. It is true that the Leader of the Opposition (Mr Howard) would like 100 per cent, and I suspect it is true that the shadow Minister for communications, Senator Messner, and perhaps even Senator Michael Baume-nobody could tell-would really like 100 per cent, but why are they all going to turn out and vote for 60 per cent? By what rational criteria are they going to do that? I support the range of Government decisions that are reflected in this legislation and in the decisions that went with it and the package of decisions that will lead to a series of further reforms. I support the decision about 75 per cent. We need consistent, logical and predictable decisions in that area. That policy has been extant for 18 months. It ought to be sustained so that people know the environment in which they are making decisions. I support that part of the package of decisions that will require divestiture by the Murdoch group from Channel 10 and the Fairfax group from Channel 7. I did sympathise with the crocodile tears that Senator Michael Baume shed about that, but I think most Australians believe that it is entirely appropriate that those cross-ownership provisions should be retained. I support the proposal for an inquiry into pay television. That is why I was fascinated by the proposal that we ought just to go helter-skelter into it without looking at the matters that need to be taken into account and without hearing the views of the Australian people. The Government has proposed that a policy options paper will be released, and then there will be months for public comment and consultation. But, of course, that is not a good idea. According to the Opposition we ought to charge in and do something without the facts. For the inquiry to be objective it first has to look at whether we ought to introduce pay television services or not. I do not object to someone trying independently to make a decision about that. It is a matter of economic judgment. I believe it is an arguable proposition, although I think the inquiry is appropriate. But what are the answers to these questions: the number and range of pay television services that should be provided; the effects of the introduction of pay television upon the existing broadcasting and communications systems; the regulatory requirements, such as limits on ownership and control, cross-media ownership and foreign ownership. I did not see anything about that in the Opposition proposal. What about the likely effects on the production in Australia of films and television programs; the scope for participation by Australian industry in the provision, manufacture, installation and servicing of equipment; and, the appropriate timetable for the possible introduction of pay television? They are a series of sensible questions for an inquiry. Unlike some people, we do not come up with the answers before we have the inquiry. I know that the facts could be an embarrassment to anybody trying to defend the Opposition's communications policy, but I support the pursuit of them. There have been, of course, inquiries in other countries. In the past they have made some very substantial contributions to the debate about cable television. I refer briefly to just one of them, the Sloan Commission on Cable Communications in 1970-71 in the United States, set up by the Alfred P. Sloan Foundation and headed by Edward Mason, the then Chairman of the Graduate School of Public Administration at Harvard University. It was a very interesting report, although I do not agree with all of its conclusions. But it made some very interesting comments about ownership, which I would like to put on the record. Although they are not necessarily entirely appropriate in all respects for Australia, they are an interesting starting point. They state: The Commission recommends that network ownership of cable franchises be prohibited . . . It recommends: that a limit be set on the number of cable subscribers served nationally by any single individual or corporate enterprise engaged in ownership of cable franchises . . . Perhaps some sort of percentage limit of market access. What a revolutionary idea, but of course the Opposition would support 100 per cent, because that is its policy. We know that. The Commission recommends that local commercial television stations and newspapers of general circulation be permitted to seek franchises within their own . . . areas . . . I am a bit doubtful about that proposal, but I think it is an interesting distinction between local stations and newspapers and network owners, provided no single such enterprise possesses franchises capable of reaching more than 10 per cent of households within the area. The Commission recommended that the public television stations in America be permitted to operate cable franchises and that restrictions on commercial stations and newspapers be waived if no other bidders for cable franchises appeared. It believed that the separation of ownership and programming were undesirable. I think some of those proposals, on the basis of the examination I have made today, I intuitively agree with. Some I am not persuaded of, but I do think they have made a substantial contribution to the debate. I think they indicate the sorts of issues about which we need an inquiry before we proceed in that direction, desirable as it would be, if it proves viable. In conclusion, the people of Australia at the moment are faced with a stark choice in communications policy. There are really only two choices. They can have an irrational, changing and unpredictable policy that is not supported by the Leader, shadow Minister or any Liberal Party State Leader or any participant or informed commentator in the area, or a logical and consistent policy which provides the basis for investment in production for localism and development of the industry and creates the opportunity for expedited aggregation. I regret that the Senate will probably make the wrong decision about it but I am very confident that the people of Australia will not. Senator WOOD(New South Wales)(12.17) —I rise to express my strong opposition to the Government's proposed amendment to the Broadcasting (Ownership and Control) Bill 1988. We call our country a democracy. The sort of democracy we have depends on information. It depends absolutely on ordinary individuals getting accurate and up to date information on what is happening in the country and what is happening overseas and on the various debates which go on in this place and in other places about matters of the day. The way in which ordinary people in this country participate in the political process is either by joining a political party or by voting. Either way, the effective use of their access to the political process depends upon their ability to judge between competing points of view. Yet we find, increasingly, that the main organs of information are becoming controlled by fewer and fewer people. New South Wales once had a very extensive network of local and regional newspapers. Such a network hardly exists today. Such newspapers have been bought out by the big print media interests. That has been beneficial to the odd radio station-because local radio stations have gone the same way-or newspapers around the State. It may have been useful for some local media interests to get a financial and creative input from outside the local region but, in general, because profitability in these large-scale enterprises is the key to success, there is a preoccupation with advertising and a de-emphasis on editorial content. So any old thing that comes to hand is thrown in as news while all the energy and resources of the enterprise are put into making sure that the advertisements are correct. So the advertisements are proofread and they get the creative input; the news and editorial content get a cursory glance and are thrown in. I find it disquieting that this Government-supposedly a Labor government but it is the Hawke conservative Government-which is meant to represent the interests of ordinary Australians, has succumbed to pressure exerted by the media barons who can formulate and develop public opinion by their stranglehold on the media. In this day and age television is probably the most influential medium-and television is the subject of this debate. On 18 April I received a long letter, by fax, from Christopher Skase. I wrote a letter back to Mr Skase in which I said, `Thanks, but no thanks. I am voting against the proposal. I do not believe that your interests match the interests of the ordinary Australian'. But still I get letters and faxes from Mr Skase, which I will go into later. Mr Skase was arguing the case for increased television reach. The fact that he faxed such a long letter to every senator and member indicates that money is no object to Mr Skase and that he already has enormous power and influence. Attached to this letter was a copy of the editorial from the Australian that day, an editorial so ludicrous it suggests that Rupert Murdoch might have written it himself. Senator Powell —He probably did. Senator WOOD —Senator Powell said that he probably did. The editorial asserted that commercial television is composed purely of channels of entertainment and that commercial television does not change a vote through argument. Senator Powell —At least it doesn't agree with the Treasurer. Senator WOOD —Obviously it does not. I wonder whether the writer of the editorial in the Australian meant what he was saying-and it probably was a he. I wonder whether he was serious. Surely it is stretching credibility too far to argue that current affairs programs and news are purely entertainment. What do the producers of 60 Minutes think, or the producers of the news programs? Sometimes I look at news and current affairs on the commercial stations and I see a large swag of time being taken up with cute stories about fat cats-real fat pussy cats, not other sorts of fat cats. Is this news, current affairs or entertainment? Obviously, commercial television has at least to be interesting. Perhaps some people get confused about what is interesting and what is entertaining. So we get entertaining things in news rather than interesting things. I do not know whether any of the Willesee clan, who seem to be ubiquitous in just about every medium, believe that commercial television is about anything other than entertainment. Either way, commercial television influences the views of Australians, not least by its choice of news items and subjects for current affairs. Because commercial television influences and develops public opinion, it is necessary to restrict television reach and control. The Americans restrict television reach more than we do. They restrict it to 25 per cent. I would favour a figure in Australia of something like 20 per cent. The city of Sydney is probably a reasonable maximum limit in terms of commercial reach. So I would favour something like a 20 per cent limit which would allow ownership of a television station in the large city of Sydney but no more. The current level of 60 per cent is too high. To consider raising it to 75 per cent is nothing short of a major sellout of the interests of ordinary Australians. I support Senator Powell in her arguments in favour of her Broadcasting (Ownership and Control Television Licences) Bill, restricting television reach to 43 per cent. I disagree with the Australian Democrats on the figure they have struck; my figure would be lower. Senator Powell cited four main reasons for her Bill. One was to reduce the enormous social and political power of the present big three owners of television, Bond, Skase and Westfield. Increasingly, we have presidential style elections with image outweighing substance. Over the last few elections we have seen how style and image in our political leaders are more important than substance. Senator Messner —Would you say that that is how you got elected, on image and style, rather than substance? Senator WOOD —I will answer Senator Messner. In New South Wales, the Nuclear Disarmament Party made a conscious decision not to adopt the cult of personality in our election campaign. My name appeared in no place other than on the how to vote cards and on the ballot paper. The Nuclear Disarmament Party in New South Wales campaigned on the issues and on the Party. I do not believe in the politics of style and image but in the politics of substance, which is why I am saying that I do not believe in the presidential style of elections, which is what is happening. The Treasurer (Mr Keating) admitted that the importance of television in formulating and developing public opinion is unquestioned. If this situation does not change, the big three will be determining the political future of this country to a much greater extent than they already do. The second aspect of Senator Powell's Bill is that it will encourage new players into television ownership. I find John Howard's platitudes concerning free enterprise quite extraordinary. If he were sincere about free enterprise he would like a bit of healthy competition, one would think, but not monopolies by media giants who can buy everyone else out, which is what he is advocating. It seems to me that monopolies are in direct opposition to free enterprise. But in a lot of the economic argument that I have heard in this place, free enterprise is merely the means to create monopolies. That sort of economics, that sort of free enterprise, involves the development of larger monopolies, so fewer people make more profits. If people were sincere about deregulation, they would be advocating a complete and absolute deregulation of the whole industry, including licensing, so that anyone who can afford to build a transmitter can broadcast. That is what free enterprise and deregulation are all about: anyone who can afford to broadcast should be able to do so. What would happen then to Skase's almost monopolistic interests? The third aspect of Senator Powell's Bill is that it will prevent regional television interests from being engulfed. Despite Christopher Skase's arguments to the contrary, an increase in television reach will simply allow those who presently dominate metropolitan television to buy up and dominate regional television holdings. It will lead not to a diversity but to a horrifying sameness from coast to coast. There is already a horrifying sameness from channel to channel. One switches channels and gets the same American situation comedies; they are there no matter what channel one looks at. Senator Messner —It is a good argument for pay television, isn't it? Senator WOOD —It is a good argument for local production houses producing community television, producing programs for a community of interest. Finally, the Bill seeks to redress the imbalance in negotiations between the major networks and regional groups aligned with the networks and lower the limits, so that Sydney and Melbourne will not be the only centres to make production and programming decisions. It seems that everyone everywhere will be watching Sydney or Melbourne television. We have already had the horrifying experience in New South Wales of having that great entertainer Derryn Hinch gracing the television sets of Sydney. Senator Powell —You are welcome to him. Senator WOOD —Senator Powell says that we are welcome to him, but I point out to Senator Powell that she can have him back with pleasure. I suppose that Derryn Hinch would be the example par excellence of where the line between what is news and what is current affairs and entertainment blurs. Senator Powell —I will trade him for Clive Robertson. Senator WOOD —We will keep Clive Robertson. I will not trade Clive Robertson for Derryn Hinch. If the Labor Party really cares about democracy, about sharing power, it should allow regional groups some negotiating power, power which they do not have now and which certainly they would have less of if the limit were raised to 75 per cent. Despite the fact that I politely wrote back to Christopher Skase outlining my views, laying it fairly clearly on the line where I stood on his proposal, this morning I got another letter from an increasingly desperate Christopher Skase, with a copy of the editorial from yesterday's Sydney Morning Herald. The editorial argued for an increase in the limit. It is a pity that Mr Skase did not include the editorial from yesterday's Age, which stated: If there is a case for public regulation of commercial television . . . then such regulation should be based on reasonable criteria of public interest and not the arrogant dictates of media moguls . . . what is best for Christopher Skase or Alan Bond or Frank Lowy is not necessarily best for Australia. `Hear, hear', say I. Maybe we should be abolishing the whole system that we have here and follow instead the model in Britain, where no television channel is commercially owned. Most people would agree that British television is the best and most varied in the world. There the Independent Television Authority franchises 15 competitive program companies to produce commercial television programs for 14 regions. The companies that make the best programs make the most money, by selling them to other regions and abroad. There is real competition in production. If the Opposition wants to talk about private enterprise and producing quality television, let us have a serious look at the British system and at how applicable it is to the current situation. It is time that the media moguls stopped calling the tune in this country. Because Christopher Skase arrogantly bought up a couple more stations and raised his coverage to 67 per cent, the Government seems to be falling over itself in its rush to accommodate him through this amendment. Senator Powell —It wanted to do it anyway. Senator WOOD —Yes; this is probably just a prod in the right direction-or in the wrong direction, depending on one's point of view. What we need in this country is control and regulation of the media moguls. The public interest should dictate what these media moguls do, not the other way round. It is not in the interests of the public to have wealth and greed the sole determinants of television ownership. It is imperative that the Australian Broadcasting Tribunal have the power to rule on takeovers so that the interests of the public can be preserved. The Tribunal awarded the third television licence in Perth to Kerry Stokes, after an exhaustive inquiry, and yet after no time at all it was sold, at massive profit, to Westfield's Frank Lowy, and that pushed his audience share to 60 per cent. The Australian Broadcasting Tribunal was not able to stop that. It is a ludicrous situation that must be redressed. In considering further the matter of the interests of the public, we need to look at Alan Bond and his comments about Chile. I hope that no-one in this chamber has any sorts of fond feelings for Pinochet, the most foul dictator there has ever been. Yet, Alan Bond came away from Chile and said that things were fairly okay over there and that Pinochet had had a bit of bad Press. He said that perhaps a film crew ought to be sent over there to clean up Pinochet's image a bit. Is that in the best interests of truth? Is that in the best interests of objective reporting? If Bond has that sort of attitude to Pinochet, where is the commitment to any sort of objectivity? Where is the commitment to any sort of unbiased reporting? Of course, there is no commitment in that regard. Neither Bond nor Skase nor Lowy care about information. They do not care whether the information that goes through their media outlets is unbiased or informative or truthful-none of that. All they care about is having stuff going through their media outlets that is entertaining, that will sell television time and newspapers, or whatever it is-anything that will make money and be profitable. It seems to me that we need more control over who says what to the Australian people. Bond should not be allowed to simply clean up Pinochet's image just because Bond has gold mining and other interests in Chile. Of course, Bond has interests with the Pentagon from which he is receiving billions of dollars to produce airships. It is a very important contract for Mr Bond, so where will Mr Bond sit with his media interests if a situation arises where Australia's interests are in direct conflict with American foreign policy? There is no doubt about it: Mr Bond has proved to us with the Chile example that he will come down on the side of where his profits and commercial interests lie. In Australia we no longer have media barons in the Fairfax tradition of concern for the media. Of course, Fairfax was Fairfax, and media barons of his ilk had their biases; they came from a particular class with a particular background and that showed in their publications. Nevertheless, they had an interest in the media. Their concern was the media and they had a commitment to produce what they thought was unbiased reporting. However, we now have financial barons-rather than media barons-whose interests are primarily financial and only one of their interests is the media. The media interests of these financial barons are secondary to their overall commercial interests, and that is something that we must address. I oppose the amendment because I do not believe that it is in the public interest. I would argue for a figure even lower than the 43 per cent proposed by the Australian Democrats, and I will support Senator Powell's amendment to that effect. I call on the Senate to look again at the whole industry and give serious consideration to adopting the British system, under which media moguls are not allowed to control and influence the media. The time when media interests in this country catered to the interests of the general public is long gone. The media is now secondary to the interests of big business and to the financial interests of large corporations. There should be a guarantee that the media will produce information which is unbiased and as informative as possible to assist ordinary Australians to make informed decisions about the great political and social problems of the day. Debate (on motion by Senator Tate) adjourned. Bill received from the House of Representatives. Motion (by Senator Tate) agreed to: That the Bill may proceed without formalities and be now read a first time. Bill read a first time. Senator TATE(Tasmania-Minister for Justice)(12.44) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The proposed Admiralty Bill will give Australia, for the first time, a comprehensive, up to date, locally enacted and uniform law governing the exercise of Admiralty jurisdiction by Australian courts. The law will replace existing Imperial legislation. In the Bicentennial year it is appropriate that we remove one further piece of old, inherited British legislation from our statute book and replace it with legislation specifically designed for Australian conditions. This the Bill is designed to do. The Bill follows the recommendations contained in the Report No. 33 on Civil Admiralty Jurisdiction prepared by the Australian Law Reform Commission and issued at the end of 1986. That Report followed a reference given to the Commission by the former Coalition government in 1982. The need for reform in this area has been recognised over a long period. A Joint Committee of the Maritime Law Association of Australia and New Zealand and the Law Council of Australia, with Justice Zelling as Chairman, in 1982 had produced a Joint Report on reform of Admiralty jurisdiction. The Law Reform Commission was required to have regard to this Report in its consideration of the matter. It received, as well, input from other maritime and legal bodies, State Governments and individuals, who it consulted in the preparation of the Report. All were agreed on the need for reform of Admiralty law. The Report is a comprehensive analysis of admiralty jurisdiction and the Government, in seeking reactions to the Report, found widespread support for early implementation of the recommendations contained in it. I commend the Commission for its Report which has been widely praised. Admiralty has long been a distinct jurisdiction in the court system. Business expectations rely on the fact that jurisdiction over ships and shipowners will be asserted in special ways. Australia is principally a country of shippers rather than shipowners and is dependent on foreign shipping for much of its import and export trade. It is, therefore, in Australia's interest to support a broad Admiralty jurisdiction, which is dependent principally on the presence in the jurisdiction of the ship or sister ship in relation to which a maritime claim arises. The proposed legislation, therefore, asserts a broad admiralty jurisdiction but at the same time takes account of international trends and remains within internationally acceptable limits. Admiralty jurisdiction exercised by the Courts has its own distinctive features. The key feature is the ability it provides to bring an action in rem-that is the power to arrest a ship (including foreign ships) within the jurisdiction of a State and to use that ship as security for a maritime claim. Actions in rem arise from the existence of a maritime lien or a statutory right of action based on a proprietary or general maritime claim arising under the general law and involving the ownership or operation of ships. The Bill also provides for Admiralty jurisdiction to be exercised in relation to claims in personam-that is claims directed against a specific person-in relation to maritime claims or claims for damage to a ship. The Bill does not attempt a substantive overhaul of the law. It does not, for instance, create new causes of action or, with the exception of cl. 34, create new substantive rights, as distinct from creating new procedures. The Bill, therefore, seeks to clarify what claims are subject to Admiralty jurisdiction and which Courts can exercise that jurisdiction. It is proposed that the Federal Court as well as the State and Territory Supreme Courts be invested with Admiralty jurisdiction. I turn now to address the significant features of the proposed legislation: Maritime claims are defined in detail in cl. 4. A distinction is made between proprietary maritime claims and general maritime claims. Proprietary claims involve claims relating to ownership or possession of a ship. General maritime claims include a wide range of claims arising from the operation of a ship. The legislation retains the existing distinction in Admiralty law that exists between actions in rem based on maritime liens and statutory rights of action in rem based on causes of action arising under the general law and involving the ownership or operation of ships. It confers a right to proceed in rem over claims involving maritime liens in cl. 15 but does not seek to codify or define the substantive law governing maritime liens. Their traditional priority, ranking ahead of other maritime claims, is maintained. The scope of the statutory right of action in rem is defined exhaustively and in detail. The circumstances in which claims in rem can be brought on maritime claims are set out in cls. 16-19. These clauses outline the nexus between a ship and the relevant person against whom the claim arises which is required before an action in rem can be brought. Provision is made in cl. 19 for the first time in Australian law, for arrest of surrogate or sister ships. This is a feature of Admiralty law in certain other countries, including UK and NZ. Admiralty jurisdiction in personam is conferred in cl. 9 with respect to maritime claims and in addition with respect to claims for damage done to a ship. Concurrent jurisdiction in Admiralty is conferred on the Federal Court and State and Territory Supreme Courts. Appeals will proceed through the Full Court or Court of Appeal of the relevant Federal, State or Territory Court to the High Court, under the ordinary rules governing appeals from the respective Courts. The experience of the State Supreme Courts in admiralty matters is preserved. Provision is made for the promulgation of uniform admiralty rules, applicable to all Admiralty actions. There is provision for a Rules Committee with a judge of the Federal Court and a Supreme Court to advise the Attorney-General on the Rules and possible amendment to them. The rules will be made by the Governor-General in Council and will be subject to disallowance by the Parliament. The Bill will remove the uncertainly that arises from the continued application of old imperial legislation. In particular, the 1890 Colonial Courts of Admiralty Act will cease to operate in Australia. A number of other old Imperial enactments are repealed. The Bill makes a number of minor consequential amendments to the Navigation Act 1912 and the Shipping Registration Act 1981. Financial Impact Statement The financial impact of the legislation is expected to be minimal. I present the explanatory memorandum to this Bill. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. The ACTING DEPUTY PRESIDENT(Senator Colston) —Pursuant to sessional order, the Senate will now consider matters of public interest. Senator MACKLIN(Queensland)(12.45) —On 24 March I asked the Minister for Resources (Senator Cook), who represents the Minister for Community Services and Health (Dr Blewett) in this place, a question without notice about the funding of the drug Azidothymidine (AZT). Honourable senators will know that AZT is the main drug to have shown significant benefits to sufferers of acquired immune deficiency syndrome (AIDS). Certainly, it is one of the significant breakthroughs in terms of quality of life for such people. In his answer, the Minister stated that the Commonwealth had undertaken to contribute $1m to a program of clinical evaluation of AZT, on a dollar for dollar basis between the Commonwealth, the States and the Territories. The clinical trial involves about 200 patients around Australia. AZT, of course, has been approved for general use in the United States of America but it is currently available in Australia on a limited trial basis only. The Minister said in his answer that the Commonwealth would not contribute beyond the scope of this arrangement, and that any supplementary funding `was a matter for the State and Territory administrations'. He also informed the Senate that the renegotiation of a revised Medicare agreement between the Federal and State governments to incorporate AIDS treatment and the provision of AZT would be considered in May at a meeting of the health Ministers. The effect of the Government's policy is that there now is a growing number of people suffering from AIDS who fulfil the clinical requirements to be part of the Government trial but who are being denied access to AZT. Indeed, in New South Wales, where about 70 per cent of Australia's AIDS patients are, on average six people join the waiting list for the drug treatment every week. Because of the lack of government funding, these people are being denied treatment by a drug that has been proven in clinical trials to be effective. The problem, then, is twofold. Until the clinical trials in Australia are completed and evaluated, the drug will not be publicly available. The appropriate United States agency has approved AZT for general use and, of course, it is hoped that the Australian authorities will complete their program speedily and efficiently. However, because of the limited funding for these trials, we are now in a catch-22 situation. This is probably best illustrated by the Commonwealth's seeming lack of concern for the sick and many of the disadvantaged in our society. The discussion has been couched very much in terms of dollars. I would be quite happy to engage in that discussion if, in fact, it were legitimately based. However, I do not think it is legitimately based. When we see, as we heard in a debate yesterday, many of our large corporations still being able to pay tax of 10c in the dollar, one wonders why we need to discuss the costs of health care to so many people in our community. Commonwealth and State governments have pointed to the cost of treatment by using AZT which, on average, is about $10,000 per patient per year-a very large cost indeed. But, when we compare this to the cost of similar treatments of life-threatening illnesses, it would not seem to be an excessive amount. I want to mention some of the treatments which are covered under the Medicare arrangements because I think this is the way we really have to go. We have a situation basically, then, where clinically ill people are being deprived of a drug because of funding restrictions. As the AIDS Council of New South Wales has made clear, this would seem to be one of the only situations where a scientifically proven drug is being denied patients on the basis of economic considerations only. The drug in question has been around for quite some time. It was originally marketed about 20 years ago by researchers who were looking for some cure for cancer. It ended up being relatively useless in that area and, indeed, quite toxic, and was put aside. It was found to be very effective during routine tests on the AIDS virus. It has since gone on to be the major operative drug in the area today. There is a difficulty, however, in its manufacture and this has led to some of the extraordinary costs that are associated with the drug itself. There is still a fair amount of dispute between the originally public funded research which provided the drug and Burroughs-Wellcome, the drug company that currently has control over the drug for another seven years. There is also some discussion about how the drug actually works. But, I think, these points can be put aside in this debate. What we are looking at is the humanitarian situation, particularly in respect of those people who may be diagnosed very early in the piece as suffering from AIDS and who, in fact, may see that a treatment with this drug would be much more beneficial at that stage than at a later stage. It would seem that one of the ways that Australia could go might be to release funds for research with regard to this area of drugs itself and proceed to the development of a similar drug which operates in a similar way. At the moment the situation is that AZT is available only to people who meet the strict criteria laid down for the trials. So we have a highly emotional-and quite rightly emotional-debate building up in the community. If one looks at this matter in purely commercial terms, $10,000 may seem expensive but so too, for example, is $35,000 a year for someone who is on dialysis for kidney failure. An average cost of a chemotherapy patient is $11,000 a year and the cost of a drunk driver who spends a month in intensive care is somewhere between $50,000 and $100,000. In other words, it is important to see that there are very large costs in many areas of health care. They are costs which the community has made it clear it is willing to carry. According to information provided by the National Health and Medical Research Council, the cost of treating an AIDS patient in hospital is about $40,000. It would seem, then, that any treatment which is able to be effective and prevent hospitalisation should be looked at as a cost-saving measure. So I think costs in this area are being looked at differently from the costs of ill patients in other areas of health care. The current funding situation, of course, is that the State health Ministers want the Commonwealth to pay, although the Commonwealth does not pay for drugs given out through the State-run public hospitals. It would seem that what the Commonwealth Government is attempting to do is to make, in terms of a longer term plan, a gradual withdrawal from the provinces of providing medical services. The New South Wales Minister approached the drug company in an attempt to reduce the costs. But he had no success. He then asked the Commonwealth Government to assist his Government by helping it to shoulder the burden in New South Wales. The Commonwealth Government has refused. The Victorian Government has asked the Federal Government to provide increased funding. The Victorian Government also believes that the method I have outlined is the most cost efficient method available with regard to keeping the number of in-patients down to a minimum. But, of course, it also wants the Commonwealth to come in on the funding exercise. The Commonwealth Government in turn has argued that it does not allocate money for specific drugs. Rather, it gives the States a block grant and it is up to the States to distribute funds. I think what we have here is an impasse which, unfortunately, is affecting an increasing number of people. It is a impasse which I believe ought to be broken, and broken very rapidly. The AIDS epidemic has been with us for quite a long time. The country itself has come to grips with the problem. Yet we still have this continuing wrangle between the State and Commonwealth governments about what we are to do about the situation. As of 15 March 1988, there have been almost 800 people with AIDS in Australia, of whom 418 have died. Critics of the existing policy say that if AIDS is not considered a special case, but a complex, potentially devastating disease which will incur considerable expense, all people who need the treatment will have to be treated. While AIDS continues to be seen as something extraordinary and outside the area, governments are going to face charges of withholding medical care on the basis of discrimination against certain groups within our community. Nobody is arguing that Australia's health budget is unlimited. There is an appreciation that the provision of health care needs careful consideration. Certainly, the current problems of limited availability as a result of government funding indicate the need for this. However, the head of the AIDS task force has made it very clear that he sees that there is now no dilemma, that AZT should be given to people on the basis of medical need without any other further consideration. That, after all, is the way in which we have dealt with all other diseases. Surely in the late twentieth century we have advanced to a stage where we can make available in Australia a clinically proven treatment for a life-threatening disease. I would hope that governments in Australia would not use the federal system as a means of shirking their responsibility collectively to the community. I think that is what is occurring at the moment. It is not good enough for a government simply to say, `This is somebody else's problem' and try to shuffle it off. I do not believe that we should have to wait to see what happens in May when the health Ministers meet. I think the Commonwealth Government has a primary responsibility in this area. Hopefully, after the May meeting there will be agreement that this matter will come under the normal Medicare arrangements. Additional funding probably needs to be provided in the short term. I think that is necessary and could be provided for in terms of the Government's current health budget. I have very little time left in which to deal with the last concern that I wish to raise. I refer to the other drugs that are able to be used but which, seemingly, are not being tested extensively. I would hope that these drugs also might become part of the trials that are being conducted and might be able to be funded and used, particularly as some of them have the potential for being as good, if not better, at a significantly lower cost. Motion (by Senator Tate) agreed to: (1) That discussion of Matters of Public Interest be not further proceeded with this day. (2) That intervening Government Business be postponed till after consideration of Government Business Order of the day No. 13 (Norfolk Island Amendment Bill 1988), the Admiralty Bill 1988 and Government Business, Orders of the Day Nos 10 (Bounty and Subsidy Legislation Amendment Bill 1988), 11 (Excise Tariff Amendment Bill 1988), 12 (Export Inspection package), and 14 (Honey Marketing package). (3) That this Order have effect till 2.00 p.m. this day. Debate resumed from 24 March 1988, on motion by Senator Richardson: That the Bill be now read a second time. Senator VANSTONE(South Australia)(1.02) —The Norfolk Island Amendment Bill 1988 is, in absolute terms of size, a small one. In relative terms of its substance, it is an equally small one. Senator Macklin —In keeping with the size of the island. Senator VANSTONE —As my colleague Senator Macklin says, perhaps this is in keeping with the size of the island. But in pointing to the size of the Bill we should not neglect to mention that in substance the Bill represents an important step towards the Norfolk Island Administration gaining greater responsibility and independence in the long term. In the past, section 83 of the Act has required the accounts to be audited by the Auditor-General for the Commonwealth. The purpose of this Bill is to amend the Norfolk Island Act 1979 in such a way as to enable the Norfolk Island Government to appoint its own auditor to audit the public accounts of the Territory. The Opposition is satisfied with the detail in the Bill which implements the purpose of the legislation. We support the Bill. Senator TATE(Tasmania-Minister for Justice)(1.04) —I thank Senator Vanstone for contributing to the debate and I ask that the second reading motion be put to the chamber for its concurrence. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed. Senator LEWIS(Victoria)(1.05) —The Opposition supports the Admiralty Bill 1988. Indeed, even though it was introduced only about 25 minutes ago, we will allow it to be debated in the Senate today. In fact, it will be passed within a few moments. The coalition parties agree with the Government that it is in Australia's interests to have up-to-date admiralty legislation relevant to modern conditions. So we are supporting the Bill. Our basic maritime transport policy orientation is dictated primarily by our status as a user rather than as a supplier of shipping services. We have a strong interest in providing effective local remedies for persons dealing with ships, whether as importers, ships suppliers, crew members or otherwise. At the same time, an excessive regard to the interests of plaintiffs may carry the risk that Australia will be adversely affected. This Bill achieves a conservative balance and adopts the Law Reform Commission's civil admiralty jurisdiction report, which advocated long overdue reforms. That report has apparently been well received by wide cross-section of the relevant interested parties. Senator COOK(Western Australia-Minister for Resources)(1.07) —I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 15 April, on motion by Senator Reynolds: That the Bill be now read a second time. Senator COOK(Western Australia-Minister for Resources) —Mr Deputy President, I suggest that we have a cognate debate on the Bounty and Subsidy Legislation Amendment Bill 1988, the Excise Tariff Amendment Bill 1988, the Export Inspection (Services Charge) Amendment Bill 1988 and the Export Inspection Charges Collection Amendment Bill 1988. Also, I table an explanatory memorandum relating to the Bounty and Subsidy Legislation Amendment Bill. The DEPUTY PRESIDENT —Is that the wish of the Senate? There being no objection, it is so ordered. Senator LEWIS(Victoria)(1.08) —As has just been indicated by the Minister for Resources (Senator Cook), the Senate is debating cognately four Bills-the Bounty and Subsidy Legislation Amendment Bill 1988, the Excise Tariff Amendment Bill 1988, the Export Inspection (Services Charge) Amendment Bill 1988 and the complementary Export Inspection Charges Collection Amendment Bill 1988. The Senate is doing this in order to accommodate the Government, which has a backlog of Bills. I shall not be speaking at length to these Bills, which are not opposed. However, I point out that, once again, these Bills reveal the shortcomings and bureaucratic ineptitude of this Government. Senator Brownhill —Hear, hear! Senator LEWIS —I am supported by my colleague Senator Brownhill. In particular, I will point out the major difficulties created by this Government. The Minister for Industry, Technology and Commerce (Senator Button) is full of rhetoric about what this Government is doing for industry, but, as I point out once again, the Government is either taking the soft option of lowering tariffs-that is the easy thing to do-or, in fact, taking away bounties, as it is doing in this case. The difficult option is to look at the other measures which need to be taken to assist industry by relieving it of some of the burdens so that it can get on with its job. I draw the Minister's attention in particular to the concerns of two companies-Waltanna Tractors of Hamilton in western Victoria and E.M. Baldwin and Sons Pty Ltd of Mount Druitt in New South Wales. The Government is taking away the bounty on tractors. The Opposition is not opposing this measure because it was brought down as part of the Budget. But both of these companies are in a position where they have to face competition from imported tractors which do not attract duty. At the same time, they have to pay duty on many of their components which are imported or they have to pay a higher price for Australian components, and this significantly adds to their costs. Both companies have been leaders in design in their particular fields and both have been active in research and development. Waltanna has been actively pursuing export markets and has developed a unique timber and forestry machine which is called a timber forwarder. I gather that this machine is a tractor which incorporates a piece of equipment to enable the operator to pick up timber and move it forward. Part of the machine, as finally manufactured and delivered, is a crane and the manufacture of cranes in Australia is protected by a 35 per cent tariff. So Waltanna either has to pay a 35 per cent duty on a crane which it imports for incorporation in its machine, or has to buy a crane from an Australian manufacturer which is protected by the 35 per cent tariff. Accordingly, the price that Waltanna pays is that much higher. The cost of Waltanna's timber forwarder has increased by approximately $12,000 because of the crane component. Waltanna is competing with fully imported machines which attract no import duty at all. The Government is in a bind in that the manufacturer of the machines which are being built in Australia finds that he is ultimately responsible for a $12,000 duty imposed on a major component, but his competitors are able to bring in their machines manufactured outside Australia free of duty. Waltanna tells me that a duty is also imposed on other components, one of which I think is an axle. Waltanna either has to pay the duty on the imported goods or the duty, in effect, is encompassed in an Australian product. The total value of all the duties that Waltanna pays on its timber forwarder is $26,000. So this company is put at a disadvantage of some $26,000 in competing with imported products because the Government simply has taken away the bounty which it was giving to companies to compensate for this problem. The Government has taken the simple option. It has taken away the bounty and not rectified the situation for the company. As a result, its product costs $26,000 more than it should. I am not suggesting that the bounty should be reimposed; quite the contrary. What I am saying is that a customs tariff concession order should be made available to the company. But when the company tried to apply for some concession to enable it to import these components free of duty, it discovered that it was required to write to every manufacturer in every part of Australia and ask, `Can you produce the particular product that is needed?'. Of course, in any event, the Australian manufacturers themselves may be utilising parts which, down the line, are protected in some way or other. So the company is still faced with this burden. This is the sort of problem which is created for companies in Australia by the Government simply taking away a bounty as a Budget measure and not following through and realising the problems which may arise. This sorry story reveals inflexibility, lack of understanding of commercial realities, the problems of hasty introduction of harmonised tariffs and, quite frankly, the hasty removal of the bounty in the last Budget. I point out that the Liberal and National parties have constantly criticised the Government for the anomalies created by the harmonised tariff legislation. We understand that there would, of course, be anomalies in such a massive piece of legislation. But the Government is not addressing those problems and anomalies quickly enough and bringing about some redress of the grievances which Australian manufacturers are suffering. Both Waltanna and E. M. Baldwin and Sons Pty Ltd have the potential to develop export markets but if they cannot compete fairly on the local market and develop sufficient cash flow to carry out this work it is unlikely that they will go ahead with exports. As a matter of fact, it has even been suggested to me by one of them that it might have to cease manufacture because of the burden that is imposed on it. In other words, such an outcome would be solely due to the Government's actions. Of course, they would not be on their own if they ceased manufacture. After all, these are the only companies left in Australia that are manufacturing tractors. All of the other Australian manufacturers of tractors have gone to the wall or had to get out of the business. I urge the Minister for Industry, Technology and Commerce and his Department to undertake a speedy review of this problem and remove the disincentives to these companies that have been created by the removal of the bounty. The Government has failed to address the problems which they now face as a result of the tariffs on the components that they have to use in their product. The amendments to the Bounty Books Act 1985 are not opposed. The amendments change bounty assistance to the book producing industry which has been extended to 31 December 1993 and phase down the bounty in five steps. The coalition parties are, of course, in support of that proposal. The Excise Tariff Amendment Bill 1988 amends the Excise Tariff Act 1921 to incorporate into the Act various excise tariff proposals tabled in this Parliament during the last sittings and early in this sitting. They are routine six-monthly adjustments based on consumer price index (CPI) and import parity adjustments. The import parity price adjustments probably will be the final adjustments of this kind as legislation has been passed deregulating crude oil marketing from 1 January 1988. The adjustments concern the excise duty on liquefied petroleum gas, refined petroleum products and avgas. There is an adjustment to restrict the total excise duty increases as a result of CPI indexations for the 1987-88 financial year to 6 per cent to honour an undertaking given by the Prime Minister (Mr Hawke) during his election campaign. The Prime Minister casually mentioned that he would not allow these things to increase beyond 6 per cent and he now has to keep amending the legislation all the time to make sure that they do not. These measures are not opposed by the Opposition. The Export Inspection (Service Charge) Amendment Bill 1988 will allow effective recovery of the costs of inspection services at establishments not registered for the preparation of food and primary products for export. The principal purpose of the Export Inspection Charges Collection Amendment Bill 1988 is to enable charges to be imposed in relation to export inspection of fruit, vegetables, live animals and animal reproductive material. However, the amendments primarily affect horticultural exports. The Government introduced new inspection charges by export control orders on the horticultural industry as from 1 January 1988. These charges are structured in a way which adds significantly to the costs of these exports, particularly of small consignments of certain types of horticultural products such as cut flowers, nursery items, new variety and high quality items. These high costs have been fully canvassed in the other place and the Government must be aware that these additional charges may affect the competitiveness of these exports. Sufficient to say that horticulture offers one of our brightest export prospects and I agree with the industry viewpoint that the charges are unfair, cumbersome and counterproductive. While the Government continues to give lip service to increased exports, it seems determined to increase the burdens it imposes on exporters in the private sector. These cognate Bills highlight the bureaucratic ineptitude of this Government and its clear lack of understanding of commercial reality, notwithstanding the rhetoric of the Minister. Surely the Minister has the wit to devise systems that accommodate the needs of the private sector as well as the Government and are neither inefficient nor cumbersome. Senator BROWNHILL(New South Wales)(1.23) —I support the comments that were made by Senator Lewis, who is leading for the Opposition in this debate. I would like to direct my attention to the Export Inspection (Service Charge) Amendment Bill 1988 and the Export Inspection Charges Collection Amendment Bill 1988. I am somewhat surprised that the Government has decided to press on with this legislation, given the criticism of the legislation within some of the industries affected by it and given the announcement in March by the Minister for Primary Industries and Energy (Mr Kerin) of a review of the charges. For those not familiar with this legislation, I should explain some of the relevant facts. The purpose of the legislation relates to the ability to make export inspection charges. The first Bill-the Export Inspection (Service Charge) Amendment Bill-will allow effective recovery of the costs of inspection services at establishments not registered for the preparation of food and primary products for export. The other Bill-the Export Inspection Charges Collection Amendment Bill-provides for charges to be levied for the inspection of fruit, vegetables, live animals and animal reproduction material and some grains. As Senator Lewis has already mentioned, the most effective industries are the horticultural and grain industries. The Government is aware, and has been for some time, that the horticultural industry and some sections of the grain industry are opposed to the export charges, and so they should be. The legislation will impose dramatically increased costs on these exports at a time when we are supposed to be needing every export dollar we can get. So while the Government talks big on wanting to increase rural exports, it does everything it can to provide disincentives. I am advised by Mr Lloyd, my colleague in the other House, that the full cost of these additional charges will be of the order of some $8m, of which, on a 50 per cent cost recovery basis imposed by the Government, almost $4m will be recovered from the industry. Of that $4m, almost two-thirds will come from grain exports, particularly from the new types of grain which we need in our export program, and the remainder will come from horticultural exports. The Government is aware that there is enormous opposition to this legislation but, in its usual style, it has decided to push ahead anyway. Finally, on 15 March, Mr Kerin announced a review of fees for inspection of horticultural produce and non-prescribed grains. The following comment was made in a paper that came from the Minister's office: The aim of the review is to 1. Examine the effects of the new fees on industry, 2. Examine the cost recovery level that the fees will achieve; and 3. Establish ways in which the Government's policies of 50 per cent inspection cost contribution by industry can be met, while ensuring that no sector of industry suffers a disproportionate financial burden in the course of applying the policy. As such, it is intended to address criticisms of the new fees by industry, and to redress any anomalies or inequities identified. Under the heading `Terms of Reference', the paper states: The terms of reference of the review are: 1. Examine the effects of the new fees on industry. 2. Examine the cost recovery level which the fees will achieve. 3. Identify any anomalies arising from the new fees. 4. Devise a range of alternative options for redressing any financial imbalances caused by the fees, while still adhering to the Government's policy that industry contribute 50 per cent of the cost of providing the export inspection service. 5. Decide on a charging formula which equitably and efficiently meets the Government's cost recovery objectives, and provides the maximum incentive for efficient operation of the industry and the inspection service. The timetable for the review, by anyone's judgment, is somewhat hasty. The Government announced the review on 15 March; it circulated a discussion paper on 29 March; and it demanded that industry responses be in by 15 April, which gave the industry only two weeks to prepare a submission. The working party, made up of representatives of various affected industries and groups, is to meet and report to the Minister. Their report is to be with the Minister by the end of April-that is, by this Saturday. So, presumably, in effect that means tomorrow. I cannot work out why we should be debating the legislation in the Senate today when a report on the review has to be concluded tomorrow. Why cannot this Government just admit that its legislation was, once again, drawn up by bureaucrats who forgot to consult with the real world and find out what was going on? The legislation is most probably shonky. Why cannot the Government just throw it out? The Government should wait. It should find out what the industry can afford and is prepared to accept, and draw up legislation accordingly. In my opinion, the Government is hardly being fair and, in fact, it is being absolutely scornful of the working party which it established. Does it mean that the Government has no intention of listening to the working party and that, whatever it says, the legislation will proceed? Presumably, and hopefully, if the report of the working paper is accepted by government there will need to be amendments to the legislation. Earlier today, Senator Wood talked about democracy. I think this is yet another example of an absence of it. Certainly there is an absence of democracy in respect of the horticultural industry. We talk long and hard in this place about the vital and desperate need to reduce our overseas debt and increase our rural exports. This year, not because of any marvellous Government initiative, rural exports are expected to increase by 21 per cent to a total of some $19.3 billion. This is even bigger than the value of mineral exports, which this year will bring in, supposedly, $16.3 billion. Just to hold our debt at present levels, our trade balance needs to improve by some $10 billion. That is the enormity of the task that this country faces. It is not going to be easy and it will require more than just extra effort from export industries such as horticulture, which have been hit by extra Government charges. It seems as if they have to fight with their own government before they can get their product out of the country. The number of initiatives that have been made in recent years by people involved in horticulture is quite staggering. As Senator Lewis has already mentioned, they have found markets at premium prices for cut flowers, indoor plants and fresh fruit and vegetables. Horticulture today is more than just apples and pears to the European Economic Community. The Federal Government seems reluctant to recognise this industry and its increasing importance to exports. The Government's actions in bringing forward this legislation when a working party review on it is pending is nothing short of an insult to those affected and the Government deserves all the scorn it will get. Senator POWELL(Victoria)(1.31) —I rise to make some comments on the export inspection Bills that are before us. The Export Inspection (Service Charge) Amendment Bill 1988 seeks to amend the Export Inspection Service Charge Act 1985 to remove limitations on the imposition of charges for export inspection services performed outside export registered establishments. The Export Inspection Charges Collection Amendment Bill 1988 seeks primarily to enable charges to be imposed for the export inspection of fruit, vegetables, live animals and animal reproductive material. I do not want to delay the Senate for two long but I would like to make a few comments. I have received correspondence from some industry bodies affected by this legislation, including the Australian Nurserymen's Association, some individual orchid growers, and others, who expressed concern at the charges. However, after speaking with the Department of Primary Industries and Energy and an industry representative, I understand that the Minister for Primary Industries and Energy (Mr Kerin) has taken heed of industry concerns. He has set up a working party, which was referred to by Senator Brownhill, with formal terms of reference to look at the industry's concerns. As a result of debate in the House of Representatives, Mr Kerin said that he was about to start a review anyway but that emphasis would be added by setting up a formal working party within industry, with informal terms of reference. One week later, Senator Cook approved the terms of reference. The industry said that it supported that arrangement. The working party consisted of two members from the Department of Primary Industries and Energy, representatives from the Australian Quarantine and Inspection Service, the National Farmers Federation, the Grains Council of Australia, the Australian Nurserymen's Association, seeds people, horticultural exporters, the Association of Horticultural Growers and one State representative from Victoria. A discussion paper prepared by the Department setting out 10 options has been circulated to 65 individuals and organisations over the last few weeks. About 36 responses came back to the Department. The industry working party met on Tuesday of this week and agreed to one of those options known as option C. In the discussion it was found that the phytosanitary fee was the biggest problem. The problem was not the fee per se but rather that it would hurt some people more than others. The issue for some, especially small exporters, was the ability to pay. Under the legislation before us, the fees are $20 phyosanitary charges, $28 for the first half hour, $11 for each subsequent half hour and $14 for each half hour services at an inspector's office. At Tuesday's meeting the working party opted for option C which is no phytosanitary fee, $38 for the first half hour, $12 for each subsequent half hour and $16 per half hour for services provided at an inspector's office. This is a compromise on everybody's behalf. There are still some issues to be followed through with the industry working group such as the national residue survey and quality assurances. The Department is in the process of sending to industry members of the joint working party a draft based on the meeting. The Minister has said that it will be looked at urgently next week. An industry representative who was on the working group has informed me that the adoption of option C will assist smaller exporters and clear up the inequities. That issue was of concern to the Australian Democrats when this legislation was first introduced in the other place and when we had contacts from the industry. I would like to endorse the comments about the strides that have been made by the horticultural industry as a whole as an exporter from this country. That achievement has, I think, been recognised by all of us. This is a sector of primary industry which has great potential and the Australian Democrats are keen to support it in their possible way. I would simply make the point that one of the market niches in horticulture that has opened up and has been recognised as such by New Zealand and other countries is, of course, the area of chemical-free food. This is an area which I have urged this Government and the industry to look at closely, and I make that brief comment at this point. I conclude by saying that while an industry representative commented to me, perhaps along the lines put forward by Senator Brownhill, that the process could have been carried out more easily if the Department had sat down with the industry earlier and discussed its problems more thoroughly, it is my understanding that industry representatives on the working party are now quite happy. Therefore, the Democrats will be supporting this legislation. Senator COOK(Western Australia-Minister for Resources)(1.36) —I commend the Bounty and Subsidy Legislation Amendment Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Consideration resumed from 15 April, on motion by Senator Gareth Evans: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment, requests or debate. Debate resumed from 16 March, on motion by Senator Robert Ray: That the Bills be now read a second time. Senator POWELL(Victoria)(1.40) —Mr Deputy President, I spoke by accident on the Export Inspection (Service Charge) Amendment Bill 1988 and the Export Inspection Charges Collection Amendment Bill 1988 during the cognate debate on the Bounty and Subsidy Legislation Amendment Bill 1988. I assume the Government speakers' list which was circulated immediately before lunch without these Bills on them was also circulated by accident. When I heard by accident that there was a cognate debate on in the chamber, I assumed that it included these Bills. So I came in here, had a quick conversation with the Minister for Resources (Senator Cook) and made my speech in that cognate debate. That is really all I can say about this second unexpected cognate debate. But certainly the speakers' list which landed on my desk before lunch did not include these Bills. I actually went for a cup of soup on the basis that they were not coming on. So I have made a speech on these Bills and I am quite happy for my contribution to be adjusted to fit into whatever other accidents might occur. The DEPUTY PRESIDENT —I am not quite clear what the honourable senator wishes to do. There was a cognate debate on the four Bills. We are now putting the Bills separately because they were not taken through all stages together. There are two Bills before the chair now. Question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment or debate. Debate resumed from 26 April, on motion by Senator Reynolds: That the Bills be now read a second time. Senator ARCHER(Tasmania)(1.43) —I rise to speak on the Honey Marketing Bill 1988, the Honey Levy (No. 1) Amendment Bill 1988, the Honey Levy (No. 2) Amendment Bill 1988 and the Honey Export Charge Amendment Bill 1988. The purpose of this legislation is to produce a new honey board with revised powers and duties. It changes the membership structure of the board and it produces a better accountability to the industry. It brings the operation up to date and it is in line with the Government's policies as far as the primary industry boards are concerned. It is in line with discussions held with the industries involved. One of the things that I like about the legislation is that restraints are placed on the raising of the levies. In her second reading speech on the Honey Levy (No. 1) Amendment Bill, the Minister for Local Government (Senator Reynolds) said: While the increased levy maximum will create scope for increasing the rate of the Honey Board component of the levy beyond its present level, no increase will take place until such time as the honey industry and the Board recommend a higher rate be prescribed and the recommendation is implemented. I think it is just as well that the industry should have this much say in the payments that it makes. I am going to take the opportunity to speak a little about the honey industry because, as a small but important industry, it very seldom gets much of a run in the public arena. The industry represents a group of between 12,000 to 15,000 beekeepers Australia-wide, about 2,250 of whom are currently registered as having 40 hives or more. The vast majority of people in the industry have from one to 20 hives. All of them are very concerned about our health and the health of the nation and they provide us with honey products to keep us healthy. This industry, which is small by any terms, produces about a quarter of one per cent of the total agricultural production of the country. The health and success of the industry is absolutely vital to a range of other industries, such as those that produce fruit, seeds, vegetables and flowers. It is also of vital importance to the pasture industries. All these industries depend on beekeepers operating profitably and effectively and supplying services to them. To those industries, honey is the by-product. They require pollination and this service is estimated to be worth between $100m and $400m a year. As such, the industry is very important. The industry has come a long way in recent times. The standards of professionalism are now pretty high and the industry rates well with other industries of this nature throughout the world. In recent times the producers have become more mechanised. They use the latest of equipment and technology and their better breeding program has produced good bees in Australia which are largely free of most of the world's worst complaints. However, there is, of course, substantial international competition. Although Australia is not a major producer, it is in the top 10 countries. The largest is the Union of Soviet Socialist Republics and the next largest is China. Those two countries between them produce about one-third of the world's honey. There is still a need for research. The Minister's second reading speech defines two objectives-to maximise returns to the honey industry from exports and to generate a greater demand for Australian honey, both in Australia and overseas. Those are two very good aims and I totally support them, as does the industry. The industry has done a good job with research in the production area but now it wants to concentrate on the market end. The Rottnest Island breeding station in Western Australia has done a lot to help the industry. It is clean and clear of insects and has produced a considerable amount of very good queen bees. The strain from this source is very good. The industry certainly wants to see this activity continue and progress. The industry still, of course, wants very tight quarantine. Disease is widely spread in the honey industry throughout the world and we want to keep Australia as clean as we possibly can. Australian beekeepers have always been very nervous about chalk brood, which exists in New Zealand, and we do not want it to be any closer than that. The varroa mite is found almost everywhere in the world, and causes considerable trouble in the hives. We still do not have that problem in Australia. North America is now being infested with the Africanised bee. This is another problem which we certainly do not want to be associated with. We are still importing queen bees from the United States of America in reasonable quantities, and many of the beekeepers are very nervous about the possibility of their bees getting mixed up with this strain of Africanised bee. These are all issues that the industry has before it at present. Production of honey in Australia has been relatively stable for many years at something in the order of 20,000 to 22,000 tonnes. The year ending 30 June 1986-the last year for which records are currently available-was a good year with production reaching 26,871 tonnes from registered producers. About half of the honey produced is exported and about two-thirds of what is exported goes to either the United Kingdom or Germany. The honey produced by small producers and hobbyists is not included in those figures. Many people find beekeeping a very good hobby and they get a lot of enjoyment from it. There is a large trade in honey. All the major producers have surpluses and there is considerable dumping on world markets from time to time. In fact, it has been recently alleged that 300 tonnes of New Zealand honey was dumped in Australia and this has caused considerable concern. In my own State of Tasmania, the industry is again small, but vital. It is in every corner of the State and it includes a great number of small producers. When one talks about honey in Tasmania, everybody immediately thinks of our famous leatherwood honey, which is unique by any standards-a prized delicacy for all those who enjoy something nice. I am pleased to be able to keep in close touch with the beekeepers there and I hope to be able to keep it that way. The industry still faces problems which are mainly ones of cost. I have been recently advised that to ship a container from Tasmania to Europe now costs about $2,300, which is almost double what it was last year. The industry has problems with price fluctuation. Last year it received a good price of $1,750 or thereabouts. This year the price is about $1,500 and falling. At times, difficulties are created by entry requirements to some countries. Currently, the requirements of the Germans are a bit difficult, although the producers believe that they can be met. I support the industry. I encourage members of the Senate and members of the Press Gallery to consider giving the beekeepers a good run. It is an important industry and, on behalf of the Opposition, I support the Bills. Senator POWELL(Victoria)(1.54) —The Honey Marketing Bill 1988, the Honey Levy (No. 1) Amendment Bill 1988, the Honey Levy (No. 2) Amendment Bill 1988 and the Honey Export Charge Amendment Bill 1988 do a range of things. The Honey Marketing Bill seeks to reconstitute the Australian Honey Board by revising its functions and powers and changing its membership structure. The levy Bills apply to honey sold in Australia and to honey used in the production of other goods. The amendments will require the Honey Board to consult with the Federal organisations of honey producers and honey packers before recommending to the Minister any change in the rate of levy imposed to provide funds for the Board, and to increase the maximum levy that can be imposed under the levy Acts for Board funding from 2.20c to 5c per kilogram of honey. The remaining Bill relates to export charges. I would just like to take the opportunity to comment on a couple of things. The objectives of the Honey Board are to maximise returns to the Australian honey industry from the export of honey and to generate a greater demand for Australian honey both here and overseas. According to figures released by the Board in its latest annual report, it is meeting its export objectives with considerable success. The Chairman of the Board has stated: Australia has been able to maintain export prices at at least US$100 per tonne above other world exporters and has been a steadying influence on a world trade during a period when export demand has been extremely quiet. I think that is worth mentioning in this brief debate. I also want to make a brief comment on the 1986-87 annual report of the Honey Research Council. I note, amongst other things, that a project is involved in the evaluation of the toxicity and residuality of microencapsulated, or slow release capsule, pesticides to honey bees. Also, a project at the Queensland Agricultural College is looking at the long term effects of systemic pesticides on honey bees. Obviously, the honey industry is aware of the potential of problems in the area of pesticide use. Those projects are welcome in that they are looking at that issue. These Bills are non-controversial and they have Australian Democrat support. Senator REYNOLDS(Queensland-Minister for Local Government)(1.54) —in reply-I thank honourable senators for their contributions. Question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment, requests or debate. Sitting suspended from 1.55 to 2 p.m. Senator PANIZZA —I ask the Minister for Finance whether he is aware of the article in today's Sydney Morning Herald headed: Banks agree on information boost to ease debt crisis. Does the Minister agree that the traditional banks may have been more prudent than finance companies in lending? Furthermore, what obligation is there on banks or finance companies to disclose the full cost of borrowing in various forms, including hire purchase agreements and where roll-over facilities are offered? Senator WALSH —The answer to the first part of the question is no, I did not see the article in the Sydney Morning Herald, so for that reason I am at a bit of a disadvantage. I was also asked whether the article had said, or whether I believed, that banks were more prudent than finance companies. I cannot state that definitively, but I would expect banks to be more prudent than finance companies in their lending policies. As to the last part of the question about the disclosure requirements for banks and financial institutions generally, I do not know; I shall seek an answer to that from the Treasurer. Senator COATES —Is the Minister for Transport and Communications aware of recent concern in Tasmania over the possibility of Telecom transferring its Tasmanian engineering function to Victoria? Is there any basis for this concern and is Telecom definitely planning such a transfer? Would not such a transfer have an unacceptable negative effect on engineering job opportunities in Tasmania as well as on the skills level of the Tasmanian work force? In view of this, will the Minister ask Telecom to desist from any further consideration of such a transfer? Senator GARETH EVANS —Yes, I am aware of recent concern over the proposal to which Senator Coates refers. Telecom has informed me that as part of its changed management process it is considering the reorganisation of its network engineering activities. There is no basis, however, for the particular concerns that have been expressed. The matters under consideration include changes to reporting lines, but this would not involve a transfer of network engineering activities from Tasmania to Melbourne. There definitely would be no loss of engineering expertise; no change would occur in the ability to deal with major breakdowns in Tasmania. That is the situation in a nutshell. I do not intend to intervene in the matter. Telecom's proposals are the subject of discussions and no final decisions have yet been taken. There are specific discussions to be held in Tasmania today with engineering management and key staff, some of whom are local staff association representatives. I have no doubt that as a result of those discussions any remaining difficulties or concerns that are being experienced on this issue will be able to be amicably and satisfactorily resolved. Senator HAMER —Does the Minister for Justice recall answering a question on whether Royal Australian Air Force crews who bombed Germany would be liable for prosecution under the War Crimes Amendment Bill, if that Bill is passed by this Parliament? Does the Minister remember saying that Australians who took part in allied bombing raids on Germany would not be endangered by the Bill because of article 6 (b) of the Nuremberg Charter? Has the Minister actually looked at article 6 (b)? If so, does he agree that it reads that war crimes, inter alia, are `wanton destruction of cities, towns or villages, or devastation not justified by military necessity'? Can the Minister explain what military necessity justified the destruction of Dresden in February 1945, an operation in which many Australian air crews took part under orders? If he cannot, will he admit that he has misled the Senate? Senator TATE —I recall the question being asked about the liability of Australian and Allied ex-servicemen being dealt with under the War Crimes Bill, if it were to be enacted. As I recall my response to Senator Chaney, it was to the effect that the Bill had been drafted in a way which dealt with the crimes alleged rather than with any particular category of persons who may have committed those crimes and, therefore, there would be no attempt to quarantine any particular alleged offenders in regard to those very serious matters which would be covered by the war crimes legislation, if enacted. It is also important to emphasise that Australian and Allied ex-servicemen are already subject to prosecution, if it were ever justified in relation to war crimes, and have been since 1945. This has been operating for 43 years. The War Crimes Act 1945 applies to all persons in Allied or Axis forces and covers the types of conduct proposed to be proscribed in the War Crimes Amendment Bill. The sorts of matters addressed in the War Crimes Bill have been proscribed by customary international law since 1907. The fact is that Allied ex-servicemen have been liable, if indeed they committed an horrendous war crime of the sort we are looking at in relation to the War Crimes Bill, for many decades, and indeed, as is already well known in the Parliament, no allegation has ever been made against Australian ex-servicemen or Australian forces relating to war crimes of that kind. So far as I know, the Special Investigations Unit is not investigating the conduct of any member of the Australian forces in relation to a war crime. In regard to the example I gave, I was advised that the Nuremberg Charter indicated in its terms, particularly in article 6 (b), that there were situations where the defence could be made out that a particular operation was not undertaken wantonly and was justified by military necessity. I have not got the exact words in front of me, but I have read the Nuremberg Charter and article 6 (b). I was advised that the Charter, in particular 6 (b), was understood to cover the situation of the bombings that occurred in the European theatre of war. As to the particular instance of which Senator Hamer speaks, I do not have a full brief on the application of that principle to any particular bombing raid, but I have been advised that that defence is available in relation to the bombings which occurred in the Second World War. Senator HAMER —I ask a supplementary question. Is the Minister under the impression that the War Crimes Act 1945 applied to Allied servicemen? It appeared from his answer that he was under that impression. It does not. I wonder why the Minister is not aware of that fact. With regard to the second part of his answer, where he said that he had been `advised' of certain matters, what I was asking for was the Minister's opinion. He has told the Parliament that servicemen, bomber crews, were not liable under the Act. I think a reading of the Nuremberg Charter indicates quite clearly that they were. Is the Minister prepared to withdraw his previous statement? Senator TATE —I am advised that the War Crimes Act does apply to Australian forces and that they have been subject to it since 1945. That is the basis on which I have been giving my answers. Senator BLACK —Is the Minister for the Arts, Sport, the Environment, Tourism, and Territories aware of recent Press reports that the Queensland Government is considering a proposal to pay $25,000 to a Cairns sawmiller to mill timber allegedly taken illegally from a national park in north Queensland? Can the Minister advise the Senate of the details of this proposal and whether the national park in question is part of the area nominated by Australia for inscription on the World Heritage List? Senator RICHARDSON —I have read the Press report in the Courier-Mail, which I find astounding, to say the least. Apparently the Queensland Government is considering paying $25,000 to a Cairns sawmiller, Mr Doug Simms, to mill rainforest trees grown in the Cape Tribulation National Park and worth about $100,000. This is the same Mr Simms who, along with a Mr Quaid, is to appear in the Cairns Magistrates Court in June, I think, to answer some charges in respect of this. Cape Tribulation National Park is not one of the areas in dispute in the World Heritage listing. The Queensland Government has long pushed the idea that some areas should be preserved from logging and Cape Tribulation, north of Daintree, is considered to be one of those very special core areas that not even Queensland will touch. And when it gets to the stage that even Queensland will not lay its hands on it, it must be pretty good! Yet not only do sections of the local timber industry choose to ignore that and break the law by going in and logging those trees but also, as a result, the Queensland Government is prepared to offer those same people a profit for doing so. Even in terms of Queensland Government ethics it is, to say the least, over the top for that Government to consider rewarding criminal activity with large sums of money. It is staggering. The fact that it is even being considered is absolutely amazing. If the industry had gone into this area only once I suppose we could consider allowing an excuse, but it has to be remembered that there were, not one, but two incursions into the national parks where loggers took it upon themselves to ignore national park boundaries, get their bulldozers and chainsaws and go for it. Whatever the standards of forestry management in Queensland-Senator Puplick has been on record as saying that they are very good-I must say that allowing logging in a national park, and then paying the people who did it to mill the logs, is beyond the pale, a disgrace and unworthy of any government worth its salt. I hope that the substantial commercial benefit that may be reaped from this-- Senator Archer —Humbug! Senator RICHARDSON —Yes, it is humbug; that is exactly what the Queensland Government is engaging in. The fact that the Government is trying to reward those people with a substantial commercial benefit is extraordinary. I might say that in Queensland if one removes trees from a national park the maximum penalty is a wonderful $1,000. So to charge these people $1,000 at the end of the day and then give them back $25,000 and say, `Thank you very much' is not good enough. It really represents Queensland's concern for the environment and Queensland forestry management. Senator McLEAN —Is the Minister for Industry, Technology and Commerce aware that in New South Wales over the Easter period and Anzac weekend, petrol prices varied from 42.6c per litre to 59.9c per litre, with the lower prices being in the metropolitan areas and the higher prices being in rural and semi-rural areas? Is the Minister also aware that petrol companies are currently deciding on lease renewal formulae for retail petrol outlets, that lease renewal fees are expected to be between $30,000 and $60,000, and that this amount will be impossible for most small, independent petrol retailers to pay considering the uncertainty of their cash flow due to petrol price wars? Is the Government still determined to do absolutely nothing to help small, independent petrol retailers maintain a livelihood or to ease this manipulation of the petrol industry by multinational petrol companies which produces totally artificially induced petrol price differentials between city and country areas, putting the country areas at a gross disadvantage? Senator BUTTON —I have no direct knowledge of what happened in New South Wales over the Easter period. But I am aware, of course, that price discounting has been happening in Sydney for a long time. I am also aware that city and rural price discrepancies are generally accounted for by a relative lack of competition in the country and because a ready market for product surpluses exists in proximity to the refineries. Having said that, I must point out that retail pricing is essentially a State government matter. The Trade Practices Commission has announced an inquiry into petrol pricing for completion by the middle of this year and the Government awaits the results of that inquiry with interest. Secondly, with the expiry of the first franchise agreement signed under the Petroleum Retail Marketing Franchise Act, oil companies are looking at this so-called `window of opportunity' to review networks and their relationships with dealers. In this context, they have signalled substantial upgrading programs in both outlet appearance and marketing systems. The question of the franchisees' ability to pay premiums currently being charged in the light of prevalent discounting is ultimately a matter for negotiation between an oil company and its individual franchisees. Lack of profitability is clearly a bargaining point in such negotiations. In answer to perhaps the most important part of the question, the Government has demonstrated its continuing concern for the small operator in the petrol retailing industry by its maintenance and strengthening of the petroleum retail marketing legislation. No further changes to that legislation are contemplated at this time. Senator GIETZELT —Is the Minister representing the Treasurer aware that there have been calls from certain sections of the Australian business community for the introduction of a consumption tax or a value added type of tax in Australia? Is the Minister aware that one of the arguments used by proponents of value added tax (VAT) is that it is supposed to be much harder to avoid or evade than the taxes it could be used to replace? Is the Government persuaded by the argument that a VAT should be introduced to replace the existing sales tax and fund company tax cuts, in order to clamp down on tax avoidance and evasion in Australia? Senator WALSH —I am aware that from time to time various people call for the introduction of a broad-based consumption tax. In recent times, the most prominent of those people has, of course, been Mr Elliott. But apparently he-like Senator Stone-has had a dishcloth rammed down his neck and it may take a couple of weeks to cough it up before he starts wiping his boots all over the Leader of the Opposition again. There are problems-I will give one specific example later-with the argument that a value added type of tax cannot be evaded. The normal type of VAT system imposes a disproportionately heavy administrative burden on small business. That is the first point. It also imposes an expensive administration on both the Australian Taxation Office and the private sector, which must comply. In the normal type of VAT system each business enterprise is required to forward to the tax authorities a sum of money equal to the VAT rate multiplied by that business's sales but minus the VAT that has already been paid on the purchases during the relevant period. In other words, the enterprise-at whatever point in the production chain-gets a credit for each dollar of VAT it pays on its purchases. The credit then reduces the VAT amount that must be paid. Let me give a concrete example of how it is possible for VAT to be evaded. The Sydney Morning Herald of 14 May last year reported that Elders IXL Ltd, Mr Elliott's company, had bought a 64-foot world cruising yacht. The yacht was said to be: moored on the picturesque Pittwater playground of rich yuppies and the not so young. Since that yacht was bought with company money, it was presumably claimed to be used in the business activities of the company and claimed as a deduction under, I would expect, section 51 of the Income Tax Assessment Act. Senator Watson —How do you know? Senator WALSH —It was bought with company money, Senator. By the way, when I have had time to put it all together, I will be giving the honourable senator a proper answer and a proper serve to the silly question he asked yesterday. Ultimately, this promoted a response from Mr Elliott-- Senator Chaney —I raise a point of order. Clearly, there are secrecy provisions in the tax Act. Yet the Minister consistently makes statements which relate to the taxation affairs of individual corporations and individuals. Since it is quite clear that the Minister is acting either illegally or in ignorance, the answer he is giving ought not to be in order, if it is in order. Mr President, I draw your attention to that fact and to the present drift of the Minister's reply and ask for a ruling on the matter. The PRESIDENT —There is no way I can make a ruling on a matter of law. Therefore, I would have to rule any point of order out of order. I ask the Minister to reply through the Chair and not to take notice of the interjections. Senator WALSH —Certainly, Mr President. I am a little surprised that Senator Chaney chose to intervene because I understand that he was roasted by Mr Elliott for not buying the right pies at some Liberal Party function recently. Because he bought Four'n'Twenty pies, or did not buy Four'n'Twenty pies-whichever way it was-he got a proper roasting from Mr Elliott. To return to the question of this yacht purchase: regardless of whether it was claimed under section 51 as a deduction from the company's taxable income, if the yacht was new-I understand that it was-Elders would have had to pay sales tax of 30 per cent. But if the existing sales tax was to be abolished and a VAT introduced, no tax would be payable on that yacht because it would appear not as a consumption good but as an intermediate business good and the sales tax of 30 per cent currently payable would not be payable under a normal VAT arrangement. That is the sort of change that Mr Elliott wants to make in the taxation system to avoid the sales tax currently payable on such luxury purchases so that he can duchess his friends on the company yacht and plug the revenue gap by putting a 10 per cent or so tax on the pies that the hoi polloi eat in the outer at Princes Park while he himself is sitting in the tax deductable company box in the grandstand. Finally-in case Mr Elliott complains about this as well-it should be noted that Mr Elliott was offered the opportunity to debate on television tonight the issues that I have raised in the Senate and that Terry McCrann first raised in the Melbourne Age more than two years ago and he declined that offer. Senator BROWNHILL —My question is addressed to the Minister representing the Minister for Primary Industries and Energy. Does he agree with his colleague the Minister for Primary Industries and Energy, who in a recent interview gave support to the proposed Senate inquiry into agricultural and veterinary chemicals in Australia? Is that the view of the Government also? Senator COOK —I think that the answer to the two parts of the question is yes and yes. Senator BROWNHILL —I ask a supplementary question, Mr President. Does this mean that the Minister, therefore, disagrees with the comments made by Senator Walsh, who took the view that the Australian Democrats' inquiry would be counterproductive to Australia's best interests? Given the opposition within the industry and the Government's own ranks on this, why has the Government jeopardised a valuable export earning industry which has the highest standard in the world? Has the Government been forced into yet another deal with the Democrats, a party that Senator Walsh has described as `the fairies at the bottom of the garden party'? Senator COOK —The first part of the supplementary question, as I heard it, was whether, therefore, I disagree with my colleague Senator Walsh. Senator Brownhill then went on to quote what he alleges Senator Walsh said. I do not have the actual quote from Senator Walsh in front of me and I have not been able to confer with Senator Walsh during the asking of that question to see whether Senator Brownhill quoted him accurately. But my understanding is that if Senator Walsh said those words he would have said them earlier than when the terms of reference of the proposed inquiry were framed. Senator CHILDS —I refer the Minister representing the Minister for Community Services and Health to my question of five months ago-on 23 November last year-about a British report that claimed that risks of fatal cancer from low level radiation had been greatly underestimated. The Minister answered that the Australian Radiation Laboratory was reviewing that new information to determine what changes, if any, needed to be made to the Australian recommended radiation protection standards. Can the Minister advise what recommendations have been made? Senator COOK —During the latter half of 1987 the International Commission of Radiological Protection indicated that the risks associated with radiation exposure could be higher than the estimates of risk which were currently in use. Those higher estimates are based on studies of Japanese survivors following the atomic bomb explosions at Hiroshima and Nagasaki and on a re-evaluation of the doses to which those populations were exposed. A complete review of all available information is being undertaken by the United Nations Scientific Committee on the Effects of Atomic Radiation and will be reported to the United Nations by the end of this year. This review will provide a basis for new recommendations on radiation protection which are being developed by the International Commission of Radiological Protection. The National Health and Medical Research Council (NHMRC) will examine these recommendations when they become available and will adopt them for use in Australia if they are considered appropriate. In the meantime, advice is being prepared by the NHMRC for radiation users which makes allowance for these higher risks. On average, the annual exposure of Australian radiation workers is less than one-fiftieth of the current recommended dose limits. Senator ARCHER —I ask a question of the Minister representing the Minister for Foreign Affairs and Trade. Given reports that trade between Taiwan and mainland China broke the $US1 billion mark last year, it is evident that mainland China ipso facto recognises the existence of Taiwan, and vice versa, at least sufficiently to enable commerce to proceed to a rapidly increasing return. What is the Australian Government doing about following this lead and extending the official, commercial and social limits with Taiwan so that Australian businesses may take better advantage of this market? Senator GARETH EVANS —It is acknowledged that Taiwan is a thriving and important market for Australian traders, as indeed it is for those of many other countries. We do have a significant volume of trade with Taiwan. The political sensitivities of that relationship should, however, be extremely obvious, indeed self-evident, to Senator Archer and any other observer of the scene. It has been necessary for us to tread carefully and sensitively in further developing the trading relationship in question. Issues arise constantly about the nature and character of our trade representation there-issues about transport links and so on with it. They are all issues that are under constant consideration and review by the Government. That review process has to take due account of the subtleties and sensitivities of the situation. Beyond that I do not propose to comment any further. Senator CROWLEY —My question is addressed to the Minister for Finance. I refer to comments by Senator MacGibbon in a debate on the submarine project on 13 April 1988 when he asserted the Opposition's belief that `Australia, having started to build these submarines, that exercise must be executed as efficiently and effectively as possible'-a proposition with which I agree. Is the Minister aware of other comments by a senior Opposition spokesperson on Defence, the shadow Minister, Peter White, on 10 April-only a few days before Senator MacGibbon's contribution-still advocating a nuclear submarine option? Can the Minister give any indication of the likely cost of pursuing the nuclear submarine option? Is this the first instance in which the Opposition has advocated a massive addition to the defence capital vote? Is the difference evidenced above indicative of division within the Opposition, not only in regard to policy about defence and submarines but also about how to pay for them? Senator WALSH —I was asked whether I was aware of comments by Mr White about nuclear submarines. I have a copy of the Press release issued by Mr White on 10 April in which he said of nuclear submarines, among other things: One of the most effective deterrents, and therefore one of the most powerful instruments for maintaining peace in our region, was abandoned without a whimper. The next Liberal-National Government does not intend to let this happen a second time. Of course, that can be read only as a commitment-in the unlikely event of there being a Liberal-National Party coalition government or possibly by next year even a Liberal-National Party coalition of any sort-to procure nuclear submarines. I was asked what the cost of that would be if it were actually carried through. It was reported in the Age last week that the proposed purchase of 10 Trafalgar class nuclear submarines by Canada from the United Kingdom would cost around $8.8 billion-which is roughly double the estimated cost of the submarines about to be constructed for the Royal Australian Navy. Mr White has not made it clear in that Press release whether he proposes to abandon the present project or whether the Opposition's commitment would be additional to it. That could be inferred from Senator MacGibbon's comment: Australia having started to build these submarines, that exercise must be executed as efficiently and effectively as possible. Certainly it seems, if one puts the comments of Senator MacGibbon and Mr White together, that the Opposition is committed to completing the existing submarine program and buying nuclear submarines as well, at a cost, if 10 submarines were chosen, of around $9 billion. I was also asked whether there were any other commitments for defence expenditure by spokespeople for the Opposition. The answer to that is yes. There is another very significant proposal, again from Mr White, the shadow Defence Minister. On 28 January this year Mr White said in regard to an aircraft carrier: In due course there is no doubt Australia will acquire a sea-going platform capable of operating fixed-wing aircraft. Without such a platform our Navy is virtually confined to coastal waters in the event of major hostilities. So to the $9 billion that Mr White has already committed a future coalition government to spending, one has to add another $3 billion, at least. That represents $12 billion extra expenditure on defence alone. This is from a coalition that talks about cutting government expenditure. It has no more sense of coherence in regard to its expenditure and budgetary policies than it has in regard to its media policies-as has been demonstrated over the past week. Indeed, given these commitments by Mr White, I see absolutely no reason why he, too, should not be regarded as just another fiscal ratbag in the Opposition. I expect that Senator Stone so regards him. Senator Chaney —Mr President, I rise on a point of order. I ask that the Minister withdraw that last remark. The PRESIDENT —I ask the Minister to withdraw that reference. Senator WALSH —What, that Senator Stone regards Mr White as a fiscal ratbag? The PRESIDENT —No, I ask the Minister to withdraw the words `fiscal ratbag'. Senator WALSH —Very well, Mr President; I withdraw. Senator HILL —I refer the Minister for Finance to the Government's discounting by 2 per cent of the annual adjustments to superannuation paid to former Commonwealth Government employees. I particularly remind Senator Walsh of his assurance to the Senate on 3 July, when he said: As soon as economic circumstances permit a responsible Government to do so it is the Government's intention to put back the one-off discount of the last Budget into the pension base. As it is now the view of Mr Keating that Australia is on the verge of an economic miracle and that the public is also entitled to know-in the words of Mr Keating-`that the rewards of its restraint and good sense are there now to see', I ask: Why is the Government not now acting in accordance with its commitment to retired Commonwealth employees? Senator WALSH —Let it be noted that here is yet another proposition to increase government expenditure coming from the Opposition, which says it is committed to reducing government expenditure. Its logic is about as sound as its arithmetic. Senator Hill —But this is what you assured them. Senator WALSH —I am coming to that. If the honourable senator thinks that he will embarrass me by quoting what I have said, I can assure him that he will not. I said not only in the Senate last year, or whenever it was, but also-if it is not the same thing, it is a very similar thing-in the large number of letters I have sent out in the last 12 months, that when economic circumstances permitted, a responsible government would restore the cut. The economic circumstances that at the very least are required for that to be restored are as follows. Firstly, it is required that real wages be on a rising trend instead of, as they have been, on a falling trend. When real wages are clearly again generally on a rising trend, then one of the conditions would have been met. That has not happened. Senator Stone —Isn't that what you are promising the ACTU now? Senator WALSH —I have no doubt that if Senator Stone's party got back into government, in the short term there would be a significant increase in real wages for those people who still managed to have a job. However, probably there would be half a million people out of jobs very quickly because of that. The Opposition does not have a wages policy, other than one of letting the market sort it out. That is the same policy actually implemented by it in 1981 when wages explosions of 13 per cent and 14 per cent were induced. It is no wonder Mr Macphee said that the Government's wages policies and industrial relations policies are far more successful than those of the alternative government would have been. The second condition which needs to be met is that the current account deficit presently, very large though the reduction has been-that is the background to the statement made by the Treasurer and referred to by Senator Hill-is still a higher proportion of gross domestic product than the GDP growth rate. In other words, as long as that applies, foreign debt, as a proportion of GDP, is increasing. In those circumstances it is certainly not responsible to start reversing savings decisions that were made less than two years ago. Of course, it is even less responsible, or grossly irresponsible, to be suggesting that billions and billions of dollars should be added to existing outlays in the way that Mr White, among other people in the Opposition, has been saying. To sum up, there are two conditions which must be met before it would be responsible to restore that 2 per cent reduction. May I say, of course, that 2 per cent reduction in the payments to retired workers is significantly less than the reduction in incomes taken on average by people who are still in the work force. Real wages for people still in the work force fell by significantly more than that. The two conditions that have to be met are that the foreign debt, as a proportion of GDP, must clearly be on a falling trend and real wages must clearly be on a rising trend. Senator SCHACHT —Has the Minister for Transport and Communications heard comments made this morning by the Leader of the National Party of Australia, Mr Sinclair, expressing opposition to the policy of aggregation of regional television markets? What would be the effects on country television viewers if aggregation did not proceed? Senator GARETH EVANS —Mr Sinclair, with his remarks this morning that aggregation would not improve viewers' choice, has joined the ranks of all those other Opposition lemmings jostling for the right to be first over the cliff. He has joined the ranks of the Opposition leaders, spokesmen and self-appointed opinion leaders who have spent, at last count, six days, eight reported meetings and something like 153 consecutive media appearances-and now there is to be a kamikaze urgency motion in the House of Representatives-making comprehensive fools of themselves. Nothing could be closer to the hearts, the minds and the aspirations of country television viewers than the right to gain access to not just one but three commercial television stations. If Mr Sinclair, as the Leader of the National Party, does not understand that-or if he suggests otherwise, as he did this morning-all I can suggest is that he is either a knave or a fool, or he is insensitive. Senator Chaney —Mr President, I rise on a point of order. I suggest that the Minister should not be permitted to suggest that a member of parliament is a knave or a fool, and he should be asked to withdraw. The PRESIDENT —I ask the Minister to withdraw. Senator GARETH EVANS —I withdraw the descriptions and let the analysis speak for itself. Either he is totally ignorant of the practical benefits that will flow to country viewers from aggregation and the way in which aggregation will be held back by the opposition to the 75 per cent increase in audience reach, or he is totally insensitive and utterly fails to appreciate the quality of life, the aspirations and the welfare of the people he purports to represent. Alternatively-one hopes that this is not the case-it represents his relationship with a number of figures in the National Party who stand, or think they stand, to benefit financially from a continuation of the status quo. They are the only possible explanations for the kinds of remarks made this morning. Mr Sinclair is suggesting that the four million Australians in eastern mainland regions who now receive only one commercial television service, along with the Australian Broadcasting Corporation service, would prefer to confine their viewing to just that one service, rather than enjoying the benefits of choosing between three commercial services offering the full range of programming that is available to the people in the mainland capitals. He is suggesting by what he said this morning that people do not want the right to choose between watching cricket and watching tennis, as the case may be; they do not want the right to choose between different drama series, between different films, between different comedy programs, between different news and current affairs programs or between different local programs that are put together by the various stations. It is simply palpable nonsense for Mr Sinclair to assert, as he went on to do in the interview in question, that regional viewers will miss out on local news and sport and other local programs as a result of receiving these additional services. The truth of the matter is that the Australian Broadcasting Tribunal has a duty to ensure that all stations, regardless of their locality, provide an adequate and comprehensive service. In the case of regional television stations, a comprehensive service would unquestionably include local programming. Quite apart from any statutory obligations of this kind, market forces in the form of viewer demand will clearly act to ensure that aggregated services, operating as they will be in a newly-competitive environment, will be compelled to cover local community events and issues adequately. The truth of the matter is that Mr Sinclair and his coalition colleagues are being roundly condemned, and should be roundly condemned, by all country viewers for their stated intention to oppose the increase in audience reach limits. As I have repeatedly said, their position means that a major obstacle will now be placed in the way of achieving aggregation throughout Queensland and in the New South Wales southern region in particular. There will necessarily be major delays in viewers getting access to three stations, compared with the one they get at the moment, and the blame for that state of affairs lies squarely at the feet of Mr Sinclair and his coalition colleagues. The PRESIDENT —Order! I draw attention to the presence in my gallery of the President of the European Parliament, Lord Plumb. On behalf of all senators, I extend to him a warm welcome to Australia, and Canberra in particular, and I trust that he will enjoy the rest of his visit. With the concurrence of honourable senators, I propose to invite the President to take a seat on the floor of the Senate. Honourable senators-Hear, hear! Lord Plumb thereupon entered the chamber, and was seated accordingly. Senator CHANEY —My question is to the Minister for Transport and Communications and follows his expressions of concern for the choice which is available to rural people in Australia. I ask the Minister whether he is aware that it has been announced that East-West Airlines Ltd will close its Western Australian operations this week. Is he aware that the airline will fly the last of its jet services on the two busiest air routes within the State-Perth to Karratha and Perth to Port Hedland-on Saturday and that the closure of those East-West services will mean there will be a monopoly on those two routes? Does the Minister agree that the amount of competition and the potential for greater competition in airline operations has been significantly reduced since Labor came to power, in particular because of the changed ownership of East-West Airlines? Given the Minister's pessimism about getting the needed capital for Australian Airlines from Budget sources, the resistance within the Australian Labor Party to the privatisation of Australian Airlines and the policy confusion in this area, what assurance can the Minister give that Australian Airlines will be put in a financial position to compete with Ansett Airlines of Australia and that there will be a choice of air travel offered to Australian consumers, something which appears to be diminishing under his administration? Senator GARETH EVANS —Senator Chaney presumably will be well aware that the fate of East-West Airlines is squarely a consequence of a decision some little time ago by the Trade Practices Commission-a decision which was itself, of course, governed by a concern to ensure that there were not monopoly situations developing in this instance as a result of the acquisition of East-West Airlines by Ansett. The fact that there has not proved to be a buyer for the routes and the aircraft in question, to date anyway, as a result of the prospect of divestment that followed from that Trade Practices Commission decision is just one of the consequences, one hopes a temporary consequence, not of any Government policy decision but of a bipartisan attachment to anti-monopoly, pro-competitive laws operating under the guidance of the Trade Practices Commission. It is a quite squalid little effort, of the kind with which we have become so familiar from Senator Chaney, for him to suggest that Government policy had anything directly to do with the current state of affairs. The Government is very anxious, as of course is the Western Australian Government, with which I have been discussing this matter in recent weeks, to ensure that there is a well-serviced set of airline routes in Western Australia and is anxious that that situation should resolve itself as soon as possible. I cannot request or direct Australian Airlines to make what it regards as uncommercial decisions. The truth of the matter is that, as much as Australian Airlines might like to operate F28 services in various parts of Western Australia, it simply does not have the kind of infrastructure into which that kind of operation would readily or financially fit. It is not a matter of the capital base of Australian Airlines in any way contributing to that state of affairs or of any shortfalls in that capital base; it is a result simply of a hard-headed commercial decision that has been made. A number of other operations are potentially available for the restoration of competition and a full range of services on the Western Australian air routes in question, and it is the hope of all of us that the situation will resolve itself in the near future. Beyond that, I am unable to comment on the situation. I simply express the response that it is quite irrelevant to raise the question of the future capital prospects of Australian Airlines for the reasons that I have just mentioned. Senator CHANEY —Mr President, I ask a supplementary question. I simply point out to the Minister that the second part of my question related to the broader question of maintaining competition within the airline system of Australia, and not simply Western Australia. Is the Minister in his answer denying that Australian Airlines does require a considerable addition of capital if it is to be able to compete nationally with Ansett? Does he deny that there is a policy gap, given the opposition of his Party to privatisation and the unlikelihood, according to him, of the necessary capital being found from Budget sources? In those circumstances, what guarantee can he give us that not just in Western Australia but generally we are going to have other than a one-airline policy in this country? Senator GARETH EVANS —Of course it is the case, as I have said on numerous occasions and most recently yesterday, that Australian Airlines will need a substantial capital injection if it is to grow and flourish, particularly in the much more competitive deregulatory environment that we are anxious to implement with the termination of the two airlines policy in 1990. As the Advisory Group on Australian Airlines reported yesterday, it does need an injection of something like $240m over three years if it is to maintain the kind of financial viability that we all want it to have in that particular environment. As I also said yesterday, it is the case that there are going to be obvious difficulties about providing that capital injection from the Budget in this year or, indeed, in the foreseeable future. That does create a problem of some significance. I do not suggest there is any ready answer to that problem. I have obviously expressed a view personally, and I do so again, that a private equity injection would be one way of resolving the problem. There may be others, but that is a policy issue with which the Government is continuing to grapple. Senator POWELL —My question is directed to the Minister representing the Minister for Social Security. Has the Minister seen an article by Rod Myer in last night's Melbourne Herald headed `Crackdown on Capital Gain brings threat to pensions'? Is the Minister aware of the situation which exists where there is, as the article says, `a treatment of capital gains for pensioners much tougher than the same tax applying to Australian millionaire businessmen'? Does the Minister acknowledge the injustice of a Department of Social Security income test which assesses capital gain as income on a retrospective basis not applicable to the capital gains tax, which takes no account of inflation in its definition of a capital gain and which allows no averaging such as is available in relation to the capital gains tax? Does the Minister agree that pensioners should be tested on capital gain only on the same basis as that on which other members of the community are taxed, not more harshly? Senator Haines —Can you remember all that? Senator BOLKUS —In response to Senator Haines's supplementary question, yes, I can remember all that, because Senator Powell was decent enough to alert me to an article which I had not seen. As a consequence, I have been able to get advice from the Department of Social Security, and I am advised that the statement that pensioners are being tested for capital gains much more toughly than Australian millionaire businessmen is quite wrong. The Government's view is that pensioners should be tested on capital gains on the same basis as other members of the community, and in fact they are. I ask the Senate to note that the social security system is in fact quite different from the taxation system. Its basis is that the level of financial assistance available to a person depends on the availability of other income sources stated as support for that person. The new provisions that the article refers to were designed after extensive consultation to accurately and consistently measure a person's resources and available income support. It is interesting to note that in the article Senator Powell is quoted as saying that the system is outrageous. We should note that when the legislation was before the Senate it was recognised to be both necessary and equitable, and it should also be noted that the Australian Democrats at that stage did not dissent from that view. Senator TAMBLING —My question is directed to the Minister for Resources. Can he confirm that he has withdrawn from his scheduled visit in the next two or three weeks to the Katherine region of the Northern Territory to consult with the Jawoyn people about the proposed Coronation Hill gold mine? Can he further confirm that he intends sending in his place Mr Tony Henry, a member of his personal electorate office staff, to conduct these highly sensitive discussions on the future of one of the nation's most valuable mineral deposits? Can he further advise whether it is his view that the Coronation Hill mine should proceed and whether he is dealing with the matter with the seriousness which his portfolio demands? Senator COOK —Senator Tambling asks me first of all whether I have varied my itinerary. Since being on the front bench I have discovered that the itineraries of Ministers are subject to infinite variation because of huge and competing demands, and I vary my itinerary all the time. The fact that I vary it is no indication that I place lesser or heavier weight or responsibility on any particular issue; I do so because of working out the immediate priority. For example, next week I was going to look at some coal mines. Instead, I am going to look at some forests, because I think the forest accord is the immediate and most important issue. Senator Tambling's second question asked whether I was going to send a member of staff. The answer is yes. That does not in itself mean that I will not myself go and talk to the Jawoyn people. I have a great deal of respect for the way in which Aboriginal communities come to decisions. Ministers buzzing in and then buzzing out and having a quick discussion may not be the most appropriate way of dealing with sensitive issues. Therefore, the member of my staff, Mr Tony Henry, who prior to being a member of my staff was a lecturer at the Aboriginal college in the Northern Territory and dealt with the Jawoyn people in educational programs, is uniquely fitted and appropriate to go and spend the necessary time to talk to them about the issues. What does this mean in terms of the Coronation Hill procedure? Of course, the Coronation Hill issue is important for the Government. We have heard Senator Richardson refer to the environmental aspects and we have heard other debate in this chamber also on this issue. All of the matters with respect to Coronation Hill are, in the immediate sense, waiting for a conclusion of the Broken Hill Proprietary Co. Ltd environmental impact statement for there to be a considered response by the Government on the environmental concerns. The Aboriginal issues concerning Coronation Hill require further discussions with the Jawoyn people, and it is for that purpose that I scheduled the visit and it is for that purpose that Mr Henry will conduct those consultations. That is not to be taken to mean that I will not be attending in person to my ministerial responsibility with respect to the matter. Senator BURNS —My question is also directed to the Minister for Resources. Has he read Press reports of a speech made yesterday by the Chairman of Caltex, in which Mr Landels makes the serious claim that the Government is denying Caltex access to Bass Strait crude at free market prices? What can the Minister say about the Government's response to this serious charge? Senator COOK —I have read reports in several journals today of an address by Mr Landels, the chief executive of Caltex Oil, to his annual general meeting on the subject of the underlift by Caltex in terms of its obligations to lift Bass Strait crude oil. I was a bit surprised when I first saw a reference to the matter, because it has been the subject of cordial talks between Caltex and the Australian Government on at least two occasions, although I recognise Mr Landels' obligation to inform his annual general meeting. However, the way in which he puts a gloss on his remarks I think requires some surprise on my part and an answer to the question that has been asked by Senator Burns. In June 1987 the Government announced its intention to deregulate the oil industry and to terminate on 31 December 1987 the crude oil allocation scheme that then applied. Refiners were informed that the Government expected them to meet their obligations to lift their 1987 allocation of crude oil so as to bring the scheme to a conclusion on a balanced and equitable basis. Administrative guidelines were issued in October 1987 setting out the Government's expectations of how refiners obligations were to be met. With the sole exception of Caltex all refiners have met their obligations in full. Caltex claims that it was unable to meet its obligations under the allocation scheme due to circumstances beyond its control. At 1 January 1988 Caltex had failed to lift 5.4 million barrels of Bass Strait crude oil. The Government has carefully reviewed Caltex's claims and has allowed a reduction in the outstanding obligation of 813,392 barrels of crude for product and feedstock imported by Caltex to maintain supplies to consumers during the industrial dispute at the Kurnell Refinery in October-November 1987. The Government has rejected the balance of Caltex's claims, which are based on unsubstantiated claims that Bass Strait crude was unavailable to it or that repairs to its vessels resulted in a shortage of shipping to lift Bass Strait crude oil. Instead of lifting Bass Strait crude, as all other refiners did, Caltex chose to import large quantities of crude oil of similar quality from South East Asia. Thorough investigations have shown that these decisions to import crude oil, rather than lift Bass Strait crude oil, were commercial in nature and quite clearly within the control of Caltex. They led directly to the underlift situation. The Government has advised Caltex that it expects the company to meet its outstanding obligations under the crude oil allocation scheme by clearing its underlift at the 1 December 1987 import parity price. To do otherwise would be inequitable to the other refiners, all of whom have met their obligations in full. To conclude the matter, if the underlift is not carried through, I intend in the next few weeks to hold a meeting with the other refiners in the oil industry to see whether through that forum it is not possible to persuade Caltex now to attend to its obligations. The PRESIDENT —Order! The President of the European Parliament is now leaving the chamber. Lord Plumb thereupon withdrew from the chamber. Senator COOK —Yesterday, Senator Knowles asked me a question about the acquired immune deficiency syndrome (AIDS). I gave her an answer but I said that if there was anything I wished to add to my answer I would do so and took the balance of the question on notice. I now wish to add some further points to what I said to Senator Knowles yesterday. The parallel that Senator Knowles drew to screening for tuberculosis is not relevant to AIDS. Tuberculosis is a communicable disease and can be caught by casual social contact. There is no evidence that AIDS can be caught in this way. Senator Peter Baume —It can also be treated, unlike AIDS. Senator COOK —That is a very worthwhile interjection and I take it on board. With AIDS, the Government's aim has been to provide all Australians with sufficient knowledge so they do not put themselves at risk of catching the disease. With respect to screening immigrants for AIDS, there are no plans to introduce routine screening. If the routine medical examination that all migrants undergo reveals abnormalities that may be consistent with HIV infection, a blood test may be ordered. If a person is found to have AIDS or AIDS-related disease that person is not normally allowed to immigrate. As I stated yesterday, it is not practical to screen all persons entering Australia, as this would include tourists. In addition, as Australia has the third highest per capita incidence of AIDS in the Western world, the net effect of immigration is likely to dilute our incidence rather than increase it. In addition, the immigration process probably selects against people who are HIV infected in that emphasis is given to family reunion. Homosexuals, who are still a large part of the infected group, are less likely to have spouses or dependants than other persons and thus will often not qualify on family reunion grounds. Intravenous drug addicts, another infected group, will already be disqualified by the usual medical examination. The waiting period between application and approval-often up to a year-would discourage persons who, knowing they were HIV positive, were seeking to come to Australia, apparently for our cheaper medical care. Another matter to consider is the cost of routine screening were it introduced. There would be a considerable cost associated with the test, including the recommended counselling and associated administrative costs. Senator COOK —On 22 February, Senator Harradine asked me a long question concerning a number of matters about human bioethics, human foetal tissue in embryos and so on. I now have an answer to that question and I seek leave to have it incorporated in Hansard. Leave granted. The answer read as follows- The Minister for Community Services and Health has provided the following answer to the honourable senator's question: I am aware of the concerns of Senator Harradine in certain areas of bioethical research and its funding through NHMRC grants. As I stated in a letter to him on 15 December 1987, due to the specialist nature of medical research and the large number of projects which receive consideration each year, I am essentially dependent on the advice of NHMRC. Nevertheless I have noted Senator Harradine's concerns and have asked NHMRC to take particular cognizance of sensitivities in the area of bioethical research when making recommendations in the future. Many factors are taken into account in assessing projects for funding including the reports of three independent assessors. Regarding Professor Singer's academic standing, the assessors have stated that his centre is the most professional and productive bioethics centre in Australia and that Professor Singer has a reputation second to none in Australia for competence and expertise in this field. Because of the nature of Professor Singer's research, I consider it quite proper for him and his colleagues to express bioethical viewpoints in the current debate on human embryo experimentation. Professor Singer's group did not prepare a pro-human embryo experimentation argument to the Victorian Standing Review and Advisory Committee on Infertility. The group were invited by the Chairman of the Committee to respond to a submission prepared by the St Vincents Bioethics Centre. Their paper did not express a one-sided pro-experimentation argument. It took no stand either for or against embryo experimentation. It confined itself entirely to the question of when a new human individual is formed. Senator COOK(Western Australia-Minister for Resources) —For the information of honourable senators, I present a report entitled Energy 2000-A National Energy Policy Paper. I seek leave to make a statement on the report and to move a motion relating to the statement. Leave granted. Senator COOK —Tabling this report concludes an extensive process of consultation with the States, industry, and all interest groups involved in the energy sector. The process of consultation started in 1985 when my colleague and predecessor, Senator Gareth Evans, announced that an energy policy review was to be initiated. A series of 10 discussion papers was released in 1986, submissions were invited on those papers and 76 were received. That process led to a major national conference in Canberra in September 1986, attended by more than 100 delegates, including industry, government, union and academic representatives. The conference concentrated on issues related to petroleum policy. This in turn led to major policy decisions which were announced in mid-1987. I refer in particular to the changes in the petroleum excise system and the decision to deregulate the crude oil market from 1 January 1988. Since then, there have been further discussions with industry and close consultation with State governments, including a review under the Australian Minerals and Energy Council of the outlook for crude oil self-sufficiency in Australia, the economic implications of the likely decline in crude oil self-sufficiency, and the outlook for alternative liquid fuels. In recent months there has been further close consultation with State governments on the final drafting of Energy 2000. This process of consultation culminates today in the presentation of Energy 2000. But this does not mean that consultation is now a closed book. Indeed, I propose to put in place some specific new arrangements to continue necessary consultation with the energy industries, State governments and unions, and I commend this document as a thorough and comprehensive basis for those consultations. Energy policy is vital to all of us. The crucial effect of energy supplies and prices on economic activity and living standards was driven home by the oil crises of the 1970s. This Government has already done much in the energy field. We have been developing energy security through the balanced use of various sources of energy and reducing our dependence on oil; encouraging fuel switching away from oil to alternatives, particularly coal and gas in the case of Australia; encouraging crude oil exploration and development and refining activities in Australia; fostering conservation of energy, especially oil, including by increasing efficiency in energy usage; establishing a long term research and development effort to assess long term energy options, especially in respect of alternative liquid fuels, but also renewable energy sources; encouraging the development and expansion of energy export industries and infrastructure, especially with regard to coal but also uranium and gas; and developing response mechanisms, such as emergency planning, capable of ameliorating the shorter term impact of any future oil crises. Energy 2000 re-assesses those policies and progress made. Many aspects of the energy framework are volatile and changeable. Policy responses therefore need to be pragmatic and flexible, to accommodate the changing problems and priorities. This is not a doctrinaire master plan. We have adjusted our policies when necessary, and will continue to do so. What have we learned from the Energy 2000 review? In terms of energy outlook to 2000: domestic demand will grow by an estimated 30 per cent, with the major components being 1.6 per cent per annum growth in petroleum products; 2.1 per cent per annum for natural gas; and 2.9 per cent per annum for coal. Indigenous energy supply will also grow-quite substantially-except in the area of crude oil, where any such growth must depend on major new discoveries. In the absence of such discoveries, we will face a decline in crude oil self-sufficiency and imports of crude oil will grow substantially. Our energy exports will also grow and we should be able to look forward to a substantial positive energy trade balance-as much as $60 billion over the period 1989 to 2000. With respect to total energy demand: the relative importance of petroleum products will decrease from about 39 per cent in 1986-87 to around 36 per cent in 1999-2000; gas consumption as a percentage of the total will be relatively stable at about 17 per cent; there will be a significant increase in coal usage, from about 40 per cent of total energy demand in 1986-87 to 44 per cent in 1999-2000. Competition in the marketplace between energy sources and between energy technologies will produce the greatest gains for the smallest cost. But the market mechanism is never perfect and there is a clear need to monitor developments closely and, where justified, to supplement the market by Government initiatives. Such initiatives may be necessary and, if so, will be applied. We may need to ensure that Australia's dependence on oil as an energy source does not grow in such a way as to weaken the nation's energy security. Competition, reinforced where necessary by Government initiatives, is to be the primary driving force that will determine Australia's energy production and consumption mix to 2000. We have identified three major energy objectives: security of overall energy supplies; development of the export energy sector; and efficiency in the domestic energy sector. Let me review the Government's approach to achieving improved exports and greater domestic efficiency first, before turning to the broader issue of energy security. Energy policies have to complement and strengthen our broader economic policies. We are a major energy exporter. We are the world's largest exporter of coal, accounting for about 25 per cent of world coal trade; a major exporter of uranium; and about to become a major exporter of liquefied natural gas. We estimate that there will be a favourable energy trade balance of $60 billion over the period 1989 to 2000, in 1986-87 dollars. The principal contributions will be from: liquefied natural gas and liquefied petroleum gas-more than $15 billion; steaming coal-more than $30 billion; coking coal-more than $40 billion; and uranium-more than $9 billion. These exports will offset any projected crude oil imports over this period, bringing the net positive figure down to $63 billion. We will clearly be able to finance our oil imports. However, we will need to ensure that we maintain our international competitiveness if this export potential is to be realised-or even exceeded. Specific policy approaches are set out in the document. The most important current issue is the completion of a coal strategy that will ensure a strong, economically viable and internationally competitive coal industry well into the twenty-first century. Efficiency in our domestic activities involves productivity and operational efficiency in our oil, coal, gas and electricity industries. In the oil industry, the focus is to make our refining industry as efficient as possible, given our growing relative reliance on the refining sector to process imported crude oil, if self-sufficiency does decline as currently projected. The oil industry is attracting substantial investment under the policies that we have in place. In the last few weeks the Shell Company has announced a $2.8 billion investment program covering its activities in Australia from petroleum exploration through to refining and distribution. Investments such as this will inevitably add to the efficiency of the oil industry. In gas and electricity we have ample resources and raw materials, and the challenge is how best to manage our performance and ensure reliable delivery at reasonable prices. Our approach on these matters is set out in the report. I particularly draw attention to progress with the North West Shelf project, which has both domestic and export aspects. This project is Australia's most important energy project and construction is progressing satisfactorily, with the first export shipment planned for October 1989. More broadly, we should recognise the growing contribution of the gas industry to domestic markets. Natural gas production is now equivalent to about 250,000 barrels of oil per day, a major achievement when it is noted that Bass Strait production of crude oil is currently about 400,000 barrels per day. We have found a growing recognition that the key to energy security is confidence in our overall energy supplies, based on good management and pursuit of sound economic principles. In terms of domestic energy requirements, our energy security is strongly underpinned by the availability of coal, gas and electricity and our approach is to encourage greater relative reliance on these fuels which we have in abundance. We recognise the scope for concern about future crude oil supplies, although I must say that in recent months it has been mainly from explorers and producers wanting a better tax deal. They are entitled to put their point of view vigorously. So are we. We currently have a high level of self-sufficiency, but it is running down. We have time to adjust to this, and the Government's approach is to increase the efficiency with which oil is produced, refined and used; search for and develop new sources of crude oil; and seek increasing use of alternative liquid fuels. We have already made substantial progress in refining our petroleum policies, through deregulation of the crude oil market; crude oil excise liberalisation, including reduced maximum rates and the exemption from excise of the first 30 million barrels of production; confirmation that condensate marketed separately is free from excise; introduction of resource rent tax for offshore greenfields areas; improved access to offshore exploration areas; liberalisation of foreign investment rules for petroleum development; support for major energy projects such as the North West Shelf; detailed analysis of alternative fuels potential; and encouragement of research and development to improve fuel use efficiency. Much attention has been focused by the oil exploration companies on the need for policies more favourable to them. Their financial interest is understandable but as an industry they cannot guarantee a greater exploration effort, nor can they guarantee positive exploration results. For our part, we cannot determine the international oil prices. We cannot change the basic level of Australia's prospectivity. The real judgment is whether the exploration effort being made by the private sector is satisfactory, with all things considered-prices, prospectivity, taxation and the market outlook. Given the recent events which have affected the oil industry worldwide, the Government is satisfied that the current exploration effort and the present outlook for exploration in Australia are consistent with market conditions. Exploration activity in Australia is following a similar trend to that being experienced in other countries, with drilling activity showing a significant recovery from the effects of the oil price collapse. Latest industry estimates of activity for 1988 include 190 exploration wells onshore and 26 wells offshore. For onshore wells, this is about the average level for the last five years while for offshore wells it is below the five-year average but a substantial improvement on the 15 wells drilled in 1987. The recovery in offshore exploration this year is particularly heartening. Four drilling rigs are at present active offshore and a total of seven rigs are expected to be working offshore later in the year. This is a healthy sign for exploration activity. In what is becoming accepted as one of our most prospective areas-the Timor Sea region-activity is increasing rapidly, with as many as 20 wells being predicted for 1988. Companies currently not working in the region, including many overseas companies, are actively seeking acreage. Up to four offshore rigs are expected to be working in the Timor Sea region during 1988. It is also expected that the Carnarvon and Gippsland Basins will see a significant level of offshore activity in 1988 and future years. Onshore, activity is focusing on those areas close to established infrastructure, such as the Cooper-Eromanga Basin, and other areas are also showing signs of increasing activity. In terms of oil development, further very worthwhile investment is being made by Esso Australia Ltd and Broken Hill Proprietary Co. Ltd to bring onstream a number of smaller fields in Bass Strait while in other areas offshore the West Australian Petroleum Pty Ltd group has announced plans for the early development of Saladin field. Feasibility studies and design work are continuing for the Goodwyn gascondensate project and the Challis oil project. This level of activity would not exist if our policies were unsatisfactory. Clearly, the policies are working. With companies able and prepared to take a longer term view, and plan on the basis of an expectation of higher crude oil prices towards the year 2000, we are also seeing a re-emergence of interest in higher risk areas with potential for larger discoveries. Nevertheless, we will be monitoring closely the exploration industry performance, in terms of both the ongoing level of activity and the results of that activity. The Government recognises that, unless its policies are realistic and there continue to be commercial successes, exploration funds will be directed elsewhere. If exploration is unsuccessful and reliance on imported oil grows, then it may become desirable to move to the greater use of alternative fuels, particularly for transportation uses. Such a move would be difficult in technological terms and would have to be justifiable in economic terms. The Government sees its role as monitoring developments, supporting desirable basic research and development, and generally helping to narrow the options, so that the private sector can consider realistically decisions on investment in this area. In regard to support for research into alternative fuels, I am pleased to announce that the Government will provide an additional $5m over the next three years. I will be seeking industry cooperation on a 50/50 funding basis and the intention is to gear up a substantial new research activity, focusing particularly on the use of gas as a transport fuel. The Government's approach is set out in more detail in Energy 2000. To sum up, our policy on petroleum is much broader than exploration and we now have in place major policies that encourage a range of options to meet our energy policy objectives. In that context Energy 2000 is not a master plan of targets for Australia's energy industries, or a series of new and detailed policy prescriptions to 2000. If it were, the implication would be that the many energy policy initiatives we have already implemented had not worked or needed radical change-this is just not the case. The initiatives we have already implemented are working and are at various stages of achieving their desired objectives. What we have done is set a framework in which we can get the best out of our energy resources while remaining ready to respond to circumstances. Recognising this, the Government believes that regular and close monitoring of energy developments and the energy outlook would be facilitated by the establishment of a new consultative body. Accordingly, the Government will establish a broadly-based consultative group comprising representatives of the Commonwealth and State governments, the energy industries and the trade union movement. It will, through consultation, help to identify any major changes in trends away from the projections and positions outlined in the Energy 2000 document. In this sense the Energy 2000 review process will be a continuing one that ensures that a proper focus is maintained on the vital energy issues that affect Australia's future economic well-being. The Australian people expect energy security-and they have a right to do so. The energy industries expect both stability and pragmatism in government policies-and they have a right to do so. Our policies will give us the solid basis we need, and will give industry the incentives it needs, to maintain energy security well beyond the year 2000. I commend the report to honourable senators and to the general community. I move: That the Senate take note of the statement. Senator LEWIS(Victoria)(3.23) —As you would know, Mr Acting Deputy President, the Opposition parties have only just received these papers and we have not really had sufficient time to give them a great deal of analysis, but we are in a position to make some response to the statement by the Minister for Resources (Senator Cook). A moment ago the Minister said: In regard to support for research into alternative fuels I am pleased to announce that the Government will provide an additional $5m over the next three years. Is that a new, additional $5m or is it the same $5m that the Government offered to the Democrats as an amount to be spend on alternative energy research in exchange for the Democrats' support of the resource rent tax? I hope that the Minister will make that clear. It will be interesting to know whether it is $5m or $10m. I suspect that it is the same $5m. Senator Cook —No, it is a new $5m. Senator LEWIS —Are we talking about $5m or $10m? Senator Cook —There is an additional $5m for alternative fuel investigation, as stated in the document. Senator LEWIS —Is that additional to the $5m the Government offered when the Democrats supported the resource rent tax, or is it the same $5m? Senator Archer —It is the same $5m. Senator LEWIS —Yes, it is clearly the same $5m. When it came to office in 1983 this Government was a disaster in terms of the economy. The Government is now trying to extract itself from the problems that it created in its first two Budgets in 1983 and 1984; it is trying to get out of that difficulty. The Government also made a couple of disastrous appointments. One major disaster was the appointment of Senator Gareth Evans as Attorney-General. Senator Archer —The Minister for Disasters! Senator LEWIS —Yes, as Senator Archer reminds me; he proved to be the Minister for Disasters. The disasters of Senator Evans's period as Attorney-General were quite unbelievable. They culminated in his authorisation of a flight over Tasmania to spy on the Tasmanians. The Government became sick of Senator Evans as Attorney-General so he was appointed Minister for Resources and Energy, which was another disaster; and now the Government is presiding over the disaster that we have before us today. The new Minister for Resources (Senator Cook) tried to tell us that this country's energy policy is all right, and he has said, `Our policies are working'. In fact, the Government's policies are working so well that Australian exploration companies are exploring overseas, in the Middle East and anywhere but Australia-that is how well the Government's policies are working! These companies are desperately trying to avoid the heavy taxes and burdens that the Government has imposed on them. In a typical knee-jerk reaction the Australian Labor Party (ALP) has imposed penalties on these so-called giant companies, and overseas companies, which were in Australia doing their very best so that we could have a decent alternative energy system. This Government came to office and, in a typical knee-jerk reaction, imposed penalties on these companies one after another, the most recent being the resource rent tax. The Government has forced many companies out of the industry altogether. It is an attitude typical of the Australian Labor Party towards anyone who is trying to make a quid-`Let's get in there and kick him to death'. The Government's State colleagues do it with respect to housing. Instead of encouraging people to invest in housing so that houses are available for rent, State Labor governments get in there and kick all landlords to pieces-treatment reminiscent of the Charles Dickens era. The result is that these people opt out of housing investment, leaving a desperate housing shortage around Australia. The Federal Government is getting stuck into oil exploration, mineral and mining companies in such a way that they are opting out of investing in Australia-and what we have before us today is the result. I refer to the Director-General of Victoria's Department of Industry, Technology and Resources, Hans Eisen-a very good friend with whom I went to school but have not seen for a very long time. In a very good article in the Bulletin of 27 October a Mr Peter Gill said: At the Energy 2000 Conference in September 1986, the Director-General of Victoria's Department of Industry, Technology and Resources, Hans Eisen, drew an interesting analogy. Eisen noted that the need to restructure Australia's economy into a more competitive and export oriented footing had been identified 20 years ago but the painful decisions were only now being taken. `In relation to energy, we have only a small breathing space', Eisen observed. Mr Gill points out in that article that a year has passed since then-of course, it is now 19 months. The Minister is not trying to do anything about the `small breathing space'; instead, he has produced a document almost an inch thick of many pages which are not even numbered. What will we get out of this document? It is just paper. It is probably good for only the pulp and paper manufacturers; it is certainly not good for the oil exploration industry. I quote from the same article by Peter Gill in which, referring to the Energy 2000 Conference in 1986, he said: Representatives of all sectors of the energy industry and state governments had a round-table conference with the then Resources and Energy Minister, Senator Gareth Evans. Honourable senators all know my views about Senator Evans. To continue: Issues were debated, well-rehearsed arguments were aired and a major policy statement covering the rest of the century was promised. But the Energy 2000 exercise appears to have gone somewhat awry. State energy Ministers were less than impressed with the first draft of the policy statement which went to a meeting of all energy Ministers in early September. They were even less impressed that the federal government did not trust the states with its final recommendations and withheld the last chapter of the document. West Australian Minerals and Energy Minister, David Parker, described what the states were able to see as `fairly bland and not sufficiently analytical'. Parker said that while the Energy 2000 exercise had been worthwhile, the preliminary outcome was not. `It is either going to be a federal government or it is going to be a national policy-which is what was originally envisaged-and if it is going to be the latter then the way the Feds are going about it is absurd,' . . . Victoria's Industry, Technology and Resources Minister, Robert Fordham, put a similar view. These are Labor fellows, by the way. To continue: `The Commonwealth's got its overview so all the headings are always there, but there hasn't been to date a sufficient willingness to work with the states in coming up with the detail to make sure all the pieces interlock,' Fordham said. If one looks at this poster advertisement from Esso Australia Ltd which appeared in The Australian of Thursday, 17 March of this year, it will be seen that Esso is asking: What can we hope to achieve now we pay 83 per cent tax? It points out that the normal company tax rate is 49 per cent and says: Any new offshore oil discoveries still face a tax rate of up to 70 per cent. Not surprisingly, this has the effect of driving investment out of the oil industry and even out of Australia. The fact is, discoveries depend on exploration, exploration depends largely on investment and investment depends largely on the removal of tax disincentives. One sees that the so-called policies that Senator Cook claims are working are in fact a nonsense. Far from working, they are sending our investors in exploration industries overseas. I refer to a statement by my very good colleague Mr Warwick Smith, the shadow Minister for science and energy. In Brisbane on Wednesday, 23 March this year he said: The decline in crude oil production has already had an impact on Government revenues. Those of the Commonwealth have fallen from a high of $4 billion in 1985-86- that was as a result of Fraser Government initiatives in this area- to $2 billion. By 1990-91 it is expected to halve and by the mid 1990s will fall to only $400m. As you well know, the burden of filling Government coffers has been transferred to the petroleum product industries. Let us now look at a study by the Australian Minerals and Energy Council (AMEC) which was released in February this year. The AMEC study projects that oil imports, without major new Australian discoveries, will cost between $2.8 billion and $4 billion in seven years time, using current dollar values. The study forecasts that, after being a net exporter of 12 million barrels of crude oil and LPG in 1985-86, Australia will be a net importer of some 114 million barrels by 1990-91. Self-sufficiency will fall from 90 to 55 per cent and continue to deteriorate. I put it to the Senate that I have proved that Senator Gareth Evans as Minister responsible for energy was an absolute disaster, and now that the Prime Minister has taken him out of that job and put him into communications, we believe he is proving to be a disaster in that portfolio, too. I refer to a graph, provided to me by my colleague Mr Warwick Smith, showing the decline in offshore exploration since 1983. In 1983 expenditure on offshore exploration amounted to $520m, and under this Government that has consistently fallen every year until in 1987 it had gone down to $130m. That decline is a clear consequence of the Government's policies, of which Senator Cook has the audacity to say: To sum up, our policy on petroleum is much broader than exploration and we now have in place major policies that encourage a range of options to meet our energy policy objectives. I do not know what his energy policy objectives are, but they certainly are not the energy policy objective of the Liberal and National parties, which is a policy of self-sufficiency. Unfortunately, I am unable to expand on other areas covered by this paper at present. This is as far as I have been able to go in the time I have had the paper available, but within a day or two my colleague Mr Warwick Smith will be issuing a detailed criticism of this ministerial paper. Senator COULTER(South Australia)(3.37) —Rarely in the brief time I have been in the Senate have I read such an appalling document as that with which we have been presented this afternoon. If it had been written two centuries ago there may have been some justification for it, but it fails totally to take into account most of the important considerations which are now properly being debated worldwide. As an Australian, I am ashamed that a government in this country presents this paper as policy for the rest of the world to see. I recognise that the Minister for Resources (Senator Cook) has only recently occupied his portfolio and that he would not personally be responsible for this. But I recommend to him that he immediately get rid of all those people in his Department who are responsible for this document and replace them with people who are more competent and more familiar with the important issues that are now clearly on the energy policy agenda. Senator Archer —It is Evans who is responsible. Senator COULTER —I want to go into that now briefly, Senator Archer. We are all aware of the 10 red-covered volumes which were produced by the Department when Senator Evans was the Minister responsible for resources and energy. Looking through those 10 volumes again, I was appalled by the way in which they failed to address many of the important questions which underlie a proper and well-developed energy policy. One hoped that, out of the limited processes of public consultation in which the Government has involved itself since, the follow-up to those 10 slim documents, the Department would have dealt in this volume with some of the issues that were not earlier addressed. But in this volume even less coverage is given to those important items. The document before us says that Australia's energy policy should be directed in three ways: Security of overall energy supplies; development of the export energy sector; efficiency in the domestic energy sector. There is no mention in the statement of the fact that energy is not in itself a need. Energy is a means to an end. What needs to be guaranteed is not the supply of energy but the services which energy makes available and, in the process of which, causes considerable environmental and social consequences which also have to be addressed. In those 10 volumes which came out while Senator Gareth Evans was the responsible Minister, carbon dioxide, the principal pollutant which comes from the burning of fossil fuel, was mentioned once only in one sentence. Only one sentence in 10 volumes! In the volume before us this afternoon carbon dioxide is not mentioned at all. There is evidently a complete absence of any awareness by the Department that the burning of fossil fuels poses, in the next 40 to 50 years, serious problems relating to the greenhouse effects and the incredibly widespread consequences which flow from that in terms-- Senator Stone —Your anti-uranium policy is making it worse. Senator Collins —Coal fired power stations-40,000 tonnes a year. Senator COULTER —As I have said in this place before, if Senator Stone and Senator Collins look at the Flowers report from Great Britain and a number of other documents, they will find that the advent of nuclear energy will increase the consumption of fossil fuel. The point I will get to in a moment and which is inadequately addressed in this document is that the direction we need to take is towards greater fuel efficiency and conservation of energy rather than looking to fresh sources of supply. Senator Sanders —Their mates in the industry would not like that. Senator COULTER —Let me pick up the point which has been made by way of interjection. This document deals with the oversupply of electricity in Australia, the overgeneration capacity by all the State generating authorities around this country, and points to the very large and growing indebtedness which has arisen. For instance, on page 11.3 of the report one will see that South Australia has an installed capacity of 2,680 megawatts, whereas the peak demand in South Australia is less than 1,600 megawatts. We find that the-- Senator Stone —All right, it is wasted. What has that got to do with your case? Senator COULTER —If Senator Stone listens he will hear. Senator Wood —Mr Acting Deputy President, I rise on a point of order. Could you draw Senator Stone to order? If he wishes to contribute to this debate he could get on his feet and actually contribute rather than, as he normally does, sit in the corner and continue to interject and make comments while people are speaking. If he had the courtesy to listen to what Senator Coulter is saying he might be informed. The ACTING DEPUTY PRESIDENT(Senator Teague) —There is no point of order. It is not appropriate to take a point of order to put a personal view about the conduct of the debate. Senator Stone is the next listed speaker. I ask all honourable senators to be restrained in their interjections. Senator COULTER —The document before us contains Figure 11.2 which shows that the net public sector borrowings in the electricity area increased from just over $5,000m in 1977 to almost $25,000m in 1987. The point in terms of efficiency is that in building a power station we are, at the moment, paying roughly $1 per watt of capital cost. That dollar is spent whether that watt is used or not. That is the nature of electricity. If I choose to warm my house using electric heating and I go out and buy a 1,000 watt radiator, for which I might pay as little as $35 or $40, the moment I plug it into the power source I demand from it a generating capacity of 1,000 watts. In other words, I am demanding that the State spend $1,000 to instal the capacity so that I can turn my radiator on. Yet I may turn it on for only five minutes. Senator Collins —Plug it into your solar power. Senator COULTER —It is interesting that Senator Collins should mention this because in the Northern Territory the Government, of which I think he was once a member, on one occasion subsidised the purchase of solar energy using equipment, namely hot water services. It has recently withdrawn that subsidy and has instead put a subsidy on the purchase of air-conditioners because the Northern Territory Government has now built a power station. The point that I am developing is that alternative uses of energy are available to us which use much less energy. If Senator Stone has studied physics he will know that the generation of electricity is dependent upon the Carnot cycle and rarely do we achieve efficiency of greater than about 30 per cent. So twice as much primary energy goes into the generation of electricity as that which comes out at the other end. In Australia I believe the figure is about 28 per cent of the primary energy actually emerging at the power point. Clearly, we have to shift users of energy closer to the primary source. In other words, those who cook clearly require energy to cook but if they use gas-if gas is available to them-rather than electricity, they immediately double the efficiency with which that primary energy source is used. Those who choose to use solar energy for the warming of water, domestic purposes or even light industrial purposes do so without placing a demand on either primary non-renewable energy sources or on the sources of electricity which necessarily involve large capital expenditures, much of which goes offshore. Approximately 25 per cent of the cost of power stations goes offshore for the purchase of heavy generating equipment. So there are enormous opportunities for increasing the efficiency with which we use energy in Australia, which provide greater security of end use availability of energy without necessarily increasing the total amount of energy used and which certainly have a much more benign effect on the environment. We have not gone very far down this road, but I shall read some interesting figures from the United States of America. Between 1978 and 1986 the official United States of America economy, measured as real gross national product (GNP), grew by 19 per cent, while energy consumption fell by 5 per cent from 78.1 quads in 1978 to 74.3 quads in 1986. Had United States energy efficiency stayed at the 1978 level-that is, the amount of energy used per dollar of gross national product-the economy would have required 93.1 quads in 1986. Accordingly, improved energy efficiency measured as the decline in energy per unit of GNP since 1978 contributed 18.8 quads to the United States economy in 1986. A quad per year equals approximately 500,000 barrels of oil equivalent per day. So the application of efficiencies in automotive fuel use, building heating and cooling, home appliances and so forth improved the energy efficiency in the United States by as much as 25 per cent. Coming to the points that Senator Stone and Senator Collins made, it is interesting to note that while United States coal production increased by 2.9 quads and nuclear power increased by 1.5 quads-a combined increase of 4.4 quads-the contribution which came from conservation was 18.8 quads. In other words, four times as much energy, effectively, was derived from conservation than was derived from the increased consumption of coal and nuclear fuel together. That is a course which has been embarked on in a major way, particularly in California, and it is a course which we need to embark on much more deliberately in Australia. Clearly, there are enormous gains to be made in going down that path, and that is the way to go. I have mentioned briefly the greenhouse effect. There is no mention in the paper of the environmental consequences of the use of energy. Yet, around the world-it does not matter whether one looks at the United Nations environment program, the World Meteorological Office, the United States National Academy of Science, our own National Academy of Science or the Commonwealth Scientific and Industrial Research Organisation-there is a consistent prediction that because of greenhouse warming the average global temperature will rise between 1.5 and 4.5 degrees Celsius within the next 40 to 50 years, with enormous consequences to every aspect of life. It may well be that Australian agriculture will benefit from this, but certainly there will be major shifts in the world economy which are in no way addressed in the document. They are not even mentioned. I return to the question of Federal policy in relation to the behaviour of State electricity authorities. If one chooses electric hot water heating rather than solar hot water heating one pays the capital cost of the equipment which one uses in the home but not the capital cost of the generating equipment which the purchase of the hot water makes necessary. If, on the other hand, one purchases a solar unit, one pays the total capital cost. That capital hurdle is a considerable impediment to the use of solar energy for water heating in Australia. It comes about because the electricity authorities, which although they are public bureaucracies, are behaving just like private bureaucracies, see the expansion in the use of electricity, the increased consumption of electricity, as in their best interests. They have set tariffs in such a way as to encourage the use of electricity rather than the use of alternatives which would be a great deal more efficient. They do this by absorbing the capital cost of their generating equipment into their general tariff structure. For a long time many people in the conservation movement have been pointing to the desirability of tariff structures in which the capital cost of generation equipment is made evident in the tariff structure. That would mean having a two-part tariff essentially the same as is used by Telecom. The greater the demand, the greater the cost of the first component. It would be a demand charge. The second part of the tariff would be a flat rate charge related to the amount of energy actually used. Interestingly, West Germany, France, Spain and several other countries have gone down that road. But the electricity authorities around Australia have resisted such a simple change in the tariff structure. Although tariffs are mentioned in the report, no considerable detail is gone into which would allow one to perceive that simple changes in tariff structure such as those outlined would lead to significant changes in energy use with considerable benefits in terms of the use of less energy, less environmental pollution and less demand on non-renewable resources. Wind energy and all renewable forms of energy are mentioned in the report-as they are in the original Energy 2000 reports-in rather disparaging terms. Yet, an inquiry conducted in South Australia by Mr Stewart found that in that State the cost of wind generated electricity was already cheaper than the use of coal. When one looks at the capital indebtedness of the electricity authorities-I believe that some 30 per cent of Australia's indebtedness is related to the borrowings of State instrumentalities-and recognises that wind generating units are small units which can be built as demand increases, rather than large units which involve forward borrowings, followed by the sort of thing we see now in the Northern Territory where the use of electricity is subsidised to generate a cash flow to pay back those enormous capital borrowings, one sees that there are considerable economic advantages in using wind energy in terms of both overseas borrowings and the capital indebtedness which the use of electricity involves. The report, by not dealing with these important aspects of energy use, is a totally inadequate document. To imagine that one can in any sense plan energy in the short time scale of the next 12 years is quite ridiculous. The construction time of power stations is at least 10 to 12 years. The life of cars and most other energy using equipment certainly exceeds 12 years in most instances. A much longer time frame is required. In that longer time frame considerations of depletion of non-renewable resources and the environmental consequences of using energy must be fed into the equation and the economic consequences of that fed back into economic policy at the Federal level in 1988. This document does not do that. The document is totally inadequate and I think the Government should be thoroughly ashamed of it. Senator STONE(Queensland-Leader of the National Party of Australia)(3.58) —I spent all of last Friday and most of the weekend attending a conference of the National Party in Queensland at which one of the central items under discussion was whether or not we should, as in the end we decided to do, ignore a particular politician. Without wishing to reflect on Senator Coulter in any way, I struggled to remind myself of the need for such self-restraint in the course of his remarks. I am sorely tempted to deal with some of Senator Coulter's remarks but, in the interests of putting our time in this place to better use, I shall restrain myself. Nevertheless, having said that, I must say that I agreed with one aspect of Senator Coulter's remarks; namely, the intellectual slenderness-if I may call it that-of the statement put down in this place this afternoon by the Minister for Resources (Senator Cook). We have in front of us a 12-page ministerial statement. To use the most kindly description possible, one would have to say that it presents the Senate with a long search through the chaff to find the occasional grain. So in that respect I would agree with Senator Coulter's remarks. I came to one such grain when I got to page 11 of the statement-which, as my colleague Senator Lewis incidentally very properly reminded us beforehand, was available to the Opposition only very shortly before delivery. I, like Senator Lewis, have had, therefore, only very limited time to examine the document and to think about it in order to frame these few remarks. As I say, on page 11 of the document I encountered what I regard as a grain, among the mostly chaff preceding it. The following statement is made: In that context- that is, the context of a range of options to meet the Government's energy policy objectives- Energy 2000 is not a master plan of targets for Australia's energy industries, or a series of new and detailed policy prescriptions to 2000. I must say that I am glad that it is not. I have the impression that a master plan of targets would be the kind of thing that might appeal to Senator Coulter. I hope I am not misrepresenting Senator Coulter because I certainly would not want to do that. Of course, I understand that he would have very different targets from those the Government would employ or which, I suggest, some industries might employ. However, my own view about that kind of approach to these questions is that they are totally destructive so far as outcomes are concerned. One way of illustrating that is to note that in this area of policy there is-I think this must be observed-a tendency to focus upon one area of the energy spectrum-petroleum products. We get a great deal of material in this place particularly, but also in the media, about problems which people foresee or which, in some cases, they affect to foresee, coming down the track in relation to the availability of petroleum products for the world. On the one hand, we had all that stuff from the Club of Rome, for example, back in 1973 or thereabouts. That is totally discredited now but we should not forget that at that stage it was being put forward as the greatest set of projections since sliced bread. We still have that kind of approach to these questions. We have had such an approach since the nineteenth century, when the great English economist Jevons made similar projections about the adequacy of British coal supplies. We are still getting it today in relation to petroleum. We have it particularly in Australia so far as own petroleum self-sufficiency is concerned. I do not want to go into that particular matter here this afternoon because it is not basically the point of the matter before us. But I welcome the emphasis in the Minister's statement upon the total energy spectrum. I think it is fair to say that. It simply does not make rational economic sense to concentrate all our interest upon the supply of one particular form of energy, namely petroleum-important though that source of energy is; no-one would begin to contest that, of course-when, as we are all well aware and as the Minister's statement quite properly brings out, we are talking about a whole range of energies in Australia's case. We are talking about coal. We are talking about uranium. We would talk a great deal more about uranium production if the Government, and the Australian Democrats for that matter too, would allow us. We could talk a great deal more about it if we did not have a great many restrictions on the production of uranium in this country for proper and peaceful purposes. Of course, we are talking most particularly and, I suppose, most recently today about natural gas, whether in its natural form or in its liquefied form for export purposes. It is worth remarking-this is another grain I found in the Minister's statement-that today the production of natural gas in Australia amounts to the equivalent of 250,000 barrels of oil, compared to the present production from the Bass Strait wells of 400,000 barrels of oil. In other words, natural gas production is becoming quite significant in terms of the total energy mix in this country. On page 5 of the Minister's statement he refers in specific terms to the fact that Australia is at present-and I think it will continue to be, particularly if we dispose of the present Government at the next election-a major energy exporter. As the Minister said in his statement, Australia is the largest exporter of coal. Of course, again one has to observe, so far as that statement is concerned, that were it not for a number of aspects of our coal industry we would be a very much bigger exporter of coal. Instead of having 25 per cent of the world coal trade, we would have an even higher proportion of the world coal trade than that. When one comes to look at the reasons why that is not the case one finds, as one so often does when one finds problems of this kind in Australia, trade union influence and activity and depressing consequences for the industry behind that situation. We find the uncertainties of supply produced by the endemic disruptions of our ports for coal exports. That is the situation that led to the development of the term `Wran's navy' a few years ago. We find that our costs are obviously still quite competitive by international standards-although mainly because of the major devaluation of the Australian dollar in the past few years. However, notwithstanding that fact, our costs are still very much higher than they need to be. That is to say that productivity is much lower than it needs to be in many of our coal mines. Some of our coal mines are models of productive performance, particularly the great Queensland open cut coal mines. However, others are far from that. We have in the coal industry, particularly as it applies in New South Wales, what I can only describe as the depressing influence of the Coal Industry Tribunal, which at one stage this Government was promising to disband, abolish and fold into, if you like, the depressing enough, after all, operations of the Commonwealth Conciliation and Arbitration Commission. But the Government, in the end, did not have the courage to press on with that proposal. It abandoned that particular proposal, which, if I recall correctly, was one of the few proposals I would have agreed with from the Hancock Committee of Review of the Australian Industrial Relations Law and Systems. However, in the fact of opposition from the New South Wales coal mining unions and, no doubt, from some members in its own ranks, the Government went to water on that particular proposal also. Nevertheless, notwithstanding all these handicaps which the trade union movement in particular has placed upon our great coal industry, it is, as the Minister quite rightly says, still the world's largest exporter of coal. The Minister also concedes-I think he must have had some hesitation about including this in his speech or, at least, approving the draft given to him by his public servants-that we are a major exporter of uranium. I make that comment because, of course, the Minister's own views on uranium before he acquired a ministerial mantle are well known and voluminously known and well and truly on the record. There can have been few more vehement opponents of the development of the Australian uranium industry then the Minister, Senator Cook-who, I note for the record, is not doing the chamber the courtesy of being present while his own ministerial statement is being discussed. I happen to think that there are some-- Senator Robert Ray —He has missed nothing. Senator STONE —Senator Ray is entitled to his opinion in that regard. I am not referring to that matter. I am referring to the question of common courtesy on the part of a Minister who has brought down a statement in this chamber but who then has run away while some senators at least pay him the courtesy of paying attention to it. Senator Collins —Senator Ray meant that the Minister is listening on the speaker. Senator STONE —I thank Senator Collins for that interjection to the effect that Senator Cook is listening on the squeak-box. He may well be doing so but that does not really meet the point. Let me come back to the statement that we are a major exporter of uranium. That is perfectly true. Again, all one can say is how much greater an exporter of uranium we could have been had it not been for the malevolent influences of the left wing of the Labor Party-indeed, the Labor Party more generally before it assumed some responsibilities-the environmental movement and the usual people who want to shut down the country. I have recently had the benefit of speaking to some representatives of an Australian mining company, Denison Aus Pty Ltd, which is an associate of the Canadian based Denison Mines Ltd. I think Senator Tambling may have spoken about this matter in recent days when we were debating legislation, but the facts can be succinctly stated and they bear repetition because they bring out clearly the kind of situation into which this country has got itself by pandering to the kinds of interests represented by people such as Senator Coulter. We have in the Northern Territory the potential uranium mine at Koongarra. It is ready to go. Mining could begin there, basically, tomorrow. There has been meticulous preparation by the mining company and the local Aboriginal people which has resulted in full and total agreement on royalty payments and everything else that is involved in these matters. So there is no road block on that score. I understand that similar agreements have been arrived at with the Northern Land Council. Again those agreements are fully signed, sealed and delivered. The project has the full approval of the Northern Land Council, which is in favour of this mine proceeding. It has undergone a full scale environmental impact study, and that study has been subjected to investigation and review by the Minister for the Arts, Sport, the Environment, Tourism and Territories (Senator Richardson) and his Department. That has also received the stamp of approval from the Minister, so another one of the numerous road blocks has been removed. One might ask about markets. What is the point of opening a mine if there are no markets for this additional source of uranium? In fact, in this particular case there is a market available. The Denison company already holds firm contracts for the supply of additional uranium into the 1990s, and I am given to understand-I have no reason to doubt this information-it has a choice: it can either proceed with the Koongarra mine in the Northern Territory to satisfy these uranium contracts it has entered into or it can provide that uranium from a mine in Canada, where the uranium is equally available to it and which it already owns. We have a choice in this country as to whether this uranium will be supplied to the world for peaceful purposes-I emphasise that-from Australia or from Canada. That is the choice. It is not a small matter. If we were to proceed with this project it would bring into Australia $1.6 billion in the course of the next 10 years or so, which is roughly the life of the ore body. But nothing is happening. Nothing is happening because of the policy of the Australian Labor Party, fully supported by the Australian Democrats, that there should be only two uranium mines operating in this country. So while Senator Cook is quite correct in saying that we are a major exporter of uranium, I do put it to him that that is only half the story. The Minister also notes that we are about to become a major exporter of liquefied natural gas (LNG). Again that is true. The North West Shelf project is finally coming to fruition and shortly we will become a major exporter of LNG. On the basis of all that, the Minister has put to the Senate some estimates, derived from the Energy 2000 document, of projected energy exports over the next 12 years, from 1989 to the year 2000. These projections are made on the basis of 1986-87 prices, set out on page 5 of his statement. The document projects total exports of more than $94 billion over that time. Although it is not altogether clear from the Minister's statement-in the time available I have not been able to find out-I take that to be a gross figure because immediately preceding those export figures the Minister talks of a favourable energy trade balance-that is, a net figure-of $60 billion over that time. I want to conclude with some remarks relating to one final aspect of the Minister's statement. There is a reference on page 9 to the oil exploration industry, stating: Latest industry estimates of activity for 1988 include 190 exploration wells onshore and 26 wells offshore. Material supplied to me by the Australian Petroleum Exploration Association (APEA) agrees with the Minister's statement that, in all, 216 wells are currently estimated to be drilled this year, including both onshore and offshore wells. However, what the APEA material brings out, and which I regret the Minister's statement did not, is that the figure of 216 wells to be drilled this year includes not only wells to be drilled for oil but wells to be drilled with the objective of finding natural gas. One has to say that in this respect the presentation in the Minister's statement is misleading-I take it to be inadvertently misleading, but misleading nevertheless. If we remove from the figure for total wells expected to be drilled, which in aggregate terms at least is the same figure that the Minister has used, as the totals correspond, those with gas as the only objective, the overall exploration figure for oil drilling this year shows a continued further small fall on the figure for last year, which was already down from the year before and the year before that. The figures specifically are that in 1985 202 oil exploration wells were drilled; in 1985-86 195 such wells were drilled; in 1987 that figure fell significantly to only 157 oil exploration wells drilled; and this year it is expected that only 151 such wells will be drilled. The Australian Petroleum Exploration Association has supplied to me a point that ought to be further elucidated. In any comparison of what one might call the true level of search for new oilfields, which is what the game in the end is all about, we should focus on wildcat wells rather than on wildcat appraisal wells. The figures that I have just put into the record and which therefore are relevant to the Minister's statement relate to such wells. I am given to understand that there are wildcat wells being drilled to explore for oil only as distinct from wells being drilled for gas. Sometimes, of course, wells being drilled for gas encounter oil, but that is not the objective in the case of these figures. In 1985, 151 wildcat wells were drilled for oil exploration purposes. That figure rose to 179 in 1986. It fell very sharply last year to only 116, and there is a very slight recovery estimated for this year, to 124. To make it quite clear that I am not trying to show that you can prove anything with statistics, there is one point that the Minister could have made in his own favour in this area. If we look at offshore wildcat wells being drilled for oil-many people would say that our offshore exploration territory is likely to be the most fruitful for oil discoveries for Australia in the period ahead-we will see a significant recovery in the number of such wells this year on the basis of present estimates. The number of such wells in 1985 was 21, and in 1986 it was 20. It fell sharply last year to nine, and it is estimated to recover this year to 24. I think that is the point of good news which the Minister might have included in his statement but which in fact he failed to include, for reasons not altogether clear to me. I want to conclude by saying, as I think the two preceding speakers have said, that in the time which has been available to us to examine this statement we have obviously not had an appropriate opportunity to look into the detail. I have no doubt there will be future occasions in this place when we may want to refer further to these matters. Senator COLLINS(Northern Territory)(4.21) —I rise in this debate briefly to provide a local resident's response to some of the nonsense that was delivered about the Northern Territory during this debate, once again by Senator Coulter. Senator Coulter is perfectly correct in saying that there is enormous scope in the area of energy conservation for reducing demand for electricity. There is no question about that, and there would be few places in Australia more conscious of that, considering the cost of electricity, than the Northern Territory. There is no question at all that the energy conservation measures that have already been introduced around the world and the continuing emphasis on energy conservation have been largely responsible for the downscaling of demands for energy sources such as uranium. It has not been because of any problems within the uranium industry; it has been because of the drastic and, in my view, very welcome drop in the demand for the end product itself, that is, electricity. Having said that, Senator Coulter then went off with the fairies, as he often does. As a Territorian, I found his remarks not only inaccurate but offensive. He condemned the Northern Territory Government for offering a subsidy to consumers on the purchase of air conditioning units, and said that that was simply an encouragement to people to purchase air conditioning units because of their high electricity demand-and they indeed consume an enormous amount of electricity. He also said twice that that was simply an attempt by the Northern Territory Government to subsidise the enormous costs of constructing the gas pipeline and establishing the new power station in Darwin. It is very easy for someone who lives in South Australia to advance arguments like that, but those who live in the Northern Territory and know the reality of why the Northern Territory Government makes that extremely small subsidy on air conditioners find such remarks from people such as Senator Coulter, delivered with such great authority from his point of view of being some sort of scientific expert, highly offensive. The subsidy on the purchase of an air conditioner that he referred to is a very small one indeed-$50-provided that it is of a certain size and that it is brand new. It is not designed to subsidise the cost of power or to encourage the increased use of power in the Northern Territory. It is designed to make just a little more bearable the lives of people who are not on high incomes and who are living in some very unpleasant weather conditions in Darwin at certain times of the year. When I was the Leader of the Opposition in the Northern Territory I had at various times a very small staff of nine people working for me. One of the major reasons that I consistently lost staff-and I have to admit that there are times of the year when Darwin is less than delightful-was the weather conditions in Darwin. We have three months of idyllic weather: we have three months of very good weather; we have three months of bad weather; and we have three months of bloody bad weather, when the place is not fit for man or beast. Senator Walters —Come and live in Tasmania. Senator COLLINS —Not a hope. The Northern Territory Government, to its credit, has attempted to reduce the demand on electricity by constructing public facilities, such as schools, deliberately designed without air conditioning, efforts which we at the time in opposition encouraged. Unfortunately, they did not work effectively. It is easy for Senator Coulter to say to Northern Territorians, `do not purchase air conditioners because they are dreadful consumers of electricity. Do not take up the Northern Territory Government's assistance for subsidising air conditioners because you consume too much electricity'. It is easy for him to say that while living in South Australia, but most people who have to stay at home in the Territory are women, especially if they have small kids-and we have an extremely young population in the Northern Territory, the youngest in Australia. Senator Coulter should try sitting at home without any air conditioning at all in November, December and January and see how he likes it. In my home in Darwin, like most people in Darwin, I have one air conditioner-in the bedroom. When I purchased my house it had installed in the wall a very large unit that was designed to air condition the living room and the lounge room. It has literally never been switched on since I bought the house, because I am currently paying, with one air conditioner, $440 a quarter for power. That is right. How does Senator Coulter like them apples? And $440 a quarter for power is a pretty average power bill in the Northern Territory. The reason for that is that I have an 18-month-old daughter, and in the wet season young kids particularly find the heat rather stressful. I love the Northern Territory and I have no intention of ever leaving it. If I want to purchase an air conditioner to make life a little more bearable up there for myself and my family, I will do so and I will plug it into the electricity, Senator Coulter notwithstanding. I pose this question to Senator Coulter: How many people in Canberra would be happy to turn off the heating in June, July and August? Not too many. I wonder whether Senator Coulter himself lives in an unheated room. Actually, knowing Senator Coulter, he probably does. He probably pedals a bicycle to keep himself warm, attached to a generator to drive his television set. I would not doubt that for a minute. His solar panel would not do too well in Canberra, I might add, because there is not enough incidental sunlight down here to run it. I simply want to correct the record. The Northern Territory Government does not irresponsibly encourage an increase in electricity consumption in the Northern Territory, as Senator Coulter stated, purely to pay back the cost of the new power station. I want to conclude my remarks by referring to the new power station. If the Northern Territory Government did encourage additional consumption of electricity for that purpose, then good on it. Before the Northern Territory Government constructed the new power station and connected it to an indigenous energy source-natural gas-in the ground, which produces very little pollution, I might add, we used to get things in Darwin called blackouts. Blackouts are things that people down here have not heard about for a very long time, but we used to get them on a regular basis. They were part of life in Darwin. Not a house in Darwin was not equipped with candles and alternative lighting sources. I tell honourable senators this: When there is a power blackout because the clapped-out Stokes Hill power station-the one that has been replaced by a new power station-has turbines which fall apart, and if one has small children, and it is the pre-wet season, and the temperature at 2 o'clock in the morning is 32 degrees centigrade, and the humidity is 100 per cent, and all the meat is going rotten in the fridge, and there is no fresh milk, food or anything else, Senator Coulter might find that people in fact use electricity because it makes life just a little more bearable. As a Territorian, I simply wanted to correct the record. Senator Coulter is factually incorrect. As I said, he is off with the fairies, and if he wants to contribute meaningfully to debates on subjects as important as energy, he should first do a little bit more homework. Senator WOOD(New South Wales)(4.29) —I would like to speak very briefly to correct a factual error made by Senator Collins, and by Senator Stone by way of interjection earlier. Before Senator Collins gets on his high horse and speaks with high dudgeon about other people's factual errors, I think he should correct a few factual errors of his own. In the debates about the use of uranium as an energy source and in the debate here today about the use of alternative energy sources, there have been interjections from Senator Collins and Senator Stone to the effect that we want to turn off the lights and go back to the caves-basically to turn off the technology that we already have. That is not what we are on about. When Senator Collins says that we need sunlight to generate solar energy, he is factually wrong. Siddons Industries Ltd, which belonged to a former Australian Democrat senator, Senator Siddons, markets solar water heating and solar space heating which work in the dark and do not need sunlight or even a warm day. Modern alternative energy sources can produce heat and act as heat pumps in temperatures not much higher than freezing point. This is all we are advocating-not that we should put the atom back in its box, now that we have unlocked the atom. I am not suggesting that we can lock it away again and pretend that we do not know how to use nuclear energy and I am not suggesting that we go back to living in caves-there are not enough caves for us all. I have to agree with Senator Collins. I was with a young child in Wilcannia in New South Wales and Wilcannia in the heat is pretty unlivable and unbearable. I quite well understand the value of electricity in making life more bearable not just for older people or young children, but for all of us. We were described by Senator Stone as the malevolent forces. If caring for the environment and for future generations and looking for more appropriate technology is malevolent, I am quite happy for Senator Stone to describe me, and others who support the ideas I support, as malevolent. That would mean that we are changing the definition of malevolent. If it is malevolent to want a better future and environment-if that is what malevolent means-I am quite happy to be called one of the malevolent forces. One of the reasons that we have not gone into alternative sources of power is that one cannot sell sunshine. It cannot be bottled up and sold in a supermarket or high technology service station at dollars per gallon. When the Minister for Resources (Senator Cook) talks in his statement about securing future energy, he is talking about securing future profitability for gigantic economic concerns which can afford and which profit from the sorts of centralised mass production of energy that we see at the moment. Appropriate technology which uses the sun or a heat pump to take heat from the outside to the inside or heat from the inside to the outside are the sorts of mechanisms being marketed by Siddons Industries. This is not a plug for Siddons Industries; it is a plug for alternative energy sources. By the way, the Siddons Industries solar heaters require a small amount of electricity because they operate basically on the same principle as a refrigerator. I am not advocating that we completely and totally abolish electricity or that sort of energy source. All I am advocating is that we put the same sorts of money and resources into the research and development of alternative energy resources. Senator Coulter made the point about how inefficient the centralised production of electricity is. Senator Stone agreed with him that something like 25 per cent of the energy produced is consumed. We need the sort of alternative energy resource which can heat and cool space and heat and cool water-and other such energy uses-in a more efficient way. Had we put the same sorts of resources into the development of those technologies that have been put into the development of nuclear technology or any of the other technologies we would now have reduced substantially the requirement for the production of electricity. We would have gone some way towards producing for the future a different sort of technology. This is the point I am making and the point I will conclude on. Senator Collins the other day, in a different debate, pleaded with us to try to find some sort of energy alternative to uranium, coal or hydrocarbon. I am suggesting that at this point in time-to use a phrase that I hate-there is no economically competitive energy source in the economic environment in which we live. We require the commitment to the environment and to future generations to make the investment now which will make nuclear energy and large-scale electricity generation obsolete. So we do not have to put the atom back in the bottle and instead use lots of fossil fuels. Alternative energy resources in the future could become more profitable than even nuclear energy or other forms of energy. It would be a sound, rational and economic decision to go for small-scale, more appropriate sorts of technology. But that requires the will now to invest in a large and consistent way in alternative energy sources. Debate (on motion by Senator Chaney) adjourned. Senator WATSON(Tasmania) —by leave-In an article on the front page of today's Australian, Paul Austin stated that I was a member of a so-called `large group of members of parliament' who questioned the leadership of Mr John Howard at yesterday's party meeting. I have always been a frequent and vigorous participant in party room debates, but I have always shown loyalty to the Liberal Party leadership. It is clear that this journalist either has fabricated an article about what he thought might have gone on in a private party room meeting or has been totally misled by his informants. There was no questioning of John Howard's leadership, and certainly no hint of such from me. I resent what is yet another beat-up article by a member of the Press and I reaffirm my total loyalty to the parliamentary leadership of the Liberal Party of Australia. I believe that this matter has had an injurious impact on my character and on my standing in the Liberal Party, particularly with those members of the Party who read the Australian. I ask for a full retraction, to be placed in an equally prominent position. I also seek further redress through the Editor. In the same paper of the same day at page 15 another journalist, Laura Tingle, again failed to provide balance and selectively quoted from my question in a way which nullified the thrust of the question about the adequacy of current income tax laws to tax employee share schemes, apart from capital gains tax provisions. The result of this was that to the informed reader it appeared that my knowledge of income tax was questionable. The Senate would recall that I stated that section 26 (e) and other provisions-which would obviously include section 26aac-applied income tax to the sorts of schemes to which Senator Walsh had referred on a previous day. Both of these reports suggest poor journalism unbecoming of a great Australian newspaper. Senator PUPLICK(New South Wales)(4.42) —I move: That the Senate take note of the paper. This paper is a summary record of the proceedings of the Australian Environment Council meeting of November 1987 held in Perth. The Australian Environment Council is made up primarily of Ministers responsible for the environment from the Commonwealth and the States. I take this opportunity to draw attention to the presence in the President's Gallery of the Hon. Tim Moore, MP, the new New South Wales Minister for Planning and Environment, who is now a member of the Australian Environment Council. I want to say how delighted I am to have a friend and colleague in charge of environmental matters in New South Wales, where I know he will do an outstandingly good job. Senator Collins —Hear, hear! Senator PUPLICK —I thank Senator Collins for his support for those remarks. I wish to draw the attention of the Senate to two matters in the report. The first concerns the discussion of the establishment of a facility somewhere in the eastern States for the disposal of intractable wastes and the report on the Northern Territory proposal to establish a high temperature incineration facility in the Territory-and I am glad to see Senator Collins in the chamber at this time. The eastern States proposal is a matter of continuing discussion between the Commonwealth and the governments of New South Wales and Victoria. The establishment in the eastern States of an appropriate facility for the disposal of intractable wastes is a most important initiative. It is something that must be undertaken and I sincerely hope that if the governments of the three parties involved can reach agreement on the location of such a facility they will all equally be prepared to make some contribution towards it, although I think the primary responsibility relating to the financial support for this undertaking must lie with the Commonwealth. The other matter dealt with in the report is the extent to which the Ministers responsible for the environment addressed their minds to the difficulties of the protection of the ozone layer and the impact of chlorofluorocarbons on the ozone layer and the use of CFCs in the aerosol sprays.They agreed that immediate action should be taken in Australia to implement the international agreements on this matter. They are primarily the Vienna Convention and the associated Montreal Protocol, which deal with the protection of the earth's ozone layer. This is an important issue which has been debated previously in the Senate and undoubtedly it will be further debated in the future. On behalf of the Opposition, I indicate our continuing support for the Government to move as expeditiously as possible to put into place the provisions of the Montreal Protocol. I continue to pay proper respect to the industry for the steps that it has taken in reducing the production of CFCs in Australia. Both the association which deals with the producers and the consumers of CFCs and the aerosol industry have indicated their support for the provisions of the Montreal Protocol and I think that as an industry it is taking a responsible approach to this matter. A large number of other matters are dealt with in this summary record of proceedings. I am glad to see that in so many areas there is a clear desire on the part of the Commonwealth and the States to cooperate in particular areas of environmental management, particularly in the disposal of waste and the protection of the physical environment from pollution. The work of the Australian Environment Council is very important. I look forward to joining, in the not too distant future, my friend and colleague Mr Moore as a member of the Council and to establishing a clear majority on the Council of non-Labor Ministers, at which time a large number of the issues to which the Labor Government will not give proper attention can be dealt with in an effective and proper fashion. Question resolved in the affirmative. Senator PUPLICK(New South Wales)(4.48) —I move: That the Senate take note of the paper. First, I ought to indicate some distress at the extent to which Ministers were absent from what was supposed to be a meeting of Ministers responsible for nature conservation. Most of them were not at the sixteenth meeting of the Council of Nature Conservation Ministers (CONCOM) in Perth. The second paragraph of the report indicates that apologies were received from Mr Carr, the Minister for Planning and Environment in New South Wales; Mrs Kirner, the Minister for Conservation, Forests and Lands in Victoria; Mr Bennett, the Minister for National Parks in Tasmania-who at least was represented by the Minister for Environment, Mr Hodgman; Mr Hanrahan, the Minister for Conservation in the Northern Territory; Mr Brown, who was the Commonwealth Minister responsible for environmental matters; and Mr Jones, the Commonwealth Minister responsible for science. It was allegedly a meeting of Ministers responsible for environmental matters, but very few Ministers bothered to turn up. Perhaps one of the reasons for their not turning up was that one of the things on the agenda paper was headed `Listing of World Heritage Areas'. On this agenda item the summary record of proceedings states: Council noted and discussed the views of the Northern Territory delegation regarding World Heritage listing of areas in Australia. Council resolved to: . . . . . . . . . Reaffirm the procedures established in Resolution 198 (1984 meeting of Council) that as a matter of principle nominations by the Commonwealth for World Heritage listing should be undertaken in consultation with the States and Territories. I have raised previously-and my colleagues here from Tasmania and Queensland would be aware of this-the fact that in 1984 the meeting of the Council of Nature Conservation Ministers agreed to a set of procedures for the handling of World Heritage listing. Those procedures were comprehensively and thoroughly ignored by the Minister for the Arts, Sport, the Environment, Tourism and Territories, Senator Richardson, in proceedings for the World Heritage listing of north Queensland. In November 1987 the meeting of the Council of Nature Conservation Ministers (CONCOM) re-affirmed the procedures that were laid down at the 1984 CONCOM meeting. Since that CONCOM meeting in November 1987, Senator Richardson has repeated the process of proceeding with World Heritage listing without proper consultation with the States and Territories. Frankly, the taxpayers of Australia should be relieved of the burden of financing trips to Perth, for example, so that Commonwealth and State Ministers can meet and put down resolutions as to how they will deal with World Heritage listings, because a series of procedures was agreed on in 1984 and another meeting in 1987 re-endorsed those procedures, yet the Commonwealth Minister glibly ignored those procedures to which, as I said, he has been a party on two separate occasions. Clearly, Senator Richardson does not take these proceedings seriously or, if he does, he simply does not take seriously the agreements that he enters into with his State colleagues to observe a particular set of procedures for handling a very difficult matter. If these meetings of Commonwealth and State officers and Ministers are to be meaningful, if they are to reach agreements and reinforce and resolve to re-affirm these procedures, only to have the Commonwealth unilaterally ignore them, I think that the people of Australia should ask exactly what the Commonwealth is doing in attending these meetings, giving assurances to the States, and then not being bound by those assurances. I think that Senator Richardson should be required to tell Parliament what his attitude is to the assurances that he has given. We know that the Government is perfectly prepared to give assurances to its rich and unpleasant mates in the media, that it will poison the Parliament and agree to lift the television reach limit from 60 per cent to 75 per cent. Of course, it tries to at least honour that type of agreement. Having taken the money, it cannot find itself capable of delivery on its promises. Nevertheless, the Government is certainly prepared to make, and attempt to discharge, promises to its rich mates in the media; but it quite glibly breaks promises made to State Ministers around Australia. I think that is disgraceful and it is simply indicative of yet a further exposure of the Government's hypocrisy when it says that it wants to negotiate with and consult the States, that it is prepared to enter into resolutions promising consultation with the States, but as soon as the opportunity arises it ignores those promises. Question resolved in the affirmative. Senator WATSON(Tasmania) —On behalf of the Deputy Chairman of the Standing Committee on Publications, Senator Brian Archer, I present the seventh report of the Publications Committee. Report-by leave-adopted. Senator WATSON(Tasmania) —I present Report No. 289 of the Joint Committee of Public Accounts-Advance to the Minister for Finance. I seek leave to make a short statement. Leave granted. Senator WATSON —Report 289 is a review of the Advance to the Minister for Finance facility which has arisen from concerns that the Committee developed during its preparation last year of Report 286 on the final expenditure under the Advance for the financial year 1986-87. One of the Committee's statutory duties is to report to the Parliament on any alteration it thinks desirable in the mode of receipt, control, issue or payment of public moneys. It is in this regard that the Committee has examined the Advance with a view to improving its efficiency and effectiveness, and presents this report. The Advance to the Minister for Finance is a central contingency fund in the annual Appropriation Acts. It allows the Minister for Finance to issue money for items which will not undergo the normal parliamentary review process prior to expenditure. Such items consist mainly of expenditures that were unforeseen at the time of the preparation of Budget and other Appropriation Bills, and which are urgently required before the next appropriations. The Advance is a special area of government expenditure because it gives the Minister for Finance considerable discretion over expenditure without prior approval by the whole Parliament. However, the Parliament has long recognised the need for the Advance for the smooth running of the government. A certain amount of flexibility is always required. Therefore, the Parliament has developed strict procedures to ensure that the Advance is administered and used correctly, and that full details are later reported to the Parliament. The Committee is concerned that use of the Advance remains within the strict parameters laid down by the Parliament. This is a fundamental element in the role of the Parliament supervising the executive government. The Minister for Finance is required by law to submit to the Parliament a statement of all amounts for urgent and unforseen expenditures remaining as a final charge to the Advance at the end of the financial year. The Committee has routinely examined this statement, and its precursors, as part of its statutory duties since the Committee was re-established in 1952, and duly reported to the Parliament. The Committee has also reported in the past on the general use of the Advance and has made recommendations which were adopted to improve its administration. This report focuses again on the more general questions surrounding expenditures remaining as a final charge to the Advance. The three main concerns of the Committee are: whether the procedures for the use and reporting of the Advance are appropriate for this special area of government expenditure; whether the wording of the various Appropriation Acts with respect to the Advance is being interpreted correctly, particularly the terms `urgent' and `unforeseen'; and whether the Committee should maintain its present routine role in reviewing the Advance. The Committee draws attention to the wording of a legal opinion obtained by the Committee from the Attorney-General's Department which makes clear that there are serious doubts about the legality of the present Department of Finance guidelines for the Advance to the Minister for Finance. It is of great concern to the Committee that a central co-ordinating authority such as the Department of Finance is issuing guidelines and approving expenditures in this way. The Committee has noted in its report that the Department of Finance has not itself sought a legal opinion on the wording and interpretation of the Appropriation Acts. Accordingly, the Committee has recommended that the guidelines be revised in certain respects to ensure conformity with the law and effective scrutiny of all expenditure. The Committee notes that other committees of the Parliament have adopted a role in scrutinising expenditure from the Advance. This Committee concludes that it should not routinely examine the Advance while it is satisfied that parliamentary scrutiny is being undertaken. At present, the terms of reference for the Senate Estimates committees include examination of the Advance. I would like to emphasise that the Committee strongly believes that the existence and use of a contingency fund such as the Advance to the Minister for Finance is essential to the operations of government, provided that it is used strictly in accordance with the terms set out by the Parliament and that its use is subject to prompt and effective scrutiny. The report tabled today recommends important reforms to overhaul and revitalise parliamentary scrutiny. The report is indicative of the commitment of the present Committee not to simply deal with issues on a case by case basis, but to make important recommendations which will improve the system of parliamentary scrutiny as a whole. The Committee's specific recommendations are: use of a standard form for applying for funds from the Advance; monthly reporting of the application forms to the Parliament; and revision of Department of Finance guidelines on use of the Advance to ensure conformity with the law. I am pleased to report to the Senate that I was advised on Monday that the Department of Finance had just adopted the first of the recommendations, which was also a recommendations of this Committee in an earlier report. I look forward to the speedy adoption of the other recommendations in this report by the Department. However, I note that the Committee reported on the need for recommended changes to the guidelines. However, the Government has sought to change the law. The Committee has advised the Minister for Finance that support for the changes is conditional upon the Government supporting the only outstanding recommendation of the Committee. That recommendation called for more detailed information to be provided to the Parliament on the Government's use of the Advance. The Government's prompt response to this report emphasises the importance of the Public Accounts Committee's role in overhauling and revitalising parliamentary scrutiny in order to improve the system. The Public Accounts Committee, in a letter to the Minister for Finance following the welcome response from that Minister, said that the Committee acknowledged: . . . that there are circumstances where inadvertence or clerical error occurs where it is appropriate that the Advance should be used. It is in this light therefore that the Committee supports the proposed amendments. However this support is conditional upon the second recommendation of the Committee being accepted. That recommendation is to the effect that the monthly statements from the Department of Finance to the Parliament have appended applications made on the standard forms for funds from the Advance to the Minister for Finance so that Parliament can see clearly for what purposes advances are applied. That refers to paper 2.18 of the report. I commend the report to honourable senators. Senator COONEY(Victoria) —I present the report of the Standing Committee on Legal and Constitutional Affairs on the Cash Transaction Reports Bill 1987, together with the transcript of evidence. Ordered that the report be printed. Senator COONEY —by leave-I move: That the Senate take note of the report. On 15 December 1987 the Senate referred the Cash Transaction Reports Bill 1987 to the Committee for inquiry and report. That Bill, if enacted, will impose obligations on cash dealers to report certain transactions. It will require verification procedures to be taken when accounts are opened. It is introduced as part of a law enforcement package. This package includes the Telecommunications (Interception) Amendment Act, the Mutual Assistance in Criminal Matters Act and the Proceeds of Crime Act. The Committee's terms of reference raise specific issues which the Committee has considered in its report. The Committee received over 50 submissions. It held public hearings in Canberra and Sydney. It became possessed of a considerable body of material. That material was insufficient to enable it to make conclusive findings on the issues raised in the reference. On the question of the costs of the proposals in the Bill to the Government, to cash dealers and to consumers the estimates given in evidence and in submissions varied from `massive' to `not substantial'. Few submissions actually quantified the costs. The Committee received varying submissions on the operation of the exemption conditions contained in clauses 8 and 9 of the Bill. One submission was that, because of the onerous responsibilities on financial institutions in maintaining an exemption register and the potential for discrimination, there should be no exemptions. Another called for more exemptions because it was claimed that `traceable' records of cash flow were always maintained by some organisations, such as armoured car cash carriers. The Committee found that both submissions had force. The Committee was concerned that `blanket' reporting of transactions might swamp the Cash Transaction Reports Agency and impede the speedy analysis of information. On the other hand, exemptions might allow some people seeking to avoid the operation of the Bill to do so. The evidence as to whether the threshold of $1,000 on accounts attracting the identification verification procedures is appropriate was inconclusive. Any precise limit amounted to a matter of choice and that choice varied. There was evidence suggesting that cash dealers should seek identification verification at the opening of all accounts because of the difficulty in monitoring accounts and blocking unverified accounts which passed the limit, rather than making use of the exceptions in clause 16 of the Bill, were it to become law. This would mean that everyone dealing with cash dealers would go through an identification procedure. Swift and efficient analysis of data by the Cash Transaction Reports Agency is essential to the Bill's effectiveness were it to become law, as would the ability of the Bill, if enacted, to yield information leading to the detection and prevention of tax evasion, money laundering and organised crime. The United States of America is the only country with a mechanism comparable to that proposed in the Bill. The evidence in respect of that was contradictory. No firm conclusions could be drawn on the basis of the evidence given about the United States model. The Committee recommends that the operation of the Bill be reviewed after a suitable period of time-not more than three years. The Committee has recommended that this review include the economic, taxation, law enforcement and privacy implications of the Bill. On the evidence, the Bill impinges on privacy. The expected law enforcement benefits of legislation should be balanced against legislative intrusion into the privacy of individuals. The Committee believes that, after no more than three years of operation, the Bill be reviewed to ensure that such a balance has been achieved. I thank members of the Committee, who have carried out a lot of hard and rapid work on this report. I also thank the staff, led by Bronwyn McNaughton, Stephen Argument and Kathleen Gibson. I would make a short comment on my predecessors as chairmen of the Committee. This is my first report as the Committee's Chairman-I use the term `chairman' in the sense that that term is used in standing order 36aaa (7). Senator Bolkus, my predecessor on the Committee, has now reached the exalted status of Minister of the Crown. Prior to that Senator Tate adorned the Committee as its Chairman. Therefore, my two predecessors having set that precedent, one never knows where I may end up. Senator Bolkus, as the Committee's Chairman, produced three vital reports. One dealt with the Freedom of Information Act, the second with the Administrative Decisions (Judicial Review) Act and the third with war crimes legislation. Senator Bolkus filled his position as Chairman with distinction and I am proud to be his successor. The Committee wishes him all the best in his ministerial post. Senator HILL(South Australia)(5.08) —I also commend the report presented by the Standing Committee on Legal and Constitutional Affairs, and join the Chairman in thanking the staff for what was a particularly difficult exercise. The inquiry related to a Bill that was advanced as a tool to counter tax abuse and organised crime. Therefore, it should be seen as part of a package of Bills which the Senate has been enacting into law in recent years. This was a particularly important exercise of the Senate because clearly the Bill will be at a cost in real money terms as well as a cost in inconvenience to the community at large. I suggest that it was important to weigh the balance of claimed advantages against disadvantages in a serious considered way allowing for adequate professional and community input. The committee mechanism in the Senate has again allowed that task to take place. Four principal mechanisms are included in the Bill to facilitate law enforcement. The first is the mechanism that will require cash dealers to report certain cash transactions. The second is that dealers will be required to report certain transactions where there are reasonable grounds to suspect the circumstances surrounding the transaction. The third is that the Cash Transaction Reports Bill will also require reports of certain transactions of currency into and out of Australia. Fourthly, it will require verification of identity of certain account holders. As we now know from numerous royal commissions, organised crime tends to involve large sums of cash and often the laundering of that cash through legitimate businesses so that it reaches the ultimate beneficiary in an apparently legitimate form. I suggest, and I think it is the conclusion of the Committee, that this Bill will make such transactions more difficult to achieve without risk of the transaction coming to the attention or knowledge of the authorities. Therefore, at the very least, it will hinder the operation of criminal activity. Clearly, in recent times following the money trail has been acknowledged as an important technique in tracing crime. The method was made famous by Mr Costigan and his inquiry but what is often not appreciated is that it is also a method utilised as an effective tool by the National Crime Authority and other law enforcement agencies. Eventually, cash tends to get into a recorded transaction. It is through that method that the movement of large sums of cash can come to the attention of the authorities provided there is a mechanism to make it work. Therefore, at the least, this Bill will hinder these unlawful activities. I have little doubt that criminals, being somewhat resourceful, will find ways of avoiding-they certainly will attempt to avoid-the provisions of the Bill but as I indicated it will at least make their efforts more difficult and, as the difficulty increases, so does the risk of detection. I will deal briefly with the second obligation-that is, the obligation to report suspect transactions. It has been the view of some financial institutions in this country that the circumstances of transactions which are obviously suspicious have been beyond the concern or responsibility of those institutions. At the time of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union particularly, one recalls criticisms of banks facilitating organised crime by turning a blind eye-I am not suggesting that they knew of the detail of any illegality-by not asking obvious questions because of a belief that it was none of their business. This provision makes it clear that organised crime is so serious and has such an enormous social and economic cost to the community that the financial institutions must accept a new responsibility-that is, to report suspect transactions. It disappoints me that there now seems to be a need specifically to place this obligation on such institutions-an obligation which is clearly inconsistent with the principal of confidentiality in financial relationships. When I wrestled with the question of which is the greater evil I came to the conclusion, particularly after looking at the record of some financial institutions in this area, that it was necessary to place this obligation upon them. I suggest, and it is the Committee's view, that in many ways this technique is better than the Canadian voluntary alternative because at least the banker can point to a government-imposed obligation. Furthermore, it avoids the difficulty that has been experienced in Canada of bankers being concerned about making reports because of fears of a defamation action. I will touch briefly on the third area which is covered in this Bill-that is, the requirement to report certain overseas transactions. The Government clearly facilitated organised crime in this country by abolishing the need to record certain foreign exchange transactions. To be able to monitor movement of money in and out of the country is an important tool in fighting organised crime. Therefore, I support the Committee's view that this is a step in the right direction. Obviously, there will be criminals who do not meet the requirement of declaring large sums of money which have been taken out of the country or in fact brought into the country for illegal activity. But by refusing to make a declaration consistent with the principles of this legislation they are raising the risk of their operation. In other words, this amounts to a further hindrance to their criminal activity. Fourthly, I turn to the subject of verification. The opening of a number of accounts in a number of false names has also been recognised in many royal commissions as a tool of organised crime, particularly when one reflects on the comments made by Mr Justice Stewart in the report of the Royal Commission of Inquiry into Drug Trafficking. Mr Costigan, QC also made specific reference to it in his reports. Verification of accounts will make this more difficult for the criminal. That is one side of the equation and the conclusion is that the provisions of this Bill will make life more difficult for criminal activity. Therefore there is some worthwhile purpose in it. But as I said at the outset, there is another side to this debate. Clearly, these further obligations are at a cost to law abiding citizens. At the least, the requirement to prove identity will be an irritation to members of the community. Also, the Bill will clearly be a financial cost to law abiding citizens because I for one have no doubt that the financial institutions will pass on the burden that they are obliged to take under this legislation. It is frustrating that honest citizens must bear these costs. As I have indicated, on the other side of the equation, conceptually I do not like the idea of forcing institutions to enter into a reporting obligation in relation to transactions being carried out for their clients. Nevertheless, it seems to me to be necessary. In an ideal society this type of legislation would not be necessary, but this is not an ideal society. So there are two sides of the equation. The Committee had, as I indicated at the outset, the extremely difficult task of weighing both sides and determining whether, on balance, the cost to the community outweighed the benefits or vice versa. The Committee found this particularly difficult. In fact in some ways it was an impossible task. Estimates of costs that were put to the Committee by those involved in these industries varied to extremes. Basically, the Committee found it impossible to make a reasonable calculation of costs to put to the Senate. It also found it impossible to assess, in any objective way, the likely effectiveness of the measures-that is, effectiveness beyond that which I have stated which is that they will clearly be a hindrance to organised crime. As Senator Cooney indicated, the only precedent that we were able to look at was that of the United States of America. This precedent has not yet been adopted in any other jurisdiction. When one looks at the experience in the United States of America one must realise that anything to be drawn from the American experience is inconclusive. Therefore, the Committee felt that there was no alternative but to put the Bill into law and these requirements into practice and make another assessment after a reasonable period when costs could be determined accurately and the benefits that flowed could be calculated-in other words, whether it had proved to be effective in the task of contributing to countering organised crime. The Committee concluded that a three-year period of operation should be a sufficient period upon which the Parliament could make a better assessment. So that is what we recommend-that that further assessment be made after a period of three years. I regret that the Committee has had to be so hesitant in its conclusions. When the Senate reads the report and hopefully the submissions put to the Committee, honourable senators will realise that on information that is currently available it is impossible to become more conclusive as to the calculation of either side of the equation. I trust that the Bill, if enacted as law, will prove worthwhile and I trust that the report will help the Senate in its deliberations. Question resolved in the affirmative. Senator WALTERS(Tasmania) —by leave-I present the report of the Joint Select Committee on Video Material, together with the transcript of evidence, and move: That the Senate take note of the report. The history of the tabling of this report is a long saga of Government delays and backdowns. It goes back just over four years when the then Attorney-General, the present Minister for Transport and Communications (Senator Gareth Evans), introduced new regulations applying to the importation of video material. I quote Senator Evans when he outlined the Government guidelines to the Film Censorship Board: Barriers to the importation of hard core pornography-other than child pornography, publications which incite terrorism and publications containing extreme violence and/or sexual violence-have been lifted. At that stage the majority of people in Australia had no idea just how far Senator Evans, as Attorney-General, was prepared to go but, as the word spread, there was immense backlash and nearly 50,000 signatures on petitions were brought to the Senate alone. Many more were brought to the House of Representatives. As a result the Senate moved to set up a joint select committee to inquire into video material. By October of that year the Senate had finally resolved to set up a Senate select committee for that inquiry because the Government had refused to bring forward for debate in the House of Representatives the Senate's decision to form a joint select committee for that purpose. Once the Government realised that there was nothing it could do to stop the setting up of such a committee, it moved to set up that joint select committee and brought the Senate Select Comittee on Video Material to an end. The same terms of reference as the Senate Committee had been pursuing were passed on to the incoming committee. On 19 March 1985, the Joint Select Committee on Video Material, with Dr Klugman as its Chairman, was formed. Prior to its conclusion, the Senate Committee on Video Material brought down an interim report. The main recommendation was: A moratorium be placed on the sale and hire of `X' rated videos in the ACT consistent with the Resolution of the Senate of 17 October 1984 as the most practical interim measure to facilitate regulation of videos throughout Australia until the Joint Committee reports. We all know, from the history of this Committee, that that recommendation was ignored totally by the Government. During that time the Government changed its guidelines many times. It went from the guidelines to the Film Censorship Board of April 1984 to the guidelines of December 1984. The guidelines for X-rated videos in April 1984 read: Language: No proscriptions- in other words, anything goes- Sex: All explicit depictions of sexual acts involving adults (except those referred to under ``Refused Classification'') including explicit penetration, masturbation, ejaculation, fellatio, cunnilingus; insertion of objects in orifices; miscellaneous other sexual activities and fetishes, (e.g. urolagnia, necrophilia, coprophilia, sado-masochism). As far as violence went, the guidelines said that explicit depictions of violence were allowed except those referred to under `Refused Classification'. They included depictions of abuse of hard drugs, which might be construed as advocacy. The X-rated category in the later guidelines of December 1984 included material which includes explicit depictions of sexual acts involving adults but did not include any depictions suggesting coercion or non-consent of any kind. The guidelines, while not mentioning it, included all those fetishes contained in the earlier guidelines, but there had been a change in terms of violence. Explicit sexual violence was out altogether, but other sexual violence was moved from X to R. Because the committees' terms of reference were the same, the Joint Committee did not re-advertise for submissions and, as a result, many of the 1,717 submissions were presented on the original guidelines, which allowed sexual violence to be depicted in the X-rated category. The Committee held public meetings in each State capital, as well as in Canberra, and held briefings in Darwin. In all, 26 public hearings were held and the Committee took 3,530 pages of evidence at public hearings. The result of the hearings and submissions was the two reports I table today. The first is the majority report and the second contains a number of minority reports. I do not want honourable senators to be fooled by the size of the second report because large areas of the majority report are duplicated in the minority report, but the Chairman wanted it that way. There are many areas in which the Committee was in total agreement. Indeed, the majority of the report was unanimous. I will mention just a few recommendations. We recommend that the classification symbols should be clearly marked not only on the jackets but also on the videos themselves and that a clear description of the classification must be displayed at every video outlet. Recommendation III states: We recommend that the specific reasons for classifying a non-G film be displayed on the front cover of video slicks as part of the prescribed markings . . . on all posters, advertising material and trailers. We recommend that special areas be set aside for the display of R and X videos restricted to those 18 years and over. We agreed that it should be an offence to show a minor an R-rated or X-rated film without parental consent. Recommendation XIX states: We recommend that all video outlets including mail order outlets be registered under the Ordinance, and it be made an offence to trade without a certificate of registration. The Committee also states: As a condition of registration we recommend that the proprietors demonstrate a knowledge of their legal requirements under the Ordinance. Non-compliance with the legal requirements shall result in withdrawal of registration. As regards interstate trade in X-rated videos which is being undertaken by the Australian Capital Territory presently, the Committee noted that some States are moving to close that loophole by making it an offence to be in possession of videos not legally allowed to be marketed in their State. But that practice would stop if the majority recommendation of not permitting the sale of the majority of X-rated videos were carried. There is also general agreement on the need for a reduction in the showing of violence. Even though it may seem a minor change, a unanimous recommendation of the Committee resulted in the addition of just one word. That word tightened quite considerably the guidelines for the type of violence permitted. The Committee recommended that the current guidelines for R violence be altered. It recommended that the R violence guidelines now read: Explicit depictions of violence, but not detailed, relished or gratuitous depictions of acts of considerable violence or cruelty. The word added is the word `relished'. In other words, we can no longer have depictions of people enjoying committing violence. I believe that the Committee's recommendation is a very great step forward. I sincerely hope that the Government will take up that particular recommendation. Evidence given to the Committee regarding violence and sexual violence warned us that there were potential problems particularly in regard to the regular viewing of videos. I would like to quote Paul Wilson because he is, I suppose, one of the people that we should particularly be listening to. He is now the Deputy Director of the Australian Institute of Criminology. He appeared before the Committee to elaborate on his studies on child killing and serial killing. With a great deal of caution Dr Wilson told the Committee: While I find no evidence that sadistic sexual pornography causes serial killing, lust killings or child killing, depending on the terms that one uses, in my own mind, and reluctantly, I have found evidence that in the killer's background there is, first of all, a preoccupation with this material, secondly, a feeling that their sexual and sadistic fantasies are fuelled by this material and, thirdly, a feeling in some cases that the material is not strong enough and that their fantasies are not satisfactorily fulfilled. Those are the only three statements at this stage that I am prepared to make. I am not drawing a cause and effect relationship, but I am fairly deeply concerned. The Committee, therefore, chose to tighten the regulations. There was great difficulty experienced by the Committee in tightening up the further words of the guidelines on violence without eliminating many of those ordinary goodie and baddie videos that so many of us watch. The degree of violence we wanted to eliminate was very difficult to put into words. I would like to quote the former Chief Censor in evidence when she said: I think it is easier to define pornography than violence. The Committee simply has asked the Commonwealth Film Censorship Board to lower the level. As I have said, the Committee was in agreement on by far the majority of recommendations. However, it was when the Committee came to look at the contents of the X classification that some inconsistencies and divisions occurred within our membership. While the minority of members said that it was impossible to define pornography, the majority of the Committee, of which I was a part, agreed with the Chief Censor when she said she thought that it was easier to define pornography than it was to define violence. Consequently, we were able to clearly define pornography in the following manner: When using the term `pornography' in this report the Committee means to speak of video material which is predominantly sexually explicit and intended primarily for the purpose of sexual arousal. This is the same working definition description of pornography used by the Meese Committee and, essentially, that used by the Williams Committee and the Fraser Committee. We then divided pornography into three categories. Category 1 was video pornography or violent pornography. Category II was video pornography or non-violent degrading pornography. Category III was just video pornography. We said that category I or violent pornography: . . . sanctions threatening, beating, raping, and even torturing, maiming, and killing women. of category II we said: . . . the material in this category, although non-violent, treats women as sexual commodities to arouse the sexual desires of its target audience. Our Committee, as did the Meese Commission, also referred to this material as degrading in that it frequently depicts people, usually women, as existing solely for the sexual satisfaction of others in sexual practices that would be to most people considerably humiliating. We described category 3 as a: very small category which depicts two adults participating as fully consenting equal partners in reciprocal sexual activity of a heterosexual nature in a one to one relationship . . . This material contains little plot or character development and its intent is to arouse the sexual desires of its viewers. It is not otherwise degrading, we believe, for one particular individual as both people are equally consenting and equal partners. Social or behavioural science researchers who appeared before the Committee to give similar evidence were Professor Peter Sheehan, Professor Edward Donnerstein, Dr Paul Wilson, Professor James Check, Mr Frank Horwill, and Associate Professor James Weaver. Taken together, their evidence was to the effect that violent pornography in the media in general and category 1 video pornography in particular have marked tendencies under certain circumstances and conditions to break down inhibitions to aggression. The breaking down of inhibitions to aggressive tendencies is not limited to category I. Evidence given to the Committee was to the effect that category II and some areas of category III are equally effective in stimulating aggressive behaviour. Professor James Check, who undertook research for the Fraser Committee on pornography and prostitution in Canada, met with members of the Joint Committee in Sydney and elaborated on his research. He found that the anti-social effects of both category I and category II pornography were the most pronounced in individuals who already possessed certain sexual aggressiveness. Moreover, he said that the data revealed that it was the frequent users of pornography who had the most striking inclinations to sexual aggressive behaviour and that the same group was also the most influenced by category II pornography. He said that the high users, those people who viewed this type of non-violent video or film at least once a month, more readily accepted the rape myths or the need to use violence against women. They were more sexually callous, more disposed to endorse adversarial sexual beliefs and more likely to report that they would rape or force on women unwanted sexual activity. This evidence substantiates my discussions with senior officers at Scotland Yard when I was in London. I was told that there was evidence that regular viewing of R or X rated videos acted as a stimulation to those who, while they have an aggressive nature, would not normally go out and commit a violent act but who, if tipped over the edge when stimulated by these videos, would do so. We know that we can be desensitised. We know that when we are horrified by certain acts on television and later see worse acts of violence, we are not so horrified by those first acts of violence. I have cited evidence to substantiate the problems in relation to category II from just one of many witnesses. Other witnesses said they could not positively claim or were not convinced that this degrading type of pornography would cause harm. Paul Wilson, by `harm', meant criminal activity, and went on to elaborate: The issue of whether it causes harm in other ways is an issue that I am not really particularly concerned about at this stage. At that stage he was concerned only with criminal violence. So, as he said, he was not sure whether the category II and some of the category III pornography would indeed cause other sorts of social harm. I have not time to go in greater detail into some of the additional evidence we were given. Suffice it to say that the evidence given to the Committee at the very least led to claims such as those made by Professor Sheehan. I believe we ought to take note of what he said. He claimed in his evidence that the case against consenting non-violent pornography was not proven; however, he went on to advise that the case `is sufficiently strong . . . that some control seems advisable'. He argued: There is no question that a lot of people are stimulated mildly or strongly by seeing sexually explicit material. When one is aroused one tends to behave as a consequence of that arousal and I think if the person is aggressive aggression will out . . . In and of itself, I do not think that sexually explicit material divorced from aggression leads to strong negative effects. Once you combine sexually explicit material with aggression you have a different kettle of fish . . . We should consider that in conjunction with the latest survey put out by Senator Reynolds and the Office of the Status of Women concerning community attitudes to domestic violence. The survey indicates that one in five men accept the use of physical force by a man against his female partner. In other words, the survey says, 22 per cent of men believe it is all right to bash up their wives or hit them. If that is the case, we have a problem. If we believe, as I do and as Professor Sheehan has said, that if there is aggression in someone and the viewing of these videos will stimulate that aggression, we have real problems in the community. As a result of evidence given to the Committee the majority of the Committee has voted against almost all the present X-rated category being made available. I read from that part of the report: Almost all of the current X-rated video pornography (and their R equivalents) fall within Category II. Non Violent Degrading Pornography and some in Category III. Rather than entrenching this material into the community we believe that the Commonwealth Government introduce substantive legislation to ensure that this material is refused classification for the purposes of the Commonwealth laws. If the above recommendation were adopted it would not refuse classification to video materials which are gratuitous in regard to sexual matters to the extent that they are crude, tasteless and vulgar rather than pornographic. Nor would it apply to those video materials which include simulated dramatic depictions of sexual acts in the development and treatment (whether serious or humorous) of themes involving human sexuality which in context and intent are not pornographic. The video materials referred to in this paragraph fall within at least the scope of the current R category. One member of the Committee who signed the majority report believed that there should be a special category for explicit sexual acts demonstrating a loving and caring relationship. Because his view was not supported by any other member of the Committee he signed the majority report, saying that X-rated videos should not simply be moved to a new category called NVE, or non-violent erotica. The minority of the Committee who voted for retaining the present X-rated category under the new NVE heading did so in the belief that, as Dr Klugman said this morning when tabling the reports, `only where there is clear evidence of harm should we move to censorship'. They also took the view that adults should be able to read and view what they wished. There is no clear evidence that the tremendous increase in the incidence of crime, particularly crime associated with violence including violence against women, is a direct result of violence in videos, even though many researchers believe that there is some association. Nor do we have proof that the viewing of child pornography, bestiality or indeed depictions of gross cruelty directly leads to crimes in those areas. Yet those minority members do not suggest that this type of video should be allowed on the market. It is totally inconsistent to demand now positive proof that X-rated videos cause direct harm when they did not demand that same proof when they recommended the increased censorship against violence. Of course they believe in censorship; it is a matter of where to draw the line. While they may be willing to run the risk of ignoring all that evidence the Committee received, warning us of the potential harm, we the majority were not prepared to run that risk. I repeat that, on page 207 of the report, Professor Sheehan is recorded as having said: There is no question that a lot of people are stimulated mildly or strongly by seeing sexually explicit material. When one is aroused one tends to behave as a consequence of that arousal and I think if the person is aggressive aggression will out . . . I am satisfied that that is true, and we would be irresponsible not to act to avoid the potential problems that could result from allowing these videos to be marketed. It was for these reasons that, as Deputy Chairman, I happily signed the majority report. Senator COLLINS(Northern Territory)(5.48) —One of the things that all members of the Joint Select Committee on Video Material would agree on is that the best thing about the report is that it is finished. I pay sincere tribute to the members of this Committee who served on it for its entire duration. I have been on it only since the last election and I must say that it has probably been, at a personal level, one of the most acrimonious and unpleasant experiences of my parliamentary career. I intend to discuss the Committee's report in a meaningful way and to point out some of the inconsistencies and hypocrisies in some sections of the report, although I must say that I am pleased to be in a position to support most of the recommendations. I think they are valuable and should be implemented. But I cannot discuss this report in any meaningful way without talking about sex. I do warn people in the public gallery-and I am quite serious about this-that if they are going to be offended by some explicit discussion about sex, they should leave. It is absolutely impossible, and I do make this statement seriously to those in the public gallery, for me to point out some of the absurdities of this report, which will be pointed out in days to come by people who read the report, without discussing some of the definitional aspects of classifying material. It is true to say that my own position on this matter changed dramatically in the time I was on the Committee. My own view towards sex-and I did say this on one occasion when the Committee was taking evidence-is that I view sex very largely as I view cricket. I see the two things in a very similar way, that is, I enjoy greatly playing the game but I get bored to tears watching it. I have got no particular axe to grind at all in terms of X-classified material. I started off the exercise with a predisposition to come down very hard on X-rated material. Indeed, after listening very carefully to tedious hours of discussion, in numerous meetings of this Committee often within the same week, I realised that by taking this position I was simply wanting to impose my particular view of the world on 16 million other Australians. Having started on the Committee from a position of waiting to be persuaded but tending towards banning X-rated material, I was successfully persuaded by the arguments of both Senator Walters and Senator Harradine not to do so, because in the final analysis I just could not face the thought of getting into bed with Senator Walters and Senator Harradine. That is really what it came down to. I felt I had to make a decision and come down on one side or the other, and I chose to come down on the side of the Chairman's original report. I make that point because I want to make it clear that I do not necessarily agree with everything that is in those sections of the report to which I have put my name, but I agree with the majority of it. I do not want to inflict on the Senate a small taste of what it was like in the Committee room by engaging in acrimonious debate across the chamber with Senator Walters, who has just sniggered at that remark. It just happens to be the view I take of most things. I think there are no blacks and whites in politics or indeed in life, and that most things are shades of grey. I felt that in fairness to the public I should come down in a decisive way on one side of this argument or the other. I could not come down on the side of the report that was supported by Senator Walters and Senator Harradine, because I thought that it was an absolute travesty of an interpretation of the evidence that had been placed before the Committee, although I did have disagreements with some of the emphasis that was also placed in the Chairman's report-and I stress that it was only the emphasis, not the substance. I simply want to put a caveat on it by saying that the substance of the Chairman's report, which has now become the minority report-- Senator Walters —What about David Charles? Senator COLLINS —I will get to David Charles in a minute. Senator Walters —Well, he signed our report. Senator COLLINS —Is that an indication from Senator Walters's tiny mind that she has some feeling that, because we are members of the Australian Labor Party, we all have the same views on every issue and that some political bonus point can be made from the fact that two Labor members of the Committee, not just one, signed the report to which Senator Walters has just spoken? I do not quite see it in that light. This is an acrimonious and divisive debate in the community. One of the positive things that I guess we could say about this report is that the inconsistencies within the report itself and the acrimonious debate that took place on the Committee are simply a reflection of what is going on in the broader community on this highly controversial subject. My position certainly did change. I am perfectly happy to advise the Senate as to why it did. I just want to make some comment about the dissenting reports which are contained in volume two. On page 307 of the minority report of the Committee, the Hon. Evan Adermann, Mr David Charles, Mary Crawford, Brian Harradine and Shirley Walters said: We strongly oppose the introduction of this new category- that is NVE- as it entrenches pornographic video material in the community under the misleading title of NVE. I take exception to that. There is nothing misleading about the title. That particular category deals with material which is non-violent erotica. That is what the letters stand for. It is unquestionably erotic and it is certainly non-violent. All violent erotica has been totally banned and refused classification in this country for some years. But I am willing to concede-and this is where the debate falls down in the community-that there is widespread misunderstanding about that. It was only a matter of a few months ago, when the Western Australian Government introduced legislation to make it an offence to possess an X-rated video, that the West Australian newspaper, in its leader, said in thundering tones, `We support the Government. What a relief it will be to see such dreadful things as bestiality and child pornography off the shelves'. Of course, that material has been totally banned from import into Australia and refused classification for years. Yet people still have this misconception that that is contained in X-rated material. It is no wonder we get the results we do from public opinion polls, when editorial writers in leading newspapers in the country have the same misunderstanding. That is the reason that the majority of the Committee recommended that a new category be established, called NVE, to precisely define the material that was contained within it. With respect to Mr Jull, his dissenting report on page 309 is a total absurdity, but is valuable in that it points up the problem with this entire debate. Mr Jull agreed to provide for a category of NVE, non-violent erotica, provided it depicted explicit sexual acts only in a loving caring situation. One actually has to see the pornography, one has to watch it, to realise what an absurd position that is to take. He believes it is perfectly all right to sit there and watch on the screen people performing fellatio and cunnilingus, the full hard-core porn bit, provided they are in a loving and caring situation, in other words, they are both wearing wedding rings and there is a framed copy of their marriage certificate on the wall within shot at all times. I can tell honourable senators that that reflects the tenor of the debate that resulted in that recommendation. It points out the absurdity of these dividing lines that we try to draw in determining what 16 million Australians will see, hear or read. I now get on to the dissenting report of David Charles and Mary Crawford, which, I confess, I did not read until the printed report came down. That did not reflect any lack of diligence on my part; it simply reflected the dreadful trouble that we had in trying to meet the deadlines that were set by the extension of time that we had. That dissenting report states: The dissenting material as presented by the Chairman- Dr Dick Klugman- lacks argument, logic and he has presented a totally one-sided view point, having little regard for the evidence presented to the Committee. I have no hesitation, and I said this to David Charles last night, in saying that I consider that particular quote-to use material and language that are familiar to members of the Committee-to be crude, tasteless, vulgar, violent and certainly gratuitous. I intend to demonstrate just what I mean by that. It is also wildly inaccurate and unjustified. I turn to page 185 of volume one, which contains what has now become the majority chapter, headed ``Likely Effects'' of Video Material'. This is the most important chapter in both the majority and the minority reports. Everything flows from it. It is the chapter that deals with the effects of this material on people. Clearly, if we consider that there are effects, that warrants taking some action. If we consider there are no effects, that warrants not taking any action. The difficulty that I have with the majority report, largely drafted by Senator Harradine-and I again pay very sincere tribute to the amount of effort and work that he put into this-is what is said in paragraph 13.8, which states: The Committee notes that frequent public statements have been made by publicists and other demanding an unreasonable standard of proof before acknowledging the harmful effects of violent, pornographic or otherwise obscene video materials. That sets the stage for the rest of this chapter, because although in my view, the majority has stuck pretty closely to the evidence for all of the pages devoted to violence, when we get into that section of chapter 13 dealing with the effects of sexual material, the further the chapter goes, the further away from the evidence it gets-until finally, in respect of dealing with what the majority report classified as category III sexual material, that is, happy sex, consenting sex, there is absolutely no evidence whatever of any substance that would support a recommendation to have it banned. Senator Zakharov is going to deal with chapter 13 so I will not dwell on it at length. It quotes reams and reams of psychologists' reports. I read them all and was able to have the experience of hearing some evidence given by psychologists. It is fair to say that in a general sense I was impressed with very little of it because once we get into that esoteric area of setting up tiny studies on 200 or 300 people, exposing them to particular material, asking them about their attitudes towards marriage and violence towards women, immediately after they see the material, then drawing a result that will be applied in this case to 16 million Australians we get into tiger country on both sides of the argument, both for and against. But there is a great concentration in the majority chapter 13 on that. Senator Walters quoted Paul Wilson from volume 1 of the report. She did what is done all the time by people who are trying to create a case when there is not one. She quoted only half of what he said-not only just half of what he said but half of what is contained in the report. I would like to read the rest of it, which appears on page 194. She quoted Dr Wilson's statement: . . . while I find no evidence that sadistic sexual pornography causes serial killing, lust killing or child killing, depending on the terms that one uses, in my own mind, and reluctantly, I have found evidence that in the killer's background there is, first of all, a preoccupation with this material . . . He then went on to say: Again I say `reluctantly' because my basic philosophical position has always been one of allowing adults to read what they want in private, or, more relevantly, to view what they want; I believe there is a strong case for censoring material which combines sex and sadism, even though I am at the same time concerned about what effect that censoring will have on opening up a black market. By reading chapter 13 one will find a great deal of material that I agree with. Senator Harradine —So you-- Senator COLLINS —The honourable senator will get his turn next. That is the effect of violent sex or violence on people. But that material has been banned totally for years. The misapprehensions in the community that already exist are very easily played upon by people who want to continue to create the impression that that material is contained in the current X category and is freely available. Volume 2 at page 512 nails down the great hole in most of the psychological evidence that has been presented by the majority in support of its recommendations. I will quote from paragraph 14.5: What became clear to us was the flexible use of data, both statistical and of a research nature, by protagonists of both the harmful and `unproven-harm' points of view. The interchangeable use of material, often taken out of context, made us particularly wary of accepting the conclusions of the research. I fully concur with that statement. That is certainly one of the reasons why I opted to support this part of the report instead of the majority report. Donnerstein is a researcher who comes in for a great deal of quotation in the majority chapter 13. It is very interesting to refer to what Dr Edward Donnerstein said. I will quote from section 14.10 on page 514 of volume 2: Dr Edward Donnerstein, Professor of Communication, Center for Communication Research, University of Wisconsin, USA, told the Committee that in his recent research using video material and viewing the films in their entirety: . . . it turns out, of the R rated material which we used not one of those films would be allowed in Australia and if they were, most of the material, and in fact from what I understand all of the material which would have produced any effect, would have been censored out. None of the X rated violent material which we used in our research which produced certain types of effects, would be allowed in Australia or any other country than I am aware of. He went on to say: . . . the sexually explicit X [American] rated material of a very popular nature-films such as ``Debbie Does Dallas'', ``The Other Side of Julie'', ``Inside Jennifer Wells'' and other titles which I cannot remember at the present moment-which do not contain physical violence, did not produce any effects whatsoever. Nevertheless, Dr Donnerstein is quoted with approval in much of the majority report. Senator Harradine —No, in respect of category one. Be fair. Senator COLLINS —I think the Senate is getting just a taste of what it was like to be locked up in that Committee room. Let us look at the recommendations in volume 1. This is where we really see the absurd position that some members of this Committee put themselves in. Senator Walters said that the one recommendation that was made by this Committee in respect of violence `might seem like a small thing'. Indeed, it is a very small thing. The majority of the hypocrisy which has been attached to chapter 13, the majority section of the report, is that although there is a total preoccupation with giving lip service to concerns about violence-and the majority of all the psychological evidence that was presented was related to the harmful effects of violence, not `happy' sex-practically nothing was done about it by the Committee. That is the nub of the hypocrisy of the entire argument-and always has been. We came down like a tonne of bricks on sex but although we expressed our great concern about violence in the majority report we did practically nothing about it. We banned the sex but category R is still on the shelves. I would just like to point out how much it is still on the shelves. I will quote from the majority response-Senator Harradine's and Senator Walters's response-to the proposal contained in recommendation II; that is, that a category of non-violent erotica (NVE) be provided which contains that material currently defined in the existing category X. This is what they said: We, the majority of the Committee, strongly oppose that proposition. It would entrench X-rated video pornography (described officially as `hard core pornography'-see paragraph 3.40) in the community under the guise of the misleading title of NVE. 5. If the above recommendation were adopted- that is, the majority's recommendation- it would not refuse classification to video materials which are gratuitous in regard to sexual matters to the extent that they are crude, tasteless and vulgar, rather than pornographic. Nor would it apply to those video materials which include simulated dramatic depictions of sexual acts in the development and treatment (whether serious or humorous) of themes involving human sexuality which in context and intent are not pornographic. The video materials referred to in this paragraph fall within at least the scope of the current R category. When we look at the material and the position that the Film Censorship Board would have to take on that piece of gobbledegook, we can understand the hypocrisy of this argument. The honourable senators in the majority report are perfectly happy to allow simulated sex if it is vulgar, tasteless or crude-that is all right-because they were not prepared to bite the bullet and say, `We are going to ban R as well'. There would be a scream right around Australia if they did. They did not want that, so R is still okay. There is a problem. I have seen a lot of R-rated movies with simulated sex. There are, as Senator Harradine knows, quite a lot of X-rated movies around that are reclassified as R. I would say, without fear of contradiction, that the Film Censorship Board, based on that stupid definition, would have no choice-- Senator Harradine —They are pornographic. Senator COLLINS —In whose view? When does simulated sex not become pornographic? What a nonsensical argument. Senator Harradine —I will deal with that. Senator COLLINS —The honourable senator can try. Debbie Does Dallas, or what should more accurately be called `Dallas Does Debbie', is a classic pornographic film. It is an X-rated film and also an R-rated film. What is the difference between the X and R? In a word-genitalia. That is the difference. To expand a little, the X-rated version has genitalia, the interesting bits, in a state of sexual arousal, while in the R-rated version, of course, the genitalia are obscured by a knee, a hand, a page, or a pot-plant or whatever. But there is absolutely no doubt about what the actors are doing: one is not under the impression that they are playing chess, tiddlywinks or backgammon. It is very obvious what they are doing, but one cannot see the interesting bits, the genitalia. So, what the Committee is saying is `off with their `X' ', that provided they are legally castrated it is okay to watch the film. The amazing thing about this position is that chapter 13 of the majority report makes out a great case against citizens of this country watching X-rated movies because they may be totally corrupted, but it is okay to watch depictions that are simulated, vulgar and tasteless-the majority Committee's own words. So apparently we are strangley depraved and corrupted by the sight of genitalia. That is an extraordinary proposition, and it will result in this section of the report being roundly condemned and laughed at right around this country. `Off with their ``X'',' says Senator Harradine, `you can't see their genitalia; if you do you will be depraved and corrupted'. However, a person can sit there and watch, as I have done, endless depictions of simulated explicit sex and, apparently, that does not hurt a person at all. Further, we all have the overriding concern about access of children to this material. I will tell the Senate this, and it is an honest view: I do not want my eight-year-old son to see X-rated movies or R-rated movies, but if, in a hypothetical situation, he had to be exposed for some reason to one or other of these type of movies, I would much prefer him to see Debbie Does Dallas than Blood Sucking Freaks, I Spit on Your Grave, or The Texas Chainsaw Massacre. But of course that material will still be on the shelves. I would have a far easier time explaining the facts of life to him after he had watched Debbie Does Dallas than I would after he had seen Blood Sucking Freaks, I can tell the Senate that-and that is where the hypocrisy comes into this argument. Despite all the cant in the majority report about violence and the Committee's concern about it, as I have said, the majority of all the psychological evidence was in fact to the effect that it is the violent movies that cause these undesirable effects. That was Dr Wilson's position. He referred to sadistic sex, not happy sex. In fact, I am sure that he would be insulted and very defensive indeed if he knew that he was being misinterpreted in this way. Of course, in the course of the Committee's deliberations I tried to point this out. The reason for my involvement with this mater is that it became an issue in the Northern Territory when I was a member of the Northern Territory Parliament. I raised this matter in the Northern Territory Legislative Assembly: a laissez-faire attitude had developed in the Northern Territory and X-rated material was freely available in supermarkets and at service stations, and something had to be done about it. I took a very simple position on it: if we are going to be just as concerned about violence as we are about sex we should do more about the matter than just give it lip-service-which is what this majority report does. The law says that one cannot have access to R-rated material unless one is 18 years of age or over, and the law in the Northern Territory says that one cannot have access to X-rated material unless one is 18 or over. I thought it made a lot of sense to treat both categories in exactly the same way, to insist that only registered outlets hire these movies and that they provide a restricted area for them, with a big sign outside saying that people could not enter unless they were 18. That is the law in the Northern Territory. I approached the Northern Territory's then Chief Minister, Ian Tuxworth, and got his complete approval for the proposition. In fact, I said to Mr Tuxworth that I would much prefer the Government to introduce the measure and that we would support it. That is exactly what happened. The video retailers, of course, screamed their heads off, because they had to install these special areas. Although the legislation was passed, it was put on hold for 12 months until the retailers got their act together. We also provided an alternative for people in the Northern Territory-which we have done in this report as well: instead of those facilities being provided, the slicks of restricted videos can be made available to people at the counter but only people 18 years or over. The Northern Territory is currently the only place in Australia where R-rated and X-rated videos are treated in exactly the same way-and I am proud of the fact that I was responsible for that. In the Northern Territory we have given more than lip-service to our concerns about violence rather than simply those about sex. Most of the recommendations in the report are good and sensible. The report has a considerable amount of value. Most of the recommendations in it are supportable, and I want to see them implemented. The moves that have been made by the Northern Territory Government, as I have just outlined, have resulted in a great deal of control and restriction of this industry. We are all concerned mainly about the potential access by children to this material. That has resulted in a recommendation in this report that reflects precisely the situation in the Northern Territory. We have recommended that both the new category of NVE and R-rated be placed in similar restricted facilities, that they both be treated in exactly the same way. I commend that recommendation to the Senate. I hope that it will be adopted in any State jurisdiction that decides to adopt the majority report or the minority report or a version of both reports of the Committee. I conclude by saying that it has been a difficult exercise even to get to the point of being able to present this report to Parliament. An enormous amount of effort has gone into it and sincere concern has been expressed by all members of the Committee, irrespective of their points of view. I must pay a tribute to them and I particularly pay a tribute to the long-suffering staff who assisted the Committee. I refer especially to Jane Vincent and Rosemary Brissendon for putting up with us for the length of time that they did. Senator JENKINS(Western Australia)(6.18) —As a member of the Joint Select Committee on Video Material, I rise also to add my remarks to this debate. The Chairman in his acknowledgments has duly expressed the thanks of the Committee to all those who contributed to and assisted the Committee in its inquiry. As one who joined the Committee only in October last year when it was reappointed after the 1987 Federal election, I want to add my personal thanks in particular to our secretary, Jane Vincent, and our research officer, Rosemary Brissendon. It was a very difficult Committee on which to serve, and my personal thanks go to them for their efficient, sensitive and good humoured assistance at all times. The original Joint Select Committee on Video Material was formed on 19 March 1985. It then had nine members, eight of whom formed part of the 11-member Committee responsible for the report that has been tabled today. As stated in the preface to the report, the report was extremely difficult to prepare because of basic philosophical disagreements among Committee members. These were not on political party lines, and many sections of the report are accepted or deleted by varying six to five majorities. The issues are extremely complex and do not lead to an easy consensus. In fact, there are two reports. They are included in two volumes, totalling 829 pages, and there are additional charts, which I believe should have been included in a pocket at the end of the second volume, but that was not possible because of our time constrictions. Volume 1 is the majority report. It includes recommendations voted on by varying majorities of six to five-but on occasions in opposite directions-and that has led to contradictions within this report. Volume 2 is the major dissenting report, and largely corresponds to the original draft of the Chairman of the earlier Committee. The majority report also contains a significant proportion of the original Chairman's draft. In addition, there is dissent from recommendation I by five of the six Committee members who support the majority report; a dissent from recommendation II by the sixth member in support of the majority report; a further dissent from recommendation XV by one member; a further general dissent by two other members; and a further qualifying comment from one other member-all these supporting the majority report. I think that that demonstrates to the Senate the problems and divisions among members of the Committee. After much deliberation, consultation and heart searching, I chose to support the major dissenting report, together with the Chairman and three other Committee members. The philosophical differences in the views of the 11 Committee members no doubt reflect only some of the philosophical differences among members of the community. There has already been some insight into that in this debate. The terms of reference refer to `violent, pornographic or otherwise obscene material'. One of the fundamental differences among Committee members was the definition of the word `pornography'. Those members who supported the majority report tended towards the view that all sexually explicit material is pornographic and thus to be condemned and perhaps banned. The members who supported the major dissenting report were unable to come to such a simplistic solution, believe that one person's pornography is another's erotica; in other words, pornography means different things to different people. These differences can be found in chapter 3 of both volumes. It is not only this Committee which has had a problem with the perception of the meanings of definitions because so, too, did the Committee which produced the report of the Attorney-General's Commission on Pornography by the United States Department of Justice, also known as the Meese Commission, which reported in July 1986. Page 350 of our Select Committee's report states: With regard to the word `obscenity' the Meese Commission found it difficult because `obscenity' need not necessarily suggest anything about sex at all. They said: Those who would condemn a war as ``obscene'' are not misusing the English language, nor are those who would describe as ``obscene'' the number of people killed by intoxicated drivers. Given this usage, the designation of certain sexually explicit material as ``obscene'' involves a judgment of moral condemnation, a judgment that has led for close to two hundred years to legal condemnation as well. The Committee's conclusions and recommendations are contained in chapter 17 of the majority report and chapter 18 of the major dissenting report, and they are substantially the same. Both reports recommend that a new category, non-violent erotica (NVE), be instituted; and both reports recommend that the new NVE category should contain material as defined in the current X classification. However, I add here that the majority report Committee members added the following note to its recommendation: The Committee draws attention to the fact that the majority of the Committee disagrees with the proposal contained in this Recommendation- that is, Recommendation No. 2- and abstained from voting on it in the light of certain procedural constraints. Their response and recommendation are set out at the conclusion of this chapter. I also note at this point that some of those who made submissions or gave evidence-and I believe also, alas, some parliamentarians-are not aware of the difference between the current X and R rated videos or what is refused classification. I believe that the confusion is compounded by the different definitions of X which prevail in the United Kingdom and the United States of America. In this regard, page 506 of the report states: As the South Australian Classification of Publications Board in its submission noted: The decision in the Eastern States to call the class of videotape beyond the R classification, ``X'', was unfortunate in that this term is used in the U.S.A. and U.K. where it includes what are known as video nasties, a generic term for material including child pornography and sexual violence of the worst kind. The public assumed that X rated material in Australia was synonymous with the X rated material constantly mentioned in news items from abroad and this fed the campaign to have X rated material banned. I refer to page 723 of the report and appendix 5, which is headed `Film Censorship Board, Attorney-General's Department, Guidelines for Classification of Videotapes/Discs for Sale/Hire December 1984, where the various categories are defined as follows: X Extra-restricted (18 years and over) Material which includes explicit depictions of sexual acts involving adults, but does not include any depiction suggesting coercion or non-consent of any kind. R Restricted (18 years and over) Adult material which is considered likely to be possibly harmful to those under 18 years and possibly offensive to some sections of the adult community. Language: May be sexually explicit and/or assaultive. Sex: Implied, obscured or simulated depictions of sexual activity; depictions of sexual violence only to the extent that they are discreet, not gratuitous and not exploitative. Violence: Explicit depictions of violence, but not detailed and gratuitous depictions of acts of considerable violence or cruelty. Refused Classification Sex: Child pornography, bestiality. Violence: Detailed and gratuitous depictions of acts of considerable violence or cruelty; explicit or gratuitous depictions of sexual violence against non-consenting persons. That category also includes terrorist type weapons and acts, and the abuse of hard drugs. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TATE(Tasmania-Minister for Justice) —I seek leave to clarify an answer to a question from Senator Hamer during Question Time today. Leave granted. Senator TATE —During Question Time I replied to a question and said, amongst other things: The War Crimes Act 1945 applies to all persons in allied or axis forces and covers the types of conduct proposed to be proscribed in the War Crimes Amendment Bill. That answer is inaccurate in that the War Crimes Act 1945 applies only to a person who has committed a war crime against an Australian resident or, by virtue of section 12, `against a British subject or citizens of any power allied or associated with His Majesty in any war'. So there is a significant difference between the statute and the proposed Bill. Senator HAMER(Victoria)(6.28) —by leave-I move: That the Senate take note of the answer. I seek leave to continue my remarks later. Leave granted; debate adjourned. Sitting suspended from 6.29 to 8 p.m. Debate resumed. Senator JENKINS(Western Australia)(8.00) —Before the sitting was suspended, I was quoting the guidelines for classifications for videotapes for sale or hire as put out by the Attorney-General's Department and used by the Film Censorship Board. I had quoted the definition for X-classified videos and R-classified videos. I am sure that honourable senators will have noticed that, whereas X-rated material is described as `material which includes explicit depictions of sexual acts involving adults but does not include any depiction suggesting coercion or non-consent of any kind', R-rated material, on the other hand, can have sexual depictions within it and also depictions of violence. Therefore, in common with many other people, I am sure, I see more potential for harm in R-rated videos, which contain depictions of violence, than in X-rated videos, which include explicit depictions of sexual acts between consenting adults. Whereas it is possible to find some R-rated films which have a good story line and can be quite exciting, whether based on fact or fiction, the level of the X-rated videos, and certainly the ones I saw in relation to the Committee, would appear to me to be abysmal, entirely lacking in taste and thoroughly boring. Bearing these facts in mind, I commend the recommendations both of the majority and of the dissenting reports that the NVE classification, the non-violent erotica classification which we recommend, and the R-rated videos be given equal and restricted status. It is my opinion that these recommendations will be welcomed by those in the community who are particularly concerned about explicit video violence. At present X-rated material-that is, our recommended non-violent erotica-is classified above violence; that is, with or without sexual implications. The Joint Select Committee report recommends equal classification with equal and considerable restrictions. It is a recommendation of both reports that all R-rated and NVE-rated material be not displayed for sale or hire at a retail outlet alongside videos of G, PG and M categories. NVE- and R-rated videos are recommended to be displayed in a separate room, access to which would be restricted to those who are over the age of 18 or, if this is not possible, they could be made available in catalogues at the counter and again only to those over the age of 18. The Committee also recommends that these recommendations should also be present so far as films in hard top cinemas are concerned. I am sure that everyone is aware that these days there can be more than one cinema theatre in a complex. One may take a child along to see a PG- or G-rated film or perhaps an M-rated show and be confronted with material promoting R-rated films. We recommend that this should not be the case. In other words, we recommend that minors and adults should be protected from this sort of promotional material being flaunted before them. Those under 18 would be further protected by recommendations that would prevent a videotape having a trailer of higher classification than the feature on the same tape, and also by its being an offence to show a minor an R- or NVE-rated video without the consent of parent or guardian. Other recommendations that will, I am sure, be welcomed relate to the consumer knowing for sure before hire or sale of a video the exact classification of that video, what it denotes and the reasons for the classification. Such information would have to be on the video container and, where possible, also on the video cassette itself. The Committee's discussions ranged far and wide. Its report is lengthy and sections of it are very different in both volumes. I refer particularly to chapter 3, relating to the problem of definition, violent, pornographic or otherwise obscene material; chapter 13 in the minority report, relating to video content and classification; chapter 14, harm and video material and chapter 15, concerning access of minors. Those chapters in the minority report, the dissenting report, are quite different from the corresponding chapters in the majority report. That is where the main philosophical differences lie. The issue of control of video materials is vexed. It is a question of what line to draw, where to draw it, how to police availability and how to put in place controls without creating a flourishing racket for criminals in the distribution of elicit materials. The problem is that one cannot legislate for morality. Evils are not eliminated by passing laws against them. The evidence seems to be that they are only driven underground and made more susceptible to criminal exploitation. I am also concerned that we avoid the trap of treating a symptom as though it were the problem. Violence, sexual exploitation and deviant sexual behaviour are problems in our society. Violent videos certainly are available. The Committee's recommendations would mean that violent videos would no longer be accessible to those under the age of 18. I suspect that the causes of violence and sexual crimes are more deep-seated and that they may be connected with a lack of really deep and genuinely intimate relationships; with our inability to cope with leisure time in constructive and creative ways; with a dominant ethos of violence in the way we treat our fellow human beings so often in the rat race and also in our environment; with a strong emphasis on the individual's greeds as against the community needs; with the individual's presumed right to gratification of all desires; with the lack of adherence to fundamental moral principles; and with a sense of alienation arising from meaningless work and social deprivation-and no doubt many other factors too. These are matters which, alas, cannot be put to rights by the prevention of access to certain types of videos. I would like to conclude my remarks by reading point 4 of the introduction to the minority report. It states: The dissenting Report takes a critical look at the evidence and it does not come to `simplistic solutions': as H. L. Meancken put it, `to every complex problem there is a simple solution and it is always wrong.' (Quorum formed) Senator HARRADINE(Tasmania)(8.13) —Before I deal with the statements that have been made in this debate today, particularly those of Senator Collins-I hope he stays for the rebuttal I intend to make of his remarks-I simply want to say that the minority recommendation of the Chairman of the Joint Select Committee on Video Material that there be a new non-violent erotica (NVE) category which would contain all existing X-rated material will give John Cain a great big headache. The Victorian legislation, the Films (Classification) Act, provides that in the event of a new classification being accepted by the Australian Capital Territory's Classification of Publications Ordinance it will automatically have effect in Victoria. Currently X-rated material is banned in Victoria and if the recommendation by Dr Klugman, Senator Collins, Senator Jenkins and Senator Zakharov is adopted it will mean that this X-rated material will automatically go into Victoria. I suggest that that will, in no sense, get off the ground. What Premier in his right mind would want the type of material which is contained in the X classification distributed in Victoria on the eve of an election? I might say that this type of material has been covered up by the minority report. Nowhere in this document-in the Chairman's draft which is included in volume 2 of the report-will one see a complete and accurate description of what is contained in X-rated material. I will read it so that honourable senators can hear the bland statement that is made. Paragraph 5.32 describes X-rated material as: Material which includes explicit depictions of sexual acts involving adults, but does not include any depiction suggesting coercion or non-consent of any kind. Publicly stated it sounds very bland. If one looks at the majority report one will see that it does include a description of X-rated material and has used words which the Film Censorship Board submitted to the Committee in evidence to it. I suggest, as Senator Collins did, that the galleries be cleared if people are not prepared for the type of description that will take place here. I suggest that they remove themselves now. Senator Robert Ray —There are about five kids up there. Senator HARRADINE —I do not know who is up there. I ask honourable senators to compare paragraph 5.32 of the Chairman's draft with paragraph 5.33 of the majority report. Who is trying to hoodwink whom? Who is trying to say that the material is harmless and does not involve certain explicit acts which include anal insertion, homosexual acts and all the rest of it. This is the material that will go into Victoria on the eve of an election. I am sure Mr Cain would love that! The majority report attempted to describe in proper terms for honourable senators precisely what X-rated material and pornographic material portrayed. I will come to that in a moment but first let me digress. Senator Collins said that he wanted to tell the Senate that he had changed his mind from being opposed to X to now being for it. Why? Because of the arguments of Senator Walters and myself. I read the following quote: There are members on this side of the Assembly-and they will be free to say so-who want to see X-rated videos banned completely in the Northern Territory. I am sure there are members on the opposite side of the Assembly who also have that view. That does not happen to be my personal view. Other suggestions have been made that perhaps the X criterion classification should be narrowed simply to make it more difficult for videos to get that kind of classification. I do not agree with that either because I think you can really get into some very esoteric arguments about the fine lines that are to be drawn between these classifications as they now stand. Who said that? It was Senator Bob Collins in a debate on the legislation in the Northern Territory on 6 March 1985. He then launched into what I believe was a most unfair and unjust attack on members of the Committee. He accused them of hypocrisy and stated that the majority report contained a travesty of interpretation of evidence. Yet later in his speech, in an attempt to discredit Senator Shirley Walters, he quoted the full text of what the Committee's majority report said was the evidence given by Dr Paul Wilson. He quoted from our majority report against Senator Walters. I think I would agree with him in quoting against it, but what Senator Walters was doing, as I recall her speech, was referring to Dr Wilson in respect of violence and not in respect of pornography without violence. Nevertheless, Senator Collins used our majority report. I was trying to say at that stage, `Isn't our majority report fair? Aren't we giving a balanced view of what the evidence that has been given to us is?'. Certainly, we did so then and we did so in respect of the other evidence to which we referred. Senator Collins then started to attack Mr Jull, Mr Charles and Mrs Crawford for what they said about the Chairman's draft-that it was one-sided. I notice that Senator Collins himself said that he did not agree with everything that was in the Chairman's draft, which is now contained in volume 2. That is very significant. Mr Acting Deputy President, you know as well as I do that when members of parliament go into committees they attempt to reach a consensus on particular matters. That is what the majority of Committee members attempted to do in this case. There are a number of things in the majority report which the majority, on balance, would have preferred to have not seen in the report, but because they were in the Chairman's draft we went along with them in the hope that we would get some sort of consensus. We did not know and we were not told that, ultimately, the Chairman would put all his draft, in bulk, in the report. As far as I can recall, it is unprecedented for any committee to agree to 85 per cent of the chairman's draft and include it in the majority report and the Chairman then to put in a minority report including the whole lot. That is intransigence and an abominable waste of money. Each volume of the Committee's report costs $70. A considerable amount of that money would have been saved had the Chairman done the decent thing and simply zeroed in on what might have been the differences between the majority report and the minority report. Senator Zakharov —The supporting arguments were totally different. Senator HARRADINE —If Senator Zakharov is thinking of chapter 13 or chapter 14, as an example, why did the Chairman not just put chapter 13 and chapter 14 in without all the rest? Senator Zakharov —There was a chapter on definitions and a chapter on children. Senator HARRADINE —Sure. He could have put those chapters in and left out the bulk of it. Let me outline some of the differences between what is contained in the majority report and what is contained in the minority report, because it is important. I invite honourable senators to refer to the documents which, I hope, are before them. Paragraph 2.9 at page 15 of the majority report deals with the history of the legislation. It deals with material available to the Committee which showed that over a 15-year period, starting in 1973, the laws of this country in regard to pornography have been deliberately flouted in order to give effect to a policy decision announced by the then Attorney-General in 1973. If that is not significant for a committee to unearth, I do not know what is. Legislation of this Parliament was ignored by Executive decisions which required officers of the Commonwealth Public Service to direct their Customs officers to turn a blind eye to breach of the law. Senator Zakharov —No, to concentrate on more important matters like illicit drugs. Senator HARRADINE —That is contained in the material that is before you, Mr Acting Deputy President. In case there is any misunderstanding about what was meant by this-for Senator Zakharov's benefit-let us look at what page 17 says. It states: The document raised for consideration- the document prepared for the then Attorney-General- the question of whether the policy announced by the Attorney-General should be brought fully and immediately into effect or by stages. The Attorney-General's Department document stated: You would need to have regard to repercussions in the electorate; the Australian public is notoriously conservative, whatever its political affiliations. The Government's policy might best be achieved by a strategy of hastening slowly-gradually broadening the standards of imported material so that public opinion can be developed to embrace the principles embodied in the policy. In immediate practical terms the greatest hindrance to radical change could be the Senate, which may disallow any amending regulations. Senator Zakharov —Did you make it clear that that was a departmental minute? Senator HARRADINE —Yes; it is in the document, Senator. The report continued: In the event the policy was given effect to, not by amendments to legislation but by administrative direction. I think that a lot of people around the place have been breaking the law and I wonder what the Government intends to do about it. There has been a consistent, continuous attempt to undermine the laws of this Commonwealth in regard to Customs under directions from on high. Of course, one does not see one word of that in the minority report. There is a difference between the majority report and the minority report in respect of the term `pornography'. The minority report appears to indicate that it is impossible to come to an understanding of that term, that it is subjective. That view is expressed in dismissive statements such as, `What turns you on may not turn me on'. The majority report stated in paragraph 3.50: Any perceived difference of view over the meaning of the term `pornography' based on that subjective approach denies the possibility of a clearly identifiable reality corresponding to the term `pornography' which would be capable of reasonable understanding by both sexes, young and old. That is a factor that would make the task of this Committee almost impossible. The majority report continued: 3.52 To make the claim that the term `pornography' really refers to the subjective reactions of individuals to particular representations of sex, rather than to the representations themselves and their intent, involves a serious misuse of language. It is clear that the term `pornography' does not refer to the interior dispositions of the viewers. Both the person who experiences outrage and the person who experiences arousal of sexual desires from viewing exploitative depictions of sexual activities aimed at sexual arousal knows what kind of material is being referred to when they hear the term `pornography'. 3.53 The term refers to the nature of the materials themselves-their content and apparent or purported intention to arouse the sexual desires of its target audience. 3.54 When using the term `pornography' in this Report the Committee means to speak of video material which is predominantly sexually explicit and intended primarily for the purpose of sexual arousal. That was the broad definition description used by the Meese Commission and, essentially, by the Williams and Fraser committees. Again, we come back to Senator Collins and his misunderstanding of this situation. He attempted to charge the majority of the Committee with ignoring violence. Let me say that the majority of the Committee spent a great deal of time considering and detailing the evidence relating to violence. In fact, the majority of the Committee had in the forefront of its examination the types of films that Senator Collins said he would not like his son to see. I refer to films such as Blood Sucking Freaks and similar slasher type films. If Senator Collins did not already know it, he should have known the propositions we put forward in respect of that type of film which portrays violence in such a way as to try to develop a sense of relish in and a sense of satisfaction from the violence that takes place. We proposed that there be a provision in the R guidelines to ensure that films which contained relished acts of considerable violence, be refused classification. That is a small but absolutely most significant amendment, if it is carried through. Senator Zakharov is laughing. Senator Zakharov —How do you define `relished'? Senator HARRADINE —How does one define `relished'? How does one define `pornography'? Let it all go through! That is at the basis of what Senator Zakharov and Dr Klugman are about. They will try to undermine the evidence that has been given to us by behavioural scientists. The danger of their attempts to try to undermine the evidence given to us is not only in the area of pornography. If they attempt to try to undermine that sort of material, on what do they base the decisions to exclude certain acts of considerable violence? In my view, we are not talking here about censorship. We are talking about where to draw the line. It is the view of the majority that the line is not satisfactorily drawn. The minority relies on the slogan that people should be able to read and hear what they wish. It is, in fact, a slogan. Senator Zakharov —With qualifications. Senator HARRADINE —Where are the qualifications in Senator Zakharov's minority report? In paragraph 16.2 of the majority report we make it clear when we state: When the principle that adults be free to see, hear and read what they choose was originally stated as public policy the number of videotapes entering Australia was insignificant and there was not the widespread availability of objectionable video publications as exists today as the result of the flood of these materials into Australia . . . This principle is often stated, but not adhered to in practice, since adults are not free to view video material depicting, inter alia child pornography, bestiality and sexually explicit violent pornography as these are banned under censorship guidelines . . . and prohibited from entry into Australia under the customs regulations . . . The principle that adults be free to see, hear and read what they choose is dependent on the pornographers' claimed right to freedom of expression and the balancing of this claimed right against requirements fundamental to the common good which legislators are bound to uphold. The issue now is not whether there should be censorship as was the case in 1973 when the principle was first stated as public policy but where to draw the line. The Committee considers that the current line is not appropriately drawn. To a certain extent even the Film Censorship Board suggests that it is a question of where to draw the line. I refer the Senate to paragraph 13.54 of the majority report, which indicated: 13.54 The Film Censorship Board relied on a limited range of research in its document attached to the Attorney-General's press release following the meeting of Attorneys-General on 26 October 1984. After that meeting it was decided inter alia that sexually explicit violent pornography (Category 1) should be removed from X but the other categories of sexually explicit video pornography . . . should remain available in X. The Film Censorship Board stated: Unless it can be demonstrated, to the satisfaction of a substantial majority of the population, that the ``pornographer's'' view of sexuality, as depicted in filmic images, produces tangible social harm, such views should be allowed to take their place in the market place-besides other views depicting different life-styles, attitudes and values. What we have here is a policy based on a proposal that the pornographer's view should prevail unless it can be `demonstrated', whatever that means, to the `satisfaction', whatever that means, `of a substantial majority of the population'-however that is to be achieved. That is the basis on which the current X material is classified. What the majority of the Committee has done is to consider all of the evidence, not only the material from the behavioural scientists-although that material was quite telling-but that of all the other people who came before us. This included people such as the police in Victoria who indicated that this type of material was used by paedophiles to inveigle-if that is the right word-their victims. There are a significant number of differences between the minority report and the majority report. Suffice it to say that there are substantial errors of fact and omission in the minority report. I will give honourable senators just one example. The parties to the minority report do not even know what is contained in the Customs legislation. I refer to paragraph 2.8 on page 331 of the minority report, which says: The Commonwealth Customs legislation which was operative at the time of the introduction and growth of VCRs did not of course explicitly address the new technology of domestic video and videotapes. They were referring to the period 1970-73, and go on to refer to successive governments since 1971. If we have a look in the appendices we find the Customs (Cinematograph Films) regulations, which define a film as follows: `film' means a cinematograph film or a video tape, and includes a positive or negative of a cinematograph film; That was included in legislation well before the period they were talking about. So they did not even know the legislation. This minority report is shot to bits with errors of fact and of omission. The majority report has attempted to set the facts before the public and before the Parliament. It is hoped that we have done that in a fairly logical and readable fashion, though I admit that we formulated the report under certain very grave constraints indeed. For example, as a student who would study the evidence received by the Committee and put on the public record, I found it frustrating that the Chairman indicated before he took up the chairmanship of the Committee that his prejudice was against any form of censorship. Senator Zakharov —You are prejudiced as well. Senator HARRADINE —I have not declared my prejudice one way or the other. I attempted throughout the whole period that public evidence was given to the Committee to adopt an attitude whereby I could consider the evidence and come to my conclusions. So did the other members who have signed the majority report. The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! The honourable senator's time has expired. Senator ZAKHAROV(Victoria)(8.43) —In case I do not have time later, I want to pay tribute to the staff of the Joint Select Committee on Video Material, particularly Jane Vincent and Rosemary Brissenden, who have done a tremendous job in enabling us to table this report without any further delay. The major part of the draft was written before the 1987 election, but a great deal more had to be done when there was a change in membership and consequently different views coming into the Committee which had to be accommodated. I think Senator Collins dealt with that point. Senator Harradine —We didn't see the draft. Senator ZAKHAROV —The honourable member knows he saw the majority of the draft. He did not see the whole draft, but he saw a major part of it. Before moving on to what I intended to say I would like to answer just a few of Senator Harradine's points. He started off by saying that the Victorian Government would be very concerned about this report coming forward with its recommendations at this time. He might be interested to know that most of the letters I receive-I have not counted them but they are probably running at about eight to one-are not from Victoria, although I represent Victoria, but from interstate. I think Victorians are mature enough to have a right to choose in this matter. No-one has to watch what they do not want to watch. That is something that is sometimes forgotten. Everyone has the right to choose whether they hire, buy or watch videos, as they do with television. Senator Harradine —Have you asked John Cain? Senator ZAKHAROV —No, but I have spoken to other Ministers recently. One must remember, after all, that we have had X-rated movies in Victoria before and they did not cause any of the major problems that Senator Harradine seems to think they will, and they did not cause any political problems either. The matter of X-rating has not been covered up in the minority report. What is contained in the X category is outlined in the appendices, in the guidelines. All senators, incidentally, have had the opportunity to see for themselves, if they wanted to, what an X-rated movie looks like-a right denied to people in their own States unless they can afford to buy or hire by post. I was interested to hear Senator Harradine raise the question of cost, because I think the minority could just as well have raised the matter or what might be called the plagiarism involved in the majority's lifting of so much of the Chairman's draft to put into its own report. But that is a minor matter. On the definition of pornography, of course any definition of pornography is subjective as it depends on the attitude of the speaker. This matter was ably dealt with by Senator Jenkins in her speech. The dictionary definition is different from any definition that is used in either report, and is different again from the one which Senator Harradine chose to quote and adopt from the report of Meese et al. To answer all the claims that Senator Harradine made about our report would take hours so I will leave it there. Before coming to more specific matters I would like to emphasise two points. First, there was much common ground in the recommendations of both reports in spite of the major philosophical differences referred to in them. This common ground spread across political boundaries and also across the boundaries of beliefs. This, then, has been a very valuable inquiry and should form an excellent basis for more informed discussion, both by the general public and by decision makers, both State and federal. Apart from the major differences of opinion concerning the non-violent erotica classification, I believe the other differences between the two sets of recommendations are relatively minor and/or technical. The second general point I want to make is that the Committee discovered, and we continue to discover, a vast amount of ignorance in the community about the existing law, not only among persons in the street but among senators and members and their State equivalents who are in a position to act on these recommendations and who, in many cases, have voiced impatience about seeing our report while neglecting their own homework. One example was found in a Press release put out a few months ago by the Opposition spokesperson, Mr Peter Reith-I do not know whether he still is the Opposition spokesperson-who called for the banning of material which is in fact already banned; for example, depictions of explicit sexual violence and child pornography. He clearly believed, as do most of those who write to us, incidentally, that material rated X is more violent than material rated R. Clearly Mr Reith had not read the guidelines or consulted the Attorney-General's Department or the Film Censorship Board. I would like to spend a little time concentrating on chapter 13 of the majority report. I emphasise for the sake of the record that I am a qualified psychologist of some years standing, a member of the Australian Psychological Society and a practising counselling psychologist, so I do have some experience in dealing with the subject matter before us. The majority report's discussion of learning theory is very simplistic and selective. It seems to have been written without reference to anything more than selected submissions and perhaps an encyclopaedia. Thus chapter 13 of the majority report goes into great detail about variations within social learning theory, yet even the theory itself does not seem to have been adequately understood, while ignoring a range of other equally well accepted theories of learning which are less simplistic, such as Gestalt theory which relates learning to the restructuring of the learner's view of the subject matter, and such as cognitive or, broadly described humanistic theory which takes into account factors such as intelligence, insight, the process of concept formation, as well as motivation which is not based on simple reward or punishment, as the earlier theories were. There are even physiologically based theories which may have relevance to this issue; for example, violent acts may result from a reduction in inhibitions due to, say, drug intake or perhaps brain damage. The muddled psychology, or pseudo-psychology, in this chapter is not really capable of sensible debate, but I do not want to draw attention to some underlying assumptions about methodology which are probably responsible for the morass of theory and claims about likely effects of viewing which we find in this chapter. There is a basic lack of logic involved here or a misunderstanding of the precise meaning of some terms used in common speech and also used with more precision in the fields of science and statistics. These terms are `cause' and `correlation'. The third word which is not used in this chapter, but which should be, is `antecedent', literally meaning something going before, a prior event or a pre-existing condition. Thus, an antecedent may be a cause, but certainly not necessarily so. Attending school is an antecedent for most adult criminality, but I doubt anyone would say that school attendance causes crime or that the drinking of milk causes alcoholism, although clearly it is an antecedent. Yet we find in the majority report statements that seem to assume that, if one action is followed in time by another, it is likely, or even highly probable, that the first causes the second. Thus, viewing violent videos is seen as causing the violence, whereas the causes probably lie in any one or more of a number of factors. Viewing violent videos may be an antecedent, for example, to juvenile violence, but the cause may well be something like parental attitudes to violence or viewing actual violence at home or elsewhere where it is seen as the only way to solve conflict. Senator Harradine —You haven't read our report, because we made those comments. Senator ZAKHAROV —I have read that report in great detail. Similarly, correlation does not in itself imply causality or even a basis for the prediction of future behaviour, as seems to be claimed in chapter 13 of the majority report. When a correlation is found or even sometimes, as in this case, claimed to be found between the hire and sale of videos and crime rates, for example, whether sex crime or violent crime, there will also be correlations with many other factors, such as average weekly earnings, school retention rates or even adherence to fundamentalist religion or vegetarianism-all things which have risen in recent years. In the case of the supposed link between the crime rate and video viewing, the cause may well lie elsewhere, and I would suggest it is more likely to be related to economic factors or early childhood experience, for example. Correlation alone cannot be the basis of prediction, but it may lead to further research as to why there is a correlation and whether there is a casual connection in either direction of the two correlates. These basic points of logic are virtually ignored in chapter 13. There is much of the evidence which the majority accepted, seemingly without questioning the methodology. When methodology was questioned, the answer given was often unsatisfactory. In laboratory experiments cited there was often little attempt to choose the sample to reflect the general population. Weaver, for example, whose research got a mention, used psychology students, who from my own experience usually find it very easy to predict what the experimenter is looking for and to react accordingly. Many other studies also used students as subjects and often the effects, when found, were after a very short period. Most studies failed to account for factors such as prior experience or even tastes in reading, for example, pornographic magazines. Yet the writers of this chapter do not stop at drawing unwarranted conclusions from this research. In some cases evidence has been distorted by taking it out of context. I want to give the Senate two examples of that. Paragraph 13.29 of the report states: . . . Dr Edgar sees it as `feasible' that some individuals may select materials that exaggerate their aggressive tendency and hence allow the committal of a violent crime . . . That is what the report said, but listen to what the transcript said. It is not exactly the same. Senator Walters asked about a person with an inhibiting factor to stop him from actually carrying out the aggression, and Dr Edgar said: The video breaks it down. Senator Walters said: After psyching himself up on the videos he is then able to commit the crime. I wonder whether you think that is a feasible proposition because it is put in a number of court cases that it is so. Dr Edgar answered: I am sure it is feasible. I do not know the proportion of people or the numbers and the circumstances. Later she said: When you look at the analysis of crime you see that statistically most murders are domestic and most violence is domestic. There is another example in the next paragraph of the report. Dr Ann Knowles told the Committee: . . . American, British and some other research does suggest that viewing television violence can, in some children, subsequently increase aggressive behaviour. Further, the report says: While noting the paucity of equivalent Australian research, she stated that one `can have a certain amount of confidence' in the long term studies in America `demonstrating a weak but significant causal link between watching violence on television and later aggressiveness in some children, who are probably somewhat predisposed to aggression in the first place.' If we look at the transcript, we see that Dr Knowles said: There has not been a great deal of Australian research done but the research that has been done to date has not supported that finding. That is the American finding. To continue: There is no Australian evidence to support a causal relationship between watching violence on television and later aggressiveness in children. The point that Dr Knowles makes here is very important. Attempts to repeat the experiment to get similar results have not, on the whole, been successful, and replication is very important to validity, particularly if validity is being claimed in two different countries with different histories, different cultures and different attitudes to violence, which is the case between the United States of America and Australia. There is in chapters 13 and 14 reference to anecdotal evidence, some of which is said to be from professionals, but the `professionals' are not necessarily from professions which give them any expertise on matters involved in this inquiry. For example, in the other place this morning one of the members of the Committee majority referred to a priest in Melbourne who related viewing videos to prostitution, drugs and homelessness in young people. I have personally attended meetings and conferences with that priest, and he certainly does not seem to understand the distinction between antecedents and correlates and causes. In this case the underlying causes for the characteristics of these young people undoubtedly lie elsewhere, whether in economic factors, in early childhood experience, in domestic violence or in any number of other possible causes. Similarly, the majority report seems to give the views of teachers, untrained community volunteers and police equal weight with evidence from those with direct professional knowledge of the issues under discussion. For example, I find that policemen, I think because until very recently they were recruited with a very low level of education, are often very simplistic about their views on crime. Magistrates, too, who also get a favourable mention in the report, usually have no training in the social sciences and are not always careful enough about accepting again an antecedent as a cause. Who are some of the people quoted approvingly by the majority report as experts, who have presented evidence which convinced them that the viewing of X-rated videos was harmful? As I have said, some have been quoted out of context and others have been quoted selectively. Senator Harradine —Edgar and Knowles have been talking about violence. Senator ZAKHAROV —I thought part of the report was about violence, Senator. Senator Harradine —That's right, but you said about pornography. Senator ZAKHAROV —I am not going to go into that argument about definition again. For example, Frank Horwill, a psychologist who appeared on behalf of a working party of the Australian Psychological Society, although not representing the Society itself, in fact is quoted favourably. But when I looked at what he had actually said, his conclusion does not seem to go along with the quotation that was given. He said: On the present psychological evidence, the extent and kind of harm which may follow from viewing non-violent erotic material depends on the extent to which the content is arousing and pleasing or displeasing, the amount of viewing, the message communicated by the material, and the context in which the viewing takes place. Much more research is required before it is fully incriminated for or exonerated from contributing to violence or other physical or psychological harms. Such research would still leave open the question of harms in areas not readily amenable to psychological research. Other parts of the so-called expert advice would be laughed out of court at any gathering of people who understood the subject matter and methodology. I would like honourable senators to listen to this excerpt from the transcript of the Committee when Dr Radecki was before it. He was talking about the effects on viewers of watching pornographic material. He said: I have noticed in myself that after I see some of these types of things I start to have more rape thoughts- that is interesting- I hope that that does not mean that I am a perverted psycho. I try not to consume this because I know that it affects me. I would suggest that it can affect all of us and none of us should really entertain ourselves with this stuff. I said: The problem is, where do you draw the line between fantasising and doing and is fantasising harmful? Again, that is another logical slide. Dr Radecki said: I know of research done by Dr Gene Able-and this has nothing to do with violent entertainment. He works with sex offenders and does measurements with penile tumescence and stuff like that. He plays rape audio tapes to both rape offenders and people out in society who have not yet been convicted of raping women. He finds that a substantial minority of people do get more excited by rape fantasies and that people who accept the rape myth that women enjoy being raped, that women really want to be raped, and things of that type, are the same people who tend to get erections when listening to that type of material. That type of reaction is more common in society than we would like to think. Also, according to the most recent figures, at least one out of every six American men will rape a woman at some time during his life. That was in answer to a question when he was asked whether fantasising leads to doing. In other words, he was quite incapable of answering the question in a straight manner. That question, unanswered by Dr Radecki, of whether viewing leads to doing is very important to the debate. But, unfortunately, this example is typical of Dr Radecki's evasion of questions which had much depth and which questioned methodology. Another breathtaking Radecki claim was made, unfortunately after the Hansard people had switched off their tape, when I challenged him about a statement that linked liking heavy metal rock music with violent tendencies, by telling him that I, who abhor violence, liked that music. He replied that that explained why I had shown in my questions that I was desensitised to violence. This is laughable stuff yet this is the sort of expert that the majority has believed. Dr Court is another expert witness relied upon heavily in the majority report. I would like to quote just briefly from the evidence given to us by Dr Gus Brannigan, in an excellent critique of much of the research that was presented to the Committee. Dr Brannigan was referring to a book that Dr Court had written. He refers to the data presented and says: As usual, not a jot of data is presented to establish that change has taken place, nor is there any independent variable reflecting the change in the actual circulation of pornography. One is supposed to presume that something happens between 1964 and 1974 and one is supposed to assume that the change was not already underway . . . Again, that is looking at antecedents, not causes. He says further: Court counsels against comparison of the actual levels of rape because of definitional problems across jurisdictions, though this strikes me as rather convenient since Williams had already reproached Court for contrasting rapes in liberal England with illiberal Singapore when, in fact, the rate of rape is lower in England, where pornography has been available, contrary to everything Court has preached. There is very much more in Brannigan's contribution which is worth quoting, but I do not think there is time. I would like to mention briefly the matter of access by children, going to another chapter. Here I will quote from my own speech when the Senate Committee report was tabled, because I do not think that I can say it any better than I did three years ago. Senator Harradine would probably say that that says something about me. On that occasion, I said: We have heard the argument on past occasions about children who will see video material that their parents have hired. As parents, we must all take responsibility for what goes on in our homes. I do not consider that it is responsible for a parent to leave a whisky bottle around where there are children. Similarly, I do not consider it responsible for a parent to leave an X-rated movie around, but I do not think there is any real difference between the two cases. One could say that a parent who leaves prescription medicines around is probably far more likely to cause harm to the child than the parent who leaves an X-rated video movie around. That is in the hands of the parents and we are certainly not going to ban whisky or prescription drugs just on the supposition that children might get hold of them. I do not think that anyone is claiming that we should go ahead with that sort of action. I would like to emphasise the value of the report at this point and ask honourable senators to read both volumes. I know the amount looks heavy, but some of it is quite entertaining. Honourable senators should see that there are many recommendations, some of which were referred to by Senator Jenkins, to which everyone on the Committee agreed. They were very practical recommendations about advertising and classifications being put in a meaningful way on the outside cover and on the tape itself, for example. I commend the whole report to the Senate and hope honourable senators will read it. I said in my dissenting report on the Senate Select Committee report that I believe it to be unpardonable arrogance for the State to dictate to its adult citizens what they shall or shall not see, read or hear unless cogent reasons are advanced to the contrary. That is the sort of qualification that I was referring to in my interjection to Senator Harradine. Nothing I have heard or read during the inquiry by the Joint Committee leads me to change that point of view. I should add that over many years prior to both these inquiries I have also read a great deal on the issue of censorship. What I have learnt during this inquiry is that censorship in a pluralist society is a matter for community discussion, to reach an acceptable community standard. That is what we should be aiming for. There is no evidence available of any cause or connection between what people read, hear and view, and what they do. Senator HARRADINE(Tasmania) —Mr Acting Deputy President, I claim to have been misrepresented by the previous speaker. Senator Zakharov in her speech indicated that the majority, of whom I was one, plagiarised the Chairman's draft. Senator Zakharov —I said it could be seen that way. Senator HARRADINE —I am sorry. Senator Zakharov suggested that it could be seen that the majority, of whom I am one, plagiarised substantial parts of the Chairman's draft. I thought it was the job of members of a committee to consider a chairman's draft. A chairman's draft, under Standing Orders, must be prepared and submitted to the members of the committee. The Joint Select Committee on Video Material was not unlike other committees which have considered the chairman's draft. There was an attempt on behalf of members of the majority of the Committee to follow, as far as possible, the Chairman's draft and to accept as much of it as possible. If that is plagiarism, that is a new ball game for all committees whether they be Senate, joint or House committees. It is an unwarranted reflection on the majority of the Committee, particularly as some of the sections of the Chairman's draft which we would rather not have included in the majority report were included because we hoped that we would get some sort of unanimity and balance in the report. Debate (on motion by Senator Knowles) adjourned. Assent to the following Bills reported: Nuclear Non-Proliferation (Safeguards) (Consequential Amendments) Bill 1988. Taxation Laws Amendment Bill 1988. Income Tax (Offshore Banking Units) (Withholding Tax Recoupment) Bill 1988. Debate resumed from 24 March, on motion by Senator Patterson: That the Senate take note of the paper. Senator HARRADINE(Tasmania)(9.11) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Consideration resumed from 24 March, on motion by Senator Tambling: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 15 April, on motion by Senator Panizza: That the Senate take note of the paper. Question resolved in the affirmative. Consideration resumed from 16 April, on motion by Senator Lewis: That the Senate take note of the paper. Question resolved in the affirmative. Senator MAGUIRE(South Australia)(9.12) —I move: That the Senate take note of the paper. This paper relates to air fare consultations by the Australian National Airlines Commission and Ansett Airlines of Australia and it examines the question of setting fares for domestic air travel within Australia. This is an important subject in the operation of the airlines, but there are other aspects of air travel that are important to the Australian community. This evening I wish to speak briefly on the matter of airline schedules. I believe that the smaller capital cities and the outlying States are penalised very badly indeed by the structure of the Australian domestic airline schedules. One reaches the conclusion that the airline schedules are drawn up to suit the convenience of the operations divisions of the airlines rather than the needs of airline travellers. I refer in particular to the vexed question of duplicated flight departure times in Australia, the so-called parallel schedules which, as I am sure Senator Walsh would agree, are very bad for Perth and Western Australia. They certainly penalise business and leisure travellers from my city of Adelaide, and I know that Senator Collins is concerned about airline schedules in the Northern Territory. I refer to the latest annual report of the Australian Tourism Commission, that for 1986-87. A section in that report entitled `Looking Ahead' states: There is insufficient flexibility in domestic aviation services. That is referred to in the context of barriers to an ideal tourism environment in Australia. Our domestic airline system is just not flexible enough to present a good service for tourists. I assume that in making that comment the Commission is referring to the paralleling of schedules. The parallel departure times must be a nightmare for people coming to Australia from overseas who try to organise a domestic itinerary within Australia. It must be particularly hard to visit places such as Alice Springs and other places in central Australia which are obviously highlights for visitors from overseas. Australian Airlines has seven weekly flights at 8.45 a.m. from Adelaide to Alice Springs; Ansett has six weekly flights at 8.40 a.m.-that is, a five-minute difference-and there is another flight at 9 a.m. one day a week. So, the seven Australian Airlines weekly airline services from Adelaide to Alice Springs are paralleled by Ansett. I think that is an unacceptable situation. In fairness, I should point out that there is one other Ansett departure each week at a totally different time. However, having gone to Alice Springs and Ayers Rock and having looked at the highlights of central Australia, to fly south one must leave either on the daily 4.20 p.m. Australian Airlines flight or the 4.40 p.m. Ansett flight to Adelaide. That is the great choice. If one misses those flights one has to wait until late afternoon of the next day to make that journey. It must be a nightmare for overseas visitors trying to put together a timetable for travelling around Australia to see the tourists attractions. Similarly, there is a high degree of paralleling of departure times for the Adelaide to Sydney flights. In fact, of the 24 Australian Airlines direct flights every week, no fewer than 17 are paralleled by Ansett, with departures within 15 minutes. Thus, 17 out of 24 departure times are directly paralleled. Instead of a theoretical 45 different weekly departure times, the real figure is much less than that. I hope that when the new arrangements foreshadowed by the Government for the Australian domestic airlines system come into operation in 1990 we can really get stuck into this totally unacceptable problem of parallel scheduling which penalises domestic air travellers in the outlying States and in the smaller capital cities. Question resolved in the affirmative. Senator ALSTON(Victoria)(9.19) —I move: That the Senate take note of the paper. This paper is a report of the Advisory Group on Australian Airlines. It is significant that the composition of that committee is very heavily loaded in favour of the governing party, with Mr Bill Kelty, Mr Peter Redlich and Dr Peter Wilenski being three of the five members of that committee. Yet, despite their very powerful party backgrounds they have effectively blown the arguments against privatisation out of the water. They have done that in the nicest possible way and I suppose, one could say, with very careful regard to the consequences of the debate that will take place shortly at the Australian Labor Party national conference. But the end result is that they do not advance any significant arguments that would indicate why it is not appropriate to sell the whole of Australian Airlines. However, some rather cryptic statements need to be addressed. One in particular is that the sale of any portion of the airline at the present time would be unlikely to realise full value for current shareholders, that is, taxpayers. No argument is advanced as to why that should be the case. I suppose one could always say that there are market fluctuations that must be taken into account and with hindsight that one did not sell at the top of the market. If what is meant by `full value' is full market value, there is no reason to imagine-- Senator Walsh —The presumption is that they have been run inefficiently in recent years but will be run better in the future. Senator ALSTON —One would have thought that a premium would be paid by investors who had the same foresight as Senator Walsh. There is no particular reason to make those sorts of assumptions. One can do net present value streams of income calculations and add a premium and no doubt if it is out in the marketplace some will place more value on its present worth than others. That in itself perhaps is an argument for profit maximisation, but it is certainly not a philosophical objection to the sale. The next item that I find rather curious in the report is the statement: The group believes that the Government could . . . give consideration to infusion of equity capital from strategic investors. It is made abundantly clear that capital of the order of $1,400m will be required over the next four years and thereafter some $2,200m, and presumably that is in current dollar terms. Those sorts of figures are well beyond the Budget capacity of the Government, and that must be abundantly evident to everyone. The consequence is that the necessary capital injection will not be forthcoming. It is also interesting that the report acknowledges that there can be an appropriate gearing ratio, in this instance 60 : 40, and that that would require the injection of something like $80m a year over the next three years. However, to suggest that consideration should be given to the infusion of equity capital from strategic investors is a very quaint notion because strategic investors are defined as: Parties who may be able to contribute to the airline's future by way of specific skills and experience. I believe that that is a nonsense. Those who should invest or should be entitled to invest are those who are prepared to put in money up front, and they will make their judgments based on their own capacity to invest and the return that they would expect to obtain. There is absolutely no point at all in trying to artificially limit the category of those who should be entitled to invest. That sort of logic flows through in another fairly crucial recommendation, concerning the appropriate ways of ensuring that the airline meets the wider social responsibilities of a government-owned enterprise. That is not defined. Time and again the report argues for commercial orientation and it makes the assumption that social responsibilities should be associated with a government owned enterprise and that they can be met by the appointment of appropriate persons to the board. If that is not simply party stacking I do not know what is. The notion of social responsibility becomes a little clearer when one looks at page 95 of the report, because that spells out that apart from needing a strong commercially oriented board there are obligations such as an innovative and well-regarded employer and service provider. If that means providing a service on uneconomic routes or paying wages higher than the market requires, I would have thought that that is acting in a non-commercial manner, which is the very sort of vice that this report says should not be condoned and, therefore, I find it unsatisfactory-- The ACTING DEPUTY PRESIDENT(Senator Bjelke-Petersen) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator HAMER(Victoria)(9.25) —I move: That the Senate- (a) endorses the findings of the Draft Report of the Industries Assistance Commission on Coastal Shipping that coastal shipping in Australia is uncompetitive and inefficient; (b) notes the disastrous effect on the Australian economy of the high costs of coastal shipping; and (c) condemns the Government for its negative reaction to this Report and urges the Government to take immediate action to prevent inefficient coastal shipping services further jeopardising growth and employment opportunities in the rest of the economy. Before dealing with the justification for the motion, I will make a few general remarks. The Industries Assistance Commission (IAC) report is a devastating indictment of, first, the state of our coastal shipping and, secondly, our port handling facilities. They are a burden that a country in our economic situation cannot afford. The IAC has brought these matters to the attention of the public-and I point out that I have been talking about them for years-and they must be tackled. I would have thought that the high cost of coastal shipping and its disastrous effect on the Australian economy was obvious. We have many isolated communities around our coastline with vast distances in between and we depend desperately on efficient shipping links, which is something that we do not have at the moment. Any Government action is very hard to see, in that it either calls for more reports or, in the words of the Prime Minister (Mr Hawke), it addresses the problem. I am not sure what is meant by `addressing the problem' but it sounds like the old Latin form in that they say, `Oh problem, I wish you would go away'. The Government does nothing because it is not prepared to engage in the confrontations that are necessary to tackle these serious problems. When we were rich and our export values were high, we could possibly afford our coastal shipping and port handling facilities; but we can no longer afford their level of inefficiency. We must tackle these problems. The Minister for Home Affairs (Senator Robert Ray) has said that he wants to go very gently-`They are making progress; let us not rush things and cause an upset'. That is not a practical approach to the problem. The maritime unions have a monopoly in coastal shipping and monopolies do not yield to persuasion. Perhaps they make some token changes and do a few things to make themselves look a bit better in the eyes of the community, but ultimately they will yield their monopoly position only if one of two things is done. The first is that someone legislates to control them. With our industrial relations system and the limited power of the Federal Parliament, that is not an effective option. The only approach to deal with this monopoly and this abuse of power is to introduce competition, but the Government is extraordinarily reluctant to do that. We will not have an efficient coastal shipping service unless there is competition, and we will not have an efficient port handling system unless there is competition. Given the limitation of Federal power, there is no alternative unless we want to continue to be blackmailed and stood over by this monopoly of union power. That has been the history of the past, it is the situation at present and, given the Government's present attitude, it will be the situation in the future. However, it is a situation that this country, which is in deep economic trouble, can no longer afford. What are we really talking about in regard to coastal shipping? The IAC report summarised it and it is worth recording its summary of the present state of Australia's coastal shipping. In 1985-86 Australian coastal shipping carried about 45 million tonnes of freight between some 40 ports at an estimated cost of about $800m, $200m of which related to shore based activities. This comprised about 3 per cent of the total domestic transport task on the basis of tonnes carried or about 40 per cent of the task based on a tonne-kilometre standard. Coastal shipping is dominated by bulk cargoes relating to steel-that is, iron ore and coal; to aluminium-bauxite and alumina; and to oil refining-crude oil and petroleum products, with fairly constant demands in terms of volumes shipped, at least in recent times. Our coastal shipping provides employment for an estimated 4,500 seagoing personnel and perhaps as many again on-shore engaged in complementary activities such as stevedoring. That is the industry we are talking about. How has it got into such a mess as it now is? It is grossly uneconomic, monopoly ridden and doing great damage to the Australian economy. It all stems back to the Navigation Act, which limits coastal shipping to those ships that employ seamen at Australian wage rates and that are not in receipt of foreign government subsidies. The section in the Navigation Act dealing with coastal trade came into force in 1921. When it was introduced in that year it was done behind a web of dishonest publicity. It was said that the legislation supported competition in the coastal trade. It was said then that any ship, Australian or foreign, could be licensed to engage in the coastal trade provided it complied with certain conditions-and I emphasise `certain conditions'. Of course, the licence fee was not a problem. The licence is issued for a nominal fee. In 1981, for instance, the licence fee was $5. Why then do we not get foreign ships carrying our trade between our coastal cities? The problem is the conditions attached to the licence. Seamen have to be paid at the current rates of pay operating in Australia and the ships have to operate with Australian manning levels and Australian conditions and accommodation requirements. These conditions still apply today, 64 years later; and it is to our great cost that they still apply. Australian shipping has to be operated at award rates, with Australian manning levels and Australian conditions of crew accommodation. By the way, it costs a million dollars more to fit out an Australian ship to our standards than it does in a country with comparable or higher standards of living, such as Sweden. We also have a problem in that the crews on Australian ships, although much larger than the crews on many foreign ships, do much less maintenance work. This in turn means that Australian ships have to spend a longer period in dockyard hands. These dockyards, in another rort, an inter-union deal, are run in a way which means repairs in an Australian shipyard are three times as expensive as those in a foreign yard. No wonder our ships are not efficient or economic. The only exception-because no foreign owner would ever be mad enough to send a ship to Australia on those conditions-in which a foreign ship may obtain a permit to operate in coastal trade without meeting the stringent Australian crew requirements is for a single voyage where no suitable Australian ship is available, particularly for freight movement. To ensure that only Australian ships or foreign ships meeting the Australian crew requirements operate in the coastal trade, a licence or permit is issued for the ships to operate this trade and no ship can operate without it. The only circumstances in which this can be waived is if there is no suitable Australian ship, and then a single voyage permit issued. These permits are very rare and most are issued only for the transport of liquified petroleum gas (LPG). I seek leave to incorporate in Hansard a table showing cargo carried under the single voyage permits. Leave granted. The table read as follows- CARGO CARRIED UNDER SINGLE-VOYAGE PERMITS (SUMMARY) 1981-82 Ship- ments Tonnes 1982-83 Ship- ments Tonnes 1983-84 Ship- ments Tonnes 1984-85 Ship- ments Tonnes LPG ... 66 50,212 59 46,916 15 11,339 3 1,807 Petroleum products ... 5 96,391 . . . . . . . . . . . . Crude oil ... 1 39,934 . . . . 2 139,225 . . . . Tallow ... 6 5,423 1 1,363 2 2,215 1 400 Caustic soda ... 4 37,300 2 28,000 2 33,993 6 69,407 Sulphuric acid ... . . . . . . . . 2 18,485 2 9,955 General cargo ... 7 7,044 7 3,404 2 30 6 510 Toluene Di-isocyanate (TDI) ... . . . . 4 136 . . . . . . . . Explosives ... 1 98 1 197 . . . . . . . . Phosphate ... 2 51,334 . . . . . . . . . . . . Molasses ... 6 25,887 . . . . . . . . 3 16,500 Bricks and timber ... 2 11,307 . . . . . . . . . . . . Aqua ammonia ... 1 3,908 . . . . . . . . 2 8,535 Newsprint ... 1 1,700 . . . . . . . . . . . . Prawns ... 4 285 . . . . . . . . . . . . Total ... 106 33,823 74 80,016 25 205,287 23 107,114 Source: Department of Transport, Annual Reports. Senator HAMER —I thank the Senate. What has happened to our coastal ships is that our seamen's unions have managed to get a monopoly of the coastal trade. It has become a total rort for the seagoing unions and a high cost service for which all Australians pay. This is confirmed by the Industries Assistance Commission report to which I referred earlier and its measured words are worth recalling. It is an interim report which the Minister is trying to rubbish by picking up minor factual errors; it is only an interim draft report and minor factual errors are not important because the thrust of the report is accurate. The report says: Coastal shipping in Australia is uncompetitive and inefficient. High costs and a poor record of service have progressively reduced the industry to a position where the only goods currently shipped around the coast tend to be those for which no alternative transport modes are available, or are not a realistic proposition. While this must be of concern to the industry itself, the real issue for the Australian community is that inefficient coastal shipping services jeopardise growth and employment opportunities in the rest of the economy. The IAC has estimated that the excessive coastal shipping freight rates, between 20 and 30 per cent, wipe off between $300m and $700m from Australia's gross domestic product annually. The pendulum on the economy is equivalent to adding between $7 and $16 to the cost of every tonne of cargo transported by ship around Australia's coast or between $35,000 and $80,000 annually for every worker employed in the industry, both at sea and on the waterfront. What has happened over the years is that there has been a steady and, at the moment apparently, irreversible decline in our coastal shipping. When the Navigation Act giving the effective monopoly to Australian flagships and a monopoly to the unions concerned was ratified in 1921, there was very little competition from other forms of transport such as road and rail. At that time rail was not used for any purposes other than inside States. The transcontinental railway was completed only three years earlier. The situation of very little interstate traffic by rail continued to World War II. But by 1962 the standard gauge made rail an option for services between Victoria and New South Wales. Also in the 1920s there was really no competition from road transport. The roads either did not exist or were not good enough to take heavy traffic safely and quickly between States. But as the roads have improved the competition among road, rail and shipping has become more intense. What has happened is that our road transport in particular has become much more efficient, our shipping has not become more efficient but has declined in efficiency, and cargoes that on any economically rational basis should be carried by sea are being carried by other means, by road in particular, to the great economic loss of the country. It is absurd to see single containers carried across Australia by rail because the shipping and port handling facilities and the reliability of delivery are such that people prefer to send goods by road rather than by the much more economically sensible method of sending them by sea. Coastal shipping's share of total domestic freight has declined from 52 per cent in 1970 to 39 per cent in 1984, while road transport's share has increased from 20 to 30 per cent and rail from 28 per cent to 31 per cent. How has our shipping got into such a mess? Of course, it is the usual result of a monopoly. Monopolies exploit communities over which they have that monopoly and shipowners have little or no control over costs. The unions have demanded and, because of their monopoly position, have nearly always obtained everything they have asked for. They have been bought off again and again. There is even a situation where the shipping companies have no control over their crew selection. Imagine the consequences of that! There is no incentive to train crews to more efficiency if a company cannot get the same people on successive voyages. There is no proper system of responsibility and efficiency inside our coastal shipping industry. What is worse, when new technology became available-say, from 1970 onwards-it was either too expensive to introduce or was rejected by the maritime unions. For instance, when the rest of the world was using more efficient drive on-drive off ferries, the Australian National Line (ANL) was, and still is, running vehicle deck ships which need specialised equipment to straddle vehicles off and on board. The costs of loading and unloading these vehicles is estimated to be 40 per cent higher than it would otherwise be with some sort of roll on-roll off vehicle. Let us look at some of the other problems our coastal shipping industry has. One is manning levels. I am sure that Senator Ray will say something about this, but I do not think that what he says is likely to be credible. Manning and conditions add an excessive and grossly unreasonable cost to our coastal shipping. Despite the report of the Crawford Committee on Revitalisation of Australian Shipping, our progress in crew reductions has been very slow indeed. Although the Crawford report recommendations have been implemented, the first ship has only just come into service under these conditions. This only applies to new ships, the old ones are manned at much higher levels. But we will not see any useful results from this recommendation on manning before the mid-1990s. Even when these reforms are introduced, our crew levels will still be 25 per cent higher than those of comparable maritime nations with comparable standards of living. Australian ships are still being provided with 25 per cent more crewmen to do the same job-actually a lesser job because, as I said, our crews do less on-board maintenance than do the smaller crews in any comparable country. I will just give one example of the sort of nonsense we go in for in overmanning. Every Australian ship has to have a radio officer. Why do we want a radio officer? Why cannot the officer of the watch man the radio as the captain of an aircraft does? There is voice radio now; we do not need a specialised radio officer. Because of the old built-in inefficiencies and built-in monopoly powers we still provide people we do not need. That is only one example. Many others have to be tackled. We are dealing with big money. The cost per head of a position in an ANL ship is $100,000 per year. That is big money if one can cut back on one's crew. Also, for every position in the ship we have to provide 2.2 people to allow for six weeks on-six weeks off-six months annual leave plus sickness and similar benefits. So we are talking about big savings if we can get our crews down to the levels of comparable countries which are as rich or richer than we are. I seek leave to incorporate in Hansard a table showing the crews of ships operating under the Australian flag in the coastal fleet. Leave granted. The table read as follows- Table 3.7 THE AUSTRALIAN COASTAL FLEET-JULY 1987 Ship Operator Built Type DWT Crew Managed by A.N.L. Bass Trader ... ANL 1976 Ro/Ro 7,480 30 Flinders Range ... ANL 1977 Bulk Carrier 27,500 31 Freeway North ... OCN FRWAY 1978 Ro/Ro 9,332 26 Melbourne Trader ... ANL 1975 Ro/Ro 7,210 31 River Boyne ... ANL 1982 Bulk Carrier 76,350 31 River Embley ... ANL 1983 Bulk Carrier 76,300 31 River Torrens ... ANL 1977 Bulk (S/Unlod) 31,920 30 Managed by T.N.T. Australian Spirit ... BP 1987 Tanker (Prod) 32,600 29 BP Enterprise ... BP 1968 Tanker (Prod) 20,640 40 Conus ... SHELL 1981 Tanker (Prod) 37,790 35 Esso Gippsland ... ESSO 1972 Tanker (Prod) 24,380 37 Goliath ... TNT 1977 Bulk Cement 4,270 25 Mobil Australis ... MOBIL 1972 Tanker (Prod) 27,070 39 Seaway Hobart ... UNION 1976 Ro/Ro 7,360 32 Seaway Melbourne ... UNION 1977 Ro/Ro 7,300 32 TNT Carpentaria ... TNT 1983 Bulk Carrier 75,100 31 TNT Capricornia ... TNT 1983 Bulk Carrier 75,140 31 Wiltshire ... ICI 1968 Tanker (LPG) 12,280 33 Zincmaster ... EZ 1975 Bulk-Ro/Ro 17,530 34 Managed by B.H.P. Iron Capricorn ... BHP 1975 Bulk Carrier 35,240 33 Iron Carpentaria ... BHP 1977 Bulk Carrier 45,310 31 Iron Curtis ... BHP 1978 Bulk Carrier 45,310 31 Iron Kembla ... BHP 1986 Bulk Carrier 148,160 26 Iron Kestrel ... BHP 1974 Bulk Carrier 27,270 31 Iron Kirby ... BHP 1974 Bulk Carrier 27,300 31 Iron Monarch ... BHP 1973 Ro/Ro 14,880 31 Iron Newcastle ... BHP 1985 Bulk Carrier 148,140 26 Iron Pacific ... BHP 1986 Bulk Carrier 231,850 26 Iron Prince ... BHP 1981 Bulk Carrier 21,740 32 Iron Shortland ... BHP 1979 Bulk Carrier 107,150 34 Iron Spencer ... BHP 1981 Bulk Carrier 141,470 33 Iron Sturt ... BHP 1979 Bulk Carrier 22,100 30 Iron Whyalla ... BHP 1981 Bulk Carrier 141,470 33 Island Gas ... BORAL 1976 Tanker (LPG) 5,880 23 Managed by H.S.I. Camira ... CAIL 1980 Bulk Carrier 4,210 15 Canopus ... MILLER 1986 Tanker (Cr-Pr) 94,350 29 Conara ... CAIL 1977 Bulk Carrier 4,190 15 Era ... MILLER 1986 Tanker (Cr-Pr) 94,290 29 Howard Smith ... HOWD SMIT 1981 Bulk Carrier 43,300 31 Island Seaway ... SA GOVT 1987 Ro/Ro (Passgr) 1,170 17 Lindesay Clark ... ALCOA 1985 Bulk Carrier 29,510 26 Sandra Marie ... ICI 1986 Bulk Carrier 5,580 22 Stolt Australia ... STOLT 1986 Tanker (Chem) 9,940 29 Wallarah ... CAIL 1986 Bulk (S/Unlod) 6,670 15 Managed by Operator Abel Tasman ... TPT. TAS 1975 Ro/Ro (Passgr) 2,700 93 Accolade II ... ADEL CEMT 1982 Bulk (S/Unlod) 8,245 14 Albany ... MASON 1975 Landing Barge 402 6 Ampol Sarel ... AMPOL 1979 Tanker (Crude) 101,500 37 Arthur Phillip ... CALTEX 1974 Tanker (Crude) 66,690 38 Australia Star ... CALTEX 1986 Tanker (Cr-Pr) 94,560 29 Cementco ... QLD CEMENT 1978 Bulk Carrier 16,510 26 Challenger B ... BRAMBLES 1979 Ro/Ro 2,820 21 Fourcroy ... PERKINS 1968 Landing Barge 374 9 Irene Greenwood ... WASS 1982 Cell.Containr 21,760 34 John Hunter ... CALTEX 1975 Tanker (Prod) 24,620 40 Karawa 2 ... FLINDERS 1982 Landing Barge 200 6 Katika 1 ... FLINDERS 1960 G.C. 443 8 Koolinda ... WASS 1978 Ro/Ro-G.C. 12,360 33 Kowulka ... CSR 1984 Bulk Carrier 23,260 27 Lady Jillian ... FLINDERS 1948 G.C. 250 6 Leichhardt ... MASON 1981 Ro/Ro-G.C. 1,266 10 Melville Bay ... PERKINS 1968 Landing Barge 628 7 Ormiston ... CSR 1979 Bulk Carrier 16,580 30 Pera ... MASON 1969 Landing Barge 345 6 Pilbara ... WASS 1978 Ro/Ro-G.C. 12,350 33 Sid McGrath ... BURKE 1978 G.C. 2,745 22 Sitka ... LORD HOWE 1963 G.C. 400 6 Spinifex ... ELDER 1966 Landing Barge 90 4 Straitsman ... TPT.TAS 1972 Ro/Ro 979 14 Trisha Kate ... BARGEXPRS 1985 Landing Barge 174 3 Wadjemup ... ELDER 1985 Landing Barge 175 4 W.M. Leonard ... AMPOL 1973 Tanker (Prod) 25,560 39 TOTAL ... 2,472,018 1,892 Senator HAMER —Air travel also makes our coastal shipping inefficient. A crew member does six weeks on and six weeks off. When he finishes his six weeks on he has to be relocated back home-first class air travel, of course, and appropriate accommodation in first class hotels. Senator Robert Ray —The same as you get. Senator HAMER —Yes, it is the same as members of parliament get, but does Senator Ray think that an ordinary seaman from a merchant ship deserves or requires the same standard of transport and accommodation as a member of parliament? If he thinks that, that is equality gone berserk! Senator Michael Baume —They earn more money than we do. Senator HAMER —They possibly earn more money but that is a different problem. No other country in the world provides these conditions for its seamen. We are not the richest country in the world. We used to be, but we are now down to fourteenth. No other country in the world provides these sorts of conditions for its seamen. We do, and we do so because of the monopoly power of the unions which have managed to extort these conditions from the Australian public. Let us look at another item-repatriation conditions. If a crew member becomes ill, even with a minor complaint, say in an Asian port-this does not, of course, apply to coastal shipping but it is one of our shipping problems-he is flown to Sydney perhaps, first class of course. A replacement crew member is then flown to the port where his ship is-first class of course-and the ship may be delayed several days. It is not permitted to sail with a replacement seaman from the port in which it is caught. It has to have someone come back from the base. The cost is $30,000 to $50,000 a day. Can one wonder why our freight rates are so high? There is one other matter-that of victualling. Australian awards require two hot meals a day with alternative menus and full catering in port, despite the fact that there may be very few crew members left on board. We then come to the ultimate rort-leave. For every crew billet in one of our ships we require 2.2 seamen. This is because our seamen get six months leave a year. This figure of 338 days leave for each year's work for an Australian should be compared to 226 days for a Frenchman, 216 for an American, 174 for a West German, 141 for a Norwegian and 84 for a British rating. This is an outrageous rort. I seek leave to incorporate in Hansard a table showing the relative leave entitlements for the seamen of various countries. Leave granted. The table read as follows- LEAVE ENTITLEMENTS BY SHIPPING NATION, DECEMBER 1984 (Days) Country Leave entitlement per day worked Able Seamen Chief Mate Australia ... 0.932 0.932 Belgium ... 0.444 0.460 France ... 0.619 0.600 West Germany ... 0.477 0.523 Greece ... 0.263 0.263 Japan ... 0.247 0.247 Norway ... 0.386 0.564 Sweden ... 0.868 n.a. UK ... 0.230 0.603 USA ... 0.592 0.748 n.a. Not available Source: Derived from information presented by the Government of Tasmania (Submission no. 48, p. 37) Senator HAMER —One can see from the table and from what I have said that our leave entitlements far exceed those of most traditional maritime nations; in some cases they are up to four times as great as those applicable elsewhere, for instance in Japan, the United Kingdom and Greece. This is a significant cost burden. In addition to these factors, there are a number of non-wage items that combine to add significantly to our vessel manning costs. These are payroll tax, fringe benefits tax, superannuation, crew-related insurance for workers compensation and similar claims, travel and accommodation, which I have mentioned, victualling, which I have also mentioned, recruiting and training, medical expenses, provision of special clothing and so on. We are running a very expensive system which is far beyond what any comparable country provides and far beyond our means to provide. Although the motion refers specifically to our coastal shipping, we must not delude ourselves that the problem can be solved merely by getting competition into our coastal shipping. The other problems stem directly from our ports. We have exactly the same problems of lack of competition, inefficiency, gross overmanning and excessive wages and rorts. These must be tackled by this inactive Government. In the international insurance fraternity our ports have the reputation of being the most strike-prone in the world. We have held that title for five years in a row and we do not look like giving it up-unlike the title of the `world's best Treasurer' which Mr Keating once held. However, I believe that the next year he was runner-up to the world's worst Treasurer. I do not think that we are likely to give up our title. We have had five years in a row of having the most strike prone ports in the world. The productivity, by any standards, is disgraceful. For instance, using identical equipment-it is not a question of capital equipment; it is a question of how the equipment is operated-it takes two days to load or unload 300 containers in an Australian port. It takes four hours, as opposed to two days, using identical equipment to handle the same number of containers in Hong Kong; six hours in Singapore and never longer than one day in a European port. This is a problem we must tackle urgently. It is obvious that our coastal shipping is in an appalling state. Something has to be done to tackle this problem. It is no use saying, `We will go very softly. We must not offend anyone'. That might have been a possible approach were we one of the most prosperous countries in the world; maybe we could afford this inefficiency. But we can afford it no longer. We will not break the power of monopoly by negotiation. The only way to break a monopoly-everyone knows this; it has been proved over and over again-is by either government regulation-I do not believe that we have the power, because of the limitations of the Constitution, to do much about that; I hope that we do-or introducing competition. It is the only feasible way to solve the problems of our coastal shipping. We must open it up to competition, break the monopoly of the maritime unions and get our conditions so that they are fair but comparable with those of countries as rich as we are or even richer. At the moment, it is an appalling rort for which the whole Australian community is paying very dearly. Senator ROBERT RAY(Victoria-Minister for Home Affairs)(9.52) —On 21 July 1987, the Government referred to the Industries Assistance Commission (IAC) a reference on the efficiency of coastal shipping. Rather than read the terms of reference, I seek leave to have them incorporated in Hansard. Leave granted. The document read as follows- A.1 Terms of Reference I, JOHN NORMAN BUTTON, Minister for Industry, Technology and Commerce, in pursuance of my powers under Section 23 of the Industries Assistance Commission Act 1973 hereby: 1. Refer to the Industries Assistance Commission for inquiry and provision of an information report, the coastal shipping industry, excluding waterfront operations at Australian ports. 2. Specify that this reference is intended to elicit information about the efficiency of the coastal shipping industry in Australia and its impact on economic growth and employment within the economy. 3. Without limiting the generality of this reference, request that in its report in accordance with paragraphs 1 and 2 above, and noting the Government's existing policy is that coastal trade be carried in Australian controlled and Australian crewed ships, except where such ships are unavailable or services provided by them are inadequate, the Commission report on: (a) the economic efficiency of coastal shipping and the cost structures of operating vessels currently engaged in or capable of being used in the coastal trades, taking into account developments currently taking place in the industry (b) competitive forces within and impacting on the coastal shipping industry (c) freight charges in coastal shipping and the extent to which these might vary as a result of improved efficiency in the industry (d) the impact of Government assistance and regulation on coastal shipping operations and on costs to using industries (e) other factors which impact on the efficiency of coastal shipping or impair its competitiveness (f) the linkages between these industries and growth and employment elsewhere in the Australian economy. Senator ROBERT RAY —I thank the Senate. There is quite a substantial difference between a draft report and a final report. A draft report is circulated on the understanding that it will be given a rigorous examination, that it will invite future public comment and other submissions and further public hearings before a final report is produced. Having first read the draft report, I faced a dilemma: `Do I say nothing and wait for the final report?'. I clearly made a political decision to make my views known, at least on the contents of the draft report, because if I had not done so the debate would have raged on and there would have been no Government comment whatsoever. Everyone was ready at midnight on the 27th. Mr Julian Beale, with his usual immature approach to transport matters-why he has been left in that portfolio, I do not know; it is not surprising that Senator Hamer has the major carriage of these issues-put out an eight or 10-paragraph Press release. Apparently, that was a big effort for him. Andrew Hay from the Australian Chamber of Commerce turned cartwheels because at last he had finally found a philosophy and an exposition of a philosophy more right wing than himself. Other writers, such as Paddy McGuinness, turned cartwheels over the report's conclusions. My greatest objection to the report is not simply its conclusions or the cheap overview statement that was published; it is the methodology. If the methodology is bad it confuses the debate on shipping and leads us nowhere. The Department of Transport and Communications will be making a further submission to the IAC in which it highlights many of the weaknesses in the draft report. I will be very pleased to make that a public document as soon as I can. I should say, I think in some detail, why I put the blowtorch to the IAC report. First of all, I wish to say that my attack, if you like, on the report cannot be seen as an attack on the Industries Assistance Commission. Honourable senators can search through speeches made in this place and they will not find a record of my getting up every time the IAC brings out a report and attacking it. The IAC has a role to play in government-more often than not a hard role-that is, of devil's advocate. Governments are never bound by IAC reports or their recommendations. Nevertheless, I put it on record now that the Industries Assistance Commission is a necessary part of the government process. However, I am not Robinson Crusoe in my criticisms of the draft report. I wish to go to three different groups. The first group I wish to quote is the Australian National Maritime Association. Mr Bill Bolitho, the Chairman of the Association, said: Ship owners were deeply disappointed with the report's naivety and lack of objectivity. The cheap rates talked about in the report reflect the past serious world over supplying of shipping-the impact of which has been reducing in recent months. For example, freight rates between Australia and Japan have doubled in the last 12 months. Mr Max Moore-Wilton, the Managing Director of Australian National Line, described the report in the following terms: Notable for its inadequate financial analysis and the subjective nature of much of its commentary. Would do little to assist the necessary restructuring of Australia's maritime and waterfront industries. The combined maritime unions described it as follows: Appears to indicate blind acceptance of a series of assertions. Coupled with a shallow, negative approach to the positive features of the Australian shipping industry. I go to those points not as absolute proof but to say that a variety of people have the same belief as me that this report is inadequate. My general criticism of the report is that it is too one-sided; it is highly theoretical and, quite frankly, it ignores reality. I will go through my specific criticisms in some detail. When one puts out a Press release and says one does not like a report, people say, `All you are trying to do is shoot the messenger. All you have been doing is being shallow in your criticisms of it'. If I put out a 10- or 12-page Press report we know what would happen to it. People would read the first page and throw the other nine pages away. So I intend right now to put on record my criticisms of that report. Firstly, this inquiry was supposed to have produced a factual report. I refer honourable senators to John Button's Press release when this reference was made. The third paragraph states: The reference differs from most past references in that it seeks an information report on the industry, rather than recommendations. That was the direction given. If honourable senators read the reference they will see that it was not like a normal reference to the IAC. What we sought at the time was a factual report on the shipping industry. We did not direct the IAC to bring in a pro-Government or anti-Government position because, time and time again when we discuss Australian shipping, it is very hard to have a good statistical base that all groups agree to work off and to debate among themselves. Rarely do people in the shipping area compare like with like. So it was a Government decision to send it to an independent body which would say dispassionately, `What are the costs of Australian shipping?'. That was the intention. The intention was not to have right through the report especially in the overview section, a whole raft of implied recommendations. The IAC was asked specifically not to put in any recommendations. Therefore, I feel quite entitled to say that we are paying the IAC good money, we sent it a reference, it ignored that reference and ignored its riding instructions and has put in its own implied recommendations. If one reads the terms of reference one sees that the waterfront was specifically excluded. Yet right throughout the IAC report the waterfront gets a big mention. I have not come in here tonight to say that everything on the waterfront is fine. I would be foolish to say that. But this report was meant to deal with shipping. There are differences, in terms of costs to freight, between the costs of possible inefficiencies in shipping and inefficiencies on the waterfront. In those two major areas the IAC has brought down implied recommendations and has ignored the fact that it was sent away to establish a database from which rational debate could ensue. As well as that, we find gratuitous insults addressed to the Inter-State Commission. These are not justified in the report. The report says that the Inter-State Commission in its dealings with the waterfront is ineffective and useless. I wonder whether the IAC talked to Ted Butcher? Did it really make an investigation as to whether the Inter-State Commission was effective? Even though this inquiry was not in the terms of reference we have these gratuitous insults from one body about another. My second criticism simply relates to the lack of intellectual rigour that went into the report. I really feel like asking for a refund. All criticisms of the shipping industry seem to have been taken at face value. Therefore, one could have put any canard to the IAC and it would be run holus-bolus in the overview. The Commission does not bring any independent critical analysis to bear. It does not ask: `Are these assertions true or not?'. It simply did not do that. I can tell Senator Hamer that that was irrespective of the fact that no group appeared before the Commission that was critical of those things. Even so, conceding that, the Commission should have applied some intellectual rigour and asked: `Are these assertions credible?'. It did not do that. It just regurgitated quotes without any rigour and without any analysis. I expect more of a Government agency, which has a great record in bringing down many great reports, than the adoption of this approach. My third criticism is that the report takes a very theoretical approach. It virtually ignores reality absolutely. In this report there is no attempt to do a benefit-cost ratio analysis of its approach. It is as though it is setting up a pure model, like most economists do. The first words one learns in economics are, `on the assumption that'. In regard to this report there are many assumptions made and many realities of life that are totally ignored. For example, it is being said, `You can do this to the shipping industry because we are assuming that X, Y and Z could never occur; that there will be no reaction to doing it'. That makes the report not only unbalanced but also of no particular use to a government as guidance. Of course consistently in that report we have a very contemptuous attitude to shipowners and unions. Of course, the report contains factual errors. I have described those errors as minor. However, they are not to be dismissed with the flip of the hand, as Senator Hamer has done tonight. While they do not necessarily detract from all the conclusions in the report, because so many factual mistakes and inconsistencies exist it would be very easy to say that this report was badly researched and superficial. I think that I will just spend some time on that question and probably note five of the factual errors. The report dismisses the capacity of the Crawford and the Maritime Industry Development Committee (MIDC) schemes to achieve efficiency gains. This is on page 7-4 of the report. In fact, the Crawford scheme resulted in a 25 per cent reduction in crew size on affected ships. The MIDC scheme will result in further improvements of up to 33 per cent, on average, compared with existing ships. As an example, the capacity to ship alumina into Victoria from Western Australia has tripled in three years, but the crew required to do this job has stayed about the same-because of changes brought about by Crawford and the MIDC. That does not detract from the rest of Senator Hamer's case. However, the Commission fails to acknowledge that in this report. I ask Senator Hamer why that is so. Why would the Commission deliberately ignore those sorts of improvements and just blast the unions and the shipowners? My second point is that the report implies in two sections, 4-14 and 6-3, that under current legislation foreign flag vessels do not pay fuel excise while carrying coastal cargoes. This is simply not true. Foreign flag vessels carrying coastal cargoes pay excise, unless the coastal component of the total cargo is less than a small predetermined percentage-about 10 per cent. That is another major error. My third point relates to the statement on page 2-20 that, `Ship owners make payments to the pool, and the pool pays all seamen'. This is incorrect. Although ship operators do contribute to the pool for attendance payments and long service leave, wages are paid directly to crew members from shipowners and operators. My fourth point is that the report repeats the claim by some of the participants at the hearings that the Department takes industrial relations considerations into account in its administration of the single voyage permit, the SVP system. This is simply not true. It has not been true while I have been Minister, and it has not been true for my predecessors. The Department administers the publicly available guidelines in a fully professional manner and industrial relations factors simply are not considered. That is the fourth occasion of a simple factual error. I will go to the last error, before I move on to one of the major inconsistencies. The report asserts that the Australian National Line (ANL) has paid dividends to the Commonwealth totalling $8.3m in the past 20 years. In fact, any research will tell us that ANL has paid dividends of $17m over the last three years to the Government. In fact, the whole attitude towards ANL in the IAC report is a joke. I remind honourable senators opposite that when they left government in 1983 they left ANL technically bankrupt. They left it absolutely bankrupt. If it had been a private firm, it would have been made insolvent and dismissed. We have had to do a lot to turn around ANL's performance. It has meant that it has had to shed ships. We have taken a ruthlessly commercial approach in the running of ANL and it is now starting to pay dividends and starting to pay taxes. I move on to the question of inconsistencies. There are inconsistencies in the report in the interpretation of the Navigation Act. On page 3-12 it is stated that the capital costs of Australian ships are influenced by the accommodation standards of the Act, whereas on page 6-2 it is correctly implied that crew accommodation standards are determined by the normal processes of industrial negotiation. The report says one thing on one page and a couple of pages later makes a different statement. Again, where is the intellectual rigour? The report leaves itself open to those groups that do not want any reform on the waterfront to say, `Look at this report. Look at these factual errors. Look at all these inconsistencies'. I move now to another inconsistency. That I have difficulty accepting claims at face value is illustrated by the apparent inconsistency between the following two statements. First, the report stated on page 2-7 that coastal shipments of crude oil cost Australian refineries $30m to $35m per annum more than they would at prevailing international shipping rates. Later on the report states that the protection given to the Australian oil tanker fleet alone costs between $90m and $160m per annum. That is another inconsistency found on page 6-4 of the report. Therefore, it is quite easy to say and to show why I am so disappointed in the report when it has those sorts of factual errors and those sorts of inconsistencies. I raise now the central question of cabotage because this report says that cabotage should no longer exist. It says that Australian coastal shipping should be open to all sorts of international competition. That is the thesis of the report. I might say that cabotage has been in the Act since between 1912 and 1921. No other government in Australia has ever touched it. I argue-I am waiting to hear honourable senators opposite argue against it-that coastal shipping is part of our domestic transport system. It would be interesting for me to hear honourable senators opposite say that part of our domestic transport system should have foreign crewed ships or foreigners involved. I wonder where that ends? Does it end in our saying, `Well, because we have opened up coastal shipping we will now have guest workers in the railways'? Does it mean that we will have guest workers in the trucking industry, or the airline industry, and then that we will move on to have guest workers in the hospitality and tourism industries? Senator Hamer —They don't have monopolies. Senator ROBERT RAY —A lot of different people may or may not have monopolies. What Senator Hamer is arguing for is for guest workers to come into this country. He is arguing that the cheap labour countries should provide labour to this country. Where is it going to stop? Maybe we should start to get some guest workers in the political area so that opposite we can have Senator Pinochet, Senator Botha and Senator Marcos. We could get them in a lot cheaper than honourable senators opposite cost. We will have some guest politicians. The real point about this is that coastal shipping is a part of our domestic transport service. It would be equally ridiculous for me to say that Australian ships should not be open to all sorts of competition on the international run. Of course they are. They live and die by that; they have to survive in that area. But if, as the Opposition says, it would open up the Australian coast to guest workers, where would it stop? I hope that at the time of the next election members of the Opposition will go to all the railway shops and truck depots and say, `Look, we have introduced guest workers to the coastal run and you are next; come and vote for us. We will put you out of your job by introducing low paid workers. How do you like that?'. Of course they would not like that. We do not entirely preclude overseas crewed ships from the Australian run if no Australian ship can do the work. Senator Michael Baume —So you allow guest workers? Senator ROBERT RAY —No, Senator; where there is no Australian alternative we grant a single voyage permit. While I am on the subject, I was interested to read the rather shallow editorial in today's Age, which naturally jumped on the bandwagon. It basically says the same as the Opposition-open it up to foreigners. It was only four weeks ago that we heard all the reporters and the management of the Age squealing like stuck pigs, pleading, `Save us from foreign ownership. Please, Labor Government, intervene and protect us because we cannot have Robert Maxwell or some other overseas person come in and own us'. How absolutely hypocritical of the Age. It is no wonder that every morning I go to the Sun first. I usually leave the Age till last, and it is no wonder when we have this sort of hypocrisy. The real crux of the draft report on coastal shipping comes down to the analysis of cost and freight savings. The report estimates that the abolition of cabotage would save between 20 and 50 per cent in freight rates. These figures are badly out of date, and they are based on spot rates at the time of a depressed international market. Again, the report does not allow us to compare like with like; it has gone to the bottom of a depressed market and used spot rates. The crews on any Australian coastal shipping operation cost only 15 per cent of the freight rate. That is something to remember. So, even if we sacked all the crews and manned the ships with robots at no cost, we would make a saving of only 15 per cent. Yet the report refers to a 20 to 50 per cent saving in its opening remarks on cost. It is true that the really hard area for freight costs is on the waterfront, and that is an area that has to be looked at. But it is a bit unfair to load all these costs onto shipping in the way that this report has done. The report has inflated its 20 to 50 per cent penalty to a national economic penalty of between $300m and $700m. Of course, these figures are based on inappropriate 1980-81 Australian Bureau of Statistics input-output tables. If we convert them back in dollar terms to per tonne figures, we get a saving of between $7 and $16 per tonne. The figures of the Department of Transport and Communications show that the costs figure of $17 per tonne or less applies to 75 per cent of the coastal trade. So what the report is really saying is that we could get up to a $16 or $17 per tonne saving by getting foreign ships in. The quite logical conclusion from that is that those ships would carry everything for nothing. What an absurd proposition! The report incorrectly assumes that foreign vessels do not pay fuel excise. Senator Michael Baume —You need some intellectual rigour there. It says $7, not $17. Senator ROBERT RAY —It says $7; I said at the extreme. Senator Baume should listen. The report says that the savings could be from $7 to $16. If the upper limit of $16 were to be given credibility, the ships involved would have to carry most Australian cargo at $1 per tonne, or for nothing. Senator Michael Baume —That is rubbish! Senator ROBERT RAY —I will listen to the honourable senator later about that. He should go and read the report, apply some sort of intellectual analysis and then let us know what he has to say about it. What is really involved here is a case of taking the assumptions expressed in evidence given only by biased people, pumping them into an econometric model and getting the results out the other end. The reality is that if we put garbage into an econometric model, we will get garbage out the other end. I will not spend a lot of time on this report but it simply fails to acknowledge or have the decency to say that there have been some changes in the shipping industry. The Crawford reforms and the Maritime Industry Development Committee have gone some of the way, virtually all in the life of this Government. This report just ignores that. It again gives an unbalanced approach. I wonder what is has to say about areas such as safety. It is not simply a matter of bringing flag of convenience ships onto the Australian run. How many flag of convenience ships have sunk like a rock in the last few years because of poor safety standards? It would be like saying that we want to bring in some cheap South American airline, with its air safety standards, to do a domestic run. I believe that there is a need for reform in the Australian shipping industry. I will not walk away from that. But I look at the long term consequences of what is for the good of this country and I say that changes are best when they come by evolutionary rather than revolutionary means. That we need change is recognised by the unions. The unions have changed, and they have changed in good faith. Changes are most effective when they are well thought out and put into effect. If those opposite want to take that as timidity, they may do so. I want to point out in my concluding five minutes the massive hypocrisy of the Liberal Party-the good old boys of the Liberal Party, gung ho in opposition and pussy cats in government. Those opposite are the great regulators. When they were in power did they deregulate the Navigation Act? Of course not. They are the great `gunnas'. They were `gunna' float the dollar but they did not. They were `gunna' introduce foreign banks as competition. They were `gunna' introduce tax reform. We have the great `gunnas' of politics sitting on the Opposition benches and saying, `We need revolutionary change'. But the moment the Opposition gets in power it is the harshest regulator since Stalin ruled Russia. It is virtually Stalinist in its desire for central control and regulation. When Opposition members get really guilty they race off to a Liberal Party conference, get excited about free enterprise and talk theory, and then come back to Canberra and ask themselves how many new regulations they can think up. They do not deregulate the economy. I predict that if and when the Opposition ever gets into government it will not do away with cabotage. It will not open up the coast to foreign competition; it will just regulate it more than ever. This Government has delivered in the shipping area not to the ideal extent but at least with the cooperation of shipowners and maritime unions. When we came into government the basic crew size was 38. Even if we were unfortunate enough to lose Government in 1990, the crew size would be well on the way to 21. We have integrated ratings. We no longer have the social snobbery of the sea where the captain has a mess in one corner and the crew has the rest. We have set up facilities at the Australian Maritime College to provide integrated training. Senator Hamer mentioned the radio operators. They may be going in the next two or three years as we get multi-skilling in the work force. This is one of the areas where multi-skilling has had priority. We have not had to hold a gun at the unions' head. They know what the future is. The future of Australian shipping involves multi-skilling, reduced levels of manning and trying to make Australia competitive not only on the coast but in the international area. We as a government brought in the Ships (Capital Grants) Act to make grants to companies that modified their ships to bring in the 21 crew size. Senator Hamer said today that he agreed with the conclusions of the report. He spent very little time trying to justify how the IAC got to those conclusions, and well he should have spent little time on that because it got to the conclusions in the wrong way. It got to the conclusions only by repeating the evidence of vested interests. It did not use the necessary intellectual rigour to assess whether that evidence was any good. In the next months we will be faced with a debate on the future of the shipping industry. It is a debate in which I am going to become vigorously involved without fear or favour, without pandering to unions, shipowners or anyone else. But I very much doubt the firepower of the Liberal Party on this issue. Senator Hamer, on the variety of occasions that he has addressed shipping issues, although I do not agree with him, has brought some force and some integrity into the argument. But every time the Opposition's shadow Minister in the other place addresses shipowners or seagoing personnel, they all shake their heads afterwards and say, `Who is this bloke? How come he knows nothing about it?'. Even the right wing groups that want to get support for their reform dismiss him as a lightweight, and that is a pity. I will be opposing Senator Hamer's motion. I was disappointed with the IAC report. I am not attacking the Commission per se, but this report deserves to be dumped on. However, it is not the end of the world. We have public hearings, and I assume that everyone from all over the place will be making submissions. I look forward to a more balanced and intellectually honest report when the final draft comes out, and one that will contribute to a constructive debate in this country. That was the initial intention-not to bring down a right wing, macho, free- marketeer document so that we could go away feeling pure that we had achieved these theoretical models. It does not help. There is a real world. Those in the Opposition do not have to live in it, but we in the Government do. I say, in conclusion, that we are committed to reforms in the shipping area but not at the cost of disrupting the whole of the Australian economy. Senator MICHAEL BAUME(New South Wales)(10.22) —I rise to support Senator Hamer's motion, and I repeat it: That the Senate- (a) endorses the findings of the Draft Report of the Industries Assistance Commission on Coastal Shipping that coastal shipping in Australia is uncompetitive and inefficient; (b) notes the disastrous effect on the Australian economy of the high costs of coastal shipping; and (c) condemns the Government for its negative reaction to this Report and urges the Government to take immediate action to prevent inefficient coastal shipping services further jeopardising growth and employment opportunities in the rest of the economy. Let us apply some intellectual rigour to Senator Robert Ray's nonsense tonight. That is where the intellectual rigour ought to be applied. Let us note what his Treasurer (Mr Keating) has said about this report. On page 2141 of the House of Representatives Hansard of 27 April- Senator Robert Ray —Quote the lot of it. Quote the piece before. Senator MICHAEL BAUME —If I had more than seven minutes and if the Government had not mucked up the arrangements for the day, I could quote further. Let me quote this. It is not good enough. The Treasurer said: . . . I endorse the broad conclusion of the report. I do not think that any person interested in the Australian waterfront scene would not do so. That is, anyone except Senator Robert Ray, because he says that Senator Hamer is wrong to endorse the findings of the draft report. And why is Senator Hamer wrong? He is wrong not because the answers that the Industries Assistance Commission has come up with are wrong, but because, according to Senator Robert Ray, the IAC got to the answers the wrong way. Senator Ray has yet to demonstrate that the answers themselves are wrong, and that, I put to the Senate, is the total incompetence of the speech he made tonight. By drawing attention to some matters in the analysis where some errors were certainly made, by attacking the methodology and by attacking the fact that this report went outside its terms of reference and annoyed the Government, he has tried to denigrate the answers that he cannot himself denigrate. In all honesty-and I commend him for his honesty-he has not sought to denigrate the answers; he sought only to denigrate the methods by which the answers were achieved. So here we have an attempt to smear this report and to damn Senator Hamer's motion in a politically adept way which lacks intellectual rigour. Let us see why the Government and Senator Ray are so upset. Very simply, it is because this report attacks very effectively the method that this Government has applied so far to fix up this matter, which is now at crisis levels for the Australian economy. Because it is at crisis levels there is an urgent need for this Government to do something about it and to change its slow, steady and ponderous approach. Like the honourable senator's method of departure from the chamber, its approach is in exactly the same ponderous style. There is a need for sudden and urgent action, because of the crisis Australia faces in its balance of payments and in its economy in general, largely as a result of five years of this Government, to fix up this disaster on the wharves. This IAC report explains why something has to be done and why the Government's present policy is incompetent and inadequate. The report states: Current initiatives are not stemming increases in the costs coastal shipping impose on the rest of the economy. Real and lasting benefits will only come from fundamental reform of both the blue-water and shore-based components of the industry. Because Australia can ill afford to sustain an inefficient coastal shipping industry- Mr Keating has agreed, as reported in Hansard, that Australia has an inefficient coastal shipping industry- which jeopardises growth and job opportunities elsewhere in the economy, the need for reform is urgent. We heard Senator Ray saying, `Would it not be dreadful if these guest employees were to take Australian jobs?'. These are guest employees, by the way, which the Government already endorses when visiting ships are helping out around the coast. The point that this report makes is that the inefficiencies and the incompetence of the Australian coastal shipping industry are destroying and have destroyed the jobs of thousands of Australians by preventing many industries from upgrading, for example, raw materials before they are exported and by denying the prospect of industries to be efficient and competent because of the enormous costs of coastal shipping which price them out of their markets. Let us look at another of the conclusions of the report which damn the Government. It states: The Government has instigated a Waterfront Strategy, essentially involving problem solving by consensus. The Commission found little optimism in the industry, or among users, that this strategy would achieve significant or lasting improvements. Now we know why this Government and this Minister are so keen to damn this report; it is utterly damning of the Government's incompetence. I seek leave to incorporate in Hansard-I have discussed this before with the Minister for Home Affairs (Senator Robert Ray)-the findings of the report which the Treasurer finds so attractive and which he supports. Leave granted. The findings read as follows- On the evidence to date, the Commission has made the following findings: Coastal shipping in Australia is inefficient and has jeopardised growth and employment prospects elsewhere in the economy. Inefficiencies have developed in an environment which imposes little discipline on costs, fails to reward better performance and stifles incentive with a set of complex regulations. Complacency about costs and the quality of service is an inevitable result. A major factor producing this outcome is the insulation from foreign competition currently afforded Australian flagged vessels. High costs and poor quality of service impose unnecessary burdens on current users-chiefly those involved in export-oriented bulk cargoes and those transporting goods to and from Tasmania. While current users have little alternative, many potential users have avoided the costs of an inefficient coastal shipping industry by turning to other modes of transport. However, they still pay more than they would if efficient coastal shipping services were available. The Commission has estimated that excessive coastal shipping freight rates (of between 20 and 50 per cent) wipe off between $300 million and $700 million from Australia's gross domestic product annually-a penalty equivalent to adding between $7 and $16 to the cost of every tonne of cargo transported by ship around the coast, or between $35,000 and $80,000 annually for every worker employed in the industry (on board and on shore). The cost of coastal shipping has encouraged exports of raw materials at the expense of further processing within Australia. I thank the Senate. I also seek leave to incorporate in Hansard four short tables from the report which outline the components of total coastal shipping costs, the values of coastal shipping transport services, the components of annual ship operating costs and possible savings in annual crew costs per berth. Leave granted. The tables read as follows- Table 2.7 COMPONENTS OF TOTAL COASTAL SHIPPING COSTS, 1987 (Percentages) Cost component Tankers 30000 dwt 90000 dwt Dry bulk General cargo Bass Strait (to east coast) Other Stevedoring ... 0 0 17 41 24 Wharfage ... 19 24 15 18 8 Port charges ... 11 12 Ship-based costs ... 70 64 68 41 (a)...68 (a) The low value is due to use of a number of small, aging ships which now entail relatively low capital servicing charges. Source: ANMA (Submission No. 38, p. 26). Table 2.8 VALUES OF COASTAL SHIPPING TRANSPORT SERVICES ESTIMATED FROM TONNAGE AND FREIGHT CHARGES, 1985-86 Type of cargo Ship-based (ship charges and port charges) Shore-based (wharfage and stevedoring) Total (wharfgate- to-wharfgate) ($m) ($m) ($m) Dry bulk ... 260 50 310 Liquid bulk ... 220 50 270 General cago ... 120 100 220 Total ... 600 200 800 Source: Commission estimates. Table 4.1 COMPONENTS OF ANNUAL SHIP OPERATING COSTS, BY SHIP TYPE, 1985 86 Component Ship type Dry-bulk carrier 25 000dwt 100 000dwt Tanker Ro/Ro ($'000) (%) ($'000) (%) ($'000) (%) ($'000) (%) Capital ... 3 090 32 4 365 33 5 325 31 1 814 24 Crew ... 2 821 29 2 821 21 3 774 22 2 883 37 Fuel ... 1 274 13 2 232 17 1 486 9 877 11 Other ... 1 189 12 1 953 15 1 672 9 1 665 22 Port charges ... 1 359 14 1 814 14 5 016 29 438 6 Totals ... 9 733 100 13 185 100 17 273 100 7 677 100 Source: Commission estimates based on submissions and survey results. Table 4.5 POSSIBLE SAVINGS IN ANNUAL CREW COSTS PER BERTH(a) Ship type Crew costs per berth: assuming 2.2 men per berth 1.7 men per berth Percentage reduction ($'000) ($'000) (%) General cargo ... 93 79 15 Bulk carrier ... 91 77 15 Coastal tanker ... 102 86 16 Overseas tanker ... 110 93 15 (a) Figures reported in this table assume that, in terms of the breakdown of crew costs per berth, only the Salaries and allowances entries are affected. Since it would be unlikely that going from a 2.2 crew factor down to 1.7 would not change any of the other costs, possible savings reported in this table should be taken as very approximate. (b) Total entries from Table 4.2 Source: Commission estimates I thank the Senate. The reason I wanted those tables in Hansard is that they deny some of the nonsense that Senator Robert Ray gave us tonight, and certainly deny the merit of the quotes that the Minister gave from Mr Bill Bolitho of the Australian National Maritime Association. Senator Hamer-And Chairman of the ANL. Senator MICHAEL BAUME —And, of course, Chairman of the Australian National Line. He was put up here as a man who could provide us with an objective, not a subjective, view of the situation, a man who was closely and totally involved in the present monopolistic situation on the Australian waterfront, the present cosy club. The Minister cites this man as someone who should be taken seriously in this kind of discussion. He said that ship crews were only 14 or 15 per cent of shipping costs. He tried to present that as a pretty much across the board situation, encouraging him to say that it would not matter if coastal ships were crewed with robots-there would be no real savings in freight rates while they had to use Australia's inefficient ports and pay all the extra costs. The reality is that the great bulk of Australian shipping involves ship-based costs representing something like 70 per cent of the total costs of transport in some instances and 68 per cent in others. That is why this table is of great merit. It indicates just what the scope for saving really is. Of course, we can see that, because of the enormous impact of wharfing costs, it was natural that the IAC should extend itself to look at that area. I commend it for doing so, and I think the Minister ought to commend it for doing so. Debate interrupted. The PRESIDENT —Order! It being 10.30 p.m., pursuant to sessional order I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 10.30 p.m.