1998-06-233817SENATE374101998-06-23The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 2.00 p.m., and read prayers.Questions Without Notice374137413741West, Sen SueSenator WEST1X4NSWALP00—My question is to the Minister for Social Security, Senator Newman. I ask: can the minister inform the Senate how many of the 1,300 Centrelink customers whom she stated yesterday had been paid incorrectly were overpaid rather than underpaid? Can the minister inform the Senate of the value of these overpayments and whether or not they have been recovered? Can the minister also guarantee that the many honest people who reported their overpayments will not be classified as welfare cheats in the minister's next triumphant quarterly fraud and compliance report?3741Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—It is clear that the opposition is not very keen to have documented on a regular basis the good stewardship of this government in terms of the abuse of the social security system.Opposition senators interjecting—BE4Senator NEWMAN—Once again, Madam President, I can see that Senator West's colleagues do not want her to hear the answer. The fact is that there are very important reasons for making sure that the social security system does not fall into disrepute with those who pay for the system. Therefore this government has committed itself to making sure that people do not get paid more than they are entitled to, nor do they get paid any less.The Newstart common platform, which I answered questions about yesterday—the new IT system which is year 2000 compliant and which is going to be much more effective in giving immediate implementation to clients' needs compared with the longer processing that was involved with the system it has replaced—is going to mean a much better arrangement for people in the future. Nevertheless, it is correct to say—as I said yester day—that there have been some glitches with the new information technology system which are being worked on and ironed out as they go along. I congratulate those Centrelink staff who are working so hard to get the new system in place very quickly.I am concerned, as obviously Senator West herself has been, to make sure that people who got overpaid do not get included in any statistics of people who have broken the social security law. These people have not, and they will not be included. Centrelink has given me the undertaking that they can be extracted and not produced in the figures for this quarter, which is, of course, the quarter to the end of June.I do not believe I have the numbers of over and under, Senator—I may; if I have, I will let you know later—but certainly there were some people who were paid more and there were some people who were paid less than they were entitled to. I know that Centrelink is very sorry that people have had the inconvenience, but certainly in the administration of a new program there are always likely to be some of these problems. The previous government had them when it introduced new systems. It is not something which is specific to one brand of government over another.These Centrelink officers have been working very hard right around Australia. They gave service through manual means to people wherever, and as soon as, the problems were discovered. Senator, I would hope that you would be as concerned as I am to see that people get what they are entitled to.3741West, Sen SueSenator WEST1X4NSWALP00—Madam President, I ask a supplementary question. Given that the minister has acknowledged that there were 1,300 underpayments and overpayments—and she will get back to us with the numbers that were under and overpaid—I further ask the minister, as I asked earlier: what is the value of these overpayments and whether they will be recovered or not?3741Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—Any customers who might have been underpaid as a result of the system problems will be backpaid as the system fixes occur and as soon as customers identify themselves as being underpaid. Overpayments occurring from the system problems are debts to the Commonwealth and are recoverable under the Social Security Act, as they always have been. Waiver of debts arising from administrative error can be considered but only if the customer received the money in good faith and the debt is not raised within six weeks of the date of the first incorrect payment, or the customer complied with a notification obligation and the debt was not raised within six weeks from the end of the notification period.As I said yesterday—and as you have just used the figure again today—it is estimated that, out of an allowance population in excess of one million customers, 1,300 overpayments have occurred. The number and value of debts raised from administrative error is not included in the estimates of savings from review activity in the quarterly compliance reports tabled in parliament but the value of the debt recovered is included.Distinguished Visitors374210000PRESIDENTThe PRESIDENT—Order! I draw the attention of honourable senators to the presence in the gallery of a committee from the New Zealand parliament, the House of Representatives Health Committee, led by Mr Brian Neeson MP. On behalf of honourable senators, I welcome you to the Senate. I trust that your talks in this country will be useful and informative and that you will enjoy your visit.UNKNOWNHonourable senatorsHonourable senators—Hear, hear!Questions Without Notice374237423742Chapman, Sen GrantSenator CHAPMANFF4SALP10—I direct my question to the Leader of the Government in the Senate. Since coming to office, the coalition government has initiated the largest ever environmental rescue program in Australia's history by establishing the $1.25 billion Natural Heritage Trust. Will the minister advise the Senate of the benefits to rural and regional Australia from the trust? Have the government's efforts been supported by the Australian Labor Party?3742Hill, Sen RobertSenator HILLBH4SALPEnvironment10—The Natural Heritage Trust, involving over $1 billion being invested by the Howard government in our natural resource base, is vitally important not only for the health of our environment but also for the health of our agricultural and other rural interests. It is not always appreciated that what the agricultural and rural sectors need perhaps more than anything else is a healthy natural environment and resources. We are now aware that we have significantly degraded the health of our natural systems in this country through, in some places, over-clearing and, in others, inappropriate agricultural pursuits. In other ways, too, we have degraded the health of the natural system.We are now, therefore, reinvesting in that natural system—our natural capital—and reinvesting more than has ever been the case in the history of this country. The Natural Heritage Trust is supporting the future prosperity of Australia's agricultural and broader rural sectors. It is important to appreciate that. We all acknowledge the difficult times for people in the bush. It is not easy these days to run a profitable farm or compete with other exports. The community in rural and regional Australia needs every support it can get, and it is getting that from the Howard government.Out of that $1.1 billion, for example, $240 million is being invested in revegetation and protection of remnant vegetation, in other words, in protecting the health of the natural system. Over $280 million is being invested in restoration of our inland water systems—the Murray-Darling program, the national river care program, Waterwatch, et cetera. Over $360 million is being spent to address land degradation and other problems through Landcare, the national feral animal control program, the national weed strategy and the land and water resources audit.This is the Howard government investing in rural and regional Australia. It is worth remembering that we have been knocked at every attempt, at every step, by the alternative government, the Australian Labor Party. They opposed the setting up of the trust, they opposed the sale of Telstra to provide its capital base and they have done everything possible to undermine the success of the Natural Heritage Trust and through it to undermine rural and regional Australia.Astonishingly, after the Queensland election there has been a sudden change of mind. The Labor Party now says that it wants to use the dividends from Telstra to reinvest in rural Australia. All of a sudden the Labor Party has woken up to the bush. It is too late. For over two years they have had chances to demonstrate that they do support rural and regional Australia and they have failed to take those chances at every opportunity.Whilst I am on my feet, I would like to congratulate Greening Australia on winning the major bush care support contract under the Natural Heritage Trust. Through this fine Australian non-government organisation, $7 million a year for three years will be used to help in the revegetation of Australia and in supporting the farmers and the rural community in what they do. For the first time in my state of South Australia, for example, Greening Australia will be doing this with a conservation organisation—the South Australian Conservation Council—and with Trees for Life. It is good to see bodies such as Greening Australia joining with conservation councils. (Time expired)3743Chapman, Sen GrantSenator CHAPMANFF4SALP10—Madam President, I ask a supplementary question. Will the minister give some further examples of projects through which the Natural Heritage Trust is helping rural and regional Australia?3743Hill, Sen RobertSenator HILLBH4SALPEnvironment10—I would like to mention the one announced last weekend in South Australia for the Mt Lofty Ranges rehabilitation program. This is the major catchment area for Adelaide and has obviously suffered intense urban pressure over the years and is significantly degraded. Now more money is being reinvested in the health of the natural system than ever before. Under the new partnership, bodies such as Greening Australia are working with con councils on the ground. It is not just advocacy, con councils are getting out there and bringing their own communities into doing the hard work on the ground. Other fine environmental organisations such as Trees for Life will get an even better result in the future. It is good to see Greening Australia working now with private sector bodies in Western Australia to provide environmental training and also to set up a new partnership with the local government community in Western Australia to more effectively bring these major environmental programs to the community. It is a good story all round. (Time expired)37433743Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—My question is to Senator Newman as Minister for Social Security. Is the minister aware that slow referrals from Centrelink are being cited by desperate job agencies in South Australia as one of the key factors contributing to their imminent financial collapse? What action has the minister taken to speed up the rate of referrals? What guarantees can the minister give about when these problems will be overcome, or does the minister acknowledge that the problems are systemic—an inevitable consequence of the government's draconian cuts to the former DSS work force and yet another ill conceived and fatally flawed coalition policy?3743Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—As Senator Crowley would know very well from having attended some of the estimates committee hearings for Social Security, this is a matter which should properly be directed towards the minister responsible for employment, education, training and youth affairs as the services to which she was directing her question are those which are provided by Centrelink under contract to that department. As Centrelink has contracts with several departments, including my own of Social Security, the responsibility to answer questions on their contracts with Centrelink is placed on the shoulders of the appropriate departments and ministers who have those contracts.3743Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—Madam President, I ask a supplementary question. We may be in danger of discovering yet another government department without any minister responsible. Given that you are the minister for Centrelink, are you concerned that your department has now slipped behind a level of critical mass, given that the computer systems are failing, those who are entitled to benefits are being denied them, others who are not entitled are being showered with overpayments and the unemployed are left in a limbo between Centrelink and the failing new job agencies? Are you asleep at the wheel, Minister, or simply not up to the job?3744Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—Isn't it interesting that, every time one of the major unions has a campaign on, up jump their friends in the opposition pursuing the cause of the union. In this case senators would be interested to know that the CPSU is currently renegotiating their agreement with Centrelink management. Some of the questions that were asked yesterday were so inaccurate because they were based on figures which the CPSU put out in a press release a day or so ago. They were quite wrong, as I indicated yesterday with the response provided to me by Centrelink management.It would be a great shame if the opposition were to continue down this track because they are, first of all, making it more difficult for people who are employed in the public sector but in a statutory authority to do their job. (Time expired)37443744Eggleston, Sen AlanSenator EGGLESTON4L6WALP10—My question is directed to the Minister for Communications, the Information Economy and the Arts. What is the government doing to improve postal services in regional Australia after 13 years of neglect by the Labor Party? Is the government committed to full public ownership of Australia Post and maintaining the standard letter service at a uniform price for all Australians? Will the government's response to the National Competition Council lead to any more closures of post offices or mail centres in rural and regional Australia?3744Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—It is very important to understand that we were the party that actually increased the number of rural postal deliveries within the last 12 months. Not only that, we have honoured to the letter our commitment to maintain the standard letter service at a uniform rate to all Australians. We will not be supporting the NCC recommendation that all business mail be deregulated. We certainly will ensure that regional and rural post offices and mail centres do not close as a result of our response to the NCC report. In addition to that, Australia Post has agreed to maintain a number of loss making LPOs, licensed post offices.We are ensuring not only that we take a sensible and balanced approach to competition issues but that we fully protect those in rural areas. That is critically important because consumers come first. Who comes first for this mob? Here it is in this photo. Look at it. What a disgusting and nauseating sight. When I first saw it I thought it was Kimbo does the limbo, but then I realised that it was really about the Leader of the Opposition dancing to the tune of the unions. In other words, the postal union says dance and he dances. It is a disgraceful example of leadership from behind. You can see from that photo who is leading the dance. It is the union movement.What is so disgraceful is that the Labor Party has set its mind against any form of change whether or not it benefits consumers and whether or not it might be in the national interest and despite the fact that Simon Crean said only a couple of years ago in relation to reform of Australia Post: `What Labor would support is initiatives if they are to improve efficiency, as long as you guarantee the service to the remote and regional areas of this country.'What are the facts? The facts are that, since the Labor Party corporatised Australia Post in 1989, in the six full years since 1989, there have been closures of post offices every single year, reaching a high-water mark of 134 in 1993-94, which was about the time that Labor introduced more competition in terms of reducing the protection that is available for the reserve letter service. In other words, under Labor the number of post offices closing has risen each and every year.What has happened since we have been in government? In the first year the numbers went up by 57 and in the last full year, 1996-97, there were unbelievably 94 new postal outlets. The trend is absolutely clear: under Labor, every year the number of post offices declined in this country; under us, they have increased. They are the facts. Yet you have the cheek to get your leader out there—having his strings pulled by the puppeteers who put out press releases—saying things like, `Up to 90,000 jobs will be lost,' and, `Half the post offices in Australia will be closed.' Nothing is further from the truth.We are the ones who are protecting rural Australia. We are the ones who are delivering the goods. You are simply pandering to the trade union movement. You are not interested in principle. You are not interested in reform. You are not interested in consumers. All you want to do is close down post offices and make sure you get some healthy donations from the CEPU at the next election. It is a very short-term strategy. It is very short-sighted. If we are going to see that gross and disgusting hypocrisy—(Time expired)37453745Quirke, Sen JohnSenator QUIRKEZS6SAALP00—My question is to the Minister representing the Minister for Employment, Education, Training and Youth Affairs. Has the minister's attention been drawn to a series of articles in yesterday's Adelaide Advertiser which paints an extremely disturbing picture of the government's new Job Network? Can the minister confirm the claims in that series of articles that more than half of South Australia's new job agencies are struggling to survive after seven weeks of the new system, that almost half do not have a single job listed, that no jobs have been filled in the past four weeks by 50 employment service providers in Adelaide and that the success rate on the Centrelink screen of individual employment service providers is zero per cent with a state average of zero per cent? Does the minister agree with Minister Newman that this whole mess rests at the feet of Dr Kemp?3745Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—I am not so sure that that comment as stated by Senator Quirke is accurate or correct. Therefore, I—BE4NEWMANSenator Newman—Madam President, I raise a point of order in relation to that question. I would ask that the senator withdraw it. I have not said anything of the sort about Dr Kemp.10000PRESIDENTThe PRESIDENT—Order! There is an appropriate time to make personal explanations, Senator, which you may do.9X5Senator ELLISON—I will disregard the premise of Senator Quirke's question; it is based on an entirely false premise, as Senator Newman has just pointed out. I will go on to the fact of the matter in South Australia, and that is that there have been over 10,000 referrals of intensive assistance in South Australia. That puts it well on its way to a target of 11,000 such referrals by the end of June this year.I can say to Senator Quirke, through you, Madam President, that when these tenders were let to the jobs providers in South Australia—and all over the country, for that matter—they were let on the basis that it would be competitive. They were let on the basis that those providers knew what the contract would involve, and they knew that it would be competitive. As Dr Kemp has stated, it is a performance based system. These jobs providers have the job of going out and finding work for those people who are looking for it, and there is an incentive attached to that.Nationally, the figures show that 40 per cent of the jobs found were for long-term unemployed—40 per cent of those positions found have been for long-term unemployed. That is certainly not a system that is a mess or in chaos, Senator Quirke. What we have is a total reformation of the jobs provision, jobs seeking, sector—one which is going to serve those unemployed Australians and, in fact, one which is serving unemployed Australians. The figures show that, of those who were referred, one-fifth were not on unemployment benefits, so it is working for all unemployed.I say to Senator Quirke that, in the South Australian situation, there is a higher degree of unemployment than in other areas, and that state, despite that, still has one of the highest rates of referrals for those long-term unemployed. I think that that in itself is an indicator of a program which is succeeding. Perhaps it might help if the opposition talked it up rather than talking it down, rather than attacking a system which is delivering to the long-term unemployed.This system has resulted in four times as many job seeking sites as there were under the old CES. This has involved over 300 new organisations taking over from the CES; organisations which are providing unemployed Australians with more opportunities, especially those long-term unemployed that I have mentioned.3746Quirke, Sen JohnSenator QUIRKEZS6SAALP00—Madam President, I ask a supplementary question. Does the minister share the view of Paul Fitzgerald, the Chief Executive Officer of Job Futures, one of the four largest private job agencies, that a quarter of all the new job agencies will go broke within 12 months? If not, what is the government's prediction of the likely failure rate?3746Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—I remind Senator Quirke that, in relation to the intensive assistance program which particularly relates to long-term unemployment, there is an up-front payment of between $1,500 and $3,000. What the government did when it let out these tenders was to offer to the private sector a competitive contract which would allow them to find unemployed people jobs and succeed at the same time. The opposition might wish to see those people go broke because they would just like to prove a political point. But, of course, this is a competitive system which will result in a benefit to those unemployed Australians.I can say to Senator Quirke that what we have here is a system which will deliver jobs to unemployed Australians. It will also provide a benefit to those jobs providers in their business. They will then, in their own businesses, employ Australians themselves.37463746Lees, Sen MegSenator LEES8U4SAAD00—My question is to the Leader of the Government in the Senate. I refer to the Prime Minister's comments yesterday when he said it was `hard to deal with the Democrats' who have been `very difficult' on important issues. Minister, will you acknowledge—these are just two examples—that the government would not have had its $500 million saving by restricting overservicing by doctors or its $1.6 billion superannuation savings without our support? Would you also agree that what the Democrats have actually opposed is your government breaking its pre-election promises by doubling HECS charges, slashing social security benefits, halving the R&D tax concession and reducing child-care assistance? Will you acknowledge that a Senate that has passed 385 government bills and rejected only four—in other words, a 99 per cent pass rate—is hardly a hostile Senate?3746Hill, Sen RobertSenator HILLBH4SALPEnvironment10—Regrettably, it is very difficult to negotiate with the Australian Democrats—there is no doubt about that. But I am thankful for one thing: I am thankful for their support of our industrial relations reforms. In particular, I am thankful to former Senator Kernot, as the then Leader of the Australian Democrats, who came to the table, sipped tea and decided to support this government's reforms, reforms that were designed to break down the divisions within the Australian labour market and encourage employers and employees to come together to determine terms and conditions of employment to their mutual benefit. I was pleased that former Senator Kernot, when she was Leader of the Australian Democrats, was prepared to support this government's industrial relations reforms to achieve those objectives. I only hope that, under the new leadership, they prove just as cooperative.3746Lees, Sen MegSenator LEES8U4SAAD00—Madam President, I ask a supplementary question. Therefore, I presume the minister is agreeing that he does not have a hostile Senate. I would just like to refer you to some of the Prime Minister's comments today, Minister. He said that any suggestion that he would give a wink and a nod to One Nation in the battle for the Senate is `quite wrong'. Don't you think, Minister, that the voters deserve more than just a bet each way—that they deserve a Prime Minister who stands up and says up front that he would prefer to work with a party in the Senate that holds the government to account rather than with a party which will hold the government to ransom?3746Hill, Sen RobertSenator HILLBH4SALPEnvironment10—We have no preference for the far right or the far left; we have preference for neither. Senator Lees could in fact prove that we do not have a hostile Senate if she was prepared to bring the Australian Democrats to our very reasonable reforms under the Wik legislation; reforms that will provide a fair and reasonable outcome to a very difficult native title issue, but provide sufficient certainty for further investment, growth and jobs for all Australians. If the Australian Democrats were prepared to support the government in that objective, then I would say they were doing the Australian people a good service.37473747Sherry, Sen NickSenator SHERRYZW4TASALP00—My question is to Senator Ellison, the Minister representing the Minister for Employment, Education, Training and Youth Affairs. Can the minister confirm that one of South Australia's biggest job agency groups, with at least 23 private and community providers, has appealed to the government to pay up-front administration costs to job agencies to ensure their survival? Is the true this appeal has been backed by the South Australian Council of Social Service, the Youth Affairs Council and Adelaide University's Centre for Labour Studies? Is the government contemplating providing such assistance to agencies in South Australia and other states and territories and, if so, what is the estimated cost involved?3747Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—I am not aware of the government making any plans to provide the assistance sought as mentioned by Senator Sherry. What I can tell Senator Sherry is that under the new system we have 154 Job Network sites, compared to 29 under the previous program involving CES. That shows a fivefold increase in job sites. We made a contract with those jobs providers and made it very clear about the services that were to be provided. We made it very clear and they tendered under that.It was one of the most comprehensive and fair tenders ever conducted in this country. It is performance based, as Dr Kemp has said, and these jobs providers will need to attract those people who are seeking a job and direct them accordingly, because that is where the incentive payments lie.As I said previously, nationally 40 per cent of job placements have involved intensive assistance for the long-term unemployed. That would point to this program having a high degree of success in the very difficult area of the long-term unemployed.The government has no regrets whatsoever about this program, which has seen a great reformation of the whole job seeking process in this country and provided unemployed Australians with greater choice.3747Sherry, Sen NickSenator SHERRYZW4TASALP00—Madam President, I ask a supplementary question. The minister's answer did not go to the issue I raised about the payment of up-front administration fees to ensure the agency's survival. Has the minister's attention been drawn to the statement by a Richard Finlayson, manager of Quality Training Company with four branches in Adelaide, that the government's new system was failing `badly, very badly', and that:. . . all of the smaller companies are in trouble. . . it looks like many of us can't survive and won't survive and the Government doesn't mind about that fact.Does the government accept that fact? Does the government mind about that fact? And what is the government proposing to do about it, other than hoping the problem will go away or calling an election before its chickens come home to roost?3747Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—Can I make it quite clear that this government does not disregard the welfare of job seekers in this country. It does not have disregard for the success of those jobs providers. It does not in any way have any disregard in relation to this matter, as Senator Sherry alleges.We want to see unemployed Australians getting jobs. We want to see them have a choice of provider and we have provided that through the number of sites. We have provided that through an increased number of providers; over 300 jobs providers compared with the CES that was previously there.I have already mentioned that in the state of South Australia we have increased fivefold the number of job seeking sites that unemployed people can go to. If that is not improving the lot of unemployed people and providing them with more opportunity, I do not know what is. This is a performance based tender. It was competitive and it is up to the individual jobs providers. (Time expired)37473747Brown, Sen BobSenator BROWNQD4TASAG00—My question is to the Minister for the Environment. The European Parliament has condemned the proposed uranium mine at Jabiluka in Kakadu and the head of the World Conservation Union's natural heritage program, Mr Jim Thorsell, has said that there is `a worldwide expression of alarm about what is going on' in Kakadu. The minister's office is quoted in the Sydney Morning Herald as saying that he is not concerned at all. My question is: as minister for Australia's environment, is Senator Hill going to join to world's environmental authorities in defending Kakadu from this uranium mine and our international reputation, or is he instead going to have Australia join nine other derelict nations around the world, including African dictatorships, condemned for promoting mining threats to world heritage areas?3748Hill, Sen RobertSenator HILLBH4SALPEnvironment10—Senator Brown's worldwide expression of alarm is a group of between 40 and 60 demonstrators who have encamped in the Kakadu National Park. They are sourced from various areas of Australia. They have taken up temporary residence and they are expressing their democratic right, and I have no objection to that. I would prefer it if they did it a little bit more competently, because recently they chained themselves to a bulldozer, except they got the wrong bulldozer which was heading away from the mine site.Why I am not concerned is because this government ensured that there was a demanding environmental testing process to ensure that the new proposed mine would achieve the highest environmental standards and that process has achieved that outcome.Of course, there has been a uranium mine and processing plant in the vicinity now for over 17 years that is operated on a basis that we are assured by the Office of the Supervising Scientist—the independent supervising authority—has no environmental detriment outside the immediate mine site. It demonstrates that, with proper engineering and sound practice, mining can occur in the vicinity of the park without causing environmental damage. We have no reason to believe that this new mine will not be of the same nature.One should emphasise, however, that Jabiluka is not in the world heritage area. Senator Brown goes around talking about this world heritage area mine—it is not in the world heritage area and it is not in Kakadu National Park. Not only is it not located in those sensitive areas but, furthermore, we can be satisfied, by the process that has taken place, that it can be conducted in a way that is environmentally responsible. The other side of the ledger of course is further wealth for Australia. Further jobs for many Australians, money for the Aboriginal people of the local Aboriginal communities, are the ways in which Australians can benefit from development which is being conducted in an environmentally sensible way.3748Brown, Sen BobSenator BROWNQD4TASAG00—Madam President, I ask a supplementary question. What rearguard action has the minister taken to try to defend the indefensible before the World Heritage Bureau, which is meeting in Paris at the moment? Is he aware that Yvonne Margarula and other representatives of the Mirrar people are in Paris to put the case of the danger to the world heritage cultural values, as well as the environmental values, of the uranium mine? Does he really not care about the damage to Australia's international reputation if Kakadu is put on the world heritage endangered list because of this obscene mine?3748Hill, Sen RobertSenator HILLBH4SALPEnvironment10—In 1982 the Aboriginal traditional owners agreed to the mine at Jabiluka.XE4BOLKUSSenator Bolkus—Different mine.BH4Senator HILL—Agreed to this mine at Jabiluka, Senator Bolkus. Go back—some differences in the method of mining, some differences in the method of processing, but the Jabiluka mine was approved in 1982.There are some traditional owners that now oppose the mine. One has been mentioned by Senator Brown as going overseas to protest it, as is her right. The Aboriginal community are divided on the mine. I concede that. Some fear. But the predominant concern for them is not Senator Brown's environment concern but a concern about the social pressures and other social downsides of increasing employment and the presence of growing numbers of people in the Kakadu and mining vicinity—not the environmental issue that Senator Brown is talking about at all.37493749Bolkus, Sen NickSenator BOLKUSXE4SAALP00—My question is to the Minister for Justice. Minister, isn't it true that your government has already cut more than $1.6 million in 1996 dollar terms from the Australian Federal Police operations in South Australia, reducing the AFP staff from 94 to just 60, and that the government has also reduced the National Crime Authority's presence in South Australia from 33 staff to 13? Minister, haven't these cuts reduced the ability of our federal law enforcement agencies to stop drugs coming into South Australia? Will you now concede that the government's inappropriately named Tough on Drugs strategy is actually failing the people of your own state?3749Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—I thank Senator Bolkus for yet again a question from heaven—an opportunity to point out what this government has done that the previous government failed to do. I do not know what sort of pills he is on, but I hope he has got a long prescription for them. I look forward to this opportunity every day.Senator Bolkus asks me questions in relation to funding of the Federal Police and of the National Crime Authority, and seeks information specifically in relation to South Australia. We know that the opposition does not want to tell the truth to the Australian community. They want to use question time to mislead the community as to what this government has done in the same way that when they were in government they misled the community as to what they were doing.Senator Bolkus fails to mention a number of things. Firstly, in relation to funding of the Australian Federal Police, the situation in which the previous government left the Australian Federal Police was not satisfactory. The Prime Minister has recognised that and earlier this year—I think in January or February—told an international Interpol conference that he was personally determined to see that the Australian Federal Police would be a federal police force second to none. As a consequence of his decision, the Ayers review was set up to review the basis of Federal Police funding, to ensure that we can put the Federal Police on a financial standing and a basis for funding that will allow it to meet the challenges of law enforcement in the 21st century.Senator Bolkus also fails to mention that the nearly $200 million Tough on Drugs initiative gives nearly $100 million to law enforcement, distributed through the Federal Police, through the National Crime Authority, through Customs and through Austrac.Senator Bolkus interjecting—10000PRESIDENTThe PRESIDENT—Order! Senator Bolkus, cease interjecting.7E4Senator VANSTONE—Money is made available through Austrac for chasing money laundering in relation to drugs. He neglects to mention this input of additional money to fight drugs. He neglects specifically to mention the mobile strike teams for the Federal Police, targeted specifically at drug traffic coming into Australia, that have been funded by the Tough on Drugs initiative. He fails to mention them because he knows they are called mobile strike teams for a particular purpose, and that purpose is quite clear in their name. They might be based in Sydney—three of them are there—with one in Brisbane, one in Melbourne and one in Perth. But those teams will go where the intelligence tells them the best opportunity to stop drugs coming into Australia is to be found. If the intelligence shows that there is a reason to shift those teams for a particular period of time to South Australia or Western Australia, or to Melbourne, that is where they will go.Law enforcement should not be based on pork barrelling of one state or another, it should be based on where the intelligence tells us we can catch the drug runners. They are the changes that this government has made and is happy to stand behind.3749Bolkus, Sen NickSenator BOLKUSXE4SAALP00—Madam President, I ask a supplementary question. I note the minister does not deny the fact that resources to the NCA and the AFP are less than what they were two years ago. Is the minister aware of the following comments made by the South Australian Commissioner of Police, Mr Hyde, in respect of the South Australian police force:We are very concerned about the reduction in resources to some of the Federal agencies, particularly in the area of drugs . . . We cannot put all our resources into shoring up the Commonwealth's withdrawal of resources from those Federal agencies.Minister, how do you justify your answer and how do you justify this obscene assertion that what I am about is pork barrelling? Isn't the Commissioner of Police in South Australia, Mr Hyde, correct when says you have withdrawn resources and they are in no position to shore up your failure of responsibility?3750Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—Law enforcement, as with so many other Commonwealth areas, is a shared responsibility. I am sure people opposite who have the opportunity to be minister would understand, as I think all school children understand, that when there are shared responsibilities there is a sharing of the blame and there is a sharing of the fame. It has been my experience that, whenever any drugs are located as a consequence of a cooperative initiative between the National Crime Authority, the Federal Police and a state police force, the first people out to the paper to say `20 kilos of drugs have been seized' are always the state police. I do not mind their doing that. When they have made a contribution to a joint effort, why should they not get such publicity as they can for that? We see it in health, we see it in education, we see it in so many other areas. Of course the state police forces will always want Commonwealth law enforcement agencies to have more money. Of course they will want to share the responsibility, the shame where it is not good enough and the fame where it is.37503750O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—My question is addressed to the Minister for Resources and Energy. Senator Parer would of course be aware that our resource industries employ hundreds of thousands of Australians as a result of billions of dollars in investment in rural and regional Australia. That investment also provides the federal government each year with some $6,000 million of taxation revenue which is used to provide services for all Australians. My question to the minister is this: what effect would the implementation of different investment policies have on our resource industries? Most importantly, what impact would it have upon the jobs and the livelihoods of people in rural and regional Australia?3750Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I would like to thank Senator O'Chee for that question. He would realise, as many people on our side recognise, that the minerals and energy sector continues to be one of the great success stories for regional and rural Australia. At the moment there are no less than 122 major projects under way or committed around Australia collectively worth $24,000 million and a further 174 projects worth in excess of $75,000 million. I could not help noticing the other day Senator Lees from the Democrats claim that the real election battle will be between the Democrats and One Nation. But I ask the Senate to consider what the One Nation policies are. They are tariff barriers, restriction of foreign investment, reduced immigration and no privatisation.I ask the Senate: what is the battle? The fact is that One Nation has adopted exactly the same populist policies which have for so long been the trademark of the Australian Democrats. One Nation are the Democrat camp followers on the road to lost job opportunities, particularly in regional Australia, the very area they claim to champion. I will give the Senate some examples. Look at the northern Australian gas venture; a $10 billion project to bring gas through on the Timor Sea to Darwin for export to Asia and to develop a new pipeline network across northern Australia to regional and east coast markets. Look at the Papua-New Guinea to Gladstone pipeline, something one of the Queensland Democrats questioned. He questioned it, but think of the benefits that are going to come from this. This will create 1,800 jobs during construction right down the Queensland coast and a new environmentally friendly gas fired power station in Townsville, which I understand was just signed up yesterday, a good chance of a billion dollar alumina refinery in Gladstone, enormous business opportunities right along the Queensland coast from Cape York to Gladstone.Last week I was in Burnie to reassure the 200 people who took the time to attend the public meeting organised by local member Chris Miles—and I acknowledge the presence at that meeting of Senator Sherry. The purpose of the meeting was to show the people of Burnie that the Howard government stands squarely behind the development of a new magnesite mining and processing plant in north-west Tasmania and to tell them that we helped to bring gas from the Yolla gas field or other base rate fields to onshore Tasmania. We were there to tell them we will immediately put up to $300,000 into infrastructure planning, as we have in regional centres in other states. Not one person there opposed this project. They were absolutely enthusiastic about it because of the potential to create jobs. But, again, who do we have? The lone voice of Senator Brown opposing a project which would bring tremendous benefits to the regional part of north-western Tasmania. Real jobs, putting people first in a regional part of Australia.In Western Australia the Dampier to Kalgoorlie pipeline will soon lower by one-third the cost of household power to 95 per cent of households in the region and new mines and new processing plants under development down the pipeline route. Look at the recent announcement of the Minerva gas project in offshore Warrnambool, a new fertiliser plant in Geelong, $700 million worth of investment, thousands of construction jobs and thousands of permanent jobs once this project comes into fruition. (Time expired)37513751Lundy, Sen KateSenator LUNDY7G6ACTALP00—My question is directed to Senator Minchin, representing the Minister for Sport and Tourism. I refer to Minister Thomson's recent buck-passing in relation to funding for the Australian paralympic athletes from the Olympic athlete program. Can the minister confirm that, rather than Mr Thomson making a decision himself, he has shifted the onus onto the Australian Sports Commission by announcing a review of funding for paralympians? Is the minister aware that, despite the enormous success that our paralympians achieved at the Atlanta Games, their revenue options are extremely limited because of the selling of their marketing rights and the requirements of the Sydney 2000 Games (Indicia and Images) Protection Act 1996? When will the minister acknowledge that the government's priorities are wrong and intervene to do more than simply shift the blame and waste valuable training opportunities in the meantime?3751Minchin, Sen NickSenator MINCHINJX4SALPSpecial Minister of State;Minister Assisting the Prime Minister10—I have a brief on the preparations for the 2000 Paralympics, which I am pleased to advise the honourable senator of. Any additional information I will have to get for her and take on notice.I am advised that, in relation to preparations for the 2000 Paralympic Games, the Australian Sports Commission has provided assistance totalling $2.7 million under the Olympic athlete program since 1994-95 for the preparation of our elite athletes with disabilities for the 2000 Paralympics. These funds have been used for purposes such as elite coaching, international competition, training camps and sports science and medicine support. A further $2 million is to be provided for this purpose over the next two financial years.It is true that the Australian Paralympic Committee has expressed concern about inequities in government funding between able-bodied and disabled sport, citing the different levels of Olympic athlete program funding to prepare athletes for the 2000 Olympics and Paralympics. The government recognises that sport for the disabled does not enjoy the membership base or commercial opportunities available to many of the able-bodied sports, nor does it enjoy the same level of financial support enjoyed by many Olympic sports under the OAP.Nevertheless, the ASC must determine what is the appropriate share of available funds to each eligible organisation, and Minister Thomson understands that this is being done by examining issues such as potential for success in 2000 and the needs of the athletes in order to achieve this success. We have yet to learn about the level of funds the APC intends to commit to athlete preparation from its income from the Sydney Paralympic Organising Committee—that is, for marketing rights—and fund raising efforts to comple ment the government's contribution to the paralympic preparation program.The APC and ASC met on 15 June 1998 to discuss the needs of the paralympic preparation program; and on the 16th and 17th the APC and commission staff met to commence a review of the plans and budgets of each paralympic sport for 1998-99. Further assessment of plans and budgets identifying the needs of each sport through to 2000 will be made following the completion of world championships in 1998. This will ensure that we can all be confident about the appropriateness of the plans and their costings.At this time the APC and commission are due to meet again on 14 July to consider the progress made. Minister Thomson has met with the APC and is now awaiting advice from the commission about the appropriate level of assistance to our paralympic athletes. The commission has determined that at this time an annual allocation from the OAP of $1 million for paralympic preparation is reasonable.It must be recognised that, if further OAP funds are made available to the APC, some Olympic sports must do with less for their preparations. For this reason, the ASC needs to satisfy itself about the plans of all sports and the current review of Olympic sports will not be completed before November.3752Lundy, Sen KateSenator LUNDY7G6ACTALP00—Madam President, I ask a supplementary question. Thank you, Minister. You have confirmed certainly the buck-passing and the inequitable funding arrangements for our paralympians. But can the government also confirm that public funding by this government for Australian sport as a whole has been cut by $20 million over four years? Isn't this just another example of the Howard government getting its priorities wrong in that the government funding for sports participation and community level activity has been cut at the very time we should be using the 2000 games as motivation to get involved in healthy activities?3752Minchin, Sen NickSenator MINCHINJX4SALPSpecial Minister of State;Minister Assisting the Prime Minister10—I am advised that the budget allocation for the Australian Sports Commission in the coming year will be $89.3 million, a near record level of funding. The government gave a commitment when we came to office that this level of funding would be maintained through until the Sydney Olympics, and we have honoured that commitment.So I think the government has demonstrated a very significant commitment of taxpayers' funds to the program through to the 2000 Olympics. Madam President, as you and the senator would know from the estimates committees, of course the government has to develop a forward program from the year 2000 onwards, and it will do that through the normal budgetary process.37523752Bourne, Sen VickiSenator BOURNETW4NSWAD00—My question is addressed to Senator Hill, the Minister representing the Minister for Foreign Affairs. I ask: does the minister agree with the Minister for Foreign Affairs, Mr Downer, that Australia's influence in South-East Asia should be maximised to improve our security? Does the minister agree with senior officials from China, Malaysia, Indonesia and Papua New Guinea, as well as Bishop Belo of East Timor and Mr Alan Greenspan of the US Federal Reserve, who all nominated Radio Australia's short-wave service as the most valuable or essential to them in the region? Is the minister aware of the six heads of state from Asian nations who wrote to the Prime Minister requesting that Radio Australia's short-wave service be continued? Finally, has the government decided to sell for scrap Radio Australia's state-of-the-art short-wave transmitter in Darwin, even though it would cost only $1.8 million a year to return Radio Australia to South-East Asia?3752Hill, Sen RobertSenator HILLBH4SALPEnvironment10—Madam President, this is a debate we have had a number of times before. We, as you know, modified the coverage of Radio Australia to areas that we believed were still of relevance to that form of transmission. It was our opinion that areas into South-East Asia no longer required short wave because of access to communications through more popular methods—normal radio being an obvious example.As I said, on that basis, the honourable senator knows that we decided to no longer transmit short wave in that direction. And I think it is true that the facility that has been closed is now being sold off.3753Bourne, Sen VickiSenator BOURNETW4NSWAD00—Madam President, I ask a supplementary question. Minister, are you telling us that you believe South-East Asia is not still of relevance to Australia—is that what you are saying? Alternatively, are you telling us that you believe the majority of people in South-East Asia can get Radio Australia through satellite rather than through short-wave transmitters; or do you believe that they do not deserve to hear Radio Australia, which all these people have nominated as being the most valuable or the most essential in the region?3753Hill, Sen RobertSenator HILLBH4SALPEnvironment10—Of course I did not say that the region is not of relevance to Australia; it is of utmost relevance to Australia. What I am saying is that the method of communication that the honourable senator is talking about is no longer of the same relevance. There are so many different methods of communication now available within the region. As the honourable senator is a traveller, she would know: anywhere in South-East Asia now, there is a myriad of alternative methods of communication.That is the point we have made—that times have changed, and there is no longer the need to send short wave into that region as there once was in the past. In areas of the Pacific where there is still that need, we continue to so transmit.37533753Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—My question is directed to Senator Herron, the Minister representing the Minister for Health and Family Services. The Weekend Australian reported that:. . . the Howard Government's multi-billion dollar private health insurance incentive scheme is headed for a spectacular failure, with coverage already 500,000 shy of the target set for its first year of operation.Is that true? Can the minister confirm that 334,000 people have abandoned private health insurance over the last two years? Can the minister also confirm that the level of private health insurance has already fallen to 31 per cent, whereas the government promised to raise coverage from 32 per cent to 35.5 per cent by 30 June this year? Finally, is it not the case, Minister, that the government's policy is not heading for a spectacular failure, rather, that it already is a spectacular failure?3753Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—To the first question: no. To the second question: no, I cannot. There are about four other questions that I have lost track of in seriatim order. The general premise is that the changes that we brought in in private health insurance are heading for a spectacular failure. Imagine what would have happened if we had not brought them in? Private health insurance would be $30 a month more for a family because the deliberate policy of the Labor government was to destroy private health insurance.At least we did something to try to slow the fall. It was inevitable, with the ageing population and the cost of private health care, that it was going to fall, as it has done. It fell spectacularly under the Labor government. It went from 70 per cent when they came to power to less than 40 per cent. It has slowed, and I keep telling Senator Forshaw the rate of the fall is slowing. In Queensland, for example, it has been virtually static for 13 years, and that is what will occur.Senator Forshaw, I make a confident prediction to you once again that it will slow. The fall has been shown to be at a lesser rate since we introduced this policy. It will not be a spectacular failure. Private health insurance premiums under this government are up to $450 cheaper than they would otherwise have been.Opposition senators interjecting—Ha, ha!VW4Senator HERRON—Did I hear a laugh from the other side? That was acknowledged by their leader—by Mr Beazley, nonetheless. The Labor Party ought to see what their own leader says because Mr Beazley, in fact, acknowledged that it has been $450 cheaper under us than it would have been under the Labor Party, so I do not accept that statement.We would have loved to have put more money in, Madam President, but you will recall that we faced a $10½ billion deficit when we came into office—the previous seven budgets had a $70 billion deficit over the previous seven years. We would have loved to have put more money in, we would have loved to have helped private health insurance, because the facts of the matter are we want freedom of choice in this country that allows people to go to the public hospitals or to the private hospitals and not be dominated by the cost.The changes that the Labor Party brought in meant that there was a spectacular fall in private health insurance and an inevitable overloading of the public hospital system—this is what we have picked up. For 13 years they tried to destroy it. We are trying to resurrect the system so that we come back to that balance. It will not occur overnight; it will take some time. We are putting things like billing procedures into place so that the patient will get one bill instead of multiple bills. There are many things occurring that will revive the private health insurance industry in this country and they certainly will not come from the Labor Party.3754Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—Minister, I did not ask you for a prediction; I, in fact, referred you to the prediction of the Minister for Health and Family Services in your government.10000PRESIDENTThe PRESIDENT—Senator, you should address your remarks to the chair.656Senator FORSHAW—Madam President, the minister said that the rate of coverage would actually increase by 30 June of this year. I ask a supplementary question of the minister. Is it not true that the government's private health insurance rebate—totalling $1.7 billion over three years—has already been eaten up by the increase in private health insurance premiums—increases far in excess of the increases in the previous two years before you came to government? Further, isn't the minister prepared to admit what is now glaringly obvious—that this expensive scheme is an abysmal failure?3754Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—This 40 per cent figure was a figure that Access Economics produced before the election, which has been latched on to, which the opposition now says was a figure that we predicted would occur. Nobody has got a crystal ball; nobody knows what is going to happen tomorrow, let alone what will occur in six months' time.656FORSHAWSenator Forshaw—You just made a confident prediction.VW4Senator HERRON—I have made a confident prediction that it will plateau. I have never said what that figure will be, because I don't know any more than the opposition knows. To come back to the point of the supplementary question: no, I do not believe it has been a spectacular failure. It is inevitable that premiums rise because two-thirds of the health care dollar are spent on people over the age of 65; there is a disproportionate number of older people in private health insurance who are taking more out of it than they are contributing; and there are not enough younger people. All these fact are known to the public and, if the public knows them, at least Senator Forshaw should. (Time expired)BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper .Questions Without Notice3754375415:06:003754Mackay, Sen SueSenator MACKAY9L6TASALP00—I move:That the Senate take note of the answers given by the Minister for Schools, Vocational Education and Training (Senator Ellison) and the Minister for Social Security (Senator Newman), to questions without notice asked by Senator Quirke and Senator Crowley today, relating to employment services in South Australia and Centrelink.I would like to start by, first of all, passing comment on the non-answers—I think is the appropriate term—given by Senator Newman today, who, it turns out, is only the Minister for Social Security and not actually the minister for Centrelink or something like that. Or is it that Centrelink has contracts to other agencies that she does not know anything about, or that it is the wrong minister, or whatever? It was so contorted that it was very difficult to tell. So far as the opposition is concerned, as far as we can determine, Senator Newman is, in fact, the Minister for Social Security and also the minister for Centrelink, so we expect that when Senator West actually asks questions with regard to Centrelink, we would get some kind of response—but, oh no.5K4FAULKNER Senator Faulkner—She blames her officials.9L6Mackay, Sen SueSenator MACKAY—She always blames the officials, blames the Public Service, or it is not her portfolio, or it is some other minister, or she will have to seek advice from somewhere else, or whatever. The bottom line is: she is the Minister for Social Security and the minister for Centrelink.Let me turn to Senator Ellison. When John Howard gave his pep talk to his front bench yesterday about question time, about being concise and actually answering questions, obviously he did not include Senator Ellison in that. We did not get any response at all to the questions that we asked, in a situation where Senator Ellison should have been across the issues and should have been able to advise the Senate what the government is doing about this parlous situation in South Australia.I will not go through all the sad, sorry history in relation to this, but I will say this. First of all, job agencies have not been told the truth by this government with regard to the tendering process. It goes back to the very beginning when they initially put their tenders in. They were told to actually tender for all three FLEXes, a mix of FLEX 1, 2 and 3. When the results came out, the situation was that some agencies had FLEX 1, some had FLEX 2, some had FLEX 3 and some extremely lucky ones had a mix of all three FLEXes. But the job agencies themselves had put their budgets together based on a mix of all three. When the results came down, the successful job agencies said, `That is fine. I have got X amount of FLEX 3, X amount of FLEX 1 or whatever, and I will be able to budget.' But no. What happens? Centrelink referrals do not come. Centrelink has a ceiling—what the government likes to call a target is in fact a ceiling—in terms of referrals. There is absolutely no doubt that this whole situation is a shonk and is rotten to the core. Let us have a look at the Centrelink Web page. If you were a South Australian job seeker, for example, and you wanted to find out which job agency you might want to go to and you were interested in having a look at a job agency that had a reasonable success rate in South Australia, what would you do? You might think that the Centrelink Web page would tell you want the success rate of various job agencies is. You would be sadly disappointed, because right down the relevant column it says zero, zero, zero. And it is not just in South Australia that it says zero; in every single state in Australia it says zero. Why is this? We were in estimates last week, and the government has decided quite deliberately not to release the results of the success rates for job agencies until just before the election. That is the decision that this government has made. When I questioned the secretary of the department, he said, `Don't ask me—it is a government decision.' So this government, which is all about so-called choice, is actually going to wait until just before the election until it advises job seekers about information which may assist them with regard to choice. We all know why: because they want to make themselves look good and they want to make the statistics look good.What we have here is a situation where job agencies, many of them community based, which have been doing an excellent job, budgeted based on the amount of FLEX they would get—not an unreasonable situation, I would have thought. It turns out that the drip-feed from the government via Centrelink is just not working. Mr Sedgwick, who is the secretary of the department, said very clearly in the estimates, `We never promised anybody a living.' Dr Kemp has said, `If you are no good, you won't survive.' I say to the government that it is a bit late to tell these poor job agencies, which have basically budgeted on the fact that they were going to get income, that they are not going to get that income and they will not survive. I think the estimate of 25 per cent is actually very conservative. I think this government knows this and I think it is deliberately starving some of these agencies of funds. At the end of the 19-month period of the first tender round, we will have at least 25 per cent go under. What will we have left? We will have four or five, including Employment National, which is getting $130 million worth of taxpayer funds, thank you very much, and which refuses to answer questions, incidentally, with regard to the appropriations in estimates. The government knows this. This is just a pyrrhic exercise and one whereby job agencies have been clearly misled. (Time expired)15:11:003756Tambling, Sen GrantSenator TAMBLING6E4NTCLP10—Once again we see a response on questions by Labor Party senators today that shows their paranoia on anything that is to do with change, and particularly anything that is to do with change from a position which they formerly held in government. They seem to think that the world was created during a period of Labor administration that was idyllic and special. Let me assure the Senate that the systems that were created by the Labor Party were hopeless. They were in chaos when we came to government and there were areas that needed very significant change. I am very pleased that both my minister, the Minister for Social Security (Senator Newman), the Minister for Employment, Education, Training and Youth Affairs (Dr Kemp) and Senator Ellison in this place as Minister for Schools, Vocational Education and Training have addressed these particular issues.The initial question asked by Senator West this afternoon related to Centrelink's new computer system, which was installed this year on 12 May. But let me point out that that was replacing a legacy of ageing equipment that was lousy and useless and was not catching up with the particulars at any particular time. What do we now see? We see a concerted attack by the Labor Party apologists, along with the union organisation groups who are so reluctant because they are negotiating new terms and conditions for themselves and are not willing to be part of representing an improvement to the system.Yes, there have been a number of issues that have arisen with regard to the systems being put in place, and we have acknowledged that a number of those issues do need to be addressed, as happens with any new system. But I point out that the new system has produced far less recorded problems than the old system at the time of any changeover in this particular portfolio. That is particularly relevant in so many of these areas that we are currently addressing. The implementation of many of the Howard government's new policies has picked up a number of new programs meeting and mixing millions of customers throughout Australia. Millions of Australians are being affected. We have acknowledged that the consequences of change to the computer systems need to be further addressed, but the actual numbers involved are in the order of 100, 500 or 1000. They are incidental in the total number of cases, and they are all being addressed within one or two days of the implementation of any of these particular changes. I think it is an insult by the Labor Party to the Centrelink staff and to the staff of the various client government departments of Centrelink, whether it is DEETYA, Social Security, Health and Family Services or the other departments. It is the Labor Party that is now sledging the staff of Centrelink in all of these areas in identifying the problems.It is very important to note what the objective is that we are seeking to do. It is a better service to be provided to customers at the time of the update of both the policy and the administration. There are considerable processing efficiencies to be gained and finances to be obtained. The systems that are being implemented are much more integrated, and the vast majority of customers are correctly paid on time. Let me reinforce that point: the vast majority of customers are correctly paid on time. The minority—the very small numbers—that have been affected by administrative errors will certainly be picked up as quickly as possible where there is any need for backpayment and, where adjustments have to be made for overpayment, they will be handled carefully, sensitively and appropriately, as you would expect in any area of accountability.I was surprised that Senator Mackay does not understand the role of Centrelink. Centrelink is a service delivery agency. It is a new administrative advance that is far superior to anything that the Labor Party ever implemented in 13 years of government. The number of customers it has throughout Australia is remarkable—millions and millions across a number of government departments. The client departments are Social Security, DEETYA, Health and Family Services—(Time expired)15:16:003757Quirke, Sen JohnSenator QUIRKEZS6SAALP00—I think we should get back to the question, or at least some of the key bits of it. I asked the minister representing the Minister for Employment, Education, Training and Youth Affairs a series of questions about what is rapidly becoming a disaster. In part, that question was: `Can the minister confirm the claims that more than half of South Australia's new job agencies are struggling to survive after seven weeks of the new system?' Almost half do not have a single job listed. No jobs have been filled in the past four weeks by 50 employment service providers in Adelaide. The success rate on the Centrelink screen of individual employment service providers is zero per cent, with a state average of zero per cent.In the supplementary question, I went a bit further. I asked the minister if he shared the view of Paul Fitzgerald, the chief executive officer of Job Futures—one of the four largest private job agencies—that a quarter of all the new job agencies will go broke within 12 months.Those were the key salient bits. What answers did I get? To the first part—that, after seven weeks, the agencies are struggling—we got no answer. I was waiting to find out that the Adelaide Advertiser had got it wrong and that we had got it wrong. But no, I did not get that. I was waiting to find out how many jobs have been filled in the past four weeks by 50 employment service providers in Adelaide. I can only presume that the Adelaide Advertiser is absolutely accurate. I was waiting to find out that the success rate on the Centrelink screen of individual employment service providers is not zero per cent. I would not have been very happy if it were one, two, four, five or 10 per cent but, at zero per cent, there is absolutely no way you can put a decent face on that.We found out that the state average was also zero per cent. We found that out quite easily because the minister this afternoon answered everything except what was put to him, and that was to tell us that this sorry picture that is emerging is not true—that we got it wrong or that the Adelaide Advertiser got it wrong. What we expected, and what I had hoped for, was that there was going to be some glimmer of hope given by any of the ministers who were asked questions about this sorry tale of human carnage. We hoped they would tell us that this stuff is really not accurate and that there are people out there who are finding employment.I have not been in this place as long as many others but I am puzzled at how this government makes decisions. This was one of the stranger decisions that was made. As an old state member, the first thing I do every day is to flick to the obituaries in the Adelaide Advertiser to see who has passed away.LI4PATTERSONSenator Patterson—The votes of the dead ones, eh?ZS6Quirke, Sen JohnSenator QUIRKE—I have a look through that to see if any of my old constituents are no longer able to vote for me, and do you know what is next to it? The dating agencies. Then I realised where they got their policy from. This is just a different form of dating agency. Senator Patterson is trying to interrupt my speech, and she may need the services of this crowd before too much longer. It may well be that she will have a vested interest—she and Senator Synon—in how this whole system is going to work. I have to tell the senator that unfortunately there is only a couple of months for her to brush up before she may be needing these services.At the end of the day, I want to confirm that I think this government must be a bunch of romantics. The only way they could have picked up this scheme is from the idea that there are so many jobs—more than enough for all the people out there—that all we have to do is to get some super-dating agency going so that we can bring them together. What we will do—we are so miserable with money, as Senator Crowley pointed out to me before—is wait until they are happily wedded before they get their money. (Time expired)15:21:003758Patterson, Sen KaySenator PATTERSONLI4VICLP10—We know why the Labor Party looks at the obituaries. We know in Eden- Monaro they spent their whole time looking at the obituaries to find out who had died so they could actually have dead men voting. I can understand why the Labor Party is very interested in reading obituaries. That is their tactic: vote early, vote often and also have dead people voting. So I can understand why Senator Quirke reads the obituaries.Senator Mackay was loose with the truth. She said that Senator Newman is always blaming the public servants. That is totally untrue. That is not what Senator Newman does, and to say that Senator Newman is blaming the public servants was absolutely an outrageous statement. But as for being loose with the truth, the shadow minister for family services, the member for Jagajaga, Jenny Macklin, is also loose with the truth. I can go through her press releases one after the other and there they are—exaggerations, frightenings and scaremongering. In her press release about Centrelink, she says:Thousands of people have received social security benefits that they are not entitled to in yet another example of the Howard government's failure to halt the chaos in the delivery of employment services.She says, `thousands of people'. There is not even logic in the press release because later on in the third last paragraph she says:The Labor opposition calls on Senator Newman to report how many people received money that they were not entitled to and how much money was involved.She has told us up the top—`thousands'—but she was wrong. But Jenny Macklin does not let the truth get in the way of a good story or in the way of frightening older people about nursing homes or pensions or Telelink. She just spurts out any old thing that comes into her head—`thousands of people' have not got it. Senator Newman has told us today that it was something like 1,300 people out of over one million clients who have had a problem with payments from Centrelink, that they have been identified, that they are being corrected and that the overpayments will not be included in the assessment of the overpayments that have been recovered.Labor senators who have spoken in this debate did not talk about what has happened since the coalition has been in government. They did not talk about Senator Newman's press release of 7 April on her report on compliance and the crackdown on social security fraud. They did not bother to tell the public that since July 1996 some $600 million—or nearly $1.1 million a day—has been recovered for the taxpayer in respect of overpayments. We have not seen ACOSS and social security recipients marching in the street because this money has been taken from people who were not entitled to those benefits. It is money that taxpayers have paid into the system.In the last year of the Labor government we were $10 billion overspent, and $1.1 billion was in overpayments. We were borrowing money from overseas—borrowing money from foreigners—to pay people social security benefits to which they were not entitled. We were borrowing money against the children of the future—the children of the next generation—to pay people social security benefits to which they were not entitled.Senator Lundy interjecting—LI4Patterson, Sen KaySenator PATTERSON—Senator Lundy is squarking and interjecting. It was borrowing from her children to pay people social security benefits to which they were not entitled—$1.1 million a day. The Labor Party hates to hear us saying this, and I will say it over and over again. Senator Newman is saving $1.1 million a day, $28 million a week, over $1 billion a year in money that was going to people who were defrauding the social security system, to people who were in receipt of money that they should not have had. We are about giving social security to the needy, not to the greedy.We are saving that sort of money as a result of the reforms that Senator Newman has brought in. She has been able to do some things. However, one thing that has just been knocked back in the Senate is a benefit to parents caring for profoundly disabled children. But, no, the Labor Party wanted to spend more money and knocked it back. The Labor Party and the Democrats have deprived those parents of profoundly disabled children the benefit of some of the money that Senator Newman has been able to save. But they do not tell us about that. They are prepared to stand up here and tell outrageous lies, as Jenny Macklin did—giving false figures about the number of people who have been affected. (Time expired)15:26:003759Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—I am pleased to rise and follow Senator Patterson on this matter. It is not an outrageous lie, Senator. Your minister has already pointed out that some 1,300-plus people have been wrongly paid.LI4PATTERSONSenator Patterson—Thousands and thousands.ZF4Crowley, Sen RosemarySenator CROWLEY—It is all very well to say that is only 1,300 out of one million. How would you like to be one of those people whose money did not come? How would you like to be one of those unemployed people who, through no fault of their own, have nothing this week because their money did not come? How would you like to be one of those people who were overpaid through no fault of their own? Suddenly the money is being paid back and the minister will be claiming that they were welfare cheats. No, they were not; they were errors by the department—by this new Centrelink system.Senators opposite should take serious note of what is being said. This is not the Labor Party; this is the Advertiser in South Australia and, as Senator Hill would know, it is not known as a hot-to-trot Labor Party rag. No, indeed; it is much more likely to be a cautious, conservative newspaper. So when it is writing an article that absolutely savagely and scathingly criticises the job network and the new job system in South Australia, you should be paying great heed. Why are you not admitting that the system is totally chaotic and a total failure for the people it is meant to help?It is not providing jobs for the so-called FLEX 1 and 2. In fact, all Senator Ellison can tell us is that the long-term unemployed are getting jobs. That is something we would all be very pleased about. But the people who are not able to get jobs—the people who are FLEX 1 and FLEX 2 as they say—are not being provided with any assistance or any jobs at all. More importantly, all the job agencies that were successful in their tendering bids are about to go under. What does Minister Kemp say on behalf of the Liberal government? `Do your job or you die.' The Adelaide Advertiser said:The federal Employment Minister, Dr Kemp, last night shrugged off the concerns of struggling South Australian job agencies, telling them: `If you perform, you'll thrive.'And he has rejected claims that some job agencies have not received one single referral under the newly privatised Job Network scheme.What is he doing—calling all these people liars? Is that what he is saying to the job agencies whom he has appointed to do this job? They know they are not getting any money. They have a massive failure of any capital. They have no referrals. Centrelink is not providing the information to them, and it is a complete and utter stuff-up. That is the problem. People are not getting assistance with jobs and the centre providers are not going to survive.What are you planning to do about that? According to Mr Howard and Dr Kemp, you—the so-called caring, compassionate government—are not going to take the slightest notice of them. There is supposedly nothing to take any heed of—`No, the system's there. Fix it. And if you don't survive, too bad.' That is hardly a way to encourage the unemployed or the providers of employment.As the chair of the regional unemployment inquiry, I have heard and some of my colleagues have heard—Senator Ferris, for example, knows this full well—the evidence that we are getting from around Australia that many of those Job Network systems are not falling into place: they are a terrible mess. People are being referred for miles to attend an agency that will assist them with a job, only to find that, even if they are on those books at last, there is no job. They have had to travel a huge distance at great cost only to find that if they do not go to that place they cannot get a job or a referral anywhere else. People are just giving up in droves.This is a total mess. I am surprised that you do not admit there are major teething problems with this and that it would be much better to be saying, `Yes, there are problems and we are out there seriously reviewing what's going wrong,' and perhaps paying some of these agencies money up-front to allow them to survive. But no, Dr Kemp—on behalf of the so-called caring, Liberal government—says, `If you don't survive, too bad. You're in or you're out, and it's up to you to pull your fingers out and get the jobs going.' But it is not up to them at all: they are waiting for referrals from Centrelink and the Centrelink referrals are not coming. We should be very concerned that a new system that was put in place to be so-called better than the old one is a total failure. It is chaos, confusion and anxiety out there. People are hurting badly.Mr Howard and his government say that they are listening to people in rural and regional Australia. But, on the minister's evidence, they are totally deaf on this issue. People cannot get employment. People are very concerned about how they now have to go through this process to try to get employment, and it is simply not working. The jobless fill out new social security forms, wait for job seeker identification numbers, fill out more forms to link with private employment services and still nothing happens. (Time expired)15:31:003760Ferris, Sen JeannieSenator FERRIS5L6SALP10—Senator Crowley and Senator Quirke have extensively quoted today from a story in the Advertiser headed `Job centre's crisis'. The main thing that is truthful about this article is the heading. If you take out the word `centre's', you pretty well sum up the problem of South Australia in relation to unemployment under the previous government: `Job crisis'.There is no doubt that, as Senator Crowley has said, South Australia—like many other states in this country—is still suffering from the long-term unemployment legacy that this government inherited 2½ years ago. I am surprised to hear Senator Quirke and Senator Crowley so extensively quote from the Advertiser article as if it is fact and not fiction. I am very interested to hear that Senator Crowley and Senator Quirke believe everything that they read in the Advertiser, because the reality, on this occasion, is certainly far from the truth.Before I get onto that, let us take a moment to think about why we have this new process: why we have Job Network and why we decided to change the arrangements under which thousands and thousands of our young people in Australia were reluctant to get out of bed in the morning, then spent the day in front of the television set—while their parents were despairing of a future for them—or spent the day going out to the video shop because they felt that they had absolutely no future. What they have now got under Job Network is access to more than 1,400 sites around Australia—four times the number of CES sites that were previously available.AW5CARRSenator Carr—They haven't got any telephones—they can't be found.5L6Ferris, Sen JeannieSenator FERRIS—Senator Carr says they have not got any jobs. The one thing that is right about your statement, Senator Carr, is that it goes back 10 years and more: they had no jobs under your government and they had no chance of finding them. With our new Job Network arrangements, at least they have a chance at those 1,400 sites around Australia of looking for extra job vacancies.Let us turn now to the accusations made in the Advertiser. The article in the Advertiser suggested that Job Network was about to collapse in my state of South Australia. My inquiries enable me to refute that suggestion completely. Performance data shows that there have been over 10,000 job referrals for intensive assistance in South Australia since 1 May. They are well on track to achieve the 11,000 target set for the end of June. The data shows that, in fact, there is no site in South Australia which has not had a referral. Each referral to intensive assistance results in a follow-up, up-front payment to the member of the Job Network ranging from $1,500 to $3,000, depending on how disadvantaged the job seeker is and the amount of assistance that is needed to help them find a job.This government has not guaranteed and has never guaranteed a set number of referrals to individual Job Network members. Job seekers, in fact, have been given choice under this government, not the compulsion under the previous government to attend the CES whether or not it delivered a job for them, a job interview or a job opportunity. We have given job seekers the choice to choose a job network that they want to go to. Under job matching, Job Network members are contracted to place people in jobs.I am very pleased to be able to say that, of the 36 organisations at 107 sites in South Australia offering job matching services, 35 have made job placements as at 19 June. The one which has not made any placements yet—and what a pity that Senator Crowley and Senator Quirke are not here to hear this piece of truthful information—has, in fact, not commenced operations. While 35 organisations have made job placements, the one that has not has not yet started operations. So the next time that Senator Quirke and Senator Crowley pick up the Advertiser and read as gospel what appears in it, they may choose—as unfortunately the reporter did not—to check their facts with the minister's office. (Time expired)10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! The time for the debate has expired.Question resolved in the affirmative.376110001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:Petitions received.376140DT6Bartlett Sen AndrewTo the Honourable the President and Members of the Senate in the Parliament assembled:The Petition of the undersigned shows: That Australian citizens oppose social, legal and economic discrimination against people on the basis of their sexuality or transgender identity and that such discrimination is unacceptable in a democratic society.Your petitioners request that the Senate should: pass the Australian Democrats Bill to make it unlawful to discriminate or vilify on the basis of sexuality or transgender identify so that such discrimination or vilification be open to redress at a national level.Senator BartlettDT6Senator Bartlett(from 40 citizens)37613899TW4Bourne Sen VickiTo the Honourable the President and Members of the Senate in the Parliament assembled.The petition of the undersigned shows:(a) a proposal has been made by the Department of Transport to build a major no-curfew international airport in Sydney's western suburbs;(b) airports and attendant infrastructure are a major source of air and noise pollution;(c) Western Sydney already suffers from the worst air pollution in Australia;(d) an additional airport in the Sydney airshed will only serve to greatly increase such pollution; and(e) an airport in Sydney's west will harm the lifestyle and wellbeing of citizens living and working within the Sydney airshed.Your petitioners therefore request that the Senate not pass any bill which would lead to the construction of any new airport within the Sydney airshed.Senator BourneTW4Senator Bourne(from 3,899 citizens)3761591TW4 10000Bourne Sen Vicki; The PRESIDENTTo the Honourable the President and Members of the Senate in the Parliament assembled.The Petition of the undersigned draws to the attention of the Senate, the deleterious effects of the Multilateral Agreement on Investment.Your petitioners ask the Senate to call on the Australian Government to:1. Make available the draft text of the Agreement;2. Make a public statement about its intentions with regard to the signing of the MAI, detailing the beneficiaries of the Agreement, and accountability measures for all corporations.3. Not sign the MAI unless substantive amendment is made, including the observance of international agreements including environment, labour, health and safety and human rights standards.4. Extend the deadline for signing the MAI to enable full and proper public consultations to be held.Senator BourneTW4Senator Bourne(from 462 citizens)The President10000The President(from 129 citizens)37611311I4McKiernan Sen JamesTo the Honourable the President and Members of the Senate in Parliament assembled.The petition of the undersigned citizens respectfully shows that we, the citizens of regional Australia, call on the Senate to do everything possible to ensure that all Australian citizens have an equitable opportunity to be able to view the 1998 FIFA World Cup from France which is to be broadcast via the Special Broadcasting Service (SBS) Network.Regional Australians proudly belong to a multicultural nation and enjoy a widespread interest in international sport. We call on the Australian Senate to end the current discrimination that ensures that only metropolitan centres have access to the direct telecasting of one of the great sporting events of the world.And your petitioners as in duty bound will ever pray.Senator McKiernan1I4Senator McKiernan(from 131 citizens)Petitions received.Notices376237623762Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I give notice that, on the next day of sitting, I shall move:That the following matter be referred to the Foreign Affairs, Defence and Trade References Committee for report by the end of the spring sittings in 1998:The appropriateness of the Australian Defence Force (ADF) involvement in non-defence matters, with particular reference to the current legal basis for ADF involvement in such matters, including section 119 of the Constitution, section 51 of the Defence Act, Part 6B of the National Road Transport Commission Amendment Act 1998 , Australian Military and Airforce Regulations and Defence Instructions.37623762Carr, Sen KimSenator CARRAW5VICALP00—At the request of Senator Cook, I give notice that, on the next day of sitting, he will move:(1) That the following matter be referred to the Economics References Committee for inquiry and report by the last sitting day in August 1998: The operation of the Australian Taxation Office (ATO), with particular reference to: (a) the equitable treatment of taxpayers; (b) the performance of the Large Business and International Division, including, in particular, the High Wealth Individual Project; (c) compliance by the ATO with the Client Settlement Guidelines; and (d) allegations of infiltration of the ATO by organised crime.(2) That, in referring this matter, the Senate notes section 16 of the Income Tax Assessment Act 1936 but reaffirms that, under section 49 of the Constitution and section 16 of the Parliamentary Privileges Act 1987 , a witness may not be prosecuted for giving evidence to a committee of the Parliament and evidence given to a committee may not be used in proceedings in any court or tribunal.37623762Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I give notice that, on the next day of sitting, I shall move:That the following bill be introduced: A Bill for an Act to amend the War Crimes Act 1945 . War Crimes Amendment Bill 1998.37623762Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—I give notice that, on the next day of sitting, I shall move:That the Senate—(a) notes: (i) the Australian Bureau of Statistics data showing the number of firms undertaking technological innovation activities, (ii) the central place of innovation in the Government industry policy as set out in `Investing for Growth', the Government's plan for Australian industry, and (iii) that the failure to innovate undermines the Government's entire industry policy; and(b) expresses concern that the Government has failed to adequately address innovation in Australia and has instituted regressive education, taxation and employment schemes, which have a direct negative effect on the ability of industry to undertake technological innovation activities.37623762Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I give notice that, on the next day of sitting, I shall move:That:(1) On Thursday, 25 June 1998: (a) the hours of meeting shall be 9.30 am to 6.30 pm and 7.30 pm to 11.10 pm; (b) the routine of business from 7.30 pm to 10.30 pm shall be government business only; and (c) the question for the adjournment of the Senate shall be proposed at 10.30 pm.(2) The Senate shall meet on Friday, 26 June 1998, and that: (a) the hours of meeting shall be 9.30 am to 4.25 pm; (b) the routine of business shall be government business only; and (c) the question for the adjournment of the Senate shall be proposed at 3.45 pm.37633763Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I give notice that, on the next day of sitting, I shall move:That the Senate—(a) condemns the persecution of all religious minorities around the world;(b) deplores the long-lasting plight of the Christian minorities in Turkey involving discrimination against those minorities freely practising their religion and culture; and(c) requests the Government of Turkey, in the interests of secularism and respect for minorities, to: (i) make it easier for all Christian denominations to be recognised as official churches and to have clear legal rights with regard to property ownership, (ii) allow the opening of the Greek Orthodox and Armenian Apostolic seminaries which were forcibly closed in 1971 and to permit other Christian denominations, such as the Syrian Orthodox, to have seminaries as well, (iii) abolish the special tax imposed on Christian institutions, (iv) preserve the monuments and cease the destruction or desecration of Christian churches, monasteries and other religious monuments, (v) provide more protection for the Ecumenical Patriarchate of the Orthodox Church in Istanbul, and Armenian and Greek Christian churches in Turkey, against possible further attacks by Islamic extremists, (vi) return to the Armenian Protestant Church all property that was taken from it, in cluding money that the Armenians were forced to pay, and (v) not interfere in the selection of church leaders or in the affairs of the Christian communities, and in particular the operations of schools.37633763Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I withdraw government business notice of motion No. 237633763Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—At the request of Senator Bolkus, I give notice that, on the next day of sitting, he will move:That there be laid on the table by the Minister for Justice (Senator Vanstone), no later than 5 pm on 29 June 1998, the report of Mr Tony Ayers into the adequacy of the resources of the Australian Federal Police.37633763Calvert, Sen PaulSenator CALVERT5F4TASLP10—At the request of Senator Jacinta Collins, I give notice that, on the next day of sitting, she will move:That the time for the presentation of the report of the Economics References Committee on promoting Australian industry be extended to 11 August 1998.37633763Calvert, Sen PaulSenator CALVERT5F4TASLP10—At the request of Senator Ferguson, I give notice that, on the next day of sitting, he will move:That the time for the presentation of the report of the Economics Legislation Committee on the provisions of the Taxation Laws Amendment Bill (No. 4) 1998 be extended to 11 August 1998.37633763Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator O'Chee and the Standing Committee on Regulations and Ordinances, I give notice that, on the next day of sitting, Senator O'Chee will withdraw business of the Senate notice of motion Nos 1 and 2 standing in his name for the next day of sitting for the disallowance of the Australian Industrial Relations Commission Rules 1998, as contained in Statutory Rules 1998 No. 1 and the Health Insurance Commission Regulations (Amendment), as contained in Statutory Rules 1997 No. 332. I seek leave to have the committee's correspondence concerning these instruments incorporated in Hansard .Leave granted.The correspondence read as follows—Australian Industrial Relations Commission Rules 1998Statutory Rules 1998 No.125 May 1998The Hon Justice G M GiudicePresident, Australian Industrial Relations CommissionNauru House80 Collins StMELBOURNE VIC 3000Dear PresidentI do not believe that the Committee has written directly to you before and therefore on behalf of the Committee I would like to congratulate you on your appointment as President of the Commission.I am writing to you about the Australian Industrial Relations Commission Rules 1998, Statutory Rules 1998 No 1, about which the Committee has a number of concerns. The Committee has received and considered the letter of 17 April 1998 from the Industrial Registrar about these concerns and is most grateful to Mr Kelly, but we would appreciate your further advice.The Committee's first concern relates to rule 6, which appears to be a subdelegation of legislative power by the Commission to itself, giving the Commission a putative power not provided for in the enabling Act. The Committee notes the advice from Mr Kelly that a similar provision has been in force since 1989 and that there is a similar provision in the Federal Court Rules, but this does not answer the question. Subdelegation of power such as that to make rules is void unless expressly authorised by the enabling Act and we would be grateful for your advice about the authority for rule 6.By way of background I should say that the Committee detects numbers of delegated instruments which are void for subdelegation of power and that rule 6 is not unique. For instance, earlier this month, in reply to a query from the Committee, the Minister for Finance and Administration advised us that provisions in two separate Parts of a Remuneration Tribunal Determination would be amended in light of our concerns about the validity of subdelegations. With respect to the Federal Court Rules, the Committee will make further inquiries and if necessary write to the Chief Justice of that Court. Our concerns about subrule 13(2) relate to the personal rights of those affected and to ensuring "best practice" in Commonwealth drafting. We note the advice from Mr Kelly that the subrule has not caused any prejudice and our concerns would be met by your confirmation that the procedures of the Commission are such that it is possible to ascertain the day on which the Registrar has failed (as distinct from refused) to make a decision or do an Act.The Committee's final concern relates to the delay of 12 months between the making of the Practice Notes and the Rules, which appears to breach parliamentary propriety. The Minister for Workplace Relations has advised the Committee, in respect of another instrument, that it is a fundamental principle of administrative law that a public official entrusted by legislation with a discretionary power will normally be under a duty to exercise that power when appropriate circumstances arise. The Committee accepts this advice. In the opinion of the Committee that duty arose from 19 December 1996, the later date of assent of the two Acts which the Explanatory Statement advises are the basis of the Rules. The fact that the principal enabling legislation has been amended since then does not affect this duty. It is to be expected that enabling Acts will be amended from time to time. It is usual and accepted practice for delegated instruments which rely on particular enabling provisions to be made and to come into effect as soon as possible after those provisions.The Committee has raised these concerns because industrial relations are an important and sensitive part of Australian public administration. Also, as you would know, the Committee has always been active in this area. For instance, the Acting Chief Justice and the Chief Justice of the Industrial Relations Court agreed to repeal and remake the entire Rules of that court (Statutory Rules 1994, No 110) in light of our concerns about prejudicial retrospectivity, apart from one provision which everyone appeared to agree could not be validly made in any case. The Committee also received assurances from the Chief Justice about two sets of Rules which become void because they were not tabled in Parliament within the required period.Yours sincerelyBill O'CheeChairmanSenator Bill O'CheeChairmanStanding Committee on Regulations and OrdinancesParliament HouseCANBERRA ACT 260015 June 1998 Dear Senator,Thank you for your letter of 25 May 1998 and for your kind congratulations. Please convey my thanks to the Committee also.You refer to the Committee's concern that rule 6 of the Australian Industrial Relations Commission Rules 1998, Statutory Rules 1998 No.1, appears to be an impermissible sub-delegation of legislative power by the Commission. The Rules are made pursuant to s.48 of the Workplace Relations ACT 1996 (the Act). Section 48(1) reads:48(1) The President, after consultation with members of the Commission, may, by signed instrument, make rules, not consistent smith this Acts with respect to:(a) the practice and procedure to be followed in the Commission; or(b) the conduct of business in the Commission: and, in particular:(c) the manner in which, and the time within which. applications, submissions and objections may be made to the Commission; and(d) the mariner in which applications, submissions and objections may be dealt with by the Commission.The rules are intended to provide for the practice and procedure of the Commission and the conduct of its business subject to the important proviso that the rules must not be inconsistent with the Act. It is the Act which is therefore the primary legislative instrument and deals with substantive rights. This is not to deny that rights can be affected by the rules. In particular, a party which fails to comply with the rules faces the prospect of having their case dismissed. In those respects the Commission's rules are analogous to Rules of Court which almost universally contain a rule like rule 6. The ratio for such rules is that it may be grossly unfair to deprive a litigant of success because of a procedural noncompliance. Notoriously such non-compliance arises In relation to time limits on lodgement. A recent decision of The High Court is instructive as to the reasons why there should be a process to waive non-compliance with time limits contained in Rules of Court: Jackamarra v Vaguer (1998) 72 ALJR 819.The power to waive compliance with procedural rules it may be argued, is particularly appropriate in light of the terms of ss. 98, 98A and 110(2)(c) of the Act. It may even be argued that absent a rule like rule 6 the rules as a whole might be "inconsistent with the Act." This is because it may be potentially unjust to require a party to comply with a procedural requirement. For example an applicant for an order under s.127(2) ought not be prejudiced by failure to serve a copy of the application on a party when the party is aware of the application through other means (rule 25(2)(c) refers).I note from Hansard of 2 April 1998 your statement that rule 6 "May be an invalid sub-delegation of legislative power in that the Commission is allowing itself to make its own Rules (different from those tabled as Statutory Rules 1998 No.l) at any time that it chooses to do so." I am not sure that rule 6 has the characteristics which the Committee attributes to it. It confers a power to dispense with compliance. The discretion is not unbounded but must be exercised in accordance with the justice of the case: Hall v Nominal Defendant (1966) 117 CLR 423 at 429.As the Industrial Registrar indicated in his letter to you of 17 April 1998, rule 6 finds its equivalent in the Rules of the Federal Court. It was not his intention to single out the Federal Court. There is an equivalent in the rules of most of the Australian Courts including the High Court: Order 64 Rule 2.It is been said in relation to such rules that ". . . [R]ules must be the servant not the master of the Court": Clune v Watson (1882) Tarl 175 and "Rules and Forms of procedure are not ends in themselves, but a means to an end, which is the attainment of justice Coles v Ravenshaw [1907] 1 KB 1. Specifically, in respect of the Australian Conciliation and Arbitration Commission, the High Court has stated "[T]his Court, of course, recognises that the Commission is entitled to determine its own practice, consistently with the provisions of the law and the requirements of natural justice." Re Coldham and Others: Ex Parte The Australian Building Construction Employees and Builders Labourers' Federation (1985) 159 CLR 522 at 528.In light of all of the above considerations there Is an overwhelming case for rule 6 or some similar rule.In relation to subrule 13(2), I note that the Committee's concern would be met by confirmation that the procedures of the Commission are such that it is possible to ascertain the day on which a Registrar has failed (as distinct from refused) to make a decision or do an act. "Refusal" connotes a positive act whereas "failure" indicates the lack of one. The reference in the subrule to a failure provides a remedy for inaction of a kind which goes beyond a refusal. Of its nature a failure is usually a continuing state of affairs. Where the failure is of that kind, time never starts to run and an appeal may be brought at any time so long as the failure continues. Where the failure is constituted by the doing of an act, no doubt that act becomes the reference point for the calculation of the period within which the appeal must be made. (In such a case the relevant act may also constitute a refusal). I trust this explanation is satisfactory. The Committee's final concern relates to the delay of 12 months between the making of the Practice Notes and the Rules which delay it is said appears to be a breach of parliamentary propriety Let me say at once tat the delay in finalising the rules was too long. It was brought about, however, by an unusual conjunction of circumstances which are unlikely to be repeated. The first of these matters was adverted to in the Industrial Registrar's letter namely the issue of a Practice Note in December 1996 to take the place of Interim Rules. In the absence of the practice direction there would have been no guidance for parties and their advisers in respect of numerous new provisions contained in the Act Perhaps the issue of the Practice Note engendered a false sense of security.However that may be, there then followed a consultation process with members of the Commission, as required by s.48, and with some of the major industrial parties. It was difficult to undertake these consultations earlier in light of the extremely short time frame between the assent and commencement of the legislation.You will be aware that my predecessor resigned her position in July 1997. I was appointed on 17 September 1997. Although the question of finalising the rules was brought to my attention within the first few weeks I was not prepared to make the rules without satisfying myself that they hat been considered adequately and would not require substantial amendment in the near future. In the event at least one change was made in the draft which hat been prepared by the Office of Legislative Drafting in July 1997. Further amendments were made to the Act towards the end of the year and it seemed sensible to wait then so that the new rules could be comprehensive.The Minister for Workplace Relations has given the Committee advice which has led the Committee to form the opinion that the President of the Commission was under a duty to make rules and that duty arose on 19 December 1996. I have not been furnished with the advice. The principles to be applied in ascertaining whether a statutory power of this kind must be exercised are set out in a well known passage in the joint judgment of the High Court in Ward v Williams (1955) 92 CLR 496 at 505-6. Reference is often made also to dicta of Windeyer J in Finance Facilities Pty Ltd v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 64, 84-5 and 97. The principles may be summarised as follows. The use of the "may" in a statute is prima facie facultative, but the particular provision, the statutory context or the general scope and the objects of the statute may indicate that the person to whom the power is given is bound to exercise it if specified conditions are fulfilled. Although I am open to argument to the contrary, it seems to me that s.48(1) is not mandatory but permissive As I have already noted, I have not seen the advice referred to. It may be that the advice raises some consideration of which I am not aware. As presently advised, however, there is nothing apparent which requires "may" in s.48 to be read as "must". In the final analysis this may be a sterile debate since I agree that it is desirable that there be rules and that the delay in their making was inordinate.Should you wish to discuss any of these matters further please contact the Industrial Registrar, Mr M Kelly who will make the arrangements.Yours faithfullyJustice GiudicePresidentHealth Insurance Commission Regulations (Amendment)Statutory Rules 1997 No.3325 March 1998The Hon Dr Michael Wooldridge MPMinister for Health and Family ServicesParliament HouseCANBERRA ACT 2600Dear MinisterI refer to the Health Insurance Commission Regulations (Amendment), Statutory Rules 1997 No 332, which make changes to the Principal Regulations consequent upon the enactment of the Hearing Services Administration Act 1997 and the Hearing Services and AHS Reform Act 1997 .New subregulation 3H(3) of the Principal Regulations permits the Health Insurance Commission to disclose to the Department of Health and Family Services a wide range of information about claims and payments relating to hearing services. Although this provision is authorised by the Health Insurance Commission Act 1973 , the Committee would appreciate your advice as to whether the Privacy Commissioner was consulted on the content of this subregulation.Yours sincerelyBill O'CheeChairmanSenator W.G. O'CheeStanding Committee on Regulations and OrdinancesParliament HouseCANBERRA ACT 260011 MAY 1998Dear BillThank you for you for your letter of 5 March 1998 concerning the Health Insurance Commission Regulations (Amendment), Statutory Rules 1997 No 332. You asked whether the Privacy Commission was consulted on the content of subregulation 3H(3). I apologise for the delay in responding.Consultation was not undertaken with the Privacy Commissioner prior to making the new regulation as there was a pre-existing regulation. That regulation, which was not disallowed. provided for disclosure of information, including personal information, to the entity responsible for oversight of hearing services (at that time, Australian Hearing Services).The new regulation replicates that arrangement, but updates it to reflect recent changes in the delivery of hearing services, namely:(a) the relocation of the administration and management of the hearing services program into the Office of Hearing Services, with the Department of Health and Family Services; and(b) the somewhat broader information needs generated by the new structure, which is in accordance with the wishes of Parliament as set out in the Hearing Services and Administration Act 1997.The role of the Health Insurance Commission (HIC) is to pay claims while the Department of Health and Family Services is responsible for administering the hearing services program As the Department is the formal recipient of personal information (a matter which is made clear to hearing services clients; see attached form), the HIC considered that no new privacy issues or other matters affecting the personal rights or liberties of hearing services clients were raised by the new regulation.With kind regards,Yours sincerelyDr Michael WooldridgeBusiness37673767Motion (by Senator Carr) agreed to:That general business notice of motion No. 1164 standing in the name of Senator Carr for today, relating to the resignation of Mr Bill Daniels, a First Assistant Secretary in the Department of Employment, Education, Training and Youth Affairs, be postponed till the next day of sitting.3767Motion (by Senator Ian Campbell) agreed to:That government business notice of motion No. 1 standing in the name of Senator Vanstone for today, relating to the consideration of legislation, be postponed till the next day of sitting. 3767Motion (by Senator Faulkner) agreed to:That general business notice of motion No. 1160 standing in the name of Senator Faulkner for today, proposing an order for the production of documents by the Leader of the Government in the Senate (Senator Hill), be postponed till the next day of sitting.3767Motion (by Senator Margetts) agreed to:That general business notice of motion No. 1161 standing in the name of Senator Margetts for today, relating to the appointment of a select committee on the socio-economic consequences of the National Competition Policy, be postponed till the next day of sitting.3767Motion (by Senator Brown) agreed to:That general business notice of motion No. 1159 standing in the name of Senator Brown for today, relating to East Timor, be postponed till the next day of sitting.3767Motion (by Senator Lees, at the request of Senator Stott Despoja) agreed to:That general business notice of motion No. 1163 standing in the name of Senator Stott Despoja for today, relating to the Australian Youth Policy and Action Coalition, be postponed till the next day of sitting.3767Motion (by Senator Ian Campbell)—by leave—proposed:That:(a) The hours of meeting for today shall be 2.00 p.m.—6.30 p.m. and 7.30 p.m.—11.10 p.m.(b) The routine of business from 7.30 p.m. till 10.30 p.m. shall be government business only.(c) The question for the adjournment of the Senate shall be proposed at 10.30 p.m.15:47:003767Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—The opposition will support the motion that has been proposed by the Manager of Government Business in the Senate (Senator Ian Campbell), although I want to indicate that the opposition does have a number of concerns with the way the program is currently being managed. Senator Ian Campbell, as Manager of Government Business in the Senate, has provided the opposition, the minor parties and Independent senators with a list of legislation. That list is broken up into priority legislation, which is described as legislation the government intends to deal with prior to rising at the end of these sittings, and non-controversial legislation, which is a very substantial list indeed.The Manager of Government Business in the Senate provides an indicative estimation of time for debate on the so-called winter list, which is the priority list of legislation. I want to make the point that it has proved impossible in the past to make an accurate prediction about the amount of time that is needed to debate legislation. I suspect the best example we have is the recent case of the Managed Investments Bill 1997 , which is one bill that even Senator Ian Campbell himself has been handling for the government in the chamber. I think his own estimate has been out by something like a factor of four for the debate on that bill.I want to also indicate—and I do not know the views of the minor parties or Independents on this matter—that there are some bills on the list of priority legislation that, as far as the opposition is concerned, we do not intend to grant an exemption from the cut off. Obviously, if a majority of the Senate were of a like mind to the opposition on this matter, then clearly those bills would not be available for debate in the Senate during this session.I have indicated that there is a very substantial list of non-controversial legislation. Non-controversial legislation tends to be matters on which there is at best a very short committee stage and no divisions required during the second reading stage or committee consideration of these bills. Really what `non-controversial' means is no divisions and no objections from senators. As I read the list of proposed non-controversial legislation, I see a significant number of bills that I am aware involve amendments and, therefore, may not be accepted by all in the chamber as being non-controversial. I assume this is something the Manager of Government Business has taken into account.On a more substantive and immediate issue, I am concerned that the list of legislation that has been provided to the opposition by the government does not indicate a proposed order of consideration for legislation. I do think that is a very significant issue. Apart from the guidance we have on the Senate red, the Senate Order of Business, we have no guidance from the government in relation to a proposed order of consideration of those bills. In that respect, I imagine that the majority of senators in the chamber would consider that this is not a program; it is characterised more as a wish list from the government.If the government expects cooperation on the matter we are debating now, which goes to the Senate sitting this evening, Tuesday evening—and we have heard the manager a moment ago give a notice of a motion for the Senate to sit on Thursday evening of this week and Friday of this week—then it could at least provide us with a program for the final week and a half of sittings. Frankly, I have to say that I cannot recall an occasion when we have been two days into a two-week sitting period when that two-week legislative program has not been provided to the Senate. I think that situation is virtually without precedent.Given the motion that we have before us at the moment and given the situation that we have a motion to give consideration to tomorrow in relation to sitting on Thursday night and Friday, which I think the opposition would be mindful to support on the understanding that we have some indication from the government of what is proposed in the program, what is missing is that we do not have a legislative program before the Senate. We have got two wish lists, but we do not have an order of consideration and we have no program at all for the final week of this two-week sitting period. That is, I think, absolutely unacceptable.I ask that the Manager of Government Business indicate when we might expect that program to be made available for the benefit of senators. I do not think that is an unreason able request. I also think that the Senate is entitled to hear what the manager has in mind in relation to any prospective extra sitting periods, be it the Senate sitting in further evening sessions next week, be it the Senate sitting an extra day on Friday next week or the like.I also make this point, and I think this is a substantive point: I notice that the Native Title Amendment Bill is absent from both the list of priority legislation and the list of so-called controversial legislation. It does not appear on either list that Senator Ian Campbell has provided the Senate.DX5MARGETTSSenator Margetts—It is in their minds, perhaps?5K4Faulkner, Sen JohnSenator FAULKNER—No, I assume we take it from the absence—H15CAMPBELLSenator Ian Campbell—John, if you want to vote, I will put it now.5K4Faulkner, Sen JohnSenator FAULKNER—I think you understand what our position is on this, but you are the manager. What I am putting forward here are, I think, some reasonable concerns about the program in response to a motion—that the opposition intends to vote for—in relation to extra sittings tonight. I make the substantive point to the Manager of Government Business that the Native Title Amendment Bill is not on the prospective legislative program. We can probably only take from the fact that the Native Title Amendment Bill does not appear that the government does not intend bringing the bill back to the Senate during these sittings. I am sure these are issues of concern to all senators.I appreciate the fact that there is a plan to hold a discussion amongst all parties and Independent senators in the chamber to try to work through some of the issues. But, before some of these matters are given any further consideration, I think that the Senate is entitled to some answers to some of those concerns which, with due respect to all concerned, are matters of substance. It is not unreasonable that, before this matter is voted on, and even though I have given an indication of the opposition's intentions in relation to the motion before us, we know what the government's response is.I do make the point, particularly in relation to the programming, that it is absolutely unheard of for us to get to this point—the second day of what was planned as an eight-day sitting fortnight; now there is a proposal from the government that it be a nine-day sitting—AW5CARRSenator Carr—Probably 10.5K4Faulkner, Sen JohnSenator FAULKNER—Possibly 10, but that is a matter for further consideration. We would obviously appreciate the government letting us know what they have in mind. But it is, I think, unheard of at this point in the sittings, given the program we have got in front of us, for us not to have an idea about the planning of the government in relation to when this legislation is to come before the chamber. I think the chamber is entitled to some indication from the government at this point as to what the proposed order of consideration of bills might be.As I have indicated, the opposition will support this motion. I have made clear to the Leader of the Government in the Senate that, if we are to sit tonight, we may as well make it a meaningful sitting of the Senate. The suggestion that we have a situation of no quorums and no divisions—a situation in which, one assumes, only a couple of opposition senators would make speeches and perhaps many government senators would not front up—is not acceptable. If we are to sit the extra time, we ought to work for the extra period of time. I gather that view of the program has been accepted by the government.If the program is as substantial as we hear from the government, then I do not really think that we can afford to waste the time of the Senate if there is agreement to allow the Senate to sit extra hours. I would ask that, at the conclusion of this debate, the manager respond to the substantive issues that I have raised in my contribution.15:59:003769Brown, Sen BobSenator BROWNQD4TASAG00—I oppose the motion. We are not at the end of a parliamentary period; we are three years into a three-year parliamentary period. An election so far as this parliament is concerned is due about May next year. This whole motion is based on the unspoken presumption that there will be an election in August. The presumption is that the government wants to get through as much legislation as it can in this fortnight in preparation for that election, not least legislation for the sale of the rest of Telstra so that the government can be out on the hustings saying that it is going to spend money out of that sale to magically defend the interests of the bush and ordinary consumers as far as telecommunications are concerned. But it does not want to say when or how or why that election is going to take place.There is no justification for this situation arising in the Senate at this time. As far as Telstra and many of the other pieces of legislation are concerned, we should be dealing with them in the winter session when we come back here after 5 August. The whole rush to have us sit tonight, Thursday night and Friday, the same next week and potentially a week after that is to suit the government's electoral purposes.If the government says that we are going to have an election in August, then we have something fixed in our minds that we can debate. But with things—not including native title—up in the air, the government does not know what it is doing about an election. What we are seeing in here is really part of the chaotic situation that the government is in at the moment over its election planning.Not only has the Prime Minister to deal with the National Party that does not want to go to an election all of a sudden, and many members of government who are getting very nervous about the prospects of an August election, but the Manager of Government in the Senate—and I feel sorry for him—has ministers wanting to get their legislation through before an election comes up, just in case. It will take a long while to get it through if the government wins afterwards.H15CAMPBELLSenator Ian Campbell—Some of them have been waiting for two years to get some of these bills through.QD4Brown, Sen BobSenator BROWN—If they have been waiting for two years to get these bills through, there is something wrong with the way the government has been prioritising that legislation.H15CAMPBELLSenator Ian Campbell—Eighty-five hours of native title is a pretty fair review of that legislation.QD4Brown, Sen BobSenator BROWN—The government has the opportunity in an orderly fashion to make sure that their sitting times enable it to get its legislation properly debated. I am not cavelling over that, and I am not cavelling over the amount of time that the honourable manager talks about which has been given to native title, which has twice been brought before this place, and, goodness knows, may well be brought before it again if Senator Harradine caves in in the next week or two. That is not the point.What I am saying is that the government is in a chaotic position and, unfortunately, the manager is at the centre of that trying to get some order out of it. But ministers are coming from everywhere saying to the manager, `We want to get our piece of legislation through.' Suddenly this is urgent; suddenly they want to appear like they have been able to progress on matters that are important to the electorate as we go to an election over winter.I say again that this country should not be going to an election now. The country should be going to an election next year. If ever there was an argument for fixed term elections, this is it; if ever there was an argument for legislation to be introduced in here to say that elections should be every third year on a specified date and the government cannot alter that, then this is it.I am happy to stay here tonight. I came in at 8 o'clock yesterday and I left just after midnight last night, even though the Senate was not sitting, because there are really important electoral matters that I am dealing with. If we sit tonight, it will simply eat into that time, but it will not make any difference what time I go to bed. As the Leader of the Opposition says, the government has not come forward with an orderly program. It does not have a program fixed for the next two days, let alone the next week.I note that we have not had the necessary motions passed for the electoral reform that the government has in mind, which, by the way, if the government's aims are fulfilled, would deprive 15,000 prisoners in this coun try of their vote in legislation hurried through here in the next ten days. This is again trying to advantage the government as it heads towards the ballot box. They will be getting some curry from me over that one if it appears on the schedule in the next fortnight. For those reasons, I oppose this motion.16:04:003771Bourne, Sen VickiSenator BOURNETW4NSWAD00—I would like to put on the record that, as usual, the Democrats are terribly reasonable and we will not be opposing this motion. However, we really see absolutely no reason whatsoever why most of these bills cannot be dealt with in the next session. We see no reason whatsoever why we should not be coming back for a next session, or are we coming back for a next session? We do not know.Obviously, appropriations bills are urgent and we would expect them to be dealt with expeditiously. I look forward to the leaders and whips meeting tomorrow when I am sure we will get a list of what the government is expecting over the next two weeks and the time frame they are expecting it in. We will not be voting against the motion, but we certainly see no urgency in most of these bills.16:05:003771Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I would like to respond mostly to the points that Senator Faulkner raised because they were serious points. Senator Brown's point that this is all determined because of some secret election agenda is not the case. I suspect that we have had all of these bills on the Notice Paper and on the government's legislative program since we came back here at the beginning of these sittings and we are seeking to deal with them.On the substantive point about the native title legislation, there has been speculation about whether native title will come back in here. I understand from reading the paper that Senator Harradine has suggested to the Prime Minister in a phone call that he would like to discuss some amendments. Clearly, from reading the paper—and I have not actually read the papers yet this morning, or at least anything about that—those discussions are either continuing or whatever. But I certainly as manager have not been told, `Ian, please get ready because we are going to bring native title back in.'I am managing the program based on what I know, and that is that we have a list of legislation which, as I recall, is pretty much in the same state it was in when we came here a few weeks ago. Senator Faulkner suggested that the Managed Investments Bill had taken a lot longer than I estimated. As he knows, for the past 18 months I have been seeking very unsuccessfully to estimate how long it takes to debate legislation in this place. Some bits of legislation go through very quickly. But most take much longer than my estimations and I misjudged the Managed Investments Bill very badly.I had held very constructive discussions with the Australian Labor Party and the Australian Democrats in relation to their amendments and we had a very clear view as to where the party stood on that legislation. We could have passed it in that time, but Senator Margetts—as is her right—came into this place yesterday and produced a comprehensive set of amendments which needed to be debated in some detail.The Greens (WA) did not take up my offer of briefings and discussions and information offerings in relation to those bills. But, again, that is their right. They do not need to talk to me if they do not want to, and it is their right to come in here and move those things. I estimated that it would take that time and Senator Faulkner is quite right: I was about 400 per cent out, and I suspect, by the end of the debate, about 500 per cent or 600 per cent out. It is about equivalent to my record in backing the horses, so I might give up estimating time.AX5EVANSSenator Chris Evans—Just give up as manager of government business.H15Campbell, Sen IanSenator IAN CAMPBELL—Just give up? Right. The other important point that Senator Faulkner raised was this issue of the program. We provided to all leaders and whips, if not all senators, a program for this week which included nine of the 14 bills on our priority list. In other words, we set out a program which included those bills and the order in which we wanted them debated this week. That leaves four or five bills on the priority list that we would seek to deal with in week 2.We are here for a two-week program. We have scheduled, in the priority order that existed on Wednesday, 10 June—and that is when we circulated the list—a program for all of this week with the order for the nine pieces of legislation, so that leaves five pieces of legislation for week 2. As Senator Faulkner correctly points out, some of those bills have not been exempted from the cut-off and the government may not be able to deal with them. So you have a priority order and a program with the exclusion of no more than five bills. You knew the order on 10 June. It is 13 days ago that you were given that order and that program. It has been the practice of this government to send the program out for the coming sitting week a week to 10 days ahead of each sitting week. In the fortnight we send out the program for the coming week on the Friday, and of course we have regular discussions with other parties.5K4FAULKNER Senator Faulkner—The Labor government, which you were so critical of, put out a program a fortnight in advance.H15Campbell, Sen IanSenator IAN CAMPBELL—The Australian Labor Party, as Senator Faulkner says in his private conversation across the chamber, sent out on occasions, or regularly perhaps, two-week indicative programs. Of course, Senator Faulkner had the same problem that I have—that the government's priorities change. They used to change and reorder their priorities very regularly. Senator Faulkner did raise the issue of the Native Title Bill in 1993, which, he will recall—I am not sure whether he was the manager at the time—AW5CARRSenator Carr—He was the manager.H15Campbell, Sen IanSenator IAN CAMPBELL—He was the manager—AW5CARRSenator Carr—In the good old days when we had a really good manager!H15Campbell, Sen IanSenator IAN CAMPBELL—In those days! He will recall that at the end of those sittings in December 1993 the Native Title Bill, which I am sure he would not have estimated was going to take two or three hours—5K4FAULKNER Senator Faulkner—The only thing that I didn't take into account was your disruptive behaviour!H15Campbell, Sen IanSenator IAN CAMPBELL—We gave that bill detailed consideration. We thought we gave it detailed consideration. It may have been too lengthy.AW5CARRSenator Carr—You filibustered!H15Campbell, Sen IanSenator IAN CAMPBELL—Some people would call it a filibuster, but even in the detailed consideration that we gave that bill in 1993—I think that debate was about 52 hours—DX5MARGETTSSenator Margetts—You cannot claim there was filibustering in this one.H15Campbell, Sen IanSenator IAN CAMPBELL—Of course there was not, Senator Margetts, and that is exactly what I said in 1993 when I was sitting on that side of the chamber.DX5MARGETTSSenator Margetts—You were wrong then.H15Campbell, Sen IanSenator IAN CAMPBELL—I know: I am always wrong and you are always right, and one day I will see the light. Hallelujah! But there was detailed scrutiny that the then opposition gave the native title legislation that Senator Faulkner introduced on the last afternoon of the scheduled sittings. I think we were due to rise that evening and at 5 o'clock or thereabouts—you can go back and check the Hansard— the native title legislation was brought in. That was an example of the sort of program we had to deal with in those days. I know as well as Senator Faulkner that trying to manage government programs in a Senate where you do not have the numbers is difficult. But it is worth comparing the scrutiny that the Native Title Bill got in 1993 with the 85 hours that the Senate gave it scrutiny for in the last 12 months. In fact, the 50 hours that the Senate spent on native title in 1993 were all additional hours. They were all added to the program; they were additional weeks. Some of us will remember sitting on a Saturday and sitting many, many extra days on top of the government's program. All agreements, as I recall—and I recall reading the Hansard recently on this matter—that were made with the opposition at that time were breached, as I understand. That was a matter between Senator Hill and Senator Faulkner at the time.AW5CARRSenator Carr—You breached them!H15Campbell, Sen IanSenator IAN CAMPBELL—It is reported in the Hansard . The people who are interested in this debate can debate that. It was debated in 1993. That debate took 50 hours of additional time. The native title debate over the past 12 months has taken 85 hours. Every senator in this place who wants to be honest and up-front about it knows that that is one of the reasons why the government has a backlog of 100 pieces of legislation. Some of that legislation, such as migration laws which affect the rights and responsibilities of migrants and other citizens, has been sitting on the Notice Paper for many months. One of the reasons we have a backlog of about 100 pieces of legislation is because the Senate chose to spend 85 hours debating native title and 52 hours debating industrial relations laws. Of course, we had to re-present those bills. So we are in this situation where there is a backlog of important legislation and we are seeking to deal with it in a well-managed way in a place where we do not have majority support.I say, in response to Senator Faulkner's points, you have a program in front of you. The government is seeking to give absolute clarity to all parties as to what we are dealing with and in what order. No-one can complain about that. We accommodate on a very regular, if not a daily, basis members of the opposition and opposition frontbenchers coming to us—I do not know whether they do it through Senator Faulkner or with Senator Faulkner's support—and saying `Look, sorry, we can't deal with this particular measure today because I have have to go somewhere.'5K4FAULKNER Senator Faulkner—You keep changing the program.5K4Campbell, Sen IanSenator IAN CAMPBELL—No, we do not.5K4FAULKNER Senator Faulkner—Yes, you do.H15Campbell, Sen IanSenator IAN CAMPBELL—We have a program. I will get down to specifics then, Senator Faulkner. A shadow minister says, `Sorry, I have to move house today so let's not do the social security bill.' Another shadow minister says, `I have to go and see some people in Adelaide so let's not do this bill.' So we rearrange the program on a daily basis to accommodate opposition shadow ministers very regularly, and we stick to it as much as we can. That is how we are dealing with the program. We try to accommodate Democrat senators and Green senators when they say, `It would be really helpful if we could do this.' So we rearrange our program. We try to accommodate senators as much as we can.5K4FAULKNER Senator Faulkner—This has got absolutely nothing to do with the issue before the chair.H15Campbell, Sen IanSenator IAN CAMPBELL—The Leader of the Opposition in the Senate asked me to respond to his substantive points. One of them was that we do not have a program. Senator Faulkner perhaps does not know that he was sent a copy of a program that covers 90 per cent of the government's legislative program.5K4FAULKNER Senator Faulkner—It covers one week.H15Campbell, Sen IanSenator IAN CAMPBELL—It covers 90 per cent of the program.5K4FAULKNER Senator Faulkner—It covers one week.H15Campbell, Sen IanSenator IAN CAMPBELL—It covers nine bills out of 14 bills. They are placed into an order, and Senator Faulkner wants to pretend that he has not received a program. He has received a program, and he has received a priority order for nine out of 14 bills. What you can assess from that, Senator Faulkner, is that the government gives priority to the nine bills that are on the program for this week and they lower the priority for the five bills that remain. We want to deal with nine bills this week and five next week. That is our priority; that is our program. Senator Faulkner has the program. Senator Brown has the program. All senators have seen that program. I think it is available even on the Internet. Sorry, it is not available on the Internet.5K4FAULKNER Senator Faulkner—You don't know whether it is on the Internet or not.H15Campbell, Sen IanSenator IAN CAMPBELL—I have just been told that it is not on the Internet. I do not even know how to get into the Internet, but I know that Senator Schacht knows. So I will give him a copy of the program and he can stick it on his home page.Question resolved in the affirmative.3774Motion (by Senator Denman, at the request of Senator Conroy) agreed to:That general business notice of motion No. 1167 standing in the name of Senator Conroy for today, relating to the reference of a matter to the Parliamentary Joint Committee on Corporations and Securities, be postponed till the next day of sitting.Committees377437743774Motion (by Senator Calvert, at the request of Senator Crane)—by leave—agreed to:That the time for the presentation of the reports of the Rural and Regional Affairs and Transport Legislation Committee on the provisions of the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 and on the provisions of the Stevedoring Levy (Collection) Bill 1998 and the Stevedoring Levy (Imposition) Bill 1998 be extended to 24 June 1998.37743774Motion (by Senator Calvert)—by leave—agreed to:That the Rural and Regional Affairs and Transport Legislation Committee be authorised to hold an in-camera hearing during the sitting of the Senate on Tuesday, 23 June 1998 from 6.00 p.m. for the purpose of taking evidence for the committee's inquiry into matters relating to the administration of AQIS.Business37743774Motion (by Senator Stott Despoja) agreed to:That general business notice of motion No. 1169 standing in the name of Senator Stott Despoja for today, relating to Triple J's Rock Enrol campaign, be postponed till the next day of sitting.Committees377437743774Motion (by Senator Calvert, at the request of Senator Abetz)—by leave—agreed to:That the time for the presentation of the report of the Legal and Constitutional Legislation Committee on its examination of the 1998-99 budget estimates be extended to the next day of sitting.Notices377437743774Allison, Sen LynSenator ALLISON1M6VICAD00—I give notice that, on the next day of sitting, I shall move:That the time for the presentation of the report of the Environment, Recreation, Communications and the Arts References Committee on the powers of the Commonwealth in environmental protection and ecologically-sustainable development in Australia be extended to 17 September 1998.Committees377437743774Motion (by Senator Knowles) agreed to:That the time for the presentation of the report of the Community Affairs Legislation Committee on the continued monitoring of the operation of the Health Legislation (Private Health Insurance Reform) Amendment Act 1995 be extended to 10 December 1998.37743774Motion (by Senator Denman, at the request of Senator Jacinta Collins) agreed to:That the time for the presentation of the report of the Economics References Committee on whether a new reactor should be built to replace the High Flux Australian Reactor at Lucas Heights be extended to 5 November 1998.37743774Motion (by Senator Bishop)—by leave—agreed to:That the Community Affairs References Committee be authorised to hold a public hearing during the sitting of the Senate on 25 June 1998, from 4 pm, to take evidence for the committee's inquiry into the impact of Government child care funding cuts on families, children and child care services. Matters of Public Importance3775377510000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—The President has received a letter from Senator Stott Despoja proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:The Government's decision to defund the Australian Youth Policy and Action Coalition (AYPAC), the peak national youth affairs organisation in the community sector.I call upon those senators who approve of the proposed discussion to rise in their places.More than the number of senators required by the standing orders having risen in their places—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clocks accordingly.16:23:003775Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—I rise today to discuss this matter of public importance relating to the government's decision to defund Australia's national peak youth representative body, the Australian Youth Policy and Action Coalition, AYPAC. The Australian Democrats condemn this decision; we condemn not only the decision to defund the organisation but the political move behind the government's move to shut down the only national peak representative body of this kind in Australia today.There has been a peak national body for young people in this country for 20 years. Although AYPAC was established in 1991 and has been in existence ever since, this country has had such an umbrella peak youth organisation since the inception of the youth affairs councils of Australia in 1979. So ever since the establishment of AYPAC and its predecessor organisations, governments have been able to work with such bodies—until now. This government has chosen not to work with this organisation; it has chosen to close it down and, instead, to meet only twice a year with a select group of young Australians.Last Thursday Dr David Kemp, the Minister for Employment, Education, Training and Youth Affairs, gave, I believe, 20 minutes notice to AYPAC that it was about to lose its funding as at 30 June this year. So that organisation has been given less than a fortnight's notice of being expected to disband and halt its activities. The notice he gave them was that their contract would not be renewed.I have to contemplate this decision with some cynicism, given that AYPAC will stop operating from 30 June—the end of this financial year—and we will see the commencement the next day of the government's new youth payments system, the common youth allowance. So it is incredibly coincidental that the day the common youth allowance is due to commence AYPAC—an organisation which provides important research and policy advice to government as well as advocating on behalf of young people and representing their views not only to governments but to the community generally, to non-government organisations, et cetera—will be no longer in existence.So I have to ask: how bad does the government think its common youth allowance is going to be? It has effectively disbanded the one body that not only could give it advice on how to improve difficulties and nasties in that system but would be out there advocating—it is one of many bodies, but certainly the only peak national representative body of young people—on behalf of young people who find themselves faced with problems through the introduction of the common youth allowance on 1 July this year. So the timing is incredibly suspicious. But it is a blatant political decision by this government: it is a decision to silence the voice of young people—in particular, to silence the youth sector in this nation. As I say, it is very, very timely indeed.AYPAC represents a number of groups. I will list only a couple. I could go on all afternoon, but I will not take up the Senate's time because many of these names were put on record by me last night in the adjournment debate. That list includes Girl Guides, YMCA, YWCA, St Vincent de Paul, National Union of Students, Australian Association of Adolescent Health, Australian Rural Youth, as well as the state and territory youth affairs peak bodies. These groups will now be denied a permanent, ongoing, year-round representative body in the form of AYPAC.It is clear what some of these groups think of the decision, Madam Deputy President. You just have to look at some of the press release headlines that have come out since the decision was announced. One is from the Australian Catholic Social Welfare Commission—hardly a subversive group in our society: `Government drops youth affairs in too-hard basket'. That commission recognises that this decision is a political one designed to, effectively, ban dissent and silence young people's voices. The Catholic Commission for Justice, Development and Peace has said `Silencing the messenger—another advocacy group bites the dust'. The media release of the Catholic Social Services has the headline `Youth to lose voice—loss of quality research and advocacy'. Centrecare Sydney's media release reads `Federal coalition unwilling to listen to youth'. How true that is.So, instead of an expert, well-resourced, permanent youth policy body, the government has decided that the only input it wants from young people, and the only input that it will accept, is through a twice-yearly meeting of 50 young people—so that is twice a year with a select few. There is no indication that these young people will be given the resources they need in order to adequately develop policy and advice to government and to liaise with other organisations on behalf of young people.Again, this is another promise broken; it is another so-called non-promise from this government. I quote from the government's federal election strategy for young people, the youth policy `Giving hope to our young', which was released in 1996. It said that the Howard government would `improve the effectiveness of government in responding to the needs and concerns of young Australians by consulting directly with young Australians around the nation through formal representative organisations such as AYPAC.'AYPAC has been an invaluable resource not only in the provision of policy advice to successive governments but also in assisting those who work with young people providing information through newsletters, conferences, publications, national forums and a range of mechanisms. In fact, most recently it was working through DEETYA's youth offices in order to assist youth affairs networks with the coordination of those 41 new youth offices. This is exactly the kind of liaison between government and non-government organisations that AYPAC has been effectively providing for many years. Of course, its national conferences, the youth gatherings—certainly in 1994 and 1996—are examples of providing opportunities for young people to have a say in government.Yesterday, when I asked the minister representing the minister, Senator Ellison, about this issue, he seemed to think an Internet site would be appropriate. He seemed to think that would somehow suffice, along with these round table meetings, as a way for young people—O15TIERNEYSenator Tierney—What's wrong with having an Internet site?3I6Stott Despoja, Sen NatashaSenator STOTT DESPOJA—I take that interjection. How many homeless young people have access to the Internet, Senator Tierney? How many young people would prefer face-to-face contact with a youth sector representative, with a government official or with a spokesperson from DEETYA, rather than tapping online? I am not suggesting that an Internet site is a bad thing, that a round table is a bad thing in itself or that additional assistance to the YMCA youth forums is a bad thing; I am saying that the government could have taken the opportunity to complement the existing structure of AYPAC, not to defund youth representation in this country by at least another $140,000. There has been a drop in funding; don't think the replacement organisations or policies or round tables will be given the same resources that AYPAC had—indeed, they will not. As for the idea that some kind of chat line with Dr Kemp through the Internet will be appropriate—it will not be. (Time expired)16:30:003776Tierney, Sen JohnSenator TIERNEYO15NSWLP10—What a storm in a teacup this is. If we have a look at what the minister has done—and his decision is not to renew the Australian Youth Policy and Action Coalition contract—AYPAC has not been defunded, as Senator Stott Despoja claimed in the adjournment last night and again just now. Instead, the government has chosen not to renew its contract.AW5CARRSenator Carr—A huge difference.O15Tierney, Sen JohnSenator TIERNEY—We do these sorts of things all the time, and the last government certainly did this sort of thing all the time with all sorts of bodies. It would give something funding for three years and then not fund that and fund other things. Senator Stott Despoja is trying to make out that there is absolutely nothing in its place. I want to spend my time today pointing out what the government has put in place instead of this particular organisation and also what this government has done for youth in its policies, in youth support, in education and other things.Even though Senator Stott Despoja might try to rubbish the idea of having an Internet site, it has been highly successful, which I will demonstrate in a minute. The government's plan has provided alternative ways for the youth of this nation to share their voice with the government, and it is part of the ongoing commitment of this government to the youth of the country. We do have a federal youth affairs ministry in this country, something which we did not have under the previous government. Indeed, the state government of New South Wales had a youth affairs ministry under the Liberal government, and the Labor government abolished that particular body—so much for what the ALP thinks about the youth of the country.In addition to this, we have established a round table—the round table much maligned by Senator Stott Despoja—but this will be far more representative than the original system set up by Labor. It will represent youth from all walks of life. Pay attention, Senator, and concentrate on the fact that the previous organisation had a peak group of five to make the representations, whereas we will have a round table of 50 which will be much more representative and much broader in its advice to government. In addition to this, DEETYA is setting up a youth bureau which will complement this and which will consult directly with peak bodies on youth matters across Australia. Designated officers will maintain relationships so that the voice of those peak bodies does come through to the minister.In addition, if I can turn to the Internet site, which was much maligned by Senator Stott Despoja claiming that youth had no access at all—that is how much in the Dark Ages Senator Stott Despoja is—14,000 hits a week. I think that is not too bad as a supplementary thing; this is not a replacement. There have been 14,000 hits on this site and this is just starting. This is not a bad thing. You are trying to make out that all youth do not have such a site in their home, that is quite right, but there is quite a lot of access to such sites through public libraries, through universities, through schools and Internet cafes or wherever. Senator Stott Despoja yesterday accused the government of being afraid of meeting young people, and I think the initiatives I have outlined and the way in which we have set this up as an alternative structure—AW5CARRSenator Carr—What about the Young Liberals?O15Tierney, Sen JohnSenator TIERNEY—We do not have to follow Labor Party ideas. The Labor Party set up all sorts of structures, we do not necessarily have to follow them, particularly if there is a better way, a more broadly representative way, if there is a way of using new technology to do this.Consultation is one thing, action is another. This government has introduced a number of programs which have been extremely helpful to youth and which are very popular with youth out in the community. If we look at the development of programs such as work for the dole, Green Corps, and the 220,000 new apprentices that will be starting between 1997 and 1999, we will see that people are appreciative of them. Unlike the previous government's so-called Working Nation program that put them on a treadmill where they just had training and no work, these people are actually out there working and getting work experience which does set them up in a much better way for work in the future. Of course, the work will be there in much greater quantities than it was under the last Labor government.Senator Carr interjecting—O15Tierney, Sen JohnSenator TIERNEY—Senator Carr, who is interjecting all the time, why don't you interject and tell us about net job creation under your government between 1990 and 1994? How many net new jobs did you create in four years? We created more than that in the last three months. You had such a massive recession, such a massive loss of jobs to youth over 1990-1994, that it has taken years to recover from your programs and the way in which you mismanaged the economy over 13 years. Under this government, with the creation of budget surpluses, getting the economy back on track with lower inflation, with us getting off the back of small business, we are actually creating real jobs for the youth instead of that job treadmill that you had.As well as having a better opportunity for jobs, if they do need income support from the government, the youth of this country have a much better arrangement than they did under your government. We had a major inquiry in the Senate which pointed out the shortcomings of your Austudy system. With the common youth allowance, that Senator Stott Despoja was maligning a little bit earlier, we are actually putting more resources into this, we are paying more money into this than your previous government, and students who were under the old Austudy system now have access to things like living away from home allowances as well as getting more money.It was not a coincidence, as Senator Stott Despoja was trying to make out, that the change in the arrangement for consulting youth happened at the same time as the common youth allowance. It had nothing to do with it at all. We are keeping mechanisms in place for consultations with youth. We are undertaking programs which actually help youth get a job and we are creating the economic conditions so that when they have been through experiences like work for the dole and Green Corps out there in the private sector, under the policies of this government, they have got a much better chance of getting lasting, sustained work.16:38:003778Lundy, Sen KateSenator LUNDY7G6ACTALP00—I rise to support the motion moved by my colleague Senator Stott Despoja. This government have pursued one agenda above all others, and that is to silence their critics. Whether it is the ABC, women's organisations or ATSIC, anyone who they perceive as being critical of their policies and their way of doing business gets the chop. Now they have gone after Australia's youth. The decision to cut funding—or, in Senator Tierney's words, not to renew the contract—of the Australian Youth Policy and Action Coalition brings to the fore this government's petty, small-minded prejudice towards politically active Australians in general, and in this case young people in particular.AYPAC cannot be stereotyped as a left-wing lobby group. In fact, AYPAC represents 22 youth organisations, many of which are non-political and can even be described as conservative in their nature. AYPAC is a peak representative body. It brings together the structural organisation of many youth representative bodies in an organised way. AYPAC does this on the basis that there is a critical need for national youth organisations to coordinate their information sharing. Why? Because it is efficient to do so. This is where some of the ironies to do with this government come into play. They talk about efficiencies in dissemination of information and how to get people involved, yet at the same time they actively undermine and de-fund those structures which are designed to assist them in getting their message out and in extracting from the community its points of view and expressions of interest in various matters.We must not forget that AYPAC includes 300 associate members that represent local youth networks and individuals, and it is these networks that rely so heavily on the infrastructure that AYPAC provides. This infrastructure is very practical. It is about circulating information on legislation before this place and before the parliaments of the states and Territories and about issues of importance to young people confronting local govern ments right around of the country. To have a central point where information can be circulated in this way is absolutely critical for the young people of Australia to feel as though they are actively connected to our political processes. In trying to silence AYPAC, the government is marginalising the voices of thousands of young Australians across a wide spectrum of the population.This is in the context of a much broader political attack on young people. Let us have a look at it. The introduction of the common youth allowance has already been mentioned by previous speakers. That is coming up shortly. Experience shows us that, whether it is the Austudy debacle or whether it is what we have seen with Centrelink just in the last two weeks, this government has a very bad history of mismanaging new systems. What better way to smooth the path for a controversial new allowance than to disenfranchise the voice of those who are there waiting and watching and who will act as a watchdog on the implementation of those new policies?We have seen changes with respect to industrial relations. AYPAC has taken a very active role in monitoring the status of young people with respect to the industrial relations system and awards. We know that the government's 20 allowable matters will marginalise young people's ability to stand up for themselves in our industrial relations system. We know that young people are not highly unionised and do not have the protection that a union can offer in terms of an award and sticking up for their rights in the workplace.These attacks keep coming. I have already mentioned Austudy. In higher education there have been a billion dollars worth of cuts, cutting off the opportunity for so many young Australians to participate in higher education and thereby better themselves and be able to seek work in an area contingent upon having those qualifications.But this attack is not just limited to higher education. We have seen a transfer in government support from the public education system to the private education system, favouring those in our society who have some advantage already. All these things tell the young people of Australia one thing: that this government has absolutely no interest in representing them or their concerns.AYPAC's value to our political system is absolutely imperative. Its role is to coordinate responses to matters relevant to young people and to promote the needs of young Australians. It is a mechanism to identify the needs of young Australians and to convey those needs cohesively to the respective governments so that, hopefully, government can respond. Not only does AYPAC inform government about the needs of young Australians but it also serves to inform its members. As I said before, it is a resource, and the sad irony is that this government is actively disenfranchising a resource that I think it will come to find it will sorely miss.I would now like to turn to the alternative that the government has offered in the context of this particular event. In terminating AYPAC's funding, the minister has offered a youth round table. It is an interesting concept: they did the same thing when they defunded a plethora of women's organisations. Instead of using the networks that have evolved and existed within the communities of these people, they have chosen to restructure in a way that suits them. Such a round table—if it is indeed there to serve the purpose of providing a direct voice to the minister—should serve as a supplement to AYPAC. It should be additional, and perhaps it would be a worthy addition, but it certainly is not worthy as a replacement.The minister reckons that sitting down twice a year with a select group of hand-picked young Australians is all he needs in terms of policy input. Is there no end to this government's arrogance? Every member of AYPAC, which includes the organisations I alluded to earlier, has come out actively supporting continued funding for this peak youth body. Unfortunately, Minister Kemp is offering young people nothing more than plain old tokenism.If you want an example of how this Tory tokenism to youth affairs will work, you only need to look at the Northern Territory. The Northern Territory youth advisory body has only one indigenous person on it, yet indigen ous Australians make up about 30 per cent of the population. This government is living so far in the past with its attitudes to community involvement in policy-making and accessing appropriate networks and voices in the community that it serves only to reinforce the perception that John Howard so rigidly gives when he stands up and talks about Australia as though we were living in the 1950s.What is Minister Kemp actually offering young Australians? It is not a commitment to act on their concerns, because that commitment was made before the last election. We now know the difference between a Howard commitment and a real commitment. Obviously this government's commitment to Australia's young people was not a core promise. It was a non-core promise—one that has been completely expendable. It seems that the minister would rather be seen in a pair of jeans, eating pizza with a select group of young Libs networking their way through life than to actually deal with the realities of working with an organisation that offers some intellectual in-depth analysis of policy and legislation.It is easy for us on this side of the chamber to actively oppose the policies of this government and to identify the issues of deficiency in what they espouse and for them to criticise us enough for us to debate the issues. It is another matter altogether to completely take away the voice of a peak representative youth body that has established itself with great credibility and great dignity across governments of all persuasions.This government has shown what it thinks about the needs of young Australians. By removing AYPAC they are saying that Australia's youth are not worthy of proper representation. They are discouraging young Australians from being politically active and from taking an active role in the considerations in this place. (Time expired)16:48:003780Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I rise to speak on the defunding of the Australian Youth Policy and Action Coalition with a sense of despair at the demise of substantive democracy in Australia. For the information of senators opposite, substantive democracy is that in which all groups in society are offered the opportunity to participate in the political arena. This is not to say that participation will be equal. Kerry Packer will always have a greater influence on public policy than tens of thousands of Australian youth, but it is a recognition that systems must be put in place for sections of the community to autonomously organise and agitate for positive change. The defunding of AYPAC and its replacement with a round table of youth elite, hand-picked by the department, is a gross attack on substantive democracy for young Australians. It is a transparent attempt to silence legitimate dissent against an arrogant and patronising government.Let us look at this youth round table for a moment. It is going to meet twice a year to discuss government policy, and it will be funded to cover air fares and accommodation. Where is the capacity for this group to critically analyse government policy? Where is the capacity for this group to have the organisational and information resources to challenge departmental officials and ministers? Could it be that they do not want this to happen? It is difficult enough for senators in this place, with all our access to resources, to extract information from ministers and their departments. What hope do these young people, who lob into Canberra twice a year, have to play anything but a token role? But that is what the government is all about with this decision: silencing dissent.AYPAC have provided an invaluable service to the community in commenting on matters such as the youth allowance. For their honesty, hard work and commitment to young Australians, they have copped it in the neck from the minister, Dr Kemp. I ask you: has there ever been a minister for youth affairs more out of touch with young people than Minister Kemp? This is a man who has been contacted 12 times by AYPAC since his appointment and has refused to meet with Australia's peak youth body. This is a man who got a staffer to inform AYPAC by telephone, half an hour before his announcement, that every single cent of AYPAC's funding would be removed. Yet this is where politics in Australia appears to be heading. If young people seek to defend their rights, abolish their organisations. If environment groups criticise the blackmailing sale of Telstra, remove their funding. And no doubt, soon, when the government has its One Nation lackeys in this place, Aboriginal and multicultural organisations will be axed as well. I understand that AYPAC will launch a bite-back campaign in the wake of this decision, and I can proudly declare that the Greens (WA) will support AYPAC in this endeavour, every step of the way.Is this the first time the government has acted in this way? No, actually it is not. Groovy, radical and funky organisations like the Australian Pensioners and Superannuants Federation have been defunded as well. We have mentioned environment groups, and not exactly radical environment groups like the ACF have had their funds cut. We have had organisations like National Shelter defunded. Could it be they have criticised the federal government's housing policy?We have had migrant groups picked off for having dared to be progressive in their viewpoints. We have had the Australian Community Health Association defunded. How dare Environmental Defenders choose to litigate against the government. Considering most environment laws can only be acted against the government, how dare they criticise by way of litigation. How dare they be concerned with those really important things like test cases, which the government should be funding in the first place in the public interest. What a dreadful thing for them to do—to speak up for the community. The Migrant Women's Association: heavens, fancy talking about the workplace relations impacts on migrant women. Whoops, they go as well.Has it occurred to the government that, if you keep doing that in every sector of the community that you affect, eventually what happens is that that dissent, that level of mistrust, will bubble up to the extent that people no longer trust governments any more? Has it occurred to the government that the strongest governments are those that have the strongest oppositions? The strongest governments are those that are prepared to listen to and promote criticism.It has been put to me that there have been three stages so far in relation to lobby groups in Australia. We know that when the previous Labor government started its term of office, there was the ability for many organisations to lobby; in fact, the government encouraged that. After a while, they too became arrogant and they said, `We don't fund you to lobby. You fund your own lobbying, but we will still give you residual funding.' Now, the government says, `We don't fund you to tell us what is wrong with our policies.'I would like to finish with a quote from an Australian Council of Social Service press release in relation to AYPAC. The ACOSS President, Michael Raper, said:The Minister has cut funding to one of the most effective advocates for youth in this country.The timing of the decision relates to the youth allowance. He continued:The Governmentshould recognise that silencing the voices in opposition does not reduce the negative impact many of their policies are having on low income and disadvantaged people.It does not make those issues go away; it just means that you will lurch from crisis to crisis, and you are not learning.16:54:003781Synon, Sen KarenSenator SYNONFQ6VICLP10—I am pleased today to rise again on a theme that I consider vital to Australia and to its future—youth policies and the representation of youth interests in government policy making.AW5CARRSenator Carr—And crushing critics!FQ6Synon, Sen KarenSenator SYNON—In 13 years of ALP government, Senator Carr, Australian young people were neglected and ignored. Their needs were swept under the carpet, their futures disregarded and their situation completed overlooked. The ALP churned our young people through training program after training program. That they managed, but they refused to put in place the sound economic policies that would give our young people a job. They spent our young people's future and they nearly mortgaged this country out of existence.Of course, we have the fine record of the now Leader of the Opposition, then employ ment minister, Mr Kim Beazley, when, in 1992, our young people faced a seasonally adjusted youth unemployment rate of 34.1 per cent. Many people just stopped looking for work, and you cannot blame them. Giving up looking was hardly surprising when you consider the options that the ALP provided for these young people to seek jobs. We had the CES with its oh so impressive less than 20 per cent success rate, with less than a quarter of the sites that our job network now provides and with less than 20 per cent of all vacancies listed.The things Australian young people said about the CES are a disgraceful indictment on the people who sit on the benches opposite. They show how significantly the previous government let them down. One young person from an employment network provider in Footscray said, `Here I feel like a person whereas at the CES I felt like a number.' The previous government made our people feel like numbers and offered them no sense of self-worth or self-respect. For over a decade, they consistently failed young people. Their message to our young people was that the dole was an acceptable alternative to education, training or employment, and that seeking further opportunities was simply not worth the effort.When the coalition promised that a cabinet minister would be given the responsibility for the youth affairs portfolio, we sent a powerful signal that we would be different and that we would listen to young people's concerns. In government we have proved this over and over again. We introduced work for the dole, which will expand to 25,000 participants for each of the four years starting in 1998. We have dedicated $61.8 million to work for the dole this coming financial year, and 80 per cent of the places provided will be targeted to the 18- to 24-year olds. The aims of work for the dole are clear and provide good support and encouragement for Australia's young people. All those participating in work for the dole are acquiring the skills, the abilities and the confidence which employers seek. They are also getting the opportunity to extract themselves from the sticky web of unemploy ment that was so common under the Labor government.We are assisting young people in getting the education and training they need to get a job. If young people are finished year 12 or have some training or qualifications, research shows that they are far less likely to experience unemployment. That is something that I think people on all sides of this chamber should applaud and encourage. The coalition is working to make our young people's lives better. It is giving them every opportunity to realise their full potential, and we are working towards this goal in consultation with young people and their chosen organisations. Senator Stott Despoja's proposal for discussion today is not concerned with the government's overall record in the area of youth policy—a record the government would be proud to debate, but I dare say the Democrats and the ALP would be somewhat reticent to do. It is targeted directly at the issue that the government's contract with the Australian Youth Policy and Action Coalition will end on 1 July. Senator Stott Despoja's assertion that AYPAC has been defunded is simply mistaken, as we have already heard. Their contract was for three years. It finishes next week, and the government has decided upon an alternative mechanism that is more representative and more inclusive.The establishment of a new representative mechanism will be welcomed by young people. Their involvement in grassroots initiatives—such as the YMCA's youth parliaments, Here for Life, the National Youth Initiative—has decisively shown that young people are demanding ways of having more effective and more direct communication with their government. By contrast, the Australian Youth Policy and Action Coalition is a peak body whose national representative board represents only nine youth organisations and meets only three to four times a year. It has an executive of five members—hardly representative—and, moreover, produces just one view, a common view.I am here to tell you that young people's views are as divergent as the views of the population throughout Australia. Young Australians want the government to hear a diversity of views and they want direct input. They do not want just one group acting for them in, I might say, a most paternalistic way. They want to speak and act for themselves. I fully support the right of young people to speak for themselves. The days of paternalism are over.This government is not afraid to sit down directly with young Australians, listen to their concerns and work together with them to develop better opportunities for all our young people. This government is committed to giving young people an effective voice. As Minister Kemp said just last week:Young people are the trustees of [our] future. . . They must have an effective voice if the Government is to meet their needs and foster their talents and dreams.That the minister cares for our young people's dreams and aspirations and wants to give them a voice is something for which all of us who care about Australia's young people should congratulate him. I congratulate David Kemp for his vision, his commitment and his belief in the empowerment of young people to speak for themselves. Last week Minister Kemp attended the Victoria Summit where 900 students from around Victoria gathered to talk about current issues, their concerns and issues for the future. David Kemp was there. David Kemp was listening. David Kemp was responding. (Time expired)17:02:003783Carr, Sen KimSenator CARRAW5VICALP00—The proposition we have before us today about the Australian Youth Policy and Action Coalition allows the Senate to consider yet another move by this government to attempt to silence its critics. What we see running through this government is a common pattern. If you are a conservation group, if you are a group that is concerned with housing, if you are a group that is concerned with aged care, child care or public housing—you can run through the list of community organisations; there is a whole range of them—what you see is that this government does not like anyone to actually criticise it.What you see is a government that moves in a whole range of areas to undermine independent advice, even within the bureaucracy. It will not have it because, you see, it supposedly knows what is good for people. It talks about paternalism all right—it knows precisely how to act.What you see is this latest effort by the government to undermine a peak body representing some 300 organisations across Australia representing some 750,000 young people. The truth is spelt out in the government's own documents. The government revealed in a document dated 25 March 1998 regarding the youth allowance media strategy that this particular organisation, the Australian Youth Policy and Action Coalition, was one of the organisations specifically named to be targeted by this government for attack because it had expressed its opposition to parts of the government's initiative on the youth allowance. The document spelt out quite clearly how this opposition was also coming from church organisations and from various religious groups that the government felt would add credibility to concerns being raised about the way in which this government was introducing youth policies.It is specifically pointed out in the briefing paper prepared for the minister that those persons over the age of 18 who are unemployed will be financially dependent on their families until they are 21. It is demonstrated, in regard to students, that those up to the age of 25 would be dependent on their families under this government's proposal. What is also demonstrated is that the youth allowance `would cause more family disputes and encourage family breakdowns'; that the youth allowance would cause young people to leave home and leave the security of family support; that the youth allowance would cause more youth homelessness; and that the $23,000 was not a lot of money before the youth allowance starts to cut out because of the parental income test.These were the criticisms that this particular peak body, representing youth opinion in this country, drew to the attention of the public, like the church groups, various educational authorities and various political organisations across the country. It demonstrated deeply felt concerns, and for that it was to be punished. This organisation has consequently been punished by the removal of its funding at the very same time that the youth allowance will be introduced by this government.What this demonstrates is the government's great fear of criticism. AYPAC is not a particularly revolutionary organisation. We are talking about an organisation that represents the Girl Guides, the National Union of Students, national rural youth, and the Young Christian Workers Association—hardly what you would call the great bolsheviks of our society, yet these are the people that this government runs in fear of. It is terrified of them. What it essentially relies upon is a 1950s nostalgic view of what young people should be doing: they should be comfortably at home with their wealthy parents. Of course, the reality is very different in our sort of society.What you see is a government that has stripped away support for young people. For instance, 125,000 young people are actually worse off as a result of budget measures introduced by this government to reduce student support, income support, through Austudy and Abstudy throughout the last two budgets. What you see is that 8,500 Austudy and Abstudy beneficiaries have lost support as a result of changes to the homeless rate in regard to the schooling incidentals allowance. Some 2,600 students have lost support in regard to dependants who share accommodation. Some 3,376 persons were adversely affected by the introduction of a two-year waiting period for Austudy for newly arrived migrants. Some 13,000 students were adversely affected by budget measures to tighten the Austudy actual means test. Some 13,700 students were affected adversely by the government's measures to raise the age of independence for Austudy to 25.The situation goes on with reductions in funding in regard to schooling, particularly in public education with a reduction in real terms in the amounts of money provided for public education in this country. Some 21,000 places were taken away from the higher education sector, the universities sector, in regard to public support for university funding. You see some hundreds of millions of dollars taken out of the TAFE budget in regard to less support being provided for some 44,000 students as a result of this government's expectations that that growth will be funded by the states with no additional money.What you are seeing quite clearly is a pattern emerging: this government does not like people who criticise it, no matter how just that criticism is and no matter how appropriate it is that these various groups defend their various constituent groups, as they are supposed to be doing in any sort of democratic process. This government will not allow criticism to emerge, it will seek to suppress dissent and, of course, ultimately such a strategy will backfire on it. I trust that in the next election that concern will be expressed more broadly in the community as a result of this government's quite blatant attempts.17:07:003784Payne, Sen MariseSenator PAYNEM56NSWLP10—Although there has been a lot of obfuscation around the question we are debating here today, the criticism that we have heard is in fact about the non-renewal of the contract between the Commonwealth government and the Australian Youth Policy Action Coalition. It is about the fact that the government has had what would be termed by the Democrats and those opposite the `audacity' to address its methods of communication with young Australians in a different manner—a manner of which the opposition and the Democrats do not approve.Appropriately admonished, I rise today to address some of the real issues surrounding communications with young Australians, the concerns that they have expressed to this government and the reasons that a decision such as this has been made. It does not matter what self-appointed youth communications experts say or what footwear they choose, they do not have a monopoly on listening to and talking with young Australians. When you enter this place you do not move into some sort of category that says, `I am the arbiter of all things that young Australians want to hear, see, know, read or listen to.' It is a much broader situation than that and all members of the parliament have an obligation and a responsibility to address issues which are of concern to young Australians.The Commonwealth government, in this particular initiative, has taken a new approach called the voices of youth—and it is about listening and about hearing the views of young Australians. Through important initiatives such as the Australian Youth Forum, Here for Life and its operations primarily in Victoria, the YMCA's youth parliaments, innumerable youth constitutional conventions held over the last 12 months and the National Youth Initiative, I have had the opportunity to hear some of those concerns and see some of the activities put together to express those concerns. These are forums that have been supported by other senators in this place, but particularly by my colleagues Senator Lundy and Senator Stott Despoja.Let me talk about some of their views on things like the Australian Youth Forum, of which Senator Lundy said last year:It was a terrific initiative. I hope that, through regional organisations and those delegates who participated, the energy that flowed from that gathering will continue to gain momentum both on a regional and a state basis, and that once again the group will come together, share their ideas amongst themselves and send us what I think are quite pertinent messages.In relation to the Australian Youth forum, Senator Stott Despoja said:You can tell that this event was an inspiring one for me—to see young people claim power and working for goals such as accessible education and a sustainable economy. It filled me with hope . . . The point is that there are other ways to inform government; there are methods of communication other than the ones rigidly supported by those opposite and the Australian Democrats. Not just an organisation like AYPAC can inform the government; not just AYPAC has that role in this country. It would have been arrogant in the extreme for them to claim that.From these forums and from similar input the government has developed the idea of a national youth round table, for which all major youth organisations—and I am sure that that would mean, although completely ignored by speakers from the other side this afternoon, major youth organisations who are constituents of AYPAC—community groups and the wider community will be invited to nominate representatives to meet with ministers to advise government on key issues, including employment, education, training, youth suicide, health and youth services.The second element of the voices for youth initiative is support for the YMCA's youth parliaments—currently convened on a state basis. They provide an opportunity for participants to learn about our parliamentary system and develop skills in speaking, teamwork, leadership, research—skills which are important to young Australians as they develop personally and in their careers. The government will provide funds to assist with the establishment of the national youth parliament. And, maybe, some people might like to try to give it a go; they might like to listen to some community members who have something to say rather than to self-appointed elites.Senator Lundy, for example, criticised the women's round table the minister held last year, but the government in fact received positive feedback on that initiative and was very pleased with the response of those participating. It seems to me that it is easier to ignore other government initiatives in this area because that is certainly what has been done this afternoon. Initiatives like the 41 youth officers in DEETYA around Australia and the rural youth information services were completely ignored in today's debate. We have even had, and it surprised me more than anything else that has been said this afternoon, an observation that Internet access is perhaps not so important. The `Have your say' section where you can tell government what you are thinking has 14,000 hits per week. It seems to me to be a very important resource for direct communication with young Australians—a resource that provides people who may otherwise be isolated and unable to access government through other means with very important opportunities.With regard to funding and information technology and the rural youth information services, additional funding has been provided by the government, significantly enhancing the availability of information for young Australians. (Time expired)17:14:003786O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—It was interesting to hear the comment from Senator Payne that not just AYPAC can purport to express the views of young people on issues that affect young people. But, of course, what this government wants is that it will not be AYPAC that expresses those views. There is nothing in the issues that have been debated before the Senate today that indicates the opposition proposes to silence any of the other organisations that might seek to give voice to their concerns. The fact of the matter is that for seven years there has been in existence an organisation that involves and includes participants from a range of community youth organisations that are well respected in the community, and this government has chosen not to allow it to continue.The government suggests that AYPAC has not been defunded. The fact of the matter is that the government has chosen not to provide funds for this organisation, which has very adequately represented the views of young people. I think a number of other senators have expressed quite adequately the fact that this is an organisation which is broadly based in the community and which does provide good work and good advice to various groups within the community on issues that affect youth as well as to the government.The fact is that this government is not about giving youth a voice. This government is proposing to replace AYPAC with an opportunity for youth to stick their views on a chat line. They could have done that anyway, of course. There is nothing which has prevented the government from seeking to directly access views. This government has also chosen to hand-pick a round table that will meet twice a year. That is supposed to replace AYPAC and its role. Having been funded for seven years, AYPAC for their sins—that is, their sins of criticising this government—have lost the ability to continue as an organisation. They were—and up to the end of their funding will continue to be—a voice for young people. Their sin is they actually dared to voice young Australians' criticism of this government. That is the reason that they are being denied funding.It is a difficult task to bring together such a diverse group of youth organisations as are covered by the AYPAC umbrella, but AYPAC have actually achieved this and they have achieved it through their professionalism, their hard work and the constant provision of credible, well-researched information. In Tasmania, AYPAC have provided youth service providers with up-to-date objective information on national issues and government policies. They have ensured that there is an effective mechanism through which young people and service providers can provide feedback on these issues and policies.Young people in Tasmania often feel that they are ignored by governments and organisations in favour of the views put by young people in larger cities on mainland Australia. But AYPAC have provided for Tasmanian issues to be debated through that forum at a national level. Tasmanian organisations which are part of AYPAC have valued the opportunity to participate in national debates through the very mechanism that AYPAC provides—that is, through this objective and professional approach to advising government on youth issues.The breadth of AYPAC membership has ensured that its policy positions go well beyond the narrow interests of particular subsections of the broader youth community. The AYPAC board has had representatives from young people in Australia, including the rural youth representatives who have held positions of the vice-chair and treasurer. I say that because they also come from Tasmania. I wonder whether my state will be given adequate representation in the new organisation. By direct input as well as through the organisational consultative level, AYPAC has ensured that equal level of representation.This government has recognised the worth of AYPAC. Minister Anderson, through AYPAC, sought to select representatives to attend the International Food Summit and Health Forum in Rome. As a result of that, a woman from Tasmania was able to be represented. I wonder whether this new forum will provide such opportunities for young people from my state.3I6STOTT DESPOJASenator Stott Despoja—We are no longer eligible; we can't.8O6O'Brien, Sen KerrySenator O'BRIEN—As Senator Stott Despoja suggests, they are probably no longer going to be eligible. AYPAC also nominated two Tasmanians amongst its representatives to attend the Australian Reconciliation Convention, an important convention.In short, AYPAC have been an effective voice for many diverse groups and have actively pursued a policy of equal representation. Tasmanian young people and youth service providers have recognised this and, frankly, are appalled at this government's decision, which is not just short-sighted; it is malicious. It is a position which is aimed at silencing criticism. It is a position that is aimed at manipulating public opinion. It ought to be condemned.17:19:003787Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—by leave—With the abolition of AYPAC, Australia is one of the few OECD countries that will not have a national youth representative body. To take up Senator O'Brien's point, with the closure of AYPAC, Australia is no longer eligible to be a member of the World Assembly of Youth, denying representation for young people not only at a domestic level but on a national and international level.Senator Tierney said there was a difference between ending a contract and defunding. I am sorry but those subtleties escape me. The end result is the same. We will no longer have a national peak body representing young people in Australia when this body is defunded as of 1 July this year. We will no longer have a body that provides liaison with government, NGOs, young people and between a range of youth representative organisations, that provides publications, that organises forums, that has conferences on behalf of young Australians and that provides an ongoing permanent year-round consultative research action and policy body for young people.Contrary to some suggestions by senators who offered quite personal debates, I thought, in this chamber earlier, I have not criticised the idea of the government's proposal for a round table. I am suggesting that that will complement or should value-add to AYPAC, the body that already exists, and the mechanisms that are already available. What I do condemn is not only defunding AYPAC but also reducing funding by $140,000 per annum when this policy comes into place.What I am suggesting is wrong is that governments should have to meet with young Australians—and only 50 at that—only twice a year with no guarantees that this organisation or round table will be adequately resourced, that it will not only have enough money to spend on advertising and selection provisions, as suggested by Dr David Kemp on Triple J yesterday, but be able to carry out on behalf of young people consultation with them and work on their behalf as well as advocacy on their behalf when it comes to issues affecting young people—and believe me there are many. Senator Tierney alluded to issues like Green Corp, work for the dole and the common youth allowance. They are indicative of the low esteem in which this government holds young people, the low priority that this government has for young people.The government has effectively silenced the youth sector and a youth body that was working since 1979. Let us remember that every government since then—it was set up by Liberals—has been able to work with these young people. It is only this government that not only says it cannot but has chosen not to. This is a political decision. This government has closed down AYPAC, not because it wants to but because it wants young people to be seen and not heard. It is a crying shame.It is for these reasons that, with both anger and sadness, I brought on this matter of public importance today. This government stands condemned in the eyes of young people, the community and the Senate.Ministerial Statements3787378717:23:003787Troeth, Sen JudithSenator TROETHGX5VICLP10—I table a statement on the implementation of the government's health policy for the veteran com munity in rural and remote areas by the Minister for Veterans' Affairs, together with a related document entitled Rural and remote: a report on the implementation of the health policy for the veteran community in rural and remote areas . I seek leave to incorporate the statement in Hansard . Leave granted.The statement read as follows—It gives me a great deal of pleasure to table this progress report on the implementation of the Government's Health Policy for the Veteran Community in Rural and Remote Areas. The report covers the period 1 November 1996 to 31 March 1998.The Health Policy for the Veteran Community in Rural and Remote Areas was my portfolio's response to the government's election commitment to improve the services provided to people living in rural and remote Australia.The development of a health policy for rural veterans was also one of my major personal priorities when I became minister for Veterans' Affairs.I made this matter a priority for a number of reasons.Firstly, I knew from my own personal experience as a representative of a rural electorate that health services and facilities in rural areas were not as accessible as they were in the cities. Secondly, it was evident that with the inevitable aging of veterans, their health was becoming increasingly critical to their quality of life.Thirdly, rural Australia is the chosen home of many veterans and their families.Many took up soldier settler blocks after the world wars, and others simply returned to the regions from where they had been recruited.The end result was that by October 1996, 106,600 (31.6% of the veterans, war widows and dependants entitled to health care through my Department) lived outside the major metropolitan areas. By 31 March 1998 this number had increased to 108,592 or (31.9%) an increase which may be due to improved awareness of entitlements.The Health Policy for the Veteran Community in Rural and Remote Areas was developed to provide innovative, cost-effective ways to make information, health and community services more accessible to members of the veteran community living in rural and remote Australia. Initiatives outlined in the Policy were to be implemented within existing resources.The goals of the Policy were to: . maintain and improve the health and well being of the veteran community in rural and remote areas; and. increase the awareness of Department of Veterans' Affairs entitlements and services among the veteran community and health care providers in rural and remote areas.In the implementation of the Policy we took into account the unique characteristics of rural and remote Australia—the extreme and harsh climate, the physical and social isolation, the immobility of the population, the lack of public transport, the close-knit nature of communities and the limited and often low quality communication services.The Policy spelt out what we could do to make more health services available, to promote awareness of preventive care measures and to improve communication with the veteran community and health care providers.Simply put, it all boils down to access, information and communication. Improving access to services is an important part of the better rural health equation. Providing better health information and building communication channels is equally important and complementary.During the reporting period one of my personal highlights was presenting the keynote speech at the 4th National Rural Health Conference in Perth in February 1997.As I said then, the government is acutely aware and appreciative of the role played by rural doctors, nurses, allied health professionals, community nurses, voluntary workers and health administrators in striving to meet the health needs of those who live outside the capital cities.In developing the Health Policy for the Veteran Community in Rural and Remote Areas, we identified ten priority areas which needed attention. These areas spelt out in the Policy, included:. improved access to health care services in local communities which have limited and sparsely distributed services and facilities;. more flexible transport arrangements for veterans who need to travel long distances for treatment;. improved planning and delivery of the Department's services, particularly in remote areas; and. an improvement in the flow of information to the veteran community and health care providers about available health care services and entitlements.The progress report focuses on action undertaken and proposed in these ten priority areas.I am pleased to report that since I announced the Policy on 16 October 1996 much has been achieved. During the development of the Policy I had the opportunity of visiting several of Australia's most remote communities, including Thursday Island, to see for myself the service delivery challenges they were facing.The report notes the development of some very innovative service delivery initiatives, sponsored by my Department, in many of these communities.I would like to briefly describe some of the most significant of these initiatives highlighted in the report.. 100,000 copies of A Guide to Services for the Veteran Community in Rural and Remote Areas have been published and distributed. The feedback on the Guide, including letters of commendation, indicates that this publication has raised the awareness of the Department's services with veterans as well as health and community care providers.. Support for rural ex-service organisations, ESOs, has been increased, in some cases providing motivation for groups to continue.. Podiatry clinics on Thursday and Norfolk Islands have been introduced.. The numbers of mental health counsellors providing counselling services in rural areas has been increased to over 240 nationally.. Annual Health Care Plans have been introduced through doctors in various rural and remote areas, thereby providing more comprehensive care to veterans with complex and chronic medical conditions.. The Repatriation transport guidelines have been improved to assist veterans in rural and remote areas who have to travel long distances for medical treatment. The guidelines recognise the importance of support from family and friends in the treatment and recovery of veterans who are ill by providing assistance to help meet the costs of an attendant's accommodation or return travel while the veteran is receiving treatment away from home.. Local government agents have been contracted to provide information services in country areas. For example, the Mildura Rural City Council now provides information services in Mildura and the Sunraysia region.The Queensland Government Agents Program, QGAP, the New South Wales Government Access Centres, NGAC, and the Australian Country Information Service, ACIS, are also now providing DVA information services in many country regions throughout Australia, as is Centrelink in Wagga Wagga, Orange, Tamworth and Rockhampton;. We are assisting local veteran groups through seeding grants, training and support, to establish Veterans' Information Centres in Murray Bridge and Port Lincoln in South Australia as well as Alice Springs.. Funding and expertise are being provided to community organisations so that they can provide programs and services for the veteran community. Examples include—funding a respite holiday program for veterans and their carers in Queensland, training two Aboriginal Welfare Officers in Northern Queensland and two in Western Australia to provide information on Department of Veterans' Affairs services to their communities, funding the establishment of a "one telephone number" Central Information and Referral Service for Older People in the Clarence Valley of New South Wales to assist members of the veteran community to access the wide range of community services including residential and in-home respite places in the region, and providing funding for a range of volunteer based services to veterans and carers within the Bridgetown—Greenbushes shire in Western Australia;. Finally, the number of Training Information Program courses conducted in rural areas has been increased. More than 2,750 people, mainly volunteer Ex-service Pension and Welfare officers have attended in excess of 59 courses in rural areas since November 1996.Looking to the future, the government will continue to assist veterans in accessing health services by working with rural communities, local health care providers, and ex-service and community groups.While we will continue to address all ten priority areas, particular focus will be given to further improving the availability of timely and accurate information in rural areas.Initiatives planned for 1998 and beyond include further expansion of our network of advice and information services to fill the current gaps in these services in rural Australia.This includes the direct provision of information and advice on veterans' entitlements and services through contracting more government agencies such as some rural Centrelink offices or by the use of `information kiosks' in the various state run Government Access Centres and the Australian Country Information Service;This year agent agreements have been entered into for the Queensland towns of Emerald, Roma and Rockhampton and in Tasmania, Smithton and Queenstown will be serviced through the Service Tasmania Project.Our Training and Information Program courses for ex-service organisation pension and welfare officers will be increased. Refresher courses will be available in some areas for those participants who were trained some time ago. We will soon be introducing an online information system known as DVA FACTS which will build on the success of A Guide to Services for the Veteran Community in Rural and Remote Areas. The system will enable rural veterans to access detailed, up-to-date information on the Department's programs and services either through offices of the Department, its agents or the Internet.What I have spoken about today is just a snapshot of the many rural and remote initiatives being implemented within my portfolio. I recommend that you take a closer look at the report.Improving services in rural and remote areas will continue to be a major priority of the government's. We do not accept that the price of living outside a capital or major regional city means doing without reasonable standards of services, especially when such services can be made available with an appropriate degree of commitment, co-ordination and creative planning.I believe that our experience translates well to the general community and provides a valuable model for delivery of health services to the broader community, and in particular, the aged.Finally, I would like to thank veterans and service providers in rural and remote areas of Australia for the important contribution they have made to the development and continuing implementation of the Health Policy for the Veteran Community in Rural and Remote Areas.I would also like to extend my appreciation to the staff of the Department of Veterans' Affairs for their enthusiasm, hard work and commitment to improving the quality of life of veterans living in rural and remote Australia.Committees37903790379017:24:003790Troeth, Sen JudithSenator TROETHGX5VICLP10—I present the government's response to the report of the Senate Rural and Regional Affairs and Transport References Committee entitled Value adding in agricultural production . I seek leave to incorporate the document in Hansard .Leave granted.The response read as follows—The purpose of this paper is to provide the Commonwealth Government response to the findings of the Value-adding in Agricultural Production Report of the Senate Rural and Regional Affairs and Transport References Committee. The Government agrees with the general conclusions of the Committee that Australia's agricultural sector must become increasingly oriented to value-enhancing and produce a diverse range of value-added products which meet the needs and desires of consumers here and overseas. The Government's view is that value-enhancing needs to be encouraged where it is beneficial to do so.Value-enhancing provides the opportunity to diversify and expand our agricultural export base and to improve the profitability and competitiveness of our exports. The growth in world trade over recent years has been in value-enhanced products. For example, Australia's exports of high value-added food products have grown from $2.6 billion to $4.2 billion over the five years to 1995-96.The challenge is to increase the returns Australia receives from agricultural exports. While there is considerable potential to enhance the value of our exports, it is critical to do so in the context of whether or not Australia can be internationally competitive in adding that value. The Government notes that the Committee has focussed largely on the role value-adding in agricultural production can play in broadening Australia's manufacturing base.It is important to emphasise that value-enhancing goes beyond simply moving from raw produce to processed goods. Value-enhancing encompasses any process or service in the supply chain that adds to or enhances the value of the product for the customer. This may mean:. producing new products or different varieties, such as specialist grain products, pesticide free fruit or developing fabrics made from wool, cotton and synthetic mixtures;. utilising currently ignored by-products;. maintaining quality assurance standards;. changing the presentation of traditional products to meet market requirements, eg packing products for on-shelf display;. providing services such as fast responses to customer requirements, timeliness, consistency etc;. partially enhancing the value of agricultural products which have been exported traditionally in their raw form; or. managing the use of natural resources more efficiently and sustainably.Agriculture is one area where services can be a more important aspect of value-enhancing, simply because agricultural products can, in many cases, be marketed right up to the point of retail sale without significant manufacturing transformation.Decisions on value-enhancing activities are commercial ones and are the responsibility of industry. The Government sees its role as one of establishing an environment conducive to value enhancement, as well as sustainable natural resource management, through policies that encourage efficiency in input and output markets and at all stages through the supply/marketing chain. The Government has undertaken a range of initiatives which contribute to facilitating value-enhancing activities in the agricultural sector, including. creating a stable and competitive macroenvironment that encourages increased investment;. microeconomic reform to improve productivity;. increasing access to export markets and increased trade liberalisation;. reforming market arrangements in key sectors, including structural reforms in the meat. wheat and wool industries;. maintaining funding for agricultural research and development and encouraging innovation in industry;. developing specific industry initiatives such as the Supermarket to Asia Strategy which is the cornerstone of Government and industry efforts to improve the competitiveness of the agri-food sector;. supporting sustainable land, water and vegetation management; and. supporting education and training.Observations Conclusions and Recommendations of the ReportThe Committee has made a number of observations, conclusions and recommendations in relation to a wide range of issues concerning Government involvement in facilitating valueenhancing in agricultural production. A summary of the Committee's observations, conclusions and recommendations is provided at Attachment 1.The Government has responded to those observations and conclusions which propose action on the part of Government, and to all recommendations of the Report. The responses are set out in Attachment 2. The Government notes that, in general, the issues raised by the Committee in the report's recommendations, observations and conclusions, are already being addressed by Government initiatives and measures. These are detailed in the response at Attachment 2.In responding to the points made by the Committee, the Government also recognises that a number of the recommendations concern issues relating to business program design and delivery which have been considered in Going for Growth, the report of the Mortimer Review. These issues have been addressed in the Government's industry statement, Investing for Growth, launched on 8 December 1997.May 1998OBSERVATIONS, CONCLUSIONS AND RECOMMENDATIONSPART ONECHAPTER 1Paras. 1.35-1.37Committee observationsAlthough agriculture's proportionate contribution to Australia's GNP and labour force has declined over the years it still makes a very significant contribution to the national economy, particularly in regional areas, and will continue to do so.The Committee accepts that the emphasis on the importance of value-adding to Australia's agricultural production has possibly been over rated at times. However, given Australia's level of foreign debt and current account deficit it is the view of the Committee that Australia must seek out every opportunity to increase the level and value of its exports. The Committee agrees with the comment of the South Australian Government that although Australia is an efficient exporter of bulk agricultural commodities it must, when the opportunities appear, "shift its agricultural export profile up the trade spectrum to higher value added products". [1]Value-adding activities related to agricultural production must be encouraged at all levels, not just due to resulting trade and balance of payment benefits but also because of the benefits to the national economy through increased employment opportunities and the broadening of our manufacturing base.The Committee believes that value-adding to our agricultural production should be viewed as part of an attempt to broaden our manufacturing base. The Committee acknowledges a magazine article published in July 1991 which argued that value-adding translates into a "recognition of the need to change from the traditional production-driven approach of Australian agriculture to a market-driven system." [2]Paras. 1.45-1.47Committee observationsDespite concerns expressed during the inquiry regarding the domination of Australia's food and beverage companies by overseas companies the Committee would be concerned if this development results in a serious lack of competition in the domestic food market leading to a detrimental affect on consumers or primary producers, or a loss of access to export markets. During the inquiry the Committee received no concrete evidence that such consequences have resulted due to the purchase or investment in Australian food-processing companies by overseas interests.The Committee accepts that the globalisation of value-added food industries is likely to continue and that the benefits of such a development have not been given adequate attention. Foreign ownership of food processing firms in Australia can lead to:. the provision of significant financial resources for Australian operations;. the opening up new markets for exports; and. the provision of new technology and skills for the Australian workforce, resulting in Australian operations becoming more internationally competitive.The Committee is of the view that the Commonwealth Government should indicate how it intends to monitor the impact on Australia's food and beverage industries resulting from foreign ownership.Paras. 1.60-1.62ConclusionThe Committee accepts that Australia enjoys a wide variety of advantages in producing value-added agriculturally based products. However, it is important that none of these existing advantages be taken for granted. Every effort must be made to ensure that these advantages are exploited to the greatest extent possible in order to promote Australia's value-added products.Australia's relatively clean environment is an advantage that is difficult to duplicate in most other countries. Unfortunately, it is the most fragile of the assets Australia has in value-adding and it is therefore imperative that Australian authorities, industry bodies and individuals make every effort to preserve Australia's image as a producer of clean food. Once the image of Australia as a producer of such food from a clean environment is tarnished the image will be very difficult to restore.As the comments of Mr Radcliffe make clear, Australia is operating in a competitive environment overseas and it is essential that Australian producers and manufacturers take nothing for granted in relation to the quality of Australian food products.Paras. 1.82-1.83Committee observationFood processing industries have been more profitable in using their assets compared to most other manufacturing sectors. This is despite the fact that real growth for food manufacturing has been behind that for the manufacturing sector generally. Food processing industries' profitability has also been assisted in recent years by the fact its productivity per employee is greater than that found in other areas of manufacturing.It is apparent to the Committee that companies involved in food processing must increase their level of growth to maximise their profitability. For continued profitability such companies must main tain the relatively high level of productivity per employee presently existing in the food processing sector.Paras. 1.99—1.102Committee observations and recommendationsMany people are surprised at the level at which Australia imports highly processed value-added foods and beverages. Despite efforts to replace these imports with value-added Australian products the Committee expects that the import of highly processed value-added food products will continue in the future at significant levels. However, the Committee recommends that the Commonwealth Government implement improved programs, if possible, to counter the dumping onto the Australian market of value-added food and beverages.Despite a general view in the community that food products should not be dumped in Australia by overseas companies to the detriment of Australian producers, the Committee recommends that anti-dumping regulations should not be used as a sham to block imports. Nevertheless, the Committee accepts that there are occasions when action must be taken against deliberately dumped overseas food products so as to protect our own producers. Action taken must not be in effect a "defacto import restriction".Australia has been critical of countries using, for instance, health or quarantine regulations as a means to block the import of our food products and it would be improper to use the same types of strategies to restrict foreign food imports into Australia in order to protect our domestic market from competition.The issue of the labelling of food products indicating their place of origin is outside the scope of this inquiry. However, the Committee wishes to express its view that Australian consumers should have the right to clearly know where value-added food products they purchase have been manufactured and in which country the bulk produce used in their manufacture originated. The Committee does therefore support strict truth in labelling.Para. 1.109Committee observationsAs noted earlier in the chapter the importance of value-adding may have been over stated on occasions. However, such activities do make a valuable contribution, not only to Australia's balance of payments, but also to the national economy as a whole. Although the Committee accepts that ideally every effort should be made to support and encourage value-adding activities related to agricultural production it recognises that resources to support such goals are limited. The Committee is therefore of the view that careful assessment of industries seeking financial support for their value-adding activities is necessary based largely upon the results of a cost/benefit analysis.PART TWOCHAPTER 3Paras. 3.17-3.18ConclusionsThe Committee is of the view that it is unlikely that any value-adding could be successfully carried out in Australia, and the export of value-added products take place even with some Government involvement, unless it can stand on its own feet in the medium and long term. On occasions industry groups probably overestimate the role that governments can play in smoothing the way for their participation in value-adding, particularly gaining access to overseas markets. The Committee accepts that governments should only play a role in creating an environment in which value-adding is encouraged. However, there may be situations where governments can be more active in encouraging value-adding enterprises in Australia and promoting Australia's export of value-added products. Occasions for active involvement in supporting value-adding activities are discussed later in this chapter. Value- adding is in the national interest and it is therefore important for all levels of government to encourage and support such activities.The dairy industry provides an example of an industry that has benefited from a reduction in government regulation. The importance of government support to value-adding activities varies from one industry group to another.Para. 3.53ConclusionsDespite some negative comments concerning the performance of Austrade in supporting value-adding enterprises in overseas markets the organisation, in the view of the Committee, appears to be performing reasonably well. However, insufficient evidence was presented during the inquiry to allow the Committee to express a more detailed view on Austrade's performance.Para. 3.76ConclusionsThe Committee is in agreement with the view of the Secretary of the Department of Primary Industries and Energy that essentially the role of government in respect to building Australia's image as a producer of clean food can be divided into two roles, namely:. providing enforcement and validation of standards in relation to the safety of food, labelling and quarantine issues; and . the provision of leadership, technical information and funding leading to the improvement of food safety and quality. [3]Para. 3.87Conclusion and recommendationsThe Committee is swayed by the arguments presented by the Ricegrowers' Co-operative to the extent that it believes there is a need for a review of legislation in relation to co-operatives. The Committee therefore recommends that Commonwealth authorities, in co-operation with relevant state authorities conduct, a review of legislation affecting the ability of co-operatives to expand their operations. It is further recommended that if existing legislation is found to inhibit the ability of co-operatives to make themselves internationally competitive the relevant legislation be amended to remove these constraints.CHAPTER 4Paras. 4.31-4.32Conclusions and recommendationsAs noted in this chapter there is a wide range of diverse programs and bodies, both Commonwealth and State, which in whole or in part, support value-adding to Australia's agricultural production. The Committee is fully in agreement with the views of the Victorian Government that coordination of policies and programs between the States and Commonwealth authorities is essential if progress is to be made in the facilitation of value- adding activities in Australia. The Committee recommends that Commonwealth authorities ensure that Commonwealth programs are linked with State programs, where possible. The Committee further recommends that State authorities be involved in the delivery of Commonwealth programs, if appropriate.It is appreciated that the existence of a large number of programs and bodies has caused confusion among companies and individuals seeking support for their value-adding activities. The Committee, therefore, warmly welcomes the establishment of the AusIndustry organisation which will provide information on Commonwealth and state assistance programs dealing with exports. AusIndustry should provide value-adding enterprises with a one stop facility directing them to the most appropriate body and program to meet their requirements.Para. 4.60ConclusionsThe Committee is of the view that research is essential for the future of value-adding to Australia's agricultural production. The Committee believes that for research to be as beneficial as possible it should be closely related to particular agricultural and related industries. As a result of this view the Committee welcomes the increasing proportion of research being carried out by industries themselves as opposed to government research, both Commonwealth and State.Paras. 4.84-4.86Conclusions and recommendationThe Committee encourages all levels of government to work in a cooperative manner with industry groups to increase and improve the quality of value-adding activities in agriculturally based industries.The Committee appreciates that Commonwealth Government agencies are involved in many of the suggested shared strategies set out above. However, the Committee strongly encourages all relevant government authorities to review their involvement in these activities and ascertain how they can further strengthen their involvement with industry groups to support value-adding activities.In relation to supporting the export of value-added products the Committee sees an important role for the Commonwealth Government, particularly Austrade. The Committee recommends that Austrade review its programs and activities formulated to enhance the export of agriculturally based value-added products.Para. 4.92Conclusion and recommendationThe Committee is of the view that Agricultural Product Marketing Units do offer the potential of making significant contributions to the marketing of agricultural products and at the same time provide marketing skills to students who take part in the activities of the units. There would be the potential of an overlap in the activities by the units and other existing research bodies. However, the Committee is confident that any overlap or conflict between the units and other bodies can be overcome. Therefore the Committee recommends that as an initial step relevant Commonwealth authorities consult with State authorities to ascertain how such units could best be established, define what activities they might most profitably carry out, what their relationships would be with existing research and marketing bodies and what financial arrangements could be put in place to support them.Paras. 4.110-4.112Conclusions and recommendationGiven the number of programs and bodies that support value-adding activities, to an extent it is understandable that some individuals and organisations have been disappointed at times by the way they have been treated when seeking support for their value-adding activities. It is hoped that the organisation AusIndustry will help to overcome some of the problems previously faced by these individuals and bodies. Of concern to the Committee was the claim raised by the West Australian Government that small companies involved in value-adding were not always receiving the assistance from Commonwealth authorities that they may be entitled to. The Committee supports the call by the West Australian Government for an inquiry and accordingly recommends that appropriate Commonwealth authorities review assistance provided to small and medium sized companies to ascertain whether Commonwealth programs are meeting the needs of these value-adding enterprises.The Committee would like to see economic obstacles to the establishment and operation of value-adding enterprises moderated or removed. These restraints include taxation and other structural reforms. The issue of tax in relation to value-adding activities is complex and well beyond the expertise of the Committee. Therefore the Committee has chosen not to make a recommendation in relation to the issue of taxation although it is aware of its economic importance to various sectors involved in value-adding.Para. 4.121Conclusions and recommendationsAs noted earlier in the report, the Committee believes that it is essential for Australia to be flexible in marketing its value-added products overseas and that on occasion it may be advantageous for Australian companies to enter into agreements with overseas companies to value-add to Australian bulk or semi-processed agricultural production overseas. The Committee recommends that two possible strategies be followed:. Australian primary producers and/or processors take up financial interests in established overseas companies and then use the resulting influence within these companies to ensure that Australian bulk or partially value-added agricultural products are imported by these companies for further processing and sale in the country or region concerned; or. In countries where it is permitted, Australian primary producers and/or processors establish joint venture companies to produce value-added food and beverages for the local or regional markets. These companies would import Australian raw agricultural produce or partially value-added agricultural products.The Committee further recommends that the Commonwealth Government enter into discussions with relevant industry groups to ascertain the possible viability of such strategies.CHAPTER 5Paras. 5.41-5.46 Conclusions and recommendationsIt is evident to the Committee that for regional development to take place in Australia, including the establishment and profitable operation of value-adding activities, close cooperation between all levels of government is necessary. The Committee acknowledges the view of the Victorian Government that Commonwealth programs designed to support value-adding must be based on a "set of agreed principles". Following on from its recommendation in chapter 3 of this report, concerning the need for coordination between the Commonwealth and State governments regarding value-adding support programs, the Committee further recommends that:. Commonwealth authorities closely consult with State and local authorities concerning the most appropriate form of encouragement that can be provided to promote regional development and related value-adding activities; and. whenever possible Commonwealth regional development programs closely involve both State and local authorities in their implementation.The Committee accepts that the Rural Development Organisations provide valuable feedback to the Commonwealth Government on the development needs of regional areas. State and local government authorities are also involved in these RDOs. However, the Committee believes there is a need to upgrade and improve coordination between all levels of government in the promotion of value-adding activities in regional area. The Committee therefore recommends that the Commonwealth Government consider methods to improve improving the level of State and local government involvement in RDOs to improve communication between the three levels of government in relation to regional development.The Committee is firmly of the view that without coordination between the three levels of government, in consultation with relevant industries and local people, sustainable regional development and related value-adding activities are made more difficult. Suggested strategies to achieve regional development and value-adding are complicated without consultation and cooperation between governments and other relevant groupsThe Committee believes regions attempting to increase value-adding in their own areas can learn from the experiences of other regions. Therefore, the Committee would encourage all authorities involved in a particular regional development program to consider consulting with authorities involved in similar development programs within or outside their own State. Certainly Commonwealth authorities should have an overview of what is occurring in various projects nationally but the Committee received no indication during the inquiry that other participants, such as State and local authorities and industry groups, consult with similar authorities and bodies elsewhere to learn from their experiences.The existence of appropriate infrastructure such as roads and rail lines provide a major attraction for industries to locate in regional areas. Private companies do not have the resources to construct major infrastructure, only governments have that ability. Various government bodies, Commonwealth and State are involved in the construction of infrastructure either alone or cooperatively. The Committee is of the view that in deciding on the construction or improvement of infrastructure in regional areas governments must give consideration to how such infrastructure can stimulate, or maintain, value-adding activities in regional areas.Adequate financing of value-adding activities is essential for the establishment of viable value-adding enterprises in regional areas. As noted in chapter 3 of the report there is a wide range of diverse government programs, both Commonwealth and State that support value-adding activities in Australia, including regional areas. Many of these programs supply financial support for value-adding enterprises. Although the additional allocation of funds for regional development, in relation to value-adding, would no doubt be appreciated by supporters of such development the inquiry received no detailed evidence that there is an inadequate allocation of money for value-adding in regional areas.PART THREECHAPTER 6Paras. 6.12-6.13ConclusionsIt is in the national interest that value-adding activities related to agricultural production be encouraged at all levels so as to benefit the national economy. However, the Committee is of the view that industries themselves have to make the decision as to what extent they can profitably carry out value-adding activities. For companies to make a correct assessment concerning profitability involved in value-adding activities they must have access to the most up to date and reliable information available.There is no doubt that Australia is one of the most efficient producers of bulk agricultural produce in the world. The Committee accepts that in some situations it may be most profitable to export bulk produce with no value-adding component involved.Paras. 6.35-6.36ConclusionsThe Committee considers that the use of new technology resulting from research and development programs will continue to have a significant impact on the future course and success of value-adding to Australia's agricultural production.In its attempt to compete in the Australian and international market place Australian agricultural based industries face intense competition. To gain and maintain a significant share in these market places Australian value-adding industries must exploit every resource possible to be competitive. Due to the increasing liberalisation of world trade, even within Australia, food producers can no longer count on having a near monopoly on the supply of food, in all its varied forms. Australian value-adding industries must be competitive in whatever market place they are operating. To be competitive, primary producers and value-adding enterprises must have access to the best available research and to the most advanced technology that can be developed or purchased to exploit the results of this research.Para. 6.69ConclusionsThe Committee accepts that the concentration of retail and wholesale market power in the hands of a few large companies has impacted on value-adding food industries in Australia. However, the Committee accepts that this impact has not always been negative. The Committee is concerned that the negative effect of large food retailers, wholesalers and food processors on value-adding activities is moderated, while not destroying the advantages consumers enjoy from the operation of these large companies.Paras. 6.80-6.81ConclusionsThe Committee is of the view that there appears to be a lack of unity of purpose and cooperation within the beef industry which has an impact on value-adding in the industry and on the marketing of beef and beef products overseas. The Committee encourages all sectors of the beef industry to improve their level of communication and cooperation so as to increase the industry's value adding activities.The Committee appreciates that the Australian beef industry faces significant difficulties in increasing its share of existing overseas markets, as well as difficulties in breaking into new markets. Some of these difficulties, such as quotas or contrived health restrictions, are beyond the control of the Australian beef industry. However, difficulties the industry makes for itself in dealing with overseas markets, such as a lack of unity and cooperation in the industry, can be overcome with some effort by all the parties concerned. Para. 6.110ConclusionsAs noted earlier in this chapter the Committee accepts that in some circumstances it may be more profitable for Australian producers and processors to export bulk produce rather than value-added items. It appears that dried fruits is an excellent example of an industry where in some circumstances it may be more profitable to export dried fruits in bulk, allowing packaging, a form of value-adding, to take place overseas.CHAPTER 7Paras. 7.30-7.32Conclusions and recommendationThere was conflicting evidence presented during the inquiry concerning the level of enthusiasm displayed by Australian food related companies regarding entry into export markets. However, the Committee is of the view that in recent years there has been a change in attitude by Australian companies, particularly larger companies, resulting in a greater willingness to export their value-added products. This development is welcomed by the Committee.In chapter 1 of this report the Committee commented that in principle it is not concerned with foreign ownership of Australia's food and beverage companies unless such ownership results in a serious lack of competition in the domestic food market leading to a detrimental affect on consumers or primary producers, or a loss of access to export markets. However, the Committee would be concerned if multi-national companies deliberately prevented their Australian subsidiaries from entering export markets so as to benefit their subsidiaries in other countries or the parent company. Such a situation would be to the detriment of Australia's value-adding activities and should not be tolerated by the Australian Government.No evidence was provided to the Committee that Australian subsidiaries of foreign companies are being prevented from entering and operating in export markets. However, the Committee recommends that the Commonwealth Government maintain a watching brief to ensure that foreign owned companies involved in value-adding in Australia are not restricted in their overseas marketing activities by their overseas owners. The Australian Government must ensure that the activities of foreign owned companies in Australia benefit Australian interests and not solely the interest of foreign owners.Paras. 7.55-7.60ConclusionsWhen looking at the potential of exporting value-added agricultural products there must be an appreciation that no country wants to import such products if not absolutely necessary. Countries, if at all possible, want to do their own value-adding using imported bulk or semi-value added agricultural produce when necessary, so as to benefit their own economies. Australia wants to do its own value-adding to products consumed in this country whenever possible and it would be totally illogical to expect that other countries would not have the same attitude to value-added products sold in their own countries.Although tariffs as a tool to curtail the import of value-added agricultural products may decline in the future as a result of the General Agreement on Tariffs and Trade countries may attempt to devise other means to place restrictions on the import of value-added products.During the inquiry evidence was presented by diverse bodies noting the importance of the Asian market to Australia's value-added production. The Committee accepts that Asia is, and will continue to be, an important market for Australia agricultural production including, fresh bulk and value-added. However, the Committee is concerned that too much emphasis may have been placed on the Asian market. It is important that Australian value-adding enterprises investigate and exploit all potential markets and opportunities either in Asia, Europe, Africa or the Americas.In the view of the Committee it is essential that Australia be flexible in marketing its value-added products overseas.The Committee supports the views of Mr Denis Gastin that there is a significant potential market for Australian value-adding agricultural based industries to produce and export Asian style foods into Asia. It is the hope of the Committee that relevant Australian producers and manufacturers will investigate the potential of this particular market.Australian agricultural producers and processors must be willing to export bulk or semi-value-added products into any available overseas market when the situation calls for such a strategy. It may be appropriate for Australian companies to enter into agreements with overseas companies to carry out value-adding to Australian produce in overseas locations. Flexibility must be the key for Australian agricultural producers and processors to exploit any available opportunities in world markets.Paras. 7.99-7.101ConclusionsThe Committee is of the view that Australia should be aware of the danger of becoming a dumping ground for polluting industries. As time goes on it is likely that Australia may be pressured into carrying out increased wool scouring by companies in countries where this practice has become less acceptable. The Committee sees considerable advantages for Australia if wool scouring systems can be operated in an environmentally acceptable manner.Regrettably the Committee has concluded that Australia may struggle to become competitive in the weaving of wool and the production of wool garments. It would appear to be more productive for the industry to concentrate on what it does best, namely the production of the world's best wool.As noted earlier the Committee expressed the belief that it is essential for Australia to be flexible in marketing its value-added products overseas. It is in line with this belief that the Committee accepts the suggestion, that in relation to wool, most of the more complex value-adding processes appear to be more competitively carried out overseas.Para. 7.120Conclusions and recommendationThe production of alcohol from sugar appears to the Committee to offer a significant opportunity for value-adding. The Committee appreciates that the production of ethanol is a complex operation and that at times its economic and social benefits have been overestimated. Nevertheless, the Committee is of the view that every possible encouragement should be given to the production and use of ethanol alcohol. The Committee recommends that the Commonwealth Government give substance to this encouragement by:. reviewing, in cooperation with the relevant States and industry bodies, what actions can be taken to simplify barriers to ethanol production; and. ascertaining what changes are necessary to overcome problems which may occur in existing strategies and programs designed to promote ethanol production in Australia.Paras. 7.131-133Conclusions and recommendationThe issue of value-adding in the tobacco industry and any support that should be provided by governments to this industry is a controversial subject.Given the health dangers related to tobacco consumption the question arises whether governments should be encouraging value-adding in this industry and supporting the export of tobacco overseas where its use may lead to medical problems in a number of consumers? This is not an easy question to answer. It is perplexing that Australian governments are financing campaigns to curtail tobacco consumption in Australia while at the same time encouraging value-adding in the industry. [4]The Committee accepts that tobacco use will continue in Australia and overseas for the foreseeable future and if Australian producers and processors do not supply tobacco other countries will. Nevertheless, the Committee considers that any expenditure by governments to support the production of tobacco has the potential of being viewed as providing a double standard. Given the limited amount of government funds available to support value-adding in Australia the Committee recommends that no funds or assistance should be provided to the tobacco industry, except assistance for growers to leave the industry.Para. 7.168Conclusions and recommendationTo meet the increasing competition from the United States and New Zealand to the export of Australian beef, particularly into Asia, the Committee is of the view that Australia must concentrate on producing beef through feedlots to meet market requirements. The Committee accepts that feedlots provide a significant means of "drought proofing" the beef industry. [5]Paras. 7.183-7.184ConclusionsThe Australian dairy industry presents an outstanding example of an industry that has shown flexibility in adapting to the requirements of overseas markets. The Committee congratulates the Australian Dairy Corporation on taking the initiative in acquiring equity in dairy processing plants in Asia in an effort to assure access to these markets for Australian milk and milk products. This strategy is an example of the foresight and flexibility necessary to achieve success, or at least the chance of success, in export markets for Australian value-adding agricultural based industries.The Committee accepts the view of ABARE that Australia will improve its access to overseas markets for its dairy products as a result of the implementation of the Uruguay Round Agreement. It is the conclusion of ABARE, accepted by the Committee, that Australia will increase its share of world trade in dairy products due to a lessening of exports from the United States and Europe. This lessening will result from increased domestic consumption in these countries along with a reduction in subsidised dairy exports. [6]Footnotes[1] Evidence, South Australian Government, p. 557.[2] Nigel Austin, The Growing Revolution, Bulletin Magazine Vol. 113, 16 July 1991, p. 90.[3] Mr Greg Taylor, Government-industry Partnership to Underpin Clean Food Exports, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 118.[4] See again Evidence, Philip Morris Ltd., p. 639. [5] See Kevin Roberts, Producing to Meet the Market, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 229.[6] See T. Gleeson and others, Outlook for the Dairy Industry, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 262,Attachment 2Response to the Recommendations and Selected Observations and Conclusions of the Value-adding in Agricultural Production Report of the Senate Rural and Regional Affairs and Transport References CommitteeChapter 1— Background: Setting the SceneObservation: Paragraph 1.47 The Committee is of the view that the Commonwealth Government should indicate how it intends to monitor the impact on Australia's food and beverages industries resulting from foreign ownership.The Government notes this observation and this issue is addressed in the response to Recommendation 14 (paragraph 7.32).Observation: Paragraph 1.61 Australia's relatively clean environment is an advantage that is difficult to duplicate in most countries. Unfortunately, it is the most fragile of the assets Australia has in value-adding and it is therefore imperative that Australian authorities, industry bodies and individuals make every effort to preserve Australia's image as a producer of clean food. Once the image of Australia as a producer of such food from a clean environment is tarnished the image will be very difficult to restore.The Government supports this observation. Not only does Australia need to maintain its image as a producer of clean food, we need to be able to support our claims to producing clean food.The Government is taking action which will help to underpin the reputation of Australia's food products for our domestic and overseas customers.Major initiatives include the development of a National Safe Food System (NSFS) Model and the initiatives of the Supermarket to Asia Council's (STA) Quality and Safety Working Group to support that Model. The Council's Asian Marketing Working Group is developing a Quality Food Australia (QFA) proposal which includes the development of a quality certification logo that will be underpinned by quality and safety criteria. The NSFS and STA initiatives are also being supported by the development of National Strategies for the sustainable use of Agricultural and Veterinary Chemicals and Fertilisers.Another important initiative is the Landcare program which will be encompassed in the National Heritage Trust (NHT) framework. A key outcome of the NHT programs is to achieve the further integration of environmental protection (including biodiversity conservation), sustainable agriculture and natural resources management.Australia's reputation as a producer of clean food also depends on the effectiveness of quarantine risk analysis and border surveillance and control activities in ensuring that exotic pests and diseases do not enter Australia. Such pests and diseases can significantly damage the quality of Australian produce. The control of them may require the use of pesticides and insecticides in turn increasing the risk that chemical residues may be detected in product going to domestic and export markets. The Government has recently announced a package of measures costing $76 million over the next four years to implement key recommendations of the Nairn report on quarantine and the National Fish Task Force Report.The Department of Primary Industries and Energy (DPIE) is also involved in a range of other initiatives aimed at underpinning Australia's clean food image, including the Residue Management Group and the National Residue Survey. DPIE has been working with key food industries (ie meat, dairy, grains, horticulture and seafood) to develop on-farm quality assurance (QA) strategies for their sectors. DPIE has also been involved in the development of a number of other QA programs in partnership with industry for example: CATTLECARE for the beef industry; FLOCKCARE for the sheep industry; a pulse industry QA program; and SeaQual which is aimed at promoting quality processing in the seafood industry.In addition, there is a wide range of other food safety and quality initiatives and programs currently operating or in development at Commonwealth and State government level and by industry. At a broader level, Australia is also actively involved in international fora (including the OECD and Codex) to help ensure that Australia's food and fibre products are respected for their integrity.The NSFS Model provides a strategic framework to coordinate current and future food safety initiatives to achieve an integrated approach to food safety along the whole food supply chain. This issue is discussed further at the response to the Committee's conclusion at paragraph 3.76.Recommendation 1.The Committee recommends that the Commonwealth Government implement improved programs, if possible, to counter the dumping onto the Australian market of value-added food and beverages. (paragraph 1.99)The Government supports this recommendation.The Government has a firm commitment to having an effective anti-dumping system available to industry, to combat unfair competition from dumped product.Australia's anti-dumping and countervailing procedures were the subject of a Government initiated review conducted by Mr Lawrie Willett during 1996 to fulfil the Government's election commitments to improve existing arrangements. Following the receipt of the findings of the Willett Review, the Hon Geoff Prosser, the then Minister for Small Business and Consumer Affairs and Minister responsible for Customs, announced reductions in the time frames for the different stages for examination of an anti-dumping complaint.The Minister for Industry, Science and Tourism, Mr Moore and the Minister for Customs and Consumer Affairs, Mr Truss announced on 24 February 1998 further significant changes to Australia's anti-dumping and countervailing arrangements. These new arrangements provide a shorter period for the investigation of complaints and reduces the time taken to reach a final finding to 155 days. Interim duties can also be imposed from day 60 of the process on the basis of a provisional finding. These changes give full effect to the Government's 1996 election commitments on anti-dumping arrangements. The legislation to implement these changes will be considered by the Parliament during the Budget Session.As a member of the World Trade Organisation (WTO), Australia is committed to ensuring that its anti-dumping and countervailing regime is consistent with the WTO Agreements.Recommendation 2.Despite a general view in the community that food products should not be dumped in Australia by overseas companies to the detriment of Australian producers, the Committee recommends that anti-dumping regulations should not be used as a sham to block imports. (paragraph 1.100)The Government supports this recommendation.While the existence of anti-dumping and countervailing procedures present the opportunity for harassment of importers, the possible misuse of these procedures is minimised by the need to demonstrate that a prime facie case exists before the Australian Customs Service pursues a full investigation.As noted in the response to Recommendation 1, the operation of Australia's anti-dumping and countervailing regime must meet the requirements of the WTO Agreements. The Agreements emphasise the need to prove that dumping or subsidisation has occurred and that there is injury caused to domestic industry.Observation: Paragraph 1.102 The issue of the labelling of food products indicating their place of origin is outside the scope of this inquiry. However, the Committee wishes to express its view that Australian consumers should have the right to clearly know where value-added food products they purchase have been manufactured and in which country the bulk produce used in their manufacture originated. The Committee does therefore support strict truth in labelling.The Government supports this observation.Currently, country of origin labelling of food in Australia is regulated by:. the Australian Food Standards Code, administered by ANZFA (and enforced through State food laws) which requires all packaged and certain unpackaged foods offered for sale in Australia to be labelled with a statement indicating its country of origin. Under current arrangements the definition of country of origin, including claims of Australian origin, is determined by Federal Court interpretations of the Trade Practices Act 1974 (TPA);. the TPA, which prohibits false and misleading labelling of all products, including food; and. the Commerce (Imports) Regulations (made under the Commerce (Trade Descriptions) Act 1905 ) which requires that, at point of entry to Australia, specified goods, including food, must carry the name of the country in which the goods were made or produced.The Government announced on 19 November 1997 its agreement to introduce a clearer, more effective country of origin labelling system. The proposed changes to country of origin arrangements will address industry and consumer concerns about the uncertainty of origin labelling that has emerged over recent years; provide the information consumers need to make informed choices; and allow Australian companies to promote their contribution to the local economy.The Government proposes to amend the Trade Practices Act 1974 to adopt a `substantial transformation' approach to clarify claims of `made in Australia'. When the amendment is implemented, a product will only be able to be labelled as Australian made if it meets two tests, as follows:. the product has been substantially transformed in Australia, ie it has been used in a production operation which results in a new, significantly different and separately identifiable product; and. at least 50 per cent of the cost of production has been incurred in Australia. The proposed legislation will include a regulation making power which will enable the Government to ensure that certain simple processes applied to imported goods are not considered as satisfying the substantial transformation test. Such processes would not be enough to allow a product to be labelled as `made in Australia'. Examples would include ham and bacon made from imported pork and orange juice reconstituted from imported concentrates.The Government also announced that it will ask the Australia New Zealand Food Authority (ANZFA), as a matter of urgency, to consider whether the proposed amendments to the TPA are adequate for the food sector.Chapter 3— Government Involvement in Value-adding with particular reference to the roles of the Commonwealth GovernmentConclusion: Paragraph 3.76 The Committee is in agreement with the view of the Secretary of the Department of Primary Industries and Energy that essentially the role of government in respect to building Australia's image as a producer of clean food can be divided into two roles, namely:. providing enforcement and validation of standards in relation to the safety of food, labelling and quarantine issues; and. the provision of leadership, technical information and funding leading to the improvement of food safety and quality.The Government supports this conclusion.As noted in the response to the Committee's observation at paragraph 1.61, the Government is addressing a number of key issues to maintain Australia's reputation as a supplier of safe quality food for domestic and overseas customers. The Government recognises that food safety and quality are critical issues for export success and that safety is the non-negotiable component in a quality food product. Food safety is also a pre-competitive requirement to the supply of a wholesome, quality product to consumers.The Commonwealth is undertaking a number of initiatives aimed at improving food quality and safety. These initiatives will include work on enforcing and validating standards for food products and will provide leadership and technical information and may look at providing funding.Australia's commitment to continuous improvement on a national whole-of food chain scale is being facilitated by the development of a National Safe Food System (NSFS) Model. This Model has been developed by the joint National Safe Food Working Group, comprising representatives of Commonwealth and State agriculture, health and fisheries departments and industry. The Model draws together the existing structure and measures into a coherent, strategic framework for continuous improvement. It comprises a number of elements including the proposed National Food Hygiene Standard, implementation of HACCP systems, monitoring and surveillance, emergency management arrangements, training and education.The National Food Hygiene Standard, currently being developed by the Australia New Zealand Food Authority (ANZFA), is an important component of the NSFS Model. The proposed standard will require food businesses to comply with a range of requirements for the delivery of safe food products to consumers. The Government is also undertaking a Review of Food Regulation which aims to reduce the regulatory burden on the food sector, and improve the efficiency of food regulation arrangements. A final report is due by mid 1998.Food safety and quality are a key focus for the Supermarket to Asia (STA) Council Quality and Safety Working Group. The Working Group considers one of its roles, and that of the STA Council, is to promote a quality culture throughout Australian industry. Its ability to do so will depend on other systems and processes being right on the mark, such as the management of the use of agricultural and veterinary chemicals under the national registration scheme. Ensuring the integrity of this management is one of the main objectives of the national strategy for agricultural and veterinary chemicals.The STA Quality and Safety Working Group has developed an action plan to address a number of elements of the NSFS initiative. A key element of the action plan is the development of a Model Food Safety Emergency Management Plan for the agri-food sector. The Plan is designed to provide agricultural and fisheries industries with a template for emergency management action at the sectoral level.In addition, the STA Council's Asian Marketing Working Group is developing a Quality Food Australia (QFA) proposal. This includes the development of a QFA logo that will be licensed to exporters and will be underpinned by third-party quality certification. The quality and safety criteria, which would need to be met by all links in the food supply chain, are currently being developed by the Working Group in consultation with the Council's Quality and Safety Working Group.As outlined in the response to paragraph 1.61, Australia's reputation as a producer of clean food also depends on the effectiveness of quarantine surveillance, disease and residue management and other associated risk analysis in keeping Australia free of exotic pests and diseases and other forms of chemical or physical contamination whose introduction would undermine the marketability of Australia's agricultural products in export markets. The Government is taking action to implement key recommendations of the Nairn report on quarantine and the National Fish Task Force Report.The Residue Management Group (RMG) was formed in 1994 to provide leadership and strategic direction for the proactive management of agricultural and chemical residue issues in the red meat industry. The Secretary of DPIE is a member of this Group, which has recently developed a three year Strategic Plan to ensure that consumer and market expectations for safe wholesome food are fully met.Residue issues are also addressed through the National Residue Survey which undertakes random monitoring programs for agricultural and veterinary chemicals, stock-feed additives and environmental contaminants in a range of raw agricultural commodities. ANZFA also publishes the Australian Market Basket Survey which provides information on the levels of heavy metals, pesticide residues and natural toxins in a range of everyday foods.Concern about maintaining Australia's `clean green' image is explicit in the DPIE corporate plan (refer pages 17 and 19 of the plan). The need to address issues related to the maintenance of this image as well as food safety and quality issues is explicitly stated in letters, outlining Government rural research and development (R&D) priorities, to the R&D Corporations (RDCs) by the Minister for Primary Industries and Energy in 1994, and again in 1997.In his 22 August 1994 letter, the then Minister Collins suggested that `R&D related to quarantine, human health and quality assurance will undoubtedly assist industry and Government in the push for greater exports'.More recently Minister Anderson made a number of comments relevant to the Committee's concerns in his 28 January 1997 R&D priorities letter to the RDC Chairs, stating (among other things) that:'I also see the food quality and safety issues as vital to the encouragement of higher uptake of Australian products. While Australia has a reputation as a supplier of safe and high quality agricultural products, to confirm and maintain our status as being relatively disease-free and non-polluted requires an integrated approach to food safety, quality assurance, and animal and plant health. Co-investment by RDCs with industry in the development and adoption of Integrated Management Programs and Quality Assurance standards, and the introduction of through-chain product certification could lead to broader industry investment in the production of quality products.'Recommendation 3.The Committee recommends that Commonwealth authorities, in co-operation with relevant State authorities, conduct a review of legislation affecting the ability of co-operatives to expand their operations. (paragraph 3.87)The Government supports this recommendation.This issue is currently being addressed with all States and Territories having agreed to enact or amend legislation to reflect `core consistent provisions' which will remove legislative barriers to co-operatives operating nationally. Further details are set out in the response to Recommendation 4.Recommendation 4.It is further recommended that if existing legislation is found to inhibit the ability of co-operatives to make themselves internationally competitive the relevant legislation be amended to remove these constraints. (paragraph 3.87)The Government supports this recommendation.This issue is currently being addressed. On 25 October 1996, the Standing Committee of Attorneys General (SCAG) endorsed the core consistent provisions of co-operatives legislation as a basis for a nationally consistent legislation scheme. It was also decided to conclude an intergovernmental agreement (currently being developed) to ensure continuing uniformity of the provisions and consistency in administration. The core consistent provisions will enable co-operatives to operate across State borders and will provide for improved accountability of co-operatives.Significant progress has been made in enacting or amending State and Territory co-operatives legislation to include the core consistent provisions. Queensland proclaimed its new co-operatives legislation on 1 September 1997 and Victoria proclaimed new legislation in October 1997. The Northern Territory, South Australia and New South Wales have each passed legislation which is expected to be proclaimed shortly. Western Australia, Tasmania and the ACT are to introduce comparable legislation later.The development of nationally consistent legislation requires associated amendments to National Corporations Law which would allow co-operatives to raise funds from members across State borders. The Ministerial Council on Corporations has agreed to changes to National Corporations Law and work is underway to enact the required amendments.The new cooperatives legislation will make it easier for co-operatives to merge, expand their operations and raise capital. This in turn will make a major contribution to the development of strong, nationally based agricultural co-operatives which are better able to compete on global markets. Chapter 4— The States, Commonwealth and Value-adding IndustriesRecommendation 5.The Committee is fully in agreement with the views of the Victorian Government that co-ordination of policies and programs between the States and Commonwealth authorities is essential if progress is to be made in the facilitation of value-adding activities in Australia. The Committee recommends that Commonwealth authorities ensure that Commonwealth programs are linked with State programs, where possible. (paragraph 4.31)The Government supports this recommendation in principle.The Commonwealth agrees that the co-ordination of policies and programs between the Commonwealth and States is important, especially to avoid duplication of efforts and ensure programs are complementary. For example, AusIndustry Enterprise Development Programs are delivered through a Commonwealth, State and Territory Government partnership. Following the November 1994 Burgess Review of business development programs, AusIndustry partners have worked cooperatively to link respective programs where possible and to avoid program duplication and overlap.Also, agricultural resource base programs such as those for the Murray Darling Basin, the Council of Australian Governments (COAG) water reform and the NHT, including Landcare, are significant examples of Commonwealth/State program coordination.The issue of business program design and delivery has been addressed in the Government's industry statement, Investing for Growth , which was launched on 8 December 1997.To maximise the effectiveness of programs, the Government will adopt design requirements for business programs based on the recommendations of the Mortimer review, including establishing clear program objectives and performance indicators and undertaking regular independent reviews of programs.In delivering programs, the Department of Industry, Science and Tourism will move to separate program development and program delivery, as advocated by Mortimer. This will ensure that the delivery of business programs is more cost effective and clearly focused on achieving the required outcomes.Recommendation 6.The Committee further recommends that State authorities be involved in the delivery of Commonwealth programs, if appropriate. (paragraph 4.31)The Government supports this recommendation in principle. The option of delivering programs through the States is always considered by the Commonwealth in determining program delivery arrangements. As mentioned in the response to Recommendation 5, relevant State authorities are active partners in the existing delivery network for Commonwealth programs such as AusIndustry and agricultural resource base programs.Also as set out in the response to Recommendation 5, the issue of business program design and delivery has been addressed in the Government's industry statement, Investing for Growth .Conclusion: Paragraph 4.60 The Committee is of the view that research is essential for the future of value-adding to Australia's agricultural production. The Committee believes that for research to be as beneficial as possible it should be closely related to particular agricultural and related industries. As a result of this view the Committee welcomes the increasing proportion of research being carried out by industries themselves as opposed to government research, both Commonwealth and State.The Government notes this conclusion.The Research and Development Corporation (RDC) Model accords with the Committee's view that research should be closely related to particular agricultural industries. Most of the RDCs are commodity specific and are specifically charged with taking a whole of industry approach—from production to processing and marketing—in order to improve industry competitiveness and profitability. Industry has been particularly supportive of the Model, with industry research and development (R&D) contributions increasing from $26.5 million in 1984-85 to $124.8 million in 1995-96. The Commonwealth Government provided $136 million in the way of matching appropriation funds. Total RDC expenditure for that year was nearly $265 million.Despite the fact that it is the primary producer who is at the core of the RDC Model, the Corporations fund a significant amount of downstream R&D. DPIE informally surveys the Corporations on a range of issues each year. The results of the 1993-94 survey showed that more than 40 per cent of the RDC's research effort is in the off-farm sector, with five of the RDCs investing 50 per cent or more of their R&D budgets in off-farm areas. More up to date information on RDC investments will be available shortly.The issue of value-adding was also addressed in Minister Anderson's 28 January 1997 R&D priorities letter to the RDCs:'The complex processing of our commodities will require the development and adoption of new processing technologies that are efficient, safe and environmentally friendly. Notwithstanding the significant benefits that may flow from value-added to processing industries and producers, without the RDCs activities there is the potential for under-investment in these areas.The RDCs have a key role in identifying limiting factors to value-adding and identifying market opportunities for value-added products.RDCs must ensure their investments cover the entire production/marketing chain, including the timely delivery, quality and integrity of our product. Our transport, storage and distribution systems often compare poorly against our trading competitors. While the Government will act to accelerate microeconomic reform in these sectors, research, development and adoption of systems that are innovative, cost-effective and integrated into the production phase are central to Australia's comparative advantage as an exporter of primary and processed products.'Recommendation 7.In relation to supporting the export of value-added products the Committee sees an important role for the Commonwealth Government, particularly Austrade. The Committee recommends that Austrade review its programs and activities formulated to enhance the export of agriculturally based value-added products. (paragraph 4.86)The Government notes this recommendation.Austrade programs have been subject to on-going review over recent years. For example, the Export Market Development Grants Scheme was reviewed in the 1996-97 Budget process. The Mortimer Review has also examined Austrade's role and programs. The Government's December 1997 industry statement, Investing for Growth , sets out an expanded role for Austrade in coordinating and advising on the development of export programs across Commonwealth agencies to ensure a focused and consistent approach.Austrade provides a range of services to assist the Australian agribusiness industry develop international business. It is the only agency of the Australian Government exclusively focussed on international markets. It helps Australian businesses take advantage of export opportunities and assists with foreign investment into Australia and export-related investment in other countries.Austrade's services are tailored to meet the needs of Australian businesses, ranging from first-time exporters to well-established exporters. Austrade can assist businesses which are:. seeking general information and advice on exporting. selecting, understanding and entering export markets. expanding existing export markets. Through Austrade's global network of almost 100 offices in 67 countries, Austrade helps businesses by identifying opportunities and passing them onto industry. Austrade works with these organisations to capture export opportunities, including facilitating the establishment of consortia for more complex, longer term business opportunities.Austrade, through its offshore network and its operations in Australia, is working with the agribusiness industry to exploit a range of identified opportunities, from low value added products through to high value added products and systems. Austrade recognises the potential value to Australian industry of exports of value added products and it is a particular focus of the Austrade posts in their ongoing opportunity identification responsibility, particularly in Asia.Austrade also recognises that in some cases value-adding may not be the most commercially viable activity, for example some value added products face market access barriers where often the core component raw materials of such value added products may not. Austrade considers that the issue of value adding needs to be addressed on a cost/benefit basis on a sector by sector basis and where there is a clear commercial benefit, the pursuit of offshore markets for value-added products by the Australian agribusiness industry should be encouraged.In conjunction with individual companies, groups of companies, other government and allies, Austrade also works to develop initiatives which seek to maximise the scope for industry involvement across the value chain. A current example is Austrade's `Meat Industry, Philippines' initiative. This initiative was developed in response to the opportunity identified to broaden Australia's involvement in the rapidly growing Philippines meat industry from current suppliers of livestock and meat, to suppliers of technology, equipment, services and investment along the `cold chain' .Austrade also assists the industry through co-ordination of industry involvement in international trade fairs and Austrade organised trade displays.In addition, Austrade works in partnership with the efforts of value adding industries in development of their export strategies and implementation. An example is the wine industry where Austrade is actively supporting the Australian Wine Exporters Council's efforts offshore through dedicated resources in targeted Austrade posts. In parallel and taking the value chain approach, Austrade is supporting the efforts of the Australian Wine Technology Exporters Group in the United States.Austrade also supports related activities of ally departments and organisations, for example the Prime Minister's Supermarket to Asia (STA) initiative. Within the STA umbrella, the potential for value added exports is being explored in a number of capacities, and Austrade is supportive of those efforts, and is providing input to those activities.Austrade is in broad and frequent dialogue with individual organisations, trade associations, State and Federal government and other allies. Minister Fischer launched in April 1997 an Agribusiness Advisory Panel, a vehicle to allow direct feedback from industry on Austrade's efforts and activities in the agribusiness industry and provide input to planned activities. In this context, Austrade is responsive to the needs of the industry and it is this ongoing dialogue which has helped shape the strategic efforts of Austrade in the agribusiness sector, including a focus on value added exports.Whilst Austrade does assist the industry in its efforts to identify and pursue value adding opportunities offshore, Austrade also assists the efforts of Australia's bulk commodity sectors. Where these sectors have Statutory Marketing Authorities (SMAs), Austrade supports the latter's efforts. In those sectors where there are no SMAs, Austrade can provide services from the range of Austrade services outlined above, as sought by industry.Austrade acknowledges the potential benefits of assisting Australian businesses pursue value added opportunities offshore and this is reflected in many activities underway around the world via Austrade's posts, some of which have been highlighted above. Austrade will continue its efforts in this area.Recommendation 8.The Committee is of the view that Agricultural Product Marketing Units do offer the potential of making significant contributions to the marketing of agricultural products. . . . . . .The Committee recommends that as an initial step relevant Commonwealth authorities consult with State authorities to ascertain how such units could best be established, define what activities they might most profitably carry out, what their relationships would be with existing research and marketing bodies and what financial arrangements could be put in place to support them. (paragraph 4.92)The Government supports this recommendation in principle.The Commonwealth supports the concept of closer involvement by universities and educational institutions in market development and research activities. However, further consideration would need to be given to how any involvement, including the establishment of the proposed Agricultural Product Marketing Units, could be funded.The Committee appears to support the view that some rural R&D Corporation funds could be allocated to the provision of education related to export markets. This suggestion is outside the legislative brief of the R&D Corporations who, while certainly interested in market information, will only fund targeted market research projects of direct relevance to their industries; in some cases such projects may involve post-graduate students.DPIE has undertaken to consult with the appropriate State authorities to consider the viability of the proposed Agricultural Product Marketing Units. There are a number of Commonwealth SMAs which are actively involved in the marketing of agricultural products which should also be consulted on this matter. Consultations with State and Territory governments and other Commonwealth departments and agencies on the proposed units were initiated at the September 1997 meeting of the Agribusiness Developments Forum.Recommendation 9.Of concern to the Committee was the claim raised by the Western Australian Government that small companies involved in value-adding were not always receiving the assistance from Commonwealth authorities that they may be entitled to. The Committee supports the call by the Western Australian Government for an inquiry and accordingly recommends that appropriate Commonwealth authorities review assistance provided to small to medium sized companies to ascertain whether Commonwealth programs are meeting the needs of these value-adding enterprises. (paragraph 4.111)The Government supports this recommendation.This issue has been addressed by recent reviews. Following the 1994 Burgess report, interagency mechanisms were put in place between AusIndustry and DPIE to ensure that potential client overlap issues are addressed. These arrangements appear to be working satisfactorily.The Government is taking action to significantly reduce the regulatory and compliance burden for small business in response to the recommendations of the 1996 Small Business Deregulation (Bell) Task Force. For small business, the initiatives will include:. simplifying taxation compliance (including changes to fringe benefits taxation);. providing easier access to government information and compliance requirements (including a single entry point for access and an improved national business information service);. reducing the complexity, duplication and delays in business approvals and registration processes;. easing access to finance for small business (including establishment of a Small Business Innovation Fund); and. accelerating Commonwealth, State and Territory reform of rules and regulations. Taxation reforms which have already been introduced for small business include: capital gains tax (CGT) rollover relief; extension of CGT exemption on sale of a small business for retirement, reduction of the provisional tax uplift factor from eight per cent to six per cent and agreement to set up a new Small Taxation Claims Tribunal.The Mortimer Review also addressed the question of whether Commonwealth programs are meeting the needs of small to medium sized enterprises (SMEs) involved in value-adding. As set out in the response to Recommendation 5, the issue of business program design and delivery has been addressed in the Government's industry statement, Investing for Growth . The Government is proposing a range of measures to ensure that the delivery of business programs is more cost effective and clearly focused on achieving the required outcomes. Details are provided in the Investing for Growth statement.Recommendation 10.As noted earlier in the report, the Committee believes it is essential for Australia to be flexible in marketing its value-added products overseas and that on occasion it may be advantageous for Australian companies to enter into agreements with overseas companies to value-add to Australian bulk or semi-processed agricultural production overseas. The Committee recommends that two possible strategies be followed:. Australian primary producers and/or processors take up financial interests in established overseas companies and then use the resulting influence within these companies to ensure that Australian bulk or partially value-added agricultural products are imported by these companies for further processing and sale in the country or region concerned; orIn countries where it is permitted, Australian primary producers and/or processors establish joint venture companies to produce value-added food and beverages for the local or regional markets. These companies would import Australian raw agricultural produce or partially value-added agricultural products. (paragraph 4.121)The Government supports this recommendation.When assisting organisations develop supply solutions for identified offshore opportunities, Austrade works with such organisations to explore solutions and develop an assessment of the relative levels of viability for each option. This work is done on a case-by-case (or opportunity-by-opportunity) basis. In this context, one of the two strategies proposed by the Committee may be assessed as being the most appropriate option, alternatively, another option may prove more viable. It is important to differentiate between what is a viable option in principle, and what is a viable option for the specific circumstances of individual opportunities. Austrade agrees in principlethat the two options can be viable, but also considers that other options may exist for individual opportunities and a rigorous assessment of all options should be undertaken for each opportunity pursued by the industry. Industry determines the relative commercial viability of alternative options.In the current world trading environment where new trading blocks are emerging, the two options outlined in the recommendations above can enable Australian organisations develop `insider relationships' in countries where Australia is not a member country.Austrade has assisted organisations develop opportunity supply solutions for each of the two options outlined above. For example, in respect of the first dot point, Austrade assisted Murray Goulburn take out a $5 million investment in the Tianjin Shuang Jiang Dairy joint venture in China to market and further process dairy ingredients for the processed food industry.There is also increasing scope for Asian agribusiness organisations (including Asian based multinationals) and for companies from countries with complementary agribusiness expertise to Australia to establish joint venture and strategic alliances with Australian companies in Australia for exports to third countries. For example, Murray Goulburn has formed a consortium with Meiji & Mitsubishi—Meiji-MGC Dairy Company to build a $50 million infant formula plant at Cobram, expected to generate $60 million in exports.In addition, the joint venture company Danpork Australia Ltd, owned jointly by a Danish consortium and Euphron (Indonesia/Singapore owned), is currently building a $70 million piggery and pork processing plant in Queensland to supply chilled pork to Japan and other south east Asian countries.Recommendation 11.The Committee further recommends that the Commonwealth Government enter into discussions with relevant industry groups to ascertain the possible viability of such strategies. (paragraph 4.121)The Government supports this recommendation.Consistent with Austrade's position that the two strategies outlined in Recommendation 10 may be assessed as being viable options for any one particular opportunity, the Government supports this recommendation that such options should be presented to individual organisations, groups of organisations (eg consortia and networks) and industry associations in appropriate circumstances. DPIE, through its `Strategic Alliances for Food Co-operatives' project (under the Supermarket to Asia Strategy) is encouraging Australian food co-operatives to develop strategic alliances, such as joint ventures, with Asian business partners and customers. Under this initiative, DPIE is assisting four co-operatives; the Queensland Fruitgrowers Co-operative Society, the South Burnett Meat Works Co-operative, Murray Goulburn and Bonlac Foods to develop strategic alliances with Asian business partners. Such strategic alliances should assist these co-operatives to enhance their competitiveness in their chosen market, establish longer term trading relationships with their partners, as well as capture price premiums for their products.Chapter 5— Value-adding and Regional AreasRecommendation 12.It is evident to the Committee that for regional development to take place in Australia, including the establishment and profitable operation of value-adding activities, close cooperation between all levels of government is necessary. . . . . . Following on from its recommendation in chapter 3 (sic) of this report, concerning the need for coordination between the Commonwealth and State governments regarding value-adding support programs, the Committee further recommends that:Commonwealth authorities closely consult with State and local authorities concerning the most appropriate form of encouragement that can be provided to promote regional development and related value- adding activities; andwhenever possible Commonwealth regional development programs closely involve both State and local authorities in their implementation. (paragraph 5.41)The Government supports this recommendation.The Commonwealth is consulting closely with the States in relation to the implementation of specific programs designed to encourage regional development. These include the Rail Reform Transition Program, in South Australia and Tasmania, and the Commonwealth's response to the closure of BHP steelworks in the Newcastle region.More broadly, the Commonwealth is also pursuing co-ordination of regional development activities through a forum of Commonwealth, State and Territory Ministers for Regional Development. At its February 1997 meeting, the Ministers agreed upon the following general principles in relation to regional development:. the need to avoid duplication;. the need to foster closer coordination and cooperation;. recognition of the State and Territory expertise in regional development; . recognition that there are areas where the States, Territories and the Commonwealth cannot act alone. Infrastructure development is a key area where strong partnerships can be formed;. recognition of differences between the jurisdictions.Recommendation 13.The Committee believes there is a need to upgrade and improve coordination between all levels of government in the promotion of value-adding activities in regional areas. The Committee therefore recommends that the Commonwealth Government consider methods to improve the level of State and local government involvement in Regional Development Organisations to improve communication between the three levels of government in relation to regional development. (paragraph 5.42)The Government supports this recommendation in principle.As had been planned under the previous Government's Regional Development Program, Commonwealth funding for Regional Development Organisations ceases in 1997-98. As part of the wind down of the Program, the Government has encouraged Regional DevelopmentOrganisations to consider amalgamation with State-based regional development bodies. Closer co-ordination has also been pursued through the Commonwealth-State Ministerial forum on regional development.Chapter 6— Prospects for Value-adding: The ProblemsConclusion: Paragraph 6.80 The Committee is of the view that there appears to be a lack of unity of purpose and cooperation within the beef industry which has an impact on value-adding in the industry and on the marketing of beef and beef products overseas. The Committee encourages all sectors of the beef industry to improve their level of communication and cooperation so as to increase the industry's value adding activities.The Government supports this conclusion.The Government supports the further development of unity of purpose within the beef industry. The Meat Industry Strategic Plan, generally accepted across the meat industry, embraces the concept of value adding and is providing the strategic direction for the industry. The current meat industry reform process is partly designed to enhance communication and co-operation within the industry through the development of willing partnership arrangements to fund core industry activities. Chapter 7— Prospects for Value-adding: Exports and StrategiesRecommendation 14.No evidence was provided to the Committee that Australian subsidiaries of foreign companies are being prevented from entering and operating in export markets. However, the Committee recommends that the Commonwealth Government maintain a watching brief to ensure that foreign owned companies involved in value-adding in Australia are not restricted in their overseas marketing activities by their overseas owners. (paragraph 7.32)The Government notes this recommendation and the Committee's observation at paragraph 1.47 which concern foreign investment in the agri-food industryThe Government's foreign investment policy encourages foreign investment which is consistent with the needs of the Australian community. An important part of the Government's foreign investment policy is a screening process. This requires foreign interests to seek prior approval for investments or acquisitions above specified thresholds which are then examined to determine whether or not they are contrary to the national interest.The screening process is oversighted by the Foreign Investment Review Board (FIRB), a non-statutory advisory body established in April 1976. The Board's main functions are:. to examine proposals by foreign interests for acquisitions and new investment projects in Australia and, against the background of the Government's foreign investment policy, to make recommendations to the Government on those proposals;. to advise the Government on foreign investment matters generally;. to foster an awareness and understanding, both in Australia and abroad, of the Government's foreign investment policy;. to provide guidance, where necessary, to foreign investors so that their proposals conform with the policy; and. to monitor and ensure compliance with foreign investment policy.In its annual report, the Board publishes detailed foreign investment statistics covering the number of applications received, the proposed size of the investment, the target sector for the investment, and the country of the investor.In the examination of large or otherwise significant proposals, including those related to agricultural production, Government departments and authorities (including State Government departments and authorities) with responsibilities relevant to the proposed activity of the foreign investor are consulted.Conclusion: Paragraphs 7.57—7.58 The Committee accepts that Asia is, and will continue, to be an important market for Australian agricultural production including, fresh, bulk and value-added. The Committee is concerned that too much emphasis may have been placed on the Asian market. It is important that Australian value-adding enterprises investigate and exploit all potential markets and opportunities either in Asia, Europe, Africa or the Americas.In the view of the Committee it is essential that Australia be flexible in marketing its value-added products overseas.The Government notes this conclusion.The Government does not consider that there is too much focus on the Asian market. Expansion into any market in which Australian producers have a competitive advantage is encouraged, but it must be recognised that it is in Asia that the greater opportunities exist. More mature markets such as the EU and US do not provide the same general opportunities, although it is acknowledged that there are niche markets to be exploited and established complementarities that must not be neglected. Emerging markets such as Latin America and Africa may represent long term opportunities for Australian producers, however they do not appear to have the same growth potential in the short term that is evident in the Asian market.The Prime Minister's Supermarket to Asia Council was established in September 1996 to provide the leadership and drive necessary to achieve success in export markets for Australia's agri-food products, with a clear focus on Asia. This is in recognition of the enormous opportunities for increased food exports to Asian markets.Australian food exports to Asia have grown at an annual trend rate of 19 per cent over the period 1991-92 to 1995-96, more than doubling from $AUD 4.9 billion to $AUD 10.3 billion. The Supermarket to Asia Council has set a target for Australian food exports to Asia to reach $AUD 16 billion by the year 2001.It is conservatively estimated that Asian food consumption is growing by $AUD 20 billion per annum. There is increased demand for convenience, snack and fast foods and fresh food packaged in consumer ready forms. While the recent developments in Asian currency and financial markets may have some effects, it is expected that the Asian food market will be close to $AUD 1,000 billion by the year 2000.The Government has also focussed on the establishment and development of export markets for Australia's value-added wool product. These markets are not confined to Asia, but include Europe and the Americas. A particular focus over the last few years has been the establishment of a wool top trade to Mexico as well as Indonesia and China The scoured trade to Japan, Italy, Malaysia, Thailand and India has expanded and a small but significant scoured market established in Lithuania. Emerging markets being examined include the former CIS countries and Chile.The Government, however, will continue its efforts to improve market access to other export markets and encourage Australian enterprises to take advantage of opportunities for exports of value-added agricultural products in all overseas markets. The initiatives of the Supermarket to Asia Council and its working groups to improve the competitiveness of the Australian agri-food industry and remove impediments to exports should also contribute to increased food exports to other overseas markets.Conclusion: Paragraph 7.59 The Committee supports the views of Mr Denis Gastin that there is a significant potential market for Australian value-adding agricultural based industries to produce and export Asian style foods into Asia. It is the hope of the Committee that relevant Australian producers and manufacturers will investigate the potential of this particular market.The Government supports this conclusion.While there is increasing demand for Westernised foods, there has also been a significant rise in consumption of traditional Asian foods such as rice, fish and tropical fruit. It is estimated that Western food accounts for around 10 per cent of food demand in Asian markets.The Supermarket to Asia Council has identified the need for Australian suppliers to be more attuned to customer requirements, including producing new or different products rather than offering what has traditionally been produced. The Council's Small to Medium Enterprises Working Group, is undertaking work to encourage exporters to identify and meet Asian customers' requirements and preferences for specific foods. This would include Asian style foods. For example, the Delicatessen Program, announced in the 1997-98 Budget, is aimed at assisting Australian food producers to better appreciate the specific requirements of Asian customers and enable them to capture export opportunities.In addition, the Rural Industries R&D Corporation (RIRDC) has an Asian Foods R&D program with the specific objective of fostering the development of an Australian Asian Foods industry. This program has been running for a number of years. In 1995-96 $570,000 was invested in R&D in this area by RIRDC. Recommendation 15.The production of alcohol from sugar appears to the Committee to offer a significant opportunity for value-adding. The Committee appreciates that the production of ethanol is a complex operation and that at times its economic and social benefits have been overestimated. Nevertheless, the Committee is of the view that every possible encouragement should be given to the production and use of ethanol alcohol. TheCommittee recommends that the Commonwealth Government should give substance to this encouragement by:. reviewing, in cooperation with the relevant States and industry bodies, what actions can be taken to simplify barriers to ethanol production; and. ascertaining what changes are necessary to overcome problems which may occur in existing strategies and programs designed to promote ethanol production in Australia. (paragraph 7.120)The Government supports this recommendation in principle, noting that evaluation and review of ethanol production strategies and assistance schemes have been continuing over recent years.The Government recognises that ethanol production and use has the potential to offer wider benefits, including in relation to land and water management. A substantial reduction in transport related urban and global emissions may also be available through the use of emerging technologies for ethanol production and use. The NSW Department of Land and Water is currently undertaking research through a consultancy by ACIL to confirm the nature of R&D and other developments within the Australian ethanol industry.The Government already encourages the production of ethanol by maintaining an excise exemption which is currently about 36 cents per litre of petrol. In 1994-95 and 1995-96 a production bounty was provided for fuel ethanol.A comprehensive evaluation of the Ethanol Bounty Scheme was undertaken prior to a decision to terminate bounty assistance for the production of fuel ethanol in August 1996. The evaluation addressed questions about the appropriateness of the Scheme in relation to environmental and sustainable development benefits, and its effectiveness in facilitating the development of a competitive fuel ethanol industry.The evaluation concluded that the appropriateness of encouraging fuel ethanol production and use, as implemented through the scheme, was questionable: current production and use of fuel ethanol was not cost effective in reducing emissions of greenhouse gas and environmental air pollutants; and the Scheme had not met its objective of developing an economically viable fuel ethanol industry and was unlikely to significantly achieve this if continued in the future. As part of the evaluation, a review of information on the use of ethanol overseas was undertaken for comparative purposes and to draw on overseas experience, including that of Brazil. In summarising assessments of overseas programs it was clear that significant subsidies for fuel ethanol production were required—however, the benefits were not necessarily sufficient to justify the costs.While the Government does not believe that economically viable ethanol production is being restrained by regulatory barriers, mechanisms to address any such impediments would be considered if barriers were identified. The Government is also of the view that commercial issues such as costs of production should not be addressed by production subsidies.The Government recognises, however, that emerging technologies for ethanol production and use currently being developed in Australia and overseas could have potential benefits, as noted above. The Government continues to maintain an offer of a grant of $2 million, on a dollar-for-dollar basis with industry, for the construction of a plant to demonstrate new Australian technologies for producing ethanol from woody fibres and other organic materials.The demonstration would seek to establish the technical, environmental and economic viability of producing ethanol as a crucial element in establishing a sustainable fuel ethanol industry in Australia, and to address environmental challenges arising from conventional transport fuel use. The following additional outcomes can be identified if the demonstration is successful:. enhanced profitability of the forestry industry, if the currently non-marketable wood products can be utilised to produce ethanol;. enhanced utilisation of locally developed and overseas technologies, both in Australia and overseas.The Government has, however, decided to defer expenditure on the demonstration plant until the completion and evaluation of the ongoing $3.94 million ethanol research and development (R&D) program, the results of which will in turn provide definitive conclusions on the ethanol production cost and the overall environmental benefits of ethanol use.Recommendation 16.The issue of value-adding in the tobacco industry and any support that should be provided by governments to this industry is a controversial subject. . . . . . .the Committee considers that any expenditure by governments to support the production of tobacco has the potential of being viewed as providing a double standard. Given the limited amount of government funds available to support value-adding in Australia the Committee recommends that no funds or assistance should be provided to the tobacco industry, except assistance for growers to leave the industry. (paragraphs 7.131—7.133)The Government supports the provision of assistance to producers in all agricultural industries to leave the industry if necessary.In the case of the tobacco industry, the Commonwealth is currently working in partnership with the Queensland Government and the Atherton Tablelands community to develop a regional Rural Partnership Program (RPP) strategy. The RPP Strategy `Directions' aims to restructure and develop the region to overcome the impacts from the decline in the tobacco industry.The Commonwealth is also working with the Victorian Government and is committed to the North East Valleys community. The Australian Alpine Valleys Agribusiness Forum is in the process of developing a strategic plan for the region under the RPP.The structural adjustment component of the strategies is designed to assist farmers in the establishment and development of new products and industries, and to promote strategies to effectively market new crops and products domestically and internationally. Funding for this process will be partially sourced from the $1.5 million Tobacco Restructuring Package announced in 1994.The Commonwealth also contributes to tobacco production research and development (R&D) administered by the Tobacco R&D Corporation. Under current arrangements, the Government matches industry contributions dollar-for-dollar up to a level of 0.5 per cent of the industry'sGross Value of Production. In 1996-97, the Commonwealth contributed funding of $345,000 towards a R&D program of just over $1 million which focussed on ecologically sustainable production, farming productivity and plant breeding and varietal development.No other Commonwealth funding is currently provided to or is proposed for the tobacco production industry.Conclusion: Paragraph 7.168 To meet the increasing competition from the United States and New Zealand to the export of Australian beef, particularly into Asia, the Committee is of the view that Australia must concentrate on producing beef through feedlots to meet market requirements.The Government notes this conclusion.The lot feeding industry in Australia has developed as a direct result of consumer demand, particularly in north Asia. However, Australia services a wide variety of markets some of which require lot fed beef, such as Japan, while others, such as the United States, require grass fed beef. The Australian beef industry has responded to the varying market needs by developing both types of meats. The industry acknowledges that each type of meat has a place and those in the best position to pursue either, or both, will continue to do so until the markets dictate otherwise.May 19983810381017:24:003810Troeth, Sen JudithSenator TROETHGX5VICLP10—I present the government's response to the report of the Joint Standing Committee on Foreign Affairs, Defence and Trade entitled The Human Rights and Equal Opportunity Commissioner and the Commonwealth Ombudsman: Report on public seminars, 20 and 25 September 1996 . I seek leave to incorporate the document in Hansard .Leave granted.The response read as follows— COMMITTEE RECOMMENDATIONGOVERNMENT RESPONSE1. The Australian Government introduce legislation to incorporate the Convention on the Rights of the Child into domestic law.The Joint Standing Committee on Treaties is presently inquiring into the implementation and monitoring of the Convention on the Rights of the Child in Australia. The first of its terms of reference is "the domestic ramifications of having ratified the Convention". This inquiry has received over 450 submissions since it began in February. A report from this inquiry is expected in the near future. The Government will consider the findings of this report when it is tabled. 2. The Attorney-General investigate the feasibility of establishing a Children's Commissioner within the Human Rights and Equal Opportunity Commission.On 24 September 1997, the Government announced the establishment of a new Human Rights and Responsibilities Commission following a reorganisation of the Human Rights and Equal Opportunity Commission. The new Commission will have a streamlined structure consisting of a president and three deputy presidents. While the Commission as a whole will have the responsibility of protecting and promoting human rights, each deputy president will also have responsibility for particular areas. The deputy president responsible for human rights and disability will also be able to develop expertise in areas such as children and the aged. However, it is the Government's view that the establishment of deputy presidents with more general responsibilities will remove perceptions that the Commission seeks only to protect sections of the community for whom a specific commissioner exists. Legislation to introduce these changes was introduced into the House of Representatives on 8 April 1998.The Australian Law Reform Commission and the Human Rights and Equal Opportunity Commission have recently provided their report: Seen and heard: priority for children in the legal process . The report recommends that the Human Rights and Equal Opportunity Commission be funded to provide a specialist Children's Rights Unit and that an Office for Children be established in the Department of the Prime Minister and Cabinet. In addition, the Government has recently established a National Council for the Prevention Child Abuse to examine the findings of the Wood Royal Commission and to report on a national strategy to prevent child abuse.The Government will study both reports and will consider what further action is necessary to protect the rights and interests of children. 3. The Government expedite the necessary changes to jurisdiction outlined in the 1995-96 Report: (a)to ensure that the Ombudsman's Office retains maximum jurisdiction covering the changed structures of public administration;(a)A Senate Committee Inquiry has considered the accountability arrangements for contracted-out Government services and tabled its report on 14 May 1998. The Government and the Commonwealth Ombudsman contributed to the inquiry. The Government is considering the Committee's report and recommendations.(b)to allow maximum parliamentary control and scrutiny over the work of the Ombudsman's Office; and(b)The Government has no current plans for changing the budgeting or other accountability arrangements for the Ombudsman's Office.(c)to ensure that the funding to the office reflects the demand of Australian citizens for the Ombudsman's services.(c)The Government will keep the funding needs of the Ombudsman's Office under review to ensure that they reflect the demand for the Ombudsman's services and deliver the improvements in efficiency required from all areas of the Australian Public Service.4. A parliamentary review of the Office of the Commonwealth Ombudsman be conducted in order to examine the resources of the Ombudsman's Office, mechanisms for ensuring its independence from any specific portfolio, and the desirability of giving the Ombudsman the status of an independent officer of the Parliament.The Government notes this recommendation.5. The Australian Government fund an indigenous person's position within the Office of the Ombudsman to give special focus to the needs of indigenous Australians.It is for the Ombudsman to determine whether the creation of an indigenous person's position within her Office is necessary and would meet the particular concerns of indigenous people.3812381217:25:003812Troeth, Sen JudithSenator TROETHGX5VICLP10—I present the government's response to the report of the Joint Standing Committee on Foreign Affairs, Defence Trade entitled From empire to partnership: report on a seminar on the Commonwealth of Nations . I seek leave to incorporate the document in Hansard .Leave granted.The document read as follows—THE GOVERNMENT RESPONSE TO THE JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE REPORT"From Empire to Partnership" : Report on a Seminar on the Commonwealth of NationsIntroductionThe Government welcomes the opportunity to comment on the Report by the Joint Standing Committee on Foreign Affairs, Defence and Trade on a Seminar on the Commonwealth of Nations. Support for the Commonwealth continues to be an important element of Australian foreign policy. In earlier days the Commonwealth was seen primarily by Australia as an adjunct to our close relations with Britain. Its chief value to Australia now lies in the opportunity it provides to pursue and pro mote foreign policy objectives in a multilateral forum, which brings together a broadly representative cross-section of the world's English speaking countries particularly from Africa, the Caribbean, the Pacific and Asia.As the Prime Minister, Mr Howard, said in his statement to Parliament on 19 November 1997, following the Commonwealth Heads of Government Meeting in Edinburgh, `the Commonwealth also complements our key bilateral relationships and our focus on regional forums such as APEC and the South Pacific Forum. It is the major avenue for our engagement with many Commonwealth countries beyond our immediate region. As the third largest financial contributor to the Commonwealth, Australia has a positive role in promoting the economic and social development of those countries'.The active role taken by Australia at CHOGM—particularly the Prime Minister's initiative in establishing an International Trade and Investment Facility to assist developing countries benefit from globalisation—reflects the government's commitment to the Commonwealth as a valuable international network.That said, Australia has long emphasised the importance of the Commonwealth focusing its activities on areas in which it has genuine comparative advantage and responding to the changing needs of its members as efficiently and effectively as possible. Australia believes the Commonwealth has an important role to play in the promotion of fundamental political values among its members including, in particular, democratisation, good governance and institution building. Australia's interest in the Commonwealth is also influenced by its relevance to our wider foreign and trade policy interests.The report makes a useful contribution to discussions on the relevance of the Commonwealth and Australia's role within it. The many suggestions and recommendations from the Report will be particularly helpful as Australia works to build on the outcomes from the 1997 Commonwealth Heads of Government Meeting (CHOGM) in Edinburgh and prepares to host CHOGM in the year 2001 to coincide with our Centenary of Federation celebrations.Recommendation 1That the Australian Government, in consultation with Commonwealth organisations and educational institutions, assist in the establishment of a Commonwealth resources centre.The Government agrees that there would be value in improving understanding of the Commonwealth within Australia.The question of how the Commonwealth is projected internationally, and within Commonwealth countries in particular, has been given close attention by both member governments and the Commonwealth Secretariat in recent years. As noted in the Committee's report, a review of the Commonwealth Secretariat's information programs, was undertaken in 1996-97 by Mr Derek Ingram, a journalist and writer on Commonwealth affairs, at the instigation of the Steering Committee of Senior Officials, of which Australia is an active member. In undertaking the review, Mr Ingram visited Australia in 1996 where he consulted with the Department of Foreign Affairs and Trade, other Departments, as well as a range of journalists, academics and non-governmental organisations.Mr Ingram produced an extensive range of recommendations. His review, and the response of the Secretariat, were considered at the Edinburgh CHOGM in October by the Committee of the Whole, the meeting of senior officials from all member countries which reports to Heads of Government on matters of Commonwealth Functional Cooperation. The Committee, whose report was endorsed by Heads of Government, welcomed Mr Ingram's report as an important contribution to examining ways in which the Commonwealth's image could be sharpened. It emphasised the need for Commonwealth member countries and the Secretariat to project the Commonwealth's role and activities within member states and to the wider world in a more effective manner, including through the school system.The Committee of the Whole broadly endorsed the approach contained in the responses to the review's recommendations by the Secretariat, as well as the Commonwealth Foundation and the Commonwealth of Learning—the two other inter-governmental Commonwealth organisations. Observing that the Secretariat, the Foundation and the Commonwealth of Learning had begun implementing some of the recommendations addressed to them and would report periodically on the progress of implementation, the Committee noted that the biennial Senior Officials Meeting—which meets in the years in between CHOGMs to discuss implementation of CHOGM mandates and the arrangements and issues for the next CHOGM meeting—would discuss the recommendations directed to member governments at their next meeting in late 1998. The Committee encouraged governments to develop individual country programs.The Australian Government will take note of the Committee of the Whole's response to the Ingram Review recommendations and consider how best to respond, with a view to making a positive report to the Senior Officials Meeting this year. The Government interprets the CHOGM proposal for individual country programs to refer to the need to address the key recommendations constructively, but not necessarily to establish elaborate or resource- intensive mechanisms of any kind. Some of the recommendations directed at both member governments and the Secretariat resonate with the comments by the Joint Standing Committee Report.The Government looks for appropriate opportunities to raise the profile of the Commonwealth and will continue to do so.. The Prime Minister's offer to host the 2001 CHOGM, as a way of making the Commonwealth a part of events celebrating Australia's Centenary of Federation, was readily accepted by other Heads of Government at the recent Edinburgh CHOGM. As one of the largest inter-governmental events hosted by Australia, the meeting will provide a key opportunity to underline the importance the Government attaches to the Commonwealth and to promote the Commonwealth within Australia.. As the decision to award CHOGM to Australia was taken four years prior to the event rather than the normal two, this will give Australia additional time to prepare for the event and involve a range of organisations in those preparations. The Government will ensure that strategies to promote the Commonwealth are an integral part of planning for the 2001 CHOGM.As to the specific recommendation made by the Committee regarding the establishment of a resources centre, it is highly unlikely, given existing budgetary constraints, that Government funds will be available for the establishment of a Commonwealth resources centre either within the Department of Foreign Affairs and Trade or within an existing Commonwealth organisation in Australia.The Government, therefore, considers that initially more needs to be done to promote the location and availability of already-existing information and resources. At a time when those interested in Commonwealth issues are keen to project an image of a modern Commonwealth of continuing relevance it is appropriate that the Commonwealth Secretariat in London, the Foreign and Commonwealth Office in the United Kingdom and the Australian Government maintain home pages on the Internet which provide relevant information on the Commonwealth. The Australian Government's home page, for example, contains a background paper on the history of the Commonwealth and Australia's role in it (including in the development agencies), as well as speeches by the Prime Minister and the Foreign Minister on Commonwealth issues.The Government understands that some of the information contained on the Commonwealth Secretariat's home page is not as up-to-date as it could be and will work with the Secretariat to ensure that its information sources are appropriately maintained. In particular, the Government will encour age the Secretariat to make better use of information technology. It will also encourage the Secretariat's public information area to tailor specific information on the Commonwealth for distribution by national organisations, including the Australian Government, the Royal Commonwealth Society and the Commonwealth Journalists Association.Recommendation 2That the Australian Government consult with the Commonwealth Secretariat, in the first instance, on the identity and possible tasks for a group of eminent persons who can publicise the work of the CommonwealthThe Government considers the idea of a group of eminent persons to be interesting, however, such an idea would need to be supported by the Commonwealth Secretariat and should not carry resource implications.The Government would like to see the Secretariat investigate the idea of designated appointed eminent Commonwealth representatives in member countries and to put forward proposals (to identify individuals and tasks) should they see fit. The Government would take into consideration any proposal put forward by the Secretariat but would not be in a position to provide additional resources to fund salaries or other costs which may arise from the establishment of a group of eminent persons.Paragraph 1.45 (Commonwealth Studies)That Australia should participate in the establishment of an Association for Commonwealth Studies, and that the Government should examine other recommendations of the Symons report of relevance to Australia. The Government agrees with the suggestion that Australia should participate in the establishment of an Association for Commonwealth Studies and will participate in its establishment in whatever capacity it is able. The development of civics and citizenship education which includes knowledge of matters such as the development of liberal and democratic ideas, institutions and legal frameworks in Britain as they influenced Australian developments is a priority for the government.It also notes the Malaysian Government's proposal to establish a Commonwealth University in Malaysia, to be built in Tapa, north of Kuala Lumpur. While the university would have a broad curriculum, the Malaysian government has expressed some interest in developing Commonwealth studies within the curriculum offered. That may provide additional opportunities for Australian universities to become involved in promoting Commonwealth studies internationally. Section Two—Commonwealth NetworksRecommendation 3That the Prime Minister report on the outcome of the CHOGM meeting, with a view to highlighting the benefits for Australia from such meetings, with a view to highlighting the benefits for Australia from such meetings.The Prime Minister reported to Parliament on the outcome of the Edinburgh CHOGM on 19 November 1997, focusing on the outcomes achieved and the benefits to Australia of involvement in the Commonwealth. Mr Downer has also delivered speeches on "The Edinburgh CHOGM : The Outcomes and Implications for Australia" to the ACT Branch of the Royal Commonwealth Society on 27 November 1997 and on "The Commonwealth : Promoting Trade, Investment and Development" to the NSW Branch of the Royal Commonwealth Society on 15 December 1997. Copies of these speeches are attached at Annex A.Recommendation 4That the Departments of Foreign Affairs and Trade, and Prime Minister and Cabinet examine the question of reinstituting a Commonwealth Heads of Government Regional Meeting, and determine if there is regional support for its reintroduction.The Government has considered the question of reinstituting the Commonwealth Heads of Government Regional Meeting. It does not consider there would be broad support from regional governments. Since a CHOGRM was last held in 1984, there has been a significant growth in the range of international meetings, including at the regional level, to which Prime Ministers and ministers in member governments must devote their time.With the opportunities available to meet other regional Commonwealth Heads of Government both bilaterally and in forums such as APEC and the South Pacific Forum, the need for an additional Commonwealth meeting at the regional level outside CHOGM is not convincing. While Commonwealth links are a useful support in furthering our links with key members of groups such as APEC and ASEAN, it is unlikely there would be agreement on the need for Commonwealth members to meet in a separate institutional framework or that there would be an agenda that would sustain such a body, particularly when weighed against the considerable resources that would be required to support it.Para 2.13 Attendance at Commonwealth meetingsThat the Australian Government maintain its representation at Commonwealth meetings at Ministerial levelThe Government takes note of the Committee's encouragement to maintain Australia's representa tion at Ministerial level meetings. This Government believes it is important to engage in Commonwealth Ministerial Meetings at an appropriate level, particularly when those meetings address issues of importance to Australia, and where there is a clear advantage in the Commonwealth having a role.For example, Australia has almost always been represented at the biennial Commonwealth Law Ministers Meetings by Attorneys-General or Ministers of Justice. The fact that nearly all Commonwealth jurisdictions, like Australia, have common law systems make the association a very useful forum for furthering international cooperation on legal issues and furthering Australian interests in this area.Australia was represented at the last Commonwealth Health Ministers' Meeting in South Africa in 1995 by the then Minister for Family Services, Ms Rosemary Crowley. And although Australia's delegation to the Commonwealth Education Ministers' meeting in Botswana in 1997 was small and was not at ministerial level, overall Australia's profile was high through significant involvement by Australians in both the CCEM and the parallel convention. In recent years, other priorities have prevented the Treasurer from attending Commonwealth Finance Ministers' (CFM) meetings. Nevertheless, the Treasurer has expressed a willingness to attend future CFM meetings if the timing and other priorities permit him to do so.Commonwealth Ministerial meetings cover a broad range of functional areas and some governments accord a higher priority to particular meetings than others. For example, only one other minister apart from Senator Hill, the Chairman, attended the Commonwealth Consultative Group on the Environment, held in the wings of the UNGASS conference in New York last June. Senator Hill's attendance was important in securing an outcome that protected Australia's interests in the negotiations leading up to the Kyoto Climate Change Conference. On other occasions, the nature of the meeting and the pressure of domestic priorities may be such that it will be necessary for Australia to be represented by a senior official rather than a Minister.Recommendation 5That the Australian Government, as part of its aid program, set aside a defined number of scholarships for students from Commonwealth countries to assist with tertiary and post-graduate education in Australia.The Government believes the linkages developed by foreign students studying in Australia are valuable and notes the Committee's recommendation that specific assistance should be given to students from Commonwealth countries in the form of a defined number of scholarships. The Government does not accept that a defined number of scholarships needs to be set aside for Commonwealth countries. In early 1998 there were 1,778 students from Commonwealth developing countries undertaking post-secondary courses in Australia under the auspices of the aid program. In addition, 431 students from Papua New Guinea are studying in Australian secondary schools with aid-funded scholarships. Of the post-secondary scholarships, just 19 are designated as Commonwealth Scholarship and Fellowship Plan (CSFP). To specify future student numbers from developing countries would work against the need to keep the aid program flexible in the face of changing needs.Students from developed Commonwealth countries participate in education and research through the larger non-defined awards schemes such as the Overseas Postgraduate Research Scholarships Scheme (OPRS) and the Australian Research Council Fellowships which allocate around 400 new awards a year. From 1 January 1998 Australia will not be offering further CSFP awards to developed Commonwealth countries. The New Zealand Government has similarly ceased to fund CSFP awards to Australia from 1997 and the Canadian Government has reduced the tenure of the CSFP awards it now offers. As the Committee has been informed, the CSFP awards offered to Australians by the UK have also fallen in numbers in recent years, with only 6 being offered in 1996.Recommendation 6That the Australian branches of the Commonwealth Parliamentary Association encourage it to continue as a forum promoting democratic values, the rule of law and freedom of the press.The Government is not in a position to comment on behalf of the Commonwealth Parliamentary Association and the Committee will need to seek separate advice from the CPA on this recommendation.Recommendation 7That the Australian Government continue to support the Commonwealth Games Association, as a means of fostering closer contact throughout the Commonwealth, and encouraging all member states to meet in friendly competition.Australia makes a significant contribution to development through sport across the Commonwealth. Australia is the Commonwealth's largest sports donor, seeing the social, health and economic benefits for young people of participation in sport and the import role of sport in strengthening Commonwealth ties. The Australian Government has undertaken a range of initiatives in Commonwealth countries, aimed at developing people through sport, rather than developing sports people. These programs complement the Government's support of elite athlete competition within the Commonwealth and promotion of opportunities to develop athletes to compete at the Commonwealth Games, thereby holding its stature as a world class event.On 27 October 1997, the Prime Minister announced the extension of existing successful programs assisting the development of sport in the Commonwealth. Australia will continue to fund the Protea sport program in South Africa, which was due to wind up in 1998, and work with South Africa to extend it to other parts of Commonwealth Africa, with funding of $1.8 million. Protea Sport is based on Australia's highly successful Aussie Sport program for which the Australian Sports Commission has won awards from UNESCO and the International Olympic Committee. South African authorities recognise that getting children to play sport in the townships is an important contributor to reducing violence and anti-social behaviour.The Government will also extend support for junior sports development in the Caribbean, with funding of $1.35 million. Australia already has a $3 million sports development program for the South Pacific, aimed at ensuring those countries have every opportunity to participate in the Sydney 2000 Olympics and to strengthen sports infrastructure in the region. Subject to a review, this program will be extended until 2006.As well as financial support, Australia is providing support to the CHOGM Sub-Committee on Cooperation Through Sport, which has been considering a cooperative Commonwealth-wide approach to the development of sport. The Executive Director of the Australian Sports Commission chairs a working group of this Sub-Committee, charged with developing and implementing a Commonwealth-wide strategy on sports development and ensuring greater integration of donor efforts.Recommendation 8That the Australian Government continue its support of Commonwealth NGOs in their work in the less developed Commonwealth member countries.Assistance for Commonwealth NGOs is provided through an annual core contribution to the Commonwealth Foundation. The Foundation is an intergovernmental organisation with a mandate to support the work of the non-governmental sector in the Commonwealth. Foundation programs and grants benefit NGOs, professional associations and cultural bodies.Australia provides the third highest level of funding to the Foundation with a contribution of $500,000 (in 1997/98). The Government plans to continue this support. Section 3—Aid, Trade and InvestmentRecommendation 9That the Australian Minister for Trade together with his regional Commonwealth counterparts consider establishing regular meetings of regional Commonwealth Trade Ministers.The Government agrees that there is scope for the Commonwealth to strengthen its role in developing consensus on global trade issues and in assisting its less developed members and small states adjust to and benefit from the challenges of globalisation. But it is not convinced meetings of regional trade ministers should be the focal point of such activity. The Commonwealth's key advantage lies in its cross-regional character, bridging regional groupings. The examples cited in the Report—such as the use of Commonwealth networks in developing trade and business links outside countries' own regions—argue for using the Commonwealth in developing transregional strategies, rather than as a vehicle for enhancing economic cooperation in the Asia-Pacific region alone, where there are already a variety of institutional mechanisms and networks that Australia can utilise.The selection of a special theme for the Edinburgh CHOGM on `Trade, Investment and Sustainable Development: the Path to Commonwealth Prosperity' reflected both the importance of these issues for development and a recognition that the association's shared legal, administrative and business systems provide a firm basis for promoting transregional economic cooperation. One major outcome was the adoption of the Edinburgh Economic Declaration which set out for the first time a common approach to international economic issues. The Declaration emphasises a commitment to market principles and openness to international trade and investment, as well as the need to ensure that all countries are able to take advantage of the attendant benefits. It also sets out several specific areas for practical action by member governments and the Secretariat in relation to trade, investment and development issues and enhancing commercial interaction.One of the main steps agreed at the Edinburgh CHOGM was the establishment of a Trade and Investment Access Facility, as proposed by the Prime Minister, including a $1.5 million Australian contribution over three years. Britain, Canada and New Zealand also pledged financial support for the Facility. The Facility, which commenced operation on 1 January 1998, is a fund administered by the Commonwealth Secretariat aimed at assisting developing countries adjust to, and take advantage of, the opportunities of globalisation. It will provide technical assistance to help countries identify and manage the potential economic and social impacts of trade and investment liberalisation, including by identifying new sources of revenue and market opportunities. It will also fund the provision of advice and training to help put in place appropriate legal and regulatory frameworks to promote trade and investment flows, and enhance countries' capacity to participate in WTO negotiations and meet the requirements of WTO and other international agreements. The Facility will be reviewed after three years' operation.Another major innovation at the 1997 CHOGM was the holding of the inaugural Commonwealth Business Forum immediately prior to CHOGM, in London. The Business Forum brought together government and business representatives from across the Commonwealth. The Prime Minister delivered a speech to the Forum on the "Post-Uruguay Round: Removing the Obstacles to Trade and Investment". Australia's official delegates were Mr Maurice Newman, Chairman of the Sydney Stock Exchange, and Mr Don Kenyon, Australia's Ambassador to the European Union and formerly Ambassador to the WTO.Heads of Government welcomed the recommendations forwarded to them by the Business Forum, including the proposal that it should continue to meet every two years prior to CHOGM, in order to act as a link between the private and public sectors in Commonwealth countries. In addition, they agreed to set up a Commonwealth Business Council, headed by Lord Cairns of the UK and Cyril Ramaphosa of South Africa (respectively Chairman and Vice-Chairman of the Business Forum) and composed of a small group of private sector leaders.The Business Forum's report identified a number of priority activities such as the promotion of greater private sector involvement in infrastructure development; consideration of additional investment and export insurance capacity; and promotion of best practice in corporate and public-sector governance. Heads of Government agreed a number of related measures including: further analysis by the Secretariat of the scope and possible mechanisms for improving trade among Commonwealth countries (it is likely that this study will canvass the potential for Commonwealth countries to assist each other in improving market access); initiating an action programme to remove administrative obstacles to trade by simplifying customs procedures and eliminating bureaucratic and technical hurdles; and examination of the growing importance of electronic commerce and the developmental implications of the use of cyberspace for commercial and financial transactions.The Commonwealth Business Forum mechanism agreed in Edinburgh provides, in the Government's view, the best way forward to increase intra-Commonwealth consultation among trade ministers, their ministries and the private sector. Section 4—The Commonwealth, Good Governance and Human RightsRecommendation 10That the Australian Government raise with other Commonwealth members the strengthening of the role and resources of the Human Rights Unit within the Secretariat, to enable it to take a wider approach to the promotion and protection of human rights.The Government agrees with the Committee's view that promotion of human rights and democratic norms should be an important aspect of the Secretariat's work. It is a natural area of comparative advantage for the Commonwealth, given the principles enshrined in the Harare Declaration, as well as members' shared legal and political systems. Observance of the Harare principles has increasingly become a condition of membership, particularly since the decision in 1995 to suspend Nigeria in response to serious violations of the Harare principles, and the establishment of the Commonwealth Ministerial Action Group (CMAG) to recommend pan-Commonwealth responses in dealing with Nigeria and similar situations in other countries.The Edinburgh CHOGM decided that CMAG should continue its work as a standing ministerial mechanism. It clarified that CMAG's remit should extend beyond those countries of initial focus (Nigeria, Sierra Leone and The Gambia) to any member country deemed to be in serious or persistent violation of the Harare principles. Furthermore, in considering what criteria should apply in assessing new applicants for Commonwealth membership, Heads of Government agreed that future applicants should comply with Commonwealth values and principles as set out in the Harare Declaration.In that sense, the Commonwealth has accepted the importance of human rights-based normative rules for the organisation, and developed mechanisms of compliance. As a result, the Secretariat itself has taken on a broader human rights agenda, through servicing CMAG and providing advice to member states. Aside from CMAG, the Secretariat has also taken a more active role over the last decade in the broad area of promoting the fundamental political values of the Commonwealth—democracy, rule of law, just and honest government, and fundamental human rights. A key element has been the observance of elections by Commonwealth Observer Groups, which the Secretariat has sought to integrate with the provision of legal and electoral experts.The Secretariat has also supported such activity as strengthening the domestic human rights machinery of members, establishment of Ombudsmen's offices, workshops on such areas as criminal justice, administrative law and combating corruption, and implementation of international human rights conventions. As noted in the Committee's Report, the Secretary-General has deployed his good offices in conflict prevention and resolution, to support efforts to maintain stability and democratic government.While the Human Rights Unit of the Secretariat has an important role to play, responsibility for efforts to promote good governance and Commonwealth political values is spread across the Political Affairs Division and the Legal and Constitutional Affairs Division, of which the Human Rights Unit is only one part. Australia has consistently supported allocating a greater share of resources to Secretariat programs in these areas, and the range of activities undertaken by the Secretariat has expanded significantly over the last decade. Australia will continue to urge that these programs be given priority. This will not necessarily mean increased resources for the Human Rights Unit in particular, insofar as promotion of good governance is the responsibility of a much larger part of the Secretariat, but Australia will seek to ensure that the Unit is appropriately funded and that it seeks to enhance the effectiveness of its program delivery.At the same time, there are limitations on the extent to which member governments are prepared to see a substantial increase in human rights-related work by the Secretariat at the expense of programs which are more directly aimed at promoting economic development. In that context, Australia will seek to promote an approach that takes a broad view of good governance by acknowledging its importance in economic development. For example, promotion of best practice principles for public accountability and transparency of government finances, of the kind adopted by the South Pacific Forum Leaders in September 1997, are a vital element in promoting economic development of developing countries. The Commonwealth Secretariat's program assisting public sector reform in member countries make a valuable contribution to creating the right enabling environments for growth and investment, as well as the strengthening of `just and honest government'.In this context, as a forum combining both developed and developing countries of diverse economic profiles, the Commonwealth is well placed to promote greater consensus about the need for a more integrated approach to human rights, stressing the interdependence of political and economic rights rather than the priority of one over the other. The Government will encourage efforts by the Commonwealth to promote such a consensus.Annex AThe Edinburgh CHOGM:The Outcomes and Implications for AustraliaSpeech by the Hon Alexander Downer, MP, Minister for Foreign Affairs, to the ACT Branch of the Commonwealth Society, Canberra, 27 November 1997.IntroductionYour Excellencies, Hugh CraftIt is a great pleasure to be here to address the ACT Branch of the Commonwealth Society, and to speak in a familiar location—the Australian Institute of International Affairs.The Commonwealth continues to play an influential and positive role in world affairs.It is worth remembering that the Commonwealth's membership represents an enormous slice of the world's population. Its member countries account for one quarter of the world's population, and range in population from only a few thousand to over 900 million. Commonwealth countries are located in almost every region of the world, including the Asia Pacific, Africa, the Caribbean and the Mediterranean.The special strength of the Commonwealth lies in the combination of the diversity of its members with their shared inheritance in language, culture and the rule of law.I have just returned from an important APEC meeting in Vancouver, and it is true that the Commonwealth is not at the centre of Australia's foreign and trade policy priorities in the way that the Asia Pacific is.But it is also fair to say that the Commonwealth's important contribution to international life, and the enduring place that it holds in Australia's global priorities, has been undervalued.Sir Robert Menzies said in 1961 that the Commonwealth meant much for "sanity and tolerance in a grievously troubled world", and he praised its ability to make "constant and notable contributions" to world peace and prosperity. Almost forty years later, the world has changed in many remarkable ways, but the words of Menzies continue to ring true.There was no better demonstration of this than the Commonwealth Heads of Government Meeting (CHOGM) in Edinburgh last month. From Australia's point of view, the meeting was very successful and helped advance our regional and global interests in practical ways.I was particularly pleased, as I know Prime Minister Howard was, that Australia's offer to host CHOGM in 2001—the year of Australia's Centenary of Federation—was warmly endorsed by the Edinburgh meeting. I want to outline briefly today the major outcomes of the Edinburgh CHOGM and their implications for Australia, including the Government's perspective on the Commonwealth's continuing relevance in contemporary international affairs.Part One: Promoting Shared Prosperity: Trade and Investment LiberalisationFor Australia, the Commonwealth is significant because through our work on the Commonwealth's Secretariat, and through Commonwealth Heads of Government Meetings, we are able to show leadership and strengthen relations with many developing and developed countries.The Commonwealth's greatest strength over the years has been its capacity to respond flexibly to new circumstances and meet the changing needs of its members. The special theme of this year's meeting in Edinburgh—"Trade, Investment and Development : The Road to Prosperity"—reflects the crucial importance of these issues to all Commonwealth nations as we prepare to enter the 21st century.One of the most influential trends facing Commonwealth and non-Commonwealth nations alike is globalisation. Globalisation is here to stay. It is offering huge opportunities for economies that are internationally competitive, just as it challenges economies which are not. It blurs the division between foreign and domestic policies, and it increases competitive pressures in markets.Globalisation is helping break down barriers to trade and investment, and is underpinned by extraordinary technological change bringing the world closer together. It is makes us all neighbours. But not all countries have benefited to the same degree. Developed members of the international trading system, and of the Commonwealth, have a responsibility to help developing members respond and adapt to globalisation.I am pleased to say that many developing countries are already on the move. The nations of the South Pacific, for example—including many Commonwealth members—are improving their capacity to take advantage of opportunities in the new global trading arena. They have made a strong commitment to liberalising trade and investment, promoting the role of private sector development, and improving public accountability and transparency.The right response to globalisation is more liberalisation, not less. The Economic Declaration which emerged from Edinburgh—entitled "Promoting Shared Prosperity"—is important because it helps member countries come to grips with the influence of global economic forces and the vital part that trade, investment and development play in harnessing this world-wide economic dynamism for the common good. The Economic Declaration is a worthy counterpart to the historic Harare Declaration on the Commonwealth's political values. It welcomes the progress that has been made in recent years in dismantling trade barriers and establishing a rules-based international trading system, but it also recognises that significant barriers to trade in goods and services remain, and that the benefits of the expansion of world trade are still unevenly shared.Through the Declaration, Commonwealth members resolved to strengthen the multilateral trading system within the framework of the World Trade Organisation (WTO), and support the full implementation of the Uruguay Round commitments. Commonwealth members resolved to maintain the momentum towards freer trade through multilateral negotiations, as outlined in the built-in agenda and other issues under discussion in the WTO, including progress on agriculture and financial and other services. This is an objective with major implications for future jobs and economic growth in Australia, and the Australian Government endorsed it unreservedly.Prime Minister Howard's initiative for the creation of an international Trade and Investment Access Facility was warmly welcomed by Commonwealth members. This facility will help Commonwealth countries identify and manage the potential economic and social impacts of trade and investment liberalisation, and respond creatively to the challenges of globalisation.We hope that other governments might also find the facility a useful channel for funding activities to achieve the shared goal of freer and more open trade and investment. Australia will contribute $1.5 million to the facility over three years. Canada, Britain and New Zealand also indicated their willingness to provide financial contributions.Among the Economic Declaration's other significant decisions, Commonwealth members agreed to examine the growing importance of electronic commerce in trade and the developmental implications of the use of cyberspace for commercial and financial transactions. This has immediate relevance for Australia because we are ranked 8th in the world as a network society `plugged in' to the high-tech world—a little known ranking that puts Australia ahead of both Germany (13th overall) and Japan (16th overall). According to my Department, the global value of goods and services transacted on the Internet will grow from its current value of less than $US 5 billion per year to between $US 100 billion and $US 150 billion by the year 2000.I should also mention that the first ever Commonwealth Business Forum was held prior to the Edinburgh CHOGM. This successful meeting of senior representatives from business and government provided valuable input and direction for the CHOGM discussions. I am pleased to say that the forum will meet again in future CHOGM years and be institutionalised through the creation of a Commonwealth Business Council. Prime Minister Howard addressed the Forum on globalisation and the post-Uruguay Round.The creation of the Council is important from Australia's point of view not just because of the new dimension it gives to CHOGM discussions but because it builds the same type of government-business cooperation that the Australian Government is fostering across the board in its foreign and trade policies—whether, for example, through the Australia-Indonesia Development Area concluded earlier this year, or through stronger linkages between the ASEAN Free Trade Area and Australia and New Zealand.Part Two: Economic Growth and the EnvironmentOne of the major aims of the Commonwealth Business Council will be to encourage private sector involvement in promoting trade and investment. This underlines the fact that trade and investment liberalisation is the engine of economic growth, and that growth holds the key to addressing many of the environmental challenges of the late 20th century.This is not to say that economic growth by itself is the total answer. But it does mean that, as incomes rise, both the means and the will to address environmental concerns increase.That is why proposals to tackle climate change which have the effect of dislocating or restricting trade, distorting international investment flows, lowering growth and reducing living standards will not work. The results will be worse again if they discriminate against particular countries. In that respect, the Australian Government believes the CHOGM Economic Declaration addressed the issue of climate change in a constructive and positive way.Importantly, the Declaration recognised the importance of differentiation in international negotiations on environmental issues by stating that the cost of protecting the environment should be "borne in accordance with shared and differentiated responsibilities".Apart from this there were a further two aspects of the Declaration which we saw as particularly important.First, the Declaration recognised the need for the outcome of the forthcoming Kyoto meeting in Japan to involve realistic and achievable goals.And second, the Declaration said that not only the OECD countries but all countries have a role to play in reducing greenhouse gas emissions.That is why I believe the Edinburgh outcome on climate change was a very satisfactory one. It is completely consistent with the arguments the Government has been promoting vigorously in Australia and abroad. The Edinburgh CHOGM sent a clear message that the Kyoto outcome needs to be workable and provide a framework for a global solution to what we all recognise is a global problem.Part Three: Promoting Democratisation and Good GovernanceBeyond the issue of climate change, the Commonwealth's members share a commitment to several fundamental principles. The Commonwealth's anchoring values—its commitment to promoting democracy, human decency and rights and economic liberalism—are at the core of what the institution is about.The Commonwealth has focused in recent times on the development of good governance amongst its membership, within a framework of fundamental human rights. Members have been working together to strengthen democratic institutions and the rule of law, and working towards best practice in all aspects of administrative, judicial and regulatory matters.The decisions taken at the Edinburgh CHOGM sustain this long tradition of support for institution-building and good governance.Commonwealth Heads of Government agreed to maintain Nigeria's suspension from the Commonwealth until it completes its scheduled return to civilian democratic government by 1 October 1998. Heads of Government also authorised the Commonwealth Ministerial Action Group (CMAG) to recommend Commonwealth-wide implementation of measures if, in its view, these would serve to encourage greater integrity of the process of transition and respect for human rights in Nigeria. Heads of Government agreed that if, following 1 October 1998, the Nigerian regime had not completed a credible programme for the restoration of democracy and to the observance of the Harare Principles, they would consider further measures, including Nigeria's expulsion from the Commonwealth.The Edinburgh CHOGM also endorsed the decision of CMAG to suspend representatives of Sierra Leone's military junta from participation in Commonwealth meetings, and welcomed UN Security Council sanctions against the regime.Heads of Government adopted three criteria for assessing applications for membership of the Commonwealth—traditional historical ties; observance of the Harare Principles of democratic government and rule of law; and acceptance of Commonwealth practices and conventions. It was particularly pleasing to see Fiji represented at Edinburgh after its readmission to the Commonwealth in September this year. I want to emphasise that the Commonwealth's commitment to democratic reform and institution-building is something that Australia supports strongly because it goes to the heart of our own practical commitment to improving human rights and building national institutions in the Asia Pacific.I should also mention that Australia was particularly pleased with the balanced, comprehensive reference in the Communique to the landmines issue, which invites countries to consider signing the Ottawa Treaty while referring to complementary work in the Conference on Disarmament and other fora.This was clear recognition of the importance of the landmines issue to developed and developing countries alike. The Prime Minister announced on 17 November that I will travel to Ottawa in early December to sign the Ottawa Treaty on Australia's behalf. This will mean that Australia will forever forswear the use of anti-personnel landmines and destroy its stockpile, consistent with the provisions of the Treaty.I am very proud of the leading role that Australia continues to play in international efforts to find a comprehensive and lasting solution to the grave humanitarian and economic crisis which the misuse of landmines has inflicted on many countries, including in our region. This has been backed up by a practical $19 million commitment to demining in the last 20 months which will help make a real difference to villagers in Laos, Cambodia, Afghanistan and other countries.In addition to its formal sessions and activities, the Commonwealth—like APEC and other key international fora—provides an opportunity for leaders to develop personal contacts and mutual understanding on a more informal basis. In Edinburgh, among a wide range of formal and informal exchanges, Prime Minister Howard had constructive bilateral meetings with the Prime Ministers of Britain, Canada, Malaysia and Singapore, and PNG Deputy Prime Minister Haiveta.Finally, Prime Minister Howard announced in Edinburgh that Australia is extending its existing successful programmes which assist the development of sport in the Commonwealth. The Commonwealth has an excellent record in sport at the elite level and, equally importantly, as part of its work of community development. As a strong sporting nation, Australia is well placed to help broaden sports development so that the Commonwealth Games remains a competition of genuinely international stature and wide interest. Conclusion: The Commonwealth's Continuing RelevanceI do not want to conclude my remarks today without returning to where I began—the significance of Australia's hosting of CHOGM in 2001.This will be an exciting and important international event for all Australians. It will underline the seriousness of Australia's commitment to the work of the Commonwealth and the organisation's continuing relevance in the modern world.In the lead-up period to 2001, non-government groups that support the work of the Commonwealth will have an important role to play in helping build renewed interest and momentum across Australia for CHOGM. The Australian Government looks forward to working with Royal Commonwealth Societies, including the ACT branch, in this shared endeavour.It is clear from everything I have said to today that the Australian Government's involvement in the Commonwealth mirrors the practical and innovative approach we take to our engagement with the Asia Pacific—it is a tightly focused contribution that seeks to advance our national interests and fundamental values in clear ways.No-one should doubt the continuing relevance of the Commonwealth or the enduring quality of its contribution to international life. It is not the out-dated relic of colonial times that some of its ill-informed critics make it out to be. Rather, the Commonwealth is helping its members come to grips with some of the most challenging economic, political and social trends of the 1990s.As the Edinburgh CHOGM demonstrated, the Commonwealth is a remarkably supple and forward-looking body which finds strength in the diversity of its membership and is encouraging countries to shape their own political and economic futures into the new millennium.The Commonwealth is a unique body with a very proud history, and it has an important future in which all Australians can share, and from which all Australians can benefit.The Commonwealth: Promoting Trade, Investment and DevelopmentSpeech by the Hon Alexander Downer, MP, Minister for Foreign Affairs, to the NSW Branch of the Royal Commonwealth Society, Sydney, 15 December 1997.IntroductionIt is a great pleasure to be in Sydney and to have the opportunity to address the NSW Branch of the Commonwealth Society, particularly in this "Year of the Commonwealth". The NSW Branch is part of an extraordinary network of associated organisations in all the member countries of the Commonwealth—a vast network of personal and professional links that are the lifeblood of the Commonwealth.I am convinced that the Commonwealth continues to play an influential and positive role in world affairs. It is worth remembering that the Commonwealth's membership represent an enormous slice of the world's population.Commonwealth countries are located in almost every region of the world, including the Asia Pacific, Africa, the Caribbean and the Mediterranean.The special strength of the Commonwealth lies in the combination of the diversity of its members with their shared inheritance in language, culture and the rule of law.I have just returned from a visit to North America, China and Hong Kong, and it is true that the Commonwealth is not at the centre of Australia's foreign and trade policy priorities in the way that the Asia Pacific is.But it is also fair to say that the Commonwealth's important contribution to international life, and the enduring place it holds in Australia's global priorities, has been undervalued.From Australia's point of view, the Commonwealth Heads of Government Meeting (CHOGM) in Edinburgh in October was very successful and helped advance our regional and global interests in practical ways.I was particularly pleased, as I know Prime Minister Howard was, that Australia's offer to host CHOGM in 2001—the year of Australia's Centenary of Federation—was warmly endorsed by the Edinburgh meeting.Today, I want to focus my remarks on the major outcomes from the Edinburgh meeting—with a special emphasis on the trade and investment aspects—and give you the Government's perspective on the Commonwealth's continuing relevance in contemporary international affairs.Part One: Promoting Shared Prosperity—Trade and Investment LiberalisationFor Australia, the Commonwealth is significant because through our work on the Commonwealth's Secretariat—and through Commonwealth Heads of Government Meetings—we are able to show leadership and strengthen relations with many developing and developed countries.The Commonwealth complements our key bilateral relationships and our focus on regional forums such as APEC and the South Pacific Forum. It is also the principal avenue for our engagement with many Commonwealth countries beyond our immediate region. As the third largest financial contributor to the Commonwealth, Australia has a positive role in promoting the economic and social development of those countries.And it is not just Australia that finds enduring value in the Commonwealth.Forty-three of the fifty-one member states that attended the CHOGM meeting in Edinburgh were represented by their head of government or head of state. This demonstrates clearly that the Commonwealth's greatest strength over the years has been its capacity to respond flexibly to new circumstances and meet the changing needs of its members.For the first time, CHOGM focused its discussions on a theme—"Trade, Investment and Development : The Road to Prosperity". This reflects the central importance of these issues to all Commonwealth nations as we prepare to enter the 21st century.One of the most influential trends facing Commonwealth and non-Commonwealth nations alike is globalisation. In my address to the National Press Club in Canberra two weeks ago, I emphasised that globalisation is here to stay and is a force for good in the world.Globalisation is offering huge opportunities for economies that are internationally competitive, just as it challenges economies which are not. It blurs the division between foreign and domestic policies, and it increases competitive pressures in markets.Globalisation is helping break down barriers to trade and investment, and is underpinned by extraordinary technological change bringing the world closer together. It is making us all neighbours.But not all countries have benefited to the same degree. Developed members of the international trading system, and of the Commonwealth, have a responsibility to help developing members respond and adapt to globalisation.I am pleased to say that many developing countries are already on the move. The nations of the South Pacific, for example—including many Commonwealth members—are improving their capacity to take advantage of opportunities in the new global trading arena. They have made a strong commitment to liberalising trade and investment, promoting the role of private sector development, and improving public accountability and transparency.The right response to globalisation is more liberalisation, not less. That was the strong message sent by the APEC meeting in Vancouver last month which underlined the Asia Pacific's undiminished resolve to stay the course on liberalisation and economic reform.Similarly, the Economic Declaration which emerged from Edinburgh—entitled "Promoting Shared Prosperity"—is important because it helps member countries come to grips with the influence of global economic forces and the vital part that trade, investment and development play in harnessing this world-wide economic dynamism for the common good.The Economic Declaration reflects the pleasing degree of common ground reached between developed and developing members on the need for continuing trade liberalisation, the importance of encouraging investment flows—especially through sound macroeconomic policies and financial systems, strong regulatory frameworks and good governance.The Economic Declaration is a worthy counterpart to the historic 1991 Harare Declaration on the Commonwealth's political values. It welcomes the progress that has been made in recent years in dismantling trade barriers and establishing a rules-based international trading system. But it also recognises that significant barriers to trade in goods and services remain, and that benefits from the expansion of world trade are still unevenly shared.Through the Economic Declaration, Commonwealth members resolved to strengthen the multilateral trading system within the framework of the World Trade Organisation (WTO), and support the full implementation of the Uruguay Round Commitments.Commonwealth members resolved to maintain the momentum towards freer trade through multilateral negotiations, as outlined in the built-in agenda and other issues under discussion in the WTO, including progress on agriculture and financial and other services. This is an objective with major implications for future jobs and economic growth in Australia, and the Australian Government endorsed it unreservedly.The Economic declaration also recognises that some countries need a helping hand in adjusting to and taking advantage of globalisation.Prime Minister John Howard's initiative for the creation of an international Trade and Investment Access Facility was warmly welcomed and endorsed by Commonwealth leaders. This facility will help Commonwealth countries identify and manage the potential economic and social impacts of trade and investment liberalisation, and respond creatively to the challenges of globalisation.We hope that other governments might also find the facility a useful channel for funding activities to achieve the shared goal of freer and more open trade and investment. Australia will contribute $1.5 million to the facility over three years. Canada, Britain and New Zealand also indicated their willingness to provide financial contributions.Among the Economic Declaration's other significant decisions, Commonwealth members agreed to examine the growing importance of electronic commerce in trade and the developmental implications of the use of cyberspace for commercial and financial transactions.This has immediate relevance for Australia because we are ranked 8th in the world as a network society `plugged in' to the high-tech world—a little known ranking that puts Australia ahead of both Germany (13th overall) and Japan (16th overall).I should also mention that the first ever Commonwealth Business Forum was held prior to the Edinburgh CHOGM. This successful meeting of senior representatives from business and government provided valuable input and direction for the CHOGM discussions.I am pleased to say that the forum will meet again in future CHOGM years and be institutionalised through the creation of a Commonwealth Business Council. Prime Minister Howard addressed the Forum on globalisation and the post-Uruguay Round.The creation of the Council is important from Australia's point of view not just because of the new dimension it gives to CHOGM discussions but because it builds the same type of government-business cooperation that Australia is fostering across the board—whether, for example, through our extensive trading relationships with China and Hong Kong, or through stronger linkages between the ASEAN Free Trade Area and Australia and New Zealand.Part Two: Democratisation and Good GovernanceBeyond trade and investment issues, the Commonwealth's members share a commitment to several fundamental principles. The Commonwealth's anchoring values—its commitment to promoting democracy, human decency and rights and economic liberalism—are at the core of what the institution is about.The Commonwealth has focused in recent times on the development of good governance amongst its membership, within a framework of fundamental human rights. Members have been working together to strengthen democratic institutions and the rule of law, and working towards best practice in all aspects of administrative, judicial and regulatory matters.The decisions taken at the Edinburgh CHOGM sustain this long tradition of support for institution-building and good governance. Commonwealth leaders confirmed the Commonwealth Ministerial Action Group's (CMAG) mandate to respond to situations where the Commonwealth's principles are seriously or persistently violated.Heads of Government agreed to maintain Nigeria's suspension from the Commonwealth until it com pletes its scheduled return to civilian democratic government by 1 October 1998.Heads of Government also authorised the Action Group (CMAG) to recommend Commonwealth-wide implementation of measures if, in its view, these would serve to encourage greater integrity of the process of transition and respect for human rights in Nigeria.If, following 1 October 1998, the Nigerian regime had not completed a credible programme for the restoration of democracy and to the observance of the Harare Principles, Heads of Government agreed they would consider further measures, including Nigeria's expulsion from the Commonwealth.The Edinburgh outcome on membership was also positive in maintaining the integrity of the Commonwealth by emphasising the common threads which unite an otherwise diverse group.The meeting adopted three criteria for assessing applications for membership of the Commonwealth—traditional historical ties; observance of Harare Principles of democratic government and rule of law; and acceptance of Commonwealth practices and conventions.It was particularly pleasing to see Fiji represented at Edinburgh after its readmission to the Commonwealth in September this year.I should also say that the Edinburgh Communique contained a balanced and comprehensive reference to the landmines issue—it invited countries to consider signing the Ottawa Treaty while referring to complementary work in the Conference on Disarmament and other fora. This was clear recognition of the importance of the landmines issue to developed and developing countries alike.On 3 December in Ottawa, I signed on Australia's behalf the Ottawa Treaty. This means that Australia forever forswears the use of anti-personnel landmines and will destroy its stockpile, consistent with the provisions of the Treaty. The Ottawa Treaty is a remarkable humanitarian response to one of the most compelling humanitarian issues of our time.I am very proud of the leading role that Australia continues to play in international efforts to find a comprehensive and lasting solution to the grave crisis which the misuse of landmines has inflicted on many countries, including in our region. This has been backed up by a practical $19 million commitment to demining in the last 20 months, which will help make a real difference to villagers in Laos, Cambodia, Afghanistan and other countries.A Tolerant and Diverse AustraliaThe Commonwealth's commitment to democratic reform and institution-building is something that Australia supports strongly because it goes to the heart of our own practical commitment to improv ing human rights and building national institutions in the Asia Pacific.It is a reflection of our fundamental values as a people and a nation.Australia is a remarkably tolerant and diverse country with a growing web of relationships across the Asia Pacific.Australia's genuine commitment to the region is measured by our deeds as well as our words. In recent months, Australia has demonstrated clearly that it is not a `fair-weather friend'.I have been quite struck, for example, by the positive impact among Asian ministerial colleagues of Australia's decision to join the Thai and Indonesian IMF packages, and our most recent decision to support the IMF package for Korea.There has been a similar regional response to Australia's quick and effective assistance to Indonesia and Malaysia to help deal with drought, fires and smoke and to the enormous effort we are putting in to achieving peace in Bougainville and—admittedly to a lesser extent—peace in Mindanao in the Southern Philippines.That is why I believe our friends and neighbours in the region recognise Australia's strong and practical commitment to the Asia Pacific, just as we welcome and value everything that the region has to offer Australia.The flow of students and other visitors from South and North East Asia to Australia continues unabated. In the 1996-7 financial year, for example, student visa numbers were up by 8 percent from North East Asia and by 9 percent from South East Asia, while visitor visa numbers were up by 3 percent and 11 percent respectively.These facts are an unambiguous rebuttal to those who claim that the people of the Asia Pacific are turning their backs on Australia because of the so-called `Hanson factor'.Conclusion: The Commonwealth's Enduring RelevanceI do not want to conclude my remarks today without returning to where I began—the significance of Australia's hosting of CHOGM in 2001.This will be an exciting and important international event for all Australians. It will underline the seriousness of Australia's commitment to the work of the Commonwealth and the organisation's continuing relevance in the modern world.In the lead-up period to 2001, non-government groups that support the work of the Commonwealth will have an important role to play in helping build renewed interest and momentum across Australia for CHOGM.I know that the NSW Branch of the Royal Commonwealth Society is determined to continue its vital work in building bonds of friendship and mutual regard between Commonwealth countries. Those efforts will become even more indispensable as the 2001 CHOGM draws nearer.The Australian Government looks forward to working with the NSW Branch, and all the Royal Commonwealth Societies across Australia, in this shared endeavour.The Australian Government's involvement in the Commonwealth mirrors the practical and innovative approach we take to our engagement with the Asia Pacific—it is a tightly focused contribution that seeks to advance our national interests and fundamental values in clear ways.Sir Robert Menzies said in 1961 that the Commonwealth meant much for "sanity and tolerance in a grievously troubled world", and he praised its ability to make "constant and notable contributions" to world peace and prosperity.Almost forty years later, the world has changed in many remarkable ways, but the words of Menzies continue to ring true.As the Edinburgh CHOGM demonstrated, the Commonwealth is a remarkably supple and forward-looking body which finds strength in the diversity of its membership. It is encouraging countries to shape their own political and economic futures into the new millennium.The Commonwealth is a unique body with a very proud history, and it has an important future which all Australians can share in and benefit from.Documents38253825382510000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—On behalf of the President and in accordance with the provisions of the Audit Act 1901, I present the Auditor-General's report No. 47 of 1997-98: Performance audit: management of Commonwealth guarantees, indemnities and letters of comfort .Miscellaneous382510000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I present a response by the Parliamentary Secretary to the Minister for Health and Family Services (Ms Worth) to a resolution of the Senate of 12 March 1998 concerning complementary medicines.Miscellaneous382610000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I present a resolution from the Northern Territory Legislative Assembly concerning the 50th anniversary of the first sitting of the Legislative Council of the Northern Territory.Committees38263826382617:26:003826Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of the Joint Committee on Public Works, I present report No. 2 of 1998 entitled New facilities for the National Museum of Australia and the Australian Institute of Aboriginal and Torres Strait Islander Studies . I seek leave to move a motion in relation to the report and to incorporate my tabling statement in Hansard .Leave granted.5F4Calvert, Sen PaulSenator CALVERT—I move:That the Senate take note of the reportThe report read as follows—Madame President, the report which I have tabled concerns the proposed construction of new facilities for the National Museum of Australia and the Australian Institute of Aboriginal and Torres Strait Islander StudiesThe indicative cost of the capital works is $133 million. The ACT Government has also committed $3 million for infrastructure and is proposing to establish the ACT Aboriginal and Torres Strait Islander Cultural Centre on the site.The Committee has recommended that the project should proceed. This recomendation is contingent on a number of conditions which I will address shortly. Let me begin by saying that this report follows a lengthy and protracted inquiry by the Committee. It was lengthy because of a number of complexities which surfaced. These are addressed at length in the report, but they encompass changes to the award winning design, the cost of the proposed work and the project delivery mechanism to be used.The report begins by providing the history of the development of the concept of the National Museum. This goes back almost 30 years and involved an almost endless series of studies and reports.The proposal examined by the Committee was initiated by an international architectural competi tion which was promoted as such overseas. Unfortunately, as the Committee discovered, it did not qualify for this title. The report spells out the reasons and how the competition was conducted.The basis for the design of any building is the architectural brief. A brief was prepared for the five competition finalists to give them some idea of what was required.Unfortunately, again, the Committee found that the brief was completed with considerable haste and was not properly costed until after the design competition closed. These factors resulted in the inclusion in the brief of what can best be desribed as "ambit claims for space".The Committee found that none of the five final designs from which the winning design was selected met the cost cap, nor did the costing of the brief undertaken by the Commonwealth's own cost consultants.This resulted in what were described to the Committee as further refinements and a tightening up of space, requiring "further testing and refinement of the original concept".The Committee believes the final design is a significant departure from what the public was advised the Museum would look like. The original concept and the revised design are illustrated in the report and Honourable Senators can make their own comparisons.Further refinements to the winning design have resulted in a building which appears to depart from the original design concept. These changes appear to the Committee to have been driven in the main by the need for the winning design to meet the budget rather than simply as improvements to functionality.As this is a project of national significance funded by taxpayers, major departures from the published design are a cause of concern to the Committee.Whilst the design of the proposed building to house the Australian Insitute of Aboriginal and Torres Strait Islander Studies largely remained intact, the layout was transposed to offer improved views of the lake. This transposition was intended, however, to save two heritage trees on Acton Peninsula.A feature of the design was the provision of a wetlands area. This was intended to demonstrate a commitment to ecologically sustainable development principles. Gabions, or small man-made islands would form part of the wetlands. The Committee has recommended that the need for the inclusion of gabions in the wetlands should be reviewed. Submerged wave barriers should not be provided due to their deleterious effects.The proposed works include the construction of an ACT Aboriginal and Torres Strait Islander Cultural Centre in conjunction with the Museum and the Institute project. This will be funded by the ACT Government. The Committee has recommended that on completion of the National Museum of Australia, consideration should be given for the facilities at Yarramundi Reach to be vacated for use by the ACT Cultural Centre. This will provide scope for future expansion of the Museum on Acton Peninsula.It is proposed to employ a form of delivery process known as project alliancing as the preferred method of delivery for the project.This is the first time this method of delivery has been used an an Australian construction project, the first time on a Commonwealth project and, need I say it, the first time on a project examined by the Committee.The alliancing concept was described to the Committee at the end of the third day of public hearings as "complex". This occurred after the Committee had spent a considerable amount of time questioning departmental officials about how it would work in relation to:. cost and profit. minimising risks to the Commonwealth. the anti-litigation provision. checks and balances. negotiation of variations. the protection of subcontractors. quality controlAlthough the Committee gave approval to the Department of Communications and the Arts to call for expressions of interest for alliances to undertake the work, the Committee remained concerned about the suitability of the alliance concept.The Committee concluded that although a project alliance has commenced for the Sydney Water Project, its outcome has yet to be proven in delivering a quality product in the public sector.Moreover, this delivery system is untested in the construction industry in Australia.Notwithstanding that the Committee has given approval for the Department of Communications and the Arts to advertise for expressions of interest from possible alliance participants, considerable doubt remains about how the interests of the Commonwealth will be protected in an alliance arrangement.Issues relating to quality control and cost imposts associated with delays due to mismatched delivery of works between the construction partner and the service provider remain to be answered to the Committee's satisfaction.In terms of cost, the submission to the Committee from DOCA advised that the total establishment costs for the Museum and the Institute, including capital works, were $152.374 million.This is somewhat at variance with the cost of the project when referred to the Committee, which was $133 million.At the public hearing on 8 December 1997, DOCA amended the establishment costs for the Museum and Institute to $151.9 million.The report details the Committee dissatisfaction with the lack of consistency in the budget proposed to be expended on the proposal. As already stated, the work as referred was for $133 million.Since the amount to be expended was subsequently stated to be $151.9 million, the Committee is unable to understand why the total amount was not the same as the amount originally referred.Furthermore, the Committee wishes to place on record its concern about the proposed increase in cost on the basis that the Committee's consideration is limited to the expenditure of $133 million, as originally referred.Having said that, the report recommends the construction of the works in this reference at a cost of $133 million at October 1997 prices subject to the provision, to the Committee, of six monthly reports on the progress of the project until completed.The reports should address:. progress of works and services elements identified in the construction and fitout program;. any variations to the timetable for the completion of the project;. any further design changes—their nature, justification and cost;. expenditure and audit reports;. confirmation that subcontractors have been paid on time for work undertaken;. if applicable, details of disputes between any parties on site;. if applicable, details of delays to the project due to the mismatch of timetables between the construction alliance partner and the service provider;. specified standards of finish and the standard of finish provided.. details of attempts, successful or otherwise, to obtain endowments and bequests for the Museum.Finally, if it is considered necessary to proceed with Lump Sum tendering, the aim of completing the project by January 2001 should be reviewed for the reasons stated by the Department of Communications and the Arts in the paper, discussed in the report, which addresses the disadvantages of proceeding with this delivery method. I commend the report to the Senate.Question resolved in the affirmative.Miscellaneous38283828382817:27:003828Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Abetz, I present additional information received by the Legal and Constitutional Legislation Committee in response to the 1997-98 additional estimates hearings.Bills3828s162382817:27:003828Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Gibson, I present the report of the Finance and Public Administration Legislation Committee on the provisions of the Electoral and Referendum Amendment Bill (No. 2) 1998 , together with submissions and the Hansard record of proceedings.Ordered that the report be printed.Bills3828r460382817:27:003828Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Knowles, I present the report of the Community Affairs Legislation Committee on the provisions of the Commonwealth Rehabilitation Service Reform Bill 1998 , together with submissions and the Hansard record of proceedings.Ordered that the report be printed.Bills3828r513Billsr514382817:27:003828Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Patterson, I present the report of the Environment, Recreation, Communications and the Arts Legislation Committee on the provisions of the Datacasting Charge (Imposition) Bill 1998 and the Television Broadcasting Services (Digital Conversion) Bill 1998 , together with submissions and the Hansard record of proceedings.Ordered that the report be printed.5F4Calvert, Sen PaulSenator CALVERT—I also seek leave to incorporate a statement relating to the report in Hansard .Leave granted.The statement read as follows—The Television Broadcasting Services (Digital Conversion) Bill 1998 puts in place a regulatory framework for the conversion from analog to digital television transmissions which are due to begin in metropolitan areas on 1 January 2001 and progressively in regional areas between January 2001 and 1 January 2004. The Datacasting Charge (Imposition) Bill 1998 provides for the Australian Communications Authority to impose a charge on broadcasters who will provide datacasting services.The Committee held one private briefing on the technical aspects of the bills followed by three public hearings in Canberra. It received 32 submissions and 22 supplementary submissions. The supplementary submissions were a reflection of the complexity of the issues involved in the inquiry and they mostly addressed the question of definitions and possible amendments to the legislation.The Television Broadcasting Services (Digital Conversion) Bill 1998 requires the Australian Broadcasting Authority (ABA) to develop and implement conversion schemes and take various related administrative decisions. Those conversion schemes and decisions must be tabled and approved by the Parliament. If not, they will be disallowed. The Committee has concluded that it is of the utmost importance for the Parliament to maintain a watching brief on the progress of the Digital Channel Plan and on the ABA's conversion schemes and other initiatives in this area. Accordingly, the Committee has recommended that the Department of Communications and the Arts and the Australian Broadcasting Authority report in a separate addition to their Annual Reports until the year 2010 on the progress and implementation of the regulatory framework for conversion to digital transmissions.The pace of technological change in the broadcasting and information technology area was a constant issue raised in evidence to the Committee. In response, the Committee has urged that all the various reviews required in this legislation be carried out at the earliest opportunity.Evidence was put to the Committee that the costs of conversion would fall particularly heavily on regional television broadcasters partly because of the higher number of transmitters needed to cover large areas in the countryside. The Committee has recommended that the government consider means of assisting regional television operators with the costs of transmission.Before concluding I wish to express my deep concern and that of my colleagues that for the second time this session a draft report of this Committee was leaked to a journalist and that the recommendations that were still being considered by the Committee appeared in articles in The Australian Financial Review and the Sydney Morning Herald . As I have stated previously, I consider this to be a totally unacceptable breach of the rules of the Senate and the Committee will be considering ways of ensuring that the confidentiality of draft reports is maintained in future.This has been a very interesting inquiry for all the Committee members who have been involved with it. The Committee has carefully weighed up all the arguments put to it. The Committee recognises that much work remains to be done in order to ensure an orderly transition to digital broadcasting. However, the Committee is convinced that the passage of the Television Broadcasting Services (Digital Conversion) Bill 1998 and of the Datacasting Charge (Imposition) Bill 1998 is a necessary first step to ensure that when Australian television operates fully in digital mode, Australia will still maintain its world class television system and that there will be minimal disruption to consumers during the transition period.I commend the report to the Senate.Miscellaneous38293829382917:28:003829Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of the respective chairs of the Community Affairs; Economics; Employment, Education and Training; Environment, Recreation, Communications and the Arts; Finance and Public Administration; Foreign Affairs, Defence and Trade; and Rural and Regional Affairs and Transport legislation committees, I present reports on proposed expenditure in respect of the year ended 30 June 1999, together with the transcripts of evidence.Ordered that the reports be printed.Committees38293829UNKNOWNThe ACTING DEPUTY PRESIDENT (Senator Crowley)The ACTING DEPUTY PRESIDENT (Senator Crowley)—I have received letters from the Leader of the Opposition in the Senate seeking variation to the membership of certain committees.Motion (by Senator Ian Campbell)—by leave—agreed to.That senators be discharged from and appointed to committees as follows:Employment, Education and Training References Committee— Participating member: Senator CrossinNational Capital and External Territories—Joint Standing Committee— Appointed: Senator Crossin Discharged: Senator CarrPublications—Standing Committee— Appointed: Senator Crossin Discharged: Senator CarrRegulations and Ordinances—Standing Committee— Appointed: Senator Crossin Discharged: Senator George CampbellRural and Regional Affairs and Transport References Committee— Participating member: Senator Crossin.Bills3829A message from His Excellency the Governor-General was reported, informing the Senate that he had assented to the following law: Tax Law Improvement Bill (No. 1) 1998 Bills3829r509Billsr5083829Bills received from the House of Representatives. Motion (by Senator Ian Campbell) agreed to:That these bills may proceed without formalities, may be taken together and be now read a first time.Bills read a first time.383017:32:003830Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table a revised explanatory memorandum relating to the bills and move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—TAXATION LAWS AMENDMENT (COMPANY LAW REVIEW) BILL 1998As a result of changes to the Corporations Law, the bill will amend the Income Tax Assessment Act 1936 and associated tax laws to prevent dividend substitution and capital streaming arrangements, and make various consequential amendments to the tax laws.The amendments will apply on a day to be fixed by proclamation after the bill has been passed by Parliament. In respect of the anti-avoidance rule, the rule is to apply to distributions made, or bonus shares issued, after that time, unless made or issued pursuant to a binding commitment entered into before 13 November 1997.Full details of the measures in the bill are contained in the explanatory memorandum circulated to honourable senators.I commend the bill to the Senate.INCOME TAX (UNTAINTING TAX) BILL 1998The background to this bill was detailed in my second reading speech of the Taxation Laws Amendment (Company Law Review) Bill 1998.I commend the bill to the Senate and present the explanatory memorandum.Debate (on motion by Senator Chris Evans) adjourned.Bills3830r545Billsr5363830Bills received from the House of Representatives.3830Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate to the Senate that those bills which have just been announced are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper . I move:That these bills may proceed without formalities, may be taken together and be now read a first time.Question resolved in the affirmative.Bills read a first time.383017:33:003830Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table a replacement explanatory memorandum relating to the Taxation Laws Amendment (Political Donations) Bill 1998 and move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—TAXATION LAWS AMENDMENT (POLITICAL DONATIONS) BILL 1998The bill will implement the Government's recently announced response to the taxation-related recommendations of the Joint Standing Committee on Electoral Matters, following its inquiry into the conduct of the 1996 Federal Election. This bill complements other legislation currently before the Parliament which implements the Government's response to the other recommendations of the Joint Standing Committee—the Electoral and Referendum Amendment Bill 1998 and the Electoral and Referendum Amendment Bill (No. 2) 1998.Currently, the income tax law allows a non-corporate taxpayer to deduct a contribution (which includes a membership subscription as well as a gift) of $2 or more to political parties registered under Part XI of the Commonwealth Electoral Act 1918. The total deductions allowable to a taxpayer are subject to a maximum level of $100 in an income year. Testamentary gifts or contributions are not deductible.The Joint Standing Committee recommended that the income tax law be amended so that the maximum annual tax deductibility threshold for donations to political parties be increased from $100 to $1500, and that companies be allowed to make tax deductible donations. The word "donation" is a general term which covers contributions as well as gifts.The Government has accepted that recommendation. The Government agrees with the Joint Standing Committee that an increase in the threshold will encourage small to medium donations, thereby increasing the number of Australians (including companies) involved in the democratic process and reducing a political party's reliance on a small number of large donations.The Joint Standing Committee also recommended that the income tax law be amended to provide that donations to an independent candidate at a Federal or State election are tax deductible, at the same level as donations to registered political parties.The Government has also accepted this recommendation. This will provide an equivalence of treatment between independent candidates and members and political parties.To implement these recommendations the bill repeals the existing provisions of the Income Tax Assessment Act 1997 that apply to contributions to political parties and inserts a new Subdivision that applies to both contributions to political parties and gifts to independent members and candidatesThe bill also allows taxpayers to make tax deductible contributions to political parties that are registered under State or Territory electoral legislation. This expansion will complement the tax concession afforded to independent candidates and members.The amendments made by the bill will apply to contributions to political parties and gifts to independent candidates and members made on or after 1 July 1998.It is anticipated that implementation of these recommendations of the Joint Standing Committee will increase the number of Australians involved in the democratic process and reduce a political party's reliance on large donations. The measures contained in the bill complement the election funding of political parties and provide an equivalence of treatment between donations to political parties and donations to independents. Full details of the measures in the bill are contained in the explanatory memorandum circulated to honourable senators.CUSTOMS TARIFF AMENDMENT BILL (No. 2) 1998Customs Tariff Amendment Bill (No. 2) 1998, which is now before the chamber gives effect to the government's commitment to remove tariffs on inputs to the manufacture of information industries equipment. The initiatives were announced by the Treasurer in the 1998/1999 Budget.The Prime Minister made the "investing for growth" industry statement of the eighth of December 1997. In it he announced the government would remove tariffs on inputs to the manufacture of information industries equipment, after consulting with local component suppliers to assess the likely impact on them. The Prime Minister also said that whenever doubts over classification of information technology equipment arise, the lowest tariff will be applied.We are now taking action to address these matters. The issue with tariffs on inputs is one of negative assistance. Most fully assembled information industries equipment is imported duty free. However, many of the chemical products, mechanical parts, electronic components and sub-assemblies that are used in local production of the same equipment attract either a 3 per cent or 5 per cent tariff.This represents a situation of "negative assistance" in an industry which is highly competitive and in which margins are often small.There has also been an issue within the industry whereby goods classified as information technology equipment are duty free, and goods classified as telecommunications equipment carry a duty of 5 per cent. This duty differential means that there has been incentive for importers to seek to have goods classified to an information technology item, rather than a telecommunications item.Following consultation with industry, we are taking action on two fronts. The central element is an acceleration of duty reductions already scheduled under the Information Technology Agreement (ITA). Australia, along with forty-two other countries, is a signatory to the ita which covers ninety-three per cent of world trade in information technology products. This agreement produced a list of goods in the information technology industries on which tariffs are being phased to zero on the first of January 2000.With the exception of a small range of finished goods, we will be bringing forward by eighteen months the tariff reductions to which Australia is committed under the ita. A zero duty rate will now apply from the first of July 1998. The goods that will be excluded, and for which the first of January 2000 will remain the operative date for a zero rate, include: line telephone, cordless, mobile and other telephone sets, facsimile and telephone answering machines, digital still image cameras, pagers, antennas and aerial reflectors.The classification issue has been resolved by reducing, to free, the duty on goods which were considered contentious at the time of the "investing for growth" statement.Madam President, the second element of the approach is the establishment of a new schedule 4 item in the customs tariff for those inputs not covered by the ITA. This will allow duty free entry for other inputs which are currently subject to a Tariff Concession Order (TCO).The new item will cover inputs to the manufacture of information industries equipment. Information industries equipment will be defined in terms of a series of tariff items within the by-laws written to the new schedule 4 item. If the coverage of goods contained in the ita expands over time, this listing of tariff items will be altered appropriately. Inputs to manufacture are goods that are an integral part of the manufacturing process for this equipment, and include goods that are incorporated into the equipment or consumed during the manufacture of the equipment, as well as certain capital equipment utilised in the manufacturing process.In consultation with industry, an initial list of tcos covering relevant inputs has been developed. The coverage for the new schedule will be expanded as new TCOs are established for other inputs to information industry equipment manufacture.Australian information technology manufacturers will benefit from duty free access to key inputs which will strengthen the competitive base of Australia's information technology industry. The cost to government is estimated at $80 million over the next eighteen months, and this should translate directly to reduced costs for industry, and ultimately flow through to lower prices for consumers.Australia's position in the context of the ita will also be enhanced, at a time when some countries are calling for accelerated action on trade liberalisation. I commend the bill.Ordered that the further consideration of the second reading of these bills be adjourned to the first day of sitting in the Spring sittings 1998 in accordance with standing order 111.Ordered that the bills be listed on the Notice Paper as separate orders of the day.Bills3832r513Billsr5143832Bills received from the House of Representatives.Motion (by Senator Ian Campbell) agreed to:That these bills may proceed without formalities, may be taken together and be now read a first time.Bills read a first time.383217:34:003832Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table a revised explanatory memorandum relating to the bills and move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—TELEVISION BROADCASTING SERVICES (DIGITAL CONVERSION) BILL 1998We have a proud record of free-to-air terrestrial television broadcasting in Australia. From its inception in the mid 1950s, through the introduction of colour television in 1975, we have built a world class free-to-air system with both publicly funded and commercial broadcasters, and with a substantial proportion of quality Australian content.However, as we approach the new Millennium, we stand on the threshold of new and exciting broadcasting opportunities. The era of digital broadcasting has arrived, in which television becomes part of the digital revolution which is sweeping every aspect of our society.The digital television era provides a quantum leap in television technology. Viewers will have the option of viewing high definition pictures of startling clarity, and with CD quality surround sound.But digital broadcasting offers much more than just better pictures and sound. It provides the capacity for the humble television set to become a central information point in every home. Users will no longer be limited to looking passively at a box in the corner of the house. Digital transmissions will enable a host of new information services, including interactive services, to be provided along with the main television programming.This Government is committed to ensuring that all Australians are able to enjoy the benefits of digital free-to-air broadcasting as we move into the next century.Our policy is aimed at ensuring that viewers continue to enjoy a high quality television service throughout the conversion process, and that the change-over to digital is undertaken with the minimum disruption to viewers' enjoyment. We are therefore implementing a managed conversion process which will maintain existing services for at least 8 years from the commencement of digital services, and ensure that viewers have ample time to adapt to the new services.To achieve this we need to ensure that broadcasters have clear sign posts along the road to digital television, and are able to embark on the risky conversion process with a degree of certainty about Government policy. The Government's policy is aimed at providing a clear framework for investment decisions, which enables industry to build on its existing infrastructure and expertise wherever possible.The Television Broadcasting Services (Digital Conversion) Bill takes the first steps towards this objective by setting in place the basic framework for the conversion of free-to-air terrestrial commercial and national broadcasters.The bill amends certain provisions of the Broadcasting Services Act 1992, and the Radiocommunications Act 1992, and introduces a new Schedule 4 to the Broadcasting Services Act dealing with digital television broadcasting.Since its introduction into the House of Representatives on 8 April 1998, the Government has made a number of minor policy and technical amendments to the bill. These have the effect of clarifying and refining the operations of the bill, but have not affected the substance of the Government's policies.The mechanism by which the digital conversion process will be implemented for broadcasters is through the formulation of television conversion schemes by the Australian Broadcasting Authority (ABA), which must meet certain Government objectives as set out in the bill.Under the scheme, commercial broadcasters will be required to submit to the ABA, for approval, implementation plans. National broadcasters are to submit such plans to the Minister.This approach has been adopted to ensure that the Government's objectives are clearly enshrined in the bill, but at the same time the ABA has some degree of flexibility in the administration of the fine detail of the provisions, given that digital broadcasting is still a new and developing technology.The bill provides for the allocation of additional television channels to free-to-air broadcasters, so that they can commence delivery of digital terrestrial television services. This is achieved by requiring transmitter licences to be issued for digital television broadcasts, through consequent amendments to the Radiocommunications Act 1992. It is intended that these licences be issued free of charge having regard to the high initial costs that free-to-air television broadcasters will be required to meet in relation to digital conversion and simulcasting.Digital broadcasts will commence on 1 January 2001 in metropolitan areas and from that date in regional areas, such that broadcasts have commenced in all licence areas by 1 January 2004. Broadcasters who do not meet these targets will be required to surrender their transmitter licences authorising digital transmissions unless there are exceptional circumstances.Broadcasters will be required to simulcast substantially the same programs in both the new digital channel and their current analog channel, for a period of at least 8 years from the commencement date. This period will be reviewed in 2005. In determining whether the period should be extended, the review will take into account the take up of digital reception equipment by consumers.Broadcasters will be required to achieve the same level of coverage and potential reception quality with their digital services as they do with their current analog services, as soon as practicable after the commencement of the simulcast period.At the end of the simulcast period, the spectrum used for analog transmissions will be returned to the Commonwealth, and will be potentially available for re-allocation for specified purposes through a price-based mechanism.To ensure that broadcasters primarily focus on providing the highest quality television services to all Australians, they will be required to transmit a specified minimum proportion of high definition television, which will be set in the regulations.Broadcasters who fail to comply with the simulcasting and high definition television format obligations after being given an opportunity to rectify the breach will be required to surrender their digital transmission licences, unless there are exceptional circumstances.The bill also provides for closed captioning standards to be set in regulations, and reflects the Government's intention that, as far as practicable, prime time services, and non-prime time news and current affairs, be captioned. Commercial and national broadcasters will not be allowed to provide multiple separate channels of programs (multichannelling), or subscription television services. However they will be able to provide limited enhanced programming which is incidental and directly linked to the main simulcast program. A statutory review will be held into the kinds of programming which should be allowed by regulations to be treated as being "incidental and directly linked".A review will also be held as to whether certain programs provided by the ABC and SBS will be exempt from the restriction on multichannelling, where those programs are of a non-commercial nature and are consistent with their Charters.No new commercial television broadcasting licences will be allowed before 2008, in licence areas which already have three commercial services. A review will be held in 2005 to decide whether new licences should be allocated after that date.The Government will identify unused television spectrum, which is not needed for the transition to digital broadcasting, and make this available for allocation for datacasting services on a competitive basis. In identifying unused spectrum, the Australian Broadcasting Authority will have regard to the possible need for channels to accommodate additional commercial licensees, should the moratorium be lifted after 2008.Broadcasters—both national and commercial—will not be able to bid for this spectrum, but will be able to use any excess transmission capacity in their digital channels for datacasting services. However, they will pay a charge for doing so, set at a value which ensures a level playing field between broadcasters and datacasters. This charge is the subject of the Datacasting Charge (Imposition) Bill 1998.The needs of regional Australians have not been forgotten. The Government will review whether any amendments should be made to laws to ensure that underserved regional areas (that is, areas with fewer than three commercial services) are provided with the same number of television services as metropolitan areas.The Government will give consideration to the provision of assistance measures, such as rebates on broadcasting licence fees, to assist regional broadcasters meet the substantial costs of conversion of their broadcasting infrastructure to digital, as well as maintaining a parallel analog service throughout the simulcast period.The Government will also continue to support community broadcasters and will facilitate the transmission of community television broadcast services, free of charge, in channels that have been allocated for datacasting services. The bill establishes a regime to provide access by broadcasters and datacasters to transmission towers for the location of digital transmitters, or to the sites on which such towers are located. However, the Government recognises that access to transmission facilities may not always be possible for technical reasons, and thus the ABA will have the power to issue a certificate exempting a tower or site owner from complying where such access is not technically feasible.This bill shows once again the willingness of this Government to take the lead in the global communications revolution. It provides a legislative framework which will enable commercial and national free-to-air broadcasters to embark confidently in building the next generation of television services, which will be an important plank in Australia's development as an information economy.Importantly, the bill also provides for a review prior to 2001 of whether any amendments to Commonwealth laws should be made in order to deal with convergence between broadcasting services and other services. This review is in recognition of the rapidly changing landscape in broadcasting and communications as a result of digital technologies.Australians have always been confident users of new technology. Only five years after television was first introduced in Sydney and Melbourne, around three quarters of homes in these cities had television sets. More recently, we have witnessed the phenomenal growth in the use of technologies such as mobile phones and computers. I have no doubt that Australians will embrace the digital revolution in television with equal fervour.DATACASTING CHARGE (IMPOSITION) BILL 1998The Datacasting Charge (Imposition) Bill 1998 provides for the imposition of a charge in relation to the provision of datacasting services by commercial and national (ABC and SBS) television broadcasters. Part 6 of the proposed Schedule 4 to the Broadcasting Services Act 1992 provides for the collection of this charge. Part 6 is contained in Schedule 1 to the Television Broadcasting Services (Digital Conversion) Bill 1998.The Government's policy on the conversion of commercial and national television broadcasters from analog to digital transmission allows the free to air broadcasters to use any surplus transmission capacity remaining after meeting their obligations in regard to providing their main broadcasting services, for datacasting purposes. The Government has also announced that it will make available unused television channels in the broadcasting spectrum bands for datacasting services; that datacasting spectrum will be allocated on a competitive basis; and that free to air television broadcasters will not be eligible to bid for datacasting spectrum.The Government has decided that the charge to be imposed on broadcasters who use residual spectrum for datacasting purposes should be set at a level which will be competitively neutral when compared to the price paid by datacasters for competitively allocated channels.This bill provides for the amount of the charge for residual datacasting by the free to air broadcasters to be determined in writing by the Australian Communications Authority. This determination will be a disallowable instrument.It is neither practicable nor desirable to specify in this bill the residual datacasting charge, or to set any upper limit on the residual datacasting charge. This is because the price for datacasting spectrum that is to be allocated on a competitive basis will not be known until after relevant television spectrum has been identified (as part of the planning process for the introduction of digital television in Australia) and regulatory arrangements for the allocation of that spectrum have been determined.However, the Digital Conversion bill requires the ACA, before determining the charge under this bill, to provide a report to the Minister on the extent to which the proposed charge meets competitive neutrality principles.Debate (on motion by Senator Chris Evans) adjourned.Bills3835Message received from the House of Representatives agreeing to the following bill without amendment:Crimes Amendment (Enforcement of Fines) Bill 1998Bills3835r4243835Consideration resumed from 22 June.17:36:003835Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I seek leave to withdraw Greens (WA) amendments Nos 25 to 28 and seek leave to move new amendments 25 to 28 on sheet 1023 revised.Leave granted.DX5Margetts, Sen DeeSenator MARGETTS—I move:(25) Schedule 1, item 1, page 44 (line 7), after "entity", insert "or a director, secretary or executive officer of the responsible entity".(26) Schedule 1, item 1, page 44 (line 9), after "against", insert "the director, secretary or executive officer or".(27) Schedule 1, item 1, page 44 (line 10), after "not", insert "the director, secretary or executive officer or".(28) Schedule 1, item 1, page 44 (line 11), after "against", insert "him, her or".In relation to these amendments we are seeking to expand section 601MA so that the officers and directors are also liable to the investors, and that is in addition to the responsible entity. We want to do this because it restores protection afforded under the current law. Under the current law both scheme managers and independent trustees are directly liable to investors if they breach their duty of care or trust. Directors and officers of responsible entities of public offer superannuation schemes are directly accountable to investors under the SI(S) Act.This outcome is not, however, achieved under this bill for managed investments. It is contrary to the fundamental rationale of the bill. Protections currently provided to investors would not be weakened but strengthened. The bill, as it stands, would give the ordinary investor no direct right of action against the director who was negligent. The bill proposes that only the responsible entity or the regulator, but not the investor who suffers the loss, may sue the directors and officers of the responsible entity.Investors must rely on the responsible entity or the regulator to sue for compensation if loss is suffered due to failure to exercise proper care and diligence in meeting all requirements of the law. The scheme constitution and the compliance plan allow the Australian Securities Commission to bring an action for several penalties, but it is cold comfort to an investor seeking to recover compensation for losses incurred due to the negligence and incompetence of fund managers' directors.This outcome diminishes the effectiveness of investor protection compared to the current law, so we are going backwards. Directors and officers may influence decisions of responsible entities and may be less likely to sue. Empowering the responsible entity to sue its own directors and officers, as the bill does, provides little comfort to investors as the wrongdoers are in a position to influence or determine the responsible entity's decision as to whether to take action. I explained last night that many of those people involved in that decision may well not be able to act entirely independently.The bill leaves aggrieved investors to rely entirely on the ASC to take legal action on their behalf. This outcome is undesirable from a public policy viewpoint and is disadvantageous to investors. It diminishes the likelihood of private enforcement action by investors and requires the ASC to take action at public expense to enforce private rights and interests. It is inconsistent with the law relating to superannuation funds and the rationale of the Wallis reforms, because the directors of public offer superannuation funds are directly accountable to their investors. Why should it be different for other managed funds?The financial system inquiry recommended harmonisation of public offer superannuation funds with those of managed investment funds, so why wouldn't the same rules of liability apply? I cannot even pretend to have been a fan of the outcome of the Wallis inquiry, but the government did pretend to be a fan, or perhaps did not pretend to be. But the government stated it was keen on the outcomes. So here it is: a recommendation of the Wallis inquiry which they are choosing not to listen to. Is there a good public policy reason for not doing it? If a trustee is abolished or a scheme is run without one, the investors must rely on the integrity and competence of the responsible entity's directors to look after their interests. Why wouldn't the law require them to be directly accountable to investors for their actions?The other problem is the inconsistency with the corporate governance trend in corporations law. Over the last decade a strong theme in the changes in the Corporations Law has been corporate governance. There has been recognition, through actions such as fraud on the minority and oppression, that fraudulent directors are unlikely to sue themselves and members need to be given direct remedies. What is happening is going starkly against this trend because the current government is showing a tendency in our community to water down the liability of directors of institutions that are charged with responsibility for looking after people. So whom is this push coming from?In this case, the directors of fund managers acting as responsible entities under this bill are essentially looking after other people's money—the savings of ordinary Australians in this case. They should be responsible people and they should be held accountable. It is as a simple as that. The OECD has rules and guidelines. Australia's OECD report also suggests that these kinds of checks and balances should be part of any investment scheme.We are seeing that the government is very keen that all Australians should be involved with investment of some sort. We are seeing that there has been a push, starting with the previous government, to require people to put their own money into superannuation, but also into other schemes, to look after their retirement. We have seen that people are being encouraged to add to Australia's savings in all sorts of ways. Why shouldn't this push be associated with international accepted practice in relation to corporations law and the safety aspects involved with that? I really do believe that this should be strongly considered and I look forward to a response from the parliamentary secretary and I look forward at some stage to a response from the ALP if there is someone here to give it.17:44:003836Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The coalition will not support this amendment. The main reason is that by making other entities responsible in this way you diminish the responsibility of the responsible entity by definition. This amendment would quite specifically make other entities—other persons—responsible directly to investors. In so doing it will specifically and quite clearly reduce the responsibility of the responsible entity to investors. Furthermore, under 601MA under the registers scheme it is the responsible entity that is made quite specifically civilly liable to the members. But it goes on further in part 3, and it makes sure that this section does not affect any liability that a person has under other provisions of the law. In other words, if the officers and directors that Senator Margetts is concerned about do not carry out their duties or responsibilities, then they are liable to the responsible entity under the Corporations Law. So we do not let them off the hook at all.What we are doing is making sure that the responsible entity is the entity that has the responsibility under the fiduciary relationship to the investor and that the other people that Senator Margetts also wants to make responsible through a separate, independent line of responsibility are not let off the hook. They are subject to the provisions of the Corporations Law under 601MA part 3, which you will find at 44. Officers are also subject under 601FD to a civil penalty provision for breaches of their duties as officers. So they have responsibility there. The trouble that the government has with this amendment is that, by creating a distinct and different line of responsibility to these officers and investors, you are undermining, diminishing and attacking the core investor protection provision and foundations of the single responsible entity scheme.17:47:003837Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to respond to the argument—one of the few arguments repeated and given by the parliamentary secretary—in relation to undermining the concept of the single responsible entity, though nothing has proved that the single responsible entity in itself achieves anything except being a single responsible entity. It is a nonsense to suggest that, if you give other people responsibility, you are diminishing the role of the entity you have provided. The Greens (WA) believe you are strengthening that entity if you share that responsibility and enforce the responsibility by other people being able to assist in that task being taken.I do not feel as a senator that speaking and using information and sharing the responsi bility for providing a voice to the Senate by other groups in the community for whom we speak diminishes me as a senator. I believe that strengthens me. I believe in the case of a single entity, which the government wants, if there are other people who are able to be a watchdog on that single entity surely that is a strengthening of the role rather than a diminution. But it is a fallacious argument. The Australian Securities Commission already has the ability to pursue both remedies. The parliamentary secretary has mentioned that briefly himself, but you cannot have it both ways.The government may claim that, by allowing investors to have direct remedies against the officers of a fund, it would undermine the concept of a single responsible entity and would create confusion. This is a curious argument considering that the ASC has the ability to seek redress against both the SRE and officers of the SRE. So the government have already created the so-called confusion that forms the basis of this argument. You have given the committee no powers to check, you have given the committee almost no powers to speak out, but the ASC already has the ability to seek redress. We do not think that is enough. We have given very good reasons why that is not enough, because the ASC itself relies on information that is provided to them. Here we are relying on the ASC, but we are virtually gagging other people who may be in receipt of information that would help the actions of the ASC. We are gagging them and saying, `We don't want the ASC to know that.' It forms the base of this argument.Consequently, this is an absolutely invalid and flawed argument against this amendment. They are saying that we do not need it because we already have something under the ASC that does that, and then they are saying that we do not want this to happen. We do not want there to be other people responsible. The Australian Securities Commission can sue the officers of the entity, and we know from the government that the members of the committees have been given reduced ability to take action themselves. We believe the government has created the problem.I mentioned briefly the OECD economic survey. We have been told very clearly, and the government have told us very clearly in their own report to the OECD, that public enforcement through the Australian Securities Commission is not enough. What the government are saying—and hopefully not the opposition—is that they do not actually agree with Australia's own report to the OECD: that is, it is fanciful to rely on public enforcement of rights through the Australian Securities Commission. Although the ASC may well have good intentions to nab all the directors that breach their duties under 601FD, the resources of the Australian Securities Commission would not allow that to happen or for us to have any assurance that that would happen.This argument was directly expressed in the OECD economic survey for 1998. I hope the parliamentary secretary is listening—that is, this year in regard to his own government's OECD economic survey. It states:It is impractical to rely exclusively on public enforcement. Resource constraints mean that regulators cannot pursue all breaches of the law. At the same time, regulatory priorities may differ from those of the aggrieved parties and may not always be correct. For these reasons, private enforcement provides a reliable means of ensuring stability in the application of the law.If the government and opposition are saying that they disagree with the OECD and Australia's report to the OECD, perhaps they should put it on the record now.Moreover, the American Law Institute has also made the point that, where there is no private enforcement, the state holds a monopoly on the access to remedies and it can determine, perhaps rather arbitrarily, on political grounds not to enforce rights or duties it had previously guarded. Private enforcement serves a fail-safe function to ensure greater stability in the application of the law—and I have mentioned already the inconsistency of the government's own Wallis inquiry which it publicly endorsed and which it is now ignoring. I would be very keen to hear now from Senator Cook as to whether he agrees with Australia's OECD economic survey and his response to our amendments.17:53:003838Cook, Sen PeterSenator COOKRF4WAALP00—I would like to speak on the amendment moved by the Greens (WA). First of all, I understand this amendment became available and my advisers were consulted on it earlier today. I have been able to look at it more recently than that, and I understand the advice my advisers have given was that we should listen to the arguments being put forward—and that, I have done.In dealing with this amendment, I think we basically need to go back to the purpose of this bill. The purpose of this bill is to put the key weight of responsibility on the so-called single responsible entity. That is why that entity is so named, and that is the purpose of this whole piece of legislation—to make that the decisive element in governing managed investments.Reading this amendment, I do think it does water down that objective. As I said in my speech during the second reading debate, subject to the amendments I foreshadowed, we support the concept involved here. I do think now, reading this amendment, that that concept is watered down. Let me explain briefly why. Amendment 25 requires:. . . after "entity", insert "or a director, secretary or executive officer of the responsible entity".To be taken in the body of the bill, that means that people can sue individual elements, be they a director, a secretary or an executive officer of the responsible entity. Frankly, I think that is a wrong view to take.As I understand it, the single responsible entity, of itself, is a legal personality. Certainly, action should be able to be taken. But rather than the action being taken against the officers of a single legal personality and choosing between particular officers of that single legal personality, it should be taken against the legal personality and not any subpart or section or individual officer of that personality. As a consequence, I think the right course of redress, in the event of a shareholder believing that they have a case of wrongdoing by the single legal entity, is against the entity itself. The entity itself must take responsibility for the actions of its individual component parts.This is not at all dissimilar to a cabinet in which there are many different views, and most ministers might express a particular view. But, when the cabinet meets and decides `the view', that is what the government does. Whatever the views or actions might be of various officers, the single legal entity at the end of the day takes responsibility for what it does—and that is, obviously by progression, any wrongdoing of a particular individual, of several individuals or of the whole entity. It is the actions that it takes at the end of the day that determine what it does. If what it does is improper, then a legal action will succeed.The only question here is against whom it should be lodged. Since this is embodied in the concept of the bill, I think it should be against the single legal entity.17:57:003839Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—It was a bit unfair for Senator Cook to suggest that this amendment was only made available today. The amendment itself was available last Friday. This amendment was revised in consultation with the Labor Party. In conversation with the ALP, we revised it to suit the concerns expressed between my electorate officers and your advisers—and it is a bit unfair to say, having changed it because of conversations with the ALP, that we have only now produced the amendment. The amendment was available last Friday; we have been talking to you and your advisers; and now, having revised it to remove the word `employees' at your request, it is hard to be criticised by you. It might be that you have only just received the revised edition, but it is a bit unfair.I believe that, if the scheme is run by a company, you can sue the individuals associated with that company anyway. I do not think our wording creates something different than may be created by the anomaly itself. We have tried to make sure that various people's concerns have been addressed. Given that, and given that the director, secretary or executive officer of the responsible entity may, under company law, be liable anyway, I do not think the excuses put forward by the ALP hold up.17:59:003839Cook, Sen PeterSenator COOKRF4WAALP00—I should withdraw my remarks about lack of notice. I have been advised that what Senator Dee Margetts has said is true and, therefore, I withdraw those remarks and apologise for misrepresenting your position. However, that has not changed my view about this amendment. What I said before about the amendment stands: I will oppose it.17:59:003839Murray, Sen AndrewSenator MURRAY3M6WAAD00—I direct a question to the parliamentary secretary. Parliamentary secretary, this bill amends the Corporations Law, as I understand it. My understanding of the Corporations Law is that in a number of circumstances, if an entity is being sued, so can the officers and the directors be sued if they fail to act in an appropriate manner. Is that so? Would that cover some of the intention of Senator Margetts's amendment in that individuals in appropriate circumstances can, indeed, be sued along with an entity?18:00:003839Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—That is correct. To the extent that the duties under this legislation are higher as they relate to managed investment schemes, they are set out in that law. For example, they have picked that up under 601FD(2). In other words, wherever there is a higher duty required for a managed investment above the general requirements under directors duties and responsibilities of officers in the Corporations Law, it has been specified in this law.Amendments not agreed to.18:01:003839Murray, Sen AndrewSenator MURRAY3M6WAAD00—I refer the committee to Democrats' amendment 10 on sheet 943 revised 2. I move:(10) Schedule 1, item 1, page 49 (after line 21), after section 601NG, insert:601NH Limited liability of membersOn winding up of a scheme a member is liable to contribute to the scheme property only to the extent to which the member has not paid the consideration that the member was liable to pay to acquire the interest in the scheme held by the member immediately before commencement of the winding up.The committee will see that this is a relatively simple amendment. It refers to the limited liability of members. The intention is that it offers a limited liability for investors similar to the limitation of liability of shareholders in a public company. It is our view that investors, by the nature of their participation and their limited ability to influence the affected entity, should not be subject to the full liability which would be appropriate in a much smaller operation or a much more tightly controlled entity.18:02:003840Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I have had the opportunity to discuss this with Senator Murray and his advisers, and I have got no doubt whatsoever that this is an extremely well-intentioned amendment. I am not even going to say, as we usually say, `However' after this. I want to place on record the government's concerns about this. We will be voting against this, and we will be doing so for one reason—that is, that it is not clear, and it remains unclear to the government, as to whether or not members would be liable in any event.I think Senator Murray would probably say, `If you are not certain, then why not do it anyway?' I will say why. I am also not aware of any practical problem of the type that this amendment intends to prevent that has arisen in which members have found themselves being held liable for losses incurred in the operation of a scheme. So we are not sure that a problem has been found here that we are seeking to remedy. We are worried, however, about any unintended consequence. We do understand, however, after consultation following Senator Murray providing this amendment to us, that it is usual practise to include a provision in scheme constitutions that do limit liability, so that may be part of the answer to the question.The proposed amendment has not been the subject of detailed consideration or public consultation. We have not had the opportunity since seeing this amendment to do detailed consultation on this, which we would like to do. We do have a genuine concern that proceeding with the proposal without this sort of consideration and consultation may give rise to unintended consequences. It is a concern, it is a worry, we genuinely are concerned about it. We would not have any worries about proceeding with this if we did not think that there may be unintended consequences.As I have said to Senator Murray privately, and am very happy to put on the record, we would like to undertake—and I now, on behalf of the government will commit to the Senate and to Senator Murray—to consult with industry participants and other interested parties on the proposal to limit scheme members' liability. We undertake to do so in the period when the corporate law economic reform program legislation is lying on the table. I have said that we intend to introduce that next week, subject to a vote of the ministerial council which I expect to receive shortly. If it is clearly desirable to proceed with this amendment, we will do so, we will seek to use the platform of the CLERP legislation to bring it in.I am saying to the Senate, and particularly to Senator Murray, that we do not have a strong opposition to this in principle. We can understand where it is coming from, we do think it is genuinely a desirable outcome you are seeking, and we just want more time to have a look at it. We are saying that, if there are no downsides to this, we will investigate this. Senator Murray, the committee that you are a member of can certainly look at this as part of its deliberations. So we are not conducting some secret inquiry into this, we are quite happy for it to be open, full, frank, and for anyone who has a view on this to come forward. If there are no unintended consequences, if there is no downside to this—certainly the intent of it seems to have upsides—I certainly undertake that the government will introduce it as an amendment to the managed investments scheme laws and that we would use the CLERP platform to do so.18:07:003840Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to add my arguments in relation to Democrats' amendment No. 10. Firstly, the parliamentary secretary has said that there is protection from liability. Perhaps he could respond to the fact that the beneficiaries of a trust can, under current law, be made liable if the trust deed is not properly drafted, and we cannot assume that all trust deeds are properly drafted. Secondly, and perhaps even more importantly, this bill does not just deal with trusts; this bill deals with far more than trusts, so those reassurances that you have given us, asking us to pass the bill and perhaps put those protections in later, is not really good enough.As a precautionary principle, I suggest that you enable this amendment to get up now because, quite frankly, your current legislation does not provide protection against liability because of those factors. Not all trust deeds are properly drafted, and this bill does not just contain trusts. Perhaps you would like to respond?18:08:003841Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—What I sought to do was to give reasons to Senator Murray and all honourable senators as to why we had not heard of a problem. No-one has contacted the government. That is a very broad statement, I guess, but I am not aware of anyone contacting the government on this issue saying that this is needed because there is some perceived problem with the structure of managed investments. I am not saying that does not mean it is a good policy move. What I am saying is that the answer to the dilemma I pose, which is that no-one is saying it is a problem, is that most deeds have that in them.Senator Margetts, the natural progression of the proposal that, instead of having these provisions in the deeds, in the constitutions, of schemes under the new managed investments proposal is that you take it out of the deeds and put it into the law. The natural progression of that is that you take everything out of scheme constitutions and put it line by line into the law. Of course, that would be less than desirable because, although there are core provisions that appear in most deeds, there are many other provisions that are unnecessary in deeds and you do need to have it flexible. Otherwise, not only would the law be large, unwieldy, unreadable and of little value but also it would severely restrict the capability of people to devise deeds which are more appropriate for their individual scheme. So I clarify what I said. I am saying that perhaps the reason that the problem is not being brought to us is that this sort of provision appears in deeds already.While I am on my feet, I might add that one of the potential unintended consequences may be this. For example, the wording of the proposed amendment makes it clear that the protection it would afford applies in relation to the liability scheme members may have to make payments by way of contributions to scheme property. The government is concerned that there may be other areas of possible liability which the amendment does not address. We are saying that, even though Senator Murray has sought to set out a limiting of liability to one particular instance, it may not cover other instances.It may well be that, as a result of the consultations that we undertake to carry out over the next few weeks, people will come forward and say, `Look, it is a very desirable idea. It is a good idea that has been put up. But, if you are going to seek to limit liability, you should really do it to cover these other potentialities.' Or people may come to us and say, `You should not do it because that is the sort of thing that should be covered under the scheme constitutions.' I am not sure. I have not done the consultation. I have undertaken to do it on behalf of the government, and we will certainly keep you and other interested members of the parliament involved in that process, that is, if you do not seek to use the joint parliamentary committee process to do that at the same time, in parallel or in harmony with my consultation process. But that is the point we are making. We are not saying that it is a bad idea. We are saying that it may be a good idea but we would like to deal with it in a sensible legislative process. If that comes up trumps, it will be in the law as soon as the CLERP legislation comes here.18:11:003841Murray, Sen AndrewSenator MURRAY3M6WAAD00—Parliamentary Secretary, thank you for your full response, as outlined earlier. You are aware, of course, that in a debate such as this your particular words are attended to by the courts at times if they need to interpret the government's meaning. Therefore, I ask you a direct question with that in mind. Is it the general principle of the government that as a general principle they would prefer the liability of members to be limited?18:12:003842Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I think the way they would read my words is to say that the government clearly has no problem with the philosophy behind this. Clearly, it is in many scheme constitutions and maybe it is in all—I have not looked at all the constitutions and trust deeds of all the schemes in Australia, which is about the only thing I have not done in this debate. I think anyone reading my words and seeking any guidance out of them, God help them, would perceive that the government has no problem with that philosophy. It is a matter of how you achieve that and, as I showed by way of that example, it may well be that doing it this way does not achieve what we would like to achieve. But, if you read my words over the last 20 minutes, you will see that philosophically the government has no trouble with this concept.18:13:003842Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to get a response from the parliamentary secretary on one thing he said. Of course, his words are listened to carefully by a lot of people in these debates. He said that nobody mentioned these issues to the inquiry. I know you have mentioned the Law Reform Commission on a number of instances when they have said things that you wanted them to say in relation to this inquiry, but I am advised that the Law Reform Commission adverted to this very issue and asked for clarification. They actually asked the government to clarify the situation of liability. So it has in fact been brought up, and by the very body that you were saying supports your viewpoint. Perhaps you would like to respond and correct the record, that nobody has brought this to the attention of the government.18:14:003842Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I am advised that the Law Reform Commission did not say that they have had people coming to them saying that there is a problem here. You are correct in saying, however, that they did say that it would be desirable to do something about it, and we share that view. I have given a commitment to say we will do something about it. We are going to look at how you can do that. I have not been in this process, thank the Lord, that has occurred in developing this legislation all the way since 1989-90; I have only come into it in the last two years. But I would imagine that they may well have had a look at how you do this and decided for some good reason that it is covered already. As a result of Senator Murray's interest and now Senator Margetts's interest, we have undertaken to pursue that further in a very genuine and open way. If we think there is some way of achieving that, we will do so.18:15:003842Cook, Sen PeterSenator COOKRF4WAALP00—The opposition supports the principle of this amendment and thinks it is an appropriate principle. We understand what the parliamentary secretary has said about the need for certainty—or as close as you can get to it—in terms of there not being any unforeseen problems with it, and we are of a mind to encourage a more consultative process than we have had up until now as to whether or not this amendment can be incorporated in the CLERP legislation.Before we sign off on that position and commit ourselves to an outcome, I would be interested to know from the mover of this amendment—through you, Madam Chair—whether or not the explanation given by the parliamentary secretary, about the possible inclusion of this amendment in the CLERP legislation following further consultation and all the rubric about interparliamentary committees and so forth, assuages concerns and meets the favour of the mover or whether the mover would wish to persist with this amendment in these circumstances.I also add that, in that broad reference to the Acts Interpretation Act, what the officer of the government says in these debates is taken as meaning what the intention of the government was if a court has to construe meaning. I would like to know whether that explanation meets the point, given the other questions about consultation and so forth. I would be very interested in knowing the answer to that question.18:17:003843Murray, Sen AndrewSenator MURRAY3M6WAAD00—I thank Senator Cook for the question, and it is a good one. The amendment was not considered by the first joint parliamentary committee which looked into this bill, and neither was it considered by the second committee hearing which specifically examined this Managed Investments Bill. The amendment has arisen subsequently, and the problem for us all is that whilst the government has had this amendment for five or six weeks, the joint committee has not met and therefore there has not been a parliamentary forum for the specific examination of this issue.This amendment, which is to do with the limited liability of members, arises from two directions. The first is a perception of the Law Reform Commission and some other observers that it is an area of law which, whilst it may not have appeared as a major problem to date, does leave some doubt and some danger to investor members because they are not adequately protected in law. The second arises from our particular attitude to this bill, which is a belief that for certain classes of investors their security will diminish under this bill. We are concerned that if a consequence of this bill might be that some funds were to go under, members of those funds could be faced with direct and immediate danger if their particular trust deeds and their particular schemes did not appropriately limit the liability of members.It is not within the ability of you, me, the parliamentary secretary or probably the government to establish what each and every scheme and trust deed says. We just do not know how large or how small the potential danger is. This is genuinely, therefore, a precautionary move. With the way we have read it and designed it, we think the potential unintended consequences that the parliamentary secretary alludes to might be a little fanciful. It is plain, both from his own response and presumably those of his advisers, that they cannot put their finger on any real concern. There is just a concern that it is possibly not big enough, full enough or does not look at the issue well enough. It could well be improved—I will not say it cannot—but nobody in this debate, including me, is able to say it is deficient in any particular area.For us, this is entirely a precautionary and protective mechanism that falls within a general principle that the Senate as a whole has traditionally upheld: that in certain legal and commercial entities it is appropriate to limit the liability of participants. In that sense it is neither new law nor a new principle. Frankly, I would prefer for the amendment to be passed and for the government to improve the amendment subject to the CLERP process, rather than for it not to be passed, because I cannot be sure, given the state of the electoral cycle, when the next bill might come up. It might only come up in late 1999 as a consequence of the whole process and procedure. If that were so and if something were to happen in the meantime simply because we were unnecessarily nervous about a well-established, clearly expressed principle, I would be very unhappy.I cannot see that the inclusion of this element in the law exposes the government to real danger in terms of the intention, the fabric or the structure of its bill. I think it merely provides protection which we have all been comfortable with, regardless of the particular philosophy or direction. My preference would be for the Senate to support it and, if the government or the committee can find a mechanism to improve it, I would be very happy to support that.18:22:003843Cook, Sen PeterSenator COOKRF4WAALP00—My question then to the parliamentary secretary is: what advice can you give the chamber on when the CLER legislation might come before us?18:22:003843Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I have written to the attorneys-general in the states who are members of the ministerial council which I chair. Your government, with our support, actually stacked the numbers on that committee very effectively in favour of the Commonwealth, but I still need two states.RF4COOKSenator Cook—Stacked?H15Campbell, Sen IanSenator IAN CAMPBELL—Well, gave the Commonwealth a bit of weighting on the votes. We are waiting for a vote on it. I do not expect there to be any difficulties there. We fully expect to have that legislation brought into the parliament next week. I do not expect it to be exempted from the cut-off and to be debated next week. The schedule looks a bit tight for that. We are intending to have it debated early in the next sittings. Regardless of whether there is an election between then and now and regardless of the outcome of that election, the CLER proposals have had very strong and broad support and I would imagine they would be debated fairly early in the next sittings no matter who is sitting on the government benches. They certainly will if I am on the government benches.I would have some concerns about saying, `Let's put this in and see if you can improve it.' We are worried about bringing something in and then saying that we are not sure of what the consequences are, particularly when we are expecting this new legislative framework to be up and running on 1 July. Many managed investment managers and trustees will be seeking to commence the transition phase on 1 July this year. That is only a few days away. To say, `Here is something totally new that has never applied to managed investment schemes before in terms of their constitutions,' and then say that the government may actually be changing it at some stage, is less desirable than saying `Let's have a look to see if it is necessary.' It may well be that the constitutions of all these schemes adequately cover this potentiality, but it may be that they do not. I would prefer to go down the route that ensures that it gets proper parliamentary scrutiny and proper consultation.18:25:003844Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—What has just been said by the parliamentary secretary is bizarre. The precautionary principle here would say that there may be a chance—and I believe there is a chance—that individual investors could be liable. Quite frankly, the failure of this parliament to legislate to limit liability means that the courts will be forced to enforce the current laws on liability.It means two things. It means that anybody investing in managed investments which are partnerships or syndicates perhaps should have a warning issued by the government, like the health warning on a cigarette packet, which says, `Be advised that you as an investor may be subject to liability under this investment.' It also means that anybody investing in a trust, if they are not already a lawyer, should employ a lawyer to check the trust deeds. You cannot assume that everybody investing in a managed investment has the legal training to examine trust deeds to know whether or not such things as their liability are safe.Perhaps the cost of this failure—if that is what the government and the opposition are saying—will be that we are going to be back in here dealing with a situation where people have been taken to the cleaners. We do not know when an election will take place. We do not know what will happen with a changeover of government. The legislation may never happen. At some stage we are going to have to fix a major muck-up. The best scenario, if that does not happen, is that the individual cost to everybody, who magically will know that they have to have legal advice to read their trust documents or their syndicate or partnership managed investments, will be that every single investor will be required to employ a lawyer. That is the reality. Either we are saying that everybody has to have a lawyer to read their trust documents to know whether they themselves are liable, whether that deed has to be changed or whether they ought to be looking elsewhere, or we are saying that we are prepared to allow this parliament to put them at that risk. Then, at some unknown time in the future, we will come back and try to fix the problem.I do not think that is acceptable, and I do not think either the parliamentary secretary or Senator Cook has given us any good reason why we should not be taking a precautionary principle. We have given a very good reason why these people are not covered under the current situation.Amendment not agreed to.18:28:003845Murray, Sen AndrewSenator MURRAY3M6WAAD00—I intend to withdraw amendment No. 12 and proceed with amendment No. 13. Accordingly, I move:(13) Schedule 1, item 1, page 54 (after line 5), after section 601QA, insert:601QAA (1) The ASIC must develop a system for rating managed investment schemes according to the relative security of investor funds.(2) The system must be in writing and must be published in the Gazette .Amendment No. 13 says that ASIC must develop a system for rating managed investment schemes according to the relative security of investor funds. The system must be in writing and must be published in the Gazette . It will not evade the attention of the parliamentary secretary or the opposition that that particular proscription has no force in law. There is no penalty attached to it. It is, in fact, an advisory activity. That is a very important point to be made because I appreciate the difficulties of this type of scheme being proposed.Sitting suspended from 6.30 p.m. to 7.30 p.m.3845Murray, Sen AndrewSenator MURRAY3M6WAAD00—As we broke for dinner, the assembled masses were absolutely enthralled by what I had to say. I think they were hanging on every word. In fact, they were counting down the seconds they were so excited by it.We are dealing here with the potential that we have highlighted for there to be a problem with regard to the variety of products which are going to be on the market as a result of the MIB. As the Senate knows, our attitude has consistently been that this bill diminishes the level of investor security and protection. But, if that is so, the government's counter to that is that the new bill will, in fact, improve the marketability and the product variety which is available to investors as a whole.If that is so, there are likely to be not only different classes of investors but different classes of schemes. Those schemes will be capable of being differently rated, in terms of protective mechanisms, lower risk or higher risk or lower return or higher return. Without the added safeguards provided by a trustee or custodian, the greater onus falls on the single responsible entity, which is the fund manager. There is a maxim, which is a maxim because it is well established, that `the higher the risk, the higher the return'. Undoubtedly, different classes of investors have different needs: some will be innovative risk takers; some are least risk takers, much more cautious and safety conscious; and others simply want a guaranteed return.One of the things which really made me nervous of economists—of course, I have studied economics, as some senators would know—was that they begin their theories with the word `assume'. One of the things they do when they assume about markets is to assume perfect knowledge. The fact is that people within a market do not have perfect knowledge: they rely on the product, the laws and the regulation to make sure that they get into as little trouble as possible. We cannot assume that investors will have the means, the ability or the mechanisms by which they can rate the relative risk in each scheme.I explored these concepts with Mr Tony Hartnell, who is the Bankers Trust adviser and the former chief executive of the NSC, during the hearings. He acknowledged that this is a genuine problem: how do you acquaint the people in the marketplace, the investors, with the relative risk of the relative funds and schemes they have to deal with? When people buy a fridge, it has a star rating system on it in terms of its safety or its environmental acceptability. If they are concerned about a car, they can be a member of the RAC or they can get the appropriate magazine that will tell them about the safety features, the speed features or the particular characteristics of that motor vehicle and compare them in an easily assessed manner. That is so for many of the products that people enjoy in the marketplace. The difficulty is finding a way to rate the different investment products promoted by funds. There is no grading system, no Moody's system, available. At present the mandatory trustee role does ensure certain safeguards so that uninformed investors have some protection. They have a trustee—a person standing in trust, an entity standing in trust—which rates the appropriate products for them. The government is taking away that rating capability, that protection, and under the single responsible entity system investors will still not necessarily be aware that some funds will be higher risk than others.I have no problem with an informed and capable market participant taking an informed decision, taking a risk and losing their money. If they know exactly what they are about and they take that risk, they know the downside is there. But I do have a great problem with the ordinary investor and the indirect investor—the millions of them through trusts, unit funds and schemes—being participants in managed investments and not knowing whether the risk is higher or lower with one product versus another. They simply do not have the means to compare.Because of that, we think that an appropriate rating system should be devised. Before dinner I made it clear that the Australian Democrats understand very well that that is a difficult matter to resolve. All we have required of the ASIC—and I will repeat what I read out earlier—is that:(1) The ASIC must develop a system for rating managed investment schemes according to the relative security of investor funds.(2) The system must be in writing and must be published in the Gazette .The parliamentary secretary and the government know that one of the ASIC's prime charters is for consumer protection: to make sure that consumers generally are protected as far as they can be from the vagaries of the market and from fraud and improper behaviour. Because of that, the ASIC has links with all the fair trading acts within all the states. It is that protective requirement which we are seeking to stimulate here through this amendment. The government cannot say in answer to this, `There are unintended consequences.' There are no penalties. There is nothing required here other than an advisory scheme whereby investors may be able to assess funds on an informed basis. The government and the ASIC should at least make an effort to develop a system and evaluate it. On the grounds of the need for consumer protection in the far more open and vulnerable market that will result from this bill, I commend this amendment to the Senate.19:38:003846Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The government opposes this amendment. We do so because we believe that it is clearly outside the functions of an independent corporate regulator to make ratings for managed investment schemes. Managed investment schemes are already rated by a range of ratings agencies and private sector groups that look at performance returns and so forth. That is certainly something for those agencies to do, but it is outside the functions of an independent regulator to look at market integrity and consumer protection.I also suspect that it would create a significant level of moral hazard for a government agency to be in the market place trying to monitor thousands of investment schemes and creating ratings for them and providing those to the public. You would have to have a massive number of people employed in the ASIC keeping a very close watch on the fortunes not only of the schemes themselves but also of the individual fluctuations in the industries that those schemes are involved in. There are schemes involved in property, growing grapes, investing in securities and a range of things. You would need specialist teams within the ASIC to set up a ratings mechanism. I suspect you would need potentially hundreds of people to monitor the ups and downs of the particular industry segments and the particular investment funds within those segments and then to publish ratings for those funds.If a scheme which the government's own agency gave 10 out of 12 to either failed or had lower than expected returns, an investor in that scheme would not change funds or go to the responsible entity; they would come to the government and say, `Your agency said that this scheme is a 10 when really it is only a five.'As with almost everything that Senator Andrew Murray does in this place, this amendment is very well intended. But firstly, it is wrong for the ASIC to do this. It is totally outside its remit and its functions. Secondly, it would set up massive problems for the ASIC and potentially for investors.19:41:003847Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The Greens (WA) will be supporting Democrat amendment No. 13. I ask the Parliamentary Secretary to the Treasurer this: what proportion of funds invested as superannuation funds that everybody has to be involved with in some way or another actually make their way into some form of managed investment?19:42:003847Murray, Sen AndrewSenator MURRAY3M6WAAD00—I would like to add to Senator Margetts's question as follows: I do not believe that it is outside the remit of the ASIC, as I spelt out in my remarks. That amendment does not require the government to have a five out of 10 or a three out of 10 approach. It requires the ASIC to develop a rating system which would be appropriate for the industry. It may require the industry to rate itself against a set number of criteria. In other words, the ASIC would spell out the things an investor should be looking for and ask the funds: how do you rate yourself on those things? Each fund would perhaps do that. That is why the amendment is done in that form. We do not intend that the ASIC should itself try to rate every single fund and give marks for every fund. We believe that the task of the ASIC would be to develop a rating system which the funds would then rate themselves against and which they would provide as a matter of course to the investor. That would enable the investor to rate the funds on an appropriate scale of risk and return. The amendment has been designed very broadly to allow the ASIC maximum flexibility in reacting to it.19:43:003847Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I understand the flexibility that you have put into this amendment, Senator Murray, and that it has been somewhat changed since our first discussion on this. But, again, you are requiring the ASIC to `develop a system for rating managed investment schemes according to the relative security of investor funds', and to create a published, as you say in part (2) of the motion, rating of managed investment schemes based on their assessment of the security. What you have said does not change anything I said in my initial intervention in this debate. You are setting up what I would regard as a significant moral hazard for investors who would look at this gazette and say, `The ASIC believes that this sort of scheme has this sort of relative security and this other scheme has this other relative security.'Even if I were to agree that it is not outside the ASIC's functions and remit, it is certainly outside the ASIC's capabilities to seek to create a dynamic, which it would have to be, rating system. The independent ratings agencies that create these rating systems are amending them, adjusting them and looking at the schemes, the investments and the companies that they are rating on an almost daily or weekly basis. To ask the ASIC to do this is fundamentally wrong.19:45:003847Cook, Sen PeterSenator COOKRF4WAALP00—The opposition will not be supporting Democrat amendment No. 13, though I might say that Senator Murray has touched a fairly raw nerve. If there has been a beguiling debate in the Labor Party that has stretched since we gained office in 1983 until now it has been about what the proper role of the private sector is and what the proper role of the public sector is. Given our origins as a social democratic party in our early phase as a socialist party, then it is clear to see that in this debate the role of the public sector is one that is strongly defended within our organisation.I suppose the best way you would define our view of this is to say that there are some things best left to the market. What we have here with the ASIC is, in essence, a market regulatory mechanism. Its job is to make sure that the market is properly regulated and, therefore, leaving the remaining balance of things that happen to the market to decide. It is a moot point, but nonetheless one that I think should be put: the ASIC engaging in setting criteria for the rating of the performance of funds is a mechanism best left to the market rather than to the public authority.If one wants to take that one step further, is it the job of a regulatory body to lay down criteria upon which a fund might be rated? I concede immediately people can take the contrary view and do so very respectably. However, I would contend—and this is the view of our party—that that probably stretches the limits of what public regulation should be about. While it is in the interests of greater transparency, you could argue there would be a role for it if there were not existing private sector mechanisms that engage in rating. The fact that there are many of them and that they themselves are rated shows that there is no gap here in the market where transparency of fund operations is concerned. I, therefore, come to the conclusion that this is something that is best left to the market and market forces to decide rather than the government moving in here and setting down through its regulatory authority what it thinks should be the bases upon which funds' performances are rated.I am always persuaded when Senator Murray makes a longer, thought through and thought out contribution in this chamber to pause and consider whether I should go back and revisit the basis of my own judgments on this, because he in his previous career has been more of a player in the private sector market than I have and his words ought to be weighed carefully. Having done that, however, I must say we are not persuaded to support the amendment on this occasion.19:49:003848Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I almost feel sympathy for Senator Cook in defending what I believe is the indefensible here because there are several examples that could be given as precedents. What has been suggested is not a new thing. I believe that in the case of the Insurance and Superannuation Commission it was almost forced on them in relation to rating capital stable and capital variable schemes. So the reality is that this kind of situation exists already. The government were pushing in the superannuation choice legislation the key feature statements. So we already have precedents that exist. We also have a precedent that exists from the government side as well. We have two sides, both major parties, defending the indefensible saying, `This shouldn't exist. This doesn't exist.'The minister was having a talk with his advisers at the time I asked this question, so perhaps I should ask it again. What proportion of superannuation funds does he envisage is likely to be involved in these managed investment funds? There is an element of compulsion within superannuation funds and I think governments bear some responsibility for what happens when people have to make a superannuation contribution and when part of that superannuation contribution may go into managed investment funds. Could you give us some idea of what kind of money is involved with managed investments in terms of the proportion of superannuation investment and total funds?We already have the precedent of the Insurance and Superannuation Commission rating schemes and we also have your own government promoting key feature statements for superannuation choice legislation. So we have examples. It can be done and it is done. In fact, it was forced on parliament to do these things given the amount of risk—hundreds of millions of dollars at risk—in relation to things like insurance and superannuation funds.19:51:003848Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I do not have at hand the amount of superannuation funds that is invested in managed investment schemes. As Senator Margetts has made clear, they are regulated under the SIS scheme and they are also regulated and oversighted prudentially by the new APRA. As was said in the second reading speech, the estimate we have been provided with is that about $85 billion is invested in managed investment schemes. As I have said a couple of times, that includes small agricultural schemes, such as blueberry farms and vineyards in the south-west of Western Australia, and they may be of only a few hundred thousand dollars or go up to the multibillion dollar funds managed by the large financial institutions of this nation.It was also stated in the second reading speech that the current growth rate, which apparently is not abating—in fact, growth is increasing and has been increasing even during the debate on this bill over the last 18 months—is increasing at the rate of about $20 billion a year. So it is a very significant portion of the financial sector of this great nation.19:53:003849Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I think the amount of money involved that the parliamentary secretary just mentioned puts into stark focus just how important it should have been for both the major parties to take a much more careful approach in their duty of care in relation to this money.Amendment not agreed to.19:54:003849Murray, Sen AndrewSenator MURRAY3M6WAAD00—I advise the committee that I am withdrawing Democrat amendment 14 on sheet 943, revised 2, and Democrat amendment 16 on sheet 943, revised 2, because they relate to matters that were defeated earlier. Accordingly—by leave—I move:(2) Schedule 1, item 1, page 4 (after line 15), after paragraph (d), insert: (da) the scheme does not meet the requirements of subsection 784(2A); or(17) Schedule 2, page 87 (after line 13), after item 120, insert:120A At the end of subsection 784(2)Add:; and (e) if the licence applied for is a licence to operate a managed investment scheme or schemes, at least one of the paragraphs in subsection (2A) applies.(2A) At least one of the following paragraphs must apply for the purpose of paragraph (2)(e): (a) the ASIC is satisfied that the value of the net tangible assets of the applicant, or the custodian or trustee where there is one, is and will be maintained as follows: (i) where the value of all scheme property is less than $100,000,000, the higher of: (A) $100,000; or (B) 5% of the value of the scheme property; or (ii) where the value of all scheme property is $100,000,000 or more, the higher of: (A) $5,000,000; or (B) 0.25% of the value of the scheme property or such other amount as is agreed by the ASIC; (b) the Commission is satisfied that the applicant is entitled to the benefit of an approved guarantee in respect of its duties as a responsible entity of an amount not less than the higher of the two amounts referred to in subparagraph (a)(i) or (ii), as the case requires; (c) the Commission is satisfied that the sum of the applicant's net tangible assets and any approved guarantee in respect of its duties as a responsible entity is not less than the higher of the two amounts referred to in subparagraph (a)(i) or (ii), as the case requires.These amendments consist of the third of our major amendments to this bill and refer to the matter of capital adequacy. Single responsible entities do not have a solvency test and rarely have a capital adequacy requirement beyond the $5 million required under the SIS legislation. This is a serious problem. The trustees organisation provided a schedule which showed the equity of fund managers averaging a low $19.11 million which, as a percentage of funds under management, was a minuscule 0.45 per cent. Banks, by contrast, have a minimum capital requirement of eight per cent of total deposits.Reserve Bank rules prohibit banks from guaranteeing the performance or liabilities of a fund. Many of these funds have banks as parents or related entities. Insurance companies usually do not guarantee their funds. It is obvious that capital adequacy rules should be introduced to ensure that investors are adequately protected. It is a principle which is well established. It is a principle which does not go against the intention of the bill. It does not interfere with the SRE principle. What it does do is provide protection to investors.These amendments have two tiers to ensure that smaller schemes have reasonable capital provision while not requiring a huge fixed amount hurdle that they must all satisfy. If we turn to amendment 17, which is on page 6 of sheet 943, it can be seen that the two schemes are laid out. One scheme says:(i) where the value of all scheme property is less than $100,000,000, the higher of: (A) $100,000; or (B) 5% of the value of the scheme property; or—is the capital adequacy amount. The other scheme says:(ii) where the value of all scheme property is $100,000,000 or more, the higher of: (A) $5,000,000; or (B) 0.25% of the value of the scheme property or such other amount as is agreed by the ASIC;I note that the Labor Party have attended to this problem of capital adequacy themselves, so they are obviously in agreement with the principle. These amendments of ours provide flexibility in that the capital adequacy requirements can be met by guarantee or by including the assets of a custodian in the assessment.I would also draw to the attention of the Senate that it is our view that the corporate shenanigans that went on with the Patrick group in terms of way in which subsidiaries could be structured put some fear into us that the potential for any parent company to structure a subsidiary in such a way that they could thereafter withdraw their contractual obligations puts all potential creditors, investors and employees at risk. For these reasons it is absolutely essential, in our view, that capital adequacy provisions be provided. I therefore commend my amendments 17 and 2 to you. They sit well, we think, within the bill, and provide a much needed level of additional security. I commend these amendments to the Senate.19:58:003850Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The coalition government shares with the Australian Democrats and the Australian Labor Party—as I understand it from discussions with the Australian Labor Party in private—the view that capital adequacy requirements are, indeed, an important part of the licensing requirements of managed investment schemes. Indeed, the ASC shares that view. As Senator Murray will know, because I am sure he has read the commission's draft policy statement on this matter—I think I provided him with a copy of that when it first became available—the ASC went into some detail on capital adequacy requirements. I know, because I have been involved in them, they have had discussions with industry in the weeks since they were first issued. They have since published a revised policy statement which deals with capital adequacy.When the Securities Commission issued their capital adequacy policy statement they received a lot of submissions from smaller funds—I did refer to this in an earlier debate. As I mentioned in this debate yesterday, smaller funds such as Precedent Financial Services and others from Western Australia made it quite clear that the capital adequacy requirements would adversely affect managed funds, and that when investors are looking at issues such as the security of managed investment schemes they do not look at capital adequacy as much as they look at insurance, particularly insurance in relation to professional negligence. The ASC held consultations with a range of small funds and, as a result of those consultations, significantly altered the capital adequacy requirements so that they would not adversely affect small schemes.The small to medium-sized managed funds in the $80 million, $100 million or $150 million range believe that you could not run a managed fund with these capital adequacy requirements. It would basically wipe them out and leave the marketplace to the big end of town. The ASC has recognised that problem and has amended its capital adequacy requirements.The Democrats and the Australian Labor Party have sought to put the capital adequacy requirements into the law. The government would much prefer to see those left to policy statements. I have held discussions with Jillian Segal, a commissioner member of the ASC, who has made it very clear that the ASC, to properly regulate these schemes, would prefer to have the flexibility of adjusting the policy on capital adequacy in terms of licensing. The ASC made it very clear that it would prefer not to have a rigid set of capital adequacy requirements in the law.I have spoken to the chairman of the Australian Securities Commission this evening, and he has made it very clear that to put into the law these sorts of strict requirements, as they are drafted at the moment, will actually encourage people to go outside the law, to try to avoid the regulation of the scheme. I am particularly talking about small schemes, the sorts of schemes for which it is not economically viable to have $50,000 cash sitting in the bank.I will put our position first, before I give an example, because it will truncate the debate. I indicate that the coalition has put forward some amendments to the proposed Labor amendment, which would put us into the position of being able to support the amendment. I indicate now that, if Labor agrees—and I think it has agreed to do so, in discussions between our offices, but I will not pin that on Labor until I have its formal position—we will support the Labor amendment with additional words placed in it. That would have the effect of giving ASIC—or the ASC as it is called now—and particularly a member of ASIC the right to exempt an applicant from the requirements of 2(a) in the Labor amendment. That power could not be delegated, and ASIC would be required to provide details of the exemptions in its annual report. It makes it clear that it is an exceptional exemption from this requirement.Mr Cameron has made it clear to me and to my officers, in conversations over the dinner break, that he could see that this would create specific problems, particularly for small schemes and particularly for the vineyard schemes, schemes in the $1 million to $2 million range. He said that it could force them entirely out of the gambit of this legislation and close down a large section of activity in the managed fund area, and that the ASC regards having flexibility in this area as very important. That is the reason we will not support Senator Murray's amendment. We do believe that the capital adequacy requirements would ideally be left to the ASC to be put in policy statements and amended from time to time, as the market changes and as its knowledge increases about the requirements of the marketplace. We have the ASC to be the consumer protection and market integrity regulator in this field, and it is very much its job to develop these policies and to enforce the law.We believe that to put these requirements into the law in the way that the Democrat amendment does would be to tie one hand and half a foot behind the ASC's back. We prefer to give it the discretion to apply capital adequacy and other requirements that protect investors and create market integrity, by using its expertise, knowledge and powers, without limiting its powers. That is our principle. We will be supporting, subject to the inclusion of a new subsection 2(d), the Labor amendment—I say that now—but we will be voting against Senator Murray's amendment.20:05:003851Murray, Sen AndrewSenator MURRAY3M6WAAD00—Parliamentary Secretary, I know you have twice mentioned the Precedent company from Western Australia, and I had the impression almost that you had set them on me. I wondered—and perhaps you could clarify this—whether you had been to see them, acquainted them with your views and asked them to write to me, because they did indeed write to me. They had a mistaken view of my amendments. When I sent them my amendments, they came around pretty quickly. They said, `That is reasonable. We didn't realise it was like that.' I think you have to be a little careful in terms of quoting what their views are.The second point I would make is that someone you have quoted—and, because the remark was made privately, I am not going to quote them in return—somebody very senior and authoritative in these matters told us some time ago that we had the amendment on capital adequacy pretty well right. While probably preferring that it be by policy and not by law, nevertheless they felt that it was quite adequate.The instance you have outlined of the potential for there to be fund managers and schemes who will avoid this bill because of the potential for them to be regulated just horrifies me, because it really draws attention to the very things we have been saying: that if you go after this SRE concept you open the door to fly-by-night operators. At present, somebody like that could not exist. They have to go through a trustee. You are opening a door to that kind of fly-by-night operator. If it is this particular amendment which might make them fly-by-night, what about some other amendment? What about some other control of the ASC? That is a really worrying statement. I hope it was made in the hyperbole of debate and not as a considered view of the government because I did find it alarming.We think that the capital adequacy provisions laid out are reasonable. Bear in mind that the amount for small funds is limited to $100,000 or five per cent of the value of scheme property, so it is not necessarily a large sum of money for a small scheme. With regard to the larger schemes, of course it is such other amount as is agreed by the ASIC. We have laid out flexibility in there for the commission. We accept that you would prefer it to be done in a different manner, but it is clear that you have a choice: you are going to have to accept either Labor's version or ours, if either of those has the numbers. I therefore welcome your statement that you would be prepared to support capital adequacy provisions of one sort or the other, even if it is subject to further amendment by you.20:10:003852Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I do not want to prolong the debate on this but I want to clarify three things. First, the government has always supported a capital adequacy requirement and has worked very closely with the ASC in developing one. Second, in relation to Precedent Financial Services, Senator Murray, you reiterate their views. They came to see me about it because they were horrified by the capital adequacy requirements in the draft ASC policy statement. They said, `It will wipe out our business. It will wipe out all of the small end of town.'The ASC has amended it to a minimum of $50,000, which is reflected in the Labor legislation. But they make the point, as you did, that it should be in the policy statement and not in the legislation. Quite clearly, you have in your amendment something very close to what the ASC has finalised; there are differences. The only point I make is that it should be in the policy statement if you want maximum investor protection. If you want to allow ASIC to use its powers and its expertise to do this, it is preferable to have it in the policy statement.As I have said, as long as the ASC has an exemption power, which is what we will support, then of course we can have it in the law. It is very inflexible, as people in this place know, to have something like a capital adequacy requirement in the legislation. If you need for some reason to change it, it can potentially take a very long time. Having it in a policy statement is obviously far more flexible for a market focused regulator that is in there at the marketplace.My comment, Senator Murray, about this inflexibility forcing people outside the law is not my comment. It is not on behalf of the government. It is by the chairman of the Australian Securities Commission who told that to an officer of mine tonight. He is the man who is charged with the responsibility of enforcing existing schemes, and schemes under the new proposal if this legislation passes through the Senate. Based on his experience which is probably the best in this country in terms of regulating this industry, as has been his responsibility for the past four or five years, he is saying not to allow this flexibility. These are his words, not mine and not the government's, but it is the view of the head of the regulator that it will force people outside the law. I am horrified as well, Senator Murray, but they are not my words. They are the words of the chairman of the Australian Securities Commission who has said that. He is saying that the amendment in its current form would force people outside the law and I find that horrifying. That is why I am not supporting it.20:13:003852Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The very fact that the parliamentary secretary has indicated in this debate on record that the head of the Australian Securities Commission has admitted that funds and fund managers rather than not operate would actually deliberately operate outside the law is the very reason we have been trying through this debate—H15CAMPBELLSenator Ian Campbell—Under this amendment, he said.DX5Margetts, Sen DeeSenator MARGETTS—No, no. I am just indicating that you have got on the record that these fund managers are quite willing—and it has been admitted by the Australian Securities Commission manager—to operate outside the law. Not that they would not operate but that they would operate outside the law. That is exactly what we have been trying to argue all night. It would force them to operate outside the law. Why? To minimise their costs; to minimise compliance. This is what we have heard from the minister tonight. There is about $85 billion worth of money in Australia and you have the minister admitting that experts are telling him that fund managers will—not might—operate outside the law if they do not like the way it has been set up.That is the best argument that I have heard for the kind of safeguards that we have been trying desperately to argue for, for this amount of money in this kind of climate, and I still have not heard any response from either the minister or the representative of the opposition here as to whether or not they repudiate the statements in the OECD documents. I will still ask that at the end of this debate if I have not heard an answer.But I would like to ask, where in the bill is the power of the Australian Securities Commission to impose capital adequacy requirements? Is it in their policy statement or anywhere else? Where is the power, because section 601QB allows modification by regulation? Modification indicates there would have to be some action, some capital adequacy requirement in the first place.The only thing in the bill is that there is the allowance that the ASC can modify capital adequacy—not create it, not require it, but modify it. Unless the parliamentary secretary can show me, show the parliament, express in Hansard where the power actually lies in the bill for this to happen in the policy, there may not be this power. It does not actually exist. I suggest that, if that is the case, we will have litigation by the barrel load. I would also like to find out whether the parliamentary secretary has been advised by the Attorney-General that there is power in this legislation for such action by the ASC to take place.20:16:003853Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The part of the law that the honourable senator asks me to draw to her attention is section 784 of the Corporations Law, which is the licensing provisions, the granting of licences. The policy statement of the ASC is quite clear: they will not be able to grant a licence and will not grant a licence to a managed responsible entity unless they comply with those capital adequacy provisions.20:16:003853Cook, Sen PeterSenator COOKRF4WAALP00—On behalf of the Labor opposition, I should indicate my view about these amendments moved by Senator Andrew Murray on behalf of the Australian Democrats. It seems in this debate that we are all agreed about the need for capital adequacy. The disagreement centres on how best to provide that. That point, therefore, is common between us all. I have a great deal of sympathy for the amendment moved by Senator Murray. The parliamentary secretary has indicated rightly and truthfully that the amendment that I have foreshadowed which deals with this matter and which is on the running sheet behind the amendment we are now considering has been the subject of some discussion between the government advisers and my own advisers. I am not yet in a position of having thoroughly absorbed all the advice that my advisers have given me on the changes that they proposed following the discussions with the government, although I must say it seems to me on a first reading that they are changes that we would accept. By the time my turn comes to move my amendment, I will be on top of it and will give you more precise advice than that.Having said that, let me turn to Senator Andrew Murray's amendment. I will not vote for this amendment, not because I disagree with the principle; that is an established thing between us all. I think there are two really important issues in the debate in the Senate that should be considered carefully when it comes to the capital adequacy issue. That is, one has to strike a balance between setting the bar in terms of capital adequacy high enough to take the shonks out of the system—to put it bluntly—but setting the bar equally low enough as to not be a barrier to entry into the market. Getting that balance right is the issue that Senator Murray has given us an example of, and I thank him for that. It is just that we think in our terms, given the consultations we have engaged in and, more importantly, the published views of the ASC, that our amendment is the better one. This is not an occasion where, as might normally be the case, I would vote for the Democrat amendment and if that got defeated fall back and vote for my amendment. I think this is a question of a choice rather than a progressive improvement to the bill. Therefore, the choice will be—unsurprisingly for us—for our own amendment.20:19:003854Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I seek further clarification from the parliamentary secretary. My understanding of section 784 of the Corporations Law is that it is the power to refuse a licence. How often would a trust apply for a licence? My understanding is that it is not the power to impose capital adequacy; it is simply the power to refuse a licence. Is that not correct?20:20:003854Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—They have to get a licence, otherwise they cannot set up a managed scheme and they cannot be responsible entities. If they have that licence withdrawn, again, they cannot be a responsible entity under the law.20:20:003854Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—To clarify that, it is not a power to impose capital adequacy per se; it is a power simply to refuse to license.20:21:003854Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The ASC has the power through the licensing power and through its policy statement to impose whatever it wants on schemes. It is really like the switch on the metre board on the front of your house. That is really the power. They will not connect you in the first place unless you meet their capital adequacy requirements. If you do not meet them, for whatever reason, they can unplug you. They can take your licence away. It is a very powerful tool that they have. That is how it is exercised.20:21:003854Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—So there would be a number of trusts which already have licences. Is the parliamentary secretary suggesting that all of the trusts that have ever been licensed have capital adequacy? If they do not, what power would the trust then have to enforce capital adequacy?20:22:003854Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—All managed investment schemes in Australia, whether they are set up at the moment or whether they are going to be set up at some stage in the future, will be required to be licensed. There is a two-year transitional period where all existing schemes will have to decide who will be the responsible entity—be it an existing trustee or be it a manager. They will have to go to the ASC during the next two years and get themselves licensed. If any of the existing schemes do not meet the capital adequacy requirements—be they a small property scheme or a small vineyard or any one of AMP's managed funds or anyone else's managed funds—they will have to meet this requirement or they will not get a licence. If at some stage in the future they do not meet these requirements, the ASC will have the power to withdraw that licence.Amendments not agreed to.20:23:003854Cook, Sen PeterSenator COOKRF4WAALP00—I move:(1) Schedule 2, page 87 (after line 13), after item 120, insert:120A At the end of subsection 784(2) Add: ; and (e) if the licence applied for is a licence to operate a managed investment scheme or schemes, the applicant meets the requirements of subsection (2A), and any additional requirements determined by the ASC under subsection (2B). 120B After subsection 784(2) Insert: (2A) For the purpose of paragraph (2)(e), the ASC must be satisfied that the value of the net tangible assets of the applicant is and will be maintained at a minimum of $50,000 or, where the value of all scheme property is greater than $10,000,000, an amount equal to 0.5% of those assets shown in the latest accounts of the scheme lodged with the ASC, up to a maximum of $5,000,000. (2B) The ASC may determine additional requirements for the purpose of paragraph (2)(e), including, but not limited to, a requirement that scheme property be held by an agent in particular circumstances. (2C) In this section: net tangible assets means the total tangible assets of the applicant, including any guarantee approved by the ASC, less any adjusted liabilities as shown in the latest accounts of the scheme lodged with the ASC.This amendment goes again to the subject of capital adequacy; it is obviously an important part of the debate before us. I should now acknowledge that I have had a chance to consider the changes being suggested, and I agree to them. I should also perhaps now spell out what those changes are so that we have before the Senate exactly what it is that I am moving.My proposal is to add to my amendment, as it is on sheet 1038 revised, a further subclause, being subclause (2D), which now would read:The ASC, or a member of the ASC, may exempt an applicant from the requirements of subsection (2A). This power may not be delegated. The ASC is to provide details of any exemptions granted under this section in its annual report.That is the change, and I think it is confirmed.20:24:003855Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I would make one helpful suggestion. Just to keep us confused, I am told that, wherever it says ASC, we now need to change it to ASIC.20:25:003855Cook, Sen PeterSenator COOKRF4WAALP00—If that is the right form, let me adopt that change. Wherever I have read the acronym `ASC', it will become `ASIC'—H15CAMPBELLSenator Ian Campbell—And throughout the amendment.RF4Cook, Sen PeterSenator COOK—and throughout the entire amendment. I trust, therefore, it is somewhat clear what it is I am proposing to move.Let me say a few words about this amendment. Capital adequacy should not be taken as meaning the funds available for the members if the scheme should fail, although obviously any funds which are available to scheme members in the event of fund failure should be accessible. However, capital adequacy should also be a measure of the SRE's commitment to the scheme.There are two important issues in this debate which the Senate should consider carefully. The first relates to the setting of the bar for managed investment schemes. A scheme should be able to show that it has sufficient capital to enable it to handle all of the complex administrative and support functions required to operate a managed investment scheme. Yet, on the other hand, we are talking about a market which ranges from relatively small investment schemes of a few hundred thousand dollars to massive property and unit trusts which run into hundreds of thousands of dollars.How does one set the bar high enough so that only serious operators are able to become single responsible entities, yet set it low enough so that it does not act as a barrier to entry for those who wish to get into the market and create competition on fees and charges? As I said earlier, the Australian Democrats have provided an example of how capital adequacy might work in their amendment, the amendment that we have just considered. While Labor agrees with the intent of the Democrats's amendment, we thought some changes were necessary to meet the requirements—and those changes are the ones I have just outlined.To the Democrats's amendment, Labor is proposing an alternative which requires different capital adequacy levels: a minimum of $50,000, with a maximum of $5 million. In addition, where the value of all scheme property is greater than $10 million, the single responsible entity or their agent will be required to have net tangible assets of an amount equally to 0.5 per cent of the value of those assets up to a maximum of $5 million. The levels specified in Labor's amendment, as I understand it, are the same as those being proposed by the ASC in its latest policy paper on financial requirements. So I would hope that the government is willing to accept our amendment and, of course, the government has indicated that, with the changes we have made, it is.Labor's amendment is designed to provide the ASC with a clear indication from the parliament of the minimum and maximum capital adequacy levels required of managed investment schemes. However, Labor's amendment is broad enough to allow the ASC to impose other conditions on the SRE, given the particular circumstances of each applicant for a managed investment scheme licence. For example, the ASC may require an applicant to use an agent to hold the scheme assets before it will issue a licence. As the editorial in the Australian Financial Review yesterday outlined, many managed investment schemes are going to do just that as a matter of course. But investors will find it reassuring to know that the ASC has the capacity to demand this, before issuing a licence to an SRE. Labor believes that our amendment does set the bar high enough to ensure that only those schemes which are committed to the appropriate running of a managed investment scheme can participate, but sets it low enough for it not to act as a barrier to entry.Importantly, the amendment allows the SRE to engage the services of a third party to vouch for the SRE's capacity to engage in the operation of a managed investment. This already occurs in a similar way in the operation of the superannuation industry, where a superannuation fund can seek a bank covenant to meet the capital adequacy requirements under the superannuation industry supervisory act. In that way, a third party can also assess the risks of the SRE, before agreeing to act as a guarantor for the SRE. However, the ASC will still have the ultimate power to determine whether an SRE can appropriately operate a managed investments scheme, and it can refuse to issue a licence or register the scheme if it is not satisfied with the SRE's commitment to that scheme.The second important issue which the Senate should carefully consider is whether this type of regulation relating to capital adequacy should be in the legislation or is better left determined by the appropriate agency, the ASC, which will become the ASIC. This is a point that the parliamentary secretary did address us on. The issue relates to the flexibility of the ASIC's capacity to move with the industry over the years, rather than a less flexible legislative provision which is more difficult to change in nature or size as the industry changes.On balance, Labor is inclined to believe that, on this occasion, the parliament should give the ASC some clear direction on how it wishes it to regulate the industry in the area of financial commitment to managed investment services. Labor's amendment is not designed to be a major barrier to entry into the managed investment scheme market. However, it is designed to ensure that a scheme has the financial capacity and commitment to the scheme or is, at least, able to gain the backing of a third party to prove that commitment, to ensure that investors have appropriate confidence in the scheme in which they are investing. It gives a clear direction to the ASC about what the parliament thinks is an appropriate level of financial commitment to a scheme, while still allowing the ASC the capacity to require additional provisions on top of what the parliament determines in certain cases within the broad parameters set.With respect to the new subclause (d), the one that I have orally articulated to the Senate and which is not on sheet 1038 revised, I make the further observations that the power to be exercised in this case is to be seen as an exception and, with respect to this change, `member' means a commissioner only of the ASIC. Obviously, we are concerned to make sure that the exemptions provision is public and transparent. I think the first amendment that was made to this bill was an amendment moved by us and supported by the Senate to ensure that there will be a review after three years of this legislation. With those words, I commend our amendment to the Senate.20:31:003857Murray, Sen AndrewSenator MURRAY3M6WAAD00—Senator Cook and the Labor Party, I acknowledge your amendment; I commend it. I think it is a good amendment. Furthermore, I indicate in advance, Parliamentary Secretary, that we will support your proposed amendment. I am glad that, as a result of this debate, the hearings and the inquiries, the government will see fit to accept this provision not only into policy but into law. Accordingly, I record the support of the Australian Democrats.20:32:003857Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to return briefly to section 784 of the Corporations Law because the parliamentary secretary made a very clear statement a little while ago that section 784 was the power by which the Australian Securities Commission could, in fact, impose a capital adequacy requirement. I would like the parliamentary secretary to say `yes' or `no' as to whether or not section 784 says it is mandatory for the ASC to actually grant a licence; whether capital adequacy is not one of the mandatory elements within section 784. It is mandatory if there are other criteria that are addressed, but section 784, without Labor's amendments, did not, in fact, create a power for the Australian Securities Commission to impose capital adequacy.20:34:003857Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Section 784 is the section of the Corporations Law that gives them the power to grant a licence, and it is actually section 786, which is on the next page, which gives them the power to place conditions on the licence. It starts off by saying:786 Conditions of licence(1) A licence is subject to:(a) conditions and restrictions as are prescribed; and(b) subject to section 837, such conditions and restrictions as the Commission imposes when granting the licence or at any time when the licence is in force. So they can choose to put in additional requirements as they develop. That is one of the benefits of having policy statements where they may, as a matter of practice, decide that, if the capital adequacy requirements in the policy statement are not adequate for some reason, to impose additional requirements on the licensee under subsection 786(1)(b). I hope that answers your question.20:35:003857Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—So the parliamentary secretary, in fact, was saying that he was wrong in his original advice, that it was not actually section 784 which gives the power to impose a capital adequacy requirement; he was, in fact, saying, or suggesting, that it is section 786 which gives that power. I would like to return briefly to section 784 of the Corporations Law which says:(2) The Commission shall grant the licence . . . I have heard of, and been involved with, situations where the word `shall' has been the source of many arguments in law. The following four points are included under `shall':(2) The Commission shall grant the licence if:(a) The application was made in accordance with section 782;(b) the applicant is not an externally-administered body corporate;(c) the Commission is satisfied that the educational qualifications and experience of each responsible officer of the applicant are adequate having regard to the duties the officer would perform in connection with the holding of the licence; and(d) the Commission had no reason to believe that the applicant will not perform efficiently, honestly and fairly the duties of a holder of a licence of the kind applied for.When people have said, `There is another element of this bill which has not been abided by,' I have heard ministers say, `There is nothing I can do.' The word `shall' in this legislation means: providing points (a), (b), (c) and (d) apply, there is no power to impose a capital adequacy requirement—unless this amendment goes through. Parliamentary Secretary, you have now got the ability to apologise to the Senate and to acknowledge that until an amendment is actually placed to put this power in the legislation—and it has not yet been—that power does not exist.I invite the parliamentary secretary to correct the record, having misled the Senate, in relation to whether or not there was power under this legislation for the Australian Securities Commission to refuse a licence without capital adequacy until we have amended this legislation. I have just read out the reasons why there was no power until we have amended the legislation, and I am inviting the parliamentary secretary to apologise to the Senate.Amendment agreed to.20:38:003858Cook, Sen PeterSenator COOKRF4WAALP00—My next amendment is the fourth one listed on opposition sheet No. 939. This concerns the disclosure of custodial arrangements in scheme prospectuses. This amendment is designed to act as a signpost for investors who are putting their hard-earned cash into managed investments. It will ensure that investors have in front of them in the SRE scheme's prospectus an important part of the relevant information so that they can make an informed decision about the nature of their chosen investment vehicle. Labor's amendment will require a fund to declare in its prospectus how the scheme's assets will be held, which is an important situation for some but not for others, as I have already suggested. Whatever a person's motivation for investing, they should have an appropriate amount of information before them when deciding. Our amendment will provide that information when it comes to custodial arrangements. Accordingly, I move:(4) Schedule 2, page 90 (after line 27), after item 138, insert:138A At the end of paragraph 1022(3)(a) Add "and, in relation to a managed investment scheme, the nature of the arrangements by which the scheme property is held".20:39:003858Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—In principle this is a sound idea, and what we intend doing, and now commit to do, is to place this requirement in the regulations which will be subsidiary to this law. The additional point which we made privately, and which I am happy to put on the record, is that we believe that the 1022 prospectus requirements of the Corporations Law would already require this sort of information to be made available, but we are happy, belt and braces, to put this into the regulations to make sure that is the case.RF4COOKSenator Cook—Which regulations?H15Campbell, Sen IanSenator IAN CAMPBELL—The regulations which will flow from this bill, I think. I am informed that that is already in regulation 7.12.12—I had better get my numbers right or Senator Margetts will get cranky. The regulations which will flow from this bill, according to my advisers, will add a requirement to regulation 7.12.12. Based on that, we would be opposing this amendment, because we believe it should be covered in regulations.20:41:003858Murray, Sen AndrewSenator MURRAY3M6WAAD00—The parliamentary secretary is correct. There is a power in section 1021(7) to make regulations in relation to prospectuses in a specified class of prospectuses, which are managed investment prospectuses. That is left to the discretion of government and that regulation is not yet before us, though I accept, of course, the parliamentary secretary's word that that will come through. As investors in new schemes will need to rely on disclosures to decide whether they wish to take the risk of investing in a scheme without a custodian, we do not think that the issue should be left to regulation. What would happen if, between the parliamentary secretary's agreement and the arrival of the regulation, an election is called? This thing is law and then there is no regulation, et cetera.Section 1021 of the Corporations Law is a good example of why the ALP amendment should be supported. Section 1021 provides specific detail regarding the prospectus, including it being dated and the size of the font being not less than size 8. Size 8, incidentally, is also known in the industry as mice type because of its size, and it is not a particularly helpful sized font for older investors. Section 1022 concerns general provisions applicable to prospectuses, and how scheme property is being held by the scheme is fundamental investor information. We think the ALP amendment needs to be supported for seeking to ensure that prospectuses have such information clearly contained in the document. Accordingly, unless the government is able to be more persuasive than it has been to date, we will be supporting the ALP amendment.20:43:003859Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The Greens (WA) believe that the ALP's amendment is a valuable one and we will be supporting it. We oppose this going simply into regulation, for two reasons. It is inconsistent with section 1021. Section 1021 specifies some minute details such as the size of the type font, which has been mentioned, yet now the government is arguing that something as important as who is holding the scheme's property should not be put into legislation. The reality is that we have got legislation which does go to detail, and now we are talking about massive, important areas being put into regulation.Secondly, it is important information to know in the prospectus. The prospectus content provisions in section 1021 of the Corporations Law reflect a longstanding concern by both the legislature and the judiciary that the prospectus should fully inform investors. Indeed, the reasons why detailed information in a prospectus is required has been outlined as early as 1877 by Lord Coleridge CJ in Twycross v. Grant, where his lordship said:The value of a share company . . . depends on the persons by whom and the mode in which the capital of the company is to be dealt with.He also says:His money—That is, the purchaser—becomes part of the capital of the company; and to him it is all important to know what sort of persons are to have the control of his money when he has paid it—Of course, this was in the days before `he' or `she' was used—and how that money is to be applied, whether upon the enterprise itself or in remunerating, perhaps with lavish extravagance, those who have brought the company into existence.It is not new, I argue.Thirdly, I would like to argue that it is doubtful whether the government has the power. It is unclear whether the government has this power to make regulations. This important aspect should not be kept in the dark. I have been delivered section 1021 of the Corporations Law. It says:(1) This section applies in relation to any prospectus in relation to securities of a corporation.(2) The prospectus shall be printed in type of a size not less than the type known as the eight point Times . . . size of letter are legible and satisfactory.(3) The prospectus shall be dated.. . . . . . . . .(7) The regulations may require prospectuses included in a specified class of prospectuses to set out such matters, or contain such reports, or both, as are specified in the regulations.This is a discretionary power only. So we have given the best arguments that we can under the circumstances that it is simply not good enough that this is only put in regulations. I would strongly support the ALP's amendment No. 4.20:47:003859Cook, Sen PeterSenator COOKRF4WAALP00—I am very pleased by the support I have attracted from the minor parties. The trouble is that I find the parliamentary secretary's explanation about incorporating this in the regulations a reasonable explanation in the circumstances, and I was of a mind to withdraw my amendment. It was then suggested to me that one has to have in mind the circumstances in which the Senate operates, and there is a widespread rumour—which I do not expect the parliamentary secretary to corroborate—that this may be the last fortnightly sitting of the parliament—WH4McGAURANSenator McGauran—What do you know?RF4Cook, Sen PeterSenator COOK—I am not expecting you to corroborate it. If you did, you would be headline lead news for the morning newspapers. This bill, which is in imminent expectation of being passed in the Senate, can become law relatively quickly but the regulations could be some time in the making. I wonder if the parliamentary secretary could tell me, in view of the explanation that you have made about the regulations, which I find persuasive, when might the regulations come into force?20:48:003860Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The answer to that is that they will come into force at the same time as the bill, and the start-up date for the bill, subject to the Senate's deliberations and successful passage, is 1 July. The regulations will have effect on that same day, which, as I understand the program, is while the Senate is still sitting—regardless of that rumour you heard.20:49:003860Cook, Sen PeterSenator COOKRF4WAALP00—In which case, I seek leave to withdraw my amendment.Leave granted.20:49:003860Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Senator Cook has withdrawn his amendment but I would like to move the amendment in Senator Cook's name. I move:(4) Schedule 2, page 90 (after line 27), after item 138, insert:138A At the end of paragraph 1022(3)(a) Add "and, in relation to a managed investment scheme, the nature of the arrangements by which the scheme property is held".Amendment not agreed to.20:50:003860Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:(18) Schedule 2, page 90 (after line 27), after item 138, insert:138A After subsection 1043(1)Insert:(1A) Where a corporation offers interests in a registered scheme, the corporation must, in all prospectuses and other representations relating to the interests in the scheme, direct that all cheques and other payment orders in respect of applications for interests be drawn in favour of the responsible entity, or custodian or trustee where there is one, on account of the particular scheme and the applicant.I do not want you to go to sleep with that, because this is about fraud and crime. The purpose of this amendment is to protect investors from fraud by making it clear to the responsible entity on whose account money is being invested. It will guard against fraudulent financial advisers, who may substitute their own application form for that of the investor or otherwise use cheques given to them fraudulently. It is not a matter that comes within the ambit of section 1022, which is a general disclosure test. It can only be included in regulations if the government has given a power to make regulations concerning this issue.There is a general power in the bill to modify the law as it applies to managed investment schemes in section 601QB. This power may not be broad enough, as neither the bill nor the law deal with the issue of how cheques for application moneys are to be drawn. The power in section 1021(7) may be available but it is not clear. Also as I understand it, the government will control what regulations are made.The amendment is proposed to cover recent frauds perpetrated by someone whom I shall refer to as Mr X. In his case, he had investors complete a prospectus and draw a cheque payable to a trustee company. He then separated the investor's cheque from the prospectus, substituted his own prospectus in his own name and successfully deposited the cheque with his prospectus in his own name—a classic case of false pretences. The amendment will ensure the protection of investors from such fraud by making it clear if there is any irregularity in the depositing of the investment by having the cheque state clearly the particular scheme and the name of the applicant.Apparently it has only just been announced that Mr X is in the process of being successfully extradited to Australia. I would suggest to the parliamentary secretary and to the opposition that, if the fraud could be executed once, it could be executed twice. This amendment seeks to remedy that defect, which I am sure was not foreseen in either the act or the bill originally. I therefore commend the amendment to the Senate.20:53:003860Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—This amendment falls into an identical category to the previous one in that it already exists in corporations regulation 7.12.15(6)(bb). Not only is there an existing corporations regulation that ensures that this is required, but the government is preparing draft regulations amending the corporations regulations to take account of the change from prescribed interest to managed investment schemes, which is really the terminology that flows with the changes under the Managed Investments Bill.One of the amending regulations will continue the obligation currently imposed by regulation 7.12.15(6)(bb). Accordingly, the government does not believe that the proposed amendment is necessary. As I said in answer to a question from Senator Cook on the previous amendment, the amendments will be in place for the start-up date of 1 July.20:55:003861Murray, Sen AndrewSenator MURRAY3M6WAAD00—So let me be clear: as I understand it, parliamentary secretary, what you are telling me is that you know the problem exists, the government has moved to correct it through that regulation, the advice I received that the bill and the act did not provide you with the specified power is incorrect and that such frauds as have previously occurred could no longer occur under that regulation. Is that correct?20:55:003861Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—They would indeed be frauds, Senator Murray. The power to make the regulation exists at 601QB, which is on page 54 of the Managed Investments Bill 1997 .20:55:003861Murray, Sen AndrewSenator MURRAY3M6WAAD00—I am having to rely on advice on this matter because this is not an area in which I am either skilled or adequately versed. My advice is that it would be preferable to proceed with the amendment to provide full protection, and that the parliamentary secretary may be mistaken in believing that his regulation fixes all the ills. I do not mean intentionally mistaken, but that is my advice. Accordingly, I would like to proceed with the amendment.Amendment agreed to.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—We now return to the postponed Greens (WA) amendments 3 to 6.20:57:003861Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I think the person that we were waiting on in relation to the postponed amendments was in fact Senator Cook. He escaped to dinner and did not come back immediately after dinner on that particular occasion. He was going to cogitate over dinner and, I hope, a nice glass of wine, and come back to us to see whether he agreed with us on Greens (WA) amendments 3 to 6 on sheet 1023 revised. They were in relation to the duties of the responsible entity.Obviously we have a fairly good picture of what the Labor Party has done in relation to the rest of the legislation, but I will be happy to see what the effect of last night's dinner was on Senator Cook and the Labor Party in relation to these particular amendments.20:58:003861Cook, Sen PeterSenator COOKRF4WAALP00—We did ask for this matter to be deferred so that we could cogitate. I regret to say that, while I did it over dinner, I did not enjoy the company of a nice glass of wine as you suggested, as perhaps I may have done. That is unlucky for me. My advice is that this bill is not outside the operation of other laws. As such, we do not think it is appropriate for us to support the amendments that you have moved.20:58:003861Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Why am I not surprised? Basically this is fairly indicative of what has happened with this bill. I think the whole debate has been somewhat of a snow job. I will speak more during the third reading stage.Amendments not agreed to.Bill, as amended, agreed to.Bill reported with amendments; report adopted.3861Motion (by Senator Ian Campbell) proposed:That this bill be now read a third time.21:00:003861Murray, Sen AndrewSenator MURRAY3M6WAAD00—I recognise, parliamentary secretary, the effort that you have put into the Managed Investments Bill 1997 . You have fought very hard for your corner and you have won your case. This has indeed been, to some extent, a clash of philosophies and, as in those circumstances, at times it gets a little heated and passionate. I do not object for an instant to the strength with which you have held to your position.Sometimes the Australian Democrats are quite rightly referred to as a `minor party' and I think that is appropriate within the lexicon of parliamentary discussion. But sometimes, when other senators look at the Democrats standing here and see just seven of us, there is an inclination by them to be a little dismissive—and I am not necessarily saying that is so of the senators who are participants to this debate—but in 1996 we did garner 1.2 million voters. Consequently, we feel an obligation to do our best to justify the faith that those 1.2 million voters put in us.I make those remarks because early on in this debate and discussion there were attempts to steamroll this bill through. There were attempts to avoid its going to a hearing. There were attempts to have it run through as a non-controversial bill. It was far from that.Whilst, parliamentary secretary, I do not condemn you one minute for using every weapon in your armoury—because that is your job—nevertheless I think the nature of the debate and the fact that the bill was agreed to with amendments, including some which you yourself have agreed to, indicated that it was appropriate that a matter which involves nearly $100 million worth of investor funds at present and affects the lives of probably 2½ million Australians deserved to be properly debated in the Senate and to have the viewpoints appropriately put. In this instance I am a loser. I am sore but not that sore because I think our case has now been appropriately heard. I thank the other senators for the way in which they have conducted the debate.I want to outline again briefly our concerns about the bill. We put up a couple of tests which we would apply to the bill in deciding whether to support it. The first test was whether the bill would provide investors with choice in relation to the management of their existing investments. We have said all along it is the government's perfect right to introduce new schemes and new approaches, but we were concerned that investors should be able to choose what happens to their existing investments.I know that there are a number of senators on both the Labor Party side and the coalition side who actually oppose this bill. They are backbenchers. In fact, I know two West Australian coalition senators who feel just that way. So there is by no means unanimity about the bill. I, for one, am hopeful that the government is right and that our fears are overstated and that all will turn out to be well.Our second test was whether the bill would maintain or improve investor security and, most importantly, whether the bill would allow investors to choose arrangements which they considered would best safeguard their investments. The Australian Democrats recognise that those who have been involved in the debate about structures for managed investment schemes have been through many debates, committees and inquiries and wish to see a final outcome to the legislative process, and we can understand the desire for industry certainty.The parliamentary secretary has pointed out quite rightly that this is a bill that has been long in the making, which has had a great deal of consultation, debate and development under both the Labor Party and the coalition. Quite frankly, I commend both for the time and the effort that their respective governments put into developing it and looking at it, even if I do not like the outcome.We seek such certainty particularly for the investor but we do not seek it at the cost of investor protection. We find it unacceptable that investors who have placed funds in schemes will have the fiduciary arrangements changed without their consent, particularly the removal of a trustee, and that is at the heart of our concern and our dismay at losing this debate. We have simply not found the arguments compelling in relation to cost savings or in relation to the simplifications of liability when a fund falls over. Consequently, we believe that in a number of respects the managed investments industry has been made far less safe and secure for existing Australian inves tors. As the parliamentary secretary well knows, there is a substantial number of very senior and capable people who are in accord with that view.Whilst we well know that there are many others who do not, the fact is that, when we stand here and represent those views, we are not taking an idiosyncratic or isolated opinion: there are substantial numbers of people who are, indeed, concerned. They are concerned because of the amount of money which is at stake and because of the interests which are affected. I accept that some of those interests are vested interests and that many of them are obviously playing to their particular interest, but that never concerns the Senate. Providing the issues are open and the agenda is obvious, it does not matter that people hold to their views very strongly.The chamber will be aware that it is a relatively rare occasion that the Australian Democrats will oppose a total bill outright, but I regret that in this instance we will be opposing this entire bill outright. We will call for a division on its third reading because we believe that the security which did attach to 2½ million investors has been eroded by this bill. I conclude by again thanking the parliamentary secretary for the way in which he has conducted this debate and the negotiations prior to it.21:08:003863Cook, Sen PeterSenator COOKRF4WAALP00—This Managed Investments Bill 1997 is an important bill. It has undergone a considerable degree of consideration both outside the parliamentary building and inside this chamber. That consideration has considerably strengthened it.As Senator Murray said, there is a conflict of philosophy here. I do not apologise at all for the philosophy that has geared our response to the amendments and our view of the bill. We stand by that. That is not to say that we do not acknowledge and respect the views that others have put and I now record our respect for those views. There is by no means a unanimity of view about this, but the safeguards built in here are the provision for a review after three years and the certainty, which this chamber will be aware of, that Labor senators will use the Senate estimates committees to question the ASC on how this matter is progressing and elicit progressive information on that.Although I note that the Parliamentary Secretary to the Treasurer (Senator Ian Campbell) is absent from the chamber, my final remark on this legislation is that it has been interestingly carried by four Western Australian senators. One hopes that there can be some flexibility in the parliamentary system such that we could all meet back in Perth, borrow the state legislative chamber and do it there without having to put ourselves through the travel necessary to bring us to Canberra and send us home again. Perhaps you could preside over it, Madam Acting Deputy President Knowles.I hope that the people I have referred to as the `minor parties', the Greens (WA) and the Australian Democrats, are back here in force without taking a single vote off the Labor Party after the next election. I am sure I do not know what would have happened if we had had One Nation senators holding the balance of power in this place in this debate. So I hope you are back. We will be working to achieve a majority here, but with your presence too. Thank you.21:10:003863Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I acknowledge that all the speakers so far in this debate have been West Australian. The debate that has taken place over the last two days is a very unfortunate example of why the voters of Queensland are abandoning the major parties. Today and yesterday we have seen the Australian Labor Party and the coalition, for reasons best known to themselves, increase the risk associated with $85 billion—and rising—of Australian investors' funds. These are the mums and dads.We have been reminded today that under the Wik 10-point plan—the extinguish native title plan, the remove rights of Aboriginal people plan—it is absolutely necessary, so the government says, to take the human rights off individuals because of the potential or created or implied risk to pastoralists, which in most cases does not exist if they are not going to change their land use. With this bill there is a real risk involving $85 billion and rising—$20 billion a year. We are looking at a figure that equates to the entire government budget. We have a situation here today where, not because of a little philosophical viewpoint but because of major differences in accountability and security, changes have been made that are going to leave it to the market to protect those people.I can see why the government would like to get rid of me from the Senate. I can see why the government would like to get rid of the minor parties like the Greens and the Democrats from the Senate. I can see why the government would like to put One Nation into the Senate—they do not actually have policies in any detail. I can see that a philosophy which says that accountability is important, that participatory democracy is important and that ordinary people in the community are important would be a worry to parties that are putting together legislation like this. Who would want to be exposed? Who would want those words to haunt them in court cases in the future? Who would want the difficulty of coming back in two or three years time to sort out the mess that we believe this legislation will create?I am sad about the way this debate has gone. I find it very difficult to see why Senator Cook could not, as he said, apologise for the ALP. Which particular element of ALP philosophy supports this approach? Which particular policy within the ALP says that not taking the precautionary approach when so much of ordinary people's money is involved is the right thing to do? Looking into the future, if Australia does leap into signing the Multilateral Agreement on Investment, would we ever get the chance to fix up the mess?I too will be opposing the bill at the third reading. It is not the kind of bill that I would ever want to support in this forum.21:14:003864Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I conclude by thanking senators for their contributions to this debate on the Managed Investments Bill 1997 . I particularly thank Senator Cook, Mr Gareth Evans, the opposition Treasury spokesman, and his team—Tim Fawcett and Jody Fassina—for the constructive way in which they have engaged in discussions on amendments to this bill, which in a similar form was part of Labor Party legislation prior to the last election. I would like to thank the team of people from the business law division of Treasury and my own staff.I would also like to particularly thank Senator Andrew Murray and his team for the most constructive way in which they have contributed to the discussions on this bill. Even though we have a fundamental philosophical divide on the bill, which will be obvious when we divide in a minute, Senator Murray has at all times availed himself of offers of briefings, has come to us when he has wanted advice on amendments, has discussed proposed amendments with us over many months, has participated constructively in the committee process and has made himself available to talk to people in the industry who have concerns about this legislation—even when I can guarantee that I did not put them onto you, Senator Murray. I think they put themselves onto everybody because they were very worried that that policy statement would rub out their business, which is a natural concern. I thank you very genuinely on behalf of the government for the constructive approach you have taken to this crucial piece of legislation.Senator Margetts said she was still seeking an answer to the question. I have spoken to the Treasury official who is in charge of the OECD corporate governance project and the OECD discussions on corporate governance and I am advised that none of the work on the OECD report is actual related to the managed investment schemes that we are aware of in the business law division of Treasury. They have done a project on corporate governance which looks at corporations regulations, but none of it focuses at all or in any way whatsoever on managed investments, according to the person responsible in Treasury.IOSCO, however, has looked at managed investment schemes and released a document in September last year. I refer Senator Margetts to the evidence provided on 12 March 1998 by Mr Alan Cameron, the Chair man of the ASC, soon to be the ASIC. At page 63 of the Hansard of the Joint Committee on Corporations and Securities, Mr Cameron said:. . . if you look at the latest IOSCO document from September last year on this very subject, you will see that it uses language very reminiscent of the bill—he is referring to the Managed Investments Bill 1997 —It is really about holding assets separately and keeping them clearly identified and keeping them apart from the assets of other funds and so on.Mr Cameron is a distinguished member of IOSCO—I think he was actually a chairman of IOSCO—who has been involved in this very closely over recent years. He went on to say:How you achieve that is something that could be different, depending upon local circumstances and local law . . . but I would not have thought there was anything in this bill that is incompatible with that—that is, the IOSCO statement on custody of assets for managed investment schemes of September 1997. I thank all of those who have contributed to this debate and commend the bill to the Senate. Question put: That the bill be now read a third time.21:23:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Bishop, M. Campbell, G.Campbell, I. G. Carr, K.Collins, J. M. A. Conroy, S.Cook, P. F. S. Coonan, H.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. Ferris, J.Forshaw, M. G. Gibson, B. F.Heffernan, W. *Hogg, J.Knowles, S. C. Macdonald, S.McKiernan, J. P. Murphy, S. M.O'Brien, K. W. K. Patterson, K. C. L.Payne, M. A.Quirke, J. A.Reid, M. E. Reynolds, M.Sherry, N. Tambling, G. E. J.Tierney, J. Troeth, J.Watson, J. O. W. West, S. M.10Allison, L. Bartlett, A. J. J.Bourne, V. *Brown, B.Harradine, B. Lees, M. H.Margetts, D. Murray, A.Stott Despoja, N. Woodley, J.Question so resolved in the affirmative.Bill read a third time.Bills3865r4053865Debate resumed from 5 March, on motion by Senator Ian Campbell:That this bill be now read a second time.21:25:003865Cook, Sen PeterSenator COOKRF4WAALP00—The Company Law Review Bill 1997 in its original form was an initiative of Labor that was originally released in 1995. It seeks to improve and simplify most of the core provisions of the Corporations Law. It covers seven major areas of company regulation: registering companies, meetings, share capital, financial reporting, annual returns, deregistration of defunct companies and company names.These are all vital areas of company regulation which do need significant simplification and reform. However, we have a number of serious concerns about various aspects of the bill which we will be seeking to amend. These concerns were raised in the conclusion of the report by the Joint Standing Committee on Corporations and Securities and relate to the issues of disclosure of financial information, including details of director and senior executive remuneration; annual directors reports to shareholders; the minimum notice period for members meetings; and voting procedures at meetings.An earlier draft of the bill, the draft Second Corporate Law Simplification Bill, was considered earlier by the parliamentary joint committee. While a number of the 11 unani mous recommendations of that committee have been adopted by the government in the new bill, others have not.In addition to these matters, the bill also contains some unilateral alterations made by the government which were not included in the original referred legislation. The broad areas covered by the bill cover a wide range of company law. The bill proposes to abolish the concept of par value for shares. This proposal follows in the footsteps of other comparable nations such as the United States, Canada and New Zealand. The abolition of the concept of par value will considerably simplify and streamline the processes which must currently be undertaken. At the moment, if a company's share price is lower than the par value, special meeting processes and court involvement are necessary to approve proposals to issue fresh capital. These processes have lost their relevance in the modern commercial world and their reform is supported by the Labor Party.Buttressing the abolition of par value for shares is the related proposal to simplify the processes concerning capital variations. If a company wishes to reduce its issued capital, it must seek court confirmation of the proposal. This bill will abolish the involvement of the court in this process. This will save time, save expense and remove an unnecessary complication to the financial affairs of major companies. However, like many worthwhile reforms, there are significant complications that arise from these proposals. As the government has acknowledged, these capital reforms will open up an enormous tax avoidance opportunity. That opportunity is that companies will be able to stream amounts that would technically be capital—hence non-taxable—to shareholders in lieu of taxable dividends. This would be an untenable situation.The Treasurer (Mr Costello) has announced that the tax law will need to be amended to ensure that rorts cannot be undertaken. I understand that the amending tax legislation is now before the parliament and will close the loophole created by the government. It is an improvement in the government's attitude towards tax avoidance that they have moved to close off the avoidance opportunity, although I point out they must have known about this loophole at the time yet did not contemporaneously introduce the anti-avoidance legislation—and it is just as well because the parliament could not confidently pass this legislation with the prospect that it may be opening a significant tax avoidance loophole. That would have been very negligent of the Senate and it would also have reflected badly on the government.Another important area covered by the bill is the simplified procedures for setting up and running a company. The main thrust of these proposals is to reduce the cost and the regulatory requirements of establishing companies, and the completion of the legal recognition of the one-person company through reforms such as the abolition of the rule requiring a company to keep their registered office open to the public.Again, these proposals seek to simplify the processes for establishing business entities—which should assist the general business environment, especially for small business. However, while not opposing the thrust of the proposals, I do wish to raise an issue which has been brought to my attention concerning the proposed simplification of the process of registering companies. That issue is the ability to actually trace the person behind the company.The opposition has been informed of a concern that the new proposals involving electronic establishment of companies will allow companies to be formed without the principal ever being identified. If that were the case, the possibility for fraud is clearly greatly enhanced. The reputation of Australia could be damaged if it were possible to rort the company laws surrounding the establishment and registration of companies. I am not sure whether this could be an outcome of the bill, but I seek assurances from the government that this will not occur as a result of the bill.There are at least three other aspects of the bill which are causing concern to the stakeholders—national and international investors, institutions and shareholder groups. These aspects are, firstly, disclosure of financial information, including details on executive remuneration and a directors' report to shareholders; secondly, the minimum notice required to hold a meeting considering a special resolution; and, thirdly, voting procedures at meetings.The issue concerning the minimum notice required for meetings is a relatively simple one. The joint committee has previously recommended to the parliament that the minimum notice period ought to be 28 days. This was, let me point out, a unanimous cross-party recommendation. The government chose to ignore that proposal and go for 21 days. This has now been severely criticised, especially by international investors. The simple point they make is that the best practice standard is 28 to 30 days. This is what applies in the world's major capital markets, such as the United States, which has 30 days; Germany, which has 32 days; France, which has 30 days; and so on.There was correspondence from Dr Stephen Davis, President of Davis Global Advisers of Newton Massachusetts, to Senator Ian Campbell, suggesting that, if passed in its present form, the measure would set Australia on a course that would place it behind the emerging international best practice of 28 to 30 days. This is a matter which the opposition has raised informally with Senator Campbell. He has indicated that there may be some reassessment of this issue. The opposition would welcome his support for its amendment on this issue.Secondly, there are some issues regarding the conduct of meetings and particularly the rules governing show of hands voting that have raised some concerns. Put simply, we would not be supportive of a proposition which prevents show of hands voting, if what this is about is saving directors at meetings the embarrassment of being outvoted on the floor at a meeting of shareholders. If it were to be used as a vehicle to prevent small investors from bringing their legitimate concerns regarding the management of a company onto the floor of meetings, this in our view would not be appropriate. Many people would be aware of the situation which occurs at meetings of shareholders where those who are present vote in a particular direction but may well be outvoted by the proxy votes or the block votes of other large shareholders.We are moving an amendment which we think will at least provide some transparency in relation to the use of proxy votes. To the opposition, the major issue in the legislation before us is that these proposals do not adopt full disclosure on executive remuneration. I believe this is both offensive to shareholders and likely to diminish Australia's reputation with international investors. The government is arguing in effect here that shareholders should not be able to find out, as of right, the full details about the packages that very highly paid executives are being paid by the company that they, the shareholders, own.The shareholders own the company and pay these salaries, yet under these proposals they will not be entitled to full disclosure of the salaries that they are paying. You can imagine the kind of uproar that would ensue if the same sort of proposition were put forward, for example, for members of parliament salaries, judicial salaries or other things of that nature which are paid for by the taxpayer. This is indeed a matter which has been the subject of some international concern.A report in the Australian Financial Review on 8 January sets out that many United States fund managers are alarmed by what they regard as significant omissions from proposed changes to Australian company laws. The major rewrite of Corporations Law has been watered down before even being put before the parliament, and the managers, one of whom controls $US9 billion in securities outside of the United States, has written to Treasury officials in Canberra warning that the weakened Company Law Review Bill 1997 will leave Australia lagging behind international standards in corporate governance. The joint committee chaired by Senator Chapman took submissions on the bill and certainly, according to Senator Chapman, the committee gave `careful consideration to these issues and recommended changes to the exposure draft to deal with them'. But the matter of fuller disclosure of executive sala ries and remunerations was high up on the United States investors' list of important issues, and this issue has not been addressed by the government.Currently, a listed company in Australia simply has to show the numbers of its executives who are paid salaries between certain bands, but it does not have to show who gets what or how that package is made up. There are some companies, such as Westpac, which have moved into line with the international standard, the international best practice, and do show the names and salaries of—in Westpac's case—the top five executives and they also break down the mix into base pay, bonuses, options and the like that make up the salaries.The United States companies are compelled to do the same as Westpac is doing. But the bill we have before us simply requires companies to disclose in their directors' report the details of options that are issued over unissued shares, and they will not have to give the details of any other part of the remuneration package, such as salaries and bonuses. As the Australian Financial Review points out, this makes an absolute nonsense of the ASX listing rule that requires directors' options to be approved by shareholders—since you can hardly vote to approve an option without knowing what the rest of a director's salary package is.Indeed, the Australian Financial Review editorial of the same day as the report above makes reference to the concern of United States investors and refers to the fact that they are concerned about the issue of disclosure of executive remuneration, the limit on how far ahead of annual meetings notice papers must be published, and a plan to do away with show of hands votes at these meetings. It is not as though there is not some community concern about the issue of executive remuneration, to say nothing of legitimate shareholder concern.We have got a government that is terribly anxious and terribly fired up about the pay that is received by workers down on the waterfront, but when you come to the issue of executive salaries you hear a lot less from this government. Last year the member for Scullin gave the other place some first-class information about executive salaries in this country and the history of these executive salaries. One of the things he pointed out was that from 1983 to 1993 award wages increased by 53 per cent, average weekly earnings went up by 74 per cent, as did inflation, yet over the same period executive pay increased by 133 per cent. If you look at the salaries paid to the executives of the top 150 companies, they were increasing annually by six to eight per cent, and by 10 to 15 per cent if you include the cheap share deals and bonuses that have become common practice.Indeed, the survey of executive salaries by Cullen Egan Dell showed that senior management remuneration increased by 6.3 per cent last year, much more than the going rate throughout the rest of the community. The Independent Monthly back in June 1996 estimated that there were 45 senior executives in Australia who earned more than a million dollars, and many more who earned well in excess of half a million dollars. It is very sobering to consider that, for example, the chief executive of Westfield Holdings in 1997 was earning some $72,000 a week whereas the average taxable income, for example in my own state of Western Australia, at a similar time was around $24,000 or $25,000. In effect, this means that an average person in my electorate takes three years to earn the same amount that the chief executive of Westfield earns in a week.We have had other celebrated cases of executive pay not being linked in any shape or form to the performance of the company. In 1989-90 Elders IXL managed to increase its executive remuneration package by 23 per cent at the same time as there was an 80 per cent drop in operating profit. In the same year, Adsteam had its chief executive given a 53 per cent pay increase at the same time as the value of the company was shrinking to eight per cent of its former value on the Australian Stock Exchange.We have seen a spectacular salary package for Peter Bartels, the chief executive officer of Coles Myer: $2.8 million. At that time Woolworths were doing a lot better, but their chief executive was getting a mere $665,000 a year, so he was entitled to feel a bit disappointed. The Age newspaper at one stage described the salary package of the chief executive of Tabcorp as roughly twice the GDP of Tasmania. That was somewhat flippant, but in 1997 his salary was over a million dollars and his shares had increased in value to such an extent that they were adding an additional $10 million to his salary.The Prime Minister, Mr Howard, and the Treasurer, Mr Costello, occasionally have sounded off about executive salary increases but they have done absolutely nothing about them. When they have got the chance to do something about them—at least in terms of disclosure and of giving shareholders the opportunity to know just what salaries are being paid so that when they vote either to endorse or not endorse these salaries they will know what they are voting on—the Prime Minister and the Treasurer apparently walk away from that opportunity. It is a prime case of letting the wealthy and the rich do as they choose while applying laws to reduce wages of ordinary workers.What about executive salaries in some major companies in more recent times using, say, a quarter of a million dollars as a benchmark? It is more than the Prime Minister's salary, but, just as importantly, it is about 10 times the average income. Frankly, I do not believe that anyone does work of such quality that they can defend getting in salary more than 10 times the going rate of average Australians.C16HEFFERNANSenator Heffernan—You put up AIDC from $300,000-odd to $1.8 million!RF4Cook, Sen PeterSenator COOK—Get your facts right if you want to say that. I did not do that, and that is misleading in this place. You are absolutely and unmitigatedly wrong and you should withdraw. However, let me continue and not be drawn aside, Madam Acting Deputy President. I was saying that I do not believe anyone does work of such quality that they can defend getting in salary more than 10 times the going rate of average Australians. As I have pointed out, it takes them 10 years to earn that sort of money. Indeed, when we are talking about million-dollar salaries, as we are in a number of cases, it takes them 40 years to earn that kind of salary.BHP's report to shareholders for 1997 shows that 62 employees were earning over a quarter of a million dollars compared with 55 the year before. In Coles Myer, 55 people were earning over a quarter of a million dollars. It would be interesting to know what the people at the bottom of the line there were providing for their salaries in excess of a quarter of a million dollars. I note that payments include retirement payments and payments associated with terminations, as well as the exercise of share options and the like, but the number is 55 compared with, according to the report, 18 from last year. In Western Mining, 16 directors and other executive officers received over a quarter of a million dollars in salary—up from 11. At Westpac 39 employees received over $250,000. At the top of the range at Westpac, the amount was in excess of $1.9 million and at Western Mining it was around the $1 million mark.It is pretty shabby when the government is saying, `We are worried about the salaries being paid on the waterfront. They are outrageous, excessive, and not in the national interest,' but when it comes to executive salaries they are prepared to do absolutely nothing. They are being given at least an option in this bill of public disclosure so that people know what kinds of executive salaries are being provided. But apparently they will not support it. This is an issue which we intend to pursue through amendments and we look forward to the Senate's support for those amendments.21:44:003869Murray, Sen AndrewSenator MURRAY3M6WAAD00—The Australian Democrats are glad that the Company Law Review Bill 1997 has finally found its way onto the Notice Paper . This is another one of those bills which had its genesis in the Labor government's era and has been continued under the coalition government. It is a welcome addition to the modernisation of our law. This is also another one of those bills which the government, in its executive minded way, wished to push onto the parliament, have accepted as non-controversial and for it to be rushed through. It was the Australian Democrats who referred this bill to the Joint Committee on Corporations and Securities. The result of the hearing and subsequent discussions with various interested parties has meant that numerous amendments are available from all sides of the house, including government, to advance this bill in a number of better directions. I look forward to the debate that is to come on the nature and the content of those amendments.The Australian Democrats have always fully supported the need to reform and modernise Australian company law. While the Company Law Review Bill 1997 , known as the CLRB—which I always think sounds like a troll—does advance this program of reform considerably, there are important areas in which the bill is still deficient. We are aware that further reforms are envisaged by the government, but the progress of such change is never certain, and the Senate must deal with the fact of the law as it is at present and the fact of the bill before us, not the promise of the future. When critics say, `Wait, something else will come later on,' they forget that all of us in this place are very experienced in matters that are supposed to be before us early but which sometimes take many years before they eventually reach the floor of the Senate. Because the government of the day will have other priorities and the Senate itself may have other priorities, sometimes it is difficult for reform of this kind to arrive in time. The hearing of the Company Law Review Bill 1997 was rushed through in March, and here we are now at the end of June finally considering this bill.The deficiencies of the bill revolve around its failure to significantly advance corporate governance standards and directors' accountability to shareholders. I am aware of the government's plans to advance reform in these particular areas, but I personally doubt that that program will be completed before late 1999. The parliamentary secretary who has carriage of these things is a notoriously optimistic person—notoriously optimistic about the amount of time a debate will take or when things can come before us. Perhaps that is a reflection of the fact that he is younger than I am. I have been in here a shorter time than he has, and I am afraid that I do not share that optimism. We have therefore brought on in our amendments accountability in corporate governance matters which we think needs to be dealt with immediately.We think that has to happen because corporations in the modern world have enormous power over our communities, over the environment in which we live, over the society in which we live, over the fabric of our relationships. If you do not attend to the health of those corporations, if you do not attend to the soul of those corporations, you will find that they will do us less good than they otherwise might. If you attend solely to the economics, it is a bit like making sure that somebody is clean and fed but is not nurtured appropriately. The Australian Democrats feel that matters of accountability and honesty and corporate governance need to come before economics in corporate law reform in the interests of the public as a whole.A comprehensive legislative structure to ensure transparency and accountability in the activities of company management is vital. Shareholders on whose behalf the directors and senior management are working must be able to monitor the full extent of the decisions taken by company management and directors, and have the opportunity to ensure they comply with best commercial practice as prescribed by law. The government, quite rightly, although I think they indulge in some hyperbole, applaud the greater entry of Australians into share ownership and participation in the shareholding of companies, both private and public. Most of those Australians do their participation indirectly through investing in unit funds, trusts and other such mechanisms.The peculiar thing about modern companies is that it is often the shareholder who is left behind in matters of power and matters of decision making. Companies worldwide have been taken over by two classes of beings. One is the managerial elite or the managerial class who very often are far from entrepreneurial. Most managers in major companies have not ever had to earn a dollar on their own account. They have always sat on the back of somebody else's money, somebody else's structure, somebody else's company, and they are not at all entrepreneurial. They preserve, in a guild like fashion, the benefits and the attributes that go with being part of an elite and a class.Similarly, the directors' class can sometimes be categorised in the same manner. There is a particular person who will find himself and sometimes herself, thank goodness—but generally himself—repeated on countless companies because of the way the club operates; directors recommend their succeeding directors, and it is a kind of mates' class. They too operate in a system of power and control which can be to the detriment of shareholders en masse. The average shareholder, in fact, is very little more than simply a paper holder in a company.We think there are important elements which have to be attended to in terms of the modern relationship between governments and parliaments representing the people and powerful interests controlling our economies and affecting our societies and communities. Those interests have to be attended to in terms of much greater democratisation, much greater responsiveness to the community as a whole and much greater concern with public interest.Of course, whilst I am illustrating some of the weaknesses of the system as it is, we must recognise that there are many very good pioneers in companies—pioneering managers, pioneering directors—who operate their companies, their corporations and their enterprises in the public interest and who, in fact, advance the cause of good corporate governance, good corporate management and good relations with the societies out of which they make their profits and their sales.One of the requirements of good company law is that there should be a scheme setting out the steps company management must follow to achieve not only best commercial practice but also best community practice. The scheme should be paired with a comprehensive mechanism to enable shareholders and outsiders to monitor what management is actually doing and, where necessary, require that it comply with the law.Unfortunately, in our opinion, the new bill does very little to progress accountability in public companies. It has made company law simpler, more efficient and easier to read. But we do not think it improves directors' standards, corporate governance and accountability materially. For example, the bill does not adequately provide for reporting on financial and other business matters by senior management. A valuable recommendation made by the parliamentary Joint Committee on Corporations and Securities in relation to the previous version of this reform bill required directors to include in their annual report a discussion and analysis of all matters of relevance to the company's overall financial position at that time.The intention of this section would be to provide shareholders and any other interested person with, as part of the annual report, a concise comprehensive statement of all facts, decisions, actions and projections relevant to the company's business operations. It would greatly assist shareholders in easily and efficiently obtaining a picture of the company's existing situation and where the senior management and the directors propose to take it. It would also make Australian corporate regulation consistent with that of other major capital markets, including the UK, the USA and Canada—and surely a characteristic of the international market is that, as far as possible, we should have consistency with foreign regulation and standards.This reporting requirement is a valuable component in increasing the accountability and openness of company management and ensuring consistency between Australian and overseas users. In spite of these advantages and substantial support from major business and consumer groups, the current bill has omitted the provision altogether, leaving Australian corporate consumers with poorer quality financial reporting and Australian companies at a disadvantage relative to those in significant overseas markets.Another unfortunate omission from the bill is the exemption of proprietary companies from the obligation to lodge with the ASIC a copy of their constitution and any subsequent amendments. Again, this is an important aspect of ensuring the accountability of management to shareholders and those who do business with companies. The law states that the assumption may legitimately be made that a company is complying with its constitution. But, without ready access to the constitution and any amendments, this assumption is rendered meaningless—an entirely inappropriate approach to the standards which a company should comply with.The constitution of a company sets out the internal rules of conduct that the directors and members agree to be bound by in their dealings with each other and outsiders. It is the basis on which the shareholders attach their trust to the company and the way in which it is managed. As such, it is clearly integral to the ability of shareholders to monitor the actions of company management and ensure accountability, and to provide certainty to those who deal with the company about the internal rules that apply to it.Serious deficiencies exist in both the current Corporations Law and the new bill which contribute to the disparity between the rules governing the internal operations of companies and the principles of corporate democracy. The existing method of electing company directors on a limited re-election basis is one such deficiency, allowing dominance by control groups and reducing the possibility of support being expressed for particular directors. This is an aspect of all corporate structures which is to be regretted. It does not enable minority interests to be heard through more accessible internal procedures and it forces shareholders to rely on expensive and time consuming formal procedures, like the legal system and ASIC.A better alternative would be to adapt the system of preferential or cumulative voting for the election of directors of listed companies. This system would require all directors to be elected annually, with each share obtaining as many votes as there are vacancies. This is a system well understood by Australians and would improve corporate governance. The number of directors to be elected would be determined according to the company's constitution, and the law would need to specify that each shareholder is free to distribute their allotment of votes as they see fit to those nominated as directors.This proposal would improve the democratisation of the relationship between company directors and shareholders which, as it stands, is not in good shape. However, even if this is not the favoured proposal, it is clear that some reform of this aspect of the management-investor relationship is desperately needed. It is another failing of the bill before us that no such reform is put forward.The removal of the provision allowing an individual director to requisition a special general meeting completely undermines the ability of directors to act independently in the best interests of all shareholders. I get the impression sometimes that the government's very extensive system of consultation with the industry has, to an extent, resulted in the lowest common denominator syndrome. In other words, the thing which most agree with, they agree with. I am quite certain that, in many respects, those agreements are not necessarily in the interests of advancing corporate governance. It is not, as the government believes, a sufficient safeguard against improper action by a majority of directors to give the power to call special meetings to five per cent of shareholders.The bill does nothing to improve the treatment of proxy votes. Proxy votes are absolutely critical in any dealings with a company—they are the prime means by which votes are recorded, yet the bill does nothing to improve their treatment. The bill should require the chair of a shareholder meeting to disclose the results of proxy votes received prior to the meeting and to then call for a poll if the vote by show of hands does not reflect the votes of the proxies received. For those of us who are used to the election process, it is a little bit like us turning up to the announcement of the results and only the votes of the people in the room being counted, not the votes that were recorded at the poll. It is extraordinary.Perhaps the most important issue affecting accountability in corporate management is the structure applied by law to corporate governance. This issue embodies the basic conflict that advocating greater accountability raises— whether shareholders and the public interest are better served by a model that promotes minimum accountability, maximum freedom and lowest costs or whether they are better served by the alternative model, which is maximum accountability ensuring less opportunity for fraud and mismanagement and greater adherence to best commercial practice. As fundamental principles, the Australian Democrats always favour greater accountability, greater openness, greater transparency and better representation.The existing corporate governance structure gives very wide-ranging operational and management duties to the board of directors, including powers to determine their own remuneration, appoint and remunerate company auditors, nominate themselves for re-election, initiate changes in the constitution and control the conduct of shareholder meetings and voting procedures. These powers alone create situations where major conflicts of interest, corruption and mismanagement can arise and go unchecked, as the very individuals who may be affected by these things are the ones who are responsible for their management and elimination. Clearly, this issue goes to the heart of managerial accountability to shareholders and the public interest.One reform involves the separation of the normal business operations and internal management functions from the duty to ensure openness and accountability in fulfilling these functions. The former duties would continue to be performed by the board of directors, while the latter would be undertaken by a new body created specifically for that purpose. The directors of this new board would be elected directly by individual shareholders in order to protect minorities, minimise conflicts of interest and ensure accountability.This would have the additional benefits of simplifying and reducing the role, responsibilities and workload of the principal board directors and, at the same time, increasing their credibility by removing the powers that permit the appearance or reality of a conflict of interest. As a result, directors should be able to make better business management decisions, so improving the company's finan cial situation and its credibility. Ultimately, this is about re-establishing the balance of company governance in favour of shareholders, rather than management. It is a significant deficiency in the bill that no substantive attempt to tackle these issues is put forward.Another substantial component of a corporate structure set up to ensure managerial accountability is the role of company auditors. By carrying out regular, independent scrutiny of company reports, the auditor is central to the monitoring of company management and enforcement of compliance with the law and accountability. The existing method of appointing auditors involves a recommendation to shareholders by the board, the shareholders then agree or reject the board's recommendations. This is not satisfactory from an accountability perspective, and we will be moving amendments to correct it. (Time expired)22:04:003873Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Before I comment on the substantive provisions in this bill, I would like to comment on a formal issue of language. Once again, in this bill, we revisit the government's—and from that we should read `Mr Howard's'—apparent preference for gender specific language, such as `chairman'. We saw it in the Productivity Commission Bill and now we are seeing it again in the auspices of the Company Law Review Bill 1997 . I cannot believe that this issue keeps coming up with this government. I question the commitment of this government to the formal policy of gender neutral language. Why do they sporadically put up legislation that uses gender specific language? Has the government issued some kind of policy direction to its departments to use regressive gender specific language?In addition, I have got to seriously question the commitment of this government to the promotion of gender equity in a wider sense. We saw it in this year's budget statement by the Minister for the Status of Women (Mrs Moylan) which scrounged to find anything in the budget that demonstrated a clear commitment to women—there was just a general rave about some recycled initiatives. So much of the slash and burn budgetary measures had devastating impact on the promotion of gender equity in Australia.Indeed, the CEDAW committee has noted with concern the government's ambivalence to the promotion of gender equity. It expressed deep concern over the slashes in child-care funding, slashes in funding to the Human Rights and Equal Opportunity Commission and slashes in funding for housing. This government is having a regressive impact on the promotion of gender equity in Australia, and this bill provides another fine example of that. The Greens (WA) will be supporting the Democrats' amendments which ensure the bill complies with current policy of gender neutral language.I now move to the substantive elements of the bill. The Company Law Review Bill 1997 has its positive and negative elements. The general aim of the bill is to make the Corporations Law more understandable and easy to apply in practice. This bill, in my opinion, goes some way to achieving these goals. Notably, the changes to registration and deregistration methods are positive changes. Also, abolishing the memorandum of association will cut out the necessity of employing a lawyer to draw up documents that are filed away into the paperwork abyss. There are other alternatives that are also positive, and I will leave it to the government to sing its own praises and the opposition to claim it was all their idea.The bill, however, has significant deficiencies. The deficiencies are not what it does but what it fails to do. The bill does not advance corporate governance, directors' standards or accountability. This bill weakens protection for shareholders against a variety of forms of corporate malpractice. In the delicate balancing act between the competing interests of investor protection on the one hand and the cries from corporations to lessen compliance costs on the other hand, this bill squarely promotes the latter. Is this what governments should do?The Greens (WA) have a distinct bias in this balance. The Greens support in principle the notion of reducing the regulatory load for business and making the law simpler and more accessible. We have certainly done that and argued for that for small business. While we appreciate that governments should aim to reduce compliance costs for business where this is possible and practicable, the Greens do not think that the checks and balances that promote investor protection should be compromised in this process.The Greens do not think that the government and the legislative process should be used so blatantly to beef up corporations' bottom lines. Parliament is not here to swell the profits of large corporations and leave the mum and dad shareholders floundering. This is especially so in the situation where more and more mum and dad shareholders are coming to the party, and doesn't the government want them to do so. Investor protection, transparency and accountability are more crucial than ever. It is a ridiculous situation to wind back any provisions that promote the accountability of directors or any transparency requirements.Over the last decade there have been attempts to increase investor protection as different examples of corporate malpractice were revealed. Investors, especially minority shareholders, have gradually gained better and more comprehensive protection through various causes of action, more flexible standing arrangements, more backup from the Australian Securities Commission, a wider range of remedies, more complete disclosure requirements and more stringent standards for directors.However, it is questionable whether the current requirements are strong enough. There is a strong argument for introducing more stringent mechanisms to ensure accountability and transparency, especially when more and more minority shareholders are entering the market. It is ludicrous to be winding back important safeguards at the very time that an unprecedented number of new shareholders are entering the market. The now famous mum and dad shareholders are jumping in and investing in the share market while the government is slicing away the checks and balances on the bigwigs at the top.The common catchcry that deregulation will shower Australia with prosperity on all levels is decidedly unconvincing. Suffice to say at this point that the history of Australian business highlights that when it is unregulated the wealth created goes to unscrupulous fat cats at the top of companies and there is no trickle-down effect to give wider benefits to investors, unemployed or the country as a whole. The fat cats just get fatter and the investors starve. I actually thought we learned something from the 1980, but maybe we didn't.Under the extensive changes being considered in this bill and its counterparts—the Managed Investments Bill and the Corporate Law Economic Reform Program, or CLERP—the trend towards investor protection is doing a gigantic U-turn. The focus is so heavily on simplification and streamlining that the gains made towards improving investor protection are the proverbial baby being thrown out with the bathwater. The winding back of accountability and corporate governance mechanisms is astounding in light of the Asian financial crisis.I think we were amongst those who sat and wagged our finger at some of the countries in Asia about what they were doing. The Joint Standing Committee on Foreign Affairs, Defence and Trade explicitly linked the Asian financial crisis directly to political and economic corruption and lack of transparency and accountability. Having just debated the Managed Investments Bill, it is horrifying that we are starting again on another bill that is doing the same thing. This government is in the process of significantly limiting mechanisms that ensure transparency and accountability in Australian companies.How does the undermining of investor protection fit with the continued cry of the government that Australia needs to attract investment? Rather uncomfortably, I suggest. How attractive will investment be now? It is hardly promoting a great image of Australia if it is known to have some of the weakest investment regulations in the world. Indeed, we have already heard some concern expressed by major US fund managers about the weakening of corporate governance. If these relaxed controls spawn some huge scandal—the next Alan Bond or Christopher Skase— Australia's investment potential could sink to a new low.What are the points in this bill? Most of the serious changes to investment protection fall under the auspices of the Managed Investments Bill 1997 and the proposed CLERP. Changes such as the abolition of trustees in managed investment funds, which we have debated already, the reduction of directors' liability and the waiver of prospectus laws are giant leaps backwards in corporate governance. In relation to the bill to hand, though, there are also a number of deficiencies. The government has watered down a number of measures that would have enhanced the knowledge of shareholders and the accountability of companies. When this government say they are consulting, guess what sort of advice they are getting and from whom. They are getting it from the very companies which would like to avoid that level of scrutiny.Let us look at what is being watered down. The first thing is the directors' ability to call a members' meeting. The bill fails to enable a director to call a members' meeting. You need not look further than Cousins's resignation from Hudson Conway to realise that this would be good idea. This was a key recommendation from the Joint Standing Committee on Corporations and Securities report on the draft second Corporate Law Simplification Bill 1996. That recommendation has been totally shafted in this bill, despite the merits of the proposal. The recommendation has been kicked out despite the fact that the evidence of the committee clearly showed that the ability to call a members' meeting promoted independence of directors. The Greens (WA) think that directors should clearly have this ability and that it is important.Under remuneration, the bill also fails to require full disclosure of directors' and senior executives' payment packages. The investors will have to wait for a story in the newspaper before they have access to the full picture of what is happening at the top. Shareholders do not have the ability to discern whether their directors and senior executives are performing to standard. Shareholders do not have the means to determine whether these bigwigs are giving them value for money. This hiding of the remuneration of top salaries is out of line with international practice that matches the names and salaries of top executives and outlines the mix of pay, bonuses and options.Let us talk about management discussion and analysis, or MD&A. The watering down of disclosure requirements is also an issue. The bill deletes the general MD&A requirement that the report should discuss and analyse the matters members need to be informed about if they are to understand the overall financial position of the company. The position of this interpretive information is very useful to help investors understand the company's performance, its financial position and its future prospects. The inclusion of this information improves the quality of the report.Being presented with a financial report without any comments can be daunting or intimidating for investors trying to make an informed judgment. The managed discussion and analysis requirement is excluded despite the fact that the government affirmed this requirement in its response to the the Joint Statutory Committee on Corporations and Securities report on the second Corporate Law Simplification Bill. This committee noted that shareholders and major corporate professional organisations all strongly support MD&A requirements as a sensible measure that promotes accessibility and transparency. The accounting bodies—the Australian Society of CPAs and the Institute of Chartered Accountants—gave evidence to the committee that the government's approach is inappropriate, as many companies would not supply this interpretive commentary unless required to do so. Consequently, the quality of the report would be improved by this reporting requirement of a managed discussion and analysis.The Securities Institute also made the comment to the committee that the omission of managed discussion and analysis was contrary to the international norms set by major financial markets such as the United States, Canada and the United Kingdom. This leaves Australian users of annual company reporting at a disadvantage. It is also quite hypocritical for a government that continually sprouts the terminology of international best practice when it is convenient for them to do so.Let us talk about the notice period. The length of notice for annual meetings is something that is also out of line with international norms. The Australian average is around 28 to 30 days and the joint committee believed that 28 days would cause little additional inconvenience for management of listed companies but would provide the investors with a more realistic time to arrange for the casting of votes. The 28-day notice period is another measure that has support from both shareholder and investor groups, yet the government is happier to ignore this advice, to ignore the fact that this measure is not an onerous one for companies and to ignore the fact that this recommendation would allow time for investors to adequately scrutinise board and management recommendations.The bill also fails to adequately promote corporate democracy in any substantive or formal sense. The provisions in relation to proxies fail to provide shareholders with any proxy voting information. Remember they have only 28 days to know how to get to the meeting. Shareholders have a legitimate interest in knowing proxy voting information. It may assist shareholders in knowing if it is worthwhile to demand a poll—that is, whether it is likely that there would be a different decision than by show of hands.Transparency in relation to proxy voting not only empowers other shareholders to make informed decisions; transparency can also prevent mistakes or fraud by the chair. Transparency ensures the chair has properly taken into account the proxy votes when finalising the decision of the meeting. Again, this is not an onerous suggestion by any stretch of the imagination, but one the government has failed to take up.I will go on to corporate governance, which is a concept that the Greens (WA) support in principle, and it has been a developing theme in Corporations Law. This bill does not develop that theme in any way; however, I am pleased to see that Senator Murray is attempting to tighten up this area by way of amendment. Any negatives relating to corporate governance in terms of compliance costs and restrictions in freedom are offset, in our opinion, by advantages to investors, shareholders and the public interest.Strong corporate governance brings with it confidence for both Australian and international investors. Strong corporate governance promotes a distribution of power in the top echelons of company management. Currently directors in a company are vested with an incredibly wide range of powers including powers relating to both management and accountability. They have, for example, the sole power to manage their own remuneration, conflicts of interest and so on. This situation at present lends itself to corruption and improper conduct by managers. The dual structure of a distinct corporate governance body separates the two distinct functions of accountability and management and allows each body more time and focus to excel in their roles. It also provides extra checks and balances that come with a dissemination of power.Separate corporate governance also provides a pro-active role designed to detect and extinguish problems in the formative stages. I will just reflect on some of the statements made in the Managed Investments Bill that, somehow or other, having a backup power weakens the role. I think it is quite clear and quite easy to prove that it does not weaken the role; it strengthens the role to have backups. The stock market is a poor substitute for such a pro-active ability. Market disciplines kick in when it is often too late and then doubly prejudice shareholders as their share prices tumble.The combination of these significant issues gives strong indications that the government is ambivalent to investor protection measures. It indicates that they prefer the hands-off approach to regulation predictably promoted by those who have the most to gain: large corporations. In the delicate balancing act between the competing interests of shareholder protection and the cries from corporations to lessen compliance costs, this bill clearly indicates that the government favours the latter. Will we end up with a situation of corporate governance in Australia where whatever corporations want—especially large corporations—they will get, no matter what the impact, no matter what the risk and no matter what the outcome for the community of Australia? That is my fear and that is what I would like to be seriously addressed in this bill and in the amendments during the committee stage.Debate (on motion by Senator Ellison) adjourned.Bills3877r518Billsr516387722:22:003877O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—On behalf of Senator Crane, I present the report of the Rural and Regional Affairs and Transport Legislation Committee on the provisions of the Stevedoring Levy (Collection) Bill 1998 and the Stevedoring Levy (Imposition) Bill 1998 , together with submissions received by the committee and the transcript of proceedings.Ordered that the report be printed.Miscellaneous38773877387722:22:003877O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—On behalf of Senator Abetz, I present the report of the Legal and Constitutional Legislation Committee on proposed expenditure in respect of the year ending 30 June 1998, together with the transcript of evidence.Ordered that the report be printed.Questions Without Notice3877387722:23:003877Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—by leave—Today in question time, Senator Sherry asked me a question without notice about the South Australian Jobs Network providers. I stated that, under the Jobs Network, there were 154 Jobs Network sites in South Australia compared to 29 under the previous program involving the CES, and that that showed a fivefold increase in job sites. I have since been advised that there are, in fact, 115 Jobs Network sites in South Australia and 45 network providers. My response in relation to the number of CES locations remains correct. However, the number of Jobs Network sites amounts to an almost fourfold increase in job sites.Adjournment3878Motion (by Senator Ellison) proposed:That the Senate do now adjourn.387822:24:003878Macdonald, Sen SandySenator SANDY MACDONALDCX5NSWNP10—The Minister for Trade, Tim Fischer, acknowledges that trade is our meal ticket, and he does that because it is. But there are few free kicks. Explaining the benefits of trade liberalisation and free trade so that we give an honest and clear picture is one of the biggest challenges for all politicians.The pursuit of free trade, as distinct from the unfortunately illusory level playing field, is immensely important to every Australian—not just farmers and exporters but to all of us. We only need one in five of our farmers—about 20,000 people—to feed and clothe us. We need to export four times more food than we consume. Hundreds of thousands of jobs rely on our ability to sell overseas our agricultural produce, our manufactured goods and our services and, of course, on the tourists that come here. Always remember that people come here because they like us, and they trade with us often for the same reasons.Australia has few monopolies in the world marketplace. Our major trading partner, Japan, taking 20 per cent of our exports, is a good example. Three hundred and fifty thousand Australian jobs rely on our relationship with Japan. Taiwan, our seventh largest trading partner, is another case in point, not only as a trade destination but also as an investment partner. Tonight, in downtown Taipei, locals are driving Mitsubishi cars made in Australia.I live in northern New South Wales and two months ago the Taiwanese Pineapple and Sugar Corporations reopened the Killara feedlot in partnership with Elders Pastoral. The result is 12 extra people in work as I speak. In a town like Quirindi, with a population of only 4,000 and unemployment still too high, 12 jobs and 12 extra pay packets circulating in an economy is good news. As Chairman of the Australia-Taiwan parliamentary group, I am conscious of the need to built the strong personal, economic and political links between our two countries that help to get joint ventures like the Killara feedlot up and running. That is one reason that I have been so concerned about the statements made by One Nation about our Asian connection as an export market and as a provider of capital investment in Australia.As I mentioned, Taiwan is Australia's seventh largest trading partner, the fifth largest export market and the eighth largest source of imports. It is our fourth largest primary product market, and total two-way trade was valued at $6.7 billion in 1997 with a trend growth of an incredible 7.2 per cent in the five years to 1997. Taiwan is a major and growing source of services. Export revenue, especially tourism and education, was valued at $707 million in 1995-96, and it is potentially a significant source of investment. Tourism is growing strongly with around 155,000 visitors from Taiwan travelling to Australia each year. Taiwan is now Australia's sixth largest source of visitors, which is incredible when you think that, in 1985, a mere 8,000 came from Taiwan.Taiwan was the seventh most important source students in Australia in 1996, with nearly 10,000 Taiwanese students at all levels studying in Australia. In the Hunter Valley, which is an area I know well—the economic powerhouse of New South Wales—Taipower has a big investment in Bengalla Mine, which is about to be opened in September which will employ up to 250 people. Of course, the Brian McGuigan wine company group have very strong connections with Taiwan. We have 46 Taiwanese students enrolled at the University of Newcastle. Tourism, which is very important to the Hunter Valley, takes a large number of those Taiwanese visitors each year.On Friday, I addressed a seminar in Parramatta on the future of trade for the greater western Sydney region, as the guest of my colleague Senator Payne. The good news is that, in spite of the Asian crisis and the associated disruption of downturns, trade performance in that region is very healthy. There is an enormous variety of goods being exported from that region, from steel framed housing to small goods and from electric vehicles to motor cycles. The latest figures available suggest that 60 per cent of greater western Sydney's manufacturers are exporting. An estimated 25 per cent of western Sydney's total manufacturing output is being exported. Exporters in greater western Sydney have been quick to respond to the Asian crisis.The coalition and Austrade's objectives in addressing the currency crisis in Asia have been twofold. We are encouraging exporters to work with existing customers to accommodate them where possible, while at the same time looking for other opportunities which exist in places like the European Union countries, South Africa and South America. More generally, we have encouraged people to look beyond Asia to places like the Middle East and the United Kingdom to broaden their sales base. For example, our wheat exports this year to Iran are up 70 per cent.Particularly in Asia, while always acknowledging that 60 per cent of our trade goes to that region, we have beefed up EFIC, we have been part of the IMF packages for Korea and Indonesia, we have been part of the bilateral currency swaps to shore up our trading partners, and we have always been a sympathetic ear and a driving force in the APEC process. The Howard-Fischer government is committed to our exporters' success. We believe in fiscal responsibility. We believe in getting the macroeconomic settings right. We believe in creating the right framework for business and export success, which means low inflation, low interest rates, a competitive Australian dollar and an efficient waterfront. We have made a start and we have not finished, but the trade minister's efforts and his chairmanship of the Cairns Group have meant results for Australian exporters—not just farmers but all exporters.I have mentioned our commitment to trade liberalisation and the need to explain the benefits which it can bring to every single Australian household. We all have an obligation to explain that tariffs do not save jobs, that there is no point in hiding behind a 1950s style of fortress Australia, that trade liberalisation has helped to create new jobs and higher incomes which have more than offset the jobs lost from industries which have lost tariff protection. At the same time, we are not in the business of being bullied by WTO obligations and we insist that other countries give Australia lower tariff access—for example, Mexico with its nil tariffs for Australian wool and coal, which gives us tariff-free access to the North American market.I want to mention briefly the impact of the One Nation Party's showing in the Queensland election. I have to say that to be anti-Asian equals fewer jobs; to be anti-foreign investment equals fewer jobs. Isolationism hurts the poorest and least trained people in the community the most. Tourism, for example, employs a lot of young and casual employees. They unfortunately will be the ones who suffer. Since Federation we have always been a capital importing nation. We rely on our trade links and our reputation and we do not want to be thought of as some backward-looking, unsophisticated, aggressive place.Last week the visiting Hong Kong Chief Executive, Mr Tung, is reported to have said in a delightfully Chinese way:I understand One Nation had 23 per cent of the vote; so the other 77 per cent must be saying something else.To ensure our future prosperity, I think it is up to all of us to get the message out that, while we acknowledge the right of any of us to make a protest in the way that we vote, One Nation does not speak for this nation, because on this very important aspect of our foreign policy it is wrong and ordinary Aussie wage earners will be the losers. I am a nationalist and I am prepared to concede that a lot of the Queensland One Nation voters are too. But on this issue they are damaging Australia.388022:33:003880Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I rise to speak on an issue that has arisen today which in part occurred because of the emergence of One Nation, which Senator Sandy Macdonald spoke eloquently about while condemning One Nation. The only point that the opposition would make is that, while I agree with all of your remarks, Senator Macdonald, just remember this: at the next election give your preferences to all the other parties before you give them to One Nation.If the Labor Party had done what the National Party had done in Queensland and had given preferences to One Nation ahead of the National Party, the One Nation Party would now be the biggest individual conservative party represented in the Queensland parliament with around 20 seats. It would now be leading the conservative coalition efforts to become the government of Queensland or, at the very least, if Mr Beattie is successful—and I hope he is—in becoming Premier in the next few days, it would have the title of Her Majesty's loyal opposition.What an extraordinary performance if we had done the same to the National Party and the Liberal Party as they have done to us! The only reason One Nation did not get more seats in Queensland is the principled position of the Labor Party. I hope Senator Macdonald and the National Party take that on board in the forthcoming federal election in the allocation of preferences.Today the Prime Minister (Mr Howard) called a press conference to announce his support in principle for the Melbourne to Darwin railway proposal. It is clear that part of his reasoning for coming forward and supporting this proposal and putting his imprimatur on it is that he believes that this is a way to show One Nation supporters that his government does have some vision and some idea of helping the bush in Australia. What an extraordinary proposal it is.We in the opposition do not object to any entrepreneur or group of entrepreneurs trying to raise funds for private investment in Aus tralia. But this Prime Minister had already announced that his government would give $100 million—with $100 million from South Australia and $100 million from the Northern Territory government—to the building of the Alice Springs-Darwin railway line, a commitment made last year by the Prime Minister. The Labor Party federally is committed to making a contribution of $300 million to ensure that the Alice Springs-Darwin project goes ahead to meet the commitment made to South Australia in 1911 that the train line would be built.This is a major issue for the Northern Territory and a major issue for South Australia. It is a bipartisan issue. The Country-Liberal Party government of the Northern Territory, the Labor Party of the Northern Territory, the Liberal Party and the Labor Party in South Australia have a bipartisan position on this and I think it has been very effective in getting us very close now to raising the private capital plus the government money to build this train line. Yet today we have the Prime Minister saying that he is willing to support personally—put his imprimatur on—a project for a train line to go from Melbourne through the western plains of Victoria, through New South Wales and Queensland and into the Northern Territory and on to Darwin.The map that was provided of the proposed route for this train line has more turns and twists in it than one could imagine. It seems that the proposal is designed to go through every country town in Australia west of the Great Divide so that no-one is missed out. How you can run a fast train when you have the twists and turns shown on this map is beyond me. When completed, the Alice Springs to Darwin line would be a direct line from Melbourne and Adelaide—south-eastern Australia—through to Darwin.It is extraordinary that the Prime Minister would make this statement and go to this press conference with the proponents of the line. As far as I am aware, up until he made the promise for $100 million he never attended any press conference or made any commitment to stand with the Premier of South Australia or the Chief Minister of the North ern Territory or any other political leader of that state or territory to support the Alice Springs to Darwin railway line. Yet he is suddenly willing to emerge and say that this is a great national project. His government will not give it any money but clearly the private developers will use the Prime Minister's imprimatur to go and raise money. The Prime Minister supporting two different railway lines ending up at the one destination will create considerable confusion in the private sector. It is really an awful position for the people of South Australia and the Northern Territory to be in now—having the Prime Minister equivocating over which train line he is supporting. Its description and outcome today is almost Monty Pythonish.I have the transcript of the Prime Minister's press conference when he made the announcement. I do not know whether he was pulling our leg or not, but in the transcript he mentions the people who are involved in the private sector in promoting this proposal of a Melbourne to Darwin—EU4O'CHEESenator O'Chee—Stephen Loosley.4J4Schacht, Sen ChrisSenator SCHACHT—He does not mention Stephen Loosley at all, Senator O'Chee. But he says:I am also delighted that my old Liberal Party friend, Mr Lloyd Lang, is here, he is the Deputy Chairman of Abigroup. His greatest contribution to public and commercial life in Australia was in December of 1973 to be the Chairman of my pre-selection committee when I was chosen by the Liberal Party to represent the seat of Bennelong at the 1974 elections.When I read this transcript, I do not know whether the Prime Minister is pulling their leg or our leg about how serious he was. If he is not being serious he has misled Mr Compton and the others who genuinely believe that this is a viable project. I have to say that, on all the information I have seen, this project that is going to cost nearly $8 billion is not viable compared with the cost of the Alice Springs to Darwin railway line, which has had a much more thorough and longer term feasibility study.The Prime Minister has to be aware that we in South Australia believe that, because of the way he has entered into and made comments about supporting and putting his Prime Ministerial imprimatur on this project, this is all but a double cross on South Australia and the Northern Territory. If the Prime Minister is serious, and I qualify my remarks by saying that he may be perpetrating a great joke on us, it is clearly in response to One Nation. As one of the television services pointed out tonight, every electorate that the train line goes through in the western plains of the Great Divide of Australia is either a Liberal Party or a National Party electorate that may be under challenge from One Nation.We also note that last week the Prime Minister and the Treasurer were very strong in condemning One Nation for having a policy of providing two per cent interest rates which they would fund by printing more money. Quite rightly this was condemned by every sensible politician and public figure in Australia. But here we have a proposal for $8 billion, and Mr Compton said in the press conference, `What's 8 billion? It is just an eight and a five with a few naughts.' Is this the way we are going to go about looking at major infrastructure?VJ4WATSONSenator Watson—It's their money.4J4Schacht, Sen ChrisSenator SCHACHT—They are going out to get it from the private sector—one would hope that it is presented better than saying, `It is just an eight and a five with a few naughts.'The best accolade the Prime Minister can give to the people who are involved in this proposal is that one of them helped get him preselected in 1973. If that is the best he can do then this project is being sent up by the Prime Minister. We in South Australia cannot believe that the Prime Minister, after making a commitment last year to build the Alice Springs to Darwin railway line, now gives his imprimatur to a project involving a different train line ending up in Darwin. This is not the way to go about decent planning in Australia. It is typical of this government, which has no vision, no future and no plans for Australia. That is why, unfortunately, One Nation is taking so many votes off you, Senator Watson. 388222:43:003882Allison, Sen LynSenator ALLISON1M6VICAD00—I rise to speak tonight on the subject of world heritage areas. Australia has many beautiful and special places, from arid lands to snowy mountains, from lush tropical and cool temperate rainforests to coral reefs. As an Australian who has been lucky enough to see many of these, I revel in the diversity and uniqueness of our environment.Of all the places that are special to us, some are so important that the rest of the world considers them precious enough to list as world heritage and to commend Australia for its protection of those places for all countries. In fact, we have an unusually high number of places of natural heritage and several that are important for natural and cultural heritage. These 13 sites represent everything from marine and terrestrial ecosystems, button grass plains and escarpments, fossil sites and forests, rock art and rainforests, Shark Bay and sandy islands, Lord Howe Island and Antarctic islands.World heritage listing is like getting the Nobel Prize for the environment. Yet some politicians treat these places with contempt. I well remember a representative of the Liberal Party calling the mighty Franklin River a brown, leech ridden ditch. Queensland politicians have travelled the world trying to stop the listing of their rainforests. The Great Barrier Reef, which represents one-third of the world's world heritage in area, was in deep trouble two decades ago. The then Queensland mines and energy department presented a report which concluded that three-quarters of the reef could be destroyed and mined for limestone without causing environmental harm.These areas mostly have a common thread: they were nominated in order to protect them from irreversible damage by governments and developers intent on destroying them. World heritage has provided a level of protection. Of course, some governments and some industry groups will not take no for an answer and still spend lots of energy trying to develop or destroy them. But I suggest that no government, save perhaps the Victorian state government, has been as ready to accommodate the exploitation of world heritage areas as this one.We get concepts of multiple use and the threat of mining in some world heritage areas and another uranium mine approval, against the wishes of traditional owners at Kakadu. Senator Hill said just today that the traditional owners gave their permission and that it is just one of the Aboriginal groups which is causing all the fuss. The truth of the matter is that the Mirrar people are not just one of many traditional owners; they are the traditional owners and they will tell you that the Mirrar people were presented with a fait accompli and permission was extracted from them under some duress. I sat on the floor of the very shed in which those so-called agreements were extracted and I heard the story.Kakadu is not the only world heritage site in which, or adjacent to which, destructive activities are currently taking place. We know when we see these sorts of activities that the government is dancing to the tune of the Australian Minerals and Energy Council. In their submission to the House of Representatives Standing Committee on the Environment, Recreation and the Arts about world heritage, AMEC said that world heritage listing got in the way of the mining industry's desire and that `virtually no area of Australia can be discarded as being non-mineral prospective.' AMEC also called for multiple land use programs in world heritage areas and devolution of responsibility for world heritage areas to state governments—precisely what the federal government is planning to achieve through its current overhaul of federal environment legislation.Coupled with the threat of direct destruction is destruction by stealth. The world heritage budget has declined very considerably under this government, especially in the most recent budget. Despite their promise that Natural Heritage Trust funding would be additional to existing funding, the core funding for world heritage has declined substantially and is being propped up by Natural Heritage Trust funding. This is not some measure which will encourage more efficient world heritage management. It means a direct and serious loss of integrity for those sites. Areas will have to be cut off from general public access, tracks will begin to decline and so on.I could appeal to the government to increase their budget because of their environmental and world heritage significance; however, I know that probably will not work. So I will use the language that the government understands a little better and appeal for protection of world heritage in the interest of jobs and wealth generation. While there are economic, albeit difficult to quantify, reasons to preserve world heritage areas—such as clean water, biodiversity and other intrinsic values—there are direct benefits in the tourism dollar. A lot of that money stays in Australia in a labour intensive industry. Recent figures show that the Great Barrier Reef alone brings $1 billion in tourism each year. Combine this with the hundreds of millions for Kakadu, the south-west area of Tasmania, Uluru and the Wet Tropics and you have very sound reasons to protect the integrity of these areas.I would like to pay tribute to the thousands of Australians and hundreds of conservation groups who have worked tirelessly over the years to protect these areas for tourists and for the world. Yet still the government talks about mining some of these areas—in an environmentally sensitive way, of course. The world is starting to become concerned at the way that Australians manage their world heritage areas. As I speak, the World Heritage Bureau is meeting in Paris and discussing the management of Kakudu and the Great Barrier Reef. It is doing that because of the weight of world concern that has been raised in relation to these areas.In Kakadu we know that the so-called stringent conditions imposed on Energy Resources of Australia by Senator Hill are no more than a public relations exercise between the company and the government. The Great Barrier Reef is facing its most serious threat yet with revelations that shale oil mining is about to start on a mining lease that extends into the world heritage property area and several other very large shale oil mines are in the queue.Our world heritage sites suffer from lack of funding and from developmental threats. I suggest to honourable senators that the federal government cannot be trusted with our world heritage areas. The government may protest and say, `But we nominated Heard, McDonald and Macquarie Islands.' But they will not tell you the whole story. They will not say that only the terrestrial areas were accepted for the nomination even though the marine areas were considered to be of significance. They will not say that these islands are so far away that world heritage listing will not cost anything and that there is nothing in the budget to manage them.The government will not tell you that the reason the marine areas around the islands were not listed was because of the plundering of the patagonian tooth fish, and that was organised through Senator Hill. He did approve that fishery without any environmental impact statement. That was the reason it was not listed. I could go on. I could point out that the minister reduced the recommended size of the dugong sanctuaries after pressure from the fishing industry and that he allowed a mining lease over Shark Bay to go through from the Western Australian government.Finally, I would like the Senate to note the world heritage areas that ought to be presented for consideration: the Australian Alps, the Huon and Picton Valleys and the Tarkine in Tasmania, Lake Eyre and East Gippsland. They are not on the way for world heritage listing because I think this government would rather they were destroyed or have their integrity compromised than to take a strong stand on protecting them.Senator Hill certainly has been responsible for a lot of tree planting under the Natural Heritage Trust fund, and of course that is important. But surely it is first and foremost more important to protect the places that we do have. Surely prevention is a lot more effective and easier than cure.The government has failed, I think, miserably on world heritage. It might go through the motions of investigating the Blue Mountains and listing convict sites, which is an easy and a feelgood move. There may even be a move to investigate Purnulu, but I would urge them in this instance to consult the traditional owners before going down that path. Other than that, I regret to say that it is a dismal picture that is painted for the Senate on the future of Australia's world heritage under the current government.388422:53:003884Coonan, Sen HelenSenator COONAN2M6NSWLP10—Tonight I wish to raise a topical matter—that of legal aid and access to justice—and some recent innovations that can improve the delivery of legal services. It is a fair comment, I think, to say that legal aid and traditional systems of administering it are under pressure as there seems to be an almost infinite demand, somewhat akin to Medicare, and of course only a finite amount of funding to service it.The Senate Legal and Constitutional References Committee recently concluded an inquiry into legal aid and, as the report has not yet been tabled, I make no comment on its findings. But, as a general proposition, to seek to increase access to the legal system by relying only on the availability of an infinite pool of legal aid funding ignores the reality that funding is and will continue to be finite. However, greater scrutiny of funding for legal aid might increase not only efficiency but even the equity of the legal aid system and access to justice.A major challenge is to look at new and innovative ways to deliver legal services in Australia not only to the poorest recipients who qualify for legal aid but also to the great number of Australians who fall outside the legal aid guidelines and are unable to risk their own funds to access the courts. It is this category of Australians needing legal services which is often overlooked.Firstly, I am pleased to inform the Senate that there have, indeed, been significant procedural and other reforms in the conduct and management of criminal law cases. Secondly, there have been some imaginative and innovative steps in improving access to the delivery of legal services by some of the legal aid commissions. Also, there is the possibility of dramatically improving access to legal services by those who do not qualify for legal aid by encouraging the use of new legal insurance products such as the `after the event insurance' recently launched in the United Kingdom. That, together with access to lawyers through conditional fee arrangements, is transforming the legal services landscape there and has the potential to do the same here.I now want to say a few words about each of these developments. In the field of criminal law reforms there is at last a coordinated approach by the country's nine directors of public prosecution, the directors of the eight legal aid commissions and the public defenders offices to solve some of the problems that beset Australia's criminal justice system. Prosecutors, defence lawyers, judges and the courts are now working together in an unprecedented attack on costs and mega-trials. Under the recent proposals, defendants would be forced to show their hand to the prosecution before trials, police would have to sign declarations that they had hidden nothing from the defence and judges would be encouraged to be more interventionist. The proposals, if implemented, would put a whole new face on the way trials are run, and significantly they would be uniform across Australia.Some criminal cases—particularly, I suppose you could say, drug importation cases that often involve conspiracy charges and multiple parties—potentially can last for years and can cost millions to run. All the while, defendants are not on bail; they can actually be in prison awaiting trial. Streamlining criminal trials would prevent wealthy defendants and their lawyers winning acquittals because they can afford, through obfuscation and delay, to string out cases and wear down juries and everyone else associated with the case. At the other end of the scale, it would stop police overcharging defendants in order to try to make something stick.A pilot of some of the proposed changes begins in New South Wales next month. The pilot will see committal proceedings in five Sydney suburban courts being centralised and defendants will be represented by legal aid. The pilot will see the New South Wales Legal Aid Commission working with prosecutors to identify the points at issue to shorten trials by guilty pleas to lesser charges. Victims will be consulted before a plea to a lesser charge is accepted. It is an especially important innovation to actually have some regard to the victims who so often feel shut out from this process. Also working to reform criminal trials is the Law Council of Australia, whose President, Bret Walker, stated:There has never been such a coalition for change before. We now have both prosecutors and defendants saying something should be done.Legal aid commissions also have reform agendas.There is no doubt that a principled approach to providing legal aid must also examine new and innovative ways of using the available funds for the maximum benefit. Traditional approaches may not now provide the most effective outcomes and legal aid commissions must examine alternatives. Part of the drive for efficiency has resulted in new products being introduced to ease the financial pressure on legal aid. Queensland has been particularly innovative and has streamlined telephone and/or fax advice and information services; child support forums; legal aid counselling services; outreach advice and an outreach van; community workshops, especially in rural communities; and video links and an Internet home page advice service which particularly targets community organisations which deal with disadvantaged groups. The Queensland commission has also built an interactive kiosk where people actually go to get information. Using this kiosk, people can instigate proceedings such as an application for divorce without actually needing a grant of legal aid in order to do so.Very many Australians are precluded from having access to the justice system, as they fall just outside the threshold for legal aid and therefore, if they want to litigate, must risk their own funds. But many Australians do not have the resources to risk, and therefore very often meritorious cases simply cannot be proceeded with. If they do have funds available, the risk of losing the case and having costs awarded to the other party is sufficient to dissuade even the most enthusiastic self-funded litigant.One avenue which would be of great benefit to very many Australians is legal expense insurance. Legal expense insurance is one way to give better access to justice across the board. Some schemes in Australia have reportedly low take-up rates, but the concept should not be disregarded, particularly in light of developments in England. England is phasing out legal aid for all money and damages claims except medical negligence and instead is encouraging the use of what are known as `conditional fee arrangements', which have developed from legal expense insurance policies.Also known as `no win, no fee' arrangements, these allow lawyers to take on cases with the understanding that, if the case is lost, they will not charge the client for the work done. If, on the other hand, the case is won, the lawyer can charge a success fee designed to compensate for the risk. The big advance is that the client can take out `after the event' insurance, after a claim has matured. This enables the litigant to insure against an order for costs being awarded against them. Conditional fees allow the lawyer and the client to share the risk and to set the success fee according to the degree of risk the lawyer is taking.But where do clients stand if costs are awarded against them? That is the great problem, and this is where the insurance concept cuts in with `after the event' insurance, which means that a client can insure against having to pay an opponent's costs. This insurance policy, as the name suggests, is taken out only after a decision has been made to litigate. Therefore there are no ongoing premiums but usually there is a one-off payment, although probably a high one because of the degree of risk the insurer may perceive in the case.In England, the use of conditional fees has been legislated. It excludes family law and criminal matters there, but there is certainly an argument for extending these categories, especially as they are heavy demand areas. The advantage of an efficient legal expense insurance regime is that it reduces the need for legal aid, as it makes access to the legal system easier for most people.The need to work within available legal aid budgets has prompted these innovations, and the legal profession must continue to devise and implement systemic changes that increase access to justice for more Australians.The developments I have mentioned are clear evidence that, with effort and imagination, money for legal services will be used effectively and will be directed to where it is needed most. I congratulate my colleagues in the legal profession who have used their skills to achieve what can only be regarded as a public good.388623:03:003886Watson, Sen JohnSenator WATSONVJ4TASLP10—It is in the interests of every Australian consumer, grower, producer, manufacturer and exporter to achieve a more efficient Australian waterfront. It is in the interests of the Australian nation to get the waterfront productive, efficient and equal to world standards. Despite the $430 million Waterfront Industry Reform Authority program between 1989 and 1992, Australia still has a complex and inflexible system which retards productivity, increases operating costs and reduces timeliness and reliability.Genuine waterfront reform must address three issues. Firstly, ships in Australia must turn around in a time that is competitive with our major trading countries; secondly, our ports must be guaranteed free from industrial trouble; and, thirdly, the customer, the shipper, must always be right. Australia has good workers and good products, and the markets are there. The world will buy significantly more Australian products if we are reliable and competitive.We want to reform the Australian waterfront because it will create more jobs, generate more investment and make Australia a more competitive exporter in an increasingly competitive world trading environment. The volumes Australia exports and the prices we receive for these exports have a profound impact on the Australian economy. They affect our balance of payments, the strength of our currency, the level of our foreign debt, interest rates, the level of domestic spending, and job creation.The Australian shipping industry has shocked many a newcomer, with shippers coming to the belief that they have no rights at all. Shippers believe that they are at the mercy of shipping companies and very bad waterside practices. There are difficulties in booking space and getting containers. Loading is unreliable. Ships hardly ever dock on time or leave on time. To keep up with their schedules, new shipowners will make their decision to pull out of a port, leaving on the docks containers booked on their vessel but hopefully to be loaded onto the next ship.Exporters do not have the faith that containers will be shipped in the manner they request or on the deck they request. If a tarpaulin is put on a container at the shipper's expense to protect the product, the tarpaulin may be stolen and almost certainly will be damaged. Exporters find they have no right to expect their product to be cared for or protected, once out of their sight.23:05:003886Senate adjourned at 11.05 p.m.Documents38863886The following government documents were tabled:Aboriginal Deaths in Custody—Royal Commission—Implementation of the recommendations of the Royal Commission into Aboriginal Deaths in Custody—Australian Capital Territory Government—Report for 1996-97.Advance to the Minister for Finance—Statements and supporting applications of issues— November 1997. February 1998. March 1998. April 1998.Agriculture and Resource Management Council of Australia and New Zealand—Record and resolutions—12th meeting, Hobart, 27 February 1998.Equal Employment Opportunity (Commonwealth Authorities) Act—Equal employment opportunity program—Federal Airports Corporation (FAC)—Report for 1997.Human Rights and Equal Opportunity Commission Act—Human Rights and Equal Opportunity Commission—Inquiry into complaints of discrimination in employment and occupation—Report—Discrimination on the ground of sexual preference (Report no. 6).National Health and Medical Research Council Act—National Health and Medical Research Council— Grants for 1998. Report for 1997.Provision for running costs borrowings—Statements and supporting applications of issues— March 1998. April 1998.University of Canberra Act—University of Canberra—Report for 1997.3887The following documents were tabled by the Clerk:Civil Aviation Act—Civil Aviation Regulations—Civil Aviation Orders—Instrument No. CASA 208/98.Customs Act and Excise Act—Instrument of Approval No. 20 of 1998.States Grants (Primary and Secondary Education Assistance) Act—Determination No. 1998-521-s79.3887Briefing papers relating to the proposed non-violent erotica classification are tabled pursuant to the order of the Senate of 28 May 1998.Answers to Questions on Notice3888The following answers to questions were circulated:3888(Question No. 1122)11223888O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Development, upon notice, on 3 April 1998:(1) Was a report on sexual discrimination prepared for the Civil Aviation Authority (CAA) in 1994; if so (a) when was the report commissioned; (b) when was it completed; (c) why was it commissioned; and (d) was the report prepared by Ms Carmel Niland.(2) Can a copy of the report be provided; if not, why not.(3) (a) How many allegations of sexual harassment in the CAA, the Civil Aviation Safety Authority and Airservices Australia have been made in the financial years 1993-94, 1994-95,1995-96, 1996-97 and so far in 1997-98 and (b) where were the officers making the allegations based.(4) (a) How was each case dealt with; (b) who was the senior officer responsible for each case; (c) what was the outcome of each case; and (d) were any of the allegations referred to the police; if so, what action did the police take in relation to these allegations and what resulted from that action(5) Was Dr Helen James an employee of the CAA; if so: (a) when was she appointed; and (b) when did her employment cease and why did she leave the CAA.3888Alston, Sen RichardSenator AlstonLD4VICLPCommunications, the Information Economy and the Arts10—The Minister for Transport and Regional Development has provided the following answers to the honourable senator's questions:(1) No, a report on sexual discrimination was not prepared for the CAA in 1994.(a) However, a report into fairness and equity was commissioned on 8 February 1994, and (b) completed later in 1994; (c) the report was commis sioned when the CAA's Air Traffic Services Division became concerned about the fair treatment of its employees and it was decided to conduct an organisation-wide audit of equity and diversity. (d) The report was prepared by Ms Carmel Niland.(2) A copy of the report has been provided to Senator O'Brien who is asked to respect the confidentiality of the report.(3) (a) In July 1995, the CAA was replaced by the establishment of the Civil Aviation Safety Authority (CASA) and Airservices Australia.Statistics on allegations of sexual harassment have been kept since September 1994 for the CAA. These statistics (listed below) are provided by the network of Equity and Contact Officers and may not include cases dealt with directly by managers. They are provided in Airservices' Annual Equity and Diversity report to the Minister.Sexual harassment Complaints/InquiriesCAA1993-December 1994—No statistics keptJan—June 1995—8Airservices1995-96—161996-97—81997-98 (to December 1997)—5CASA1995—96—21996—97—21997—98:—2(b) With respect to Airservices, details of complainants are confidential, so unless there is formal investigation, the case progresses to the Grievance and Appeal Board or goes to an external organisation, whereabouts of complainants are not identified.Four of the sexual harassment complaints listed above went to formal investigation and were dealt with as follows:LocationTimeOutcome1. SydneyFebruary 1994Alleged harasser proceeded to Federal court. Matter settled out of court on 18 July 1996. Mediation process was undertaken and the terms are the subject of a confidentiality agreement. Nine recommendations from the internal mediation were implemented.2. BrisbaneApril 1994Internal investigation. Matter resolved at local level. Alleged harasser removed from supervisory position. Education program conducted3. SydneyMay 1995Program of education for all concerned staff implemented and normal working environment was re-established.4. RockhamptonSeptember 1996Sub-contract cleaner made allegations to Queensland Anti-Discrimination Board re inappropriate materials in the workplace. Allegation withdrawn January 1997.In respect of CASA, the officers concerned were located in Brisbane, Sydney, Canberra and Adelaide.(4) Airservices has provided replies as follows:(a) Cases are dealt with individually. Since 1995 cases have been processed in accordance with the Airservices Guidelines for Eliminating Harassment. Most cases are resolved informally; (b) in more serious cases, the General Manager for the relevant Division is responsible for the outcome. In cases 1 and 2, the General Manager Air Traffic Services, in cases 3 and 4, the Chief Fire Officer; (c) outcomes are shown in table above; (d) no allegations of sexual harassment were referred to the police.CASA has provided replies as follows:Allegation 1 (1995/96): Brisbane(a) The Regional Manager convened a joint meeting between the parties. He subsequently counselled the offender, explaining to him the standard of behaviour and conduct expected in the workplace. The offender was reminded of his managerial responsibilities, which included the need to set the right example at all times.(b) The Regional Manager, North East Region(c) The details of the counselling session, including the victim's written allegation, were placed on the offender's personnel file. The offender undertook in writing to modify his behaviour—this was also placed on file. He also undertook some awareness raising sessions. There have been no further complaints regarding the behaviour of the offender with respect to sexual harassment.(d) No.Allegation 2 (1995/96): Sydney (a) The General Manager, Human Resource Management, arranged for the Regional Manager South East Region to interview the parties and then formally counsel the offender.(b) The Regional Manager, South East Region(c) The counselling session resulted in the offender agreeing to stop bringing offensive material to the workplace. This satisfied the victim. A short time later the offender's employment was ceased.(d) No.Allegation 3 (1996/97): Sydney(a) The Regional Manager interviewed the parties and then counselled the offender.(b) The Regional Manager, South East Region(c) The counselling session resulted in the offender agreeing to stop the unwanted behaviour. This satisfied the victim, however, she requested to be transferred to another area. In the interests of alleviating any discomfort for the victim the request for transfer was met.(d) No.Allegation 4 (1996/97): Canberra(a) The Section Manager raised the victim's concerns with the offender (a temporary employee), who decided to withdraw his services to CASA. The whole section attended a session facilitated by Equity & Diversity co-ordinators with a view to raising awareness in relation to the elimination of sexual harassment in the workplace.(b) The Section Manager(c) The victim, due to the embarrassment she suffered over the incident, requested to be temporarily removed from that working environment. She went on to work at the same level in another section. CASA decided to periodically monitor the victim's well being and readjustment to the workplace. Progress reports to date have been very favourable.(d) No.Allegation 5 (1997/98): Adelaide(a) The Harassment Contact Officer advised the victim to bring the matter to the attention of the Flying Operations District Manager. This she did and the Flying Operations District Manager subsequently counselled the offender.(b) The District Manager, Flying Operations(c) Whilst the offender claimed that he did not realise his language was offensive to the victim he agreed not to repeat the behaviour. This satisfied the victim, and there have been no further complaints.(d) No.Allegation 6 (1997/98): Canberra(a) The General Manager, Human Resource Management Branch interviewed the victim and offender, and then separately counselled the latter.(b) The General Manager, Human Resource Management(c) Whilst the offender claimed that there was a misunderstanding with regard to the intent of the language used, he expressed remorse for causing offence to the victim. During a mediated session, the offender formally apologised to the victim and agreed to modify his language. However, the victim expressed discomfort in continuing to work with the offender and requested a transfer to another area. For this reason her request was complied with. The manager's behaviour has been monitored.(d) No.(5) Dr Helen James was an employee of the CAA; (a) she was appointed in October 1988 and; (b) her employment ceased in January 1995 due to redundancy.