Tuesday, 27 September 1988 The PRESIDENT (Senator the Hon. Kerry Sibraa) took the chair at 2 p.m., and read prayers. The PRESIDENT —It is with deep regret that I inform the Senate of the death on Monday, 19 September 1988, of Henry Basil Turner, a former member of the House of Representatives. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia showeth: 1. that the constitution of the Commonwealth has served Australia well, is not out of date, has proved to be flexible and should not be radically altered. 2. our deep concern that the recommendations of the constitutional commission and its advisory committees which propose radical changes to the constitution are threatening to reduce our rights as citizens of the Commonwealth. 3. our strongest opposition to any referendum proposals of the Hawke Government which gives more power to the government and less to the people and which concentrates that power in Canberra at the expense of the states and weakens the role of the Senate. by Senator Durack (from 38 citizens). To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that . . . 1. The Watsonia Army Barracks contains electronic communication facilities, operated by Australian and American personnel, that gives the United States the ability to pin-point Soviet nuclear submarines, hidden in the Oceans. 2. This would make it possible for U.S killer-submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a `first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the `Joint Australian-U.S.' electronic communication facilities in the Watsonia army barracks. by Senator Zakharov (from 109 citizens). To the Honourable the President and senators assembled in Parliament: The petition of certain citizens of Australia points out that aged and disabled people who require accommodation and support in nursing homes are entitled to the highest possible standard and quality of nursing care. We, the petitioners, request the Government to ensure that provision of funds for nursing homes in Victoria is sustained at least at a level sufficient to maintain the high standard of care now available in nursing homes in this State. by Senator Button (from 79 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: 1. That it be recognised the proposed Aboriginal and Torres Strait Islander Commission Bill is a public, legal acknowledgment that Australians who are non-aboriginal do not have sovereignty in their own country. 2. That the Australian people are opposed to the idea of a treaty, compact or makarrata between the Australian people who are non-aboriginal and those who are aboriginal, and the Government has no mandate or authority to pursue it. 3. That the proposed legislation and treaty will damage Australia's position under international law and in any conflict, will cause distrust and conflict between our aboriginal population (1%) and the non-aboriginal population (99%), will extend aboriginal land rights, contrary to the wishes of the Australian people, will not be acceptable to the aboriginal people themselves, will solve none of the problems of aboriginal people who need housing, health services, education and employment. That therefore, the Senate reject absolutely the announced proposals for an Aboriginal and Torres Strait Islander Commission Bill, and the negotiation of a treaty, compact or makarrata between the Commonwealth and aboriginal people. And your petitioners as in duty bound will ever pray. by Senator Cook (from 10 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: (1) That we are totally opposed to the proposal for the establishment of a gambling casino in Canberra or the Australian Capital Territory. (2) That a casino in Canberra would detract from the unique character and status of our National Capital. Your petitioners therefore most humbly request the Senate and the Government of the Commonwealth of Australia to reject any proposal or legislation which would permit the establishment of a casino in the Australian Capital Territory. And your humble petitioners as in duty bound will ever pray. by Senator Reid (from 205 citizens). To the Honourable President of the Senate and Senators in Parliament assembled: We, the undersigned citizens of Australia, strongly urge that the Australian Government prohibit the entry of nuclear-armed or nuclear-powered vessels into Australian ports or waters during our bicentennial celebrations and at any other time in the future. And your petitioners, as in duty bound, will ever pray. by Senator Powell (from 400 citizens). To the Honourable the President and members of the Senate in Parliament assembled: We the undersigned, note that a majority of the Joint Select Committee on Video Material has strongly opposed the proposition that a new NVE category will contain that material as defined in the current `X' classification. call upon the Senate to request the Government immediately to implement the recommendation of the majority of the Joint Select Committee on Video Material by introducing substantive legislation to ensure that X rated video material (and its R rated equivalent) is refused classification for the purpose of Commonwealth laws. And your petitioners as in duty bound will ever pray. by Senator Walters (from 192 citizens). To the Honourable the President and members of the Senate in Parliament assembled: We the undersigned, (i) are alarmed that many sporting, cultural and community groups have been made to feel that they can attract sponsorship only from promoters of unhealthy products; (ii) call for a National Health Promotion Foundation to be established through an increase in tobacco excise of 10 cents per packet; and (iii) urge that the National Health Promotion Foundation provide national sporting, cultural and community groups with alternative sponsorship funding so that these groups can flourish without the taint of accepting money from tobacco companies and assisting in the promotion of their unhealthy products. And your petitioners as in duty bound will ever pray. by Senator Vallentine (from 487 citizens). Petitions received. Senator REID(Australian Capital Territory) —I give notice that, on the next day of sitting, I shall move: That leave of absence be granted to Senator Michael Baume for the period from 27 September to 30 September 1988, inclusive, on account of absence overseas on parliamentary business. Senator HILL(South Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) regrets that the muddled state of foreign policy of the Hawke Government is continuing under the new Minister for Foreign Affairs and Trade (Senator Evans) in that what was not a downgrading of Australia's commitment to disarmament issues a few months ago, namely, the abolition of the post of Ambassador for Disarmament, is now seen as such a downgrade and therefore should be reversed; (b) considers it, therefore, not surprising that women attending the current World Women Parliamentarians for Peace conference found Senator Evans' contribution disappointing and lacking in knowledge; and (c) nevertheless, supports the Government's belated decision to adopt the Opposition's policy stance of `Peace through Security', and expresses the hope that the Government remains consistent at least in this one aspect of foreign policy. Senator MacGIBBON(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) congratulates the Federal Government on holding the Bicentennial Naval Review in Sydney this week; and (b) warmly welcomes the presence, in Australian ports, of the ships of the navies of the western democratic nations whose steadfast support for peace through nuclear deterrence has kept the world free from a major world war for the last 43 years. Senator MACKLIN(Queensland) —I withdraw General Business notice of motion No. 29 standing in my name relating to questions on notice. Senator MACKLIN(Queensland) —I give notice that, on the next day of sitting, I shall move: (1) That if a Senate Minister does not answer a question on notice asked by a Senator within 30 days of the asking of that question, and does not, within that period, provide to the Senator who asked the question an explanation satisfactory to that Senator of why an answer has not yet been provided, then- (a) at the conclusion of Question Time on any day after that period, the Senator may ask the relevant Minister for such an explanation, and (b) the Senator may, at the conclusion of the explanation, move without notice `That the Senate take note of the explanation', or (c) in the event that the Minister does not provide an explanation, the Senator may, without notice, move a motion with regard to the Minister's failure to provide either an answer or an explanation. (2) That the provisions of the foregoing resolution, so far as they are inconsistent with the Standing Orders, have effect notwithstanding anything contained in the Standing Orders. Senator TAMBLING(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes that Senator Vallentine chose to go to jail for her part in the Pine Gap demonstration in October 1987, instead of taking the option of community service; (b) notes, too, the comments of Alice Springs magistrate, Mr Denis Barritt, who subsequently accused Senator Vallentine of turning her back on fellow citizens `for a little bit of self-imposed martyrdom'; (c) rebukes the Pine Gap protesters who appeared in court wearing fancy dress and artificial ears in a blatant attempt to gain maximum media exposure; and (d) reaffirms support for the Pine Gap Joint Defence Facility near Alice Springs and the future of the United States-Australian alliance. Motion (by Senator McLean)-by leave-agreed to: That leave of absence be granted to Senator Haines for the period from 27 September 1988 to 30 September 1988, inclusive, on account of absence overseas on parliamentary business. Motion (by Senator McLean)-by leave-agreed to: That leave of absence be granted to Senator Jenkins for the period from 27 September 1988 to 28 September 1988, inclusive, on account of absence overseas on parliamentary business. Senator ROBERT RAY(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. VISIT TO THE UNITED STATES-19-26 June 1988-text of a statement by the Prime Minister. 2. AUSTRALIAN MEDICAL EDUCATION AND WORKFORCE INTO THE 21ST CENTURY-Report of the Committee of Inquiry into Medical Education and Medical Workforce-together with the text of a tabling statement by the Minister for Community Services and Health. 3. AUSTRALIAN TOBACCO BOARD-Annual Report 1987-including the Auditor-General's Report-section 26 of the Tobacco Marketing Act 1965. 4. AUSTRALIAN MILITARY FORCES RELIEF TRUST FUND-Annual Report 1987-including the Auditor-General's Report-section 34 of the Services Trust Funds Act 1947. 5. SCHEDULES OF SPECIAL PURPOSE FLIGHTS BY THE ROYAL AUSTRALIAN AIR FORCE-1 July 1986 to 30 June 1987. 6. INDUSTRIES ASSISTANCE COMMISSION-Annual Report 1987-88-together with a statement of what action has been taken during that year in respect of each report made to the Minister by the Commission during that year or a preceding year-section 45 of the Industries Assistance Commission Act 1973. 7. THIRTY-FIRST ANNUAL REPORT OF THE PRESIDENT OF THE AUSTRALIAN CONCILIATION AND ARBITRATION COMMISSION-Year ended 13 August 1987-section 70 of the Conciliation and Arbitration Act 1904. 8. ADVANCE TO THE MINISTER FOR FINANCE-statements of expenditure-May and June 1988. 9. ADVANCE TO THE MINISTER FOR FINANCE-Statement of Heads of Expenditure and the amounts charged thereto pursuant to section 36a of the Audit Act 1901-for the year ended 30 June 1988. 10. CONFERENCE ON DISARMAMENT-Report of the Australian Delegation-1987 Session. 11. UNITED NATIONS COMMISSION ON HUMAN RIGHTS-Report of the Australian Delegation-Forty-third Session. 12. UNITED NATIONS GENERAL ASSEMBLY -Report of the Australian Delegation-Forty-second Session 1987. 13. COUNCIL ON OVERSEAS PROFESSIONAL QUALIFICATIONS-Annual Report 1986-87. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I wish to inform the Senate of the changes to the Ministry following the resignation from Parliament of the former Minister for Foreign Affairs and Trade, the Hon. Bill Hayden, who is to be appointed as Governor-General when Sir Ninian Stephen concludes his term in February next year. His Excellency made the following ministerial appointments on 2 September at Government House: Senator Gareth Evans is portfolio Minister for Foreign Affairs and Trade. Mr Ralph Willis is portfolio Minister for Transport and Communications. Mr Peter Morris is portfolio Minister for Industrial Relations. He will also be Minister Assisting the Prime Minister for Public Service Matters and will continue as Minister Assisting the Treasurer. Senator Robert Ray is portfolio Minister for Immigration, Local Government and Ethnic Affairs. He will also be Minister Assisting the Prime Minister for Multicultural Affairs and has taken over from Senator Evans the role of Manager of Government Business in the Senate. Mr Clyde Holding is Minister for the Arts and Territories in the Arts, Sport, the Environment, Tourism and Territories portfolio. Mr Holding will also be Minister Assisting the Minister for Immigration, Local Government and Ethnic Affairs and Minister Assisting the Prime Minister generally across his portfolio, including in relation to the Bicentenary. Mr Gary Punch is Minister for Telecommunications and Aviation Support in the Transport and Communications portfolio and Mr Bob Brown is Minister for Land Transport and Shipping Support, also in Mr Willis's portfolio. As announced earlier, the Minister for Social Security, Mr Howe, is now Minister Assisting the Prime Minister for Social Justice. Mr Morris and Senator Ray have become members of the Cabinet. There is now no office of Minister for Home Affairs within the Administrative Services portfolio. Because of the breadth of responsibilities and the workload there are three Ministers in the Transport and Communications portfolio. Within the latter portfolio, Mr Punch will be responsible, under Mr Willis, for telecommunications, postal and certain other communications matters and domestic aviation, infrastructure and aviation security. Mr Brown will work on land transport, road safety and maritime operations and will assist Mr Willis with maritime policy. Responsibilities within other portfolios remain unchanged. These appointments will ensure that the Government continues to have a ministerial team of the highest quality, deployed in a way which takes full account of its policy and administrative priorities and the changing relative workloads of portfolios. There are no changes in the number of departments or Ministers and the roles and tasks of portfolios also remain unchanged. I seek leave to incorporate in Hansard a Ministry list setting out the new ministerial arrangements in detail. The list also sets out full details of representation in this chamber. Leave granted. The list read as follows- COMMONWEALTH GOVERNMENT Third Hawke Ministry Title Minister Representative in other Chamber Department(s) administered Prime Minister The Hon.R.J.L. Hawke, AC, MP Senator Button Prime Minister and Cabinet Attorney-General and Minister Assisting the Prime Minister for Commonwealth-State Relations The Hon. Lionel Bowen, MP (Deputy Prime Minister) Senator Tate Attorney-General's Minister for Justice Senator the Hon. Michael Tate Mr Bowen Attorney-General's Minister for Consumer Affairs and Minister Assisting the Treasurer for Prices Senator the Hon. Nick Bolkus Mr Bowen Attorney-General's Minister for Industry, Technology and Commerce Senator the Hon. John Button (Leader of the Government in the Senate) Mr Jones Industry, Technology and Commerce Minister for Science, Customs and Small Business The Hon. Barry O. Jones, MP Senator Button Industry, Technology and Commerce Minister for Foreign Affairs and Trade Senator the Hon. Gareth Evans, QC (Deputy Leader of the Government in the Senate) Mr Duffy Foreign Affairs and Trade Minister for Trade Negotiations, Minister Assisting the Minister for Industry, Technology and Commerce and Minister Assisting the Minister for Primary Industries and Energy) The Hon. Michael Duffy, MP Senator Evans Foreign Affairs and Trade Treasurer The Hon. P.J. Keating, MP Senator Walsh Treasury Minister for Finance Senator the Hon. Peter Walsh Mr Dawkins Finance Minister for Transport and Communications The Hon. Ralph Willis, MP Senator Evans Transport and Communications Minister for Telecommunications and Aviation Support The Hon. Gary Punch, MP Senator Evans Transport and Communications Minister for Land Transport and Shipping Support The Hon. Bob Brown, MP Senator Evans Transport and Communications Minister for Employment, Education and Training The Hon. J.S. Dawkins, MP Senator Walsh Employment, Education and Training; Aboriginal Affairs Minister for Employment and Education Services The Hon. Peter Duncan, MP Senator Walsh Employment, Education and Training Minister for Aboriginal Affairs The Hon. Gerard L. Hand, MP Senator Tate Aboriginal Affairs Minister for Defence The Hon. Kim C. Beazley, MP (Vice-Present of the Executive Council and Leader of the House) Senator Richardson Defence Minister for Defence Science and Personnel The Hon. Ros Kelly, MP Senator Richardson Defence Minister for Primary Industries and Energy The Hon. John Kerin, MP Senator Cook Primary Industries and Energy Minister for Resources Senator the Hon. Peter Cook Mr Kerin Primary Industries and Energy Minister for Social Security and Minister Assisting the Prime Minister for Social Justice The Hon. Brian Howe, MP Senator Bolkus Social Security Minister for Administrative Services The Hon. Stewart West, MP Senator Ray Administrative Services Minister for Community Services and Health The Hon. Neal Blewett, MP Senator Cook Community Services and Health; Veterans' Affairs Minister for Housing and Aged Care The Hon. Peter Staples, MP Senator Cook Community Services and Health Minister for Veterans' Affairs The Hon. Ben Humphreys, MP Senator Reynolds Veterans' Affairs Minister for the Arts, Sport, the Environment, Tourism and Territories Senator the Hon. Graham Richardson Mr Holding Arts, Sport, the Environment, Tourism and Territories Minister for the Arts and Territories, Minister Assisting the Prime Minister and Minister Assisting the Minister for Immigration, Local Government and Ethnic Affairs The Hon. A.C. Holding, MP Senator Richardson Arts, Sport, the Environment, Tourism and Territories Minister for Industrial Relations, Minister Assisting the Prime Minister for Public Service Matters and Minister Assisting the Treasurer The Hon. Peter Morris, MP Senator Button Industrial Relations Minister for Immigration, Local Government and Ethnic Affairs and Minister Assisting the Prime Minister for Multicultural Affairs Senator the Hon. Robert Ray (Manager of Government Business in the Senate) Mr Holding Immigration, Local Government and Ethnic Affairs Minister for Local Government and Minister Assisting the Prime Minister for the Status of Women Senator the Hon. Margaret Reynolds Mr Holding Immigration, Local Government and Ethnic Affairs Portfolio Ministers, all of whom are in the Cabinet, are shown in bold type. Mr Duffy is also a Cabinet Minister Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-Consequent upon the Government's extensive changes to its ministerial arrangements and a few changes within the Opposition of its own accord, I wish to indicate to the Senate the changed arrangements which apply to the shadow Ministry of the Opposition. The trade and resources area will be shadowed by the Rt Hon. Ian Sinclair; Treasury by the Hon. Andrew Peacock; primary industry by Mr Bruce Lloyd; industry, technology and commerce by me; communications by Senator Austin Lewis; foreign affairs by Mr John Spender, QC; business and consumer affairs by the Hon. John Moore; public administration, Federal affairs and local government by Senator the Hon. Tony Messner; education by Mr Julian Beale; transport and aviation by Mr Charles Blunt; employment and training by Mr Wilson Tuckey; Administrative Services by the Hon. Wal Fife; environment, the arts and the Bicentenary by Senator Christopher Puplick; health by Mr Peter Shack; industrial relations by Mr Peter Reith; community services and aged care by Mr Ray Braithwaite; defence by Mr Peter White; Attorney-General by Mr Neil Brown; veterans' affairs by Mr Tim Fischer; immigration and ethnic affairs by Mr Alan Cadman; social security and retirement income by Mr David Connolly; sport, tourism and youth affairs by Mr John Sharp; Aboriginal affairs by Mr Christopher Miles; finance by Dr John Hewson; housing and small business by Mr Alexander Downer; justice, the Australian Capital Territory and the status of women by Senator Robert Hill; science and energy by Mr Peter McGauran; defence science and personnel by Senator Jocelyn Newman; regional development and external territories by Senator Ron Boswell; and the Secretary to the shadow Cabinet will be Senator Michael Baume. I seek leave to incorporate in Hansard a list showing the shadow Ministry representation and the representation in the respective chambers. Leave granted. The list read as follows- SHADOW MINISTRY REPRESENTATION Portfolio Shadow Minister Representation in other Chamber Leader of the Opposition Mr Howard Senator Chaney Trade and Resources Mr Sinclair Senator Lewis Treasury Mr Peacock Senator Messner Primary Industry Mr Lloyd Senator Lewis Industry, Technology and Commerce Senator Chaney Mr Moore Communications Senator Lewis Mr Blunt Foreign Affairs Mr Spender Senator Hill Business and Consumer Affairs Mr Moore Senator Lewis Public Administration, Federal Affairs and Local Government Senator Messner Mr McGauran Education Mr Beale Senator Hill Transport and Aviation Mr Blunt Senator Messner Employment and Training Mr Tuckey Senator Newman Administrative Services Mr Fife Senator Puplick Environment and the Arts Senator Puplick Mr Downer Health Mr Shack Senator Puplick Industrial Relations Mr Reith Senator Chaney Community Services and Aged Care Mr Braithwaite Senator Boswell Defence Mr White Senator Newman Attorney-General Mr Brown Senator Hill Veterans' Affairs Mr Fischer Senator Newman Immigration and Ethnic Affairs Mr Cadman Senator Puplick Social Security and Retirement Income Mr Connolly Senator Messner Sport, Tourism and Youth Affairs Mr Sharp Senator Puplick Aboriginal Affairs Mr Miles Senator Chaney Finance Dr Hewson Senator Messner Housing and Small Business Mr Downer Senator Boswell Justice, the ACT and the Status of Women Senator Hill Mr Brown Science and Energy Mr McGauran Senator Lewis Defence Science and Personnel Senator Newman Mr White Regional Development and External Territories Senator Boswell Mr Braithwaite Secretary to the shadow Cabinet Senator Baume Senator STONE(Queensland-Leader of the National Party of Australia) —by leave-My remarks follow on from those made by my colleague the Leader of the Opposition (Senator Chaney). As honourable senators are aware, on 13 September last my membership of the Opposition shadow Cabinet was terminated. As to that, I believe that honourable senators are already fully informed as to the circumstances and I have nothing to add to that matter here today. For the records of the Senate, however, I seek leave to incorporate in Hansard the media release on the matter which I issued on 14 September 1988. Leave granted. The release read as follows- Statement by Senator John Stone, Leader of the National Party in the Senate Naturally I regret yesterday's decision by the Leader of the Opposition, the Hon. John Howard, to request the Leader of my own National Party, the Rt Hon. Ian Sinclair to terminate my membership of the Shadow Cabinet-a decision subsequently concurred in with regret, as he has said, by Mr Sinclair. Because of some confusion in media reporting of yesterday's events leading up to that outcome, the salient facts are set out for the record in the Attachment to this media release. As will be clear from that Attachment, I totally support the new, and much improved, immigration policy recently agreed by the Coalition Parties. Any balanced reading of the transcript of last Sunday's ``Face to Face'' program would have clearly shown that. Indeed, having had no small hand in having the new immigration policy arrived at, it would be extraordinary if I were not now to support it. As some journalists have quite correctly pointed out this morning, the problem between me and some other members of the Shadow Cabinet-as well as certain backbench members of the Liberal Party-lies not in the wording of our new immigration policy but in its interpretation. I would have wished to avoid raking over old coals in that respect, but in the light of Mr Howard's comments at his media conference yesterday about my alleged failure to be a ``team player'' in this matter, I am forced to say that in that regard my only fault has been to support too faithfully the position originally taken up-and never recanted-by the leader of the team. As to the question of what Mr Howard, in his news release yesterday, called ``Shadow Cabinet discipline and teamwork'' more generally, I shall take a more appropriate opportunity to comment in detail on that aspect-including suggestions being purveyed by way of background briefing of the media. Suffice it perhaps only to recall that there was no criticism of my ``discipline and teamwork'' when, last year, I was the means of presenting the Leader of the Opposition with his greatest triumph in this Parliament-the killing off of the Australia Card-as he said, ``Stone dead''. But enough of all that. I want only to add two things. First, I remain a loyal member, in good standing, of my own parliamentary National Party Room. In that capacity I shall continue to work as hard in the future as I have done during the past year or so to bring about the defeat of the Labor Party-whether federally, in the State election now proceeding in Victoria, or in the impending by-election in the federal seat of Oxley. So far as I can see, my capacity to do so will not be materially affected-and indeed may even be enhanced-by yesterday's decision. Secondly, and particularly after having talked to my family and some good friends about all this, I am inclined to think that, on balance, Mr Howard yesterday may have done me a favour. At any rate, that is the attitude of mind which I bring to it all today. Canberra, A.C.T. 14 September, 1988 Attachment Yesterday morning in Sydney, by arrangement, I discussed with the Leader of the National Party, the Rt Hon. Ian Sinclair, the demands which had been made of him by the Leader of the Opposition, the Hon. John Howard, following my appearance on the Channel 10 programme ``Face to Face'' last Sunday. As a result of that discussion I initially acceded to Mr Sinclair's personal request to me, in his capacity as Leader of my Party, to signify to Mr Howard my willingness to issue a statement relating to immigration policy. For the record, the text of that statement was as follows: ``In my `Face to Face' interview broadcast on Sunday last, some questioning related to immigration. There have been subsequent suggestions in the media that in my responses to that questioning I was in some way seeking to re-open the debate on the Coalition policy or differ from it. That is not so. As with all members of Shadow Cabinet I of course accept and am bound by that policy. The remarks I made earlier about this issue were of course before Coalition policy was adopted. The policy itself makes no decision on migrant mix nor does it identify or exclude any source country. The policy however does provide Coalition Government with the capacity to control the flow of migrants from any part of the world if it were felt desirable to do so.'' At this point Mr Howard made the new demand that I should add to the statement above a further and final paragraph saying that in my future statements as a Shadow Minister I would confine myself to those relating to my own Shadow portfolio of Finance or otherwise only in support of settled Coalition policy. Particularly having in mind my position as Leader of the National Party in the Senate, and for other obvious reasons, I was not prepared to do so; nor did Mr Sinclair suggest that I should. Again for the record I should say that, apart from a fleeting chance encounter in the corridor, at no time yesterday did Mr Howard and I converse personally on these matters. Senator STONE —I thank the Senate. As a result of the shadow Cabinet reshuffle announced by the Leader of the Opposition (Mr Howard) on 16 September 1988, my National Party friend and colleague Senator Ron Boswell has been appointed shadow Minister for regional affairs and external territories-an appointment on which I take this opportunity of publicly congratulating him. The office holders in the Senate remain unchanged. As a result of these events it is however appropriate that I should move from my previous Senate seating next to my friend and colleague the Deputy Leader of the Liberal Party in the Senate, Senator Lewis, to this new place from which, Mr President, I now address you. In noting that change may I add that one of the more pleasing aspects of these events is my freedom to sit with all my National Party colleagues from whom previously I was physically separated. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I inform the Senate that Senator Richardson will be absent from the chamber for Question Time this week as he is representing the Government at the Olympic Games in Seoul and at tourism conferences in Hong Kong and Western Australia. Any questions which would normally be directed to Senator Richardson in relation to this portfolio or those he represents should be directed to Senator Robert Ray. I further inform the Senate that Senator Bolkus will be absent from the chamber for Question Time this week as he is representing the Government at the tenth anniversary of independence celebrations in Tuvalu. Any questions on prices that would normally be directed to Senator Bolkus should be directed to Senator Walsh. Those questions on consumer affairs should be directed to Senator Tate. Questions on social security matters should be directed to me. Senator CHANEY —Is the Minister for Justice aware that the Hawke-Keating Government of which he is a part is proposing to save $40m a year by removing pharmaceutical benefits for vital drugs required by people with chronic illnesses such as asthma and epilepsy? As the Minister was responsible for bringing forward in this place proposals for constitutional amendment at a total cost of almost $50m can he explain how or why higher priority was given to this discredited, deceptive and wasteful exercise which has been so decisively rejected by the Australian people, rather than helping people with life-threatening illnesses? Senator TATE —I believe that the expenditure by the Government in relation to the constitutional referendum campaign was totally justified in the sense that the Australian people-as ought to be the case in a democracy-were presented with proposals for change which had been given assent to not only by the House of Representatives but also by this chamber where the Government does not have a majority. The people were presented with an opportunity to make a judgment on the proposals and gave their verdict. This Government, being proud of the fact that it has had a term of government in this great democracy, accepted that verdict quite readily. I believe that the money was well spent. Indeed, as one moves around the country one finds that the interesting constitutional matters which arose during that campaign are a very important part of the democratic process and the expenditure is justified in that sense alone. The other matter which has to do with recurrent savings in relation to another portfolio program is a matter on which I have no comment to make. Senator CHANEY —I ask a supplementary question, Mr President. Is the Minister saying that he supports giving higher priority to these referendums than to the maintenance of drugs that are required by people with chronic illnesses such as asthma and epilepsy? Senator TATE —I make no such statement, nor should that be inferred from my comment. I am saying that the expenditure on the constitutional referendum campaign was justified and proper. The Government's decision on recurrent savings in relation to certain benefits in the pharmaceutical area is a matter which I believe can be justified. Senator McKIERNAN —My question is directed to the Minister for Finance. Has the Minister's attention been drawn to a letter published in the Australian Financial Review on Wednesday, 21 September, from Mr Max Burr, MHR? Among other things that letter asserts: The Government has now acquired almost half of our national economy; it was 28 per cent in 1972 under the McMahon Government. Can the Minister provide the Senate with information on the accuracy of these figures regarding the current size of government in Australia? Senator WALSH —I have seen the letter from Max Burr, who I think is a member of the Liberal Party from Tasmania or somewhere. I am surprised that the Australian Financial Review has published this sort of thing, because its readership is much too sophisticated to take this sort of rubbish seriously. It is like a visit back to the 1940s, when I started taking an interest in politics. It is hard to know what he means by saying that the Government has acquired almost half of the economy. It is probably his clumsy way of purporting to describe the fraction of gross domestic product (GDP) which the Commonwealth Government, in this case, spends via Budget outlays. So in addition to the previously known innumeracy of members of the Opposition we can now produce evidence of semi-literacy. On the basis of Commonwealth outlays as a proportion of GDP, the correct figure for 1988-89 is 25.6 per cent, not almost half as Mr Burr asserted. It is true that that figure is higher than the 1971-72 figure, which was 23 per cent. It is, however, lower than for all the years of the Fraser Government. In the seven years of the Fraser Government Commonwealth Budget outlays as a proportion of GDP, starting from 1976-77, were: 27.7 per cent; 28.2 per cent; 27.1 per cent; 26 per cent; 26.2 per cent; 26.7 per cent; and, in the last year, with John Howard's supernova Budget it blew out to 29 per cent of gross domestic product, and, as Senator Stone was good enough to put in writing shortly after that, it left this Government facing a prospective Budget deficit of almost $10 billion. So if socialism, which is purported to be the subject of Mr Burr's letter, is defined as a higher proportion of Government expenditure, Mr Burr should be vilifying the Fraser Government for all of its Budgets and not vilifying the present Government for its last Budget. But if he wants to know more about public finance, I suggest he ask Senator Stone for some help because, firstly, Senator Stone understands these things and, secondly, he will have a bit more spare time than he used to have-unless he is providing research assistance for the new shadow Finance Minister, Dr Hewson, whom Senator Stone once described as a mere meretricious player flitting across the stage. Senator CALVERT —My question is directed to the Minister for Local Government, who would be aware that in the May economic statement the Hawke-Keating Government cut more than $30m off road funding for State and local government. As the Government has just spent considerably more than that sum on its futile and dishonest proposals for constitutional change, can the Minister explain how priority was given to those discredited, deceptive and wasteful proposals which have been so decisively rejected by the Australian people? Senator REYNOLDS —I am surprised that Senator Calvert has not been in touch with local government in Tasmania. Senator Boswell —You ought to be ashamed of that vote. You ought to resign. Senator REYNOLDS —The reality is that local government throughout Australia is extremely disappointed in the outcome of the referendum. It is even more disappointed and disgusted with the attitudes of the Opposition in regard to the way in which it conducted its campaign. I believe that Senator Calvert will find that he and all Opposition members have a great deal of bridge-building to do with local government. Senator Calvert asks me about road funding, but in reality it is the Opposition that will have to be involved in bridge-building with local government. Local government rejects the Opposition's stance in relation to the referendum and, of course, it was very disappointed. However, I believe it is important now to focus on the outcomes of the referendum in relation to constitutional recognition of local government. One of the most important outcomes that many Australians are interested in, even though obviously members of the Opposition are not particularly interested in local government, is that the campaign enabled people throughout Australia to find out more about local government and to find out about its contribution to local communities. This has been a very worthwhile exercise. Furthermore, it has prompted both the Tasmanian Premier and the Queensland Premier to look at recognising local government in State constitutions, something which, I am sure, all honourable senators on this side of the chamber will agree is a major step forward. Finally, of course, I understand that in New South Wales the Premier, Mr Greiner, is looking at enshrining local government in the constitution and is considering calling a referendum to ensure that that recognition cannot be taken out by government. Senator Bishop —You do not seem to understand that in the terms of the New South Wales constitution you cannot take it out except by way of referendum. Senator REYNOLDS —Precisely. That was the basis of the approach that the Government took in putting this question to the people. I believe that later this year, in November, I will be conducting consultations with the Australian Local Government Association to try to get greater progress in regard to inter-governmental relations. I think this is very important. The question that was asked at the referendum was about greater recognition of and greater consultation with local government. Just because the Opposition was not prepared to adopt a bipartisan approach on this issue, I am not deterred and Australian local government is not deterred. We will continue to work for the recognition of local government. One of these days members of the Opposition will agree to support a proposal that does in fact recognise the very important role that local government plays for local communities. Senator CALVERT —Mr President, I ask a supplementary question. I thank the Minister for her long answer on local government but she really has not answered why priority was given to constitutional change. Does she deny that $30m was cut from State and local government road funding? Senator REYNOLDS —I am not sure where Senator Calvert gets his figures. Senator Calvert —Look at the Estimates. Senator REYNOLDS —If one looks very closely at road funding one will find that there are a number of categories of funding in so far as it affects local government. In actual fact, when it comes to local roads funding, we have been able to maintain funding to local government in real terms. That means that there has been a $13m increase this year for local roads funding. It is true I believe that the figures which Senator Calvert is referring to relate to arterial road funding and the amount of funding that goes through State governments. Of course, State governments contract to local governments. Therefore, I do not dispute Senator Calvert's $30m in that sense. However, I think it is important to recognise that the Government and Senator Walsh-I pay tribute to him as Finance Minister for being keen to support local government-have ensured that local road funding has been maintained in real terms. When Senator Stone was on the Opposition front bench he was always talking about greater cuts in government spending. It is important in the current economic climate that local government take the necessary restraints that have been applied to both Commonwealth and State governments. I believe that the outcome of that real terms increase in local roads funding was a very fair and equitable decision for local government, given the overall period of restraint. Senator MAGUIRE —My question is directed to the Minister for Foreign Affairs and Trade. I refer to my question of 10 May concerning human rights abuses in Colombia in South America. Has the Minister's attention now been drawn to a special report by Amnesty International, documenting horrific human rights abuses in Colombia? Does the Minister have anything further to add to his answer to me on 10 May? Senator GARETH EVANS —There is not a lot that I can add to the answer that I gave to Senator Maguire on this matter, but the situation does remain one that gives the Government very serious concern. The tragic human rights situation in that country was the subject of a report by Amnesty in April of this year, documenting abuses, including political killings and disappearances which have apparently continued at high levels, against a background of violence involving the Government, guerilla groups and criminal groups associated with drug trafficking. In a reply to Amnesty International's report, the Government of Colombia pointed out that efforts were being made to improve the general human rights situation. That may or may not be the case. As in the past, the Australian Government has expressed its concern about the situation in Colombia. In the first half of this year 11 representations were made to the Colombian Government on specific instances of human rights abuse involving groups and individuals. These representations were based on reports passed to the Australian Government by Amnesty International. All I can say is that the Australian Government will maintain its high level of interest and involvement in this issue. Senator McLEAN —My question is directed to the Minister representing the Minister for Defence. Has the Government called upon all State governments to advise them of contingency plans in the event of a nuclear accident in an Australian port? In particular, and in view of the massive concentration of warships in Sydney Harbour over the next few days, many of which are probably carrying nuclear weapons, has the Government checked contingency plans for a nuclear accident in Sydney Harbour? Has the Government drawn up contingency plans for a nuclear accident within Australian waters? If not, why not? If so, is the Minister satisfied of the adequacy of all such plans? When will the Government make all these plans public? Senator ROBERT RAY —I have some background material that may assist Senator McLean. A preliminary draft of the procedural document for responding to nuclear weapons accidents has been prepared. This document has no status, having not been approved within the Department of Defence, by the relevant interdepartmental committee, or by Mr Beazley himself. The Government has no reason to alter its long-established assessments concerning the safety of nuclear weapons that could be deployed on allied warships visiting Australian ports. An accidental nuclear detonation is essentially impossible. Secondly, the chance of any kind of accident involving a nuclear weapon is virtually nil. These assessments are based on the fact that all nuclear weapons that might be carried on visiting allied warships would be safely stowed under armed guard in their magazines, protected from fire and electrically disconnected. They would not be handled or used for training. They would not be in an armed condition. The Government does not require visiting allied warships to declare whether they deploy nuclear weapons. The general emergency plan of Australian ports would be adequate to respond to any conceivable accident. The purpose of the current document would be to formalise arrangements for Commonwealth assistance to State governments. It has always been envisaged that the Commonwealth would provide assistance to States, analagous to arrangements outlined in existing plans for visits by nuclear-powered warships. When a sound draft set of procedures has been finalised the Government will consider the desirability of their adoption. In the meantime there is no reason to alter the Government's position of allowing visits to Australian ports by nuclear-capable ships. Senator McLEAN —Mr President, I ask a supplementary question. Am I to understand that the Minister is saying there is a plan but it has no status? Therefore, my question is: Is not such a plan no plan at all? Senator ROBERT RAY —All plans have their embryonic beginnings. I cannot add much to the brief, other than to say that that particular plan is in the developmental stage. It has not yet officially been approved, as I indicated to the honourable senator, by the Department of Defence, the interdepartmental committee or Minister Beazley himself. Senator SCHACHT —My question is directed to the Minister representing the Minister for Transport and Communications. In view of the many complaints by the public and many media commentators regarding the quality and content of the television coverage in Australia of the Olympic Games by the Ten network and, in particular, the incessant number of advertisements that are endlessly repeated; the amount of time wasted with unnecessary comment by the studio commentators; and the fact that many of the events being televised are delayed, not live, can the Minister arrange for the Australian Broadcasting Tribunal to conduct an inquiry to see whether the Ten network has exceeded the limits allowed for commercial advertising? Can the Minister also obtain from the Ten network details of the number of comments and complaints made to the network by members of the public regarding the television coverage? Finally, in view of the high interest of the Australian public in the Olympic Games, can the Australian Broadcasting Tribunal lay down guidelines to ensure that the coverage of future Olympics by any television network is in accordance with the spirit of the Olympic Games and not unbridled commercialism? Senator GARETH EVANS —I note the comments made by Senator Schacht. I do not know whether or not they are justified by the factual circumstances of the broadcasts in question. Certainly I have not engaged in any evaluation; I have not had time to make any judgment of my own about the quality or quantity of the presentation. All I can say to him is that I will refer his question to the Minister for Transport and Communications to take such action as he deems appropriate in all the circumstances. Senator STONE —My question is addressed to the Minister representing the Treasurer. By way of preface I note that in the recent Commonwealth Budget the Treasurer forecast that, because of an improvement in our international terms of trade this year, our external balance of payments deficit would decline to `only' $9.5 billion and that that decline, together with the large surplus estimated in the Budget, would produce downward pressure on our domestic interest rates. I ask the Minister: First, in the light of recent trends in commodity prices, together with the extraordinary balance of payments deficit of $1.67 billion for July alone, does the Minister still forecast a $9.5 billion deficit for the year as a whole? Secondly, does the Minister agree that since the Budget commercial interest rates have risen, not fallen, and that there is now every likelihood that, as soon as the Victorian election and the Oxley by-election are out of the way, commercial interest rates, including housing loan rates, will rise further? Finally, given these developments, will the Minister now make it clear that without major spending cuts the Government cannot possibly provide the Treasurer's promised tax cuts next July without blowing out the balance of payments even further and producing an even faster rise in our foreign debt? Senator WALSH —I am surprised that Senator Stone's first question in his new capacity was directed to me. I thought it would have been directed to Senator Ray as the Minister for Immigration, Local Government and Ethnic Affairs, since immigration is Senator Stone's favourite topic and his primary interest. Now that he is no longer the shadow spokesman on finance apparently he is interested in Treasury matters and public finance. I have been asked whether the Government believes that the $9.5 billion current account deficit forecast in the Budget is an accurate one. I think it is much too early to give a considered response to that question. Certainly the current account deficit for July was higher than anybody I know of anticipated, but we have had only one month while figures perform and I think it is much too early to speculate about whether the $9.5 billion forecast was correct. In regard to interest rates, Senator Stone seems to be caught in a time warp. He suggested that interest rates were being held down in some way because of an election in some State next Saturday. He seems to be back in the 1980 period, when of course, as Secretary to the Treasury, he would have been absolutely disgusted by the actions of the Fraser Government and John Howard, when everybody knew that monetary policy should be tightened, in artificially holding down interest rates until an election in Queensland was out of the way. This ultimately did the Fraser Government a great deal of damage and destroyed what little bit of credibility it may have had left at that time. But Senator Stone is caught in that time warp. Apparently, he still believes that interest rates are regulated, whereas, of course, for the past 1 1/2 years-or is it 2 1/2 years; I am not quite sure-apart from pre-existing housing loan rates, interest rates have not been regulated. The level of interest rates is something which, essentially, the financial institutions determine, and not the Government. Senator STONE —I ask a supplementary question, Mr President. First, I understand from the Minister's response that he refuses to confirm the balance of payments forecast. Secondly, will the Minister now respond to the second of my questions, which was-and leaving aside the question of whether it follows the Victorian election or the Oxley by-election: does the Minister agree that interest rates are likely to rise further in the near future, including housing loan interest rates? Thirdly, I refer to the question to which the Minister did not respond at all, namely: will he now make it clear that, without major spending cuts, the Government cannot possibly provide the Treasurer's promised tax cuts next July without blowing out the balance of payments even further and producing an even faster rise in our foreign debt? Senator WALSH —I did neglect to comment on Senator Stone's reference to commodity prices in the original question that he asked. Ever since October last year, Senator Stone has been preaching doom and gloom and saying, essentially, that obviously the world is heading for a massive depression; that, because of the stock market collapse, 1929-30 is going to repeat itself; and so on. The honourable senator asked several questions along those lines last October and November. I told him then that I thought it was too early to make those sorts of predictions. I said that there were two ways in which the stock market crash conceivably could have damaged the Australian economy, namely, if it had induced a flight of capital from Australia or a drastic fall in commodity prices. There was no evidence in November that either of those things was going to happen, and there is still no evidence of that. As to what the market generally may do to interest rates in Australia, I intend to follow the practice that I have followed as long as I have had this job: I will not speculate about the direction in which I think interest rates are likely to go. I will not repeat the mistakes that Senator Stone's National Party colleagues made when they were in government. I remember Mr Anthony saying in 1977 that if interest rates had not fallen by 2 per cent before the end of the year he would eat his hat. By the end of the year interest rates had increased by about 2 per cent. I will not speculate on interest rates, any more than I will speculate on what I think the value of the Australian dollar should be. Senator ZAKHAROV —As the Minister for Resources would be aware, the soil conservation conference in Cairns in August endorsed the Federal Government's support for a community based approach to the issue of land degradation. What is Victoria's commitment to this issue and has Victoria put any initiatives in place, in conjunction with the Commonwealth Government? Senator COOK —Victoria has put in place a number of initiatives in conjunction with the Commonwealth Government, I am pleased to say. In many respects, Victoria is a model State when it comes to effort to combat land degradation. Before I go into details, I think it is important that the Senate be reminded that the most overwhelmingly important conservation issue in Australia is that of land degradation. Annually we lose over $600m in production from agricultural lands in this country because we allow lands to decline, to salinate and to erode, and the river systems and water catchments that serve them to become polluted and eutrophied. After I took over this portfolio, very early on I appointed a ministerial task force, consisting of Rick Farley, the executive director of the National Farmers Federation, and Philip Toyne, the executive director of the Australian Conservation Foundation. The reason for my taking that action was, in part, based on an action taken by Joan Kirner, the Victorian Minister for Conservation, Forests and Lands, who has worked very closely with the Victorian Farmers Federation in developing a land care model, a community based model for land protection in Victoria. The Victorian land care model focuses very much on the actions of community groups and it aims at solving the problem of land degradation not simply by trying to find a chequebook answer by throwing money at the problem, but rather by motivating farmers, local government councillors and other people in local communities through a catchment based approach to resolving the problems of land degradation in their own areas. I think the Victorian land care program stands as a shining example to the rest of Australia. It is a major initiative by the Victorian Government. For example, under land care the budget for tree planting to control erosion and salinity stands at some $27m over the last several years. Expenditure in Victoria for 1987-88 under the national soil conservation program totalled $677,536, the State component of which was almost $624,000 and the national component $53,000. Under the national soil conservation program we are currently funding 22 projects in Victoria. The value of this expenditure is $583,600, of which the State has a component of $475,000 and we, the Commonwealth, a national component of $107,781. As well as those positive steps, the Victorian Government is a co-sponsor of the first land care community conference, which is to be held in Bendigo on 29 and 30 September this year. This important conference stands to energise further the work of local community groups, the bipartisan political nature of the attack upon this major problem, and better information and understanding of what can be done to remedy the matter. Senator Patterson —Mr President, I take a point of order. I ask that the Minister table the document from which he was reading. The PRESIDENT —There is no point of order. However, will the Minister table the document? Senator Cook —I was not reading from a document, Mr President. I can table my notes, if that is what the honourable senator would wish to see. Senator Peter Baume —That is a document. Senator Cook —I have a few pencilled notes. Fine, I will table them. Senator WALTERS —Is the Minister representing the Attorney-General aware of the existence of nine legal opinions and an Ombudsman report relating to the conduct of a household expenditure survey currently being undertaken by the Australian Bureau of Statistics? Is the Minister also aware that eight of these opinions, including that of the Senate Clerk Assistant (Procedure) and eminent lawyers as Professor Whalan of the Australian National University, are that the survey is a new one and should have been tabled in Parliament prior to its commencement and that, as a result, the survey is illegal? Is the Minister also aware that the only opinion supporting the household expenditure survey is the one given by the Attorney-General's Department, while the Ombudsman's report suggests that the matter should be tested for legality in the courts? In light of this overwhelming opinion against the legality of the household expenditure survey, will the Minister confirm media speculation that the Attorney-General's Department has been instructed to re-examine the matter and, if so, when will the results of this re-examination be made available to the Senate? Senator TATE —I am aware in a general way of the conflict of legal opinions that have been circulated. But, of course, the Government relies, as it properly should, on the opinion that has been provided by the Attorney-General's Department in relation to this matter. It is quite supportive of that opinion. The fact is that I am not aware of any re-examination of the matter within the Attorney-General's portfolio. I will refer that part of the question to the Attorney-General. Senator JONES —My question is directed to the Minister for Resources. I refer to an amnesty provided by the Federal Government to Australian grape growers who might be guilty of importing illegal table, dried fruit and wine grape cuttings. I ask: What has been the response to the amnesty, which expired earlier this month? How many properties whose owners have not responded are under continued Federal Government suspicion, and of these how many are now under quarantine? What are the dangers posed to the Australian rural community through the illegal importation of vines? What are the penalties available to the courts against growers found to be guilty of this practice? Senator COOK —On 16 September an amnesty that I had extended to those who had illegally imported grape vines expired. At the expiration of that amnesty, 27 growers had taken advantage of it and offered vines for destruction by the Australian Quarantine and Inspection Service, and 32 properties are currently quarantined for the suspected presence of illegally imported vines. We are continuing, through the Australian Quarantine and Inspection Service, to investigate and determine whether such vines are present on other properties as well. It is a matter of considerable importance to the Commonwealth, not to mention to anyone in Australia who likes to sample our wines or, indeed, enjoys a table grape or dried fruits, that foreign vines that may contain exotic diseases which are communicable to properly registered vineyards or grape growers in this country, therefore bringing into jeopardy the health of their crop, be not imported. Thus the Australian Quarantine and Inspection Service maintains an extremely close check to see that nothing is illegally imported. However, we came across some illegally imported vines in the Mildura area of Victoria and we were aware through the grower organisations that there may have been some widespread practice of illegal importation. We took advice from the grower organisations that the best way of dealing with this was, rather than to investigate, to offer an amnesty to allow those who had illegally imported to come forward. As I have said, some 27 growers have turned themselves in-six from the Sunraysia district in Victoria and 21 from the Swan Valley in Western Australia. That at least has enabled us to get control of this issue. However, now that the amnesty has expired, we will continue the policing of illegally imported vines with a great deal more enthusiasm. The dangers about which the honourable senator has asked I have spelt out. They are basically dangers to the Australian grape crop, in whatever form that crop appears-as table grapes, wine grapes or dried fruits-and the danger of communicable diseases of exotic pests for which there is no defence mechanism in Australia. The honourable senator also asked what the penalties are. Under the Quarantine Act there is a maximum penalty of $50,000 and/or 10 years gaol and the ultimate forfeiture to the Crown of illegally imported materials. I might say as a response to those growers who have turned in vines that we are in the process of having those vines removed and subsequent possible breaches that do not relate to the growers but may relate to other people, such as falsifying brands at the point of importation, breaches of the Export Control Act, or breaches of the Quarantine Act, will be referred to the Director of Public Prosecutions. Senator MESSNER —My question is addressed to the Minister for Finance. Has his attention been drawn to the Prime Minister's address yesterday to the Shop Distributive and Allied Employees Association in which in relation to the Government's proposed tax cuts next year he said that those in the lower and middle income ranges should be those whose interests are primarily first dealt with, and that that will be the case? Does this mean that the Government is proposing to provide tax cuts in two stages, the first to low and middle income earners and the second to those in the highest marginal tax bracket? Given that a 40 per cent tax rate applies to incomes of about $19,000, which is nearly $6,000 less than the annual average earnings, exactly how far is the Government proposing to go in providing tax cuts to restore the real income of average income earners to the level it was when Labor came to office-some $56 a week? Further, does the Minister support the proposal that the highest marginal tax rate should not be reduced to the same level as the corporate tax rate-if at all-given the fact that most policy formulators and tax commentators have contended that the two rates should be aligned to minimise tax evasion and avoidance? Senator WALSH —Senator Messner wants to know what the new taxation rate scale will be. He will just have to be patient and wait until the Government announces it. As for the rest of his question, I want to take up the alleged $56 a week that average earners have lost. That figure, of course, came from his colleague in the House of Representatives, Mr Peacock, who asserted that because of bracket creep, or what is more accurately described, I think, as fiscal drag, the average wage earner has lost a full $56 a week since Labor has been in Government. Senator Chaney —On a point of order: that is a gross misrepresentation of what Mr Peacock said. Senator Walsh —It is not. Senator Chaney —It is a gross mis- representation. Senator Walsh —It is not a point of order anyway. The PRESIDENT —Order! Senator Chaney has raised a point of order. Senator Chaney —I take the point of order because, if the Minister intends to spend his time wandering around the Opposition's yard, as is his wont, instead of answering questions, he might at least get the thing right. Mr Peacock has made a quite different statement in that respect. Bracket creep is but one of the elements which have contributed to the loss of living standards under this Government. The PRESIDENT —Order! There is no point of order. It is not up to me to determine whether a Minister's answer is correct. Senator WALSH —Senator Messner mentioned $56 in his question. If Senator Chaney wants to argue about that, he had better take it up with Senator Messner, not with me. He is repeating the innumerate rubbish that has been pouring out of the mouth of the Liberal Party shadow Treasurer. If average earners had lost $56 a week and if that sort of adjustment were spread proportionately among taxpayers with above and below average weekly earnings, as Mr Peacock has undertaken to do implicitly, what do honourable senators think that would cost-$5 billion or $10 billion? It would cost about $25 billion! That is the sort of irresponsible tax policy to which you yobbos in the Opposition remain committed. Senator Chaney —I raise a point of order regarding the Minister's pathetic last outburst. The PRESIDENT —Order! I ask Senator Walsh to withdraw the comment. Senator WALSH —To which the innumerates in the Opposition remain committed. The PRESIDENT —No; the last part. Senator WALSH —I withdraw. Senator FOREMAN —I draw the attention of the Minister representing the Treasurer to media reports of Victorian Liberal promises of cuts to payroll tax and land tax and other measures. Can the Minister assure the Senate that, in the unlikely event of the Liberals winning next Saturday's poll, the Commonwealth will not underwrite, by grant moneys, any financial irresponsibility? Senator WALSH —I can give the assurance sought, and that is that the Commonwealth will not underwrite fiscal irresponsibility by a highly unlikely State Liberal government in Victoria, or indeed by any other State government. As the question suggests, the Victorian Opposition Leader has been making a lot of very expensive promises on both the outlays and the revenue sides of the State Budget. For example, he said that he would cut payroll tax-that would cost $72m-reduce stamp duty, at a cost of another $55m, and freeze electricity and gas prices, which would cost another $40m. Those and a number of relatively minor items would add up to a total of $201m revenue forgone if Mr Kennett were to implement his policies. On the spending side, he has made commitments in health, which would cost $130m; education, which would cost $83m; housing, which would cost $75m; and police, which would cost $70m. Those and a couple of minor items make a grand total of $401m. The total damage bill to the Victorian Budget would be over $600m if Mr Kennett's promises were to be implemented. Obviously, Mr Kennett is well down the track of fiscal irresponsibility-a bad habit which presumably he picked up from his Federal counterparts, particularly the discredited former Treasurer. Senator PANIZZA —My question is directed to the Minister representing the Minister for Transport and Communications. The Minister should be aware that for the second time in just over three months Australia, and especially Western Australia, has been subject to blockade by heavy road transport. Firstly, has the Minister ascertained the reason for the latest blockade in Western Australia? Secondly, does he yet accept that the new registration fees implemented on 1 July were too severe and were applied too quickly? Thirdly, what does the Minister intend to do to keep the free flow of goods into and out of Perth in the future? Senator GARETH EVANS —I do not have any specific information on the situation in Western Australia or the current claims, extravagant or otherwise, being made by some in the trucking industry who continue to be unwilling to make their fair contribution to road damage on a national basis in the same way as is done by their counterparts elsewhere. Disputation does still continue, of course, but most people are prepared to knuckle down and accept the responsibilities that go with being major road users. The situation generally in relation to the matters that have been the subject of dispute is as follows: the Federal Government did negotiate-as will be recalled-a quick end to the truck blockade in July that was started by interstate operators to highlight pressures facing some sectors of the industry. The main problem was not Federal charges, which compare favourably in every jurisdiction with State charges. Rather, it has been the decline in real freight rates caused by overcapacity in the industry. The Government will not regulate freight rates or entry into the industry but we have moved to improve operating conditions through more simple and uniform regulations. Federal and State Ministers for transport met on 16 September, as was previously foreshadowed, to consider issues raised during this blockade. They agreed on the following measures: first, that road vehicle technical regulations, including 42.5 tonne mass limits, will be nationally uniform for the first time in Australia's history. Secondly, a uniform points demerit system for all categories of drivers in all States will be finalised and implemented in March 1989, with uniform driver licensing arrangements being considered by Ministers in March 1989. Thirdly, vehicle permits will be eliminated where possible and States and Territories will provide one stop shopping where possible for the range of services required by truck operators. Finally, Federal registration charges, which are the nub of Senator Panizza's question, will be frozen at their present levels until January 1990. The Government regards these reforms as really quite historic in improving the operating environment for industry. We have done more than any other government to increase stability and professionalism in the industry. Further blockades of the kind we are seeing desultory examples of around the country at the moment will simply set the industry's image back decades and make further reform much more difficult to achieve. Senator McMULLAN —I direct my question to the Minister for Foreign Affairs and Trade. I refer to recent reports alleging Iraqi use of chemical weapons against Kurdish rebels in that country. Can the Minister confirm the accuracy of those reports? What action, if any, has the Government taken in response to those reports? Senator GARETH EVANS —The Government believes on the evidence available to us that Iraq's August military offensive against Iraqi Kurds involved extensive use of chemical weapons. We condemn this and other violent abuses being perpetrated against the Kurds in Iraq. On 9 September I issued a Press release expressing concern at the initial reports of chemical weapons use and restated in unequivocal terms Australia's absolute condemnation of chemical weapons. Moves in the United Nations for the Secretary-General to conduct an investigation of the latest allegations of chemical weapons use were rebuffed by Iraq and Turkey, despite those two countries' support for Australia's United Nations resolution last year confirming the Secretary-General's mandate to investigate chemical weapons use. Of course we supported these moves at the United Nations in New York and in representations that we made to Turkey and Iraq. The Australian Government is committed to the eradication of chemical weapons from the world's arsenals and we have been pursuing that objective by pressing for immediate global compliance to the June 1925 Geneva Protocol banning chemical weapons use and encouraging coordinated international export controls over precursors to chemical weapons manufacture. I am happy to say, on the basis of information given to me yesterday by the Swedish disarmament ambassador, that Sweden has joined in that international effort and that is to be much applauded. We believe that the only durable solution would be the conclusion of a universal chemical weapons convention which would eliminate chemical weapons entirely. Our delegation to the Conference on Disarmament in Geneva is working vigorously towards this very high Australian disarmament priority. Senator WATSON —My question is directed to the Leader of the Government in the Senate. I ask: Firstly, is it a fact that the exchange rate over the past 12 months has been increasing more rapidly than the terms of trade? Secondly, will this situation not lower the competitiveness of Australian industry? Thirdly, given the low 4.5 per cent cost of living inflation increase predicted for 1988-89 and the banking community's prediction that interest rates will not appreciably fall and could even continue to rise, what steps is the Government taking to reduce the gap between real interest rates in Australia and overseas? Senator BUTTON —I do not wish to make any predictions about the exchange rate or interest rates. Senator Watson —I am not asking you to. Senator BUTTON —No, but the honourable senator asked me to make some assumptions about interest rates and the exchange rate, which I am not disposed to make. Senator Watson —We ask you to do something positive. Senator BUTTON —Thank you, Senator. I appreciate the honourable senator's concern. One could apply one's mind, as the honourable senator clearly has, and dredge up unfortunate and undesirable scenarios by scraping around in various barrels. But I do not share any of those assumptions. Senator Chaney —Don't you agree there is a real interest rate gap? Senator BUTTON —Of course there is a real interest rate gap. But Senator Watson-if Senator Chaney does not mind my saying, unless he wants to rewrite the question-made certain assumptions upon which he predicated his question. If he wishes to pursue the question further, he should begin on better assumptions. Senator POWELL —My question is directed to the Minister representing the Minister Assisting the Treasurer for Prices. Is the Government satisfied that savings to consumers which ought to have occurred as a result of the reduction in sales tax on beer in the August Budget are being passed on to those consumers? What, if anything, are the Federal or State governments doing to ensure that savings are passed on? Senator WALSH —Announcements were made by the Treasurer and Senator Bolkus on this issue in the same week as the Budget was delivered. The Prices Surveillance Authority (PSA) has written to the Australian Hotels Association, its affiliates and the various licensed club associations and drawn attention to the need to adjust retail margins and to take account of reductions in State licensing fees. I understand that the PSA has satisfied itself that the wholesale prices charged by the major brewers have been reduced appropriately. Senator PARER —My question, which is directed to the Minister for Industry, Technology and Commerce, follows on from the question asked by Senator Watson. With exchange rates now being used by the Government to control inflation rather than to improve the balance of payments, does this mean that the Government has now abandoned the J-curve effect for economic recovery? Why has the Government adopted a policy of increased interest rates, which will impact upon home buyers and, in addition, will result in a higher exchange rate, when what is needed in this country is continuing incentive in the manufacturing sector for both import replacement and exports? Senator BUTTON —The Government is not using the exchange rate in order to control inflation. Senator Watson —Interest rates. Senator BUTTON —I do not need any assistance. I know perfectly well what Senator Parer said. That was the first part of his question. He asked whether the Government is using interest rates to control inflation-or the allegation was there. Senator Messner —He didn't say that. Senator BUTTON —I am sorry, the exchange rate. That was what I said originally, before Senator Messner interrupted. Senator Parer asked whether the Government is using the exchange rate to control inflation. The answer to that observation or question is no. If we look at the Budget strategy and what has followed since, we will see that the Government has set in place the conditions under which interest rates are expected to fall. Senator Short —When? Senator BUTTON —As I said earlier, I am not making predictions about that. The Government, in terms of its budgetary policy, has set in place conditions whereby interest rates are expected to fall. In terms of the strategy which Senator Parer asks about the Government has done that. We believe that effect will follow in due course. Senator PARER —Mr President, I ask a supplementary question. I refer the Minister to the comment made by the Confederation of Australian Industry about the Government's policy. I redirect the question to him. The Confederation in its latest report-apart from the fact that this is a policy-claims: The consequence of this policy manoeuvring is that Australia now has: high rates of interest, a higher and possibly overvalued exchange rate, emerging evidence of balance of payments problems, excessive prospective increases in labour costs, and the likelihood that inflation will dip in the short term but then move up again with the result that Australia's inflation rate will still remain well above the rate amongst our main trade competitors. I again ask the Minister: Why is the Government adopting this policy which, obviously, will have an adverse effect on our current account deficit? Senator BUTTON —As I said in answer to the earlier part of the question, the Government is not adopting any such policy. The fact that the Confederation of Australian Industry alleges a scenario which has a number of components in it of that kind does not mean that the Government has a policy position in that direction. The fact that the Confederation of Australian Industry asserts that is not evidence of a policy position by the Government. Senator BEAHAN —I refer the Minister for Resources to recent media statements concerning the joint exploration agreement between Australia and Indonesia in the Timor Sea. Can the Minister indicate the current status of this agreement and its implications for Australia? Senator COOK —This question could have easily been directed to the Minister for Foreign Affairs and Trade. Senator Gareth Evans —It is all yours. Senator COOK —I thank the Minister. The Minister for Foreign Affairs and Trade is the senior Minister in respect of the Timor Gap issue. In any case, it is appropriate to pay tribute to the Minister for Foreign Affairs and Trade and the Minister for Finance because they were formerly Ministers for resources and energy and this issue was their concern. The present state of the understanding between Australia and Indonesia is that officers of both the Department of Foreign Affairs and Trade and the resources section of the Department of Primary Industries and Energy have met their opposite numbers in Jakarta and have reached an understanding as to how the area in dispute between Australia and Indonesia can best be developed. The area in dispute relates to the difference between Australia and Indonesia as to where the seabed boundary should be drawn between our two countries. From the Australian point of view we regard the seabed boundary as properly to be drawn along the continental shelf. The Indonesian Government takes the view that it is 200 miles from Timor. There is an overlap between both positions. The issue is how to resolve this disputed territory. We have reached a tentative agreement at officer level which reflects an understanding that we divide that disputed territory into three zones. Zone A would be the area for which both Indonesia and Australia would work out a common set of provisions to govern how prospecting would be carried out and, if prospecting is rewarded by finds, how production would be carried out; what the taxation regime would be; what the legal obligations and impediments would be; and what rule of law would prevail. In Zone B, which is the Australian end of the disputed area, the Australian provisions would apply and 16 per cent of our resource rent tax would be payable to Indonesia. In Zone C, the Indonesian end of the disputed territory, Indonesian provisions would apply. We would obtain a 10 per cent return from the Indonesian taxing system, which is based on profits. The question from Senator Beahan was: where is all that up to? It is up to a position in which, I understand, very shortly the Indonesian and Australian departments are to meet to address the question of how the Zone A terms are to be worked out. At the present time my Department is carrying out an investigation of what the existing titles or claims were by Australian-based companies to blocks or acreage in Zone A. There is a considerable amount of interest in Zone A because at the edge of the continental shelf there is a formation known as the kelp structure, which is thought to be highly prospective. I have seen estimates printed, ranging from one billion barrels of oil to seven billion barrels of oil. I think the accurate way of describing it is to say that the kelp structure may contain a huge quantity of oil, it may contain gas, or it may simply contain seawater, but it is regarded as a highly prospective area of acreage. If it were to be successfully prospected and found to contain oil, it would boost our offshore reserves quite considerably. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I move: That the Senate take note of the answer. The question that was asked was one of very great breadth, and trying to deal with a matter of such importance to Australia in the space of an answer to a question is, I think, doing less than justice both to the subject and to the Senate. At this stage I invite the Minister for Resources (Senator Cook), in view of the importance of the matter that he has addressed, to make a statement to the Senate at some suitable time so that the matter can be dealt with by the Senate in a more satisfactory way. I seek leave to continue my remarks later. Leave granted: debate adjourned. The PRESIDENT —Order! The issue of the tabling of documents came up again during Question Time today. To avoid taking up time in Question Time, I waited until now to quote from the October 1985 report of the Standing Orders Committee: The terms of Standing Orders clearly indicate that it- that is, the standing order- -is intended to apply only to a document relating to public affairs which is actually quoted by a Minister in the course of the Minister's remarks and has no application to speech notes used by a Minister. The Committee has advised the President to rule accordingly. Senator MESSNER(South Australia) —by leave-During Question Time today the Minister for Finance (Senator Walsh) gravely misrepresented my position by implying that I have given incorrect information, being a repeat of something that the shadow Treasurer, Mr Andrew Peacock, had said earlier. I rise to make quite clear what Mr Peacock had said, which I repeated in the form of the question I put to the Minister. I quote from Mr Peacock's statement the following: On conservative assumptions about wages and inflation over the next 12 months, by 1 July 1989 Australian families will require about $56 a week to restore their household real disposable income to what it was in March of 1983 when this Government came to power. That has nothing to do with the point that the Minister sought to make in the course of the answer that he gave to my question, that the Opposition was putting forward a solution for tax cuts of that order. It is nothing of the kind. We are saying that there has been a decline in living standards of $56 a week for the average weekly earner. Senator Chaney —The Minister was saying it was all due to bracket creep. Senator MESSNER —Indeed he did. He implied that it was due to bracket creep and that it was all to do with the tax question. The Government has quite clearly led us to the point where we must believe that it is not serious in dealing with the Australian Council of Trade Unions (ACTU) about a tax-wage trade-off. Today we heard the Minister in this place say that the cost of taxation cuts of that order would be $25 billion. Therefore, he has no intention of restoring to the average weekly earner wages of anything like enough to make up the difference since 1983. I believe that the Minister has revealed the Government's sleight of hand in this area and is showing quite clearly that the Government is not dealing absolutely above board with the ACTU and certainly not with the Australian people. It has thrown consider- able doubt upon the ability of the Government to deliver any kind of wage-tax trade-off. Consequently, this must represent a very big hole in the Budget strategy that the Minister for Industry, Technology and Commerce (Senator Button) talked about earlier. It means that inflation must be considerably higher than that estimated in the Budget. The Minister has quite clearly misrepresented my personal position, he has misrepresented that of the shadow Treasurer, Mr Andrew Peacock, and he has certainly misrepresented the position of the Leader of the Opposition, Mr John Howard. He has purposely and deliberately misled the Australian people on the Opposition's policy in this area, and he is misleading the Australian people about the direction of the Budget strategy. Senator REYNOLDS —On 31 August Senator McLean asked me a supplementary question seeking acknowledgment that one of the references used by Dr Steele had become the subject of a discussion after the Evatt Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam. Senator McLean went on to say that the two authors had appealed and objected to the Governor-General and the Prime Minister (Mr Hawke), saying that the contents of their material had been misrepresented and distorted by the Royal Commission, and had claimed compensation of some $30,000. He also said that the Minister had promised to offer some explanation of Cabinet's position in relation to that claim. I now have information which I can pass to the Senate. Senator McLean's supplementary question is similar to a question he addressed to Senator Button, as Minister representing the Prime Minister, on 18 February this year. Senator Button indicated that complaints had been made by two Swedish scientists, Dr Axelson and Dr Hardell, and that the complaints formed part of the submissions to the Government by the Vietnam Veterans Association of Australia (VVAA). Senator Button replied that the issue of the complaints by the two scientists would be dealt with in the context of the Government's response to the Royal Commission's report and the VVAA submissions. In announcing the Government's response on 19 May, the Minister for Veterans' Affairs said, amongst other things, that the Department of Veterans' Affairs' analyses of the submissions should be made available to the VVAA. This has been done and copies of the relevant parts, together with Minister's statements, were also sent directly to the two Swedish scientists concerned. They have since each written to the Department of Veterans' Affairs to say that they appreciated the information that was sent and that they may provide further comments in due course. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce) —by leave-The partnership for development program is a major element of the information industries strategy. My intent in making this statement is threefold. First, I wish honourable senators to clearly understand the broad economic context within which the information industries strategy was developed; secondly, to relate the partnership for development program to that strategy; and, thirdly, to inform honourable senators of the way in which the program works and of the successful results that are flowing from it. I seek leave to incorporate the remainder of the statement in Hansard. Leave granted. The statement read as follows- It has been a central theme of this Government since coming to office that far reaching changes to our economic structure are necessary if we as a nation are to retain, let alone increase, our living standards into the twenty-first century. The Australian economy needs to be restructured and positioned so that we diversify our export base and participate more effectively in the fastest growing areas of world trade. It is in the high value-added goods and services area, based on the use of newer generic technologies such as advanced materials, biotechnologies, advanced manufacturing systems, and the information technologies, that the fastest growth is taking place. Australia's future prosperity depends upon improving our international competitiveness and moving to an outward orientation for our industries. As a small, high income country we need to be highly flexible and adaptable, and to use the new technologies both to improve the competitiveness of our existing industries and to create new opportunities. We have, accordingly, taken a number of far-reaching steps to internationalise the Australian economy and better integrate our industries with the world economy, to revitalise and restructure our manufacturing and traded services industries, and to create an environment which is favourable to innovation and entrepreneurship. Over the last five years we have, for example: floated the exchange rate, deregulated the financial sector and freed up foreign investment controls; reduced barrier protection and reformed and reduced corporate taxation; tackled the fundamentals of creating sustained competitive advantage by increasing the private sector contribution to research and development, and by improving management, labour skills, work practices, quality, marketing and strategic business planning; sought to improve our education and training systems and link our research infrastructure in the Universities, and publicly funded laboratories such as the CSIRO, more closely with industry; identified and removed impediments to competitiveness such as unnecessary areas of business regulation. Information Industries Strategy Background It was against this background that the Information Industries Strategy was formulated. The information technologies are of pivotal importance for the future development of not only the Australian, but also the world economy. They are fuelling new products and services making the information industries the fastest growing area of many advanced economies. These technologies are also providing the means by which other industries are improving their competitiveness and developing new services and products for sale in markets around the world. The market for information products and services is growing rapidly: it presently accounts for 19 per cent of world trade; and the OECD estimates it is growing at 14 per cent per annum, compared to overall world trade growth of 6 per cent per annum in recent years, and will reach some $US1,300 billion by 1995. It is a global industry characterised by rapid technological progress, high levels of international trade and technology flows and dominated by firms that are internationally oriented. This combination of rapid growth and wide application of information technology is providing major opportunities for the development of `state of the art' specialised products. Australia, with its strong information technology research base, technical skills and traditional innovative flair, should be well placed to exploit the opportunities. It has already established its credentials by developing world standard products in a number of fields, particularly communications and software applications. The task ahead is to duplicate and build upon these competitive advantages and to position ourselves to take a global approach to exploiting markets for goods and services during the short product cycle times which characterise these industries. For Australia to take full advantage of the global opportunities-and to do it on an on-going, self-sustaining basis-will require a fundamental shift in the orientation of our indigenous industry. Instead of the preoccupation with limited domestic opportunities, Australian firms need to: work to achieve the stringent quality, design, delivery and price requirements demanded by the global marketplace; form strategic alliances with overseas organisations which give cost effective access to complementary skills in areas of product development and marketing; become part of the international supply network whereby they focus upon a specialised set of products and services directed at particular markets; experience the dynamic benefits from vigorous competition on international markets. In short, our industries will be most successful if they become truly international in outlook. The timeframe available for this transformation is strictly limited. The need for change in the orientation of our information industries is demonstrated by our trading performance in this sector. Despite the rapid growth of world information technology markets, Australia has not made the most of the considerable opportunities available. OECD statistics for 1985, covering all information, computer and communications products, show Australia having an export-import performance ahead of only Turkey and Iceland. While there has been some growth in our exports since then, Australia currently has a trade deficit in this sector of just under $4,000m, and on present trends this trade gap could approach $10,000m by the early 1990s. Clearly there is a major challenge before us to achieve a healthier trade balance in the information industries sector. The Information Industries Strategy The Information Industries Strategy, which I announced last September, was a product of 18 months extensive consultation with interested parties. The Strategy seeks to address the challenges I have described through joint action by the industries and Government. The Government sees its role as providing a positive operating environment which encourages these industries to maximise their potential. The Strategy also seeks to stimulate greater awareness by decision makers about the valuable market opportunities to be found abroad-that is, an expansion of their focus from the domestic to the international market. The industries themselves are confident of their own capabilities and recognise the opportunities to be gained from a more global focus to their activities. During the consultation process from which the Strategy developed, industry reached a conservative estimate that it had the potential to treble in size by 1996, and to become one of Australia's largest employment and export sectors. They forecast exports of hardware equipment, for example, increasing tenfold to $1,500m per annum by 1995. The Government does not intend to direct industry resources to any particular activities within the information industries sector. Rather, it considers that resource allocation questions are generally best left for determination by market forces. The industry also believes that, for it to realise its competitive potential, Government action to build the necessary basic infrastructure is critical for success. The Strategy is a long term integrated development package with specific goals. It formulates a range of initiatives designed to encourage our information industries to raise their competitiveness and develop their full potential by linking into world markets and expanding capacity to develop new products and services. The Government's role is to ensure that, where possible, impediments to industry growth are removed or reduced, thus allowing the potential of these industries to be fully realised. To this end the Strategy combines initiatives which concentrate on developing the potential of the information industries through action in three key areas: product research and development; enhanced international integration and increased exports; a supportive industry infrastructure, including education and skills formation and a more liberal operational environment. A strategic planning function to ensure the effectiveness of the Strategy has been provided for through the establishment of the Information Industries Board which is made up predominantly of people from the private sector actively involved in the industries. The Partnership for Development Program The role of the Partnership for Development program in this Strategy is a central one. It is a fact that transnational corporations dominate both the world and Australian markets in most of the information industries. The Partnership program harnesses the resources of these corporations to make a substantial contribution to achieving the goals of the Information Industries Strategy. It aims to provide a solid basis for the future growth of these industries and contribute substantially to their internationalisation. The thrust of the Partnership program is to encourage transnationals to deepen their roots in Australia; that is, for their Australian activities to become an integral and important part of corporate global operations and growth strategy. Through the Partnership program, we encourage the transnational to develop, on sound commercial grounds, Australian activities that play a significant role in its global R&D program and contribute new and innovative products suitable for global marketing. These activities may be owned by the Partner, or be a joint venture with Australian owned companies or organisations. Under the program, transnational corporations are encouraged to explore the opportunities available in this country and to actively seek out and work with Australian firms in the information industries. The demand of Partners for local R&D and for a wide range of exportable products, from components to finished goods and services, will stimulate industry infrastructure development and open new opportunities for Australian firms. These objectives are inherent also in the Australian Civil Offsets Program, from which the Partnership program evolved. The desire by Government to encourage the establishment and development of commercially viable activities in this country is reflected in the evolution of the Offsets Program over recent years from a simple contract by contract approach to the Pre- qualified Offsets Supplier arrangements that were introduced in March 1986. These latter arrangements allow the overseas supplier the flexibility to adopt a medium to long term approach to discharging offsets obligations without the need to enter into individual offsets arrangements against each sale to Commonwealth or State purchasing authorities. It became clear, however, that a more strategic approach would be more effective in seeking to achieve the specific objectives of the Information Industries Strategy and this rationale has given rise to the Partnerships for Development program. The development of the information industries in Australia was seen to be dependent on both building up healthy indigenous firms and on working with transnationals to form product development and marketing links into world markets. While the Offsets Program was consistent with the thrust of the Information Industries Strategy, and industry policy generally, it did not enable Australia to establish broader relationships with transnationals in the information industries regarding their overall investment plans. Transnationals typically see offsets as obligations imposed upon them in order for them to participate in the Government market. The Partnership program, on the other hand, establishes an environment which encourages the transnationals to realise that there are worthwhile opportunities to be found in Australia of commercial benefit both to themselves and to this country. Thus we sought to provide a framework within which the transnationals, and their Australian suppliers, could more sensibly and strategically plan to achieve the targets set by the industry itself. The Partnership for Development program achieves this. If the transnationals, by entering into a Partnership agreement, commit themselves to achieve the R &D and export targets then they are exempted from the requirements of the Civil Offsets Program. As long as they remain on track in performance achievement during the life of the agreements then they will continue to be exempted. When they attain the targets at the end of the agreement, and continue to operate in a manner consistent with the broad principles of the Partnership program, then they will gain permanent exemption from the Offsets Program. The R & D and export commitments require a serious level of activity to be undertaken by the transnationals. With the achievement of these Partnership undertakings, I am confident that Australia's capabilities in the information technology field will have been more than adequately demonstrated. After that, normal commercial forces should be sufficient to continue the ongoing growth and development of these industries. Given the often limited appreciation abroad of Australia's capabilities in the information industries sector, these investigations would have been unlikely to occur, or would have occurred over a much longer timeframe, without the existence of the Offsets Program and a willingness to adjust our approach to obtain a healthier relationship with some of the world's best companies. A real strength of the program is that the work undertaken by the Partner in Australia is based on long term viable activities which make commercial sense for the transnational to undertake in this country as part of its overall global R & D, production and marketing strategies. To ensure the effective integration of Australian activities into the transnationals global operations, the Partnership agreement is signed, not with the Australian subsidiary, but with the overseas corporate head office. An important point to realise is that, in committing to the Partnership program, each transnational will be undertaking activities in excess of the obligations it would normally have incurred under the civil Offsets Program. For all these reasons, therefore, it is misleading to regard the Partnership program as simply a `higher order' alternative to meeting offsets obligations. It is, as I have said, much more than this. It is a cornerstone of the Government's Information Industries Strategy, utilising for a period the leverage offered through the Civil Offsets Program to cause serious investigation by such corporations into the establishment and development in Australia of dynamic and internationally competitive activities in these technology intensive industries. Australia has a host of attributes which make it attractive for transnationals to establish activities here. These include: its convenient location to Asia-Pacific regional markets; a stable political and economic environment; a leading edge and competitive market for information industries products and services; a well educated work force with an English language base; world class industries and infrastructure; world leadership in specialised technologies. These and other competitive advantages mean that an attractive package can be harnessed to encourage transnationals to establish worthwhile and ongoing activities in Australia, rather than elsewhere in this region. The Asia-Pacific region is the fastest growing region in the world today and is increasingly attracting the interest of the transnationals. My discussions over the past year with leading corporate decision makers suggest to me that this success is due in large part to an appreciation by the transnationals of what this Government is endeavouring to achieve through the Strategy and the clear understanding that it involves mutual benefits and mutual obligations. The transnationals welcome this as a more rational approach than that of some other countries which tend to adopt a more one-sided approach to the development of their high technology industries. I recognise also that the need by those transnationals to be seen as a `good corporate citizen' is not an irrelevant factor in a sector where the Government is a major customer. But more importantly, the dynamic growth of the Asia-Pacific region has caused transnationals to rethink their long term strategies for the region. Australia, with the inherent strengths and capabilities of its information industries, can compare favourably with other countries of the region as a source of specialised information technology products and services. This regional approach in itself is indicative of the process of globalisation that is increasingly occurring within the transnationals. This demise of the `not invented here' syndrome, as transnationals compete to maintain market advantages, offers Australian high technology industries opportunities that would not have been conceivable 10 and possibly even five years ago. Accordingly, we all need to re-program our mind-set from the restrictions of the past to the opportunities of the present. Details of Partnership Agreements Let me turn now to the details of the Partnership agreements. The agreements are embodied in formal Memoranda of Understanding, with each party committing to certain undertakings. These commitments are not lightly undertaken either by myself, as the signatory for the Australian Government or by the senior corporate office holders signing for the transnationals. The status of these agreements and the goodwill generated by becoming a Partner make me confident that the undertakings by the Partners are firmly based. I am fully committed to seeing that the undertakings given by the Government are also achieved. The transnationals commit to support the aims and objectives of the Information Industries Strategy and to meet the specified R&D and export undertakings through an agreed seven year project schedule. The Commonwealth Government, in conjunction with the States, undertakes to exempt Partners from the requirements of the Australian Civil Offsets Program and to develop and maintain a supportive economic environment and industry infrastructure. The agreements are signed, as I mentioned earlier, with the transnational's corporate headquarters, not the Australian subsidiary, to ensure that the agreement has head office support and commitment and is integrated by the corporation into its overall product development and marketing strategy. Partnership Commitments Consistent with the thrust of the Information Industries Strategy itself, the commitments entered into by a transnational under a Partnership agreement focus on the three key areas of product development, internationalisation and export, and industry infrastructure development. A transnational corporation signing a Partnership agreement commits to achieve, within seven years: expenditure on R&D activities in Australia equivalent to 5% of its local turnover annually; annual exports of goods or services equivalent to 50% of the Partner's imports into Australia; an average across all exports by the seventh year of 70% local value-added content. For software companies, and in other situations where appropriate, the 50% export-import ratio is replaced by a commitment to achieve exports equivalent to 20 per cent of the corporation's Australian turnover. Again the 70% local value added criterion applies. The level of the product research and development commitment is derived from the fact that, on a global basis, these corporations tend to commit about 10% of turnover to R&D. In Australia, however, often very little is spent in this area. The 5% of turnover R&D requirement therefore represents a substantial improvement. This level of R&D also amounts to significant expenditure by the transnational, requiring serious consideration in terms of the transnational's overall R&D strategy. The commitment is also pitched at a level which will show whether Australia has the capability to undertake significant R&D activities. But it is not pitched so high as to be considered unrealistic, nor place excessive demands on scarce local R&D resources. In other words the commitment presents a challenge to both the Partners and to Australia, but one that is not insurmountable given goodwill and effort all round. The export commitments were chosen after reviewing the performance of the information industries in similar OECD countries. The target ratios were selected to provide a significant and progressive increase in the level of exports from these industries-but again pitched at levels which are both realistic and achievable. The Australian value-added requirement acts, not only to ensure that simple re-export activities are not sufficient to meet the export-import ratio, but also to develop progressively the component supply and other core aspects of industry infrastructure development. By allowing Partners to meet export commitments through facilitating the export of the products of Australian owned firms the internationalisation of our indigenous industry will be markedly assisted. Developing the Project Schedule A detailed project schedule aimed at achieving these R&D and export commitments is developed by the potential Partners and discussed with officers of my Department to ensure that it is consistent with the principles and requirements of the Partnership program. This process is assisted by relevant State Government agencies helping to identify local firms and institutions that could benefit by being involved with the Partners. While the Government is non-directive about the type of activities to be undertaken by the Partner, it always seeks to ensure that the project schedule is consistent with, and contributes meaningfully to, the global marketing and R&D strategies of the trans- national. In this way the Australian activities are effectively linked into the transnational's global operations. The Government also looks to the project schedule to include collaborative activities with local firms and institutions where this makes commercial sense. In committing to Partnership there needs to be confidence on both sides that the R&D and export commitments will be achieved. It is unrealistic to expect them to be achieved overnight. Many Partners are starting from a low base and need time to develop their activities in this country. The program allows each Partner seven years to meet the R&D and export commitments and the Government wants to see steady progress each year towards the year seven targets. However, some flexibility is necessary as each Partner is commencing from a different start point in terms of resources and levels of activity in this country. It would not be reasonable for the project schedule to nominate inflexible annual R&D and export targets applicable to all Partners. The progressive annual targets are established by the transnational and reflect what it believes it can realistically achieve to that point as it moves towards the fixed year seven R&D and export commitments. My Department, in reviewing the proposed project schedule, seeks to ensure that the rate of progress is commensurate with that of other Partners with similar levels of resources and activity in this country. The question of possible corruption or abuse of discretion by officials is irrelevant in the Partnership context. It needs to be understood that the Partnership program is a framework for the Government and the private sector (involving both indigenous and foreign-owned firms) to work co-operatively to achieve the goals of the Information Industries Strategy. The Administration of Partnerships is on a broad focus and as such is quite different from the specific processes of the Government Purchasing arrangements which are administered quite separately by the traditional Purchasing Authorities. Review and Audit of Performance To ensure that satisfactory progress is being made towards achieving the R&D and export commitments, a review is undertaken with each of the Partners each year. The review audits their performance in meeting the current year R&D and export targets and examines and sets in more detail the anticipated future project schedule activities. The agreements require that Partners maintain sufficient records of R&D, export and import activities to permit the annual auditing of such activities by representatives of the Commonwealth nominated for this purpose. Sales to Government also need to be recorded by the Partner to enable the offsets position of the transnational to be established should the agreement be terminated. The intention is that the nominated representatives of the Commonwealth be the usual independent company auditors of each of the Partners. The auditors would be required to verify the Partner's annual Australian turnover and imports for the period under review. In addition the claimed achievements in respect of R&D and exports would be subject to the audit process. Verification will be sought for each R&D and export activity claimed, whether in-house or undertaken in collaboration with third parties. Claimed sales to Government will also be checked. Part of the review and audit process will be the assessment of progress towards achieving the 50% export/import commitment and the 70% value-added local content requirement. Local value-added is considered to represent the value which has been added to imported materials, components and services by the processes of production undertaken in Australia. I am confident that potential for abuse in this area will be minimised by the operation of the annual review and audit provisions. Also the relationship of turnover to R&D, and imports to exports will also act to minimise creative accounting and other activities which are contrary to the spirit of the program. For example, if in the early years of the operation of the agreement a Partner increased imports substantially above levels forecast in the project schedule (resulting in significantly increased turnover), then the Government would wish to discuss what plans the Partner had to expand R&D and export activities to ensure a continued steady progression to the achievement of the year seven R&D and export commitments. The Commonwealth also proposes to undertake on a random basis, and where circumstances indicate it would be desirable to do so, its own independent verification of activities particularly in the area of collaborative arrangements with third parties. If the annual review reveals that the Partner has not met its foreshadowed annual target, and the shortfall cannot be adequately justified, provision exists for the Commonwealth to allow the Partner a specified period to rectify the situation prior to any move to terminate the agreement. Termination of Agreements If a Partner fails to perform adequately, the agreement can be terminated by the Government. With such termination: the transnational loses its Partnership status and the benefits arising therefrom; and returns to standard offsets arrangements. The offsets balance applying at the time of signing the Partnership agreement is adjusted to take into account, on the one hand, subsequent sales to State and Commonwealth Governments up until the date of termination and, on the other, export and R&D achievements under the Partnership work program. A further sanction arising from such termination would be the adverse impact on the corporate image of a transnational that had not lived up to its side of the balance of obligations which form the basis for the Partnership agreements. Entering a Partnership agreement is a serious long term commitment by a transnational corporation. I would not expect that the Commonwealth would need to exercise its right of termination, but that right does exist, and would be applied if necessary against a defaulting corporation. There is also provision in the agreements for Partners to withdraw from the program if the Government has not lived up to its side of the agreement. Government Undertakings The principal concession of the Partnership program is that Partners are exempted from the requirements of the Australian Civil Offsets Program introduced on 1 March 1988. This exemption applies to all civil procurement by the Commonwealth, and procurement of information technology goods and services by State and Territory Governments participating in the Civil Offsets Program. However, the Government also undertakes to address issues which are particularly important to individual transnationals. The undertakings tend to cover: publicising the Partnership program and its participants; encouraging an adequate supply of skilled labour and professionals; establishing uniform offsets arrangements between the Commonwealth and the States through the Australian Civil Offsets Agreement; taking steps to improve the performance and capabilities of local industry supplying components and products to international standards; continuing the 150% R&D taxation concession scheme until 1991 and the GIR & D scheme to at least 1990. Just as the Partners' performance is reviewed annually, so too is that of the Commonwealth in meeting its obligations. The Commonwealth has made a good start in meeting its undertakings. For example: an Information Industries Education and Training Foundation has been established to encourage an adequate supply of skilled people to meet current and future needs; 950 extra tertiary places were established for 1988 in computer science and more than 100 in electronic engineering; my colleague the Minister for Employment, Education and Training (the Hon. J. S. Dawkins, MP), in his recent policy statement on higher education, stated that the Government will continue to give a high priority in the 1989-91 triennium to fields of study relevant to the development of these industries; a `fast track' immigration scheme for needed skilled personnel was implemented for Partners in June; on 1 March 1988 uniform civil offsets arrangements were introduced by Commonwealth, State and Territory governments under the Australian Civil Offsets Agreement; a Vendor Qualification Scheme was announced in July, designed to accelerate the development of a vendor base of local companies capable of supplying world class components and products; information/communication technologies have been established as generic technologies qualifying for support under the Grants for Industry Research and Development (GIRD) Scheme; the establishment of the Information Industries Board provides an industry based mechanism to investigate relevant emerging issues and to suggest to Government further initiatives where necessary. Benefits of the Partnership Program The benefits to accrue to Australia from the Partnership program are considerable and will be broadly based. The 12 Partners signed in the program's first year expect to increase R&D in Australia from over $55m in 1988 to close to $250m per annum by 1994. This means that between 1988 and 1994 total R&D expenditure by these 12 transnationals will exceed $1,020m. I remind honourable senators that total R&D expenditure by all Australian businesses in 1986-87 was less than $1,100m. In the case of exports, the Partners will increase their overseas sales from Australia from about $185m in 1988 to close to $1,100m per annum by 1994. By then about one half of exports will be hardware, a third software and the balance services, such as training, and technical support. Overall, between 1988 and 1994, exports by the 12 will total over $4,000m. Importantly, also, by 1994 these exports will on average have a minimum Australian value-added content of 70%. The strong emphasis in the Partnership agreements on export, together with the 70% local value-added requirement, will mean that the Partners' activities in Australia will be integral to their global strategies, and that developing their Australian capabilities will be of vital importance to them. Furthermore, the R&D requirement is an investment in the long term future of the industries locally, especially in the export field. Overall, therefore, the Partners will generate considerable demand for high local content products and services, but on the only basis that matters-that it makes commercial sense to do so. These R&D and export activities will be undertaken both in-house and in collaboration with third parties, principally locally owned firms and research organisations. The involvement of transnationals in the program will act as a critical stimulus to the growth and development of infrastructure, capabilities and capacity in these firms and organisations over the period of the program. R&D activities will be undertaken in both hardware and software sectors including the development of communications and computer equipment and components, and the development of systems and application software. While much of the R&D will be done in-house for commercial security reasons, Partners are involving Australian firms and institutions in collaborative arrangements, where there is mutual benefit. Indications of success in these areas are already to hand with emerging areas of specialisation, particularly in the software field, becoming apparent. For example: Hewlett-Packard expanding its R&D facility, Australian Software Operation, to develop and export fourth generation computer languages. Some 300 professional jobs, mostly in R&D activities, are expected to be created by the company; Apollo Domain funding third party software R&D, in areas such as image processing and advanced graphic systems with the CSIRO's Division of Information Technology; and Nixdorf undertaking a joint venture with another transnational and an Australian software house to develop OSI software for worldwide application. Exports under the program will span hardware, software and services. Partners will be placing a heavy reliance on products sourced under collaborative arrangements with Australian suppliers. By 1994 about 40% of all exports under Partnership agreements will be sourced from local firms. Hardware exports will cover a variety of communications and computer equipment and components including EFTPOS equipment, modems, workstations, personal computers, memory boards, power conditioners and cables. A wide range of software with application in areas such as marketing, finance, tourism, communications and manufacturing will also be exported giving recognition to the considerable Australian expertise that exists in this field. Two examples of such activities that have already been announced include contracts worth: $12m to NetComm Australia Pty Ltd from Apple Computer for communications equipment design and development work during 1988-89 destined for the American market; $5m for software exports and another $5m for manufacturing expansion to Datacraft from its joint venture with the recently signed ICL group. Challenges and Opportunities The success of the Partnership program will depend upon how well Australia responds to the challenges and opportunities emerging in a number of key areas. Some of the challenges are already becoming apparent, such as the need to secure an adequate supply of skilled resources for the requirements of both the Partners and local industry. As I noted earlier, the Government has already taken action to address this issue and has mechanisms in place providing for on-going attention to be given to this matter. Related to the skills issue is the critical need for the development and improvement of the managerial resources of these industries. Management of local firms will need to be commercially astute in their dealings with the transnationals. They will need to appreciate and actively seek out the opportunities offered by the expanding horizons beyond Australia and into the global marketplace. For many, the Partnership program will offer a mechanism by which this can be achieved without the same cost burden and risks associated with individual export ventures. Even with marketing assistance and support from the Partners in production, the management of local companies will need to tailor product development, pricing, quality and production strategies to the requirements of these new markets. With the growing realisation of the importance of the Asian Pacific region as a major market, there is a particular need for Australian firms to build further on the regional acceptance of Australia and the opportunities arising from our location in the region. There is the very real challenge for indigenous firms wishing to benefit from the program that they be able to demonstrate that they can be world class producers meeting the exacting quality, delivery, price and quantity requirements of the transnationals. This will place heavy demands on the financial and technical, as well as the managerial, resources of the firms concerned, but the rewards for those seeking the opportunities will be well worth it. These opportunities cover not only the provision of finished products but also the supply of core componentry to assist the Partners in their quest to achieve 70% local value-added in their exports. The demand generated by Partners means that the current Australian components infrastructure will need to expand considerably. However, in developing new capabilities in such areas the driving principles must be that such expansion is commercially viable. The Government has a clear role here to encourage appropriate infrastructure development, and will be utilising the Partnership and Investment Promotion programs to help achieve this. State governments also have an important role in this regard. My Department is discussing with the partners their critical areas of need, and identifying component supply activities that could be established in Australia on a long term basis. Such developments will benefit not only the Partners but the information industries generally. The demands on our industry and industry sub-structure through the Partnership program will provide a significant challenge for the financial sector to mobilise the necessary resources necessary to meet the substantial opportunities becoming apparent. The Partnership program should provide substantial reassurance to investors and lower the image of risk that is often associated with investing in these high technology industries. The successful coming together of all these factors is critical to ensuring a sound basis for future growth of the information industries. For such issues to be resolved effectively and in a timely manner will require collaboration and a concerted effort between State and Commonwealth Governments, transnationals, local industries and the finance sector. This is what the Partnership program is all about-cooperation for mutual advantage. I am confident that all parties will realise the considerable benefits emanating from this Program and will rise to the challenge of ensuring we make the most of this opportunity to establish Australia as a major force in the Asia-Pacific region in the information industries. ATTACHMENTS Partnership for Development Statistical Information - List of Partners and Dates Agreements Signed - Research and Development Targets - Export Targets Resume of Partnership Activities Summary of Partnership News Releases Date Partnerships Signed Date Corporation 5.11.87... Honeywell Bull 16.12.87... Hewlett-Packard 2.2.88... Apollo Computer 3.2.88... Digital Equipment 24.2.88... Apple Computer 8.3.88... IBM 17.3.88... Wang Laboratories 24.3.88... Cincom Systems 11.5.88... Sun Microsystems 18.5.88... Unisys 12.8.88... Nixdorf Computer 31.8.88... ICL Partnership Targets (12 companies) 1988 1989 1990 1991 1992 1993 1994 $m $m $m $m $m $m $m Research & Development Total: 58 89 113 139 169 205 246 Exports Total: 185 299 416 534 687 855 1,087 Compiled from Partnership Memorandum of Understanding project schedule estimates. Resume of Partnership Activities The following summaries are taken from information made public by the firms participating in the Partnership for Development Program. They are not intended to be comprehensive in detail as many individual projects contained within the Partnership agreements are, for commercial reasons, confidential. The resume does, however, provide an indication of the level of commitment and direction that each Partner firm has undertaken. Further details can be found in the Press Releases issued at the time the Partnership Agreements were signed. A list of those releases is attached. Honeywell Bull The firm was the first Partnership signatory and has embarked upon a strong program to achieve exports of some $50 million in the Agreement's final year of 1994. This will provide immediate export opportunities for several Australian companies: such as Computer Switching Systems and Cables and LSE Manufacturing, among others, which will build export products for Honeywell Bull, whilst a number of companies, including CSSC, Techmetal, Morris Productions and LSE Manufacturing, will supply components to be exported in equipment manufactured by Honeywell Bull. R&D activities focusing on products to be taken to the international market place are being undertaken in-house and in collaboration with a number of Australian companies Hewlett-Packard The company has given a commitment to achieve exports totalling some $78m per annum by 1994 and to undertake R&D activities with a cumulative value in excess of $88m in the period to 1994. To achieve this Hewlett-Packard is: following a broad strategy involving hardware and software that will link Australian industry skills and products to Hewlett-Packard's operations world-wide; actively involving Australian industry in solutions to communications requirements; seeking joint venture opportunities such as the recently announced marketing agreement with Telecom Australia. Apollo Computer Apollo has chosen to fund an Advanced Systems Centre in Canberra, rather than establish its own R&D facility in Australia: the centre will play a major role in the Partnership and help indigenous organisations grow and prosper, with specific business units within the Centre addressing niche markets- Australian companies, such as Expert Systems, have been invited to undertake R&D activities that will result in internationally competitive products being marketed through Apollo Domain's worldwide business channels and lead to over $10m in exports in 1994; in addition, Apollo Domain is currently reviewing 25 products designed and developed by Australian companies, that could expand its portfolio. These products may be redeveloped for inclusion in the Apollo Domain workstation environment through the Centre. Australian organisations using the Centre will retain the rights to the products developed and will be responsible for future developments, enhancements and maintenance. Digital Equipment Corporation (DEC) DEC has identified a broad package of activities which provide for new product development and annual exports of $100m in the Program's final year, with a heavy reliance on Australian hardware and software products: initiatives under the agreement include the development of an Australian vendor capability for the supply of components worldwide and collaborative research and development activity with Australian public and private sector organisations; successes to date include- Australian Standard Cables Pty Ltd obtaining UL approval for a range of products and now preparing for a major thrust into the global marketplace; General Power Controls Pty Ltd gaining access to DEC's worldwide resources to implement technologies to international standards. As a result of the Partnership Program, the company has started to develop products which are expected to result in substantial exports. Apple Apple is aiming to lift R&D to $18m and exports to $107m per annum by 1994 under its Partnership agreement, which will provide assistance to Australian companies through: transfer of manufacturing technology, access to component/product specifications and assistance to Australian companies to reach international levels of volume manufacturing, quality control and international price competitiveness necessary to sustain long-term supply arrangements; inclusion of Australian companies in major R&D programs critical to Apple Computer's future products cycle and the development of centres of excellence in communications and plastics technology. Components and products sourced from Australia will be integral to the development and manufacture of finished Apple products worldwide: NetComm Australia Pty Ltd has signed a design and development agreement involving exports to the United States valued at over $12m during the next two years; export performance has been lifted following sales to Apple Singapore of $6m annually of memory boards manufactured by LSE Manufacturing Pty Ltd, IBM IBM's research and development program is the largest of the Partners and is projected at $75 million per annum by the end of the program, focusing on software development: important initiatives of this program include collaborative arrangements with Australian research groups and the corporation's research facilities, and an international mandate for specific applications product development work. The firm plans to lift exports to $340m under the program by 1994 by: extending the current range of activities at the Wangaratta manufacturing plant to include new product ranges; continuing export for software products developed in Australia, including software products developed in-house, products subcontracted for development by third party software companies, and products developed independently by local software companies. Wang Wang has agreed to significantly increase its manufacturing and lift exports to almost $300m over the period to 1994: To meet its export target the company has doubled the capacity of its manufacturing plant, and has formed a number of strategic alliances with Australian industry and R&D organisations including- Cleanline Systems for power management systems; Computer Support Systems Pty Ltd for computer safeguard equipment; and Datamax which has developed multi-tasking communications; Canberra's College of Advanced Education will benefit from funding for development of prototype equipment which will demonstrate that computer recognition of natural speech has practical and commercial value. Cincom This firm plans to lift exports by some $47m per annum by the end of the program, largely by reaching agreement with a number of Australian companies to export leading-edge software products through its worldwide network: a major part of Cincom's export initiative is the sale and support of Net/Master, a network management system developed in Australia by Software Developments Pty Ltd and marketed by Cincom to all countries outside Australia. Net/Master is used extensively worldwide in the banking, insurance and manufacturing industries; agreement has been reached with the Paxus Corporation for the worldwide licence of Cincom software for the development of the Paxus range of insurance industry applications based on Cincom's Supra Relational Data Management System. Sun Microsystems Sun has agreed to invest $9m in R&D and achieve exports of $35m per annum by the end of their agreement, under a program focusing upon packaging Australian software for pro-active marketing by Sun subsidiaries and distributors through Asia, North America and eventually Europe: image processing and the mining industry will be the first focus of attention. The firm's Australian subsidiary will play a key role in Sun's thrust into the world mining industry, based on the quality of local applications packages; joint development work is to be undertaken with Techway Group, Webster Computer Corporation, Austek Microsystems, CSIRO, Australian Defence Force Academy, Melbourne University, Monash University and Sydney University- another project likely to have early export success is a Weather Satellite Ground Station product that has been developed by PCM Electronics Pty Ltd in Melbourne. Unisys This firm has agreed to invest $150m in R&D over the period to 1994. In this same time frame, Unisys plans to export $414m of Australian products and services. Within these parameters, UNISYS will: undertake R&D activities both in-house and with third parties; export the products of the Australian Software Centre and the products sourced by the Company's Procurement Branch which will contract local manufacturers to supply components and sub-assemblies to Unisys worldwide manufacturing facilities. Nixdorf The company was the first European information technology firm to join the Partnership program, committing to a target that by 1994 is expected to see: $4m annually spent on R&D activities in Australia; some $14m in exports per annum from Australia that will be distributed through Nixdorf's worldwide marketing network. Initially, Nixdorf's activities will concentrate on software, including a joint venture with an Australian software house and an overseas computer hardware supplier to develop OSI software. The company has also signed a software sourcing and development agreement with another Australian firm and plans to extend this into a full development collaboration. ICL ICL's Partnership agreement has committed the firm to investing some $80m in R&D activities and achieving over $300m in exports in the period to 1994. The firm's Australian plans involve collaboration with the local data communications company, Datacraft. This commits both companies to the joint marketing of each other's product in Australia, the manufacture by Datacraft of ICL products, the export by ICL of Datacraft products, joint R&D in networked products, and the export by ICL of Datacraft products into the European and International market. Examples of specific program activities include: technology transfer from ICL to Datacraft to facilitate the development by Datacraft of ICL's Network Management software; international marketing by ICL of Datacraft developed Matrix Switch, modems and graphic based network management software; the production of PS2 compatible personal computers for the Asia/Pacific Market, and the production of interface boards for ICL terminals worldwide. PARTNERSHIP AGREEMENT NEWS RELEASES ISSUED BY THE MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE, SENATOR JOHN BUTTON Title Date No. Honeywell Bull and Government to Work in Partnership to Boost Exports 5.11.87 148/87 Apollo Domain to Work in Partnership with the Government to Boost Indigenous Companies' R&D and Exports 3.2.88 11/88 Hewlett-Packard Signs Partnership Agreement 5.2.88 12/88 Wang Looks to $300 Million Export Program 17.3.88 32/88 Government and DEC sign largest Partnership Agreement to Date 24.3.88 38/88 CINCOM to Expand Product Development Capacity Under Partnership for Development Agreement 24.3.88 37/88 IBM Signs Partnership for Development Agreement 7.4.88 44/88 Apple Computer Commits to Major Export Drive Under Partnership Program 20.4.88 53/88 UNISYS Corporation Signs Partnership for Development Agreement 18.5.88 76/88 First European Company Signs `Partnership for Development' Agreement 12.8.88 128/88 UK's Largest Computer Firm Joins Partnership Program 31.8.88 139/88 Note: Sun Microsystems pre-issued their own Press release independently. Senator LEWIS(Victoria) —by leave-I move: That the Senate take note of the statement. As the Minister for Industry, Technology and Commerce (Senator Button) has said, this deals with a most important subject. The Minister read the first part of his statement. I did not expect him to seek leave to incorporate the remainder of it in Hansard. The Minister said, `My intent in making this statement is threefold. First, I wish . . .'-but at some stage he must have sought leave to incorporate the remainder of the statement, at a time when I was distracted due to my concern about responding. I am ready to respond, but as to the statement, it deals with a most important issue. It is not as though it has been read in the other place and the Minister is simply incorporating it in this place. This matter is the Minister's responsibility, and in my view the statement should be read to the Senate. The DEPUTY PRESIDENT —Leave was granted. There was no dissenting voice when I put the question. Senator LEWIS —Thank you, Mr Deputy President. Once again, Senator Button has treated this Parliament with complete contempt. He continually does that. He has done it all the way through with his dealing with the partnership for development program, which he announced to the Press in October last year. He did not announce it to this Parliament; he did not come in here and tell us what he was proposing to do. We had to read in Press reports, issued by his Press secretary in the United States, that Senator Button was on a world tour to promote and further explain some scheme-which in those days he was calling corporate citizenship. For some reason or other, that name fell out of favour and it is now called partnership for development. Senator Watson —He cannot even answer questions. Senator LEWIS —As my colleague Senator Watson has said, Senator Button cannot even answer questions in relation to this matter. They are too technical for him. This has been going on now for some 12 months, since October last year. As a senator for the State of Victoria and as the Leader of the Government in the Senate, the honourable senator has forgotten that his first duty is to the people of Australia, including senators in this place and members of the House of Representatives. Senator Button had to be forced to make the statement today, nearly 12 months from the time he was overseas trying to sell the idea to various trans- national or multinational companies. On 19 November 1987, during the appropriation debate and in response to a question which I put to him, Senator Button said that he would make a statement about this matter at the appropriate time. He said: I think it would be best if, at an appropriate time, which is not yet, I made a statement to the Senate about a whole number of arrangements that have been entered into by the Government in relation to what Senator Lewis calls `corporate citizenship', but what we call partnership agreements, and I will undertake to do that in due course. That was in November 1987, and it has taken Senator Button until now to make his statement. I say to the Senate that he would not have made it today except for the action which I took on the last day of the sittings three weeks ago, when I moved for a suspension of Standing Orders to enable him to make the statement, and I point out that at that stage the Australian Democrats did not support my proposal. Senator Button must have got to them and said that he would make the statement in due course-and that is why he made the statement today. Had I not taken that action, the people of Australia would still be waiting to find out. Senator Button —Don't be silly; go back to Victoria instead of sitting up here bludging. Go back to your own State occasionally. Senator LEWIS —I take strong exception to that. Senator Button has told me to go back to Victoria instead of being up here bludging, when I am up here doing my job as a senator for the State of Victoria. I take strong exception to his remark. However, I will not lower myself to ask him to withdraw it. Senator Reid —He should withdraw it, as a gentleman. Senator LEWIS —He is not a gentleman; he has never been a gentleman. Senator Watson —He is out of touch, that is the problem. Senator LEWIS —That is right. He is out of touch and he is upset. He always gets this way. Whenever Senator Button is under any sort of attack he always makes a personal attack on the person who is attacking him. He has an arrogant approach. Senator Stone —He is playing the man. Senator LEWIS —As my colleague Senator Stone says from a distance away-I still recognise his voice-he is playing the man. He is not playing the ball-he rarely plays the ball in this chamber. He tries to play the ball outside when he big-notes himself by modelling with people in Vogue magazine and things of that nature. But when he gets into this chamber, he plays the man. As far as I am concerned, frankly it was fortunate that Senator Button went overseas last year for a while because in his absence Senator Walsh actually revealed some information about the program. Senator Walsh's answer to my question on 28 October is the only substantive information about the program that has been given by the Government before today's statement that had not at some stage or other been contradicted by other statements made by the Minister in this chamber. In other words, continually the Minister has made statements in this chamber about this matter and subsequently contradicted those statements in some way or other. The only substantive information that I have had about these partnership arrangements is in fact the statement given by Senator Walsh in answer to my question of 28 October last year when Senator Button was overseas. Senator Walsh said to the Senate: The satisfactory discharge of past offsets obligations is a requirement of pre-qualification to partnership status. I say to Senator Button that even that statement made last October by Senator Walsh now comes up for review. I wonder whether what Senator Walsh said has now been changed because today, at page 12 of the statement, Senator Button says: The offsets balance applying at the time of signing the Partnership agreement is adjusted to take into account, on the one hand, subsequent sales to State and Commonwealth Governments up until the date of termination and, on the other, export and R and D achievements under the Partnership work program. I wonder how that relates to what Senator Walsh said back in October 1987. Just in case Senator Walsh does not believe me, because he comes into the chamber and gives the impression that he has not given us this answer, I quote from page 1381 of Hansard of 28 October 1987: The satisfactory discharge of past offsets obligations is a requirement of pre-qualification to partnership status. Well, that has got rid of Senator Walsh. Senator Walsh —I didn't say anything about offsets. Senator LEWIS —The Minister may think he did not say anything about offsets, but the truth of the matter is that he did. Senator Watson —Senator Button needs his help. Senator LEWIS —That is right. Senator Button should go over and get Senator Walsh's help. That might help him out in this difficult area. The crux of the problem about this Minister's scheme is that he has never told the same story about it twice in the Parliament. The scheme appeared to be all things to all men. Senator Button gave us numerous different stories about what were the obligations and commitments of the partners under the agreements. A few weeks ago he actually had the audacity to say that they were not actually contractual arrangements but that there was some other sort of unspecified arrangement, as if one could enter into some partnership agreement that was not a contractual partnership agreement. I do not know what Senator Button did after he qualified in law at the University of Melbourne, but he certainly did not learn any of the things that he was taught in the subject of contracts. Senator Button has also regularly displayed a changing story about the relationship of this scheme to the offsets program. It is a cause for concern that today's statement virtually ignores the offsets program and changes that have occurred in its administration over the last 18 months. Perhaps the Minister intends to make a separate statement at some other time about the offsets program. It has been apparent to those of us who have been following the Minister's statement closely that frankly, he did not seem to know precisely the details of his own scheme, the very scheme that he has been trying to sell around the world. When Senator Button returned from his travels last year he gave me an extract from a United States of America publication that quoted him and discussed the purpose of that visit. I refer to the fact that parts of that report indicate that Senator Button left a confused message overseas about the details of his scheme and the scheme it was replacing. I refer to an article on page 1306, volume 4, of the International Trade Reporter which talks about the requirements of the current Australian law and which, in fact, mistakes the details of the offsets program. I ask whether at that stage Senator Button did not understand the offsets program. I have been following this matter in great detail since I took responsibility for this portfolio and it is quite clear to me that, frankly, Senator Button's problem is that he does not understand that the problem with offsets is the lack of a legislative base. If there were an Act of parliament which dealt with this matter, we would know what the offsets requirement was. The situation is the same with the partnerships for development program. Where governments conduct programs in secret, keep the information to themselves and deal with business people in secret arrangements, and such activities are not subject to legislation which comes before the Parliament of Australia, of course there will always be difficulties. This sort of thing creates all sorts of opportunities for confusion and leads to failure to understand. In fact, it creates all sorts of opportunities for corruption. That is the other problem which arises when there is no legislative base. On 30 August last Senator Button said in the Senate: I will try to do what Senator Lewis has suggested . . . I shall try to put together a statement relating to the details. This is a clear indication that at that stage-as recently as 30 August-he did not really know the details himself. This is not the usual self-confidence that we see from Senator Button. It is a clear indication of his own uncertainty about the arrangements. I might say that very few commentators in the media understand what this is all about. There is no doubt that it is complex. Very few of them have seen through the Minister's contradictory statements about the partnerships scheme. But those who have done so have reinforced my calls for Senator Button to come clean on the program. I refer to an article by one Colin Brammall of the magazine Computerworld written in April 1988 in which he questioned whether the partnerships were a snow job. The article stated: The Federal government-dictated formula for announcing its corporate partnerships with multinational computer companies is `snowing' the Australian people with talk of millions of dollars and Australian industry involvement that means almost nothing. The announcements appear to indicate that Australia's import/export ratio in high-tech products is to be dramatically changed for the better by 1994 . . . Mr Brammall goes on to say: The figures are `rubbery' in the extreme. He then gives details of why the figures are rubbery. I seek leave to have the article incorporated in Hansard. Leave granted. The article read as follows- Are `partnerships' a snow job? THE Federal government-dictated formula for announcing its corporate partnerships with multinational computer companies is `snowing' the Australian people with talk of millions of dollars and Australian industry involvement that means almost nothing. The announcements appear to indicate that Australia's import/export ratio in high-tech products is to be dramatically changed for the better by 1994, that foreign-exchange improvements will be achieved through increased expenditure on research and development in Australia by multinationals and that the indigenous Australian computer industry is going to be much better off through the multinationals being virtually forced to buy from them. The figures are `rubbery' in the extreme. The Minister for Industry, Technology and Commerce, Senator Button, said at the IBM signing in Sydney (CW, Apr 1, pl) that the total commitment by seven multinationals so far was $A720 million a year in exports by 1994 and $A145 million a year in R&D. IBM's signing had contributed about half of the figures. The government, which expects to have about 25 corporate partners by the end of this year, many of them software companies, bases those figures on the companies' own individual forecasts of their activities in Australia. In other words, there are seven different bases for the seven sets of figures issued so far (and about 18 more different ones to come)-not a strong foundation for building genuine expectations on computer industry development, especially as the companies will revise their forecasts according to economic developments. The announcements have been orchestrated to draw most attention to a handful of agreements between the multinationals and mostly-Australian companies (financial details withheld for `commercial in confidence' reasons) and designed to make it look as if the multinationals are bowing to government pressure to involve the indigenous industry. The IBM announcement mentioned Teknis (Adelaide), Siemens (Melbourne), Aspect (Melbourne) and the University of NSW. The multinationals have been doing deals with Australian companies for their own corporate reasons for years-IBM said it created much of its $A100 million in 1987 exports from Australia through agreements with `local suppliers'. So what's new? And what does `local' mean, by the way? Is multi-national Siemens' Australian operation `local'? And what does `much of $A100 million' mean, when IBM admits that more than 40 per cent of it was derived from services. Further, how rubbery is the $A100 million total, when IBM admits that it imports products, groups them into shipment lots and distributes them to other countries, claiming the grouping of shipment lots as `added value' for export figures. Canberra editor Colin Brammall examines IBM's entry into the `corporate partnership' scheme. All of the above should not be taken as suggesting that IBM is doing nothing for Australia. With 4000 people working here, it is contributing healthily to our economy. The point is that the government, not IBM or the other multinationals, is dazzling us with virtually meaningless figures. The IBM announcement followed a similar pattern as for the other five hardware companies-Apollo-Domain, Honeywell Bull, Hewlett-Packard, Wang, DEC and Cincom. Button gave figures for exports and R&D-and admitted their rubberiness with the words `commitments based on the anticipated growth rate projected by IBM'-and the head of IBM Brian Finn, agreed. Neither gave any detail of what the company would be doing to achieve the figures, although Button said that, `IBM's R&D program will mainly focus on software development'. He referred to the Australian companies doing deals but there were no details of the business benefit to them. Teknis said its printed-circuit board deal with IBM was potentially worth $A13m over five years. Button said: `Current manufacturing activity at the Wangaratta plant will be extended', allegedly resulting in a tripling of exports from it. Finn said later that the plant's capacity would not be extended-and it could handle the new export products it is currently developing. So what did Button mean? Button referred to unspecified education, distribution and technical services being exported and to the creation of a special engineering group `to support the development of locally designed products for overseas marketing', by which he means bringing products up to international standards. However, Finn said that the group would `design specialised products for Australian customers and export markets', a quite different activity. Then he said the group would `transfer technology into Australia and assist in the development of local manufacturing industries'. The plans are all a trifle confusing and not very informative. Senator LEWIS —I ask honourable senators to understand that the Government of Australia is entering into partnership agreements with multinational companies around the world. The Government hopes to enter into 25 partnership agreements within the next 12 months or so. But we are not to be provided with details of those partnership agreements. There is to be no legislative base for those partnership agreements. The Government, on behalf of the people of Australia, is to enter into some sort of secret agreements which are not made public. I say to the Minister: that is not right, it should not be, it should not happen. Unfortunately, this scheme does not, in the general press or, indeed, in the Parliament, have the profile of the steel plan, the textiles, clothing and footwear (TCF) plan or the passenger motor vehicle plan. But let there be no mistake: this scheme is very important, not just because it is being used by the Government for subtle public relations purposes but also because of the large sums of money and government support involved in the scheme. These amounts include access to hundreds of millions of dollars of government contracts and, allegedly, billions of dollars in export earnings. A major difference is that the financial aspects of the steel plan, TCF plan and the passenger motor vehicle plan are covered by legislation and the administering monitoring authorities are established by statute and are required to report to Parliament on their activities: not so with the partnership program, which is to have no legislative backing or parliamentary scrutiny but with enormous potential to direct activity and with apparently a high degree of administrative discretion. I note that the Minister for Industry, Technology and Commerce has said in the statement he has incorporated today that the question of abuse of discretion is irrelevant in the partnership context. What an incredible statement for the Minister to be making. I remind honourable senators that in early 1986 the Government announced substantial changes to the offsets program and that in March 1987 the Joint Committee of Public Accounts, in report No. 270, highlighted the potential for abuse in the offsets program. The high degree of administrative discretion in the administration of the program was a cause for concern. This Government has still not responded to the Committee's report No. 270, issued in March 1987. Senator Watson —It is not game. Senator LEWIS —As Senator Watson says, that is because it is not game. There are too many hidden problems. The partnership program appears to derive from continued problems with the administration by Senator Button's Department of the offsets program, and the push for these new arrangements seems to have been well under way only a few months after Senator Button said that the revised offsets scheme of early 1986 was working well. That is what he told us; yet within a very short time we have this new partnership proposal. So, despite the question marks, the Government came up with a modified scheme with apparently even greater administrative discretion and ground rules that are not revealed to the people of this nation. I note that what the Minister has said today means that there will be no regular Commonwealth scrutiny of these partnership arrangements. In April 1988 Mr W. J. Henderson of the Australian Chamber of Commerce spoke on the realities of the offsets program. This is what he had to say: `But a steady flow of ministerial press releases is all that we have seen about this program'-the snow job I mentioned before. Senator Button —That is your word, not his. Senator LEWIS —That is right; they are my words. There has been a snow job. Until today all we have seen from this Minister about this program is a series of press releases. I do not know whether he has written them. I guess that they have been written by members of his staff, who seem to know something about the matter. But they keep contradicting one another. Senator Button, when we ask him questions in this chamber, frankly does not know what it is all about. He contradicts his own Press releases. At various times has has tried to distance his partnership scheme, which he calls a child of the offsets program, from the offsets program itself. He wants to distance them, but of course they are related. Where are the answers to the questions I put on notice on 2 June 1988 about the offsets program? They were fairly straightforward questions that should have been easily answered if the program was being properly administered and the Government was truly in a position to determine whether the partners had satisfactorily discharged their offsets obligations. What is the situation with regard to Australian manufacturers of this sort of equipment? Australian manufacturers trying to get themselves established and looking for markets in Australia have to compete with multinationals who are being promoted by the Federal Government. The Federal Government is promoting the multinationals, whereas the poor old Australian manufacturer who is trying to compete with the multinationals has to promote himself. How does an Australian manufacturer get out and sell his product when he discovers that the multinationals-- Senator Watson —Look at the list. Senator LEWIS —Look at the list that has been printed. It includes Honeywell Bull, Hewlett-Packard, Apollo Computer Equipment, Digital Equipment, Apple Computer, IBM, Wang Laboratories, Cincom Systems, Sun Microsystems, Unisys, Nixdorf Computers and ICL-and there are many more to come, according to Senator Button. How is the Australian manufacturer to compete with those companies when they are able to say, `But we are being promoted by the Australian Government; Mr Hawke and Senator Button think we are great'? What assistance is this Government giving to the poor Australian manufacturer? It is giving him his interest rates, high inflation and a wage accord that he cannot cope with. Senator Puplick —Less money for research. Senator LEWIS —And less money for research. Where is this Government assisting Australian manufacturers? Notwithstanding the rhetoric contained in this report, what is this Government doing for Australian manufacturers? It is promoting the multinational manufacturers. I repeat the calls I made in July and August for an independent audit of the offsets program, the administration of which has led to this partnership program. If the Minister fails to carry out such an audit he will fuel the growing suspicion that the truth is being hidden from the Australian people. The Minister has put before us today a very lengthy statement but very many significant questions remain unanswered. I can give the Senate three such questions unanswered in this statement. What is the exact nature and detail of the Government's commitment to the so-called transnationals? That is what the Minister is calling them. He is not game to call them multinationals; he calls them transnationals. He thinks that somehow or another the people of Australia will be confused by that euphemism. What are the limits to the types of products and services that can count for export credits? Finally, are the partners exempt from the requirements of the Government's preferential purchasing arrangements? These are three significant questions that I have arrived at following my quick perusal of the document before us today. I say to the Minister: this proposal needs some legislative base. Bring the legislation into the Parliament. Let the people of Australia know what the legislation is all about. Then we will be able to debate its merits or its demerits and the people will be able to understand the sorts of deals that the Minister and his Departments are getting up to with multinational companies. Senator BISHOP(New South Wales)(3.48) —I rise to support the remarks of my colleague concerning the statement brought down today by the Minister for Industry, Technology and Commerce (Senator Button), which I have literally received in the last 20 minutes. I, too, was most disappointed that the Minister did not choose to read this statement, which takes the debate in the area of partnership for development, and the offsets discussion generally, much further along the track. It is not without surprise to members of this House that the whole contentious nature of this developed practice has come in for much discussion and much criticism within the business world. Part of the problem is due to the fact that the terms of the so-called program are vague, ill-defined and, worse still, almost unenforceable. The growth of offsets programs and counter-trade generally in international trade has begun to be looked at seriously by economies more developed than our own in the sense that they are larger and more extensive. In the United States, for instance, there is now a move to curtail many of the offsets programs demanded by Third World countries. The concern I have with regard to this statement relates to much of the language that is used in it. Although I have had the opportunity to look at this document in only a cursory way, I would bring out one or two points. First, the Government says, at the head of page 13, in dealing with the question of Government undertakings: . . . the Government . . . undertakes to address issues which are particularly important to individual transnationals. The undertakings tend to cover . . . What on earth does `tend to cover' mean? Either they do cover the dot points that are then listed or they do not. The second of the dot points says that the Government will be `encouraging an adequate supply of skilled labour and professionals'. Yet in the Industries Assistance Commission (IAC) report dealing with offsets, the Government gives a commitment at page 67 that it is to provide-not `might tend to provide'-a `supportive infrastructure environment', whatever on earth that might be, including ensuring adequate availability of skilled labour. The report sets out further things that the Government will do in relation to obligations that it undertakes pursuant to partnership for development agreements. It states: The companies' contributions are acknowledged through a public relations program. I ask the Minister: By whom is that public relations program to be undertaken; what is the cost of that program; and what is the nature of that program? The statement, which comprises in excess of 20 pages, is, I can only presume-having not had the opportunity of reading it more thoroughly at this stage-reasonably detailed. But, again, page 67 of the IAC report states, in relation to partnership for development agreements: Objectives and achievements are to be reviewed annually. What are the criteria and the enforcement provisions for the annual review? The other particulars that are laid out in the IAC report as to what shall constitute an agreement do at least define when such an agreement will come into operation. It is described as `a mechanism by which companies can choose to become exempt from obligations under the offsets program. To date, partnership agreements have been limited to firms in the information industries'. From the Minister's statement today, it seems that the whole intent behind these agreements is to reinforce the statement that they will be exempted from the requirements of the Australian civil offsets program. Page 12 of the Minister's statement informs us: If a Partner fails to perform adequately- that is, not the Government, but the contracting transnational- the agreement can be terminated . . . It does not say that the agreement must be terminated or will be terminated: it uses the word `can'; so it is optional from the Government's point of view. The statement goes on to say that, if such a termination takes place, the transnational loses its partnership status and the benefits arising therefrom, all of which are still in that airy-fairy category of being unsure as to precisely what they are. The statement then says that there will be a return to standard offsets arrangements. There has been an attempt, as from 1 March 1988, to have more standard tests and criteria relating to offsets programs, but it seems unsatisfactory to say glibly that if a contract or agreement is terminated-again, it is non-specific about who may do the terminating-there will be a return, at the very least, to the standard offset arrangements, because it would not be a great enough penalty for the benefit that would, seemingly, be disposed. The statement continues: A further sanction arising from such termination would be- not `will be' or `must be'; but `would be'- the adverse impact on the corporate image of a transnational that had not lived up to its side of the balance of obligations which form the basis for the Partnership agreements. How is that to become known? What mechanisms will the Minister use to make sure that a company attracts the odium which his statement purports to say it will, and how will he avert finding himself in hot water by in some way defaming individuals or causing loss of business to that party? Where are the provisions that cover such things? Page 12 also states glibly: There is also provision in the agreements for Partners to withdraw from the program if the Government has not lived up to its side of the agreement. With the vague and waffly things that the Government is undertaking, as largely set out on page 67 of the IAC report, it would seem that the transnational partner to an agreement will have a very wide field from which, presumably, it can unilaterally break an undertaking into which it has entered with the Government. As I said earlier, I am disappointed that the Minister did not read his statement because, when statements are read, one can often come to understand whether the Minister was the author of his own statement or whether it was written for him; indeed, whether that was his first reading of it. However, perhaps when we have the opportunity of examining the Senate Estimates we will have a better chance to expand upon the Minister's knowledge of the program and to find some satisfactory answers which certainly are not available from the statement today. Senator LEWIS(Victoria) —by leave-I wish to make a personal explanation. During my speech I endeavoured to quote words used by Mr W. J. Henderson. Unfortunately, at that time, I was unable to put my hand on that quotation. I have now done that. I will read the quotation from Mr Henderson: Greater stability in the administration of the policy is required so that consistency in interpretation and application of policy can be achieved. High staff turnover and changes in direction by DITAC have created unnecessary confusion. The object of the scheme is to improve exports of Australian manufactured products, not a steady flow of ministerial media releases. Senator WATSON(Tasmania)(3.58) — I see a general inconsistency between the statement put down by the Minister for Industry, Technology and Commerce (Senator Button) and the Government's perceived strategy, particularly its Budget strategy. The Minister continues to lecture business and the community generally to lift its performance and he does it again in this document. Nowadays we see very little by way of initiative for business from this Minister. Therefore, it is not surprising that the Prime Minister (Mr Hawke) has seen fit to take away the Industries Assistance Commission from his portfolio. His present dearth of innovation and the fact that a resilience, which was evident when he first took over that portfolio, is now lacking are starting to worry the business community. It is true that Australia's future prosperity depends on improving our international competitiveness and moving to an outward orientation for our industries. That is a central theme which the Minister pushes time and time again. Given that this is the thrust and the focus of his attention and lectures to business and the outside world, I was surprised to learn in Question Time today that he does not seem to be aware that there is a relationship between the exchange rate and the way it is moving and what is happening to the terms of trade, as those factors affect competitiveness. The Minister feels that it is hypothetical to muse on these relationships. Business journals regularly comment on such movements but, unfortunately, the Minister prefers to ignore the problems Australia is facing. At the same time, he is not prepared to tell us what steps the Government is taking to try to reduce the gap between real interest rates in Australia and those overseas, which impact on industry discussions. This lack of a comprehension of economic issues, as displayed in Question Time this afternoon, does not really match very kindly with his statements and his strong pronouncement on page 1 of his statement. The Minister talks about meeting the objectives and having an audit of those objectives. But where are those objectives? They are not stated in the document. How therefore can we have a satisfactory, other than a very vague, audit on those particular issues without a framework or clarity of definition? I think the document, as my colleague Senator Austin Lewis commented previously, is rather woolly. It is designed to help not the small struggling Australian computer manufacturers but essentially those companies that are of a multinational kind. It is time that the Minister realised that it is technology rather than capital or increases in the work force that will be the key to Australia's future economic growth. We have to acknowledge that there are major problems facing Australia. Unfortunately both the Government and certain sectors of business see little or no place for basic research and think that all money should be put into applied research. That view is also coming through in this document. The second problem, which I reiterate, is that the Government seems to think that economic growth only comes through capital or work force increases rather than through technology. So the importance of innovation and technology breakthrough has been lost, particularly when the Government has slashed funding to the Commonwealth Scientific and Industrial Research Organisation in the latest Budget. I mention that in the context of the concerns of the Minister for Science, Customs and Small Business, Mr Barry Jones, who obviously was very quietly distressed at the Government's desertion of decent support for scientific initiatives and progress in this particular area. The document is merely a lecture to a favoured sector of business. It lacks definition and substance, provides opportunities for creative accounting and is going to be very difficult to audit the results against the objectives in subsequent years of this particular program. Senator COULTER(South Australia)(4.02) —I rise to make only a few remarks as I believe Senator Chaney will be moving for the adjournment of this debate, which is what I would have done. We have before us a very significant and important document on which too little time has been given for proper consideration. I simply point out that the document is dated 27 September, today's date. It is 28 pages long and I received it only several hours ago. To attempt this afternoon to address a document like this-which in many respects is not in conformity with the facts and in other respects breaks very significant new ground in ways which need to be argued-does insufficient justice to those issues. I support what I believe Senator Chaney will be saying in a moment with respect to bringing this matter back for further debate when more time has been given for proper consideration of many of the very important aspects which this paper covers. Too often we see papers like this of considerable length and substance being brought forward at short order. It simply makes a mockery of the whole parliamentary processes if this Senate should be a body which helps to determine government policy in Australia. Senator STONE(Queensland-Leader of the National Party of Australia)(4.03) —I rise very briefly to support one of the particularly important aspects of the remarks made by Senator Lewis, namely, one might almost say, the clandestine nature of these arrangements that are being produced by this Government in the form of so-called partnership for development agreements. I refer to the 1987-88 annual report of the Industries Assistance Commission, which includes some interesting comments on this very topic. In referring to assistance mechanisms other than tariffs and quotas the report of the Commission says: It is important that policy be consistent, and this requires that all forms of assistance be as transparent as possible and subject to evaluation of their economy-wide effects. The report goes on: In its 1986-87 Annual Report, the commission examined how a wide range of `positive' assistance measures and special industry plans and strategies could work against developing a more internationally competitive economy and serve to perpetuate a `preferment mentality'. It goes on to address specifically the partnership for development agreements. In that respect it says: . . . the introduction of Partnership for Development Agreements in the information industries has broadened the options for discharging offsets obligations. Partnership Agreements may reduce the cost to foreign contractors of meeting existing offset obligations, but have further reduced the transparency of the budgetary and economic costs involved. I take those remarks of the Industries Assistance Commission to be quite central to the comments Senator Lewis made at the commencement of this discussion. Senator SHEIL(Queensland)(4.05) —About two years ago I realised that the offsets program was running off the rails. I asked the Minister for Industry, Technology and Commerce, Senator Button, a question about it in the Senate. His answer then was unsatisfactory and subsequent negotiations in this area have been equally unsatisfactory. Today we have seen this partnership for development program statement, which is lengthy, tabled in the Senate. I welcome the fact that the debate will be adjourned so we can have an in-depth look at the subject, because it is too long to deal with in a short time. Having glanced through it in the few minutes I have had the report, it is quite obvious that the Government is pressing on with its fascist plans. It has already got big business, big government and big unions into bed in Australia and now it is trying to get the big multinational companies into bed with it here in Australia to the detriment of Australian industries. It is a very sad thing to see but it is part of an ongoing program which will disadvantage a lot of Australian industries and advantage very few. Those few will be like the fly going into the spider's web. When one looks at the types of agreements that are envisaged here one sees that they are very woolly and any multinational company that agrees to these types of arrangements must realise that it is treading on very thin ice and is likely to get into a lot of bother. I welcome the fact that there will be a longer debate on this issue at a later stage. Senator CHANEY(Western Australia-Leader of the Opposition)(4.07) —The degree of interest in the offsets program and in the success of the partnership for development program is probably of some surprise to the Minister for Industry, Technology and Commerce (Senator Button). It is certainly a pleasure to see that there are so many senators who are concerned about these issues. As has been foreshadowed on my behalf by the Democrat senator from South Australia, I intend to see that this debate is adjourned. I understand that Senator Button wishes to speak to the motion and to deal with a few factual matters. I gather that Senator Button will be seeking to adjourn the debate so that the matter will not go off the Notice Paper. I turn to the matter before us by echoing the concern expressed by Senator Austin Lewis on behalf of the Opposition about the fact that we have waited until 27 September 1988 to get a detailed statement-to the extent that this is a detailed statement-on the partnership for development program. The Minister issued a media release on 8 September 1987, more than a year ago. Very substantial arrangements appear to have been made on a quite informal basis from a parliamentary point of view. I congratulate Senator Lewis for raising this matter and for vigorously pursuing the Minister on it for some time and her having obviously shaken this statement from the Minister. In terms of our examination of the partnership for development program, I do not wish to repeat the many comments made by Opposition senators with whom I am in general agreement but I do want to make a couple of points. The first is that the whole offsets program and this successor program are based on the fact that without some artificial stimulus, without some formal requirement or obligations being placed on the people who are the subject of this program, they simply would not invest in Australia. Therefore, we are trying to use an artificial means to overcome the disadvantages which appear to those potential investors to stand in the way of investment in this country. I think it is very important to keep that basic point in mind. Essentially offsets programs of this sort are aimed, in part at least, to overcome the fact that Australia is simply not providing an adequate investment climate to attract the investment that is being sought without some artificial stimulus or requirement being imposed. I do not think that is the whole story, and I do not base my remarks on it being so, because we are dealing at the moment principally with an area of international trade which is dominated by a number of large international firms-transnationals, multinationals, call them what one will-and it may well be that left alone-- Senator Walsh —`Transnational' is the cult word. Senator CHANEY —According to Senator Walsh, Senator Button is using the cult word, and we can leave it at that and I will get on with my comments. We have a situation where, I suppose, it could be argued that without artificial interference from governments in different countries we might get the centralisation of these industries in one or two nations and the whole thing being dealt with on the basis of trade, so the issue is not a simple one. Having said that, I think it is important to note the problems which arise with respect to these mechanisms and which have been identified by many people, and I, like Senator Stone, was going to cite the Industries Assistance Commission (IAC) as a body which has regularly drawn to the attention of the Government, the Parliament and the people of Australia the fact that there are problems and difficulties involved in using these mechanisms. I shall quote from a number of IAC documents, and firstly from page 83 of the 1986-87 annual report where, in a section which deals with offsets, corporate citizenship or partnership agreements and so on, the IAC makes the following point: The proposed targets for exports and R and D-research and development-have been based on the achievement of TNCs- transnational companies; it calls them `TNCs', which I guess is even more cultish- in other countries. The draft discussion paper suggests that the targets are . . . only difficult to achieve when compared with the history of the relevant Australian industries'. This ignores the possibility that the targets may bear no relation to what is appropriate in the light of Australia's resource endowments. In the 1987-88 annual report-I think this is the passage that was quoted in debate a few minutes ago by Senator Stone-the IAC said: While recent changes to the offsets program have narrowed its focus towards exports and technology-intensive activities, the introduction of Partnership for Development Agreements in the information industries has broadened the options for discharging offsets obligation. I interpolate here that it seems to me that that is a statement of a positive nature which is saying that it has given a wider range of options for dealing with this question of offsets, which I think have been fairly vexed and difficult to administer in an effective way-that is, to ensure that the people entering into obligations carry them out. The IAC then states: Partnership agreements may reduce the cost to foreign contractors of meeting existing offsets obligations, but have further reduced the transparency of the budgetary and economic costs involved. It is important to understand that one of the problems-I think this is central to the points that have been made by Senator Lewis-is that we have not got an effective way of scrutinising the costs, as against the apparent benefits, of these agreements. Do they really mean a diversion of resources from more productive investment, for example? That is one element. Then there is the simple element of supervision. The Minister has said that in the past we have been unable adequately to supervise and guarantee the performance obligation. We are dealing here with imperfection. I ask the Minister to focus on the reality that whilst in his statement he refers to the Government having moved to meet its obligations-which, on page 8 of the statement, are described in these terms: The Commonwealth Government, in conjunction with the States, undertakes to exempt Partners from the requirements of the Australian Civil Offsets Program and to develop and maintain a supportive economic environment and industry infrastructure . . . Right at the beginning of his statement he talks about things that have been done in the last five years. Some of those things have received the enthusiastic support of the Opposition. I have always been waiting, and I am sure I will wait for the rest of my political life, and certainly for the rest of the Minister's political life, for him to acknowledge that the active cooperation and support of the Opposition in some of these things have indeed made it much easier for the Government to achieve them. He talks about floating the exchange rate, deregulating the financial sector and freeing up foreign investments controls-all matters which were opposed by Labor in opposition and embraced by it to a greater or lesser extent in government and implemented with the support and assistance of the Opposition. I say `assistance' because the political history of Australia shows that an opposition which is prepared to adopt a short term and purely political approach on these issues can in fact impede or reduce a government's capacity to make worthwhile reforms. He talks about reduced barrier protection and reformed and reduced corporate taxation. Senator Lewis —He does not mention the increase in corporate taxation when it went from 46c to 49c, or the fringe benefits tax. Senator CHANEY —I am greatly assisted by my Deputy Leader of the Opposition, Senator Lewis, because he raises the points that I think are pertinent to this: that one of the things which the Government should acknowledge is that it has yet to produce an internationally competitive tax system which will, all other things being equal, give rise to the possibility of voluntary investment in Australia rather than forced investment. The Minister talks about `tackling the fundamentals of creating sustained competitive advantage by increasing the private sector contribution to research and development, improved management, labour skills, work practices, quality marketing and strategic business planning'. Again, we would say that here is an obvious area of shortfall, that whilst the Government has encouraged some moves in the right direction, which again, in all cases, we have supported, it has, as with the debate on the industrial relations legislation which we are currently undertaking in the Senate, drawn back from making changes which could accelerate that very essential process and indeed could actively impede the process with some of the legislative provisions which it is putting through this chamber. The Minister talks about removing impediments to competitiveness, such as unnecessary areas of business regulation. I think the Minister himself would concede that there remains a vast amount to be done there. I would seriously question whether the totality of new regulation which is proposed in the mass of Bills that we have before us with respect to the corporate sector-the new companies legislation-has seriously been examined with respect to the difficulties that that may cause for the business sector as against the purported advantages that it is delivering. My concern is that we are dealing here with an artificial stimulus to investment in Australia. We all want investment in Australia, but the reality is that under this Government's administration, when we compare our position with that of our key trading competitors, it remains true that our inflation rate is very high and in many cases is two or more times as high as that of some of those countries that are active in the field of computers, among other things that we are interested in. Our interest rates remain very much higher. The Minister at the table brushed off a question about real interest rates that came from Senator Watson during Question Time. The fact is that our prime rates are 50 per cent higher than those of the United States of America and almost four times those of Japan. I think there are even more significant discrepancies when we look at some of the differences in real interest rates. Our nominal wage increases are about double. Whilst the Government points, with justifiable pride, at the fact that there have been some reductions of unit labour costs, the sad fact is that those reductions have been achieved substantially because of devaluation. Over recent years one of the problems that have faced people who might invest in Australia is that in a nominal sense, in terms of the dollars that have to be paid out, our wages continue to go up about twice as fast as those in comparable countries. I think that the Government itself must be deeply concerned at the speed with which wage increases are flowing through under the current wages round. It certainly seems to be, both in the view of some leaders in the trade union movement as well as some Government Ministers, much faster than was anticipated at the time of the last Budget. The final point I would make is that, in terms of our basic capacity to attract investment of the sort which is so vital in our various industries, we have a pretty depressing set of figures on productivity growth. Again, that is probably a pretty multifaceted matter, in the sense that the changing composition of the work force has something to do with the rate at which productivity increases. There would no doubt be some sectors of Australian industry which could point to very substantial productivity improvement over recent years. When we look at the average-we are looking at the average in Australia, as we are looking at the average in the countries with which we are comparing ourselves-we see that our productivity growth is much lower: about half the estimated Organisation for Economic Cooperation and Development average over the current period. I think that is the period 1988 through to 1990. The concern which I would like to express, which is in a sense additional to those expressed in the earlier part of the debate-perhaps it was raised in the debate by Senator Stone when he spoke just before me-is that there still remains a really dramatic need to deal with those fundamentals if we are successfully to attract investment outside areas where it is actually required by government as a condition for bringing goods into Australia, which is broadly what we are dealing with here. The Government knows that it will get the cooperation of the Opposition in dealing with those fundamentals. We remain of the view that there is a great deal that could be done more quickly. I indicated earlier that I would seek leave to continue my remarks. However, in light of the fact that Senator Button wishes to speak, I will not do that. I think that the Minister should be chastised for his failure to give the Parliament more detail earlier. This is a very late repentance on his part in response to Senator Lewis's complaints. However, I welcome the fact that we have had an opportunity today, and will have an opportunity later, to look at this important area, which has been a vexed area of policy and in which I think some parliamentary debate is likely to be of great advantage to Australia. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(4.23) —I feel it appropriate that before I adjourn the debate I reply briefly to some of the comments which have been made today. Let me say first of all that this statement on the information industries and, in particular, the partnership for development agreements was distributed at 10.30 this morning to the Opposition. In light of the comments which have been made in the debate today, I will certainly willingly accede to an adjournment-in fact, I will move it-because clearly more time is needed to study the statement which has been brought down. That has certainly been revealed by the contents of the debate. The first thing I want to say is that the partnership for development program is an evolving program. Senator Lewis took great pains to cite a report in some journal called the International Trade Reporter of something which I was supposed to have said in September or October last year. There was no partnership for development program at that stage. There were no signatories to the partnership for development program. The Government had not entered into any arrangements finally with any company. What my trip overseas in October was about was to confer with the chief executives of multinational or transnational corporations-whichever one likes to call them-about the possibility of reaching agreement with their particular corporations on their activities in Australia. By and large that has been done. First of all, let me say that it is not just a matter, as Senator Lewis describes it, of government by press release. Certainly, we have announced each of the partnership agreements. In April this year we published what I would have thought was a fairly clear document about the nature of the partnership for development agreements. It is a public document. Senator Lewis —Could you table it in the Senate so that we could have access to it? Senator BUTTON —Everybody else has access to it. It is freely available. Senator Lewis —It is not in the Australian Government Publishing Service bookshop. Senator BUTTON —Yes, it is. Senator Lewis —It is not. I tried to get it today. Senator BUTTON —It was probably sold out. Senator Lewis is perhaps the last person to look for it. In the last Estimates Committee discussion we had something like two hours discussion about these matters. Question Time is available to the Opposition, and it has been since September last year, to ask questions in relation to the partnership for development program. The only time I interjected when Senator Lewis was speaking was-I want him to remember this-to give him an undertaking that I would bring down a statement as soon as possible. I gave him that undertaking 3 1/2 weeks ago. I intended to respect that undertaking. However, Senator Lewis came into the chamber on the last day of the last sittings-- Senator Lewis —You also gave that undertaking in November last year. Senator BUTTON —I did not give that undertaking in November last year. I said, `at an appropriate time'. I want to make the point, as I said earlier, that this is an evolving development. It is not a clear-cut matter which can be entirely determined in one statement or anything like that. Senator Lewis —You will get it right eventually. Senator BUTTON —Yes, we will, which is more than Senator Lewis will do. It is an evolving matter. That is the important point. I gave Senator Lewis an undertaking. On the last day of the last sittings he came in here and moved the suspension of Standing Orders, without telling me beforehand, in order that I could make that statement. However, I wanted to have the statement prepared properly and carefully so that it might be debated intelligently in this chamber. That is why I will be moving the adjournment of the debate in a little while. I just want to clear up one or two basic confusions. There is an offsets program which has been in existence for many years. It was a creature of a Liberal government of the past. It was in the hands of various Liberal governments. When we came into office there was an enormous backlog in the offsets program. There was an enormous backlog running to billions of dollars because it had not been administered properly. The second thing to be said about it is that in the context of Australian industry in the 1980s, it was no longer relevant because what it was seeking to attract here was employment in manufacturing-employment of whatever level. It used to be called metal bashing. Various companies which used the offsets arrangements sought to attract low technology activity in Australia essentially for the purposes of employment. The offsets program was changed by the Government in 1986 in order to facilitate technology transfer and higher technology activity in Australia and to be relevant to the contemporary needs of Australian industry. But, the offsets program is different from the partnership for development program. I want to make that quite clear. Senator Lewis, in the course of his remarks, quoted from an article by Colin Brammall in April of this year. Colin Brammall is reported as saying in that article that the figures were rubbery in the extreme. I must say to Senator Lewis that that allegation, although now somewhat old, probably is correct. The figures are fairly rubbery. This program is not about financial commitments of a strict order. It is about the level of exports which various companies will obtain by the year 1994. They have given targets which, I believe, they will endeavour to meet. In the context of many of the agreements, I think some companies will exceed them. The fact that the honourable senator describes them as rubbery is not a matter of any great concern to me. Senator Watson laughs. Senator Watson —What is the point of having them? You cannot even tell us whether you have reached the first lot yet. Senator BUTTON —The point of having them is-- Senator Watson —They are just a guide. Senator BUTTON —Yes. Senator Watson —Why have them at all? Senator BUTTON —The point of having them is-- Senator Watson —It sounds good. Senator BUTTON —If Senator Watson thinks that is all it amounts to, he can go on parroting that expression, but he has to face up to the fact that in this country we could have something like a $10 billion trade deficit in computers and associated equipment by the early 1990s. The problem which has to be addressed is what we as a government and you as an opposition think ought to be done about that. That is what I would like Senator Watson or any person on the Opposition benches to address his mind to. Senator Watson —What are you doing about the Commonwealth Scientific and Industrial Research Organisation? Senator BUTTON —Senator Watson interjects about the CSIRO-- Senator Watson —What are you doing about basic research? Senator BUTTON —Senator Watson interjects about the CSIRO. Let me make this point to see what his colleagues think about it: for many years the level of public sector funding of research and development in Australia has been 80 per cent of total funding. In Japan 20 per cent of research and development is funded from the public sector and 80 per cent is funded in the private sector. In Europe it is some figure in between. In the United States the figure tends more towards the Japanese figure than the Australian figure. Now, I would have thought that Senator Watson, belonging to the party that he does-- Senator Puplick —What a disingenuous example, when it is so much defence based in the United States. Senator BUTTON —Senator Puplick can criticise that example if he likes, but I remind him that private sector research and development in Australia was at an abysmal level for many years under Liberal governments, with nothing done about it. It reached the lowest level of any member of the Organisation for Economic Cooperation and Development and Senator Puplick was sitting here in government all the time while it happened. I am very pleased and proud to be able to say that there has been a significant increase in private sector investment in research and development in Australia under the present Government, and I trust that Senator Puplick would acknowledge that very significant increase. The point is, Senator Watson, that I would have thought it was desirable in the context of Australian industry to shift some of the public sector research into the private sector, and that is what is happening in respect of the CSIRO. The CSIRO has been given incentives to seek work from the private sector. Senator Watson —Encourage the private sector. Senator BUTTON —The encouragement is there in terms of the tax incentive. I do not want to go on arguing with Senator Watson about the CSIRO. He can ask me questions about that at Question Time if he wants to, but I think he ought to be aware of the facts in relation to research funding in Australia. There are two other points I wanted to deal with. There was a lot of talk about massive sums of money being involved in all of this. Let me make it clear that the offsets program is one thing. The offsets are in respect of government purchases, which are based on the open tender system. If Senator Lewis wants to attack the tender system, that is something else, but that is the way government purchasing contracts are let. The partnership for development program is not in the strict offsets category, because partners are relieved from offset obligations. Senator Lewis —That is right. Of course they are. What is it all about? You enter into a secret agreement with them and it takes away their offsets obligation. Senator BUTTON —Not at all. They make public commitments. Senator Lewis —Tell us about your public commitments. Tell us what you are going to do about publishing them. Senator BUTTON —Senator Lewis was bleating in here about playing the man earlier. If he wants a hand at that, he should try it and see how he gets on. Senator Lewis —I am not talking about playing the man. I am talking about your public commitments on your policy. The DEPUTY PRESIDENT —Order! There are too many interjections. Senator BUTTON —Senator Watson said that it is no wonder the Prime Minister took the Industries Assistance Commission away from me. It is no wonder the Opposition took Senator Lewis's job away from him last week. Senator Crichton-Browne —They wanted to give him some real competition. Senator BUTTON —That is right. But when one talks about large sums of money being involved, they are large sums of money, as the senator said, in terms of export commitments and research and development commitments, and those are the matters with are the subject of the agreements themselves. So the first question relates to the matter of money. The second question which emerged in some Opposition senators' speeches related to how Australian manufacturers compete with the multinationals that this Government is favouring. In the real world in which we live, in many areas of activity Australian companies will not compete and cannot compete with the transnational corporations involved in the information industries. But under the partnership for development programs some 40 per cent of export commitments will be exports by local Australian companies working in association with transnational corporations. Some $400m in the life of the partnership program will be exports by local companies. Senator Lewis —But they could be minerals. Senator BUTTON —No. Senator Lewis —Yes, they could be. They could be anything. That is all set out in that document that you suddenly produced today that we have not seen before. Senator BUTTON —They could not be minerals. Each partnership program is negotiated and some 20-odd local companies have been involved already. I am surprised that Senator Lewis comes in here alleging bad faith on the part of transnational companies, which is what he did. Senator Lewis —I am not alleging bad faith on the part of transnationals. I am alleging bad faith on your part. Senator BUTTON —Yes, he did. The honourable senator alleged bad faith on the part of transnational companies. He alleged that their activities would be detrimental to local companies. In fact, exactly the obverse is happening. That is why I want the honourable senator to go away and read the statement carefully. I suggest that, rather than pick one piece out of the massive computer press, he should cull it a little bit further on behalf of Australian companies in the computer and information industries to see what they say about the partnership for development program. It was a very selective quotation, if I might say so, in the course of the remarks of Senator Lewis. Of course there is no industry assistance provided for the computer industry in Australia, other than generally available assistance measures and bounty in certain circumstances provided to Australian companies. They do have to compete, but they can only compete in particular areas of activity. Senator Lewis —Meanwhile, you are publicising their opposition. Senator BUTTON —Yes, that is a very good thing, I think. To double the size of their opposition in Australia is a very good thing. If Senator Lewis thinks it is a bad thing, he ought to say so publicly, because what it involves is companies of international sophistication doing research and development and exporting from Australia and helping to create the critical mass base in technology which we need in this country. Senator Watson —At their own cost-their own associated companies-with no safeguards at all. Senator BUTTON —Senator Watson was doing this in respect of the textile industry last time. It is exactly the same level of interjection. Senator Watson —What is to prevent them exporting technology and putting any value they like on it-creative accounting opportunities with no safeguards at all? Senator BUTTON —I do not propose to answer every one of Senator Watson's interjections in this place. Let me say that the point about partnerships not being beneficial to local companies is absolute rubbish. Finally, let me say a little more about the Government's obligations under this proposal. They are, first of all, to improve infrastructure for this industry. Infrastructure in this industry, apart from anything else, means trained people-skilled people. Government commitments and government actions in relation to that matter are spelt out in the statement which has been tabled today. That is the nature of partnership: commitments by overseas corporations-transnationals or multinationals, whatever you like to call them-commitments by Australian companies, and commitments by government in respect of infrastructure. Put together, those commitments help build critical mass in terms of a very important industry for this country. I, on behalf of the Government, very warmly welcome the attitude and participation of a variety of international companies towards the partnership for development program. I believe it to be good for this country. I believe it to be good for Australian industry. I believe it to be good for our current account and for our position in this particular region of the world in terms of a very fast growing industry. Senator Chaney made one or two remarks which were of a very general nature. I do not criticise him for that because he probably had not read the statement. He made a very good point about an offsets program essentially being based on a degree of artificial stimulus. The offsets program has been used over a number of years to encourage industries in which Australia has perhaps never had any particular competitive advantage. It is now being used for a different purpose in a very important industry. What Senator Chaney said about the investment incentive effect of offset programs was undoubtedly half right. He asked about the costs, what exemptions there will be, and so on. He then went on to raise a number of questions about wage rates, productivity growth and matters of that kind. Those issues are all relevant at the margin. Research and development costs in Australia are low by sophisticated international standards. The cost of employing research personnel and personnel in the information industries is, compared with countries which have much more sophisticated industries, relatively low. Particular circumstances apply to those industries which make the activities of multinationals under the partnership for development program competitive in the Australian context, and the Government is committed to working to improve that competitive advantage over time. I sum up by saying that, as Senator Lewis said, I described the partnership for development program as a child of the offsets program. That is true. It is an offshoot of the offsets program. But it is quite different from the offsets program. If one reads the statement one will see that parties are relieved of offset obligations in undertaking certain commitments to put down roots in this country for the general benefit of the community, the business concerned, and the establishment of some critical mass in terms of technology infrastructure. The obligations are pretty clearly spelt out. These agreements are not detrimental to Australian industry, as was alleged by Senator Lewis. On the Government's side, one does not suspect that multinational companies will act with bad faith in these matters. In fact, there is every sign of them acting in very good faith in the matters in question. The Government will, in turn, honour its obligations under the agreement. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator PUPLICK(New South Wales)(4.44) —I move: That the Senate take note of the paper. This is the report of the Doherty Committee of Inquiry into Medical Education and Medical Workforce, established in January 1987, which has reported to both the Minister for Community Services and Health (Dr Blewett) and the Minister for Employment, Education and Training (Mr Dawkins). The committee was chaired by Professor Ralph Doherty, Pro-Vice Chancellor, Health Sciences, University of Queensland. It is a monumental report running to some 700-odd pages and includes 105 or so recommendations. The Committee considered some 400 submissions. I wish to make a couple of very brief points arising from a preliminary look at the report in detail. The first point is that there is some considerable degree of uncertainty as to who is now to be responsible for implementing what parts of the report. Indeed, in the fairly feeble eight-paragraph statement put down by the Minister for Employment, Education and Training in conjunction with this report we are told that the Government is currently assessing the report and its recommendations and will be moving quickly to establish its priorities in regard to the recommendations. One has no idea what the Government means by `moving quickly' in that regard. It makes it clear that many of the recommendations are in fact made to bodies other than the Government. There is no indication of any real coordination which is to be put in place to ensure that these recommendations are actually acted upon, if they should be. In many respects, I suspect, the report is a little too large. It fails to provide a comprehensive and readable document for those who are interested in the public policy aspects of this subject. Unlike the report of the FitzGerald Commission to Advise on Australia's Immigration Policies, which came down in several volumes, one of which was a distillation-the essence of the report-while the others dealt with more substantive matters, this report is extremely difficult to come to grips with from a public policy point of view. A couple of things immediately struck me when looking through the report. The first was the confusion and difficulty in dealing with the question of supply and demand. By and large, manpower studies of one sort or another have generally got wrong the great issues of supply and demand in terms of manpower planning and policy. If one looks at the table on page 501 under the heading `Recommended Doctor: Population Ratios by Specialty and Sub-Specialty', one suspects that this will in fact bring about some attempt to plan in an area in which governments have been notoriously bad. On page 512 there are some remarks about the current concern shown in many submissions at the possibility of over-supply of medical practitioners. In many respects, one is reminded of some of the arguments back in the 1960s about the production of geologists and how courses ought to be manipulated to bring about desired results. There are some quite interesting comments made, two of which I shall highlight particularly. One is the continuing disparity between male and female doctors in levels of income. On page 508 it is indicated that male doctors earn nearly twice the gross annual reported by female doctors. It will be interesting to see what the Government does by way of response to that comment. The second comment, which I find very disturbing, is about the extent to which the Committee deals with what it described as the relative unattractiveness of specialities with limited private practice opportunities-for example, geriatrics. Given all the information which has been forthcoming about the ageing of the Australian population, that is somewhat alarming. I make the point that this report is fairly thin on dealing with the question of the recognition of overseas professional qualifications, which is a major problem. If one looks at paper 13 on our Notice Paper today, that is, the report of the Council on Overseas Professional Qualifications, one will see that on page 88 considerable disquiet is expressed about the expectations of people who are highly qualified in medical disciplines coming to Australia and being unable to find proper recognition of their qualifications and satisfactory employment in this country. It does not appear that there has been a great deal of stimulated public debate as a result of the Doherty report. It is nevertheless an important contribution to the debate. I look forward with some degree of interest to seeing the way in which the Government responds to its voluminous recommendations. Senator PETER BAUME(New South Wales)(4.49) —The Australian Medical Education and Workforce into the 21st Century report confines itself, properly but very narrowly I think, only to doctoring. When one looks at the composition of the very distinguished committee that compiled this report one sees that, apart from Ms Delys Sargeant, the rest of the committee is made up entirely of professors, teachers and administrators, all from within the practice of medicine. Those of us who are medically trained can see in this report much that relates to our life experiences. The report is quite massive-it is a 700-page report, as my colleague Senator Puplick has said. It is quite difficult to read and quite difficult to analyse. Indeed, at one of the public meetings at which one of the authors, Dr Bernie Amos, spoke, he observed that it would make a very good doorstop-and that it certainly does. However, the question is: what will the report contribute in this country in relation to the important subjects that are addressed? The committee of inquiry covered all aspects of this subject. It covered health needs in this country into the next century; it described the undergraduate courses in medicine; it described medical student selection and training, pre-registration training, and advanced training both for general practice and for specialty practice as well as continuing education within the medical work force. The report drew attention to issues-issues such as why it is that more than one-third of the top one per cent of academic performers at year 12 still want to enter medicine as opposed to all other disciplines or forms of training. However, the authors of the report have not written either a readable or an easily used report. I think that, above all, the report should have outlined a clear definition of needs that we face. The authors should have chanced their arm; they should have said that in their opinion this is where the needs will lie and that this is where the priorities will lie. I have to say that in a number of areas they are very descriptive, saying that they had had, say, 30 submissions, and that this was what a certain submission said and that was what another said. They are very descriptive; they do not really identify where the needs lie, and certainly not sufficiently to satisfy me. They do not sufficiently identify the purposes, goals and aims that are involved. They do not identify sufficiently the outcomes that must be achieved or the changes that they would like to see achieved. The recommendations are very general indeed. I draw the attention of honourable senators to page 204 of the report, where the authors of the report merely say: The Committee notes and commends curriculum changes in medical schools which indicate their awareness of the various concerns expressed by community organisations and the practising profession. The report goes on, but it does not specifically refer to details to enable the Minister for Community Services and Health, or any other person trying to plan from the report, to know exactly what it is that should be done. That is the weakest part of this massive document, which has taken so much work and to which so many distinguished Australians have contributed. It is not a bad report. Even the descriptions and the summary of the various inputs are valid, and the fact that it identifies in a very broad way what some of the problems are will be helpful. But we are looking for clear statements of need, goals, aims, objectives, priorities, outcomes and desirable changes. In that regard, I have to say the report was weak; it is very hard to find those things, and it is harder than it should have been. It is difficult to know how a committee like this should have proceeded. One can imagine the difficulties which Professor Doherty and his colleagues found in trying to deal with the matter. The failure to take clear positions is the most disappointing part of the report. We wanted some clear and succinct statements on needs, goals, outcomes and priorities, but having looked at the report I do not know what the views of the committee are on each of those matters. I know the general directions, but I do not know what the views of the committee are-although I do know what the submissions to the committee set out. A question that is often asked in management is, `So, what will you do?' That is the question that I throw back to the committee; I would say it is a very fine report, but what is it that the committee wants us to do? Senator CROWLEY(South Australia)(4.55) —I want to make a few comments on this quite extraordinarily extensive report from the Committee of Inquiry into Medical Education and Medical Workforce. I do so from a medical point of view, as this involves the area in which I trained and my specialty, and I suppose that I found much in this report to comfort me-except in so far as I might have raised some of these points myself some many years ago, as I think many of us who have been through medicine have done. However, at least we now find these matters drawn together in this report. I want to highlight a few of the points that I find particularly relevant. First, I would like to say that I somewhat disagree with the emphasis given to various matters by my colleagues opposite. I think that the members of the Committee have made it clear, for instance in the area of medical curriculum, that they did not see it as their decision to design curricula but rather that it is for each institution to have the freedom to determine its own curriculum, taking account of the points that were raised by the many people who contributed to the submissions and the input into this report-as apart from the committee members themselves. I believe that it was the intention of the committee to collect as much information and to be as open as possible in presenting it. I will certainly be interested to see what the Government's response is, but I would think that it has here a starting document and some very important, useful, constructive and appropriate data on which to make that beginning appraisal of future medical planning and training in this country. I want to draw attention to a couple of points. First, I refer to the reference in chapter 9 (v) to procedures for selection of trainees, as follows: Procedures for selection of trainees should not discriminate against any group and should meet equal employment opportunity guidelines, and that colleges should establish policies and programs that will meet family commitments of trainees so far as is consistent with the maintenance of standards. I am very heartened to read such words in a report of this sort, knowing as I do how postgraduate medical training in particular, and undergraduate training to a lesser extent, takes the medical experts and the medical specialist trainees away from their families for so much time. In particular, it has been a challenge for those who decide to go on into some specialty after obtaining their undergraduate degree, as those people have to face another 10 years of specialist training and at least four to six years of very extensive, comprehensive postgraduate study. Many of those people have paid a considerable price in terms of time spent away from their family. As to women who graduate in medicine-and I think Senator Puplick raised the point, en passant, of why women in medicine earned so much less-to name just two reasons, I think the women in medicine earn so much less largely because they are practising medicine for less than full time and very much less in specialties. It is also because at the conclusion of their undergraduate degree they very often make the choice to take some years out of medicine to have and rear a family, at least in the early stages of their children growing up. I am delighted to see referred to in this report the challenge in relation to postgraduate medical training and the matter of family commitments not only for women but also for men who have to make a sacrifice in this regard. Another area that interests me concerns the number of submissions referring to medical ethics and the importance for medical ethics to be seriously part of both undergraduate and postgraduate medical training. As far as I can ascertain, the committee does not define in the recommendations a clear statement that there shall be medical ethics in each curriculum, but what has been highlighted from the submissions and from an extensive consideration provided in this area is the importance of medical efforts, not only as part of a community debate and as part of proper medical practice but also as part of the question of where our world is to go. The questions of medical ethics are much broader than simply being confined to a school of medicine. They cover the intricacies of the life of every citizen. I think the committee rightly deserves commendation for drawing to the attention of medical manpower planners the importance of medical ethics. Finally, I refer to the comment about the Flinders Medical School. I have had very close association with that and it is a body of which I would speak very highly. A recommendation is made that any medical school-but in particular the Flinders Medical School-should not be reduced to so small a size as to render it ineffectual. I am very pleased to know that Flinders Medical School does at least get an encouragement to continue, as do all the current medical schools in Australia. I believe that this is an excellent report, and it should be a very useful database for further planning in this area. Senator SHEIL(Queensland)(5.00) —I rise to speak to the report of the Committee of Inquiry into Medical Education and Medical Workforce entitled Australian Medical Education and Workforce into the 21st Century. I hope that the report does not become an extravaganza and a waste of time and taxpayers' money. But I fear very much that that is what will happen. The report is monumental in that it takes up nearly 700 pages. Reference has been made to the qualifications of the people who made up the Committee. I would be the first to say that the members are most eminently qualified. One could almost say that they are killing themselves by degrees. But if we look at the people on the Committee, we find that not one of them is a private practising doctor. What shines through is that this is an academic report. As has been mentioned, the report does not get to the bottom line in any areas at all. With the present shambles in the organisation of medicine in Australia today, with an expanding public sector, the strangling of the private sector and the public sector being more and more restricted, we could call for any number of reports. Reports such as this one or reports slanted every which way could be produced. But they would all be a waste of time and money because if we did get a proper balance between private medicine and public medicine, all of those reports, including the one before us, would become completely redundant. I would just like to point out the problems that are being experienced in New South Wales, where the authorities are on the verge of closing the Royal Alexandra Hospital in Sydney. This will be just as big a disaster as the closure of the Crown Street Hospital. According to this report, it is proposed to move the hospital to a centre of excellence. But the hospital already is a centre of excellence. It is a hospital of world renown, particularly in the area of cystic fibrosis. We cannot just throw money around to solve these problems. We cannot move hospitals to areas where bureaucrats decide they will be placed to best advantage. It takes years to build up a centre of excellence and gain an international reputation. So I consider that the kind of recommendations that are in this report are impractical in terms of the development of medicine in Australia. The report deals with medical education and medical manpower for the future and moving into the next century. I realise that the report is a good report in its way. A lot of hard work has gone into it. The Committee has gone into every area that it possibly can with regard to doctoring but it does not deal very much with research or preventive medicine. Of course, it has concentrated its main efforts in the area of doctoring. I fear that very few people are going to read the report in full because it is so extensive. I presume that people in various areas who have a particular interest will read the sections of the report that relate to them. But no-one is going to take this document in its entirety, as a document which is going to prove of value to the Australian people. So, as much as I appreciate the work that has gone into the report, I feel that it will become a monumental waste of government time and taxpayers' money. Senator COULTER(South Australia)(5.04) —This afternoon we are looking at a report entitled Australian Medical Education and Workforce into the 21st Century. Several criticisms have already been made of this quite massive report. One criticism which I think bears emphasis and which has not yet been mentioned concerns recommendation 3 (ii) which states: In future reviews of Australia's national health insurance system or its schedule of fees, full and careful consideration be given to the consequences, direct or indirect, that changes may have on the quality and accessibility of services and on the distribution and performance of providers. We are all aware that the costs of medical care are increasing much faster than that celebrated measure of overall national benefit, the gross national product. One issue which our society has not yet faced, but which it should be facing, is what services should be provided and at what cost to the general public. While the report does deal, as Senator Crowley has mentioned, with medical ethics, it does not deal with the question of involving medical students in the discussion of the question of what services should be provided at what cost to the public. I suspect that one reason why this is not included is that the people who have put this report together are like me-they are of the older school and these issues were not debated when they were at medical school. But it seems to me that to leave this out of the recommendation is simply to persist with this lack of consideration. Certainly, the community at large should be involved in considerations of the cost of medical treatment-how much to spend on very expensive programs like heart transplants, artificial kidneys, artificial hearts, in-vitro fertilisation programs and the like. But the medical profession as a whole has a very important role to play. Unless these matters are discussed, and the discussion is started during a medical student's education, I do not think that doctors will be playing their proper role. The report also makes mention of the salary disparity between doctors who choose to go into academic pursuits and those who remain in general practice. Of course, from time to time this has been a problem not only here but also overseas. There is a difficulty in attracting enough doctors out of clinical practice into academic life. However, the discussion begs the question of whether salaries as such should be addressed as a problem. I think that we as a parliament should certainly be addressing this problem because simply to chase one high salary with another high salary really does not get down to the more fundamental question of the disparity between salaries of academic or clinical medical people vis a vis other people in the community. The report also suggests two years of pre-registration and this is breaking some new ground. It also, encouragingly, speaks of varied training and says that clinical training of undergraduates and pre-registration trainees should be carried out in a range of facilities including teaching hospitals, general hospitals, general practice, community health centres and so on. This is a very encouraging recommendation. It certainly differs very much from the training which I had, which was very much towards academic-type medicine. We were taught the minutia of very complex diseases which we perhaps very rarely saw in general practice but the treatment of complications of the common cold, which we later had to deal with every day, was left out. Just briefly, I think the committee which put this report together indicates its own lack of being up with the times when it recommends that medical schools make greater use of computer aided instruction and of computers generally in their day to day activities. I suspect that most students who enter medical school from here on will have a great deal more experience with computers than their tutors or instructors. The fact that the Committee saw fit to make this a recommendation is a reflection on itself. Question resolved in the affirmative. Senator PETER BAUME(New South Wales)(5.09) —I move: That the Senate take note of the paper. This report sets out the ways in which the Australian Tobacco Board has sought to stabilise and help growers of tobacco. Although I am very much opposed to the activities of the retailers of cigarettes, I have no arguments of principle with tobacco growers, who work within the law, who make use of the subsidies and arrangements which governments provide and who make use of the marketing arrangements provided by the Government for what is in fact a legal addictive drug contained in tobacco. What I am interested in in this report is the information given by the Tobacco Board about consumption trends past and consumption trends likely. On page 3 of the report the Board makes the point: Taking into account consumption trends, the 1988 national marketing quota- that is, for green weight tobacco- was set at 13.5 million kg . . . This means that that amount of tobacco grown in Australia will be put onto the market to be made into tobacco products for smokers. The report also says that the Commonwealth Secretariat forecasts 1987 global tobacco leaf production to rise by some 7 per cent and identifies some demand depressing influences which are within the hands of government as, among other things, heavier sales and excise taxes. The report also draws attention to some concern about health matters. I would like to identify for the Senate once again the ridiculous position in which we in Australia find ourselves. On the one hand we see the active promotion of the consumption of certain drugs which we define as legal. In my State of New South Wales, prominent among those is the consumption of beer, which is heavily promoted on television. There is heavy promotion of the consumption of tobacco on every billboard. I say to Senator McKiernan that the decision to smoke is a personal decision with which I do not argue; it is the promotion of addictive and destructive drugs which I find incredible. We find that the Government, through the Department of Community Services and Health, is involved in funding some minuscule anti-smoking program and, through its social security mechanism, is involved in paying pensions for large numbers of families adversely affected by the use of tobacco. We find that another arm of the Government, the Tobacco Board, operating through the Department of Primary Industries and Energy, is engaged in matters rationalising, promoting and preserving the industry and writes very learnedly about how it wishes to encourage production in the most suitable areas for tobacco growing which are in Senator Macklin's electorate. Let me make it quite clear that the tobacco growers themselves are merely engaged in a legal activity. I do not have an argument with them. I would like to see them encouraged-I would like to see it made possible for them-to engage in the growth of different crops. I would like to see government involve itself actively in helping the tobacco growers to remain in business but to do it other than by growing tobacco. I would like to see government start to address what is national hypocrisy, whereby we define certain chemicals as illegal and bad and seek to prohibit their use entirely, while certain other chemicals, some of them more addictive-nicotine in particular-are identified as good and legal and are allowed to be promoted for use and consumption throughout this country. It is a fact, as most honourable senators know, that the single greatest preventable health problem in this country is caused by the use of tobacco. The way in which we have such a divided and hypocritical approach to drug use generally and tobacco use in particular is absolutely criminal. Senator COULTER(South Australia)(5.14) —I agree entirely with what Senator Peter Baume has said, and he has taken some words from me. Not only are we looking at the health effects of tobacco but also the report of the Australian Tobacco Board says, among other things, that tobacco leaf of good quality can be produced in only a few areas of Australia. The DEPUTY PRESIDENT —Order! The time for consideration of Government papers has expired. Senator BURNS(Queensland) —In accordance with the provisions of the Public Works Committee Act, I present the report relating to stage 2, development of Royal Australian Air Force Base Tindal, Northern Territory. Senator MACKLIN(Queensland) —I table the report of the Australian delegation to the Twenty-seventh Conference of the Inter-Parliamentary Union. Motion (by Senator Macklin) agreed to: That there be laid on the Table of the Senate, on or before 25 November 1988, details of all provisions of Acts which come into effect on proclamation and which have not been proclaimed, together with a statement of reasons for their non-proclamation and a timetable for their operation. Motion (by Senator Newman for Senator Messner) agreed to: That the following matter be referred to the Joint Committee of Public Accounts: The management and administration of the Department of Defence's computer redevelopment program, the Supply Systems Redevelopment Project and, in particular- (a) the length of time the Supply Systems Redevelopment Project has been underway; (b) the resources committed to the project to date in terms of: (i) manpower costs, including salary and related allowances payable to both civilian and Australian Defence Force personnel, (ii) consultancy services, (iii) computing support, and (iv) any other operating expenses; (c) the objectives of the Supply Systems Redevelopment Project, as stated when the proposal commenced, and the results achieved by the program to date; (d) the Supply Systems Redevelopment Project's original and 1988 cost estimates; (e) the planning and consultation which occurred at the commencement of the project, including: (i) definition of the goals of the Supply Systems Redevelopment Project, (ii) expected time-table for implementation of the Supply Systems Redevelopment Project, and (iii) adequacy of input by the three Services in the definition of user-requirements; (f) cost-benefits of the Supply Systems Redevelopment Project; and (g) what attempts have been made by the Department of Defence and the Australian Defence Force to ensure that any major computer purchases made since 1986 conform to the standardisation and decentralisation rationale of the Supply Systems Redevelopment Project and the related Defence computer acquisition program, Project DESINE. 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)(5.16) —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 Statutory Instruments (Tabling and Disallowance) Legislation Amendment Bill 1988 amends the tabling and disallowance provisions of the Acts Interpretation Act 1901 and of the Acts relating to the external Territories. It also makes consequential amendments to certain other Acts that apply the tabling and disallowance provisions of the Acts Interpretation Act to various instruments made under those Acts. The tabling and disallowance provisions of Part XII of the Acts Interpretation Act provide the means of parliamentary scrutiny and control over delegated legislation. This control is essential to the functioning of parliamentary democracy. The current tendency towards embodying matters of detail in Ministerial instruments makes this scrutiny even more important. The amendments in this Bill arose out of suggestions by the Senate Standing Committee on Regulations and Ordinances which, as you know, is the body charged with scrutinising subordinate legislation. The amendments do not extend the existing powers of either House of Parliament to disallow regulations and other subordinate instruments-rather, they are designed to fill 2 possible gaps in the system of parliamentary scrutiny. Section 48 of the Acts Interpretation Act requires regulations to be tabled in each House of the Parliament within 15 sitting days of the making of the regulations. If regulations are not so tabled they cease to have effect. Either House may by resolution disallow regulations. The disallowance resolution must, by s. 48 (4) of the Act, arise from a motion, notice of which was given within 15 sitting days of the tabling of the regulations. Thus the tabling of regulations allows for their scrutiny by the Parliament and disallowance enables the parliamentary control to which I referred earlier. As the Act stands at the moment, it may be possible to circumvent this scrutiny by not tabling regulations and remaking the identical regulations on the day after the expiration of the 15 sitting days tabling period. By repeating this process, regulations could be kept in force indefinitely and Parliament would be prevented from exercising its right to examine and, if it felt it necessary, disallow them. Clause 6 of this Bill therefore inserts new section 48A into the Act to prevent the repeated remaking of untabled regulations and instruments and to prevent the repeal and remaking of tabled regulations so soon after tabling as to have similar practical effect. Parliamentary control of subordinate legislation could be circumvented in another way. If regulations have been tabled and notice of a disallowance motion has been given, it would be possible, as the Act presently stands, to repeal the regulations and immediately remake them. The disallowance motion would of course fall as there would no longer be any regulations to which it could attach. The new regulations would be tabled and the process could be repeated each time notice of a disallowance motion was given. Proposed section 48B of the Bill, also inserted by clause 6, is designed to prevent such repeated repeal and remaking of regulations in respect of which a notice of motion for disallowance is in force. The Acts governing the A.C.T. and the external Territories require Ordinances made in relation to those Territories to be tabled in the Parliament. Those Acts contain similar disallowance provisions to the Acts Interpretation Act. As it is desirable that these tabling and disallowance provisions follow the Acts Interpretation Act, the Bill makes similar amendments to the Seat of Government (Administration) Act 1910, the Norfolk Island Act 1979, the Christmas Island Act 1958, the Cocos (Keeling) Islands Act 1955, the Ashmore and Cartier Islands Acceptance Act 1933, the Coral Sea Islands Act 1969, the Australian Antarctic Territory Act 1954 and the Heard Island and McDonald Islands Act 1979. The Environment Protection (Impact of Proposals) Act 1974 also contains its own tabling and disallowance provisions and similar amendments are being made to it. The remaining provisions of the Bill make consequential amendments to other provisions in Part XII of the Act. Apart from amending the specific Acts I have just referred to, the Schedule applies new sections 48a and 48b to various instruments to which the existing tabling and disallowance provisions already apply. I should state that, while proposing these amendments which, as I said earlier, arose out of deliberations of the Senate Committee, the Government is in no way suggesting that the Governor-General in Council is likely to repeal and remake regulations in order to avoid Parliamentary scrutiny. This scenario is one which I feel is most unlikely to occur. The possibility, even if still unlikely, could, however, arise in the case of the multiplicity of Ministerial and other instruments to which the tabling and disallowance provisions apply. The Government is concerned that the ability of the Parliament to scrutinise the actions of the Executive be maintained, and for this reason is proposing these amendments of the Acts Interpretation Act. I commend the Bill to the Senate. Debate (on motion by Senator Knowles) 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)(5.17) —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 purpose of this Bill is to amend the Australia Council Act to implement the Government's decisions in response to the House of Representatives Standing Committee on Expenditure Inquiry into Commonwealth Assistance to the Arts. The Report of this Committee, entitled `Patronage, Power and the Muse', is generally known as the McLeay Report after the Chairman, Mr Leo McLeay, MP. The Government's response to the McLeay Report was tabled in the House of Representatives on 28 May 1987. At that time, the then Minister for the Arts, the Hon. Barry Cohen, MP, outlined the process of wide consultation with the arts community which led to the preparation of the McLeay Report and the development of the Government's response. The Australia Council was involved in the consultation process and conducted its own review of its role, structure and functions at that time. Many of the McLeay Report's recommendations focused on the Australia Council, the Government's arts funding body. The Government agreed with the McLeay Committee that the Council's administrative structure should be streamlined and that the Council should take account of Government policies at the Commonwealth, State and local government levels. The Government also agreed that community cultural developments should be accorded a higher priority in the Council's activities. The Australia Council supported these recommendations and has already acted to implement those aspects of the Government's response to the McLeay Report which did not require amendment of its Act. The provisions of this Bill enable the Australia Council to complete the implementation of those aspects of the Government's response to the McLeay Report which relate to the operation of the Council. The main provisions of the Bill are as follows: The Act is to be amended to ensure that the Council has regard to Government policies and, where practicable, the policies of State and local Governments as they relate to the arts. The amendments also provide for the Council to have regard to any matters which the Minister may specify in writing. The Minister will have the power to issue directions to the Council but this power will not apply to the Council's ability to make or refuse to make grants. The `arms length' principle of arts funding is to be retained. The amendments allow representatives of the community interest to be appointed to the Council and its Boards. This will allow the Council to broaden its focus to better reflect the concerns of the consumers of arts programs and the general public. The amendments also remove the requirement for Government representation on the Council and ensure all Board Chairpersons are members of the Council. Consistent with the need to streamline administration through the amalgamation of Boards and enhance flexibility, provision for the maximum membership has been increased from eight to nine and minimum membership has been reduced from six to five. Another major change is the establishment of a new coordinating Board which may have a membership of thirteen, including the Chairperson. This new Board will have a large, flexible membership which may comprise the Chairperson and members of the Council, the Chairperson and members of Boards and wide representation from community arts and the broad public interest. The new provisions allow the Minister to establish this Board as a Community Cultural Development Board to further the development of community cultural activities, in line with the Government's response to the McLeay Report. A Community Cultural Development Board should assist the development of arts practice and access to the arts at the community level. It might also provide incentives for local and State organisations to promote existing cultural facilities and to creatively extend the use of our libraries, museums and art galleries. These amendments will not require additional funds for implementation. In line with Government policies in general and the Government's response to the McLeay Report, the Council is continuing to give consideration to streamlining its administration. I am confident the amendments will provide the impetus to carry the Australia Council forward into the next decade with a structure which is responsive to changing needs and priorities and which is in line with prevailing community wishes. I commend the Bill to the Senate. I present the explanatory memorandum to this Bill. Debate (on motion by Senator Knowles) 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)(5.18) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- Today I place before the House legislation to establish a new Aboriginal and Torres Strait Islander Commission commonly known as ATSIC, a statutory body which represents a radical and timely change in the administration of Aboriginal Affairs in this country. Today, 21 years after the 1967 Referendum which gave the Commonwealth the power to legislate for Aboriginal and Torres Strait Islander people, I present legislation which, for the first time, will ensure the place of the indigenous peoples of this country in the decision making processes of Government. Before I proceed to the substance of this Bill I would like to recount a story which I believe illustrates very vividly what ATSIC is all about. It's a story about a meeting, held in February this year, in a dried up creek bed at a place called Wingellina on the borders of Western Australia, South Australia and the Northern Territory. There were between two and three hundred people at this meeting, many of whom had travelled long distances from some of the most remote areas of this country. It was familiar land to them, it was the land of their ancestors, their home country. They had gathered together to discuss a new proposal. A proposal which would allow them to have, for the first time, a direct involvement in the decisions which affect their own lives. In their own language, over three days, they worked through the proposal. The chairman of the meeting, a man named Yami Lester, well known and respected by all who know him, guided the meeting through the details. The proposal these people were considering was the setting up of the Aboriginal and Torres Strait Islander Commission. For the Ngaanyatjarra/Pitjantjatjara people, the new body would mean they would be charged with setting the priorities for their own people in their own regions. It would also mean their own elected representative, one of their own people, would be part of a Commission which would have the power to formulate and implement policies for all Aboriginal and Torres Strait Islander people. The people who attended the meeting decided that such a body would be a good idea and they voted unanimously to support it. That meeting in far away Wingellina, was just one of hundreds of meetings around the country held to discuss this new proposal. The decision taken at that meeting in favour of the new proposal was similar to the overwhelming majority of decisions taken by Aboriginal and Islander communities around the country. It is therefore with confidence and great pride that I now bring before the House legislation which will give effect to the proposals which have been considered and endorsed by that overwhelming majority of Aboriginal and Torres Strait Islander people. The legislation will establish the Aboriginal and Torres Strait Islander Commission, a statutory body amalgamating the Department of Aboriginal Affairs and the Aboriginal Development Commission and incorporating Aboriginal Hostels Limited and the Australian Institute of Aboriginal Studies. The proposal to establish ATSIC was first announced in a statement I made to the Parliament on 10 December, 1987, called Foundations for the Future. The philosophy underlying the ATSIC was that it was to be a solid foundation-a foundation that Aboriginal and Torres Strait Islander people could use and build upon in their quest for self-determination and self-management. In proposing the establishment of ATSIC, the Government recognised and accepted the persistent demands of the Aboriginal and Torres Strait Islander people of this nation to become involved in the decision making processes of Government. ATSIC is an acknowledgment by all of us that it is no longer acceptable for Government to dictate what is best for the Aboriginal and Torres Strait Islander people; they should decide for themselves what needs to be done. And that's exactly what will happen when this legislation is enacted. The people from Wingellina, like the people from Melbourne, from Broome and from the Torres Strait, will all begin to have a real say in the running of their own affairs. In this regard, ATSIC represents a significant and major step towards the achievement of self-determination for the indigenous peoples of Australia. In case there are those who are fearful of the concept of self-determination for the Aboriginal and Torres Strait Islander people, there is no cause for alarm. Self-determination does not imply separate nationhood or the granting of sovereignty; rather it embodies the ambitions and aspirations of the indigenous communities to play their role in and make their contribution to, the development and advancement of this nation. They seek to do this in a way which is meaningful to them and by way of mechanisms and programs over which they exercise significant control. ATSIC provides a means by which this contribution can be made. It must be remembered, however, that the Constitutional responsibility for Aboriginal and Torres Strait Islander affairs is a concurrent one shared between the Commonwealth and the States. Nothing in this legislation detracts from the responsibility of State Governments to make provision for the needs and requirements of the Aboriginal and Torres Strait Islander citizens of those States, particularly in relation to basic services such as water, sewerage and education which all other Australian citizens take for granted. As I stated earlier, this legislation is the product of a great deal of consultation with Aboriginal and Torres Strait Islander communities. In January of this year, more than 21,000 copies of my parliamentary statement, Foundations for the Future, and 1,000 copies of a video were distributed to more than 1,000 separate Aboriginal and Torres Strait Islander organisations and communities throughout Australia. In the order of 537 preliminary meetings were held involving some 14,500 people to discuss the proposals outlined in Foundations prior to my meetings with communities and organisations. Between 23 January and 10 March of this year, I personally visited and spoke with some 6000 Aboriginal and Torres Strait Islander representatives at 46 separate meetings. Subsequently, an options paper was prepared which identified a range of alternative proposals based on suggestions and recommendations received as a consequence of my consultations with the Aboriginal and Torres Strait Islander people. That paper was widely circulated and was discussed at another 88 meetings involving some 2700 people. Some people suggested at the time that these consultations were not serious and alleged that Aboriginal and Islander people were unable to understand the ATSIC proposal. My answer to those people is simple: look at what happened at Wingellina and the many other meetings to which I have referred as well as the response of this Government in making changes to the original proposal as requested by those communities. This legislation is the product of that comprehensive and might I say, exhaustive consultative process: a process which has no precedent in the Aboriginal Affairs portfolio. As a consequence, there is nothing of major significance in this legislation that has not already been discussed at length with the Aboriginal and Torres Strait Islander community, and upon which they have already indicated their general support. I turn now to the main elements of the Bill. Preamble In my statement of 10 December I indicated that it would be fitting, particularly in this our Bicentennial year, for the legislation establishing the Commission to contain a declaration, in the form of a substantial Preamble, which sets down the Australian people's commitment to the recognition and protection of the rights of Aboriginal and Torres Strait Islander people and to measures to overcome their disadvantage. In addition, I made it clear that the Preamble would contain a significant and historic recognition by the Commonwealth Parliament that Aboriginal and Torres Strait Islander people of Australia were the prior occupiers and original owners of this land. Since making that statement, much has been said and written about the proposal to have the Commonwealth formally recognise what the vast majority of Australians have been prepared to acknowledge for some time as historical fact. There has been considerable discussion amongst Aboriginal and Torres Strait Islander groups, and between them and the Government, about the wording of the Preamble. In particular I wish to inform the House of consultations which have taken place on recital three of the Preamble and the role of these consultations in the formulation of recital three. During the consultations some Aboriginal and Torres Strait Islander groups expressed concern about the Government's original formulation of recital three. They feared that it could lead to certain Aboriginal and Islander groups being disadvantaged in current litigation. The Government's intention has, by contrast, always been that the language of the Preamble would be neutral and have no legal consequences for present or future litigation in relation to land claims. The language was, and is, in no way intended to recognise land rights claimed to exist, to create new rights for land or compensation or to remove or qualify rights under existing law. Nor was it, or is it, intended to restrict any future developments in the law. Accordingly, the Government was prepared to agree to amend the original language of recital three to meet the perception by some groups of a possible negative impact upon current litigation. I emphasise the neutrality of recital three conscious of the fact that courts can, in certain circumstances, have regard to second reading speeches and other extrinsic material to assist in ascertaining the Parliament's intention with regard to relevant legislation. Recital three, as now written, is intended simply to record the historical fact that up to the present time the Australian courts have not recognised Aboriginal and Torres Strait Islander property rights in land except in relation to title granted by Federal, State and Territory Governments. When endorsed by the Parliament in the name of the Australian people, the Preamble will stand as an historical expression of philosophy and principle. The intention that the Preamble has no legal consequences in no way detracts from its importance as a statement of those facts. I am happy to state that the Preamble has the support not only of the vast majority of the indigenous groups of this nation but also will, I am confident, enjoy the support of the wider community throughout Australia. The Aboriginal and Torres Strait Islander Commission The Bill provides for the establishment of the Aboriginal and Torres Strait Islander Commission. The functions of the Commission are set out in the Bill and include the formulation and implementation of programs designed to advance the social, economic and cultural condition of Aboriginal and Torres Strait Islander people. The Commission will also prepare policy proposals to meet national, State and regional needs and priorities of Aboriginal and Torres Strait Islander people. In addition, it will have the important role of advising the Government, through the Minister, on the coordination of the activities of other Commonwealth bodies that affect the interests of Aboriginal and Torres Strait Islander people. I want to emphasise that the legislation will ensure that the Commission will not be merely an advisory body. It will exercise significant executive powers and have responsibility for the administration of those programs currently undertaken by the Department of Aboriginal Affairs and the Aboriginal Development Commission. Moreover, the Commission will be assisted by, and be responsive to, the Regional Councils established by the legislation, and which are an integral part of ATSIC. The Commission will comprise a Chairperson and 14 other Commissioners. Twelve of the Commissioners will be elected by Regional Councillors to represent each of twelve zones established around Australia. The remaining two Commissioners and the Chairperson will be appointed by the Minister. Regional Councils The linchpin of the new Commission structure will be the establishment of 60 Regional Councils each of which will comprise up to 20 Councillors elected from within their respective regions on the basis of one person, one vote. As honourable senators will be aware, my original proposal provided for Regional Councils based on existing Regional Office structure of the Department of Aboriginal Affairs and would have comprised representatives of each incorporated Aboriginal and Torres Strait Islander organisation in their respective regions. However, as a consequence of my consultation with Aboriginal and Torres Strait Islander communities, the proposals now embodied in the legislation, involving elected Councils for areas determined by Aboriginal and Torres Strait Islander communities themselves, are clearly preferred as being more equitable and appropriate. Regional Councils provide the means by which people at the grass roots are able to have their views and decisions flow through to the centre of Government in a way which has never been available to them before. It is here, at the Regional Council level, that the Aboriginal and Torres Strait Islander people of this country will start to influence the programs and policies which impact upon their lives. It is here that the success of ATSIC will ultimately be determined. The creation of the Commission, based on the network of Regional Councils, will ensure a much more effective and responsive administration than has hitherto existed in the Aboriginal Affairs portfolio. In addition, it provides for the first time since the demise of the National Aboriginal Conference (NAC) for a formal means by which the voice of the indigenous peoples of Australia will be heard at a National level. Torres Strait Islanders I know that honourable senators will be aware that Torres Strait Islanders have made clear in recent times their discontent and concern at what they allege to have been the lack of interest shown by governments, both State and Commonwealth, in relation to meeting their needs. While this Government does not wholly accept that criticism, it does recognise that there is a need to focus more clearly upon the needs and priorities of the Torres Strait Islanders. It is for this reason that the legislation provides for the establishment of a Torres Strait Islander Advisory Board which has as its function advising the Minister, the Commission, and the Torres Strait Regional Council, on matters relating to the furthering of the social, economic and cultural advancement of Torres Strait Islanders. The Advisory Board will be made up of a Chairperson being the Commissioner elected by the Torres Strait Regional Council, and six Torres Strait Islanders living on the mainland. This is intended to take account of the fact that more than three quarters of all Torres Strait Islanders now live on the mainland. In addition, the legislation provides for the establishment of an Office of Torres Strait Islander Affairs within the Commission. The Office will ensure that attention is given to the development, conduct, and effectiveness of programs aimed at alleviating the disadvantage suffered by Torres Strait Islanders throughout Australia. Lastly, the Regional Council for the Torres Strait will be given direct access to the Minister at those crucial times when estimates of expenditure are being prepared and approved. This statutorily guaranteed access is not given to other Regional Councils; it is meant to offset the fact that there is likely to be only one Torres Strait Islander on the Commission. This provision fulfils a commitment I gave to Torres Strait Islanders in the Torres Strait with a view to overcoming their concern that they could be disregarded in the Commission's processes for developing estimates and the making of decisions on funding allocations to Regional Council areas. This combination of provisions will ensure that the Torres Strait Islanders can be confident that their interests, needs, and priorities can be placed before Government without fear of intervention or clouding by bureaucratic or other interests. Aboriginal Economic Development Corporation The legislation provides for the establishment of a statutory Corporation, under the control of Aboriginal and Torres Strait Islander people, with a broad charter to engage in commercial and financial activities. The Corporation's capital base will comprise the $20 million which has been allocated to the Capital Fund of the ADC since its establishment plus an additional $40 million to be allocated over this and the next three financial years. As a consequence, the Corporation will have a very significant capital base. The Board of Directors of the Corporation will comprise a Chairperson, a Deputy Chairperson, and seven other members all of whom will be appointed on a part-time basis by the Minister on the recommendation of the Commission. At least three of the Directors will be members of the Commission. The Corporation's primary function is to engage in commercial activities in accordance with sound business principles. In performing its functions, the Corporation is required to have regard to various matters which might be summarised as advancing Aboriginal and Torres Strait Islander economic interests. The Government expects that the Corporation will enhance the opportunities for Aboriginal and Torres Strait Islander people to begin to break free from the web of dependency and achieve a significant degree of economic independence. It is only when Aboriginal and Torres Strait Islander people are able to take up the challenges of commercial development, and exert influence in the private sector as well as the public sector, that they will be able to participate fully as equals in the nation's economic and political life. Institute of Aboriginal and Torres Strait Islander Studies This new body replaces the Australian Institute of Aboriginal Studies (AIAS), established by an Act of this Parliament in 1964. In large measure, the legislation enables the new Institute to operate very much as the AIAS currently operates, undertaking similar functions, but with a new emphasis on Aboriginal and Torres Strait Islander control and participation. The Council of the new Institute will consist of four persons elected by the members of the Institute, one person who is a Torres Strait Islander appointed by the Minister, and four other Aboriginal persons or Torres Strait Islanders appointed by the Minister, of who at least three will be Commissioners. The Council will therefore comprise a majority of Aboriginal and Torres Strait Islander members, and will determine the policy of the Institute with respect to all matters. There will be a Research Advisory Committee with a majority elected by the membership of the Institute. Membership of the Institute will be made up of those persons who are now either members, associate or corresponding members of the AIAS, plus such other persons appointed by the Council to be members. The provisions of this legislation in no way compromise or remove the academic freedom or scholastic excellence which is very much a part of the operation and history of the AIAS and which has led to the Institute being a nationally and internationally recognised focus for study and research related to Aboriginal and Torres Strait Islander affairs. Aboriginal Hostels Ltd The new Commission will not have any major impact upon the operations of Aboriginal Hostels Ltd which, as Honourable Members will be aware, is a highly successful company providing accommodation for Aboriginal and Torres Strait Islander people. The Board of AHL will, however, be reconstituted to provide for at least 3 of the Directors to be Commissioners of ATSIC. This will ensure that, as a subsidiary of ATSIC, the company will operate in a way consistent with the general policy directions set by the Commission. Miscellaneous, Consequential and Transitional Provisions The Bill also provides for a number of miscellaneous matters such as the declaration of certain bodies as Aboriginal Corporations, the remuneration and allowances payable to certain office holders under the legislation, review of certain administrative decisions, the audit of subsidiary companies, and the making of regulations. There are also a number of consequential amendments to other legislation, and detailed provision for the transitional arrangements in the establishment of the Commission. Honourable Senators will be interested to hear that the Bill, although quite complex in structure, has been drafted throughout in plain English. I wish to acknowledge the highly professional assistance provided by the Office of Parliamentary Counsel in the drafting of the Bill. Conclusion I said at the beginning that this legislation represents the product of a very extensive and exhaustive consultative process. And that is how it should be. The establishment of ATSIC will lead to a very significant change in Aboriginal Affairs and in the way the portfolio will be administered in the future. It is important, however, that this change not be looked at in isolation, but as part of a series of changes aimed at bringing about long overdue reforms. These reforms can and should only occur with the proper participation and involvement of Aboriginal and Torres Strait Islander people. The implementation of reform in Aboriginal Affairs depends largely on how Governments, the bureaucracy, the Aboriginal and Torres Strait Islander communities and broader community tackle the challenges that now confront them. At a Government level it is important to maintain the political will to follow through the changes. The challenge for the bureaucracy is to adapt positively to changes in their roles in a responsive and constructive way. It is equally important that the broader community builds on the understanding and support that currently exists in society to bring about far reaching reform. Finally, in order to realise the philosophy of self-determination and self-management-demands Aboriginal and Torres Strait Islander people have been talking about since well before the 1967 Referendum-it is crucial that Aboriginal and Torres Strait Islander people take up the challenge and provide the direction for all of us. I have great pleasure in commending the Bill to the Senate. Debate (on motion by Senator Knowles) adjourned. Senator TATE(Tasmania-Minister for Justice) —by leave-I table the explanatory notes of the Aboriginal Development Commission relating to the estimates of expenditure for 1988-89. Copies of these explanatory notes have been distributed to members of Senate Estimates committees. Other senators may obtain copies from the Senate Table Office if required. INDUSTRIAL RELATIONS BILL 1988 Consideration resumed from 1 September. Senator CHANEY(Western Australia-Leader of the Opposition)(5.20) —When the Committee last met, which seems a long time ago now-it is about three weeks-I moved amendments Nos 8 and 34. They are being taken together because they are on a related matter. Amendment No. 8 refers to clause 95 of the Industrial Relations Bill. I will take some time to explain this, since it is three weeks since we last discussed it. I will try to pick up the threads of the debate by going through what the amendments actually cover. Probably by the time I have done that, Senator Cook will be here. The Government provides, in clause 95 of the Bill: The Commission is not empowered to include terms in an award, or make an award under section 112 that includes terms, that are based on the terms of a certified agreement unless the Commission is satisfied that including the terms in the award, or making the award, would not: (a) be inconsistent with principles established by a Full Bench that apply in relation to the determination of wages and conditions of employment; or (b) otherwise be contrary to the public interest. What the Government is seeking to do here is to insulate from the wage fixing system generally any separate certified agreement which is made which might cause problems in terms of the principles which a national wage case or some similar case might involve. The Government is trying to insulate the process of having a move towards direct agreements, subject to fairly rigid Industrial Relations Commission control, from, in a sense, polluting the general centralised wage fixing system. The Opposition is sympathetic to that view because the Opposition's policy would go much further than the Government is going in this Bill with respect to opening up the industrial relations system to agreements. Our broad approach is that the Opposition is advocating a right for employers and employees, where they wish, to enter into agreements determining the conditions of employment and agreeing not to be bound by awards. There is nothing very revolutionary about that any more, Mr Temporary Chairman, because in your State of Queensland the South East Queensland Electricity Board (SEQEB) is operating with a fair degree of freedom to enter into agreements between employer and employee. Indeed, there is an Act of the Queensland Parliament which provides a fair amount of freedom to enter into contractual agreements-voluntary employment agreements-and a number of agreements have been made. Whether we go down the Government's more limited route or down our route, clearly we do not want a situation in which the old principles of comparative wage justice and so on simply feed any benign agreement-that is, benign from the point of view of the work force-through to the generality of the work force. The whole idea of encouraging agreements because they are a means of achieving greater productivity, enabling an enterprise to lift its performance above the ruck and hence to pay, perhaps, better wages to its employees, becomes counterproductive if the effect of a single success within an enterprise is to create a flow-on into enterprises which have not achieved the same cooperative, productive arrangements between employer and employee. We are not looking at a difference of principle here; we are looking at a difference of degree. My amendment No. 8 seeks to delete the Government's clause 95, which I read out, and insert, under the heading `Effect of certified agreements', the following: ``95. (1) The Commission is not empowered to include terms in an award, or make an award under section 112 that includes terms, that are based on the terms of a certified agreement. This amendment uses the first words of the existing clause 95 and removes the `except' exemption-the `unless' part of it. The amendment goes on to say: ``(2) Subject to subsection (3), the Commission shall not have regard to any argument raised before the Commission that is based on any matter included in a certified agreement.'' Again, that is simply an insulating proposition: it ensures that an agreement will not pollute or distort the general centralised wage fixing system. Finally, sub-clause (3) of my amendment states: ``(3) The Commission may, in proceedings relating to a certified agreement, have regard to arguments based on matter included in that agreement.''. I turn now to amendment No. 34 which deals with offences. Amendment 34 proposes the insertion of a new clause which, under the heading `Offences relating to certified agreements', provides: ``298a. A person shall not, on behalf of an organisation, make a claim to the Commission that is based on matter included in a certified agreement to which that organisation is not a party. It proposes a penalty, in the case of a natural person, of $500 or, in the case of a body corporate, of $2,500. That simply adds a buttress to the general effect of clause 95 that we are seeking to insert by making it an offence for a person to act in a way which seeks to subvert the provisions of clause 95 as it would be worded. Indeed, I think that the clause would be relevant even if the Government's clause remains, because it would be a useful buttress to what the Government proposes. The Opposition believes that the Government is proposing an approach to certified agreements which is too limited, which is too narrow and which goes beyond what is required, and indeed to some extent will be counterproductive in terms of the common objective-in the rhetorical sense anyway-which I believe the Government shares with us, of wanting to encourage a more flexible labour market and to encourage a circumstance where employers and employees work together and, where they can see that it would be mutually profitable, to regulate their affairs by agreement. I stress that we are looking at a situation where it would be seen that it would be mutually profitable. It is interesting to note that in your State, Mr Temporary Chairman, we are getting some experience of direct agreements between employers and employees. In the SEQEB case, the agreements which are being entered into provide not for reduced remuneration for employees who choose to move from the award to the agreement, but for increased remuneration. There is a margin in favour of working under an agreement. The advantage of that from the employer's point of view is that there is a productivity benefit because the agreement involves stepping away from some of the restrictive practices which have existed in the past and which have led to inefficiencies. It is very encouraging, when one looks at this area of the law, to note that in Queensland electricity costs have risen very slowly compared with electricity costs in other States. In other words, I think that we have the combination which the people of Australia would agree is desirable, that is, lower electricity tariffs, a better position for employers in that they are getting their product produced more cheaply, and a situation where employees are getting a higher remuneration. I do not think that in looking at these clauses one should think that one is dealing with some esoteric points of narrow interest. This is the area where, even if the Government's more restrictive approach is adopted, we are going to see considerable advances. I think economic necessity will impose that upon the industrial relations system. I do not want to keep harking back to Queensland but when we are dealing with this section of the Act I think it is very instructive to do so. Senator Cook, who is now at the table, is probably aware that there has been some very useful trend setting in Queensland with the agreement that was entered into with respect to Sanctuary Cove. Senator Cook can feel very relaxed about that because it was an agreement which was entered into with the Trades and Labour Council, or its equivalent in Queensland, and he was very directly involved. The employers found that by entering into a direct agreement they could come to arrangements which again suited the employers better and which involved the removal of the usual penalty rates arrangements in favour of a loaded hourly rate and this provided more adequately for the requirements of the tourist industry. Since we were last debating this issue there have been further significant advances in the Queensland tourist industry. There has been a quite substantial additional agreement. I have not seen the detail of that agreement and I am relying on the media reports of it. The reports indicate that a substantial number of resorts have now entered into a similar style of arrangement in Queensland. I stress that this is something which has been done not in some unilateral or high-handed way. It has been done very much by a process of cooperative negotiation involving employers and employees and the employees' representatives-in this case the trade unions. I return to my amendments by saying that the Government is right to be seeking to insulate the registered agreements from the general flow of award determinations. Clause 95 of the Bill does that but in our view it does not do it in a sufficiently strong way. That is why we are moving to strengthen what the Government is proposing. Further, we are seeking to reinforce that by making it an offence to make a claim based on a matter which includes certified agreement to which the applicant is not a party. Again, the Minister at the table is a Minister with very significant personal experience in the industrial relations field as a secretary of the Trades and Labour Council in Western Australia and as a trade union official in other capacities. If he were able to be frank and realistic in this debate-and we will soon find out whether he is-he would concede that there will inevitably be pressures to bear. It would be very odd if trade unions saw an opportunity to argue some old tried and tested principles of comparative wage justice flow-on and did not try to grab the ball and run with it. The Minister will assert the strong need for clause 95 in its present form. I ask him, in the interests of trying to produce the best possible industrial relations law for this country, whether he will look at the significant improvements we are suggesting to clause 95 and the buttressing of that clause which we are proposing with respect to new clause 298a and then he might consider taking that back. After all, we have a new Minister now. Mr Peter Morris might not feel quite as popish about the Bill that is before us as Mr Willis apparently felt in his Department and we might actually get some sensible consideration to these amendments rather than the blank wall that we have faced to this point. Senator COOK(Western Australia-Minister for Resources)(5.35) —I think I have been enjoined to be frank and realistic about industrial relations. That is an invitation that is not often extended to me but whenever it is it is one which I am pleased to pick up and respond to. One of the hallmarks, as Senator Harradine would know, of people who are engaged in industrial relations, is a penchant for frank and realistic assessment situations, in direct and open speaking. There is not a great deal of difference between the Government and the Opposition on this amendment but as someone once said sometimes a small difference can, in effect, in the end mean a great deal of difference in the outcome. I think it is reasonable to say that what we are both on about is similar. We think that what we are on about is more sensible and realistic concerning how the Commission works and how the industrial relations system functions than what the Opposition is proposing. These clauses and amendments are about where agreements fit in between the parties-employers and the unions-when there is a compulsory arbitration system which brings down decisions on awards based on evidence put to it and a consideration of what applies in general industry. The reason why there is some anxiety to get these provisions right is that this is not unrealistic. I have noticed that from time to time agreements are reached between employers and unions which bestow on members of those unions covered by these agreements more beneficial conditions than would be obtainable from the Commission. They are bestowed for whatever particular local reason might apply. It should also be said that the obverse is true where poorly organised, or not organised at all, workers are sometimes drawn into agreements where the conditions that they have purported to accept by way of a certified agreement are conditions which are more onerous than might generally be applied. I can think of examples on both sides of that fence. I do not think this is a debate in which it can be argued that there is purity on the one side and malice on the other. It is an argument that can be applied realistically in the real world of industrial relations in a way in which sometimes dominant groups take advantage of their position and effect agreements with groups less able to resist. That applies on both sides of the spectrum. The question here is to what extent should a commission have cognisance of the terms of such an agreement. We think that the provisions that we are putting forward are more sensible for the reason that it enables some scope for the Commission to have regard, where it is appropriate to have regard, for provisions reached by negotiation and provisions which figure in certified agreements. For example, there may be occasions in the public interest where it is appropriate that the Commission take such a view. There may be occasions where there is a need to have regard to the wage fixation principles where the Commission should take such a view. Where the appropriateness of those considerations applies it is proper that the Commission do so. If the amendment were to be carried the Commission would be disbarred from doing what are commonsense things. In fact, it would not only be disbarred but it could become an offence for the Commission to have regard to any of those such matters. If one wanted to follow an argument by reducing it to an absurdity one could easily do so. Things that figure in agreements that are reached which are perfectly sensible and reasonable would be disbarred from being considered by the Commission such as a perfectly sensible grievance procedure which might have been worked out, or where effective safety standards are somehow encoded in an agreement, or if there are worthwhile provisions for eliminating inefficient work practices. I do not think any senator here would argue that those things should not be considered by the Commission. But the amendment would prevent it from being considered, and prevent it from being considered in a way in which there may be an offence created. The second thing that needs to be said about it is that there appears to be at least a threshold constitutional issue. The amendment appears not to be a limitation on the Commission's jurisdiction, but a constitutionally impermissible interference with how the Commission exercises its powers of conciliation and arbitration. In any case it is one thing to identify a term of an award which appears to be based on a term of a certified agreement, but it would be far more difficult and uncertain to ascertain how and when an argument is based on a matter included in a certified agreement. I think in the end we have to recognise that the reason why we put on arbitration benches people with extensive experience in the real life of arbitration, to use Senator Chaney's words, with the frank and realistic practice of industrial relations, is so that they can make commonsense views, and if the parties believe those views are not common sense, they can appeal through the structure. But there needs to be some way in which things that are appropriate for consideration can be considered, even from documents such as consent agreements, in the award process. That is not to run away from the point that Senator Chaney validly raises about agreements that might be hammered out in private which might sometimes reflect conditions or provisions which should not under any circumstances flow on. Those sorts of agreements, I think under a former Liberal Minister in this portfolio, Mr Viner, were named as sweetheart agreements. They may be sweetheart agreements, or they may be agreements of another sort; but if the Opposition can accept the views that I have put, I think it will see that there is not here any smart or sharp attempt by us to undermine the force of its position. Senator Chaney —I am not accusing you of that. Senator COOK —I appreciate that, but I am making that emphasis so that I can conclude by making the point that we are trying here to fashion an Act which has the provisions which give the Bench the flexibility in all the circumstances. Senator CHANEY(Western Australia-Leader of the Opposition)(5.43) —I thank the Minister for Resources (Senator Cook) for his response. It is as a matter of courtesy, as much as anything else, that I would like to indicate where I think the fundamental divergence between us lies. The fundamental difference between what we are proposing and what the Government is proposing with respect to clause 95 is that the Government's version in the Industrial Relations Bill 1988 actually leaves a high degree of discretion in the hands of the commissioner. I pick up the words Senator Cook used, which were to the effect that we put people on the commission to apply common-sense views to these things. In a sense those words summed up my own concerns about the clause, because it does seem to me that the commissioner is being put in a position of almost impossible temptation, if I may say so. Given the whole tradition, the whole method of operation, I would simply say that if the average commissioner is exposed to the fact that somebody in the industry is getting some enhanced remuneration, consciously or unconsciously that will weigh very heavily with him. I suspect that the commissioner's view as to what is in the public interest is likely to be very heavily influenced by the whole tradition of this structure. In a sense, these clauses are about movements away from the traditional line of thought. It is not in any sense impossible, unlikely or wrong for the Commission to be part of the changed thinking which is necessary if we are to have the industrial relations structure which is relevant to a modern economy. Indeed, the very vigorous attempts of the Commission in the last two national wage cases to vary the approach to achieve a higher degree of focus at the enterprise and so on is a tribute to the desire within the Commission to respond. But one can also point to the sort of evidence that we debated last time we were in committee with respect to the Gibbons case. I say to the Minister, in the same civil spirit in which he offered his remarks, that it remains true that I think the Commission, like other organisations, can deliver some pretty odd results, and the Gibbons case is a particularly glaring and unpleasant case where the Commission was exposed in the Federal Court of Australia as having done something which was quite unconscionable. I do not suggest for a minute that would be the standard approach of the Commission or that many commissioners would not be aghast at the sort of decision that was made in the Gibbons case and subsequently so heavily criticised, I think, by Mr Justice Smithers. The fact is that we are talking about a much lesser temptation here, and in my view it would significantly enhance the operation of certified agreements if one were to guarantee a higher degree of insulation. The Government has erected a fence and then erected a stile. That is the sort of thing that I think is being effectively constructed by clause 95 in its present form, and I think many a commissioner will get a leg up by using the `unless' provision in the existing clause 95 if it goes into the law. Having said that, I would hope-I think `hope' would be putting it far too high; I suggest to the Australian Democrats that this is a very reasonable amendment which ought to be made and is in the national interest. I do that more in hope than in anticipation. Senator CRICHTON-BROWNE(Western Australia)(5.47) —As Senator Chaney says, the amendment to clause 95 is very reasonable and logical. My view is that clause 95, as written, does not need the qualifications or the caveat that has been provided in the Industrial Relations Bill. One can only speculate as to what is meant by the term `public interest'. The section in respect of preference clauses refers to the public interest for the courts to grant preference to unions. One can imagine that what is in the public interest is peace at any price. I am not suggesting that is likely to apply in this case, but that term gives the commissioners a chance to interpret it widely. As long as there is a caveat, flow-ons become almost inevitable. We have this great weight hung around the neck of industrial relations and the economy of Australia of comparative wage justice and uniformity, which again is re-stated in clause 94. Senator Cook talks of common sense. It is my view that as long as the commissioner has the power, he will be tempted to use the provisions for peace at any price. Senator Chaney's amendment proposes to insulate the court and the community from the temptation to respond to pressure for flow-ons. It seems appropriate to me that there be no provision for flow-ons. I think Senator Cook referred to safety provisions or dispute settling arrangements. I do not think that they necessarily have to come out of a certified agreement. I am quite sure that the goodwill and common sense of men can find provisions without taking them out of certified agreements and flowing them on. Obviously the interests of the unions, which have a temptation to use the benefits of certified agreements, will be not in those areas but in more beneficial areas. They will be looking to subsection (b) in respect of public interest. Senator WALTERS(Tasmania)(5.50) —In the second reading speech on the Industrial Relations Bill 1988, the Minister for Justice (Senator Tate) very clearly told us that this is a Bill that: . . . represents the most substantial revision of Australia's federal industrial relations system undertaken since the system was established in 1904. On many occasions the Minister in his second reading speech used the word `flexibility'. If that is the intention of the Government that very small difference that the Minister for Resources (Senator Cook) referred to is, indeed, vital. As the Minister said, we are both seeking the same thing. He said, in regard to this particular area, that he agrees `that a very small difference can result in a great deal of difference in outcome'. That is indeed what we believe will be the result. Our amendment to clause 95 makes that very clear. It states: The Commission is not empowered to include terms in an award, or make an award under section 112 that includes terms, that are based on the terms of a certified agreement. That is very clear. However, the Government's clause allows a loophole. The Minister for Resources, with his past experience, understands, as do we all, that if we include a simple `unless', `however' or `but' the legal beavers will class that as a challenge. There is no way in the wide world that they will not be able to get around those particular words. Once we allow an `unless' we may as well not put the clause in because it places so much pressure on the proposed Industrial Relations Commission. As I said, the legal representatives of the various parties will only accept it as a challenge-a challenge that they must be able to work their way around. It is, or seems on the surface, a small difference but, as the Minister says, there is a great deal of difference in the outcome. We believe that that is the result. As I said, the Minister's experience in this area will make him realise, perhaps even more than I do, that the legal representatives will accept this only as a challenge to be got around. As Senator Chaney has said, because of that there will be so much extra pressure put on the Commission. I believe the Government is doing it a great disservice. Senator HARRADINE(Tasmania)(5.54) —As honourable senators will know, this is my first contribution to this debate on the Industrial Relations Bill 1988. Regrettably, I was unwell on the last occasion it was debated. I wish to deal with clause 95. I know that I cannot deal with any other clauses because this is the committee stage of the debate. Let us not forget that clause 95 really relates to awards that are made under section 112 of the Industrial Relations Bill. By definition those awards are called consent awards. Under those circumstances, of course, it is for the employer and the union to consent. What the proposed Industrial Relations Commission must do under the provisions of this clause is to ensure that that consent is not inconsistent with the principles established by the Full Bench that apply in relation to the determination of wages and conditions of employment or are otherwise contrary to the public interest. Frankly, if honourable senators have been following the national wage decisions on the last two occasions at least-probably it applies in decisions before those as well-they will have noted how constricted the trade union movement has been in attempting to achieve wage increases for its members. Honourable senators may not realise that about 25 per cent of the work force has not yet received the 4 per cent wage increase and thus has not participated in the two-tier wage system. Now we have a new set of principles which, broadly speaking, are called the structural efficiency principles which tie in the trade union movement very strictly to a series of guidelines. These principles operate, as it were, as a straitjacket. What the provision does here is to tie consent awards to that straitjacket. Honourable senators must realise that this is something that, obviously, many people in the trade union movement would not agree with. It is a decision that has been taken by the Government. It is a stricture on the operations and freedom of unions and employers to consent to certain wages and conditions. As such, it is an attempt to protect the position of the Commission and to maintain the current situation in which we have a central wage fixing body. I will be voting for the Government's proposals, although I do not say that they are entirely acceptable. However, I can see the philosophy behind them. I see a similar philosophy behind the Opposition's proposed amendment. However, I point out to the Opposition that I cannot understand quite what is meant by the words: . . . the Commission shall not have regard to any argument raised before the Commission that is based on any matter included in a certified agreement. We are talking about consent awards. In fact, the discussion that takes place before this type of agreement is arrived at would naturally, in some cases, deal with conditions that apply in certified agreements. Such discussion would deal with those conditions. They would naturally be discussed by the parties to the award. Is it proposed by the Opposition that any agreement arising out of that discussion could not thereby be included in the new consent award? Is that what is being proposed? If that is what is being proposed I think that that is too much of a stricture on the parties and, indeed, on the Commission. The Commission, in my view, needs to be told of the background of consent awards and how they have been arrived at. That is part of the information necessary for the Commission to pursue its responsibilities under the Act. Therefore, I believe that the Opposition proposal goes that little bit too far. I believe the Government's clause certainly goes a long way, although I am not necessarily saying it goes too far. I can understand the philosophy behind it. I will be supporting it. Amendments negatived. Senator CRICHTON-BROWNE(Western Australia)(6.00) —On behalf of Senator Chaney I move: (9) Page 47, after subparagraph 111 (1) (g) (iii), insert the following new paragraph: ``(iiia) that an organisation that is a party to the industrial dispute and that is seeking the making of an award does not have a significant number of members who would be covered by the award;''. Section 111, like existing section 41 (1) (d), acts as a mechanism whereby the Commission may have before it a valid interstate industrial dispute, but it may refrain from making an award which would override State coverage, if it believes that State jurisdiction is more appropriate. It gives some protection to the Federal-State system against Federal award coverage. Of course, it is the view of the National Party and the Liberal Party that there ought to be a sensible balance in terms of jurisdiction in industrial relations areas and the State jurisdiction ought to be properly provided for and not interfered with when it is the most satisfactory and suitable body to have jurisdiction. The threat to the State system is that areas of work previously covered by State awards and determined can become the subject of a Federal award coverage by the creation of an interstate industrial dispute. A dispute can be found in the Federal jurisdiction and, subject to this clause, an award for certified agreement can be made in settlement of the dispute and, by virtue of section 109 of the Constitution, the Federal award prevails over any existing State award or determination. An action to obtain a Federal coverage can of course be initiated by a federally registered organisation that has virtually no membership within the State. That body could create an industrial dispute on paper and therefore become able to apply for the Federal award coverage. This, as we know and have seen, can lead to an intrusion of the Federal jurisdiction into State areas which, by any definition and common sense, are better dealt with by State awards, but it might just suit some to seek to have a Federal award, to have Federal jurisdiction. Senator CHANEY(Western Australia-Leader of the Opposition)(6.03) —I thank Senator Crichton-Browne for moving amendment No. 9 on behalf of the Opposition and for his explanation of the amendment. This amendment, which has been moved by the Opposition, picks up a recommendation of the Hancock Committee of Review of the Australian Industrial Relations Law and Systems. This matter was drawn to my attention by a union which was concerned at the failure of the Government to pick up that particular recommendation. Representations were made to a number of Queensland members of Parliament by the Queensland State Service Union, which was concerned that recommendation 9 should be implemented. The recommendation refers to the provisions now contained in section 41 (1) (d) (ii) of the Conciliation and Arbitration Act. The recommendation reads: . . . should be altered so as to require the Federal tribunal to refrain from making an award unless the applicant for Federal award coverage has satisfied the Commission that it has a significant membership in the field. The existing section 41 would be well known to the Minister for Industry, Technology and Commerce. He has probably made a quid or two out of the interpretation of it at times, back in the days when he was a solicitor in this field. I certainly do not mean that in any pejorative sense. If the unions want to spend their money on counsel or solicitors, they might as well spend it on the honourable senator. After all, they spent it on Mr Viner in their time. However, I quote from what the union had to say because it is important to see that this is a point which is being made from a particular political vantage point. In representations to Mrs Kathy Sullivan, the union wrote: The basis on which recommendation 9 of the Hancock Report rests is well documented. The industrial relations infrastructure in each of the Australian States was developed in response to the particular needs of the States. Unions of employees and unions of employers who have membership in only one State and who are registered in their respective industrial jurisdictions are predisposed to remaining thereunder. This union avers that the failure of the Bill to embody the provision of recommendation 9 overlooks the strength and currency of State jurisdictions. More importantly, this oversight is exacerbated by the further omission not to permit appeal rights to intervene as an action under the relevant new sections. The union requested both Mr Don Cameron and Mrs Sullivan to make representations on this matter, which they have done. Senator Button —Shame! You are giving the names of your members. Senator CHANEY —Well, that is the ex-senator Kathy Martin, who is now Mrs Sullivan. Mr Munro, the General Secretary of the Queensland State Service Union, wrote to Mr Cameron, after he had received comments from Mr Cameron: You no doubt perceived, together with the relevant shadow Minister, Senator Chaney, that the lack of provisions to protect State registered unions that only operate in one State is a concern that is not local but Australia wide. Consequently, the position that you have taken would be approved by an audience that is far from narrow. I make that point to the Minister because I am here bringing forward a matter which certainly has the intellectual assent of the Opposition and it is totally consistent with our view that there should be a decentralised system of industrial relations. It is also the view of a significant number of trade unions that this is the desirable position. Earlier in the debate I referred to the fact that the push for centralisation can at times be related to attempts to quash the very sort of conduct that the Minister for Industry, Technology and Commerce claims that he is seeking to encourage; namely, a greater degree of flexibility at the workplace. After all, we have had clear statements from a number of Ministers that that is a government objective. We had the statement last May from the Treasurer, Mr Keating, that the great challenge facing the Government is to have further deregulation of the labour market and to have the capacity to pay differently in different industries, according to their capacity and so on. They are fine sentiments and they are absolutely correct as they are expressed, but earlier in the Committee debate examples were given of attempts made by people to have more flexible arrangements being overridden, or attempts being made to override them by seeking to bring them within the Federal jurisdiction. I referred to the challenge to the Sanctuary Cove arrangements and to what were effectively challenges to the voluntary employment agreements entered into under the Queensland State legislation. After the union had fought against those voluntary employment agreements, trade union interests attempted to override the agreements by bringing the employees within a Federal award, thereby overriding the State jurisdiction because of the predominance of the federal constitutional provision where there are co-existing laws. What we are talking about here is clearly within that ballpark of concern that the Opposition has about this Bill. Rather than promoting the sort of flexibility, which the Government talks about and which the Bill is to some limited extent promoting, it contains specific provisions which result in there being tools which can prevent the sort of result that the Government says it is seeking. The amendment that the Opposition is seeking is limited. We are simply seeking to add to the existing clause a new sub-clause in these terms: that an organisation that is a party to the industrial dispute and that is seeking the making of an award does not have a significant number of members who would be covered by the award. In other words, what we are saying is that, if there is not a fundamental interest on the part of the person who is seeking the making of an award, surely that should be properly taken into account as a matter which would lead the Commission not to intervene. Surely it is flying in the face of the Government's industrial relations intentions to have a situation where a State union which is operating satisfactorily under a State jurisdiction can be overridden effectively, not by an organisation with a common membership but by an organisation with a nominal membership as far as that State organisation is concerned. There are questions of fairness as well as flexibility involved, and I find it difficult to see why the Government could not entertain an amendment in these terms. Since the Minister for Industry, Technology and Commerce, who has the conduct of this legislation, is now at the table, I might say that, now we have a new Minister, I express the hope that we might get a less popish approach to the legislation and less of the attitude that the words written are infallible. Senator Button —A new shadow Minister, too. Senator CHANEY —Indeed; if that will alter the equation I for one will be delighted. My plea again is for the Minister to give some rational consideration to this and, given that, in my view, it would contribute to the outcomes the Government claims it wants, to agree to it rather than simply mulishly opposing it because it happens not to be in the Government's draft. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.11) —I am about to mulishly oppose the amendment because it happens not to be in the Government's draft. More seriously, the Government has considered this matter and it does not regard the Opposition's amendment as in any way necessary. The terminology of the amendment is somewhat unclear. It is specific in one sense and very vague in another. The criterion is the number of members but the description is a significant number of members. That is far from clear. That is not the main reason for opposing the amendment moved by the Opposition. The Opposition has asserted that the Hancock Committee of Review of the Australian Industrial Relations Law and Systems made a recommendation of this kind. I am not sure whether it was precisely the same. It is the Government's view that the Committee overlooked the provisions of section 41 (1) (d) (iii), which allow the Commission to dismiss matters on the grounds that they are not in the public interest. Indeed, under this provision-- Senator Crichton-Browne —What is your definition of `public interest' in all of this? Senator BUTTON —It is defined, is it not? Perhaps it is not; I do not know. Senator Chaney —I think Lewis Carroll could have defined it. Senator BUTTON —There are all sorts of things defined in this legislation which Lewis Carroll could well have had a go at; I concede that. There is a specific discretion vested in the Commission to determine the public interest. Indeed, under section 41 (1) (d) (iii), the Commission has exercised that public interest discretion to dismiss matters in which awards were sought which would affect very few employees. Senator Chaney —It can be done. We want to make sure it is more likely to be done. Senator BUTTON —I understand that. That is the difference between us. We say it can be done and, therefore, to that extent the amendment is unnecessary. Of course, subclause 111 (1) (g) also gives the Commission discretionary power in relation to a number of other grounds, such as triviality, better dealt with by a State tribunal, and of course, the one I have mentioned, not in the public interest. In relation to one or two comments that have been made, I draw the Senate's attention to the incidence of awards in Australia and the coverage by Federal awards as against State awards. As at May 1985, 32.6 per cent of employees were covered by Federal awards, 49.8 per cent were covered by State awards, and 15 per cent were not covered by awards, determinations or collective agreements. It could be argued, on the basis of those figures, that section 49 (1) (d) (iii) has not in fact had the effect of undermining the State system. I think this was the burden of one of the specific points made by Senator Crichton-Browne. For those reasons the Government does not accept the amendment moved by the Opposition. Senator CHAPMAN(South Australia)(6.15) —Clause 111 sets down particular powers that, subject to other provisions of the Industrial Relations Bill, are available to the Australian Industrial Relations Commission in proceedings before it. This includes powers such as the ability to make awards or orders, certify agreements, give specific directions to summon parties, witnesses and other persons, and to compel the production of documents. There is also a range of more technical powers that the Commission is given under this clause. We are dealing with subclause 111 (1) (g), which permits the Commission to dismiss a matter or to refrain from hearing a matter if it is trivial; if a State industrial authority is dealing or may deal with it; where further proceedings are not in the public interest; where a party to a dispute is engaging in conduct which the Commission considers to be hindering the settlement of that or any other dispute; or where a party has breached an award or order or has contravened a direction or recommendation of the Commission to stop industrial action. Senator Chaney's amendment, which was moved by Senator Crichton-Browne, is to insert an additional subparagraph (iiia) after paragraph 111 (1) (g) to include an organisation that is a party to the industrial dispute and is seeking the making of an award but does not have a significant number of members who would be covered by the award. In other words, the Commission would have an additional power to dismiss a matter that has been brought before it. This clause is similar to the existing section 41 (1) (d) in the old Act. It acts as a mechanism whereby the Commission, although it has a valid interstate industrial dispute before it, may refrain from making an award, thus overriding State coverage, if it believes that a State jurisdiction is more appropriate to that particular award. It therefore gives protection to the State industrial relations systems against Federal award coverage interfering with State industrial jurisdictions. The threat to the State system is that areas of work previously covered by State awards and determinations can become the subject of Federal award coverage by the creation of an interstate industrial dispute. We are all aware of the means whereby paper disputes are created to establish the validity of an interstate dispute for the purpose of gaining a Federal award at the expense of an existing State award. The dispute can therefore be found in the Federal jurisdiction and, subject to this clause, an award or certified agreement made in settlement of that dispute. By virtue of section 109 of the Constitution, a Federal award always prevails over any existing State award or determination. It is through that constitutional provision that Federal awards gain that coverage and subvert the State award. Action to obtain Federal coverage may be initiated by a federally registered organisation with little or no actual membership creating, as I said a moment ago, an interstate industrial dispute on paper and applying for Federal award coverage. This can lead to the intrusion of the Federal jurisdiction into State areas where, on a rational assessment of the facts, it is not justified. In the coalition's industrial relations policy, which was recently released and which updates our policy of last year that was so well received in the community at large, particularly in the business community, we say that we will ensure that a proper balance will be maintained between Federal and State jurisdictions. For example, we will prevent the Australian Conciliation and Arbitration Commission from making a federal award covering an area of employment which is satisfactorily handled by a State jurisdiction. That is the reason for our amendment, to give effect to that section of our policy which ensures that we will provide appropriate protection for State jurisdictions. I strongly support the amendment and I urge all honourable senators to join me in that support. Senator WALTERS(Tasmania)(6.20) —I want to ask the Minister for Industry, Technology and Commerce a pretty basic question, namely: Does he believe that there should be a proper balance between the Federal and State jurisdictions? Does he believe that that is fair? Is it the Government's policy that there should be a proper balance between the Federal and State jurisdictions in this matter. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.21) —My answer to that question, of course, is yes. There should always be proper balances between the various jurisdictions, and so on. Senator WALTERS(Tasmania)(6.21) —Does the Minister for Industry, Technology and Commerce believe that it is proper for the Federal jurisdiction to take over when an award is being handled correctly at the State level and when the Federal jurisdiction has very small numbers? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.22) —This is the responsibility of the appropriate arbitral bodies et cetera to assess in any particular set of circumstances. It is a matter in relation to which discretion is vested in them. As I have said, in commenting on what Senator Chaney had said, this in fact has been done by the arbitration bodies. Senator WALTERS(Tasmania)(6.22) —The Minister for Industry, Technology and Commerce is not answering the question. I asked the Minister whether he believed that the Federal jurisdiction should take over when a matter is already being satisfactorily handled by the State jurisdiction. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.23) —The honourable senator is asking me a very hypothetical question. The point is that it is not for me to determine. In these matters, the Conciliation and Arbitration Act has always vested discretion in the tribunal, and with quite adequate recourse, I think, for representatives of the State industries and, where necessary, the State tribunals. If the honourable senator is seeking to make a broader point that there is some advocacy in the Government or some scheme in this Bill to provide a sort of sinister Federal takeover of State jurisdictions, my response to that is that that is not the case. I refer the honourable senator particularly to part VII of the legislation, dealing with cooperation with the States. If the honourable senator is seeking to flush out my personal view, I cannot take the matter much further than to say that the best arrangement is the one which is the most efficient in terms of the interests of a particular industry or industries. Senator WALTERS(Tasmania)(6.24) —That suits fine, but my one remaining question is: If the State jurisdiction has the overwhelming numbers and the Federal jurisdiction has only a very small number of people-and the State jurisdiction does not seem to be doing a bad job-what is the Minister's opinion in that case? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.24) —I have to answer that question in the same way as I did before. More than 49 per cent of all employees are covered by State awards, on the figures which I referred to earlier, and about 32 per cent of employees are covered by Federal awards. That does not suggest that, during the 80 years of our having an industrial conciliation and arbitration system of one kind or another, there has been an enormous imbalance in favour of the Federal jurisdiction-in fact, the contrary has been the case. Senator CHANEY(Western Australia-Leader of the Opposition)(6.25) —I am grateful to have this opportunity to participate in this debate prior to suspension of the sitting for dinner. I am sure that the Minister for Industry, Technology and Commerce (Senator Button) does not have much to do over the dinner break, and he might like to address the point that I will now raise and reply at 8 o'clock. I address my initial remarks in support of this amendment by pleading in aid the views of the Queensland State Service Union-which did not seem to melt the Minister's heart at all. Therefore, I refer the Minister in more detail to what was said by the Hancock Committee of Review into the Australian Industrial Relations Law and Systems. At page 296 of volume 2 of the report, Part VI deals specifically with the issue that we are currently debating. The view that was put forward by the Queensland State Service Union is precisely the view which was adopted by the Hancock Committee in Part VI. It is interesting that the Hancock Committee refers to a number of arguments that have not been brought forward in the Committee so far. For example, at paragraph 6.115 Hancock refers to the Confederation of Australian Industry (CAI), suggesting that the means of producing more inter-governmental agreement in this area would not be found while section 41 (1) (d) of the Conciliation and Arbitration Act enables the Federal Commission unilaterally to remove areas of present State jurisdiction without reference to the State tribunal. So, a series of submissions were made to the Hancock Committee, which, after all, was a Government inquiry. The Government seemed to regard the Hancock report as a matter of great importance, and it laboured for years after the report to produce some legislation to flow from it. I think the Minister owes us an explanation of why the Government has rejected this part of the Hancock inquiry. Hancock reports that there were submissions indicating dissatisfaction with the way in which one of the sections-which is repeated in this Bill-operates. A major concern expressed was: Intervention of a federally registered organisation poses a threat to the viability and structure of a State based union which has been party to the State regulation. A series of paragraphs are involved, but I will not burden the Minister by reading them all into the record. However, I ask the Minister to examine them and to explain precisely why the Government came to a conclusion contrary to that which is recorded in paragraph 6.118, as the conclusion of Mr Hancock, who has now been appointed to the Commission by the Government, as well as that of Mr Polites and Mr Fitzgibbon. Their conclusion was: . . . amendments to section 41 (1) (d) (ii)- which is the parent of and precisely the same section as that with which we are dealing here in this Bill- are desirable to give more protection to State awards. The present constitutional position is one of shared power between the Commonwealth and the States. The legislative framework should reflect this position. If the balance between the coverage of the federal and the States' systems is to change, this should be effected in a systematic way as part of a deliberate and conscious policy. The widened interpretation of `industrial dispute' by the High Court in the Social Welfare Union case, and the recommendations which we make to have the jurisdiction of the federal industrial tribunal as broad as possible, may imply a significantly increased potential for the growth of the federal jurisdiction at the expense of the States. The Minister's figures are meaningless unless one looks at them in terms of which way the system is trending. The Minister might tell us whether, in fact, he and the Government are seeking an expansion of the Federal jur- isdiction at the expense of the States-as suggested might occur by the Hancock Committee. Paragraph 6.118 continues: In many instances, this will be a development which benefits the parties and the community; but there is a risk of transfers to federal regulation in cases where most of the interests concerned find State regulation more suitable. There is merit in the argument that the move from State to federal jurisdiction may often not be in harmony with the wishes of the employees involved. A more rigorous test is justified. The precise sort of amendment that we have proposed is what is being pushed forward by the Hancock Committee. A number of other arguments are dealt with in Part VI of the report, but in the light of the time I will not pursue them at this stage. However, I ask the Minister to address over the dinner break the points that I have raised, but if he is not prepared to do that he might ask his weary exhausted advisers, who have laboured over this Bill so hard and for so long, to address themselves to these matters and to let us have some advice on this after dinner. Sitting suspended from 6.30 to 8 p.m. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.00) —Before the suspension of the sitting for dinner Senator Chaney referred to some specific passages of the report of the Hancock Committee of Review into the Australian Industrial Relations Law and Systems. I really do not have much to add to what I said in the earlier part of the debate. The Government, in considering the Hancock report and the general discussion which took place around that report's proposals, felt that this amendment was not necessary because of the matters I referred to which are contained in section 41, particularly the matters contained in section 41 (1) (d) (iii) which enable the dismissal of a matter by Commission on the public interest ground, which includes an inadequate number of members. Senator Chaney —That was there when Hancock made the recommendation. Senator BUTTON —I understand that. The Government's view is that the Hancock Committee overlooked that provision. I think I said that earlier. On the more general issue which has been raised by Senator Chaney and others, I again refer to the point that I made about the coverage of Federal awards and the relative coverage of State awards in terms of numbers of employees. Since Federation the Federal jurisdiction has naturally increased in size. That growth has not at any stage been dramatic. There have been fluctuations in the movements of relative coverage by State and Federal awards in terms of number of employees. Question put: That the amendment (Senator Crichton-Browne's) be agreed to. The Committee divided. (The Temporary Chairman-Senator B. C. Teague). Ayes . . . . . . . . . . . 26 Noes . . . . . . . . . . . 34 —— Majority . . . . . . . . . 8 —— Alston, R. K. R. Messner, A. J.Baume, Peter Newman, J. M.Bjelke-Petersen, F. I. Panizza, J. H.Boswell, R. L. D. Parer, W. R.Brownhill, D. G. C. Patterson, K. C. L.Calvert, P. H. Puplick, C. J. G.Chaney, F. M. Reid, M. E.Crichton-Browne, N. A. Short, J. R.Durack, P. D. Stone, J. O.Hamer, D. J. Tambling, G. E. J.Knowles, S. C. (Teller) Teague, B. C.Lewis, A. W. R. Vanstone, A. E.MacGibbon, D. J. Watson, J. O. W. Aulich, T. G. Harradine, B.Beahan, M. E. Jones, G. N.Black, J. R. McKiernan, J. P. (Teller)Burns, B. R. McLean, P. A.Button, J. N. McMullan, R. F.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R.Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cook, P. F. S. Ray, RobertCooney, B. C. Reynolds, M.Coulter, J. R. Sanders, N. K.Crowley, R. A. Schacht, C. C.Devereux, J. R. Sibraa, K. W.Devlin, A. R. Tate, M. C.Evans, Gareth Walsh, P. A.Foreman, D. J. Zakharov, A. O. Baume, Michael Bolkus, N.McGauran, J. J. Giles, P. J.Hill, R. M. Richardson, G. F.Sheil, G. Gietzelt, A. T. Question so resolved in the negative. Senator CHANEY(Western Australia-Leader of the Opposition)(8.11) —by leave-I move: (10) Page 51, clause 116 (4) (c), line 29 and line 31, leave out ``or part of the business''. (18) Page 68, clause 149, paragraph (d), line 32, leave out ``or part of the business''. (25) Page 88, subclause 195 (2), leave out the subclause. (35) Page 155, clause 308, leave out the clause. This group of amendments relates to the provisions in the Bill which bind successors to part of a business under a certified agreement. Clause 116 refers to the operation of a certified agreement and provides in subclause (4) that it is binding on the parties, all members of an organisation and: an employer who is a successor, assignee or transmitee (whether immediate or not) to or of the business of part of the business of a party, including a corporation that has acquired or taken over the business or part of the business of the party. Amendment (10) prevents an award constituted by a certified agreement being binding on a person who takes up a part of the business of an employer who is a party to an agreement. It complements amendment (18). Employers consider that the provisions in the Bill are virtually unworkable as it is extremely difficult to define what constitutes part of a business. Indeed, this was a matter of specific representation to us from the Australian Chamber of Manufactures, which had that view. It has said that it is concerned with the provision contained in clause 149, which goes to the next amendment, a related amendment. Clause 149 states that, subject to the order of the Commission, an award determining an industrial dispute is binding on a successor, assignee or transmittee to or of the business of a party to the dispute, but also on any successor, assignee or transmittee to or of part of the business. The Chamber of Manufactures sees this provision as being virtually unworkable, and I would like the Minister to explain why that is not so. Amendment (18) is an amendment to clause 149 of the Bill. Senator Button —It is the same argument. Senator CHANEY —Exactly, so I do not need to repeat it. I thank the Minister. Amendment (25) relates to the obligation on employers to advise of the sale of a business. There is a requirement in clause 195 that employers must notify their employer organisation if their business is sold or transferred to a non-member. Clauses 195 and 308 require that the rules of an organisation of employers must provide that members notify that organisation within 14 days if: (a) the business, or part of the business, of a member . . . is assigned or transferred to a person who is not a member of that organisation; or (b) such a person succeeds to the business, or part of the business, of a member . . . It would be an offence with a prescribed penalty of $500 for an employer organisation to fail to give written notice within 28 days of being notified of such a change to the Registrar and any registered union bound by an award or an order of the Commission that also bound the member in relation to the business or part of the business. Once again, there are difficulties in interpreting these provisions. The question again arises as to what constitutes part of a business. They are onerous administratively and are objectionable in principle, since they oblige employer organisations to report employers' business dealings directly to trade unions for the latter's benefit. In the view of the Opposition, that is not the direction in which we should be taking this matter. As I have said, the amendments I have just moved are related. Amendment (35) simply removes the obligation on an employer organisation to notify a union if one of its members has assigned or transferred his business to a non-member. I commend the amendments to the Committee. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.16) —I will try to explain the Government's intention with respect to this matter. It has always been the case that, if an employer, that employer being bound by an award, transmits a business to a stranger and he and the employees concerned continue to remain in the industry, such a transmission carries the award coverage with it. There are a number of decisions of the Conciliation and Arbitration Commission on the record to that effect. Perhaps I should give an example by way of illustration. If a motel in a motel chain is sold, it is appropriate in the Government's view that the owner or transmittor of that business, which is part of a larger business, advise the appropriate employer organisation of the transmission having taken place. Obligations are imposed on registered organisations in other sections of the Conciliation and Arbitration Act. Employer registered organisations have obligations, just as employee registered organisations have obligations, by virtue of their registration under the Act. In the example I gave-the transmittor being a motel chain selling a particular motel to another party-it is not entirely or necessarily to the benefit of the employees that such notice should be given to the employer organisation and, appropriately, to the Commission. If the motel chain is covered by a Federal award and as a result of the sale of the business the new business in the hands of the transmittee falls within the jurisdiction of a State award, the new employer, as well as the employees, ought to be aware of their rights and obligations. That is the purpose of the notification of the kind mentioned. I am surprised that Senator Chaney tells us that employers are concerned about this matter as if it was something new. We have heard a little in the debate on the preceding clauses of this Bill about the importance which the Opposition, quite understandably, attaches to State jurisdictions. There is nothing unfamiliar about this concept in State jurisdictions. Every State long service leave Act contains provisions almost identical to the one which the Government seeks in the Conciliation and Arbitration Act. Every State long service leave Act contains a provision about the sale of part of a business. I understand Senator Chaney's point about definitional problems, but part of a business is referred to in all those Acts and, presumably, is interpreted by each of the State industrial commissions, or by a court, in the event of an employee suing under the long service leave legislation. We say, first of all, that it is of benefit, in some circumstances, to not only employees but also employers and, secondly, that there is nothing new about this provision. It is in the legislation in the State systems and, for that reason, should be in the Federal system, because it is a matter involving the protection of rights whether of one or other of the parties. Amendments negatived. Senator CHANEY(Western Australia-Leader of the Opposition)(8.22) —I move amendment No. 4 to clause 3 of the Bill, that is, the objectives clause-which seeks to add additional objectives to the existing objects clause: (4) Page 2, clause 3, after paragraph (b), insert the following paragraphs: ``(bb) to encourage direct dealing between employers and employees within each enterprise; ``(bc) to minimise interference in relation to enterprises by persons or bodies who have no direct interest in those enterprises; and ``(bd) to facilitate the consolidation of single enterprise bargaining units;''. To explain this amendment, it would be desirable for me to turn to the Opposition's policy which underlies our approach to this and the related amendments which go to trade union structure. The issue of trade union structure is of fundamental importance. It is an issue on which there are very strongly held views. For example, the Australian Council of Trade Unions (ACTU) has indicated that it is seeking to establish a relatively small number of large unions: I think that a general number of around 20 has been indicated by Mr Kelty. The early indications are that the issue of union amalgamation is being actively pursued and various possible amalgamations are currently being mooted. The Opposition policy, until the reconsideration of our policy this year, was to encourage a structure of industry-based unions. The matter was examined very carefully by the Opposition, mainly in the context of trying to ascertain what it was that employers and employees wanted and what it was that would be likely to produce an effective economic result. Undoubtedly, the Opposition's approach was very heavily coloured by the very firm view that we developed, that is, that the successful operation of an enterprise in a modern economy requires very close cooperation between employer and employee. That is not least evident in the manufacturing sector for which the Minister for Industry, Technology and Commerce (Senator Button), who is at the table, is primarily responsible in the Government. I think he would agree that, in those manufacturing enterprises where there have been successful gains in productivity, that is almost always achieved on the basis of a very close working relationship between employers and employees. Senator Button —I agree. I say that I agree because you chastised me before for not acknowledging your rationality. Senator CHANEY —Senator Button agrees. One of the clear points which emerged from our very extensive discussions with industry, industry organisations and representatives of the trade union movement was that there was a broadly common view that the desirable situation was to have a single bargaining unit for an enterprise, a situation where employers and employees could deal together face to face with minimum interference from outside. That is highly desirable as it facilitates communication and the sort of cooperative endeavour that is very much the stuff of modern industry. The policy which we announced in June dealt with trade unions in terms to which I will now refer. In that policy we talked of our fundamental goal of promoting close, cooperative, flexible and productive relationships within enterprises for the mutual benefit of employers and employees. We expressed the view that we wanted genuine voluntary unionism and so on. The policy refers to the fact that the existing union structure is a significant impediment to improved relations between employers and employees in many enterprises and that most employers are forced to deal with several unions which tend to vie with one another and press narrow sectional interests within the labour force, thus creating demarcation disputes and disrupting employer-employee relations. We refer to the historical fact that the existence of unions largely based on occupation rather than industry or enterprise also encourages the rapid flow of wage adjustments from one part of the economy to other areas. We went on to deal with a number of issues relevant to that. In terms of the structure of registered trade unions, we say that, in enterprises which operate under the Australian Conciliation and Arbitration Commission and its awards, the structure should be determined by the wishes of the members of those unions. We said that freedom of association would be preserved subject only to the Commission's supervision of matters relating to the formation of new unions and amalgamation or fragmentation of existing unions with a view to ensuring that, as far as possible, new union structures contribute to the objectives of: ensuring that employers and employees within an enterprise deal directly with each other; minimising interference by people or bodies with no direct interest in the enterprise; and facilitating the consolidation of single enterprise bargaining units. We went on to make the point that a variety of union structures and sizes could meet those criteria, including unions organised on an industry or enterprise basis. I suppose it is fair to say that we believe that it is important to decide what one's objectives are before one decides what the structure should be. I think it would be fair to say that both the Government and the ACTU frequently have drawn the attention of the Australian public to overseas examples. They refer, in documents such as Australia Reconstructed and others, to the experience in Scandinavian and other European countries and often indicate circumstances where large unions appear to operate very successfully. On the other hand, one can point to Japan where a very large number of small enterprise based units seem to deal with industrial matters very successfully indeed. The amendment goes to the starting point in all this. What are the objectives? We say that the objectives are those which are set out in the amendment. I would have thought, in terms of the Minister's views on these matters, that he and the Government would have supported the direction that we are indicating. I invite the Minister to indicate to the Committee-if he is not prepared to accept this amendment-to what extent he objects to the idea that it should be one of the objects of the proposed Act to encourage direct dealing between employers and employees within each enterprise. To what extent does he object to the idea that the Act should be promoting the other objective which is to minimise interference in enterprises by persons or bodies which have no direct interest in those enterprises and, finally, to facilitate the consolidation of single enterprise bargaining units? I invite the Minister to tell us what, if anything, he disagrees with with respect to those objectives. I refer to the sorts of objections that one gets from some elements of the trade union movement and indeed sometimes from the Arbitration Commission. The reality is that some trade unions actively discourage direct dealings between employers and employees within an enterprise. It is not hard to understand why that should occur because it could be seen as a threat to the allegiance to the union and the support of the union if the employer and employees find that they can get on without the union. It is perhaps more serious than the mere protection of the vested interest of the union when we get the sort of example which I have raised in this committee debate before where, in cases involving meat industry employees, direct dealings between the employer and employees have been actively discouraged by the Commission. I quoted the Castle Bacon Pty Ltd situation and another meat industry case from Queensland which came before the Commission. In the latter case I think it was Commissioner Riordan who made the point that it made the job of the Commission more difficult to have this direct dealing between employers and employees without the involvement of the union. It is interesting to see that progress is being made in this area. It would be a pity if the Government were behind the play. One of the most encouraging industrial documents I have seen for some time was issued jointly by the Federation of Automotive Products Manufacturers in conjunction with the Metal Trades Industry Association Inc., the ACTU and the-- Senator Button —CAI. Senator CHANEY —No, there was another union involved, the Vehicle Builders Employees Federation of Australia. If the Confederation of Australian Industry was also associated I am sorry but I did not notice that in the documentation. I apologise to it if that is an omission of mine. The important thing I noted about that document related to the issue of employee participation and the encouragement of better dispute settling procedures. The encouraging thing about that document, which came out under the auspices of employers and trade unions, was that throughout the document there was clear reference to the importance of these matters being dealt with by employers and employees. There is quite a significant difference in the wording of that document and in some of the other two-party documents which have been issued promoting improved industrial relations and coming from the employer and trade union structure. In that sense direct dealings between employers and employees is something to be throttled or overcome as it is very destructive indeed. The Commission is going to play a very important role not only in the operations of industrial relations systems over the coming period but indeed in the development and change which is occurring within that system. I think it would be a pity not to give the Commission the sort of steer that this particular amendment provides. What we are saying is basically accepted by plenty of people on the employee side of the equation. It is quite clear that the sort of flexibility of work which is central to modern enterprises, the sort of employee participation which involves the capacity of the work force to contribute to the almost daily improvement of the production process, and certainly the daily monitoring and ensuring that the production process is efficient, is simply not going to be achieved to the extent that there are intermediaries who interfere with the rapid and very easy flow of information between employers and employees. I think the truth is that where this is working the distinction between employers and employees and between management and labour becomes steadily less important. I suppose that one of the heartening elements of the good examples that we have of modern management in Australia is the extent to which it contributes to acknowledging the essential dignity and worth of everybody who is part of the process and the capacity of every individual in the process to contribute. It seems to me that these amendments, which are simply the objects clause of the Bill, are very significant. They enshrine a significant principle about which we should be concerned. I trust that the Government might consider them and adopt them as part of its own approach in this very important area. Senator BURNS(Queensland)(8.36) —I would like to make a short contribution to this matter. I agree with Senator Chaney that we need to set the objectives before we look at the means used to achieve those objectives. I was very interested to hear him talk about considering international behaviour when on other occasions he and other members of his Party continue to ridicule the idea that we may import some ideas from Scandinavian countries about how industry and the economy should run. Senator Chaney talked about the Japanese experience which has been a very paternalistic one and so contrary to the way in which we have operated in Australia that it does not even bear examination. What he proposes is something that is fairly negative and which looks at a question of an enterprise decision in relation to workers on the job belonging to a particular union or unions. If one looks at the provisions in the Industrial Relations (Consequential Provisions) Bill 1988 it can be seen that the opportunity is given to the Conciliation and Arbitration Commission to make the various decisions that will bring order where chaos might reign. For many years the trade unions have collectively managed to solve demarcation disputes. It would be fair to say that nowhere near enough have been solved but everybody on both sides of the industrial fence has recognised that one of the most harmful, negative and wasteful disputes that can occur is the demarcation of work. However, for many people it has meant job security. In the terms that we suggest, the Act will enable the Commission, which has a great deal of experience and can listen to argument from practitioners within the industry and from within the calling, to bring down decisions and make suggestions that will have a common thread throughout the whole community and lead to more solutions of demarcation problems within the trade union movement. If that can happen it means that no physical disputes will occur. After all, that is what the captains of industry always seek. If we accept the proposition which Senator Chaney has put forward we will have a situation where continually smaller groups of people who do not understand the larger problems and who may have only a selfish motive will be casting votes which will create problems based on no facts at all and will not give consideration to the general overall public interest, let alone the general collective interest of the trade unions. I think the propositions in the Bill are correct and I am surprised that the Opposition would put forward such a proposition which is negative and divisive. The Opposition continues to say that it is looking to industry to be cooperative and to get the highest levels of productivity. This amendment would reduce those opportunities and it should be rejected for those reasons alone. Senator CHANEY(Western Australia-Leader of the Opposition)(8.39) —I thank Senator Burns, who has just resumed his seat, for his comments. I am very puzzled by them because I do not see these objectives as being destructive but rather as being quite the reverse-that is, as being very constructive. The concerns we have about these provisions are not concerns which are confined to the Opposition. When we move on past amendment No. 4 I will quote at greater length some of the industry and academic views which have been expressed about the general approach to the trade union structure which has been adopted by the Government. In response to Senator Burns I simply wish to say that the ideal of having direct dealing between employers and employees, which he sees as opening people up to exploitation, is I think a matter of looking backwards instead of forwards. It seems to me that in substantial areas of the economy the simple truth is that the economic results that are being pursued by employers will be achieved only by adopting modern management methods and a progressive and humane approach to the work force. `Humane' is probably the wrong word because it suggests some sort of looking down. I think there is now an absolute requirement of partnership in the productive process in many areas and I think the game has changed. We talked in this debate earlier of the change in attitude of the trade union movement in the senator's own State of Queensland with respect to the reorganisation of some past practices in the tourist industry and so on. So I suppose to some extent the difference between the senator and the Opposition is that we see the movement as being in a very positive and constructive direction, and I think the senator is essentially looking back in the remarks that he made. Senator BURNS(Queensland)(8.41) —The proposals will allow that to flow. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(8.42) —In respect of many industries I understand what Senator Chaney stated as being the objectives, namely a community of interest between employers and employees in promoting good industrial relations, harmony in the work place and more productive practices and things of those kinds. There is no doubt about the desirability of that. The question between the Opposition and the Government is how we get to that point-what route to follow and what time we take to get to that point. These things are not going to be determined ultimately by legislation. In my view they will be determined by a process of attitudinal change. Senator Chaney —But you would not say that the legislative framework is irrelevant. Senator BUTTON —No, I would not, and that is the point I am coming to. The Opposition's amendments really seek to substitute for the present system-I do not think this is an unfair characterisation-a system of enterprise bargaining from which trade unions are excluded. Earlier in this debate, when we discussed the question of enterprise bargaining and so on, we also discussed the question of how that would work, because what the Opposition is doing is substituting a new system for an existing system which the Government seeks to modify, with no transitional provisions which would assist it to come into being. For example, if we look at the constitutional power for the settlement of industrial disputes, which is what this legislation is all about, single enterprise bargaining units are not, in our view, support- able by the constitutional conciliation and arbitration power, because that requires the creation of an industrial dispute extending beyond the limits of any one State. The creation of an industrial dispute by an enterprise union working in one plant in one State does not give rise to the exercise of the power under the Conciliation and Arbitration Act to create a dispute. So we have serious doubts about that. Apart from the constitutional difficulties there are the practical questions. The proposed amendments are quite silent about existing organisations and existing awards. I suspect it is unlikely that they would voluntarily vacate the field and cease making claims for awards if there was a sudden transition, as is foreshadowed by the Opposition, for a new enterprise bargaining system. In any event, existing awards will continue in operation and it will be open to unions which are party to them to call on the Commission to decline to make awards in relation to new enterprise unions. Those difficulties would be compounded by the prospect of demarcation disputes arising between existing unions and new enterprise oriented unions. So there are a number of objections which are both practical and constitutionally based. In clauses 115, 116 and 117 of the Industrial Relations Bill, in the provisions relating to certified agreements, the Government is moving some of the way down this track because it makes provision for agreements to be negotiated at the enterprise level, but it has the additional requirement that they be certified by the Conciliation and Arbitration Commission. Senator Crichton-Browne —Why is that necessary? Senator BUTTON —For two reasons, Senator. First of all to protect employees or, if one likes, employers. Senator Crichton-Browne —Do you think they cannot look after themselves? Senator BUTTON —There have been circumstances in which that has clearly been the case. The Opposition has complained about some of those in this debate, and our side has complained about some of them too. So clearly there are circumstances where that happens. The second point is that in the current economic situation it is important that one maintain a degree of influence or direction in a wages system. If agreements have to be certified the Commission can take account of the whole range of issues relating to the wages system as a whole. To illustrate this point I refer to an article in yesterday's Australian Financial Review which discussed the industrial relations policy of the Opposition and described it as `a theoretical exercise in laissez-faire economics and cutting back union power'. But I think the important question which I want to raise on this point is revealed in this quotation: More importantly, it does not answer how a Liberal Government will control aggregate wage outcomes responsibly in an economy left to the will of the market. The policy is aimed at deregulating the labour-market-and as a `facilitator' neutralising trade unions and limiting the scope of the centralised institutions which govern industrial relations. The exerting of influence and control on aggregate wage outcomes is, I think, a very important question for a responsible political party, whether it be Government or Opposition, to confront. The exercise in laissez-faire economics, which has some attraction about it-it might be a slightly unfair characterisation-as a description of that position, would in our view clearly lead to that result. In respect of the clauses relating to the objects of the Act about which I have had something to say in the second reading stage of this Bill, the Government does not accept those amendments. I take it they are the burden of Senator Chaney's remarks at this time. He wants to go further and deal with the question of organisations. Finally, in support of Senator Chaney's argument he cites the Sanctuary Cove case and similar things and says that these things can happen. Senator Chaney —They actually happened within the arbitration system. Senator BUTTON —I understand that. These things can happen. Senator Burns —It was not the rank and file that created that. Senator BUTTON —I readily concede that but I would argue that they are happening less and less and they are likely to happen with much less success. Senator CHANEY(Western Australia-Leader of the Opposition)(8.49) —I do not quite follow the last point made by the Minister for Industry, Technology and Commerce (Senator Button). Could he clarify it? I understood everything else in his contribution, but I could not follow the last point he made about Sanctuary Cove and what was going to happen less. I think the points that have been made by the Minister require some response because to some extent he was inaccurate in terms of his comments on the Opposition's approach. For a start it is wrong to say that the policy basis is that we are anti-trade unions and that we are saying that there is not a place for trade unions. If we turn to the coalition policy on voluntary agreements we find specific reference-this is indeed a change from the 1986 policy-to what was only implicit in the previous policy, namely: Employees may appoint an agent, including a union, to negotiate on their behalf. Even within the voluntary agreement structure this is essentially an attempt to give people greater freedom of choice. That is one of the elements of this. They may choose to remain within the centralised system, they may choose to remain within the award situation or they may choose to get a union to act on their behalf. Again, we are not talking about something which is theoretical and which has never happened. It has certainly happened recently in the United Kingdom, in a way which probably Senator Burns would object to, in terms of the role of the Electrical Trades Union (ETU), which I visited whilst in the United Kingdom in June. That union has, unfortunately, just been expelled from the Trades Union Congress. It is interesting to see the role that the ETU has adopted. What it has said is that it is prepared to act on behalf of a body of workers who want a single union and who wish to negotiate an arrangement with their employer. It is interesting that the new enterprises in the United Kingdom are substantially using that sort of approach and that what we have is a situation in which a union is establishing itself as the body with expertise to operate within that arrangement. Honourable senators might say that the United Kingdom system is very different from the Australian system. That would be a correct statement. But, if we look at what is occurring-- Senator Burns —You are always talking about pommy shop stewards being crook. Senator CHANEY —I think that the ETU is a long way from the caricature of the pommy shop steward that Senator Burns has brought into the debate. What we have is people who I think are genuinely committed to the idea that if there is to be a long term employment prospect for their workers British industry has to be modern, up to date, competitive and a lot more efficient than it was until very recently. We know what was the state of British manufacturing. We know the travail British manufacturing has been through. I believe that happily we can achieve much of our improvements without having to go through some of that travail. The ETU as a trade union has adapted itself to meet the challenge of change in a way that I think is very positive. The Liberal Party and the National Party in this policy have quite overtly acknowledged that if employees want to employ an agent that right extends, of course, to appointing a union to act on their behalf. In terms of how practical that is it is very interesting to see what is happening, again in the honourable senator's State of Queensland, with respect to the voluntary employment agreements and to the operation of the South East Queensland Electricity Board which is operating under a statute in which there is an entitlement to enter into agreements directly with members of the work force. Senator Burns —Not many people have taken it up. Senator CHANEY —A substantial proportion of the work force has done so. Those people are, of course, represented by an association. Just as in our policy, that is not a registered association. People who choose to operate by agreement will have the freedom to decide precisely what association, union-call it whatever we like-they want to represent their interests. The thing that struck me and, indeed, those people who were with me when we were talking to the parties involved in that exercise was the acknowledgment by the association leadership that they had to work very hard for their members. They did not have the luxury of conscripting their members through preference clauses or whatever. They had to get their members by showing that they could perform. Quite frankly, I think that is a nice sanction and a very nice pressure for any union, whatever it might be called, to be under. Let me simply say that I think the experience within Australia reflects the experience in the United Kingdom, namely that if there is greater freedom structures will adapt to provide the services that are required by employees. Our approach is very much based on providing more flexibility so that structures can emerge which meet the requirements of both employers and employees. If, under the very able current leadership of the Australian Council of Trade Unions (ACTU), the existing trade union movement is able to offer the best representative capacity for workers under our policy, of course the employees concerned will use those structures. In Queensland again, with respect to the voluntary employment agreements, it is interesting to see the other sorts of consultants that are springing up to offer their services to people who wish to negotiate these sorts of agreements. How in the world can that be a bad thing? How can that be inimical to the interests of employees, workers-call them what we will? Senator Burns —They only want to make a quid. They don't care about the people they work for. Senator CHANEY —Senator Burns says that they only want to make a quid. When we talk to people in the trade union movement about the problems of union amalgamation they will freely admit that the desire of officials to keep making a quid is one of the major impediments to structural change. Senator Burns —Serve the membership. Senator CHANEY —I am touched by Senator Burns's belief that all union officials are activated merely by the desire to serve the membership. All I can say, Senator Burns, is that good trade union officials have said to me-I am sorry to get disorderly, Mr Temporary Chairman, I should talk through you-in a quite open and frank way, that the vested interests, and there is nothing wrong with that, or the desire of union officials to keep their jobs in existing union structures is a very substantial impediment to change. Economic influences such as that are going to occur whatever approach we adopt. The first point I want to address in terms of what Senator Button had to say tonight is his statement that we are pursuing enterprise bargaining from which trade unions are excluded. That is specifically not our policy. It will be a case of the race being to the swift and the effective. With respect to the second point that I think was very significant in what Senator Button had to say, he challenged the constitutional basis of our policy. Because Mr Willis has frequently made these statements, I can only assure the Committee that we took advice from senior counsel both before the 1986 policy and again before the issue of the 1988 policy. The two policies are, of course, in the same direction but there is simply some detail development and difference on the trade union structure side between the two. However, on the voluntary agreements matter, the policies are essentially the same thing. I can assure the Committee that senior counsel in each case have advised that there is no constitutional difficulty. I have been standing in this chamber for some time and making the point, with respect to the proposed constitutional amendments, that no lawyer, however eminent, can predict with absolute certainty what a decision of the High Court of Australia or, indeed, any other court will be. I am sure we are all familiar with that. Government Ministers, when discussing the referendum Bills, made the point that they could give no firm and clear undertaking as to what decisions the High Court might make in respect of the constitutional changes. But, the point is that the advice from senior counsel which we have obtained is sharp and clear. I must say that my own concerns about that matter are very slight. Indeed, I do not have before me the Australian Financial Review article written by Pamela Williams which was quoted by the Minister. I thought the article appeared more than a few days ago; however, it was certainly quite recent. I simply say that when I read that article I disagreed with it very strongly. Since we are going to throw newspaper opinions around I would like to contrast that article with the view of Mr Charles Fitzgibbon. I think Mr Fitzgibbon is a more distinguished participant in the trade union movement than Ms Williams. I mean no disrespect to her but Mr Fitzgibbon is of an age which means that he must have more experience than she has. He has been a vice-president of the ACTU and a head of the Waterside Workers Federation. I think very significant also for the current debate is that he has made the most extraordinarily constructive contributions to the industrial relations debate over recent years. Senator Burns —You never used to say that about him. Senator CHANEY —Senator Burns should be pleased if he sees in that remark some sign of conversion. If he reads what Mr Fitzgibbon said in 1986 to the Productivity Council of New South Wales and the Economic Planning Advisory Council, I think he will get a very good exposition of many of the defects of the present system and why change is needed. I congratulate Mr Fitzgibbon for his continuing contribution to public debate. I think he is making an extraordinarily good contribution. He also writes in the Australian Financial Review. On Friday, 23 July, he wrote about the Opposition's industrial relations policy. Since Senator Button has made the point about Ms Williams's comments, let me cite what Mr Fitzgibbon had to say. Senator Button —Are you saying he is the only one? Senator CHANEY —No, he is not the only one. There are plenty of other people. If Senator Button wants to get into that debate, I am happy to keep going. I would be happy to incorporate the whole article as I do not wish to misrepresent Mr Fitzgibbon's position at all, but I wish to quote selectively from it in the sense that I only want to quote some paragraphs. Does Senator Button want the whole article incorporated? Senator Button —Yes. I would like to read it. Senator CHANEY —Has the honourable senator not read it? Senator Button —I do not recall the particular one. I have read many. Senator CHANEY —I will not read all of it. I freely concede that it does contain some criticisms of the Opposition's policy, but in his general approach he said: There is nothing impracticable in the Coalition's industrial relations policy document and nothing that cannot be practically introduced. He talked about the fact that there is some vague wording here and there and so on, and said there is room to manoeuvre, and what the intent is with respect to some provisions only time will tell. He said: Much of the policy is capable of implementation without setting too many teeth on edge, because in many ways it continues trends already evident in society. A little later he went on: It is now generally accepted that productivity, especially in the manufacturing sector, is the key to balancing our society between its rural commodity, mining commodity and manufacturing roles, in making that sector internationally competitive: and that the best way of doing that is by forgetting the `them and us' concept and instead forging an overall unity at an enterprise level. That is not possible for every industry or undertaking. Undertaking is not liked too much by the political ideologues in our midst and may produce many hiccups along the way, but the concept is developing faster than a lot of people believe. He talked about more flexibility being engendered in the system by way of profit sharing and share deals and legislation being enacted to make this development easier. I interpolate there, Mr Temporary Chairman, that the Government has picked up more than half of the proposal that I presented during the last election campaign with respect to employee share ownerships, and I thank the Government for that. I congratulate the Government for that. The article continued: Already there is a degree of cooperation between State and Federal systems. A little later he said: Whether everyone in the community likes it or not, we are moving towards a more market-oriented system of wage determination. The contradiction which exists is that the radical leftist organisations or individuals who organise street marches or wage demands of the general norm are hastening that day. The coming of such a system has almost the feel of inevitability about it. So, many of the matters covered in the policy document are already under development-thus it will certainly be possible for the authors to refer to events and say, `There you are . . . we were right'. That is an assessment in the newspaper that was quoted by Senator Button a few minutes ago, written by Mr C. H. Fitzgibbon, a former industries assistance commissioner, General Secretary of the Waterside Workers Federation and, as I understand it, a former Vice-President of the Australian Council of Trade Unions. I quote him as an authority that I would line up, as I say, with the greatest respect against Ms Williams and with a great deal of confidence. The Minister conceded that his description of this as being a matter of laissez-faire economics is a little unfair. It certainly is unfair. After all, we still have a system where the Commission is to continue, where people may remain within the centralised system if their belief is that that is the best option for them. What we are saying is that a movement towards greater flexibility is very desirable. I think it is misunderstanding on the part of Senator Burns if he does not understand that the Government itself is moving part way down that track with this Bill, with respect to the agreements that can be entered into on a more restrictive basis. Going back to the issue that we are debating, the Minister ranged very widely in his response, but what we are saying is that we think it is fundamental to an improved industrial relations structure in this country that we have as an objective the encouragement of direct dealing between employers and employees within enterprises, minimising outside interference and facilitating the consolidation of single enterprise bargaining units. Frankly, I find it extraordinary that a Minister with Senator Button's record of trying to encourage more rational industry arrangements could deny the validity of that approach. Senator CHILDS(New South Wales)(9.05) —My contribution will be brief because I believe Senator Button has answered the proposal of the Opposition. Although Senator Chaney talked about freedom of choice when he referred to his objectives, in fact they are a prescription for anarchy. That is the simple fact of the matter. When he referred to minimum interference from outside he showed that he has a pathological misunderstanding-I believe it has to be a bias that causes him to make this error-about the trade unions and their role. Members of the Opposition continually suggest that the trade union movement does not play a positive role in industry. That is not right. Senator Button has pointed out, and it is obvious, that the Bill is a modification of an existing system that will allow for agreements at the enterprise level; in other words, the very things that Senator Chaney has said, such as employers and workers arranging things in the factory or at the place of work. What will happen is that under the existing system people will be entitled to advice and help from their trade union or from the employer organisations. The Opposition has proposed that the workers go into the negotiations with their hands behind their backs or, alternatively, without the natural support that they have had during the whole history of the trade union movement they will try to hire guns from some source outside the union that has covered them. I referred to a prescription for anarchy because Senator Chaney had to draw on cases where the unions are weak-either in non-union situations or poorly organised workplaces. Such places have always existed and always employers have had the advantage. The Opposition is obsessed with the individual cases where the employer is on top. But for there to be cooperation and for people to get the things that Senator Chaney referred to requires people as adults to negotiate. Invariably the experience has been that where one has the employer's representatives and the trade unions coming together-even at the middle level or the organiser level-the people in the enterprise have the advantage of all the other things that Senator Chaney was talking about. If the Opposition wants to change the system, it will have to give away its ideological commitment to weaken the trade union movement and put the employees in a weakened situation. The proposed legislation will continue to make available to the workers in an enterprise the assistance of all the things that normally happen-for example, legal advice, economic advice and industry advice. Under this legislation these things will be available to the people so that they will be able intelligently to go into negotiations with an employer. The employer, of course, will have the same types of assistance available. That is why the proposed system is a sensible one. Senator Chaney quoted from an article by Charlie Fitzgibbon. All Charlie Fitzgibbon was indicating in that article was that there is probably a need in many areas for people to get into direct negotiation. The Bill that the Committee is considering does not prevent that: in fact, it encourages it. To that extent it is positive legislation. I do not wish to become involved in a long discussion. There is an ideological difference between the Government and the Opposition. Unfortunately the Opposition does not have a program of objectives that will do anything. All it would do is create a tremendous crisis in industry as the fight took place from one area of Australia to another. Senator CRICHTON-BROWNE(Western Australia)(9.10) —I would respond in part to what Senator Childs has said by referring him to Hancock's second volume, where he talks about the provisions already available under part X of the Conciliation and Arbitration Act. It provides that parties may enter into industrial agreements for the prevention and settlement of industrial disputes, existing or future, by conciliation and arbitration. Similar provisions have been in the Act since 1904. The Act provides that such an agreement is binding on the parties to it and is enforceable by the monetary penalties provided. It reads: The penalty may be proceeded for and recovered in the same manner as penalties for breach of an order or award. There are of course some inhibiting provisions that make it very difficult for there to be agreements of that nature at present. Let us remind ourselves of what Hancock said: The industrial relations benefits are seen to be the greater commitment which arises from agreement whilst the economic benefits are seen to reside in the right of the parties to fix wages and conditions in the light of specific economic capacity. He went on: It can be argued that the inclusion of such provisions in the Act as early as 1904 demonstrates a recognition by the parliament that parties should be entitled to make their own arrangements for conciliation and arbitration. Hancock's recommendation 21, which has been totally ignored and in fact rejected by the Government, states: That the provisions of Part X of the Conciliation and Arbitration Act be amended to provide that parties who wish to make their own arrangements for the prevention and settlement of disputes by conciliation and arbitration may do so, and that the terms and conditions of employment resulting from those agreed arrangements would be able to operate to the exclusion of federal awards and state prescriptions. The legislation should ensure that parties who choose to follow this approach do so as a basis for the regulation of all industrial matters involved. The Conciliation and Arbitration Act 1904 envisaged the capacity and ability and common sense of parties to negotiate between themselves as to arrangements and agreements that suit both. Hancock has made that point and he has reinforced it by tracing the steps in his own recommendation. He highlights the benefits of it. But the Government seems to be obsessed with the view-apparently it is a philosophical view, according to Senator Childs-that employees coming together and meeting employers are incapable or incompetent and are not able to enter an agreement which suits them and the employers, quite separate and quite distinct from an arrangement which might suit the trade union movement as a whole or employees outside the industry or outside that particular work place. The proposition put by Senator Chaney is that, given certain parameters, it can only enhance the industrial relations system in Australia if individual employees are able and allowed to negotiate their own awards and agreements and arrangements. The proposals under clauses 115, 116 and 117 barely go towards that. Under clause 43 any arrangement or hearing before the Commission can be intruded upon by any other party with the agreement of the Commission. Presumably if that agreement does not suit the trade union movement, for whatever reason, it will intervene and present its point of view, in spite of the wishes of the parties to the agreement. The Minister for Industry, Technology and Commerce could at any time apply to the President for review by the Full Bench of the operation of the agreement. It is subject to a number of conditions, not the least being-I find this the most impertinent-whether the commissioner decides that it is in the interests of the individuals, in the interests of the parties to the agreement. I find it quaint that we have a government that pretends in every other sphere of society to be the defender of the rights of individuals yet the moment these individuals seek to exercise their rights in a very real way that goes to the heart of their daily lives the Government decides, on their behalf, that they are not capable of making judgments which best suit them in terms of their daily lives and endeavours and rewards and arrangements. This Government knows best. The truth is that it is not a matter of what this Government decides but what the Australian Council of Trade Unions (ACTU) decides, and that is reflected in this legislation. The first legislation of the former Minister for Industrial Relations, Mr Willis, was not satisfactory to the ACTU, so we now have a revised form. That is hardly a reflection of the aspirations of individual employees. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.15) —There were one or two points raised by Senator Chaney that I want to refer to quickly. First, let me make the point that in quoting from the article by Charlie Fitzgibbon he was quoting from what I certainly regard as an eminent source on industrial relations matters and a considerable contributor to the industrial relations debate. That is why he was chosen by the Government to be a member of the Hancock Committee and as a member of that Committee, his views are intruded very much into the Hancock report recommendations. The second point I make is that in talking about enterprise negotiations I said earlier that it was not possible for an enterprise union or single enterprise employer to create an industrial dispute within the meaning of the conciliation and arbitration power. I do not retract from that view at all. Senator Chaney says that the Opposition has the views of eminent Queen's Counsel on this matter. I think the views of Queen's Counsel are more likely to say that, in respect of these matters, the Opposition's amendments would be supported by the corporations power. Senator Chaney —That is additional. Senator BUTTON —I do not want to give legal opinions here. We do not get paid very much for them. I am prepared to assert with a fair degree of confidence that the enterprise bargaining referred to by Senator Chaney would not be supported by the conciliation and arbitration power. The other points I made and which I want to remind the Committee about relate again to the question of how control is maintained over aggregate wage outcomes without a process of certification of agreements. That is the distinction between the Government's amendments to clauses 115, 116 and 117 and the Opposition's amendments. One cannot, in our view, maintain a sensible situation in respect of aggregate wage outcomes-which I think is regarded by many commentators to be a success at the present period-in the context of the proposals made by the Opposition. There are a number of other reasons, which we touched on in the second reading debate, as to why the Government will not accept these amendments to the objectives. I say again that I understand the spirit behind them. But there are a number of very practical and philosophical reasons why those amendments are not accepted by the Government at this stage. Therefore we will not support them. Senator CHANEY(Western Australia-Leader of the Opposition)(9.19) —I want to respond to a couple of comments made by Senator Childs. I also omitted to respond to Senator Button's comments about aggregate wage outcomes. I regret that; it was an oversight on my part. I must say I found Senator Childs's contribution, which included a suggestion that we were ideological, a very ideological contribution. The suggestion that the policy we are pursuing requires workers to go into negotiations with their hands tied behind their backs is simply to ignore totally the content of both the policy that underlies the amendments and the amendments themselves. There is no hint of compulsion, no element of compulsion, in the policy proposals put forward by the Opposition. There is in fact a genuine widening up of freedom of action, which may be objectionable to Senator Childs and some others but is certainly regarded by the Opposition as important in terms of both principle and practical effect. It is possible for people in all parts of this process to behave in a peculiar way. The first negotiation that I had with the trade union movement was with the Printing and Kindred Industries Union (PKIU)-a union with which Senator Childs would be familiar, as it is perhaps a sister union to his own. It was a fascinating discussion, because that was a case where the union representatives with whom I was dealing quite overtly were not concerned about the welfare of the unionists. There was a most extraordinary exchange, which I would like briefly to repeat. It was when a new newspaper was being started in Perth; I was the corporate solicitor and for some reason I was told that I should go and deal with the PKIU, when it was causing difficulties in relation to the start of the newspaper. I went to the meeting with the PKIU feeling very puzzled, because we were paying rates of pay which were well above the award and we were providing working conditions which certainly were a far cry from the hot metal conditions with which I had been familiar as a copy boy at the old West Australian newspaper. This was one of the very early moves to offset very clean work. I met with representatives of the PKIU, together with a couple of journalists, and I said to them that I was puzzled because the conditions of the workers were excellent. However, the lead negotiator for the PKIU leaned on the table and said, `We are not here to talk about the conditions of the workers but we are talking about the power of this union.' That was the blunt way in which he put it. Senator Button —That is an old story. It must be if you were just a youngster. Senator CHANEY —It is an old story, and I might say that I told that story at the Victorian Industrial Relations Society. There was a PKIU representative there and he said, `Yes, we were just like that.' I have referred to that simply to illustrate the sort of silly behaviour that relates to the other side of the coin. It is that sort of behaviour which leads employees to think that there must be a better way to be represented. One can say that that is a very old example-and I think Senator Button makes the obvious interjection-but let me say that if Senator Button cares to go to Senator Cook's heartland in the Pilbara at the moment, he might be somewhat discouraged by what he finds at Mount Newman, where there has been a pathetic recurrence of disputes recently. I think there have been well over 100 disputes at Mount Newman. A few weeks ago, for example, there was supposed to be a two-month moratorium on disputes. It is a desperately inefficient operation because of the lack of use of equipment. The amount of downtime that occurs there is just pathetic, and it is because of bad industrial relations practices. Within a matter of weeks of the two-month moratorium having been declared further difficulties arose. There is a sense of desperation about the incapacity of a company to meet its contracts and obligations. That is not history; it is now. All I am saying is that in circumstances where that unreasonable side exists, it seems to me that one certainly runs the risk that employees will decide that there must be a better way of getting representation. In cases where the known and the tried and true organisations are on the ground and have the resources, it is a pretty poor show if they cannot present themselves as those most able to represent the employees' interests. All I am saying is that if the Government allowed a little freedom into the system, we would get to a situation where the economic incentive would point in the direction of correct behaviour, whether by the trade union officials, the trade union members or the employers. So, I totally reject Senator Childs's suggestion that this is some sort of doctrinaire thing. This policy is not extreme; it is simply saying that we want to open it up to more freedom. There are safeguards in the policy in respect of the payment of minimum wage levels related to awards, and so on, and people have the ultimate right to stay with what they know if that is the way they wish it to be. In terms of Senator Button's important issue on aggregate wage outcomes, a matter which was raised by Ms Williams in her article in the Australian Financial Review, the position is that in terms of the practical operation of the system, the policy makes it quite clear that both employers and employees may opt to remain within the system, and those employers-and there are plenty of them-who believe that they would not be capable of handling the wages situation would stay within the system. The 1986 policy acknowledged the nervousness of employers about this, because it actually restricted the freedom to go outside the system to small firms of 50 or less employees. But, of course, there has been a huge shift in employer understanding of their obligations in the industrial relations field. For example, the shift in the Business Council of Australia from 1986 to 1988 is very considerable and in the right direction. It is a very positive shift in terms of understanding the importance of management undertaking management of the work force as the top priority. There has been a great change, and there is not the widespread nervousness that there was in 1986. There is still nervousness, but it is not nearly as widespread. The situation is that only those employers who see that they have a capacity to carve out arrangements which will be more productive for them will want to go down that route, and that only employees who see that it would be more productive for them will want to go down that route. There is nothing compulsory in what we are suggesting. We are suggesting that people be given a chance to find their common economic interest and their best arrangements. We see this present system struggling towards a greater capacity to do that. We see the present system used at times to repress the natural economic forces that would lead to higher wages and a better profitability. That is why we are concerned to provide this other avenue through our policy. In terms of the aggregate outcomes, the situation is that aggregate outcomes will always be satisfactory if the micro outcomes are satisfactory. In other words, if one imagines a genuinely competitive sort of situation, a genuine sort of market situation, with a proper level playing field, where employers and employees come to economically sensible decisions or agreements, then provided the outcomes are rational at the micro level, the aggregate outcomes must also be rational. Senator Button —It does not necessarily follow that they will be. Senator CHANEY —I will get to that point-I just want to sketch the theoretical base first. The point is that if a firm can get together its work force and boost productivity, it can afford to pay much higher wages, because unit labour costs remain either lower or they flatten. Senator Crichton-Browne —That is presuming the premise on which they would grant increases. Senator CHANEY —One is trying to achieve productivity improvement which will pay higher wages and produce greater returns on capital. That is the objective we are after, and there should be common ground on that. It is not wage rises which are destructive. What is destructive is wage rises which are out of line with capacity to pay, with the productivity increases, and so on. We are not here to argue for lower wages. Surely, Senator Button is not arguing for lower wages for the sake of lower wages. Presumably, he wants what we want, which is higher wages-but we want sustainable higher wages. Senator Burns —Real wages. Senator CHANEY —Yes. What we want is a system which will promote, as far as possible, higher real wages. I refer back to what Charles Fitzgibbon had to say in 1986. He described so clearly the deficiencies of a system where a man who works badly is paid as well as the man who works well. He sketches in a very clear way the lack of incentive for improvement in our system. We are looking to the capacity of people to look for ways to improve their productivity, with a greater share of the profit and a greater share for the employees. For example, in relation to the South East Queensland Electricity Board-with SEQEB now being a buzz word for a negative reaction on the Labor Party's side, no doubt-it is worth examining what the people there were trying to achieve and what they are in fact achieving, namely, higher wages and lower electricity costs. Surely, that is the combination we are after. So, to get back to the matter of outcomes, what we are saying is that, ideally, provided we have a situation where the individual micro outcomes are right, then the macro outcomes will be all right. How does one ensure that? There are two points here. We are not suggesting that employers and employees be thrown to the wolves; we are saying that they should go into the market-place when it suits them-not otherwise. With respect to the centralised system, under which umbrella many will remain-perhaps they will all remain, but that is their choice and not ours-we sketch out that we would be pursuing the same sort of control of aggregate wage outcomes and so on as would be pursued by the present Government. Senator Button might jump up and say, `Aha, you will not have an accord'. Well, the accord has not always delivered what it said it would deliver. I concede that it has been an expression of the cooperation between the trade union movement and the Government. I accept that that has been a great strength for the Government. I believe that in the current situation we would have had as amicable an arrangement with the trade union movement-indeed, a more appropriate arrangement with the trade union movement-with respect to the approach that should be adopted in terms of wage rises and tax reductions. Senator Burns —You can tell tall stories. Senator CHANEY —I am simply saying that judgments will differ. But I would have thought, had I been not in opposition but in government over the last six or eight months, that the task I would have had would have certainly focused on the need to restrain aggregate wage outcomes. I would have been looking at the wage tax mix in a quite different way from the way that the present Government has chosen to do. I think the weakness of the accord in the present circumstances is that it has enabled the Government to get away with blue murder on the tax front. The reality is that Senator Childs's ex-colleagues in the trade union movement have been denied a tax cut until next year on a basis which I think is probably economically destructive in the longer term. I think the Government has got itself into a terrible bind about where it might be at the end of this financial year and moving into the next. Fundamentally, what I am saying is that those people who move out into the agreements area on the more level playing field that our totality of policy provides, with proper compliance provisions, voluntary unionism and all the rest of it, will not be upsetting the macro outcomes. We will have even stronger barriers between the agreement and the arbitrated sectors of the system. We had some discussions earlier tonight about the barrier this Government is erecting between registered agreements and awards. So we will be using much the same sorts of mechanisms. What we have to offer the work force in terms of gaining its support and cooperation is the prospect of a better future. We were really told off when we said that a lot of workers would like employee-share ownership as part of the sweetening of the system, the encouraging of common enterprise, common purpose and involvement. I am delighted that the Government has picked up that ball now. The majority of major corporations in this country have also picked up that ball and run with it. One has to look at the whole totality of approach when responding to the point that was made by Senator Button-how to control our aggregate outcomes. We do it by having a continuance of the centralised system with much the same disciplines as we have now-in fact with some additional disciplines. We will have an opting out process which will encourage a move to higher productivity which is the key to improved wages in a way which is not damaging to aggregate wage outcomes. That is a fairly discursive response to the point which was made by Senator Button. But I think he made an important point which, in a sense, is central to this debate. I am sorry that writers like Ms Williams are, in my view, a bit too mesmerised by what they see as the golden success of the accord. I would see a system which is delivering diminishing living standards and high nominal wage rises as pretty pathetic. In terms of outcomes I do not think the situation is very satisfactory. Senator HARRADINE(Tasmania)(9.34) —I agree with Senator Chaney that the accord has allowed the Government to get away with blue murder with respect to taxation cuts and that in fact we are moving to a situation next year in which it is possible that low income earners will not receive tax cuts and that the higher income groups will have their tax cut from 49c to 39c in the dollar. I can support what Senator Chaney said by referring the Committee to the fact that many people employed under existing Federal awards are on wages or salaries from which they have to sustain a number of dependants. This Government has ignored the plight of those middle income groups. It applies a taxing system which taxes their incomes without any regard to their dependants. That is one of the very major problems that we have to address in the forthcoming months. Amendment (4) put forward by Senator Chaney seeks to insert the following paragraph: `(ba) to encourage adherence to the rule of law in industrial relations; `(bb) to encourage direct dealing between employers and employees within each enterprise; `(bc) to minimise interference in relation to enterprises by persons or bodies who have no direct interest in those enterprises; and `(bd) to facilitate the consolidation of single enterprise bargaining units;'. In a perfect world there would be very little wrong and very few problems with that type of approach. Senator Chaney —Why are they not good objectives in an admittedly imperfect world? Senator HARRADINE —Because they will not work. They ignore the aspects of greed and self-interest. That is the problem. What is going to happen under this proposal in a period of high employment? We are going to get people who will agree in order to get a job. Senator Childs —Under duress. Senator HARRADINE —In fact, under duress they will agree to wage rates and conditions which are substandard. On the other hand, this will work against the employer in periods of high employment and very low unemployment. Demands will be made for standards of income and employment which are super for standards of income and employment and, which are super for employees but which will tend to create a two-class society. I think one thing of note that has occurred in the industrial scene over the years since 1904 when the Conciliation and Arbitration Act first became law is the recognition of the need to recompense employees for the work that they perform irrespective of where they are employed. I know that some differentials have crept into the system but, by and large, this system has worked reasonably well. It is a system which has worked almost irrespective of the structure of the trade union movement. People have attempted to suggest that the structure of the trade union movement is the problem. I refer honourable senators to the final report in October 1982 of the Senate Select Committee on Industrial Relations Legislation. Page 15 and subsequent pages of that report detail the history of moves from 1884 onwards to restructure the trade union movement in Australia. I do not intend to dwell on that matter, but it will be an interesting exercise for honourable senators to read the Senate Select Committee report. What we must understand is that it is not so much the structure of the trade union movement that is critical to the successful operation of any industrial relations system; it is the desire on the part of the parties to that system to see that it works. One of the problems that I foresee with Senator Chaney's proposition is that it will tend to undermine or make unworkable what appears to have been the objective of the Commission, the Government and, I believe, the Opposition over the last few years: that is, to provide incentive for restructuring and efficiency in awards of the Conciliation and Arbitration Commission and of the various State industrial tribunals. The latest judgment of the Conciliation and Arbitration Commission emphasised what it has termed the new structural efficiency principle. Under that new structural efficiency principle, the proposed award increase of 3 per cent and $10 is not available to any organisation that will not give an undertaking to the Commission to abide by the principle. That requires the trade unions to establish skill related career paths which provide an incentive to workers to continue to participate in skill formation; to eliminate impediments to multi-skilling and broadening the range of tasks that a worker may be required to perform; to create appropriate relativities between different categories of workers within the award and at the enterprise level; and to ensure that working patterns and arrangements enhance flexibility and meet the competitive requirements of the industry. There are a number of other requirements. The point that I am making here is that the Commission says, `You are not going to get a 3 per cent increase or a $10 increase unless you agree to abide by these provisions'. It is really only the registered industrial organisations that are capable, firstly, of giving that undertaking to the Commission in a formal sense and, secondly, of ultimately delivering on it, because it will be able to be delivered by the exercise of the rules of the organisation. If a group of shop stewards in a particular industry says to its union, `We are not going to abide by that rubbish; we are not going to abide by what the Conciliation and Arbitration Commission says', that puts in jeopardy the rest of the members of that organisation. Under the proposal that Senator Chaney put forward `to minimise interference in relation to enterprises by persons or bodies who have no direct interest in those enterprises', presumably the Federal executive, the Federal management committee or the national council of the relevant organisation may not even be able to exercise authority over the group concerned by the use of the provisions of its rules. Senator Chaney may not mean that; maybe I have misunderstood him. But I am very firm on the need for representative industrial organisations to be responsible and to be able to give the types of guarantees that the Commission has sought in its two most recent national wage judgments. I remind Senator Chaney that when there was full employment one of Albert Monk's greatest problems was with the shop steward organisations in the early and mid-1960s. I remember it well. I was on the Australian Council of Trade Unions executive. I see Senator Burns half smiling in his place. We were rather concerned about what was happening. It tended to be an anarchy. If we put this structure into place it might work to the disadvantage of the employees at this time, and during a period of high employment and low unemployment it could well work the other way. My view is that there ought to be a structure which enables a degree of flexibility-and I think the Government has gone far enough down that track-but emphasises the need for an egalitarian attitude to the work force so that we do not develop in Australia a situation which exists in some other countries, such as the United States of America, which have very highly paid groups and people doing the same types of work for very low pay. I come to the final point. What are we talking about when we talk about industry or enterprise? I believe that my comments here are as much a reflection on the Government's approach as they are on the Opposition's approach. Remember, I have stated, and I believe it to be correct, that it is not so much the structure of the trade union movement that results in a better industrial outcome; it is the desire of the parties to the system to see that it works and to see that orderly industrial progress is achieved. So I come to the point as to what people mean when they are talking about industry unions or enterprise unions. I suppose, being a State President of the Shop Distributive and Allied Employees Association and a member of the national council, it is all right for me to say that for the retail industry, `We will have anything that moves in the retail industry, thank you very much'. But our view in that regard may not be shared by some other people. For example, the Amalgamated Metal Workers Union may not share that viewpoint. In fact the Electrical Trades Union may not share that viewpoint. The TEMPORARY CHAIRMAN(Senator Colston) —Order! The honourable senator's time has expired. Senator CHANEY(Western Australia-Leader of the Opposition)(9.49) —I enjoyed listening to Senator Harradine. I just say to him that I am glad to have his agreement about the Government getting away with murder on middle income earners. I want to raise with the Committee Senator Harradine's suggestion that we need the system for restructuring. I think some would argue quite the reverse-that it is because of the system that we have such an urgent need for restructuring; that the system has delivered this complexity which is in so many cases counterproductive. I think most of us would welcome the attempts to reduce that complexity and to get a better situation for the employer and the employee that is inherent in the award restructuring arrangements being pursued in the metal trades area. One does not require the system to involve restructuring. I refer Senator Harradine to the description of what has been happening with respect to restructuring the South East Queensland Electricity Board (SEQEB) which is set out in the industrial relations and management letter, which is the title of the publication-volume 5, issue No. 7. It points out that there has been major restructuring within SEQEB as part of its moving out of the system. Indeed, it has the flexibility to make changes. I think that the other route is potentially just as valuable. I have absolutely no doubt-or as little doubt as one can have about these things-that the metal trades restructuring will produce substantial gains for employers and employees. I very much fear that what Senator Harradine quoted with approval from the most recent national wage case will prove in many cases, as indeed did some of the second tier negotiations, to be words rather than action. It is rather sobering to recall that the 3 per cent and the $10 rely not upon the parties acting upon the words read to the Committee by Senator Harradine, but simply involve an agreement to commence a process of discussion about it. That will make the next round terribly important. Indeed, it will make the approach of employers over the next 12 months terribly important to the extent to which they and the unions grasp the nettle of turning that agreement to talk into something which does mean something. I do not believe, I say in response to Senator Harradine, that it is an essential part of obtaining the restructuring we all seek that we remain within the system. Senator BURNS(Queensland)(9.52) —I find it difficult to see anything but hypocrisy in what Senator Chaney has said. I would like to be wrong, but he seems to show concern about workers being able to negotiate higher wages. As Senator Chaney was a member of a government which, in 1982-83, was responsible for a wage freeze which denied workers the opportunity to negotiate any wage increase, that statement seems to indicate a fair deal of hypocrisy. Senator Chaney talked about the difficulty of people negotiating substantial enterprise agreements, or registered agreements, within the Australian Conciliation and Arbitration Commission, given the current arbitration legislation and the amendments suggested by the Government. I say unequivocally that, under the present Commission legislation and the amendments offered by the Government, it is perfectly legitimate-and the opportunity is there-for negotiations to take place. What would prevent them from taking place, in terms of the level of wages and the standard of conditions that would be negotiated into those awards, would be the policy decisions of the Commission, in considering its responsibilities, including its community responsibilities, which would restrict wage levels or the national wage decision that it makes from year to year. It is total rubbish to suggest that the proposed Act denies these steps being taken: that is not true. Senator PARER(Queensland)(9.54) —Before Senator Harradine's time had expired, he asked: What is an industry union and what is an enterprise union? I am not one of those who would say that we should copy willy-nilly what might be good in another country, because we are a special country: we are different from other countries. But we can learn from other places. We are aware of the Australia Reconstructed document and the fact that the Australian Council of Trade Unions pushed very hard for fewer unions-super unions, if honourable senators wish. I warn this chamber about the danger and I will give an example. We are all very much aware, as would be the Minister for Finance (Senator Walsh) and the Minister for Industry, Technology and Commerce, who are in the chamber, of the problems in the coal industry. The coal industry would be the closest thing that I know of in this country to an industry based union. Yet it has a record second to none in regard to disputation and continued disputation. Senator Chaney —Forty times the national average. Senator PARER —I thank Senator Chaney. As a result, our reliability overseas has been tarnished. That reputation flows on to every other industry. I know that Senator Button is doing what he can to improve our exports situation, but that is a classic example of what can happen with an industry based union. I know that Senator Harradine has some strong views-he has spoken in this place after I have spoken on the matter-on closed shops and preference clauses. I will come to that later. The closed shop principle is an absolutely essential part, and has been for many years, of the industry, to the extent-it works both ways-that, if a union perceives a member to be recalcitrant, it can actually threaten him with the withdrawal of his ticket. Senator Burns knows all about that. Senator Burns —I have heard about it. Senator PARER —Often. Senator Burns —Not often. Senator PARER —Even though we should not copy exactly things that happen in other countries, we should look at those countries that have been successful. By far the most successful country-certainly since the war-has been Japan, followed by the Koreans who followed the Japanese system to a large extent. A former member of the Australian Democrats, Senator Siddons, was very much enamoured of the Japanese system. One cannot help but be enamoured of the Japanese system because it has been successful: that is the test. It is not a matter of saying, as some of the more left wing militant unions would say, that, if a country is successful it is QED; the workers are oppressed. One cannot say that in Japan. The Japanese have tightened their belt. They have worked hard. They are now getting the fruits of that hard work. Senator Burns —What about the spring offensive? Senator PARER —I have forgotten whether that was a spring offensive or a summer offensive. It was totally predictable and, if my memory is correct, it occurred only in certain industries. It was predictable, and that is the complaint that is made: one could predict it, forecast it and allow for it, so the machinery did not come to a grinding halt. I have made those remarks about what I perceive as the danger of having a few super unions and comparing those unions with the enterprise unions in Japan. Japan has a multitude of unions. In the main, they are associated with particular companies. They all kick in the same direction and that is what we need to do in this country. There must be a change of attitude. I said at the second reading stage of the Bill that I did not think this was contributing one iota to the attitudinal change that we need in this country. We need employees to work in the same direction as employers. We need a recognition that the productivity of organisations must increase, that we are on the world stage and that we are competing. I do not have to remind people that this is an economic war. Everyone needs to take the view that the success of a particular company depends on the productive efforts of everyone within that organisation. If it becomes productive, if we can get rid of some of the things that are still referred to as hard won gains and can get on to the world stage, everyone will benefit. Recently we saw the machinations that occurred in the coal mining industry. There was revulsion about getting rid of hard won gains and so on. Yet, by not getting rid of those restrictive work practices that were put in place over two or three decades, the workers were destroying their own jobs. Mines went out of business because they were unproductive. Yet that could not or would not be seen. That is the attitude that must be changed. Hence, this shows the sense of direction that we in the Liberal Party have taken towards the enterprise based unions so that people-men and women-are working in organisations. Again I refer to ex-Senator Siddons. He put this system into practice and it was very successful. In fact, he introduced a Bill in this place in an effort to encourage other organisations to follow his lead. Senator Burns —Members of the Metal Workers Union worked for him. Senator PARER —All I am saying is that it was successful. It was fought against by some unions which wanted to become big and powerful and take the decision making process out of the workplace, out of the coal face, that is a mistake. Senator Burns —He doesn't have an enterprise union. Senator PARER —He does have an enterprise union. Senator Burns —He does not. Senator PARER —In practice he has an enterprise union. I will give some other examples. I have heard Senator Button in the past refer to the success of Nucleonics, the Paul Trainor run organisation. I know that Senator Button is very proud of that and so he should be, so we all should be. Senator Button —Nucleus, it is called. Senator PARER —Thank you, Senator Button. It employs 400 or 500 people and is one of the greatest export examples that we need in this country. It is totally enterprise based. It supplies about 40 per cent of the world's heart pacemakers. I am saying that honourable senators should look at those successful organisation and learn from them. Another good example in my home State is Palmer Tube Mills Ltd., one of the growth organisations. Ross Palmer was on one of Senator Button's consultative committees. I am somewhat surprised that having seen the success of those particular organisations the Government has not taken notice of them. We need many more Nucleus organisations and many more Palmer Tube Mills. If we could achieve that in this country we would be out of a lot of the trouble that we are in. Senator Button —Tubemakers, too. Senator PARER —I do not know about Tubemakers of Australia Ltd. It used to have a lot of problems but it may have improved in recent times. I was talking about Palmer Tube Mills. Senator Burns —Members of the FIA; it is not an enterprise union. Senator PARER —It operates as an enterprise union. Senator Burns —No, it is not. Senator PARER —Senator Burns is wrong. He should go and see that organisation. It might not want to see him as he may scare the pants off it and destroy what is a productive organisation. I am saying that we need more of these organisations. That is the thrust of our policy and I think it is the direction in which this country needs to go in if we are going to change the whole attitude of people. I know it is going to be tough because there are a few people like Senator Burns wandering about who would prefer to see-- Senator Burns —I am not against productivity. Senator PARER —Would Senator Burns be prepared to trade some productivity for dollars? I have heard people from his side say that they will never trade productivity for dollars, because they would give up hard won gains. This is not entirely the problem but attitude is a major part of the problem. East is east and west is west and never the twain shall meet. The Government has a vested interest in doing that. It is not necessarily, and never has been, in the main an employer attitude. I would like to reinforce the remarks of Senator Chaney and state that I think this whole attitude of the structure of unions-the major key element of this Bill-is going in the wrong direction. Senator HARRADINE(Tasmania)(10.04) —I do not want anybody to get me wrong but I think everybody is going to rue the day we restructure the trade union movement. The proposed restructuring of the trade union movement will bring it down to 10 or 20 major industrial organisations. This will mean that there will be a greater possibility for those organisations, rich and powerful as they will be, to make their own decisions irrespective of what anybody else thinks and they will thumb their noses at central organisations such as the Australian Council of Trade Unions. I think that we will see some problems as a result of that. As we observed in the Senate Select Committee on Industrial Relations Legislation there is considerable doubt amongst the industrial relations community that unions' structures predominantly determine industrial relations outcomes. I think that is correct. Honourable senators should think about which companies are the most prosperous in Australia. They should think of Mr Elliott's company or Mr Bond's company. The brewing industry is probably one of the most profitable organisations in this country. What are the union structures there? Those companies have a multitude of unions. Senator Button —There is an insatiable demand for the product. Senator HARRADINE —That has nothing to do with union structures, I venture to suggest. Senator Chaney —Therefore, one should not be prescriptive. Senator HARRADINE —Senator Chaney has a point but we also have to have an authoritative group that will negotiate, having regard to the general effect that those negotiations are going to have on other members of the work force and other industries. I know what Senator Chaney is going to say. He is going to build a strong barrier between that sort of certified agreement-maybe it will not be a certified agreement-and consent awards or other awards. Senator Chaney —Clause 95 plus. Senator HARRADINE —I understand what Senator Chaney is talking about. The reality is that it is not going to work because if those organisations are going to achieve victories along the way it will seep inevitably into the system. I have a lot more to say but I do not propose to say it tonight. I think we have had enough discussion on this matter and I propose to sit down. Question put: That the amendment (Senator Chaney's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 34 —— Majority . . . . . . . . . 4 —— Alston, R. K. R. McGauran, J. J.Archer, B. R. Messner, A. J.Baume, Peter Newman, J. M.Bishop, B. K. Panizza, J. H.Bjelke-Petersen, F. I. Parer, W. R.Boswell, R. L. D. Patterson, K. C. L.Brownhill, D. G. C. Puplick, C. J. G.Calvert, P. H. Reid, M. E. (Teller)Chaney, F. M. Sheil, G.Chapman, H. G. P. Short, J. R.Crichton-Browne, N. A. Tambling, G. E. J.Durack, P. D. Teague, B. C.Hamer, D. J. Vanstone, A. E.Knowles, S. C. Walters, M. S.Lewis, A. W. R. Watson, J. O. W. Aulich, T. G. Harradine, B.Beahan, M. E. Jones, G. N. (Teller)Black, J. R. McKiernan, J. P.Burns, B. R. McLean, P. A.Button, J. N. McMullan, R. F.Childs, B. K. Macklin, M. J.Coates, J. Maguire, G. R.Collins, R. L. Morris, J. J.Colston, M. A. Powell, J. F.Cook, P. F. S. Ray, RobertCooney, B. C. Reynolds, M.Coulter, J. R. Sanders, N. K.Crowley, R. A. Schacht, C. C.Devereux, J. R. Sibraa, K. W.Devlin, A. R. Tate, M. C.Evans, Gareth Walsh, P. A.Foreman, D. J. Zakharov, A. O. Baume, Michael Bolkus, N.Hill, R. M. Gietzelt, A. T.MacGibbon, D. J. Giles, P. J.Stone, J. O. Richardson, G. F. Question so resolved in the negative. Senator CHANEY(Western Australia-Leader of the Opposition)(10.16) —I move: (5) Page 2, clause 3, line 14, before ``to encourage'' insert ``to provide for freedom of association, and''. Amendment No. (5) circulated in my name is another amendment to the object clause. Object (f) reads: to encourage the organisation of representative bodies of employers and employees and their registration under this Act; It is proposed that this should read: to provide for freedom of association, and to encourage the organisation of representative bodies of employers and employees and their registration under this Act. The additional point which we seek to insert is a point which I understand in a theoretical sense is much beloved of the Government. I was fortunate to be sent to Geneva by the Government to the International Labour Organisation (ILO) this year and I made the acquaintance of some members of the Department of Industrial Relations. One of the things I enjoyed most was going to the committee where member nations were being taken to task for their failure to live up to the ideals of the ILO-perhaps less the ideals than the conventions. The first experience I had of the ILO was listening to a very severe drubbing being given to the Polish contingent for its failure to honour the principles of freedom of association. I enjoyed it enormously. It actually removed some of my concerns about the ILO because I found the exchange very free, frank and highly critical. I forget the name of the senior employee representative-I am not getting much help from the officials who were also enjoying themselves in Geneva at the time-but the point is it was a forthright and highly critical attack on the Polish delegation about the limitations on freedom of association in Poland. I might say that the very good impression that was made was somewhat diminished when on the last day I listened to, I think, the Liberian delegation getting a caning about the conditions on Liberian registered ships. The force of this was somewhat broken by the fact that one of the delegates pointed out that this was the twentieth annual drubbing that the Liberians had received on this subject, which made me think that perhaps the severe admonitions that the Poles were receiving were not making as deep an impression as I had hoped. But the point is that the Government is committed to a series of both ILO and human rights conventions which pay respect to the principle of freedom of association. The actual reality in Australia is quite different because, in a number of respects, freedom of association is not respected in this country. There is de facto compulsory unionism. Certainly, I have seen plenty of places around Australia with the sign up, `No ticket, no start'. We are aware of the struggles that some people have had to withstand membership of a trade union. That is one side of the lack of freedom; the freedom not to associate if that is one's choice. No matter how much Ministers might say there is no compulsory unionism in this country there is, de facto, through the preference clause and through industrial muscle, the enforcement of the requirement of trade union membership in many circumstances. That is one element. The other element, of course, is that there is a very highly structured and controlled situation with respect to registered organisations. The Australian laws contain detailed provisions as to what is to happen if people wish to form new organisations and obtain registration for them or to break up or divide up existing organisations. The legislation which is before us now is no exception. It contains very rigid, strict controls on the organisations which can be formed or changed. In terms of freedom of association there is a very substantial inroad in this country in the sense that one may well find that although one wishes to form an organisation-one might have a group of workers who are perfectly of one mind about wishing to associate together in their common interest-the `conveniently belong' rule I think is one of the things that can be used to prevent one from forming an association in an area in which an existing registered organisation can claim that it can provide coverage. I think that there is an important question of civil liberties involved here. I put that in a category of its own. The question is whether we should have laws in Australia which prevent people from having the right to join or not join a trade union. I think that that can be looked at as an issue of individual freedom. We are very good at lecturing people around the world and lecturing each other on these subjects but in my view it is very hard to argue that a man or woman should be denied the right to join or not join. Perhaps I have put insufficient stress so far on that point. I think that the freedom of people to form associations and join them should be a matter that one is just as passionate about as their freedom not to join. There tends to be on our side of politics for natural reasons a preponderance of concern about the right not to join when one is an unwilling conscript. But, of course, the theory on which we operate and the practical basis on which we operate is that there ought also to be freedom for people to join trade unions. One of the disappointments of the collapsed human rights debate in the chamber when the Government withdrew the Bill was that we were looking forward to inserting into the human rights legislation a guarantee that people were free to join and not to join trade unions. We thought that that would have been an interesting test of the Government's bona fides in respect of that legislation but, unfortunately, the Government whipped it out from under us. However, to turn from the question of civil liberties-I do not wish in any sense to appear to make light of the question because I think it is fundamentally important to the economic side of it-it seems to me, to go back over some of the discussion we have had in the course of this evening, that in terms of encouraging productive relationships within Australian workplaces there are huge advantages to be gained in having a greater degree of freedom to form such associations as would contribute to the welfare of the parties involved within an enterprise rather than their being conscripted or forced to join organisations which have interests which are not necessarily the same as the interests of those parties. I should stress that the Opposition is not seeking to be prescriptive. One might look at the Vehicle Builders Union as a fascinating example of an industry union which has within its structure adopted an approach which gives it a lot of the advantages of an enterprise union. The approach seems to be one in which one gets the overriding servicing capacity of a large industry union and yet, in terms of the plan manufacturers, as I understand it, there is an award within each plan manufacturer. I suppose that is something that is not the same as but which reflects some of the pattern in the United States where a large industry union or, indeed, a large craft union will have local branches which in many respects are self-sufficient, except for major issues, and which might receive servicing from the overriding union structure. We are not saying that we would wish to interfere in any way with a structure such as the Vehicle Builders Union. Indeed, we would not seek under our proposals to adopt a prescriptive view at all. We are genuinely providing opportunities for people to form organisations in the pattern that they themselves want. We believe that the whole of the modern economic process will tend to mould those organisations into organisations which are more suitable rather than less suitable to the economic interests of both sides of the equation. We do not leave it completely at large. We are not totally pure in our approach in the amendments we have put forward. We do not give complete unsullied support to the principle of freedom of association because we do, in so far as there are registered associations, retain a supervisory role in respect of the Conciliation and Arbitration Commission just to advance the interests of producing single enterprise bargaining units as far as possible. That is the sole basis of public interference that we provide to the principle of freedom of association in respect of registered organisations. With respect to the balance of the system-the system which operates outside the Conciliation and Arbitration Act-we are proposing genuine and complete freedom of association. In other words, there would be no public control over the associations which were formed within organisations that were choosing to regulate their industrial relations by agreement. We think that the economic pressure would be towards single bargaining units. That would vary a lot. For example, in a public hospital one might well find a situation in which people chose to associate in the various sorts of professional categories that exist within a hospital with a wide range of professions. In other words, again we are not prescriptive about that. I suppose that one of the fascinating representations that came to me in the course of considering this legislation was that made to me by, I think, the Ambulance Union. It may have been called the Ambulance Drivers Union; I do not remember the precise title. That was an example of a small group that had actually been part of a larger organisation. What that group said to me was: `We were just being used as an industrial battering ram. We were all the time having industrial disputes. We are now a separate small union but, in fact, we have an amiable and, in our view, productive and constructive relationship with our employers. We feel that it is a much more satisfactory situation'. That is the sort of anecdotal situation, if one likes, of the virtue of giving people the freedom to form organisations that will suit them and their economic requirements. Therefore, we think that this is an important principle on two separate but related efforts. We have glasnost and perestroika in the Union of Soviet Socialist Republics because the truth is that economic progress probably is only possible for the Soviet Union if there is greater freedom. That might be a very extreme comparison to draw but I think that in those countries that cause Senator Button's brow to furrow when he looks at the problem of our becoming internationally competitive it would probably be genuinely true to say that there is more freedom rather than less when we compare their industrial relations arrangements with our own. That is not universally so but I think that would probably be a fair generalisation. Therefore, we see that there is a civil liberties argument which is important and there is a basic issue of freedom, the rights of the men and women of Australia that we wish to assert and protect better than the existing law and this Bill would provide. We see that as being very much in the economic interests of Australia as well. The TEMPORARY CHAIRMAN(Senator Teague) —Order! It being 10.30 p.m., under sessional order I put the question: That the Temporary Chairman do now leave the chair and report to the Senate. Question resolved in the affirmative. The Temporary Chairman having reported accordingly- The PRESIDENT —Order! It being 10.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Senator SHORT(Victoria)(10.30) —I want tonight to say a few words about the Victorian election campaign. It is a campaign that has been highlighted by a series of dirty tricks, on the part of the Cain Labor Government, that is unprecedented in Victoria's history. One can only imagine what is going to eventuate between now and the election on Saturday. I want to mention particularly one dirty trick that arose today. It is part of a pattern that has emerged over the last week. The first dirty trick occurred a week or so ago when an advertisement was shown on television in which the Premier pledged that the typical Victorian family will not pay $1 more over the next four years for electricity, gas and public transport charges, sewerage and water rates. That is simply not true if one can believe the content of the prospectus that was put out by the Victorian Treasurer, Mr Jolly, when he launched the Victorian Equity Trust several months ago. From that prospectus it is clear that the typical Victorian family will pay an extra $496 over the next four years from September of this year in electricity and gas charges and Melbourne and Metropolitan Board of Works rates. The Government is claiming that from those increases should be deducted the promised increase in the Victorian education allowance. But I quote from the relevant Budget Papers, which show that that allowance has always been intended to assist the family to meet, at the beginning of the school year, various expenses associated with school attendance. I take that quotation from page 9 of Budget Paper No. 2 in the 1987-88 Budget. But even if one did take into account the education allowances that have been promised, the typical family would still pay more per year than is now the case. Therefore the pledge by Premier Cain is blatantly incorrect. That was the first of the dirty tricks that appeared in the last week. Another one occurred shortly after, with the Premier's letter to voters in several marginal electorates in Victoria. That letter claimed, among other things, that the Government has `halved motor registration fees and that motor registration fees will be abolished from 1 July 1989'. That also is a statement that is blatantly not true. The Government's undertaking to reduce and abolish registration fees relates only to renewal fees for motor vehicles and then only to private A class registered cars and cars owned by pensioners. All people have still to pay the registration fees on the purchase of a new vehicle, and except for those categories that I just mentioned they will still have to pay renewal fees as well. The Premier's letter also claimed that the Government `has got rid of stamp duty for low income earners'. That again is blatantly not true. I point out that it was a commitment made in the 1988-89 Budget which has not yet been passed, and even before it has been passed in the Parliament it has been trampled on by the Government as completely out of date. In the Budget statement it is said that stamp duty will be abolished where three conditions are met. The first is where the property purchased is valued at $100,000 or less. The second is where the purchaser or purchasers meet the income test under the Commonwealth's first home owners scheme. The third is where the purchasers have dependants. None of those three conditions was mentioned in the letter that the Premier sent to voters in marginal electorates. I believe that that is a disgraceful example of yet another dirty trick by this Government in a dirty tricks campaign which is, as I said, unprecedented in Victoria's history and which now builds on a very long history of this type of activity by the Australian Labor Party in electioneering. The classic example that one recalls in recent history was the Nunawading how-to-vote scandal at the last State election-a scandal which has scarred and tarred the Labor Party for years to come. The third dirty trick that I want to mention occurred today. On public buses in Melbourne today `Support Public Transport. Return the Labor Government' signs appeared on vehicles running around, owned by the Government and operated by the Metropolitan Transit Authority. Those slogans were apparently put on the buses by the transport unions. If the Metropolitan Transit Authority gave the unions permission to do this, obviously the Authority stands condemned for a blatantly political act. Signs on public transport are always regarded as advertising and must therefore be paid for, unless they are specifically a community service advertisement. This slogan by the transport unions is obviously not a community service advertisement, so I want to know whether the unions paid for these signs. If so, were the unions charged normal commercial rates? If not, on what basis was permission given to have these blatantly political signs placed on public transport vehicles in the city of Melbourne? If the Metropolitan Transit Authority did not give permission for this advertising, it must immediately have all the signs removed. If this is not done, there could be no clearer indication that the Metropolitan Transit Authority in Victoria is improperly exercising a blatant pro-Labor political bias. To me this is a matter of extreme importance. It is a disgrace that a public utility can be used in this way in the week running up to a vital State election to so blatantly propagandise the political fortunes of a party which has been in power for 6 1/2 years and has brought the State of Victoria virtually to financial bankruptcy by indulging in huge expenditure on matters such as public transport, despite the fact that it is running at a horrendous loss each year. When all those things are considered, the idea that this type of activity can be allowed to pass without the greatest condemnation and action being taken to correct it is a further example of the extent to which the Cain Labor Government in Victoria has allowed all standards of integrity and morality in politics to slip. Senator ALSTON(Victoria)(10.40) —I draw the attention of the Senate to the affairs of the Morwell Migrant Resource Centre. This centre has been operating for quite some time but in recent months there have been a number of matters of serious concern not only to members of the migrant community in the Latrobe Valley but also to the citizenry at large. Of paramount concern at present is what can be described only as either woeful and wilful ignorance on the part of the local Federal member, the honourable member for McMillan (Mr Cunningham), and the outgoing State member, Ms Callister, or indeed a cover-up of the financial affairs of the centre. I will recite the sorry litany of events that have occurred in recent weeks. The first matter that came to the attention of the public was expression of concern by the centre's treasurer that all was not well. Subsequently, the Liberal candidate, Mr Norman Olsen, was invited to look for himself and ascertain whether there were matters of genuine concern. Having looked into the matter, I say that Mr Olsen acted with responsibility and sensitivity. He offered to meet with the chairman of the centre, Mr Don Ferguson, and to sit down with the board of management and act as a liaison person between management and the migrant community. He ultimately called for an inquiry into the running of the centre but was met merely by howls of denunciation and allegations on the part of Mr Cunningham that this was simply a politically motivated attack. By that I presume he meant that there was no substance to the allegations and that Mr Olsen was simply attempting to make use of the community concern for political purposes. The facts are quite contrary to that and I regard Mr Cunningham's behaviour as quite outrageous in the circumstances. What has now come to light is that not only have these concerns been expressed over a period of months but also they were brought to the attention of both local members, who did absolutely nothing about them for a period of some weeks. It was only then that Mr Olsen was called in. What has not been revealed to date and what I think is of very great concern is that, despite the suggestions that somehow there was nothing other than an attempt at a political beat-up, that really there was nothing that need trouble the scorers, that really there was only a personality conflict, in fact a Commonwealth auditor was brought in to investigate the financial affairs of the centre. He came down from Canberra on the 19th of this month and examined the books. He found a number of very serious irregularities. In particular, he made a clear finding that the centre had been receiving more funds than it needed and made a deliberate decision that funds should be cut back, that payments should be made only on a monthly basis, and that all moneys needed to be banked in Canberra and not locally. It is a matter of particular concern that the auditor for the centre happens to be a local accountant and also a member of the board. I would have thought that was a classic example of a conflict of interest. One expects the auditor of any organisation, let alone one that is funded by government, to have some degree of arm's length impartiality and to make judgments not affected by his own position in the matter. But the auditor was very intimately involved in the affairs of the association and clearly not wanting to have the matter become publicly known. Indeed, the Commonwealth auditor found that there were a number of other matters of serious concern, in particular that the centre had very high travelling expenses paid quite indiscriminately to members of the board. There was no proper documentation. Any person wishing to travel to Melbourne was simply given $100 cash and there was no requirement for any accountability. Income received was not always recorded in the books, quite contrary to any normal accounting practices. There was no mention in the books of the centre of a bank account containing in excess of $2,000-in fact $2,168. The auditing procedures left a lot to be desired. There were a number of pay slips which were not signed; employees were paid in cash. Cleaning had been done by two employees who had also been paid in cash but payments had been recorded in fictitious names and no signatures had been obtained. It is quite clear that the affairs of the centre are an absolute disgrace, that there is a great deal of financial and other skulduggery going on. It has been the deliberate design of the local members of parliament and, indeed, those associated with the conduct of the centre to try to keep the lid on its affairs, at least until after the State election. One can think of no other motivation because quite clearly there is a very urgent need for the affairs of the centre to be properly and impartially investigated. Belatedly, the board of management is now suggesting that somehow it had requested that the books be inspected by an independent Commonwealth auditor, Mr Ka-Lee. The reality is that Mr Ka-Lee was brought in quite independently because of a number of matters that have now been shown to be valid. The Victorian community in particular needs to be made aware of the cynical manipulation of this issue not by the Liberal candidate, Mr Olsen, but indeed by those who ought to have been in a position to know better, people who have made allegations of political motivation when in fact that can be the only explanation for their desperate desire not to have these matters aired in public. In conclusion, I believe that there is an urgent need for the report of the auditor to be made public. There also needs to be a full public inquiry into the affairs of the centre. Senator REID(Australian Capital Territory)(10.47) —I shall be brief at this hour with the matters I wish to raise concerning the provision of legal aid and funding for it. I refer particularly to a press release of the Law Council of Australia headed `Legal Aid' which was issued on 15 September 1988. To save going through the press release in the detail that I otherwise might, I shall seek leave to incorporate it in Hansard. Leave granted. The document read as follows- LEGAL AID The President of the Law Council of Australia, Mr Denis Byrne, said today that if urgent action was not taken soon, legal aid would cease to be available to many deserving applicants. The need for such action had arisen because of the inadequate provision made for legal aid in the recent Budget. Funding had been maintained at present monetary levels only, which meant a substantial reduction in real terms. Mr Byrne said the Commonwealth appeared also to be endeavouring to pass some of its responsibility for funding legal aid to the State Governments. There was a real danger that persons in need of assistance would be `the meat in the sandwich'. Mr Byrne said the matter was of increasing concern to the legal profession, which remained prepared to make its fair contribution to society in this area. ``The profession is already undertaking extensive legal aid work on the basis that less than normal charges will apply,'' he said. ``However, the situation has now been reached where the profession is being expected to do this work at rates that are unrealistically low. ``One consequence is that many practitioners simply cannot afford to undertake legal aid work. There are, however, other undesirable consequences for the integrity of the administration of justice. ``In the area of prosecutions, for example, an unacceptable position exists in that counsel engaged by a legal aid body are being paid so much less than the scale being paid to counsel for the prosecution that questions arise in regard to inequality of representation. Legally-aided persons should not be placed in a worse position than other litigants. ``The Commonwealth must face up to the need to make adequate provision for legal aid, and it should be accepted that the funding of legal aid is a proper charge on consolidated revenue. However, there is in addition a need to make the legal aid dollar go further and all ways of achieving this must be explored. ``In particular, there is a need for some drastic cost cutting to be undertaken by the Legal Aid Commissions. The Law Council is concerned that the Commissions are using valuable funds in supporting costly administrative procedures. There should be more concern to ensure that the funds are used to assist deserving applicants for aid. Bureaucratic arrangements for providing legal aid tend to be inefficient. ``The Law Council is also concerned that aid is being provided to support some proceedings that have no merit. This is a wastage that cannot be condoned. There should be a more rigorous examination of the merits of applications and the assistance of private practitioners for this purpose should be availed of. The profession stands ready to provide this assistance. ``Another way to make the legal aid dollar go further is to insist on recipients of legal aid contributing more to the cost of their proceedings. ``Court procedures must also be examined to eliminate the need for unnecessary action. The Law Council will be giving close consideration to this aspect of the matter. A committee will also be examining the scope for alternative methods of dispute resolution. However, the courts themselves and the Governments must take their own initiatives.'' 15 September 1988 Further information: Trevor Bennett (062) 47 3788 Senator REID —Legal aid is an important part of the judicial system. The funding for it must be adequate to ensure that those needs are met and that those who need aid to get before the courts are able to get it on a proper basis. The press release I have incorporated refers to the need for there to be a fair return for solicitors and lawyers who provide service. These days, in many instances, there are solicitors who no longer will work in the area because the return is so low as to make it quite impractical. For many years, and certainly during the time that I was more familiar with it, legal aid work was done at a considerable discount but reasonably happily by those who participated. In many instances, that is no longer the case. We find instances in which a person defending someone is being paid effectively with Commonwealth money at a much lower rate than the person who is prosecuting. There are anomalies of that kind in the system. The imbalance in that area needs to be looked at closely to ensure that there is some real balance and fairness in the representation that is made available. This press release refers to administrative waste. I refer briefly to a matter I have raised previously in the Senate of aid being granted for cases which really are of academic interest only. The case I am thinking of related to a man who was in gaol, having been convicted of murder. He was subsequently convicted of a couple of other murders and wished to appeal in relation to them, the very pedantic issue being whether the offences had occurred on this or that side of the Australian Capital Territory-New South Wales border. Had it been found to be one or the other-whichever was relevant-it made not the slightest difference to whether or not he stayed in gaol. Allowing the matter to proceed to the High Court seemed to me to be a luxury; the legal aid money really ought to have been saved for some other purpose. I suspect that there are other anomalies of a similar kind. The Law Council refers to its commitment to looking for alternative methods. It calls upon the Government to do so as well. I add my voice to that and hope that there will be a review of legal aid to see that it is administered and provided in the best possible way. Senator COOK(Western Australia-Minister for Resources)(10.50) —Three speakers from the Opposition have spoken in the adjournment debate tonight, and I think that exhausts the list of prospective speakers. On behalf of the Government, perhaps I can say to Senator Reid that I have taken an interest in the things that she has said. I am aware that there are always complaints in relation to the administration of legal aid. One never hears of the approval or the appreciation that is expressed, because that is often done privately. However, I will ensure that the matters that Senator Reid has raised are referred to the appropriate Minister, and if he wishes to further comment on those matters, he will no doubt do so. I must say that the adjournment debate tonight has been used by Senators Short and Alston as an opportunity to try to beat up some interest in the Victorian State election campaign-and here we are with this occurring on the Tuesday before the poll on Saturday. Rather than hearing this rather nebulous, sorry and transparent litany of complaints from those two senators, I would have expected to see perhaps Senator Grant Chapman rise to his feet and make an explanation as to why he sought registration as a business agent for business migration programs, or I would have expected to see senators opposite standing, and distancing themselves from the actions of Senator Alston, to make it clear that they do not want there to be any confusion in the mind of the public in Australia or overseas about the role of senators and about the role of business migration. However, we did not hear any of that, and I guess that in itself that is a reflection on senators opposite. We heard from Senator Short a beat-up of the worst sort about the Victorian election campaign, where he accused Premier John Cain of misleading Victorians. Senator Short cited what he said was a series of statistics to prove that. I think it needs to be said that Premier Cain enjoys the highest reputation for political integrity in office. It is not something that any of his political foes would ever seek to take issue with. Indeed, when Mr Sinclair on a public occasion said of Premier Cain: `Is this the sort of man you would trust your daughter with?', there was such a public outcry in defence of Premier Cain's integrity there was no argument but that the conservatives who adhered to the Sinclair view lost considerable credibility in the eyes of the electorate. As to the sorts of examples that Senator Short has given, I am not at this moment and in these circumstances able to rebut them exhaustively, but I do say, however, that the Government does not accept them. We are aware that, under the present State Labor Administration, Victoria has enjoyed the highest level of economic growth of any of the States in the Commonwealth, that it has a very high level of employment, a growing level of employment, and that it is marked as a State exuding a great deal of political stability and economic growth-which rewards all of its citizens in as fair a way as one can expect in a Westminster parliamentary democracy of the sort that we have in Australia. This must be contrasted with the situation in New South Wales, where, indeed, the Greiner Government did what Senator Short is now accusing Premier Cain of doing. Shortly after the Greiner Government came to power, it broke, in a completely arrogant way, the promises that it had made about not increasing State Government taxes and charges. It broke those promises bare facedly and in direct repudiation of its previous electoral undertakings. That has not happened in Victoria under Labor, but it has happened in New South Wales under the Liberals. It stands as a great disgrace in terms of the political situation in New South Wales. The situations in the two States are not directly comparable. While we have heard no mention by Senator Short of the Greiner reversal, we now have a fairly transparent cobbling together of a series of baseless statistics aimed at trying to prove a case that does not stand up, in an attempt to besmirch the Cain Government. It is a fairly sorry effort and one that must be put down as such. Senator Alston went one step further. Based on a concern that he expressed about the Morwell Migrant Resource Centre, he has tried to besmirch the reputation of a very fine member of the House of Representatives, the honourable member for McMillan, Barry Cunningham. I do not know whether Senator Alston gave the honourable member for McMillan notice that he was going to do this, but before attacking a member in this way such a courtesy ought to be extended. However, I think the honourable member for McMillan will find an appropriate way to respond to those remarks. The Government does not accept any of the allegations. Question resolved in the affirmative. Senate adjourned at 10.55 p.m. The following papers were tabled: Australian Bureau of Statistics Act-Australian Bureau of Statistics-Proposals 1988- No. 10-New topics to be included as supplements to the labour force survey. No. 11-New topic to be included as a supplement to the labour force survey: Superannuation. No. 12-Monthly collection of statistics on materials used in mining operations. Australian Capital Territory Supreme Court Act-Rules of Court-Statutory Rules 1988 No. 221. Australian Meat and Live-stock Corporation Act-Order-1988 No. MS13/88-Carriage of meat by sea to Canada and the United States of America, dated 31 August 1988. Australian National University Act-Statutes- No. 200-Academic Progress (Repeal and Transitional Provisions). No. 201-Enrolment, Courses and Degrees Amendment No. 24. Bounty (Agricultural Tractors and Equipment) Act-Return, for year 1987-88. Bounty (Bed Sheeting) Act-Return, for year 1987-88. Bounty (Berry Fruits) Act-Return, for year 1987-88. Bounty (Books) Act 1969-Return, for year 1987-88. Bounty (Books) Act 1986-Return, for year 1987-88. Bounty (Commercial Motor Vehicles) Act-Return, for year 1987-88. Bounty (Computers) Act-Return, for year 1987-88. Bounty (High Alloy Steel Products) Act-Return, for year 1987-88. Bounty (Injection-Moulding Equipment) Act-Return, for year 1987-88. Bounty (Metal Working Machine Tools) Act-Return, for year 1987-88. Bounty (Metal Working Machines and Robots) Act-Return, for year 1987-88. Bounty (Printed Fabrics) Act-Return, for year 1987-88. Bounty (Ship Repair) Act-Return, for year 1987-88. Bounty (Ships) Act-Return, for year 1987-88. Bounty (Steel Mill Products) Act-Return, for year 1987-88. Bounty (Textile Yarns) Act-Return, for year 1987-88. Broadcasting Act-Regulations-Statutory Rules 1988 No. 225. Christmas Island Act-Ordinance-1988-No. 4-Casino Control. Civil Aviation Act-Regulations-Orders 1988- Part 104 Amendments- AD/ECUREUIL/22 Amendment 4-Tail Rotor Blade Assembly. AD/F27/115 Amendment 1-Wing structure-Skin splice WS 7915. AD/ML-M4/15 Amendment 4-Retirement of life fatigue critical components. AD/ML-M5/9 Amendment 1-Retirement of life fatigue critical components. AD/ML-M7/1-Amendment 1-Retirement of life fatigue critical components. AD/TFE 731/15 HP Turbine Rotor Disc. AD/BELL 244/4-Horizontal stabilizer assembly. Copyright Act-Declarations (3) by the Attorney General under paragraph 10a (1) (b), dated 1 September 1988. Defence Act-Determinations 1988- No. 1-Superannuation Interim Arrangement. No. 43-Travelling Allowance. No. 44-Travelling Allowance and others. No. 45-Submarine Service Allowance and others. No. 46-District Allowance and others. No. 47-Travelling Allowance. No. 48-Long Service Leave. No. 49-District Allowance and others. No. 50-Overseas Living Allowance and others. Nos 51 and 52-Travelling Allowance and others. No. 53-Overseas Living Allowance and others. No. 54-Unpredictable Explosives Allowance and others. Excise Act-Declaration 1988-No. 2-Rebate and amount of rebate in respect of Bass Strait Oil, dated 31 August 1988. Federal Court of Australia Act-Rules of Court-Statutory Rules 1988 No. 217. Fertilizers Subsidy Act-Return, for year 1987-88. Fisheries Act-Fisheries Notices-No. 215-South East Trawl Fishery and East Coast Trawl Fishery-Revocation of Fisheries Notice No. 213-Re-opening of gemfish fishery, dated 9 August 1988. Judiciary Act-Rules of Court-Statutory Rules 1988 Nos 218 and 230. Lands Acquisition Act- Land etc., acquired for: Aviation purposes-Botany Bay, NSW, Mascot, NSW and Cribb Island, Queensland. Australian Wool Corporation purposes-Botany, NSW Marriage Act-Regulation-Statutory Rules 1988 No. 223. Meat Inspection Act-Regulation-Statutory Rules 1988 No. 227. National Parks and Wildlife Conservation Act-Regulations-Statutory Rules 1988 Nos 226 and 232. Navigation Act-Navigation (Orders) Regulations-Marine Orders 1988- No. 3-Part 3 (Seagoing Qualifications). No. 4-Part 6 (Marine Qualifications-Radio). No. 5-Part 9 (Health-Medical Fitness). No. 6-Part 2 (Fees). Nitrogenous Fertilizers Subsidy Act-Return, for year 1987-88. Petroleum Retail Marketing Sites Act-Regulations-Statutory Rules 1988 No. 222. Phosphate Fertilizers Subsidy Act-Return, for year 1987-88. Public Service Act- Determinations 1988-Nos 100, 140, 146, 165, 175, 180-184, 186, 188, 189-192, 194-196, 198-200, 202-204 and 206. Regulation-Statutory Rules 1988 No. 224. Radiocommunications Act-Guidelines-Statutory Rules 1988 No. 228. Radiocommunications (Receiver Licence Tax) Act-Regulations-Statutory Rules 1988 No. 219. Radiocommunications (Transmitter Licence Tax) Act-Regulations-Statutory Rules 1988 No. 220. Seat of Government (Administration) Act- Determination under the Community and Health Service Ordinance, dated 23 August 1988. Ordinances 1988- No. 53-Taxation (Administration) (Amendment) (No. 3). No. 54-Taxation (Administration) (Amendment) (No. 4). No. 55-Stamp Duties and Taxes (Amendment). No. 56-Stamp Duties and Taxes (Amendment) (No. 2). No. 57-Electricity and Water (Amendment). No. 58-Architects (Amendment). No. 59-Health Professions Board (Procedures) (Amendment). No. 60-Health Professions Boards (Elections) (Amendment). No. 61-Nurses. No. 62-Nurses (Consequential Amendments). No. 63-Rates and Land Tax (Amendment). No. 64-Long Service Leave (Building and Construction Industry) (Amendment) (No. 3). No. 65-Schools Authority (Amendment (No. 2). No. 66-Housing Assistance (Amendment). No. 67-Lakes (Amendment). No. 68-Traffic (Amendment). No. 69-Apprenticeship (Amendment). No. 70-Motor Traffic (Amendment) (No. 7). No. 71-Noise Control. No. 72-Casino Control. Regulations-1988-No. 16-(Long Service Leave (Building and Construction Industry) Ordinance). Subsidy (Cultivation Machines and Equipment) Act-Return, for year 1987-88. Subsidy (Grain Harvesters and Equipment) Act-Return, for year 1987-88. Superannuation Act-Regulations-Statutory Rules 1988 Nos 229 and 231. World Heritage Properties Conservation Act- Notice of Consent pursuant to section 9, dated 12 September 1988. Governor-General's Proclamations-Commencement of Act: Proclamations by His Excellency the Governor-General were tabled, notifying that His Excellency had proclaimed the following Acts, sections and parts of Acts to come into operation on the dates specified: Anti-Dumping Authority Act 1988-1 September 1988 (Gazette No. S217, 27 July 1988). Australian Horticultural Corporation Act 1987-Parts II, IV, V and VII-1 August 1988 (Gazette No. S216, 27 July 1988). Fisheries Amendment Act 1987-All provisions other than sections 1 and 2, paragraph 15 (a) and section 16-2 August 1988 (Gazette No. S230, 2 August 1988). Horticultural Levy Act 1987-1 August 1988 (Gazette No. S216, 27 July 1988). Horticultural Research and Development Corporation Act 1987-Part II-1 August 1988 (Gazette No. S216, 27 July 1988). Insurance (Agents and Brokers) Act 1984-Section 12-1 August 1988 (Gazette No. S221, 29 July 1988). Mutual Assistance in Criminal Matters Act 1987-All provisions other than sections 1 and 2-1 August 1988 (Gazette No. S225, 29 July 1988). Mutual Assistance in Criminal Matters (Consequential Amendments) Act 1987-1 August 1988 (Gazette No. S225, 29 July 1988). Parliamentary Precincts Act 1988-All provisions other than sections 1, 2, 3, 4, 7 and 11 and the amendment of the Parliament House Construction Authority Act 1979, made by the Parliamentary Precincts Act 1988-1 August 1988 (Gazette No. S229, 1 August 1988). States Grants (Petroleum Products) Amendment Act 1985-Subsection 3 (1) and Section 4-1 September 1988 (Gazette No. S245, 24 August 1988). Telecommunications (Interception) Amendment Act 1987-All provisions other than sections 1 and 2, section 5 (other than paragraph 5 (1) (b)) and sections 6 and 8-1 September 1988 (Gazette No. S256, 31 August 1988).