1998-06-243817SENATE389101998-06-24The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.Business389138913891Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—(9.31 a.m.)—I seek leave to amend government business notice of motion No. 1 by omitting reference to the Wheat Marketing Legislation Amendment Bill 1998.Leave granted.H15Campbell, Sen IanSenator IAN CAMPBELL—I move:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the following bills, allowing them to be considered during this period of sittings:Appropriation Bill (No. 1) 1998-99Appropriation Bill (No. 2) 1998-99Appropriation (Parliamentary Departments) Bill 1998-99Customs Legislation (Anti-dumping Amendments) Bill 1998Customs Tariff (Anti-Dumping) Amendment Bill 1998Data-matching Program (Assistance and Tax) Amendment Bill 1998National Firearms Program Implementation Bill 1998Passenger Movement Charge Amendment Bill 1998Taxation Laws Amendment (Farm Management Deposits) Bill 1998Taxation Laws Amendment (Landcare and Water Facility Tax Offset) Bill 1998Health Care (Appropriation) Bill 199809:32:003891Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Can I clarify what has happened to the Wheat Marketing Legislation Amendment Bill 1998 . Has it been taken off or deferred?10000PRESIDENTThe PRESIDENT—It is to be taken off the list, Senator.DX5Margetts, Sen DeeSenator MARGETTS—I ask that the parliamentary secretary deal separately with the Data-matching Program (Assistance and Tax) Amendment Bill 1998 and the Passenger Movement Charge Amendment Bill 1998 .10000PRESIDENTThe PRESIDENT—The question can be put separately on those bills if that is what you wish, Senator.DX5Margetts, Sen DeeSenator MARGETTS—Perhaps the Data-matching Program (Assistance and Tax) Amendment Bill 1998 and the Passenger Movement Charge Amendment Bill 1998 could be put together. The Greens (WA) will be opposing their exemption, so if they can be done separately from the Wheat Marketing Legislation Amendment Bill 1998 , that would be of great assistance.H15CAMPBELLSenator Ian Campbell—I am happy to have those questions put separately.10000PRESIDENTThe PRESIDENT—I put the question that the motion moved by Senator Ian Campbell, as amended, excluding the bills referred to by Senator Margetts, be agreed to.Question resolved in the affirmative.10000PRESIDENTThe PRESIDENT—I put the question that the motion moved by Senator Ian Campbell with respect to the two bills referred to by Senator Margetts be agreed to.09:33:003891Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—If I could briefly speak to this motion, it is not that the Greens (WA) find either the Data-matching Program (Assistance and Tax) Amendment Bill 1998 or the Passenger Movement Charge Amendment Bill 1998 particularly obnoxious; it is simply that the explanations for urgency—and considering the weight of work required for all other elements of legislation—does not seem to hold sway. It is consistent with the approach we have taken that the actual arguments for urgency should be real arguments, and not simply because at some stage the government may call an election—which, in fact, is due next May.Question resolved in the affirmative.Bills3891s1703891Motion (by Senator Ian Campbell) agreed to: That the following bill be introduced: a bill for an act to amend the War Crimes Act 1945.Motion (by Senator Ian Campbell) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.389209:35:003892Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table the explanatory memorandum and move:That this bill be now read a second time.I seek leave to have the second reading speech incorporated in Hansard.Leave granted.The speech read as follows—This bill repeals section 22 of the War Crimes Act 1945. The act was amended in 1989 prior to the fall of the "iron curtain" to enable trial in Australia with respect of conduct engaged in during World War II in Europe. Although the usual practice would have been to extradite persons accused of such crimes to the country where the crimes occurred, at the time it was considered politically unacceptable to extradite persons to countries behind the so called `iron curtain'.The `iron curtain' has fallen and many of the republics, including Latvia, Estonia and Lithuania are now independent states and have been accepted as members of the Council of Europe. Australia has, in the past, been prepared to enter into extradition arrangements with any country that is a member of the Council.The Government is actively pursuing the possibility of establishing modern extradition arrangements with many of these newly independent States. However, even if a modern extradition relationship was in place, it would still be impossible for those countries to comply with an extradition request while section 22 of the War Crimes Act remains in force.Section 22 of the act provides that where a person's extradition is sought for conduct covered by the act no surrender for extradition is possible unless there is a prima facie case. Thus, notwithstanding a modern extradition relationship with these countries, if the offence for which extradition is sought is a `war crime' then the requesting state must provide a prima facie case. Because of the differences between civil code and common law countries the practical effect is that a civil code jurisdiction could never successfully seek the extradition of a person suspected of a war crime. The concept of a prima facie case in determining sufficiency of evidence is one to which most common law countries are accustomed. However, those countries which operate under a civil code system (e.g., Latvia, Estonia and Lithuania) do not use this test in criminal proceedings, and experience has shown that use of this standard in extradition arrangements with civil code countries is almost impossible in practice. The practical issue is that the laws of evidence in common law systems are such as to make it impossible for a civil code jurisdiction to supply evidence in an admissible form. In essence, because of the fundamental differences between common law and civil code jurisdictions, particularlyevidentiary requirements, the practical effect is that it is currently impossible for a civil code jurisdiction to successfully seek the extradition of a suspected war criminal from Australia.The repeal of section 22 will remove the fundamental barrier to Australia's cooperation with the international community in relation to suspected war criminals.This is not to say that extradition of a suspected war criminal would be automatic. Any request for the extradition of a suspected war criminal would be subject to the general extradition arrangement with the requesting country. Such arrangement must include all the usual safeguards spelt out in the Extradition Act 1988. All that the amendment will do is to remove an additional onerous requirement that relates only to the extradition of war criminals This Government sees no reason in principle why this practical impediment to the extradition of war criminals should be retained.The amendment to the act will not have any financial impactI commend the bill to the Senate.Ordered that the further consideration of the second reading of this bill be adjourned to the first day of sitting in the Spring sittings 1998 in accordance with standing order 111.Business3892389209:36:003892Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—This is a matter which we wish to discuss in an informal meeting with leaders and whips a bit later this day. I give notice to colleagues that I will defer consideration of this until after that leaders and whips meeting.Ordered that consideration of government business notice of motion No. 3 be postponed until a later hour this day.Bills3893r4053893Debate resumed from 23 June, on motion by Senator Ian Campbell:That this bill be now read a second time.09:37:003893Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise today to speak on the Company Law Review Bill 1998 and welcome the government's following through on this process. Senator Ian Campbell and others have worked on this bill. There are a number of key areas, though, that I believe were identified in the report of the Parliamentary Joint Committee on Corporations and Securities which I would like to speak to. They revolved around the issues of corporate governance—WH4McGAURANSenator McGauran—Oh no!3L6Conroy, Sen StephenSenator CONROY—I am afraid so, Senator McGauran—corporate governance. Your side would not know a lot about that. There may be a few familiar names, friends of yours, who get a mention, so I am hoping that you are going to stay with me for this one.This government prides itself on wanting to introduce world best practice everywhere—world best practice in the Public Service, world best practice on the waterfront, world best practice in our tax system. Today we have an opportunity to debate world best practice for corporate governance. Where does the government stand on this issue? It is refusing to accept all of our amendments. There is an opportunity to put world best practice in corporate governance into this legislation today. This really shows how hollow and how selective this government is when it wants to talk about world best practice. It is world best practice for unions and world best practice for the Public Service, but when it comes to world best practice for the conduct of corporate behaviour in this country, the government is missing in action. There is no show from this government. It straight away caves in to its mates in business. It is not prepared to discuss some quite trivial issues—and they are quite trivial issues, as I will demonstrate in this debate.Unfortunately, the ASX has been complicit in trying to avoid facing up to some of these issues. It does not want to include or support corporate governance. In fact, one official told me they thought corporate governance was just a current fad—that transparency in corporate behaviour was just a current fad. It would be gone in a few years, we were told. Unfortunately, issues like the disclosure of directors' fees and executive salaries are regarded as a current fads. Maybe it is something to do with the demutualisation of the ASX and the sudden massive increases in the remuneration packages that senior people at the ASX are going to receive now that it has been demutualised. Maybe this has been guiding their views on this current fad.The adoption of shortened company annual reports and the 21-day notice of shareholders meetings are the sorts of issues which we have an opportunity today to insert into this bill. I would like to quote from the report, which makes reference to the views of the ASX. It says:It is not possible to identify meaningful corporate governance practices and disclosure that can usefully be applied across the diversity of different company circumstances, and views of world best practice and international standards change over time. Proscription would restrict Australian companies ability to follow world best practice as it continues to evolve. And, at a more basic level, many of the measures proposed are of questionable relevance and value in the Australian context, especially when the costs that they impose are considered.Humbug. Here is the ASX leading the charge to oppose transparency in corporate behaviour in its own markets. It is very disappointing to find that view coming from the ASX, with its key role in monitoring a lot of the shonky behaviour that goes on in the corporate world. It is usually the first port of call to detect fraudulent white-collar behaviour. But when it comes to some simple issues, it is standing in the way of genuine transparency and reform.The committee was presented with IFSA's view. It said:IFSA, in common with its predecessor body, AIMA, is firmly of the view that monitoring practices alone are insufficient to promote improvements in Australia's corporate governance environment or to bring Australia into line with the growing international consensus on what constitutes best practice in this important area. Government has a critical role to play in promoting the principle of disclosure as the key mechanism for ensuring accountability by companies and in equipping shareholders with the practical tools they need to fulfil their monitoring and review functions. IFSA is of the view that the Company Law Review Bill 1997 does not adequately address these important corporate governance matters and asks that the PJC recommend that the bill be amended to include the above requirements.The key here is not what is in the best interests of the directors of companies; it is what is in the best interests of shareholders, so that shareholders are adequately informed to make judgments about the performance of its directors. The directors are the employees; the shareholders are the owners. These amendments are about empowering shareholders. It may be that it is empowering them at the expense of directors, but is that such a bad thing? I say no. This is a chance to empower shareholders.The first of the amendments to be moved by the Labor Party, and which are supported by the Democrats and, I believe, the Greens and, hopefully, Senator Harradine, are to do with a general management discussion and analysis. It is a one page document to be included in information which gives a general overview of how the directors see the future strategy of the company. One page in regular reports is not a really onerous requirement. We have seen opposition. This is a provision that simply requires narrative information on financial statements. That is all. It is not hard to prepare. If you were in America, it would be a requirement. You have to provide that sort of information. But, disappointingly, this government is choosing to oppose this. I understand, following pressure from the opposition, that the ASX is moving, hopefully, to implement this in its listing rules.H15CAMPBELLSenator Ian Campbell—It has moved.3L6Conroy, Sen StephenSenator CONROY—The ASX has only moved because of the pressure of these potential amendments. It has only moved because there is pressure on in the parliament to gain this information for shareholders. It should be welcomed that the ASX is moving, but what should not be welcomed is its opposition to having this included in legislation. But it is a positive development by the ASX.Let me refer to a quote that was given to the committee by the government:While the government believes that proper reporting to members is an important responsibility for companies, it considers that the approach proposed by the committee is not appropriate at the present time. In particular, it considers that the provision of a management discussion analysis to members should be a matter for companies to decide.Directors should be able to decide the information given to their shareholders, not the other way around. Yet the shareholders are the ones who should make these decisions. The shareholders should be given this information so they can judge the performance of the directors, not the other way around. Directors should not be able to not provide information or decide whether to give information or not; it should be given so that the shareholders are in a position to make the judgments. The Securities Institute had a say on this issue as well. They said it was `contrary to international trends set by major capital markets such as the United States, Canada and the United Kingdom, and leaves Australian users of annual company reporting at a disadvantage.' That is the Securities Institute—another bolshie organisation, another pack of `Trots' running loose on the corporate scene.H15CAMPBELLSenator Ian Campbell—Unequivocally backed the ASX doing it.3L6Conroy, Sen StephenSenator CONROY—We support the ASX moving in that direction, but we are not trying to pretend that this only happened all of a sudden because of the ASX, which has opposed corporate governance—you missed my earlier remarks, Senator Campbell. Corporate governance is a fad, according to the ASX. I have been told that personally. They oppose corporate governance as just a fad.The ASX have been under pressure to move in this direction: pressure not generated by the government but pressure generated at the grassroots by shareholders, by institutions and by this opposition. They have not caved in because they thought it was a good idea that you suggested it to them; they have been forced to move by the pressure in the business community from institutional investors and from this opposition and minor parties.The second amendment which the government is opposing is to do with the notice of meetings. This is a small issue and we are only talking about the difference between 21 days and 28 days. What we have seen is the institutional investors in this country, who are managing the majority of the funds nowadays, saying, `We have a situation where we require a bit more information and a bit more time to make a judgment when we are notified about the issues that are up before us.' In particular, that applies to overseas investors. Despite technology, overseas investors and institutional investors are saying, `We would like 28 days.' That is the position. This government have been prepared to do the bidding on MIB of institutions in the big end of town, but when the institutional investors turn around and say, `We really would appreciate a bit more time to make our judgments about the issues that are going to be up,' and it is only 28 days—or seven days more than proposed—what do the government say? No. That is disappointing.Probably the most important, in my view, of the amendments we are proposing is the question of disclosure of director and senior executive salaries. Again, the ASX get trotted out. Again, they oppose. Here is what Mr Crosby, who made a submission, said:The question is: what is the benefit? Is it information that is actually of use to investors and creditors of companies, which is what annual reports are about? We really question at the margin from what we have now, which is banded disclosure, detailed disclosure of allotments of securities and other incentive arrangements to directors, whether there is value being added for investors in requiring detailed disclosure. We just do not think the case is made, so we do not support a requirement to have line by line disclosure of directors' remuneration.What a travesty from the ASX. As I said earlier, maybe it is just because they are about to get an increase for senior officials at the ASX in their own remuneration and their own packages. Maybe that is what is driving this. It is very disappointing to see the ASX taking this view. IFSA stated:Disclosure of the quantum and components of the remuneration of each director of the company and each of its five highest paid executives, including the existence and length of any service contract for the CEO, is necessary.The Institution of Investors are saying, `We want to know,' and this government are saying, `No, it is no-one's business.' ASX are saying, `We do not believe there is any need. There is no value in knowing that.' What have you got overseas? You have requirements along these lines overseas. The Australian markets are going to be less informed. Australian shareholders are going to be less informed than are their international counterparts. This government has a chance to say, `Let us make Australian shareholders equally as well informed as overseas shareholders.'Mr Matheson, who is the Governor of the International Corporate Governance Network, said before the committee:The last point is in relation to remuneration disclosure. I know that the committee recommended positively in this regard in its report on the bill and that the government did not accept that recommendation. Many members of the International Corporate Governance Network have expressed dismay both to me and to the government that this particular proposal was not picked up. I would like to remind the committee that, from an investor's point of view, the disclosure of remuneration details is not a voyeuristic sort of exercise. It is purely that in this country shareholders are required to vote on resolutions for the granting of options and also to approve the increases in the aggregate level of remuneration to non-executive directors.Shareholders in this country are being asked to vote on these two remuneration related matters in the absence of complete information.They are being asked to vote without knowing all the facts. And who is withholding these facts? The directors who are asking for the extra remuneration. Mr Matheson further says:I would also say to the committee that, perhaps, what parliamentarians—dare I say it—company executives and directors are being paid in many forms these days, not just in salary but in other ways like options, bonuses, long-term incentive schemes, et cetera. The reality is that some of these option schemes can add, for example, between five and 150 per cent onto the reported value of remuneration as reported in the bands in the annual report.The current system does not give full information to shareholders. Mr Matheson goes on:I believe that the remuneration disclosure and the failure of the bill to pick up on the committee's recommendation has led to much dismay in the investment community. I think it would relieve a lot of companies of a lot of agro that occurs at their annual general meetings particularly by small investors who take exception to the granting of hundreds of thousands of options, in some cases, where they are being asked to do so on the basis of incomplete information. If shareholders are being asked to make an informed determination about whether they should approve a scheme or not, then I would suggest that they are being asked to do so currently on the basis of very incomplete information.This is damning of this government. This is damning because it is seeking to assist in withholding from shareholders information about their directors' remuneration packages. This is an embarrassment internationally. `Dismay' was the word used—not by the Labor Party, not by the wharfies, not by the Democrats but by the International Corporate Governance Network. These are institutional shareholders. These are people all around the world who believe that what is most important is transparency, accountability and disclosure within corporations, so that you do not get the shonky behaviours of the Bonds and the Skases and so that people would know how much Alan Bond was getting paid and how much Chris Skase was getting paid and whether or not they were fair returns for the values that were being added.We have seen some enormous remuneration packages recently. The boss of AMP has picked up a motser in the float of AMP, yet shareholders in the new AMP are not going to be able to find out exactly how much he has made out of the float compared with themselves. They are not going to be able to find out about this.In my remaining few minutes I would like to finish off by quoting another socialist organisation that has been calling for the sort of amendments that we have been talking about. It is a well known, clearly Labor orientated organisation. I refer to a editorial in the Australian Financial Review under the heading `Corporate oligarchy'. The editorial states:But in reality the corporate market-place will not work efficiently until the shareholder class becomes better organised to discipline the clubby world of Australian boardrooms. Unfortunately, the boards too often act to disempower shareholders.This is the Australian Financial Review 's editorial. This is not a meeting of the International Socialists. This is not the Labor Party talking. This is the editorial of the Australian Financial Review talking about the `clubby world of Australian boardrooms'—and it would know. It goes on:For instance, evidence presented to the Parliamentary Joint Committee on Corporations and Securities shows that about half the companies approached recently to reveal their proxy voting results at annual meetings refused to supply the information.This is another issue that I will speak about a little later in the committee stage. On the proxy voting situation, it says:Proxy votes are merely those cast, in advance, by shareholders who do not attend the annual meeting. The disclosure sought was not an individual breakdown of which shareholders voted on which measures (although that information is available to the companies)—so the directors know how individual shareholders vote, but that is not what the requirement is; we just want to know the total outcome of those votes—simply the total proxy vote "for", "against", or "open" to the chairman's discretion.The Australian Financial Review goes on a little later in its editorial to say:It is known that the secretaries of certain Melbourne companies, not necessarily including BHP, meet on a regular basis to discuss how they will deal with this type of issue.. . . . . . . . .Shareholders should know when some directors are re-elected by a whopping margin of support, and also if other bits of deadwood float in a tide of proxy votes, some of which have been sent in blank to be cast as the chairman decides. The Australian Financial Review goes on to say:If a trade union—say, the Maritime Union of Australia—tried to run an election like this, its officials could face—gaol. That is exactly right. If a trade union tried to conduct itself—(Time expired)09:56:003897Cooney, Sen BarneySenator COONEYSF4VICALP00—The Company Law Review Bill 1997 is a bill central to the way in which we run our society, and I think that has to be remembered. As the parliamentary secretary said during the debate on the last bill, the Managed Investments Bill 1997 , the issue of corporations and the way that we run the financial affairs of the nation is based on issues of philosophy, not simply matters of economy. No doubt, Mr Acting Deputy President Watson, given your many years of experience in this area, you would agree with that.The central factor about corporate life is this: you have a vast amount of money contributed by shareholders which is in the charge of a confined number of people, the directors and the managers, who may not own much of the company at all. In other words, you have vast resources in the charge of people who do not, in fact, own those resources. It is that concept that lies behind the laws that are made in this area because those who are managers of the company and those who are directors of the company—those people who have control of the company—are not people who own most of the company. That, of course, creates the need to arrange proper rules and regulations so that the people who own the assets have a fair deal from those who control them.It has been said somewhere that corporate life is very much like a communist state in that an oligarchy, a small group of people, controls the assets of a vast number of other people. Corporation law is about trying to adjust that on a fair basis. You have had—as you no doubt could speak eloquently on, Mr Acting Deputy President—this struggle between the black letter law and the fuzzy law when disasters happen, as they did during the 1980s and 1890s in Australia. When you have terrible collapses and people stripped of their wealth, you have a rush to black letter law. As time goes by and people feel the particular crisis has been met, you have the tendency to go off to the fuzzy law situation. That is what has happened in this particular situation and it is manifest in the bill we are discussing.I would like to quote from the second reading speech and show some concern about the basis of the bill or, as the parliamentary secretary says, the different philosophies in the debate on this bill. I listened carefully to the debate on the last bill, and the parliamentary secretary was very conscious of this conflicting philosophy—properly so because that is what it is all about. In that part of the second reading speech dealing with the history of the bill, this is said:While accurate and informative reporting to shareholders is essential to maintaining investor confidence, the detail of reporting requirements should usually be left to best practice in corporate governance, rather than through detailed black-letter law. The government considers that companies should be free to decide for themselves whether they should be preparing management discussion and analysis for shareholders, instead of being compelled to do so by law.That shows confidence in the ability of market forces—the forces for efficiency and competition—to make managers and directors act as they should. History has shown that that confidence has often been betrayed.We should look at this whole area in terms of the social and political effect that Corporation Law has. One of the great classic cases in the history of the development of company law is Foss v Harbottle. The corporation dealt with in that case was not a big company by today's standards but a private company where the actual shareholders were very much in charge of the management of the company. The court had this to say:Corporations like this, of a private nature, are in truth little more than private partnerships; and in cases which may easily be suggested it would be too much to hold that a society of private persons associated together in undertakings, which though certainly beneficial to the public, are nevertheless matters of private property, are to be deprived of their civil rights, inter se , because, in order to make their common objects more attainable, the Crown or the Legislature may have conferred upon them the benefit of a corporate character.The phrase I want to take from that is `of their civil rights'. This is a case that was decided in March of 1843, so it has a long history. Even at that time the courts were talking in terms of the civil rights of the shareholders—those in the company. So that concept has always been there: companies and corporations are more than a vehicle for economic activity; they have at their base other consequences which we should look at.In the Foss and Harbottle case the court also said:But, on the other hand, it must not be without reasons of a very urgent character that established rules of law and practice are to be departed from, rules which, though in a sense technical, are founded on general principles of justice and convenience; and the question is whether a case is stated in this bill entitling the Plaintiffs to sue in their private characters.Again this concept of justice and convenience comes through, and that has been carried through up to modern times. Indeed, the development of the law in Australia has, as elsewhere, been very much affected by whether or not there has been a crisis in company law and people have lost money and companies have collapsed, or whether things have gone reasonably well.My own state of Victoria has had a very significant part to play in the history of company law. It was in Victoria that the no liability company was developed in 1871 to accommodate the mining industry. That was when things were going well, but Victoria was the place where, during the 1890s, provisions were brought in requiring annual general reporting and proper accounting to look after the shareholders and those who had an interest in the company. During the 1890s when that was brought in there was terrible crisis and a collapse in the corporate world.The United States of America is the classic example of where corporate life is fundamental to the way society runs. Corporations in America have a very powerful impact. It was in that context that Berle and Means in 1932—well before anybody in this room was born; not by much, if you look at me—produced the classic work on corporations called The modern corporation and private property. They had this to say, and it is interesting following on from my remarks about Foss and Harbottle:The typical business unit of the 19th century was owned by individuals or small groups; was managed by them or their appointees; and was, in the main, limited in size by the personal wealth of the individuals in control.So you had the ownership and the control of the companies in the one hand—the point I was making before. They go on to say later in the book:Then, the modern corporation, equally revolutionary in its effect, placed the wealth of innumerable individuals under the same central control.It was in that context where you had division between ownership and control that he wrote this great work. There are two other quotes I want to read from Berle and Means, then I want to come to something closer to the present day. They said:The corporation has, in fact, become both a method of property tenure and a means of organizing economic life. Grown to tremendous proportions, there may be said to have evolved a "corporate system"—as there was once a feudal system—which has attracted to itself a combination of attributes and powers, and has attained a degree of prominence entitling it to be dealt with as a major social institution.They made some additions to the 1932 version and published them in 1967. In the updated thoughts in December 1967 they had this to say:We are well underway toward recognition that property used in production must conform to conceptions of civilization worked out through democratic processes of American constitutional government. Few American enterprises, and no large corporations, can take the view that their plants, tools and organizations are their own, and that they can do what they please with their own. There is increasing recognition of the fact that collective operations, and those predominantly conducted by large corporations, are like operations carried on by the state itself. Corporations are essentially political constructs.They go on to say later:Philosophical preoccupation will become more important than economic. What is this personal life, this individuality, this search for personal development and fulfilment intended to achieve? Mere wallowing in consumption would leave great numbers of people unsatisfied; their demand will be for participation. This means, in substance, a growing demand that significant jobs be available for everyone, at a time when automation may diminish the number of all commercially created jobs as we presently know them. It may well mean that the state would be expected to create jobs wherever a social need is recognized, irrespective of the classic requirement for a commercial base.What is being said about this strand through the history of company law is that corporations like individual people have obligations to the state and cannot be seen simply as economic vehicles; they have a communal responsibility to everybody within society. The amendments that we are dealing with today recognise that in proposed chapter 2B, basic features of a company. We will come to this in the committee stage of the bill, but proposed subsection 124(1) says:A company has the legal capacity and powers of an individual both in and outside this jurisdiction.Then it goes on to talk about company powers. Proposed subsection 124(2) says:A company's legal capacity to do something is not affected by the fact that the company's interests are not, or would not be, served by doing it.I think that is a very important part of this bill. I think it is a bill that is in line with the sorts of things I have been talking about so far. It does realise that it is not just simply economic advancement that counts but that there are other obligations that companies have.I would like to mention some of the people who need to be remembered in this context. No doubt senators would remember the former member for Hawker in South Australia Ralph Jacobi, who made some great speeches about company law before the history of the 1980s and 1990s had occurred. I recommend to people interested in this area that they read two of his speeches—one on 12 May 1981, which is in the House of Representatives Hansard at page 2271; and another one on 27 October 1982 at page 2632—where he anticipated the disasters of the 1980s—and I think he was a lonely voice in doing so.I would also like to mention in this context that Mr Michael Duffy, the Attorney-General as he then was, did a lot of work in this area. His was to a large extent the black-letter law approach. I think myself that that is probably the proper approach still. It was the work that he did, together with others, of course, that led to the Corporations Law as we now know it.May I also mention another work, the directors' duties paper No. 395 of 1989, which goes into the issue of directors' duties. That was a product of the Senate Legal and Constitutional Affairs Committee and, declaring an interest, I was then chair of that committee. I want to finish on this topic, but in the end it said that what you need in corporate life is to create a climate, a culture, where honesty and where dedication to others are the norm.It would be a tragedy if the bill which is before us now was presented in such a way that it dealt only with the concept that corporations are an economic vehicle to increase wealth. Of course corporations are economic vehicles to create wealth. Of course we need a decent standard of living for everyone in Australia, and corporations are a central means of doing that. But they can do a lot more than that. They must be seen as groups, as bodies, as institutions that have an obligation at not only an economic level but also a social and, indeed, political level. They are citizens, like the rest of us are citizens. They have the rights of citizens, but they also have the obligations of citizens. There has to be a climate created so that corporations see that, understand that and act accordingly. If they do not, then we must have black-letter law, which is a shame. Nevertheless, people should understand where corporations should come from and we ought to make sure that they do.10:16:003899Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—In summing up this second reading debate on the Company Law Review Bill 1997, I first want to thank those senators who took a close interest in the development of the bill and those senators who contributed to the debate in the chamber over the past couple of hours.I particularly thank Senator Barney Cooney, who has had a very close interest in corpora tions issues both before his time as Chairman of the Legal and Constitutional Affairs Committee and of course throughout that time. Senator Cooney will be very pleased to see the next Corporations Law economic reform bill, the Corporations Law Amendment (ASX) Bill 1997, which we expect will come into this place in the next couple of days, because it picks up one of the recommendations of that 1989 report in relation to the business judgment rule which he has been a champion of for many years.Senator Cooney, we note your reference to that seminal work, judicial work, in Foss and Harbottle. The bill also picks up a policy idea which, for the first time in Australian law—if it passes the Senate and passes the parliament—places the entrenchment of a statutory right of action for shareholders, known in the trade as a statutory derivative right of action. In many respects, it supplants Foss and Harbottle.I might say that the Attorney-General of Western Australia, who feels he has an umbilical relationship or at least a sibling relationship, in some respects, with Foss and Harbottle, is a little bit upset that Foss and Harbottle will become less important in Australian law once the statutory derivative right of action that this government seeks to give to shareholders to enforce their rights against directors who do not take action on behalf of companies is enacted for the first time in Australian history.Senator Cooney, your contribution to debate on the Corporations Law over the decades has been a very positive and constructive one. Of course, your speech here today is just another chapter in that contribution. I want to respond to some of the key points that have been made during the debate but, prior to doing that, I suggest that Senator Cooney's speech was very similar to the other speeches in this debate in that they did not talk about the bill; they talked about one or two submissions to the first joint parliamentary inquiry—`first' because this one has been to the committee twice—to do with corporate governance issues.As I said in opening my remarks, Senator Cooney, your comments on corporate govern ance and directors' duties and your contribution to that debate through the Senate Legal and Constitutional Affairs Committee are well known. Out of the consultations that you did in 1989, out of the consultations that were done by the joint parliamentary committee in the early 1990s when I was the deputy chair of that committee, and out of the consultations I have done on corporate law economic law reform, the government has actually picked and put into the statute a business judgment rule. Senator Cooney knows better than anyone else in this place how hard it is to frame a business judgment rule that people are happy with. I have crossed my fingers and crossed my arms behind my back and think we have actually got a set of words and the construction of a business judgment rule in Australia that, for the first time, has support—dare I use the old Bob Hawkeism: a consensus.That highlights the point that I have been making in private correspondence and in public comments about dealing with corporate governance issues in the way that the opposition and the Democrats—both very well-intentioned—supported, by tagging them on and making this an omnibus corporations bill. This bill was a piece of work created by the simplification task force under then Attorney-General Lavarch. It sought to look at the core company provisions. Its intention was to streamline the application process to establish a company. It does that by putting together into one form, a single form, the requirements for registering a company. There are massive savings in paperwork to companies across Australia. It massively reduces the cost of registering a company, for the approximately 80,000 new companies a year registered in Australia.It also facilitates the use of electronic means of transmission for meetings and for communications with shareholders. It reduces the need for formal company meetings. It says that, where there is unanimity amongst directors and they have signed off on a bit of paper to say that they are unanimous, they do not need to go through the procedure of calling a meeting; something that those of us who have been company directors know will save a lot of time and headache. When there is a matter that is unanimous, why is it necessary to get everyone to put down what they are doing, come together to pass a resolution and then go away again?It abolishes the par value of shares. It reduces the need for shareholder approval in relation to financial assistance transactions. It reduces the costs in relation to annual reports. It extends from 14 days to 21 days the notice period for shareholder meetings. There is a range of other mechanical improvements to the way companies in Australia operate.A number of people have tried to use this as an omnibus bill to put all these directors' duties and corporate governance matters into a bill that was not designed to do so. The government recognises the importance of the consideration of directors' duties and corporate governance. It picked up the work of Senator Cooney's committee on these issues in the late 1980s and the work of the joint parliamentary committee in the early 1990s on the same issues, and picked up a public demand for focusing on directors' duties and corporate governance. We have dealt with that as one of the largest and biggest chapters in the corporate law economic reform program which is recognised by people such as Bob Baxt and Bill Beerworth, and most commentators on corporate law reform, as the single most thorough reform of company law policy in the history of companies in Australia.Within the six chapters of the corporate law economic reform program we have significant reforms encompassed in a specific piece of legislation designed to deal with directors' duties and corporate governance. That legislation has been referred to the Joint Parliamentary Committee on Corporations and Securities. All of the proposals that the government has in regard to directors' duties and corporate governance have been referred to that committee.I have said to the Australian Labor Party and the Australian Democrats that if they want organisations to make submissions in relation to the issues that are the bulk of the amendments we will be faced with shortly in the committee stage, then the appropriate legislative process is to allow industry, share holder groups, consumer groups, directors, institutions, corporate lawyers, accountants and other advisers to make submissions on these proposals and have any of these amendments dealt with after that public consultation.Within the proposals on corporate governance that have been tacked onto this bill there are a number of matters that have been given that consideration. The MD&A proposal has been given that consideration by the joint committee and has been discussed at length amongst experts in this field.The issue of the notice periods for meetings has again had long discussion and it is really just a decision between 14, 21 or 28 days, and a couple of the other proposals. Many of them have not been given that sort of rigorous analysis, which all of the corporate law proposals that this government has dealt with have been put through. They have been brought in here and clearly have not been given the opportunity for detailed consideration.That is not to say that no-one has the right to do that. They do, but I am suggesting that, when we have a bill that specifically deals with corporate governance issues, we should seek to amend that bill rather than tacking them on and making this into an omnibus bill. You would obviously have to wait a few weeks to do that.Those calls have gone unheeded. We had a speech from Senator Conroy saying that the government does not care about corporate governance and management discussion analysis; that we are opposed to it and that we are opposed to directors' remuneration disclosure. That is patently absurd and patently incorrect and significantly misleading.3L6CONROYSenator Conroy—Let's vote to mandate them.H15Campbell, Sen IanSenator IAN CAMPBELL—Senator Conroy interjects and says, `Let's vote to mandate them.' This draws the distinction of the approach of the Australian Labor Party and the Australian Democrats. That is, if you want to prove that you are serious about something, you come to Canberra, pass a law and impose it on every single person in Australia. That proves you are serious about it. Regardless of the fact that that has proved in jurisdictions around the world to be an ineffective way to create an improvement in corporate governance, that is the Labor Party way—Canberra knows best on corporate governance.3L6CONROYSenator Conroy—And the Fin Review's view!H15Campbell, Sen IanSenator IAN CAMPBELL—Allow me to be partisan in these matters for a minute, Mr Acting Deputy President, because Senator Conroy wants to make this a politically partisan debate. This is the Australian Labor Party that produced Joan Kirner; this is the Australian Labor Party that produced Brian Burke; this is the Australian Labor Party that produced the Bank of South Australia; this is the Australian Labor Party that produced the famous gold tax lunch; and they are saying that the Australian Labor Party knows best on corporate governance!This is the Australian Labor Party that sunk $12.2 billion worth of Australian taxpayers' money down the drain every year, year after year for 10 years; and this is the Australian Labor Party whose concept of corporate governance and financial management was to run interest rates up to 30 per cent. When the Australian Labor Party talks about corporate governance and says, `Canberra knows best,' I say to the shareholders of Australia, `Beware when the Australian Labor Party says Canberra knows best.' There are far better experts on matters of corporate governance than the Australian Labor Party, which is saying, `You govern companies well when you do it the way Canberra tells you to do it; when you do it the way the Australian Labor Party tells you to do it.'There are experts, and I refer to an article by Paul Murnane in the Business Review Weekly of 27 April last. Mr Murnane is from Russell Reynolds in Australia and he has done a comparative analysis of corporate governance in Great Britain, the United States, Europe and France. I will quote from that article because it is instructive:The Australian Labor Party says Australian corporate governance is in tatters and that Canberra has to come in and tell us how to govern our companies. He is saying it is a mess and we have to step in, even though all of the people who support MD&A, including the government, say the best way to do it is through a flexible, market oriented approach promoting best practice through the existing rules. The Labor Party says, `No, that is not good enough. We are going to tell you how to do it. We are going to put it in black letter law, write a few more pages of law and tell every reporting entity that they must do an MD&A because the Labor Party in Canberra knows best.' If you tick that box, it will be good corporate governance, according to the ALP.Russell Reynolds in Australia put it slightly differently. They say that the standard of corporate governance in Australia compares well with other countries. Mr Murnane goes on to say it is a fact that:. . . most companies have complied with high standards. All around the world you are seeing a strong push towards the Anglo-American style of governance.Australia has a more aggressive stance on governance than other countries. Australia has had non-executive chairmen forever, whereas the US is only just discovering it. We have got a fairly smallish market so you don't get the chance to do the `Wall Street walk' . . . Institutional investors in Australia have set high standards for corporate governance.He makes another point about corporate governance. He further states:Corporate governance initiatives are distinct from legislation in that they are designed to assure investors that the necessary conditions of trust are in place.In other words, the debate on corporate governance should be about promoting best practice, not imposing it from the cold hand of Canberra and central governments. Senator Conroy interjected by saying, `Let's do what the US does.' What does the US do in relation to remuneration, management discussion and analysis? Senator Conroy is a bit like the Leader of the Opposition in the other place; he knows everything. He is omni-intelligent. He is the font of almost all wisdom on every issue. So what happens with MD&A in America? He wants to impose it by a law through Canberra saying, `Everyone is going to have an MD&A, regardless of whether it makes you a better corporate governor or not.' According to the Australian Labor Party, through the wise mouth of Senator Conroy opposite, that is going to make you a good corporate governor.What happens in the United States is that it is done through the listing rules of the SEC. What do we want in Australia? We want to do it through the listing rules of the Australian Stock Exchange? Who wants to do it through the listing rules of the Australian Stock Exchange? Senator Conroy mentioned the Securities Institute of Australia, which he says is opposed to the coalition's stance on management discussion and analysis. This is indicative of the entire debate. Labor wants to put it in black-letter law, impose it from Canberra and not allow a dynamic corporate governance culture to develop in Australia. They want to do it from Canberra. In fact, you have to do it from Canberra, not because we, the industry, shareholders or consumers think it is a good idea but because a fund manager from Florida says that it is a good idea—corporate governance international. We are going to be told what to do not by Australians and Australian shareholders but by people in Europe and New York.One of the amendments states that we have to force companies to do what the SEC or Brussels tells us to do, not what we decide in Sydney or Melbourne or Brisbane or Perth or Adelaide or Hobart. We have to do what Brussels or New York tell us to do. Talk about throwing away sovereignty! Let us not go down to see the ASX or the SFE; let us go to New York and do what Arthur Leavitt tells us to do. I would like to keep control of what companies in Australia are required to report. The Securities Institute of Australia agree with this. Let me quote from a letter dated 29 May signed by John Jarrett, the National Policy Manager of the SIA:The Securities Institute of Australia has long been in support of the requirement for listed companies to report to their shareholders, an MD&A requirement. We are satisfied that the introduction of this requirement into the listing rules with your agreement will be an advance on current reporting requirements. With this in mind, if the listing rules provide for MD&A, we do not believe it is neces sary at this stage to include it in a legislative requirement.Who else agrees with us? Who was the person who proposed MD&A going into the law? It was AIMA. The people responsible at AIMA have endorsed the approach of the ASX—that is, do what they are doing in the United States: make it part of the listing rules. The Investment and Financial Services Association, which represents the big fund managers whom Senator Conroy quotes, says that it would be better if it were in the listing rules than in the black-letter law.Finally, who else says that it should be in the listing rules and not the black-letter law? The Australian Shareholders Association says that it would be wrong to put it in the black-letter law if it can be done through listing rules. So you have every single organisation saying that it is better to do it through the ASX listing rules, but the ALP and the Democrats know better. They say, no, if you want good corporate governance, you have to do all these things in the black-letter law. That is what this debate has come down to. The government believes that almost every single organisation is saying, `No, do not put it in the black-letter law,' and most organisations are saying, `Let's have a debate about corporate governance under the corporate governance bill. Let's not slow up the progress of sound reforms in CLRB by having the debate today, let's do it after proper consultation.' But the Australian Labor Party know better. They say we have to do all these things because we want to beat up about directors' remuneration.There is nothing wrong with a legal requirement to report directors' remuneration. There is one in the law already. What we are talking about is increasing it. It may well be that that is a very good idea, but we want to allow the interested parties—the stakeholders—to have a say in how you do it. Labor and the Democrats will not allow it to go to the committee. They will not even allow Australian shareholders to have a say on it. They know best; Canberra knows best. Impose it on everyone else.I turn to the final support. As mentioned by Senator Margetts yesterday in another debate, the OECD did a report on corporate governance in Australia and absolutely, uncategorically endorsed the government's approach, saying that it is better to encourage a dynamic corporate governance culture than to impose prescription. I commend the bill to the House.Question resolved in the affirmative.Bill read a second time.3904The bill.10:37:003904Conroy, Sen StephenSenator CONROY3L6VICALP00—I want to return to some of the issues I was discussing briefly earlier and also address a couple of other issues that I believe this committee and this bill should be addressing. Senator Campbell has given a spirited defence of the government's inaction on these issues. I welcome a lecture from the creature of Noel Crichton-Browne and the organisation that never forgave the current Prime Minister for introducing bottom-of-the-harbour schemes, that had a party president who belongs in gaol for defrauding shareholders in Elders. But if Senator Campbell feels that he can give us a lecture about corporate governance and the need for this country to have watered down corporate governance, then time and history will judge him.In particular, I want to talk about mandatory electronic lodgment. As I have said, some of these issues are very, very insignificant, one being whether or not a company has the option to use electronic lodgment, for instance, of proxy votes, or whether or not there should be a requirement for shareholders to have access to electronic lodgment. This would not seem to be a substantial issue of difference, you would think. Apparently, what the Labor Party and the institutional shareholders of this country think is a matter of some philosophical note and should be a matter of significant debate in the parliament.It is the Labor Party's position that electronic lodgment should be mandatory so that, when shareholders would like to lodge a proxy form by fax with a company not having provided the required details, it is mandatory for the company to do so—not that the company has an option. It would not seem to be much to expect a company to have some form of access to electronic lodgment—a fax machine, e-mail—but apparently the government is saying that it should be an option of management. I say that it should be mandatory for shareholders to have access to electronic lodgment.I would hope that at the end of the day the government will be willing to be flexible on this issue or at least give some argument as to why it should not be. That argument should not comprise the sorts of answers that the departmental officials and the government have given twice when appearing before the corporations and securities committee—`It's not time; it's not appropriate; we don't want to force these things from Canberra on companies.'This is not Canberra forcing anything on anyone. This is what is in the editorial of the Financial Review—these are the investment houses, these are the institutional shareholders, the very people that the parliamentary secretary has spent the last six months doing the bidding of. They wanted MIB. They wanted it passed. They have been desperate. Watching the behaviour of the parliamentary secretary, you will have noticed that he has been desperate to accommodate them.We have those people turning around and saying, `We would like; we believe it is necessary for good corporate governance'—institutional shareholders, not the Labor Party, not Canberra imposing. We are moving these amendments with the support of IFSA, with the support of institutional shareholders, with the support of international corporate governance bodies. This is not Canberra imposing. These are shareholders' institutions saying, `This is what we would like. We would like you to do this because companies aren't doing these things at the moment. They're not giving us the required information for us to make judgments about directors' behaviour.' This is not a Canberra driven thing. This is coming from shareholders, from their representatives.I mentioned earlier today the issue of proxy voting and the disclosure question. If we have a situation—and I think Senator Murray has covered this very well in his minority report—where only one person in a shareholders' meeting knows how the proxies have been cast but does not have to reveal it, we have to ask ourselves `Why aren't the other shareholders entitled to know how proxy shareholders have voted?'—not individually, just the totals. The chair is allowed to know how people voted individually, but only the chair. Why is this the case?If the president of a trade union sat at the front of a meeting and said, `I've got all these proxies and I'm not going to tell you how they have voted,' what would be the government's response? It would be outraged. It would say that it was undemocratic. That is what is at the nub of this: the democratic processes inside corporations. You have a situation where a shareholder goes to the trouble of turning up at a meeting of their company. Mind you, there is no point if you are at the Essendon Football Club. They will just tell you, `We're not going to answer any questions on a significant issue'—but it is a company.ZW4SHERRYSenator Sherry—Who is the No. 1 ticket holder at Essendon?3L6Conroy, Sen StephenSenator CONROY—Who is the No. 1 ticket holder at Essendon? It is the Treasurer. You can see why the government is beginning to take some of its positions. It supports corporate entities—and that is what footy clubs are nowadays—saying, `We're not going to answer any questions on whether or not the information that was posted out to you was accurate or right, or on any other issues.' So you can see where the government has come from on these issues. It does not want a better corporate democracy suddenly running around, that is right.But if a trade union has to reveal this information, why not a corporation? Why don't we say that you have to declare what the totals are, just so that shareholders can be confident there has not been a mistake? Why the need for secrecy? If you are able to say, `This many shareholders voted this way, and this many voted that way,' you have transparency. There cannot be a mistake because everybody will know; everybody can check.But an honest mistake could happen, and here is an opportunity to ensure that an honest mistake cannot happen. There is always the possibility for a dishonest mistake to occur—though `mistake' is probably the wrong word. But why is the chair the only person entitled to know?One of the issues that is fundamental to shareholders is how the votes are cast at a meeting. You have a situation where a shareholder may want to have more than just a decision on voices or a show of hands. They may want a poll. The poll may give a different outcome from the voices or the show of hands. But the shareholder cannot know whether or not the proxy votes have been cast in a particular direction.This goes to the heart of democratic process in a corporation. A shareholder is entitled to call for a poll if he believes that a poll would give a different outcome from the vote on the floor. But how can a shareholder actually know? The directors and chair sitting up the front holding the proxies know that, if the vote goes a particular way that they are not happy with, they have the proxies that can actually change that and they can say, `Let's have a poll,' because they know what is in the chair's hand. But the ordinary individual small shareholder does not know what the proxies show, so how can they make an informed judgment about whether or not to call for a poll? This is a ludicrous situation. If a shareholder is unhappy with the decision on the show of hands or the voices, they are entitled to call for a poll if they think the result would be changed by the poll including the proxies, but they are not to know how the proxies voted. This is an absurdity. This is undemocratic, and it is information that should be available to individual small shareholders.Another substantial issue is the question of the role of independent directors. We had a very recent example where an independent director blew the whistle on what the independent director believed was poor corporate governance: the incapacity of the major shareholders to act in accordance with the laws about whether all shareholders' interests were being taken into account by the direc tors, who were the majority shareholders, or major shareholders; I should not say `majority shareholders' because they would not necessarily make up a majority of the shareholders. At the end of the day the independent director had no recourse, despite believing that agreements had been made on governance issues, that separations of interests were taking place, other than to resign and issue an oblique letter on his resignation saying that he believed corporate governance issues were at stake.What was the company? It will come as no shock to anybody listening today, anyone in the gallery or members of the chamber that I am talking about Crown Casino. Crown Casino is one of the worst examples of major shareholders mistreating the minor shareholders. You have seen Lloyd Williams and Ron Walker—we had a lecture from Senator Campbell, when Ron Walker, the bagman from the Victorian Liberal Party and the national Liberal Party, has the whistle blown on him about the lack of corporate governance. This is the man who tramps around the country saying, `We saw you gave $10,000 to the New South Wales Labor Party. We expect a similar amount in Victoria.'ZW4SHERRYSenator Sherry—$10 million.3L6Conroy, Sen StephenSenator CONROY—Plus a bit.3M6MURRAYSenator Murray—Or else.3L6Conroy, Sen StephenSenator CONROY—Absolutely. He is explicit about his behaviour when it comes to raising funds. The bagman for the Victorian and federal Liberal Party had the whistle blown on him not just by any independent director but by a current staffer of the Prime Minister. This is not a Labor Party plot here; this is an employee of John Howard, the Prime Minister of this country, an independent director of Crown Casino, resigning over corporate governance issues. He believed that Ron Walker and Lloyd Williams were incapable of understanding corporate governance. What were his options: resign and issue a letter. That was it. One of these amendments today allows an independent director to requisition a meeting. How quickly do you think Ron Walker and Lloyd Williams would have been at the bargaining table in the directors' meeting if they thought Brian Powers as an independent director could have called a meeting of shareholders to discuss the issues of the directors.EU4O'CHEESenator O'Chee—This is irrelevant.3L6Conroy, Sen StephenSenator CONROY—It is not irrelevant. This is about whether an independent director has the right to call a meeting of shareholders when they are unhappy. That is the whole role of an independent director: not to act on behalf of the major shareholders but to try to ensure that minor, small shareholders get their say.3M6MURRAYSenator Murray—And that the public interest is represented.3L6Conroy, Sen StephenSenator CONROY—And to ensure that the public interest is represented. Here is a perfect opportunity for situations like this to be eradicated. The bargaining power of an independent director is substantially enhanced. They are given some teeth. They are not just put on the board for show. You have got a whole bunch of show independent directives. Nick Greiner: wasn't he a Liberal Premier? Nick Greiner is one of the most appointed show pony independent directors, and I say that because of what happened at Coles Myer. He is a show pony of an independent director. Corporate governance was nonexistent at Coles Myer. Nick Greiner was a supposed independent director. This amendment gives power and teeth to genuine independent directors. That is what this amendment is about. I will return to those issues a little later in the day.5K4FAULKNER Senator Faulkner—Oh, good.3L6Conroy, Sen StephenSenator CONROY—Thank you, Senator. Another issue on which an amendment is being moved today is the disclosure of information available to overseas markets. You would have thought that, if a company is required to supply information to an overseas market, they would have been willing to make the same information available to the Australian market. It may be that there are different requirements, but this is hardly an onerous, costly exercise. I think it would probably amount to an envelope and a stamp. `Here is this information we gave the US markets. We do not have to give it here.' But, if they did, they would just have to make a photocopy, put it in envelope, put a stamp on it and send it to the Australian market. (Time expired)10:53:003907Murray, Sen AndrewSenator MURRAY3M6WAAD00—These amendments which are to be considered today really need to be addressed in totality to begin with, in view of the quite surprising remarks of the parliamentary secretary. In his address to the Senate, he indicated everything which is wrong with the coalition attitude to government and to the people of Australia. He was exhibiting an arrogance and an elitism which, quite frankly, the entire community is sick of. They do not want to believe that a government which is a minority in the House of Representatives, with 53 per cent of the population voting against the coalition, and a minority in the Senate, with 56 per cent of the people voting against the coalition in the Senate, does not want those 53 per cent and those 56 per cent to be heard.Their view is that this matter requires representatives of the government to sit down with the representatives of the managerial class or the directors' class—with particular elites—and come to a conclusion; and then we should all accept that as the decision which we must abide by. Frankly, there are other members of the managerial class and the directors' class of ordinary shareholders and ordinary Australians who do not agree, and that is why this debate is not non-controversial. That is why it is before the representatives of the people to debate appropriately. The fact that you approach it with a different philosophy is entirely correct.H15CAMPBELLSenator Ian Campbell—I am asking you to go out and consult like I have.3M6Murray, Sen AndrewSenator MURRAY—I will come to that. You will have your opportunity to reply. The fact is that the government has gone out there to consult with many people who sit them down to nice boardroom lunches and say, with a nod and a wink, `Once you have got this through, chaps, don't forget we will be donating to you, as we did last time. You know we are on your side.' I think the worst thing the coalition can be pinned with is that it is business's lap-dog or toy boy.ZW4SHERRYSenator Sherry—Toy boy?3M6Murray, Sen AndrewSenator MURRAY—Sometimes. I hope that is an unfair allegation, but the problem is: when you state that you want your bill to go through, indisputably—H15CAMPBELLSenator Ian Campbell—Madam Temporary Chairman, I raise a point of order. I regard it as an inference and a reflection on me to suggest that I would sit down in a boardroom and say, `You put this bill through and we will donate to your party,' and then to imply that I am a toy boy. I regard that as contrary to standing orders. Not only is it a reflection but it is reflection that is based on no fact. I can say on the parliamentary record that I have never been made an offer of that kind by anybody in my life, and I would ask Senator Murray to withdraw that immediately. It is totally beneath him.3M6Murray, Sen AndrewSenator MURRAY—I am pleased to hear that, Madam Temporary Chairman, and I withdraw the inference. The problem for us all is that if you attack the very credibility and grounds on which those who oppose your views present themselves, the inclination is to ask, `Why would somebody want this to be presented as a non-controversial bill? Why would somebody want to avoid debate in the people's house?' The purpose of a parliament is to consider all issues.H15CAMPBELLSenator Ian Campbell—I have never said that. You should retract that as well. You know that.3M6Murray, Sen AndrewSenator MURRAY—That was my understanding of your earlier address. You were saying that the Labor Party, the Democrats and whoever else has put up points of view on this bill are wrong and that they should not have brought it before you.H15CAMPBELLSenator Ian Campbell—I said you should refer your amendments to a committee and allow people to discuss them.3M6Murray, Sen AndrewSenator MURRAY—Let us respond to that again.Honourable senators interjecting—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! We are going to have a long debate if there is all this interjecting.Senator Ian Campbell interjecting—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I do not think the parliamentary secretary is assisting in continuing this debate. We would all be assisted if Senator Murray were allowed to continue but Senator Murray should, where possible, avoid making statements that are going to aggravate the debate in the chamber at this time.3M6Murray, Sen AndrewSenator MURRAY—Madam Temporary Chairman, I accept your admonition but members of this Senate know that it is very seldom that I am drawn to intemperate language; very seldom indeed. I was drawn to this intemperate language—and the inferences which I have withdrawn—by an extraordinary outburst, as I saw it, from the parliamentary secretary. It is appropriate that this bill is controversial, it is appropriate that amendments are before the House and it is appropriate that they are discussed. The fact that the parliamentary secretary has an alternative point of view does not entitle him, in my view, to lash out at the credibility, the motives or the consultative processes of those who do not agree with him.The parliamentary secretary must surely recognise that he, his advisers and the government will not be right on every single thing every single time. The fact is that these bills and this process have been through two parliamentary committees and we have had a number of hearings on them. As a result of those hearings an alternative point of view was expressed by substantial numbers of professional and able organisations and individuals, and some of those positions have been adopted by both ourselves and the Labor Party.The other point is that the persons participating in this debate are not lacking in experience. I, for one, have worked and lived as an executive in four countries on three continents. I have been a director of many boards and I understand business life. I have been involved in business life for over 25 years, including on my own account as an entrepreneur. We do not enter this debate from a position of ignorance.The other point I want to make clear to you is that the problem, for both the Labor Party and for us, is that we have to deal with the fact of the law as it is at present and the fact of the bill that is before us. Because we have to deal with the fact of the law and the bill we cannot deal with any future promises the government is making as to how it will deal with things. Because the electoral cycle is such, there is going to be an election shortly. The government may change. If the government stays the same, we are advised that its main priority will be tax reform. We do not know what will overtake the priorities of this Senate and this parliament and this government. In that case, the corporate governance and accountability changes and reforms, which we regard as absolutely critical to the health of our corporations, to the health of our society and to the fabric of our economy, may well be delayed until late 1999. That is what happens with government—other priorities and other matters overtake them.The parliamentary secretary has an endearing characteristic—he is often over-optimistic about when bills will come through and how quickly they will be resolved. We all think that is a commendable characteristic, but it is not rooted in reality or in history. The history of his predictions as to the length of time taken in debates or whether bills will come up is, generally speaking, overtaken by events. That is not his fault, but it is a fact. This bill was rapidly and urgently considered by the parliamentary committee in March. Senator Conroy is aware of that because he attended those hearings—he sat with me at them. We worked posthaste to get out that committee report. I think it was only two weeks from the beginning of the reference to the very substantial report being tabled. That was in March. Here we are in late June and the bill is finally before us. That is a fact of life.I accept, Parliamentary Secretary, that the government is attending to the issues of corporate governance and accountability. I have read your government's proposals on it. There are many good issues within it. But I firmly believe that the only chance we are going to have to deal with corporate governance and accountability matters is now. I expect that the next chance will be in late 1999. We think, on our side of the House—and hopefully other senators will agree with us—that these matters are urgent enough to be dealt with at once. It is your right to disagree. It is your right to have an alternative philosophy. It is not your right, in my view, to impugn the very real and genuine concerns that we have. Before I close, I again indicate that the extravagance of Senator Campbell's earlier remarks has occasioned me to respond in kind, which is unusual for me. I did withdraw, and I particularly withdraw any personal inference to Senator Campbell himself.11:04:003909Sherry, Sen NickSenator SHERRYZW4TASALP00—What we heard from Senator Campbell in the concluding remarks he made on the Company Law Review Bill 1997 reflected a significant double standard by this government in its approach to two critical areas. My colleague Senator Conroy quite rightly drew the attention of the Senate chamber to the issue relating to the accountability mechanisms that shareholders should be able to exercise.Senator Campbell represents a government which regularly rails against trade unions and makes various allegations, firstly about the way they operate and, secondly, about pay and conditions outcomes. The government regularly calls for intervention and improvement in practices and accountability. My colleague Senator Conroy quite rightly drew attention to the claims that are continually made by government members, by Liberal-National Party members, about behaviour in trade unions. Senator Campbell's contribution endorsed all sorts of potential and practised misbehaviour that goes on in some companies in this country.Shareholders own companies. They have a right to know. There will always be occasions where some shareholders are on the losing end of the debate and they vote. But they do have a fundamental right to know how votes are being cast. It is a fundamental tenet. They do own the company, after all. They do have a right to know. That sort of principle is very important to the Australian Labor Party and, I would have thought, very important to this Liberal-National Party government, which is continually, and I think unfairly, railing against what it regards as a lack of accountability in the trade union movement.The second area is the area of executive remuneration. Again, we have a double standard. I recall the contribution of Minister Reith when criticising the remuneration of waterside workers. Minister Reith made it very clear that the average pay of waterside workers was too high and should be reduced to the community norm. I said at the time that that was an interesting principle for a government to be adopting. If the average remuneration of waterside workers is $70,000, $80,000 or $90,000—the government members seem to vary that level according to particular circumstances—at least we know what they earn.Here we have a government today saying, `Shareholders do not have a right to know as a matter of course what the executives in a company are earning.' It is a clear case of double standards by Senator Campbell. It may well be that executives are entitled to a substantial remuneration and, at the end of the day, shareholders can determine that through a vote at annual general meetings and other occasions. Shareholders have a right to know what the information is.We have a number of celebrated cases of executive pay that are not linked in any way, 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.C16HEFFERNANSenator Heffernan—What about the AIDC?ZW4Sherry, Sen NickSenator SHERRY—I hear some noise from the other side. We have had an appeal from the government to be cooperative and to get this legislation through.H15CAMPBELLSenator Ian Campbell—Why are you filibustering?ZW4Sherry, Sen NickSenator SHERRY—I am not filibustering. We had a rant and rave from you, Senator Campbell, for 15 or 20 minutes. I am not going to take anywhere near that time. I am just pointing out to the chamber the double standard that you adopted.I was saying that, in 1989-90, Elders IXL managed to increase its executive remuneration package by 23 per cent. That was a pretty big wage increase. It certainly made the wharfies look like they were in the poor house. Interestingly, at the same time as that remuneration package went up by 23 per cent, what happened to operating profit? It dropped by 80 per cent. There may or may not have been good reasons for that sort of executive remuneration outcome, but shareholders have a right to know what executives are paid and they have a right to make judgment. If you do not know what an executive is paid, it is very difficult for shareholders to make a judgment.The Age—and I will say this because it was a sad reflection on my home state of Tasmania—described the salary package of a chief executive of Tabcorp as roughly twice the gross domestic product of Tasmania. I think that was a bit of an exaggeration and somewhat flippant but, in 1997, his salary was over $1 million and his shares had increased in value to such an extent that he was adding an additional $10 million to his salary. The simple point, and the simple principle which is very important to Labor, is that people may or may not be entitled to these sums of money, but shareholders are entitled to know it is being paid so they can examine whether that level of remuneration is appropriate. There are numerous other examples, but I am not going to take the time of the Senate.I will conclude by saying that that was a very poor contribution from Senator Campbell. Senator Campbell continues to appeal for cooperation in passing legislation. We got a rant and rave from him which we have to respond to. It was an amazing set of double standards from him with respect to the rights of shareholders and executive pay. I notice we are broadcasting today. We were left wondering whether it was a last ditch appeal to the preselectors in WA to boost him up the Senate ticket.H15CAMPBELLSenator Ian Campbell—I have already been preselected.ZW4Sherry, Sen NickSenator SHERRY—Have you? You have been preselected. Noel Crichton-Browne has given you the nod. We would like to know what position you have on the ticket.On no less than 12 or 13 occasions, we had the allegation that Canberra is imposing. That was just an excuse for attempting to rebut Labor's and the Democrats' quite legitimate criticisms of your legislation. On another occasion—a last gasp after Canberra is imposing—we had an allegation that we were doing the bidding of advisers from the United States. That is not the sort of contribution that is going to assist in the passage of this legislation. We have taken advice from a range of Australian organisations, companies and shareholders on this matter.Senator Campbell quoted a letter from the Securities Institute of Australia. He read out part of it, but I think he quite deliberately left out the last sentence of the last paragraph.H15CAMPBELLSenator Ian Campbell—Incorporate the entire letter.ZW4Sherry, Sen NickSenator SHERRY—I will read the last paragraph in full. If you would just calm down over there, we would get somewhere with this legislation. You quoted from the letter. The last sentence says:However, we believe the record of compliance by listed companies with the requirement should be reviewed within two years of its introduction. Of course, if the review shows a poor record of compliance, the need for a legislative requirement would need to be revisited.I think you quite deliberately missed that section of the letter from the Securities Institute of Australia.Let us move on to this legislation. By all means, let us get it passed as expeditiously as possible. Let us examine the legislation in the necessary detail. Let us have the appropriate level of accountability with respect to shareholders, executive remuneration and a number of other issues that Labor regards as being very fundamental. Let us avoid the overblown rhetoric and the poor excuse for the hypocrisy and double standards of this government. Let us get into this legislation.Senator Campbell, we saw Senator Kemp come in and instruct you to stop wasting time. Labor just asked for cooperation. We want to cooperate. We want to get the government program through. Being unnecessarily provocative and, at times, irrelevant—with the poor level of excuse for the double standards you have adopted in this legislation—does not help the cause of getting legislation through the Senate. When the Prime Minister complains and alleges that the Senate is being obstructionist, we will remind him of your role in wasting the Senate's time.11:14:003911Cooney, Sen BarneySenator COONEYSF4VICALP00—This is a very important debate. People have been accused of listening to others and of being in board rooms. I do not think there is any truth in that and there is probably little merit in making those allegations. The reality is that this is important legislation and we ought to look at it in terms of that importance. This sort of debate has taken place again and again over the years and will take place again in the future. There is one thing you can be certain of: there will be debates about the issues we are talking about again and again in the future in the Senate because company law is a living organism. It goes on and on and requires debate just as the life of companies goes on an on in an organic way.I would like to quote something here from the speech I referred to before from the former member for Hawker, Ralph Jacobi, on 12 May 1981. That was before the excesses of the 1980s. He said:Company law must establish a solid framework which defines a company's responsibility to its shareholders, creditors and the society. Beyond question, the coming decade will bring ever-increasing pressure to bear; it will test these laws to the limit. Regrettably, these Bills fail to meet the test. They will be inadequate and, as a consequence, ineffective. Once can only describe them as completely outmoded. Even worse, they serve as nothing more than a charter for the unscrupulous. This so-called revamped companies law is almost the same as that in the laissez-faire Britain of the nineteenth century. Where are the profound and meaningful changes? Members of companies, particularly large companies, take little part in company affairs. Those members are poorly placed, and the provisions in these bills make sure that shareholders do not receive the information about their companies that would enable them to act as watchdogs on management. A classic example of that is the collapse of Associated Securities Ltd. Nothing in this legislation will remedy that situation.That quote is now over 17 years old, but it has resonance for the present.It is important that we remember a few things. Firstly, the sorts of issues that we are talking about today do not arise because people have talked to particular interest groups; they arise because they are endemic to company life and to company law. Secondly, they do need proper and deep consideration because the sort of quote I have just given will be pertinent in future debates. Thirdly, society itself, company law and those in company life, including shareholders and directors, deserve to have us get it as right as we can. If that takes a bit of time in debate, then so be it.11:18:003911Conroy, Sen StephenSenator CONROY3L6VICALP00—I want to return to the issue that I was speaking on briefly before my time ran out. That was to do with the disclosure of information available to overseas markets. I am still to hear a credible reason from the government and from any of their officials for their problem with information that is required by overseas markets also being made available to Australian markets and Australian shareholders. It seems to me that this is really a case of a government just digging in and refusing to introduce a reform that is not being requested by the Labor Party but by the investment community. It seems absurd that information about a company in which you are a shareholder is more freely available in America or in Europe than it is in Australia. This is an extraordinary state of affairs. If you can get on the Internet and access information on the US markets and you can find out more about your company through the Internet on US markets than you can on Australian markets, it says something about transparency and disclosure in this country.Senator Campbell, the Parliamentary Secretary to the Treasurer, has talked about how we are trying to impose this. I draw his attention again to the Financial Review on Wednesday, 1 April, and to an article entitled `Corporate Oligarchy'. I have already read some of the points in but I would like to finish off with the last couple of paragraphs in this editorial. It says:Essentially, the CLRB style of approach aims to be investor-friendly—for instance, by more clearly mandating how companies should keep their shareholders properly informed. By contrast, the CLERP legislation being pushed by the Treasurer, Mr Peter Costello, aims to make life easier for companies on the basis that, in a competitive corporate market, what's good for the companies is good for their shareholders.The last thing this newspaper—this is the Financial Review , not `Labor Herald' and not the Age —wants is more black-letter law mandating how boards should run their companies.H15CAMPBELLSenator Ian Campbell—Hear, hear!3L6Conroy, Sen StephenSenator CONROY—Hear, hear! The Labor Party is supporting the thrust of what the government has been doing. The last sentence reads:But if Australia's company directors won't even reveal how many votes they were elected by, they will only have themselves to blame if they find that a new law has landed squarely on their heads.The Financial Review is arguing that the reforms and the amendments that the opposition and the Democrats are putting forward are necessary for accountability and transparency. That is what the Labor Party and the Democrats and, hopefully, the Greens and other senators, will be saying to the investment community and to investment houses: `We support your call for these amendments. We support the call for greater scrutiny by shareholders of their corporate behaviour and of directors' behaviour.' As the Financial Review has clearly stated, there is a difference between what is in a company's and the directors' best interests and what is in the shareholders' best interests.Hopefully, in all cases they do not diverge but there are too many examples otherwise. Senator Sherry quoted a perfect example where Elders' remuneration packages were substantially increased at the same time as its very executives were defrauding their shareholders to the tune of over $100 million with bogus foreign exchange transactions and hiding the beneficial ownership of bonds which bought themselves shares in Elders. This was all at the same time as they were increasing substantially by 23 per cent their own remuneration. Maybe at the time Mr Elliott, Mr Scanlon and the rest of the management team at Elders deserved the 23 per cent increase. It may be that that is the case. What is relevant is whether the shareholders of Elders had a chance to pass judgment on that and had a chance to actually know that was happening.ZW4SHERRYSenator Sherry—They only own the company!3L6Conroy, Sen StephenSenator CONROY—That is right, Senator Sherry: they do only own the company and it seems a little impertinent of them to want to know what they are paying the chief executive. But there are a number of other organisations and people also displaying double standards in today's debates about these issues. Firstly, the parliamentary secretary is critical, saying that Senator Murray and others—me perhaps—have not done enough consultation. This is a process that has been alive for three or four years. As Senator Murray has indicated, we did our utmost at the government's request to speed through the inquiry. We were not happy; we believed that more time was needed. We were urged—in fact, implored—by the government to hold a hasty inquiry, to limit the time in which the submissions on these bills could be put in, and to quickly have them ready before Easter.ZW4SHERRYSenator Sherry—It is now the winter solstice.3L6Conroy, Sen StephenSenator CONROY—That is exactly right. We are near the end of the financial year. We are nearing an election. If there is criticism for a lack of consultation, it is because we were too cooperative with the government in working to your timetable, Parliamentary Secretary, to try to assist your legislative program. For you to come into the chamber to accuse us of not consulting is the height of a double standard, because we sacrificed some consultation, some of the open process, to assist you. We were not happy about it but we did it. We recognised the need.This government is continuing to try to hide the remuneration packages from public shareholder scrutiny. This is at the same time as it wants to run a publicity campaign about hidden taxes. It wants to say it is terrible to have all these hidden taxes, yet it is going to introduce a GST, which in most cases is a hidden tax unless it is actually stapled onto one's price docket when it comes out of a register. Everyone will have to change their registers if they are going to be able to actual ly state what the GST is, and not everyone is going to be able to do that.So on one hand the government says hidden taxes are terrible but at the same time it wants to hide the remuneration of people like Stan Wallis who is in the papers this week championing the case against hidden taxes and charges.ZW4SHERRYSenator Sherry—Not the Burnie workers who were sacked.3L6Conroy, Sen StephenSenator CONROY—Not the Burnie workers whom he sacked, but I am sure he has told them the GST is going to get them their jobs back. I am sure, thanks to Stan Wallis—the head of Amcor who has just sacked those workers in Burnie—they are absolutely sure they are going to get their jobs back once a GST is introduced; there is no question about that. But Stan Wallis wants to walk around this country promoting the case against hidden taxes, yet his organisation and others, including this government, do not want to have to provide information to their own shareholders—their owners—about what their remuneration packages are.Senator Campbell also chose to make something of the fact that only one or two individuals had made submissions and had ever really discussed these issues. I say to the parliamentary secretary that, in the case of the MIB debate, only one or two individuals put in supporting submissions for MIB. There were many submissions—over 50 to the parliamentary committee—opposing MIB. But the parliamentary committee process does not weigh its deliberations on the basis of who can organise the most amount of submissions to be put into a committee. I think individual senators are smart enough to work out that, just because—3M6MURRAYSenator Murray—Remember Brighton?3L6Conroy, Sen StephenSenator CONROY—That is exactly right—the battlers of Brighton. Thank you, Senator Murray. The battlers of Brighton were up in arms about the trafficking in trust losses and the government certainly did not want to take any notice of them, thank goodness!Because only one or two people put in submissions on the corporate governance regime does not mean that their views are not valid. It does not mean that, just because they represent all the investment houses in the country through IFSA, their views are not relevant or should be discounted. If institutional shareholders are saying, `We want corporate governance,' they can choose to make one combined submission through IFSA—rather than 30 individual submissions—to prove that there is broad based support. I think the senators on that committee and in this chamber are just smart enough to understand that there is a broad push in the business community, evidenced by the Australian Financial Review's editorial and evidenced by debate that has been in the newspapers over these sorts of issues.It is not that there has been no discussion, no consultation and no debate. Newspapers have been carrying articles with opinions one way and opinions the other way—just like with the MIB debate—for the last six months on this issue. We have had submissions and we have had parliamentary inquiries and the government says, `We are interested in corporate governance but you are doing it at the wrong time and the wrong place.'I, like Senator Murray, am concerned that if we do not support these amendments today, which are about disclosure and transparency and democracy in corporations, we will not likely see them, if we are lucky, before 1999. Because of that, we will see less confidence in Australian markets and companies from investors around the world and in Australia. We have an opportunity to send a loud signal and to get world's best practice in corporate governance. Today provides the opportunity for government and senators to vote on whether we do want world's best practice, on whether we are going to allow the behaviour of some of our corporate executives in this country, which is now well documented, to continue, or whether we are going to see genuine reform.The government could say to us, `This is the wrong bill. If you were to move some of these amendments to this other bill that we are looking at bringing in, we will give them favourable consideration or may even be willing to support them—it is possible.' But, Senator Campbell, the government has indi cated that it is not interested in the majority of these amendments—black letter law is what you were stressing before. You are saying, `Don't introduce them today; we will look at them next time. We are going to oppose them next time, but let's not debate them today.' No, today is the time to debate them. Today is the time to introduce world's best practice in corporate governance and to support what is being asked for by shareholders, not what is being opposed by company directors.11:32:003914Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I take the point that has been made by Senator Conroy: this parliament should not decide issues on the basis of who can drum up the most faxes, letters, submissions to committees and so forth—all of those should be considered on their merits. I am hugely assisted by the work of the Senate committees on these matters. Each of those reports—both the majority and the minority reports—that deal especially with legislation are very important in my assessment of legislation such as this.I believe that there is goodwill around the chamber and that everyone would be very supportive of the measures that come before us in this company law area which do assist in ensuring that the shareholders are able to understand what is going on in the company and that there is complete transparency. I thought we were going to start with government amendment No. 1 and work through. I would like to congratulate the parliamentary secretary on the work that he has done, but I do feel, as do other senators, obviously, that it would be remiss of us if we did not put before the chamber matters which we feel would assist in providing shareholders with the necessary transparency provisions to enable them to keep a check of the company and become involved in the company.For example, take some of the amendments proposed by Senator Murray. I do not support some of them; on others I need further clarification. His amendments 39 and 40 on the question of remuneration packages for directors—amendments on which discussion ranged in this debate—insert new paragraphs requiring the director's annual report to include details of remuneration packages for directors, senior directors and the five most highly remunerated officers of the company and related matters. Surely that is a measure which requires disclosures of matters which mean that the books and activities of the company are more transparent and that directors are more accountable to the shareholders. What is wrong with that? I would have thought that that would have received unanimous support around the chamber.Another example is Senator Murray's amendment 17, which inserts a new provision which would require the chair of a meeting to inform the meeting about proxy votes received and how they are to be cast. This provision adds transparency to the treatment of proxy votes and forces disclosure when it may be in the chair's interest not to have disclosure. It surely would be appropriate to support this amendment. It seems logical and reasonable given the parameters within which we are working.Senator Murray's amendment No. 34 again inserts a new paragraph which requires the directors' declaration in the annual financial report to include a declaration that the financial statement and notes comply with the accounting standards of section 296 and that they present a true and fair view as required by section 297. I am of the view that that new provision would be consistent with sections 296 and 297 of the Corporations Law and make the directors accountable in respect of the law. Again I see no real hassle about that. It improves the situation.But some of the amendments I do not support. For example, amendment No. 14 which deletes subsection 250C(4). That subsection currently prohibits the sending of proxies by fax and email. Given that voting is often controversial and that many persons prefer the entire process, including proxies, to be kept as confidential and as closed as possible and given that it is also more difficult to verify signatures on faxes and it is not at all possible on emails, I am wondering whether Senator Murray thinks that that might not be a practical proposition. I would be interested to hear what he has to say about that when given the opportunity.But overall I believe the amendments that are being proposed, including a key amendment proposed by the opposition, are worthy of consideration during this debate. I feel that we should deal with them as this is the opportunity to do so. Who knows when we will get another opportunity. I think Senator Sherry queried when we will get another opportunity to make these sorts of improvements. That is what this Senate is all about. We are a house of review. We seek not to harass the government and simply block its legislation; we attempt to exercise our review function in a responsible way. I believe we have the opportunity to do that to improve the company law and to do it in a manner that will be for the good of companies and their structures and for the benefit of the shareholders.11:41:003915Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move:(1) Schedule 1, item 1, page 15 (lines 17 to 24), omit subsection 5.2, substitute: 5.2 Appointment of new directors It is a replaceable rule (see 1.6) that shareholders may appoint directors by resolution at a general meeting. [section 224C](4) Schedule 1, item 1, page 47 (table item 2), omit the table item.If I may commence with a declaration—and this declaration will cover all the deliberations today and on this bill—I am a trustee of a trust which has company shares and those companies obviously would be affected by this bill. So I accordingly make a declaration.11:42:003915Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—For ease of handling and, hopefully, speed and not haste, I indicate the government will not oppose these Democrat amendments.11:42:003915Harradine, Sen BrianSenator HARRADINE6H4TASIND00—Then I do not need to ask the questions. If the government is going to support this, there is no point in my asking questions about them.Amendments agreed to.11:43:003915Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:(1) Schedule 1, item 1 page 31 (after line 7), after paragraph (k), insert:(ka) for a company limited by shares or an unlimited company, a statement that the written agreement referred to in subparagraph (k)(i) (i) includes a summary of the rights and conditions attaching to the shares agreed to be taken up (ii) sets out the total number of persons who have consented to be members and the information referred to in sub-paragraphs (k)(i) and (k)(ii) (iii) contains a statement that, if a constitution has not been adopted, the Replaceable Rules will apply and that they create a contract between the members the terms of which may alter if the Replaceable Rules change after the company is registeredParliamentary Secretary, I have, as you know, both with the bill yesterday, the Managed Investments Bill 1997 , and with this bill attempted to keep you, other senators and the official opposition in touch with my amendments. I think I circulated them five or six weeks ago. This one, however, is a late arrival. It was circulated yesterday. You would, therefore, I think need to hear my motivation for this amendment.This amendment refers to new section 117, which deals with the application for registration of companies. New subparagraph (ka)(i) is intended to ensure that people who are proposing to take up shares in a new company are aware of the rights and conditions attached to those shares. One of the problems we face is that people are often not aware. At present when a company is formed, the new members sign the memorandum of association, which will now be referred to as a constitution, which sets out the rights attaching to each class of share.New subparagraph (ka)(ii) is intended to make the members of a new company aware of who else will be members of their company and how many shares of each class of shares they will hold. This will allow the prospective members to confirm that the relative ownership of the company on its registration will be as they expect or have been led to believe. This requirement will reduce the chance that the promoter of a company may bring more members into the company than he or she has represented to the members and so dilute the ownership of those members. I will give you an example if I may. The reason I have brought it forward is that I think the example is almost trying to avoid a situation of fraud and misrepresentation and, therefore, deserves to be dealt with with some haste.The example is this. The owner of a business whose goodwill is attached to a business name may be induced to relinquish the business name—and apparently this has happened—to allow a company to be formed in that name on the basis that he is to take up one share of $1 in return for assignment of his business to the company and on the basis that the applicant would also take up one share of $1 at a premium of $100,000 in cash. A former business owner who does this believes that he is taking on a single partner who is going to contribute $100,000—and that sounds terrific—to the business in return for half the equity, and that sounds perfectly reasonable.The person entering into that agreement thinks that he or she understands exactly how that is happening. However, without his knowledge the applicant may also then bring in three more partners who take up a $1 share but with no premium payable. The former business owner may thus end up with four partners and only 20 per cent of the equity in the company on registration. It is a situation where, because the particular person has not foreseen the dangers, they become a minority in their own company simply because they have entered into a particular arrangement.The purpose of this amendment is to fix that problem. At present, the memorandum of association, now to be called a constitution, which is signed by all members on formation of the company, sets out who the other subscribers are and what shares they are taking out. New paragraph (ka)(iii) is intended to ensure that members of the proposed company are aware of the existence and effect of the replaceable rules. In summary, the rationale for the proposed amendments is to provide essential information to prospective members of a new company so that those members can make an informed decision as to whether or not they wish to be involved in the formation of the company. The additional information which must be provided will result in relatively minor additions to the agreement to take up shares. The information will be in the hands of the promoter of the company and it will be merely a case of adding that information to the document.Parliamentary Secretary, I have taken advice on this because this is an area where I am trying to deal with a fraudulent matter. I would appreciate your response.23:47:003916Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I will have to take advice on this. It is the first time this matter has been brought to my attention. I cannot provide you with a response to that particular matter at the moment.The government's response is that this amendment would add a new piece of paper which would be required in the registration of a company. It is contrary to the thrust of the original Lavarch bill in that we are trying to ensure that company registration can be done on one sheet and lodged electronically with the ASC. In fact, the Financial Review estimated that, if there is a $1,000 saving per company, there potentially would be about a $1 billion saving to the companies of Australia by achieving this paperwork reduction.Currently, companies have to lodge a range of different things—memorandum of association, registration forms and so forth. The approach that the previous government and Attorney-General took was to try to put the information onto one sheet and allow it to be lodged. This would conflict with that approach. I suspect, from the advice I have been given, that it may well be that to solve the problem Senator Murray raised—which I am sure is a serious concern—would mean using a sledgehammer to crack a nut. However, the advice I have got is that if this was done the philosophy of the Lavarch bill would be breached. In other words, single member companies and small business people would have to get professional assistance with their lodgments.Under this bill, as it was formed by the previous government and the simplification task force, that professional assistance would not be needed. People would be able to register a company without legal and specialist advice. There is no doubt that this would significantly increase the cost of forming a company. I do not intend to call a division on this, but the government will be opposing it.11:50:003917Murray, Sen AndrewSenator MURRAY3M6WAAD00—Parliamentary Secretary, if it is the will of the Senate not to pass this amendment, because it deals with an apparently potentially fraudulent practice, would you be agreeable, if I request you to do so, to refer that particular matter to the committee considering these issues so that they can examine both the problem and the remedy and conclude what is appropriate?H15CAMPBELLSenator Ian Campbell—I undertake to do so.11:50:003917Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I think that is an eminently desirable suggestion. I feel that the government would see it as such and will take it forward.11:51:003917Sherry, Sen NickSenator SHERRYZW4TASALP00—Yes, the opposition agrees.Amendment not agreed to.11:51:003917Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move:(2) Schedule 1, item 1, page 45 (line 8), omit "public".(3) Schedule 1, item 1 page 45 (lines 16 to 18), omit all words after paragraph (b).Thank you, Parliamentary Secretary, for that undertaking in relation to the previous amendment.These amendments are very briefly construed. The effect of these two amendments is that changes to constitutions would be lodged by all companies, not just public companies, with the ASIC. The reason that we have moved this amendment is that many suppliers, when a company goes to them for a credit rating or an agreement to supply, will like to access the constitutions of companies to establish just what sort of corporate animal they are dealing with. Frequently they do so through appropriate agencies such Dun and Bradstreet. So, generally speaking, creditors would, in our opinion, need access to both private and public constitutions as registered with the ASIC. That is the motive for these amendments. 11:53:003917Sherry, Sen NickSenator SHERRYZW4TASALP00—I might pose a question. Senator Campbell or Senator Murray might be able to inform us. We are concerned about the possible cost implications of this. I anticipate Senator Campbell might have some information. For quite small companies it may be totally unnecessary to be involved in the amount of paperwork and obviously the consequent cost. That is of concern to us. I am sure Senator Campbell has a view and Senator Murray can outline what he thinks the impact of his proposal will be.11:53:003917Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—This is another classic example of the benefit of allowing exposure drafts of these laws. Probably I did not explain it as well as I should have in summing up the second reading debate. It is a real principle not to reduce the Senate's role in reviewing this legislation, or any company's legislation, but the corporations agreement, which sets up the national scheme, requires that company law reforms for most chapters of the law are exposed for three months before being introduced here in the first place. This exposure allows all interested parties and stakeholders—particularly shareholders and their representatives—to look at the impact of these laws.I do not want to set off another one-hour debate about this, but this is one of the reasons why significant amendments to the law, I humbly suggest, should be exposed for the same reasons as the law itself is exposed.The original draft of the bill did require just this, but we had very strong representations from small business interests out of concern at the unnecessary nature and extent of the compliance costs for lodging these constitutions. Members of a company will be able to ask the company to give them a copy of its constitution within seven days. I refer Senator Murray to section 139 of the bill where that is a requirement. The ASC will also be able to require a company to lodge with the ASC a consolidated copy of its constitution, and that is picked up in section 138. The government believes this will be sufficient to address the exceptional case where it would be desirable for a copy of the constitution to be made available to the public.Senator Sherry asked about the costs. One of the other reasons it was dropped was that the Australian Securities Commission told us that the requirement to hold the constitution would involve in excess of one million companies. We have not got a figure, but the cost of even storing that electronically would be horrendous. I am sure that the people at the information processing centre in Walwa would think it would be a great new line of business for them. It would certainly require a significant increase.ZW4SHERRYSenator Sherry—You could locate it in Tasmania.H15Campbell, Sen IanSenator IAN CAMPBELL—In Burnie; good idea. That is the concern. The constitution will be required to be available. The ASC can demand it. So, to answer Senator Murray's proposition, if a creditor came forward, asked to see the constitution and was able to say to the ASC that there was a breach, the ASC could demand a copy of the constitution. A member of the company can demand a copy of the constitution. They are available; they have to be available. But it is a matter of practicalities and costs for the regulator—and, therefore, the taxpayer—and again a cost to the small business interests who have been strongly opposed to this.11:56:003918Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—To a certain extent some of the themes from last night's managed investment funds debate are re-emerging. The Greens (WA) opinion is that near enough is certainly not good enough when we are dealing with issues of accountability.The Democrats amendments Nos. 2 and 3 would make corporations, and not just public corporations, lodge special resolutions that adopted, changed or repealed the constitution—as well as the constitution and modified constitution—with the ASIC. We think it is a worthy amendment because it is based on the principles of transparency, accountability and investor protection.Perhaps the Parliamentary Secretary could advise us: when incorporated bodies or corporations form their constitutions, what happens to the constitution of incorporated bodies and how many are there throughout Australia? Does the minister know?11:58:003918Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I am informed that is regulated by the states. I understand it might vary from state to state. It is a matter for those regimes.11:58:003918Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The point I am trying to make is that some of these incorporated bodies have almost no money. The reality is that lodging a change in the constitution costs almost nothing for the actual corporation or the incorporated body and it is expected. As I say, teeny-weeny incorporated bodies and community based organisations lodge constitutions. Whether they do it with the states or the Commonwealth, the reality is that this is happening on a daily basis. It is part of accountability and people can take incorporated bodies to court based on changes or them not abiding by their constitutions.Why would we think it would be less important that the constitutions of bodies who are handling other people's money should not be dealt with at least as carefully, if not more carefully, than teeny-weeny, not-for-profit corporations, many of whom know that these kinds of rules exist on a daily basis? It is very hard to believe the government's logic here.11:59:003918Sherry, Sen NickSenator SHERRYZW4TASALP00—I just wanted to indicate that the concerns I raised about costs are valid. I do not want to hold us up too long. Senator Murray mentioned creditors in his contribution, and creditors needing to access information. Could you either repeat or clarify your comment in that regard?11:59:003918Murray, Sen AndrewSenator MURRAY3M6WAAD00—Senator Sherry, I think that those who have the greatest interest in corporate constitutions are those who have contractual relationships with them or who are potentially exposed to a liability—for example, groups such as banks, employees and suppliers. Obviously not every small employ ee is going to do it, but the union might want to know that a particular company is structured in a particular way. In my experience, generally speaking, those inquiries are conducted by professional organisations—your accountant or Dun and Bradstreet or somebody who does such things. Seldom do creditors, in my experience, go to the ASIC on their own and ask for those documents.Quite often those inquiries are made not secretly but not to the company concerned because the creditor—for reasons of discretion and to avoid embarrassment—will not necessarily tell the company that they are doing that sort of a check. In my experience that is how memorandum and articles have in the past been checked out and how constitutions will in future be checked out. The law, as I understand it, is that that process still applies for public companies. The question is whether it should apply to private companies as well.Amendments not agreed to.12:02:003919Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:(5) Schedule 1, item 4, page 69 (after line 3), before Chapter 2F, insert:Chapter 2FA—Corporate governancePart 2FA.1—The corporate governance board245A When is a corporate governance board required? (1) All listed corporations, which become listed after the commencement of this section, must establish a corporate governance board. (2) All other listed corporations must: (a) at least 2 weeks but not more than 4 weeks before the next annual general meeting held after the commencement of this section, or at the second annual general meeting after commencement if there is insufficient time between commencement and the next annual general meeting, circulate a summary of the operation of a corporate governance board to all members of the company, together with the opinion of its directors on matters relevant to the operation of such a board; and (b) propose a resolution, at the next or second annual general meeting held after the commencement of this section (as the case may be), that the company establish a corporate governance board. (3) Any resolution of a listed corporation which has the effect of abolishing the corporate governance board is invalid. (4) Nothing in this Division requires a company which was a listed corporation at the commencement of this section to propose a resolution at any annual general meeting, other than the next annual general meeting held after the commencement of this section, that a corporate governance board be established, if the resolution under paragraph (2)(b) is defeated.245B Membership of the corporate governance board (1) A corporate governance board must have at least 3 members, and a majority of them must be external members. (2) A member of the corporate governance board is an external member if he or she: (a) is not, and has not been in the previous 2 years, a director, an executive officer or an employee of the company or a related body corporate; and (b) is not, and has not been in the previous 2 years, substantially involved in business dealings, or in a professional capacity, with the company or a related body corporate; and (c) is not a member of a partnership that is, or has been in the previous 2 years, substantially involved in business dealings, or in a professional capacity, with the company or a related body corporate.245C Election of members of the corporate governance board (1) The membership of the corporate governance board will be vacated at each annual general meeting and the meeting must elect a new corporate governance board. (2) A person who has previously served as a member of the corporate governance board of a company may nominate for re-election. (3) Members of the corporate governance board must be elected on the basis that each member of the company is entitled to cast one vote.245D Functions of the corporate governance board (1) The functions of a corporate governance board are: (a) to determine the remuneration of company directors; and (b) to appoint auditors and determine the remuneration of auditors; and (c) to review the appointment, remuneration and functioning of independent agents, such as valuers, who provide material information to shareholders; and (d) to appoint persons to fill casual vacancies of directors; and (e) to determine whether amendments should be made to the company's constitution, whether on the request of the company's directors or on the board's own initiative; and (f) to decide issues of conflict of interest on the part of the company's directors and determine how those conflicts will be managed; and (g) to control the conduct of general meetings and determine voting procedures. (2) The corporate governance board must report to the members of the company at each annual general meeting in respect of the performance of its functions. (3) The directors of a company must not purport to perform any of the functions mentioned in subsection (1) following the establishment of the corporate governance board.245E Duties of members (1) A member of a corporate governance board must: (a) act honestly; and (b) exercise the degree of care and diligence that a reasonable person would exercise if he or she were in the member's position; and (c) not make use of information acquired through being a member of the corporate governance board in order to: (i) gain an improper advantage for the member or another person; or (ii) cause detriment to the members of the company; and (d) not make improper use of his or her position as a member of the corporate governance board to gain, directly or indirectly, an advantage for himself or herself or for any other person, or to cause detriment to the members of the company.245F Remuneration Remuneration of members of the corporate governance board is to be determined by directors who are not members of the corpo rate governance board, with the agreement of the members of the company.This is the first of the major governance issues. I bring this to the attention of the Senate because it is my belief that this amendment, which is on revised sheet 951, attends to a key problem which presently exists in terms of the relationship of shareholders to their companies and of the public at large to their companies.Corporate governance boards are not new ideas. Some companies do have such boards. Members of the Senate who are not familiar with the Corporations Law might be surprised to know that the Corporations Law does not refer to boards; it only ever refers to directors. The board structure, although we know it very widely, is not a feature of Corporations Law. The concept of a corporate governance board is between a body that conducts the normal operational and managerial functions of a board—which we should call for the purposes of this debate the main board—and another board which deals with accountability issues.Company directors have extensive powers regarding the management of a company's business and internal organisation. Some of those internal management powers which may be termed corporate governance powers include the following. For the purposes of this debate, envisage the average board as having a majority of executive directors and a minority of non-executive directors. This is what those people with a material interest in the matters at hand can determine. They can decide their own remuneration. So those members of the managerial class and directors' class sit around that board and decide their own remuneration. They can appoint and remunerate auditors and other experts. Auditors and other experts are the people who come back to the company and say, `You are running your company well, and the investing public can be assured that what you are doing is acceptable, all above board and is to the good of the company.' What happens if that is not the case? What happens if the auditors fail, as they so frequently did with all the collapses at the end of the eighties? So there is a direct conflict of interest there.They can adopt any accounting practices they see fit within accepted accounting standards. Those directors can nominate themselves for re-election. They can appoint casual vacancies for directors. They can initiate changes in the corporate constitution, and they can control the conduct of shareholders' meetings and voting procedures. In instances where the interests of the shareholders do not coincide with the directors and the management of the company, the directors of the main board having those powers can lead to some very serious conflicts of interest and some very serious matters of misjudgment, misbehaviour and at times corrupt behaviour. Directors also possess the power to manage conflicts of interest with related parties. There is a barrister in Sydney who is famous for his attacks on conflicts of interest with related parties. His name slips my mind for the moment. He is a fellow who flies an aeroplane and is getting on in years a bit.SF4COONEYSenator Cooney—Gunzman.3M6Murray, Sen AndrewSenator MURRAY—That is the man. He has really made a career out of campaigning against these sorts of things. Shann Turnbull, in the Australian Financial Review on 14 November 1996 in an article entitled `Dictatorship of the boardroom', stated:Many of our largest companies have directors who represent shareholders with related party trading interests. Examples are Arnotts, Cadbury Schweppes, Caltex, Coca-Cola Amatil, Coles-Myer and Qantas to name a few.That is a fairly respectable list of senior companies. The number and extent of these powers has led such commentators to argue:Existing practices concentrate powers with directors and provide them with absolute power to manage their own conflicts of self-interest to allow corruption of themselves and economic performance.His words in a public newspaper. Mr Turnbull made the further point that as these `governance powers are quite different from the duty of the directors to manage a company, they can and should, be separated'. I agree with that. This may be leading edge governance practice, but the fact is that we have to see a situation where conflicts of interest and related party concerns have to be addressed.A sure way to increase the independence and accountability of a company is to have two boards: one concerned with managerial and operational issues; and one solely concerned with governance issues. The former should quite properly continue to have directors elected relative to shareholdings. But to protect minorities, minimise conflict of interest issues, avoid board capture and ensure accountability, the latter needs to be elected by shareholders.So I am talking here of two classes of directors: one having the main power and comprising the directors who are elected relative to shareholdings, so there would be a few very large shareholders controlling the board, as they do at present; and the other, the governance board, the accountability board, being elected by shareholders—in other words, the mass being able to elect them. We believe that that creation—which is being developed in other countries and is already in practice in a number of companies in this country and world wide—will result in creative tension within the company and will enable boards to resolve very, very difficult issues of conflict of interest.In listed companies a separate board should exercise these internal governance powers, leaving the main board directors to concentrate on the management of the company's business operations, while the second board would provide the valuable introduction of a system of checks and balances into corporate governance procedures—a separation of powers, in other words. This proposal has the added virtue of introducing a greater measure of self-regulation, which I know is dear to the parliamentary secretary's heart. MAI Services Pty Ltd told the committee:This is a much cheaper and effective way of protecting minorities than relying solely on the legal system, ASX listing rules or the ASC.It is a much less costly method of arriving at a remedy for conflict of interest or malfeasance issues.The proposal that we are putting here is a pro-active one; it is designed to prevent problems. To those who answer that the stock market will police companies with poorly performing boards and corporate governance, that involves a reactive attitude. Most importantly, that market based view of how a company should be run is a prejudicial one to shareholders because, if corporate governance fails and the shares fall—never mind all your suits with the law courts thereafter—the value of your shares has fallen.Independent directors, as presently constituted, are often anything but. If not recommended in the first place by the other directors in the control group they are supposed to be independent of, they can be subject to board capture anyway, unless, as is fortunately sometimes the case, they are exceptional individuals. Australia does have some exceptional and outstanding individuals who are directors of both public and private companies—and we thank everyone that that is so. The Shann Turnbull article in the JASSA autumn 1998 publication said:The centralisation of corporate power in a single board is the biggest governance problem for minority shareholders and other stakeholders.I think it is the biggest problem which faces us all when dealing with companies. It is a question of how you can get them to operate with full accountability, whilst still remaining efficient and highly motivated economic and commercial entities.The corporate governance board proposal would both simplify and reduce the role, responsibilities and workload of the main board directors as well as increase their credibility by removing the powers which permit the perception or actuality of a conflict of interest. This should thereby improve the accountability of directors and the internal governance of companies and lead to better business management decisions by directors. Ultimately, this is about re-establishing the balance of company governance in favour of shareholders rather than management.Some of the powers and functions of the corporate governance board I have itemised at 245D on page 2 of revised sheet 951. There, the functions of the corporate governance board would be to determine the remuneration of company directors; appoint auditors and determine their remuneration; review the appointment, remuneration and functioning of independent agents, such as valuers— and we all remember the role valuers played in the late 1980s—who provide material information to shareholders; to appoint persons to fill casual vacancies of directors; to determine whether amendments should be made to the company's constitution, whether at the request of the company's directors or on the board's own initiative; to decide issues of conflict of interest on the part of the company's directors and determine how those conflicts will be managed; and to control the conduct of general meetings and determine voting procedures. I think that list of functions really does resolve the major accountability issue that we face.It is essential, in our view, that the separate governance board be elected on the democratic basis of one vote per shareholder rather than one vote per share. Although the Australian Democrats believe that this system is desirable for all listed companies—and this is an important point in view of the parliamentary secretary's existing law and how the corporate sector is managed at present—we appreciate that it may not be appropriate to require existing companies to change their constitutions. Accordingly, this proposal is recommended only for newly listed companies. (Time expired)12:15:003922Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I have closely studied Shann Turnbull's ideas in this area. Whilst I think there is a lot of merit in many of Shann Turnbull's ideas, there is no doubt that the concept contained in this amendment would be a radical restructuring of the law in relation to the governance of companies. It would, as Senator Murray clearly agrees, duplicate some board structures. It may well be an appropriate structure for some very large companies but may be entirely inappropriate for smaller companies. I think this fits very strongly into the category of a matter that deserves debate and discussion. This is not to stall consideration of it, but it is a very sweeping change to the structure that is required in Australia for boards.Under the guidelines in the current ASX listing rules—it is not a strict requirement, but many companies do it—companies in Austral ia are encouraged to have corporate governance committees. It is regarded as best practice. As I said in the second reading speech, the international comparisons of corporate governance on this particular point put Australia ahead of the rest of the world and certainly ahead of the United States, where there are no such requirements.I genuinely believe that having a good debate about corporate governance in Australia will improve corporate governance. I believe that the debate that takes place on corporate governance in Australia is certainly not, as Senator Conroy quoted someone from the ASX as saying, some sort of fad. I do not think it is at all. I think it is an important thing. If you followed the financial journals and press in Australia, you would rarely these days see a day go by without having some discussion of corporate governance. If anything, the risk is that it becomes a cliche and that everyone starts mouthing it and they do not see the importance of corporate governance. People might say, `If you do this, you are going to be a good corporate governor.' The clarion call I am developing, which I hope is not a cliche, is that we do need a dynamic corporate governance culture in Australia and that developing that culture is assisted by a good public debate on these issues. To that extent, the more these matters are discussed, the more that interesting, informed characters like Shann Turnbull come in and say, `This is the way you should do it,' and the more that challenges our thinking on corporate governance, the better it is for Australia.To that end, I believe that this would be a very good proposal and amendment for the joint committee to look at in its considerations of the corporate governance and directors' duties legislation that is before it at the moment and will be introduced into the parliament in the next day or two. It could have a discussion and promote discussion about it and deal with it, if it is seen fit by the committee and the parliament when that legislation comes before us.If that is what is required of the government to have this matter dealt with by the committee, if that is the way it needs to be done, I will ensure that this issue is referred to the joint parliamentary committee on behalf of the government—that is, if it is not appropriate for Senator Murray or someone else just to raise it in the normal course of events. If that cannot or should not occur, I will undertake to formally refer it as part of that current inquiry.12:18:003923Sherry, Sen NickSenator SHERRYZW4TASALP00—We have had some discussions with Senator Campbell. The position of the Labor Party is that it does believe that the concept of a corporate governance board has some merit. We have seen some very poor actions taken by some large corporations in recent times. Crown Casino and Patrick's are examples of what can only be described as atrocious behaviour and highly dubious corporate governance practice in the corporate world. The Democrats' proposal is a very significant change. We would like to have this issue of corporate governance examined in principle and then in terms of what the likely practical outcomes will be. To a significant extent, these outcomes are unknown at the present time. We would certainly hope that this approach would at least minimise some of the more recent examples of shonky corporate behaviour that have occurred. I doubt it would totally eliminate it. We are concerned that it may be using a sledgehammer to smash a walnut, which is a phrase that has been a little bit overworked in this debate.3M6MURRAYSenator Murray—It is a big walnut.ZW4Sherry, Sen NickSenator SHERRY—It is a big walnut. We are interested in pursuing the issue. We are also concerned that, as with the Managed Investments Bill 1997 yesterday, the corporate governance board may detract from the responsibility which the single legal entity, the company, and its directors have to shareholders.We do see merit in this proposal. As I have said, it is a radical change, and we believe it deserves further investigation. We have had, in the relatively brief conversation with Senator Campbell, a good discussion about corporate governance. On that basis and on the basis of his assurances that it will be referred to the Joint Standing Committee on Corporations and Securities, we think it should be examined very thoroughly. There is substantial merit in the idea. We think it is pre-emptive to deal with the matter via an amendment today, and we would like to see it examined in the context of the CLERP reforms. We put the government on notice that, if it is not examined in a reasonable and thorough way, there will certainly be opportunities to support an amendment, of the type that Senator Murray has proposed here today, to future legislation. As of today, we will not be supporting the amendment you are moving, but we do put the government on notice about the need to thoroughly examine this proposal.12:22:003924Cooney, Sen BarneySenator COONEYSF4VICALP00—I would just like to make a couple of remarks. I think this is a good idea, as the parliamentary secretary and Senator Sherry have said. I do not think the corporate governance board is there simply to ensure that there are not misdeeds and mismanagement by the directors. I think this is an idea which will have success because it removes from the directors issues which must in some way trouble them and which we, as parliamentarians, have experienced. That is why we set up the Remuneration Tribunal, for example, as a body that sits apart from the parliamentarians to give them guidance on matters that politicians feel uncomfortable with. Certainly it is there to protect the company against misdeeds and mismanagement by the directors, but I think its overall task is to ensure that directors in the company are able to go about their true business of making the company a success without being hampered—and I use that word advisedly—by all these other considerations which go off to the corporate governance board. I am glad it is going to be discussed and I predict that it will ultimately be made part of our Corporations Law.12:24:003924Conroy, Sen StephenSenator CONROY3L6VICALP00—I welcome Senator Murray's amendments. I think they are coming through at an appropriate time, and I am very pleased to see that not only is Senator Murray interested in pursuing them but it appears that the government is happy to have them before the parliamentary committee, where there will be a good chance to discuss them at some length. Without pre-empting any of the discussion that will take place, Senator Murray, the Labor Party views your move in this area very favourably and I hope that the committee will have a good look at them and take plenty of time to discuss them.I think they are particularly relevant because of an article that appeared recently in the Australian. It is an article that demonstrates the need for a corporate governance board, and I would like to quote quite extensively from the article. It is an article by Ken Jarrett, who not unknown to some in this chamber and to many people in the broader business community in Melbourne. Ken Jarrett was employed by John Elliott at Elders for a lengthy period. In the article he is talking about his experiences there, what it was like at the time and how things got really out of control. He said:Back in the `80s, it was almost a sport to try and go as close to the edge as possible without going over, and I think that attitude has changed . . . Generally, people are now more inclined to focus on running their business and making a profit rather than being clever legally or financially. People talk about the `80s as if they were a special period, characterised by a few prominent and dominant individuals, but it was also characterised by a very compliant community and boards.A lot of company directors in the `80s felt that what they didn't know wasn't of concern to them. That attitude has changed.. . . . . . . . .Executives in Elders were completely absorbed in the company and everything else was secondary . . .You were part of a team going in a certain direction and your views about what was going on outside that group were largely dependent on what the group said was going on.The propaganda said that the authorities were attacking John and that created the feeling that they were the enemy and we were on some sort of campaign that was right, however it looked.On top of that, there was this view that, if lawyers advised you that something was okay then the assumption was that it was within the rules of the game that you were playing.That situation became increasingly ridiculous as various disasters at Elders showed that they perhaps weren't right all the time.. . . . . . . . . Holmes a Court looked like getting control of BHP, which would have given him control of Elders. He then controls John Elliott and he would have made Elliott kneel down in front of him or something. It became very personal.John believed he was the hero of the business community in Melbourne and he had to do something about it.I think the basic things that Elders were doing were healthy, but then I think it did become a personal thing to him. If you saw a photo of Elders it was a photo of him—part of Elders was part of John. Everyone knew him around the world as Elders.He flew around the world in a big 737 that was owned by Elders, at Elders expense, but it was his personal plane. So he became Mr Elders and he started to believe that it was all true—that he was Mr Elders.It was clear to everyone how John was becoming all powerful and Elders was becoming his personal plaything . . . He would fly back to Australia just to watch his football team play. It would cost $50,000 so he could watch a football game.I don't think shareholders would vote for that if they had the chance. But at the time no one said `this is ridiculous.' Today, I think perhaps they would.The Elders corporate entity began to be merged with the character of John Elliott.Elders changed from being a powerful single-purpose machine to being his appendage. At that stage, Elders' original focus disappeared and the board did not know what they were trying to achieve.He goes on to say:It is not a question of reining in but giving support and, at the same time, some control—measuring the chief executive against the company objectives and standards . . . The board needs to be able to provide leadership rather than be led by the chief executive . . . You need people with stronger wills and more questioning minds, not just people who will blindly follow.A second factor in the Elders case was John Elliott's ability to divide the board and deal with one member at a time.In the end, I don't think dissenting directors had much chance. There was no independent chairman to override the politics and, to some extent, John picked his directors. People like Jerry Nyall who did question matters at board meetings were hastily retired. A third factor is that it is very difficult to agree on issues, particularly ethical issues, when under pressure. When Elders saw itself under attack, the board tended to agree to proposals without much serious questioning.So how do you get around situations where CEOs have stacked a board in their favour?This is a question that this corporate governance board is central to. Jarrett goes on to say:Don't let them . . . Shareholders should play a more active role. A lot of these things are transparent, but people don't take action on them. I think shareholders are stronger now and institutions are playing a more active role but they should insist on disclosures.A company should be capable of writing down what its objectives are and set out its standards, responsibilities, etc.If you can't write it down, it probably hasn't been thought through properly.This is from one of the insiders at the time, when the cult of personality took over a publicly owned company and bent it to its own will. A corporate governance board, duly constituted in the way that Senator Murray's amendments are suggesting, would go a long way to stopping the hijacking that took place in Elders in the 1980s. We have heard already from Senator Sherry today about the potentially excessive remuneration increases, particularly when you balance them against the performance. But the sorts of things that Ken Jarrett has described can be dealt with by Senator Murray's amendments and can be dealt with by companies if the right people, independent people, are put onto the corporate governance boards so that the sorts of shenanigans that Ken Jarrett is describing in this article cannot take place. That is important.So the Labor Party, as Senator Sherry has indicated, will not support you today, Senator Murray, but I am pretty certain we will be going shoulder-to-shoulder with you in that inquiry looking at corporate governance and some of the issues we have already discussed today—the sorts of issues that you and Ken Jarrett have drawn attention to. That is a very worthwhile inquiry. I welcome the government's decision. There is a lot that the corporate community will support in what you are saying.It will be interesting to see who opposes these moves. It will be disappointing if the business community are not prepared to acknowledge the mistakes of the past and to acknowledge how individual corporations have become personal playthings of individuals because they do not have a strong enough board, because the boards been stacked by directors. This is a way we can introduce into parliament, after consultation and discussion, ways to make sure that some of the problems do not happen. It would mean, in situations like that of Patrick, that if you had an independent corporate government board it would be able to look at a shonky financial structure and it would be able to say: `Just a minute. Have we got legal advice? Is the corporate strategy that has just been determined actually legal?'You would have a situation where Lloyd Williams and Ron Walker could not continue to behave as they have done for a couple of years in Crown Casino. That is a situation where we have seen a director resign because of the corporate governance questions, the interrelated transactions, the interrelation of the entities of Hudson Conway, owned by Walker and Lloyd Williams, which merge with Crown itself and which make it the major shareholder—not the majority shareholder. A whole range of institutions and small shareholders have taken a bath in Crown, and a large part of Crown minority shareholders' bath is because of a disgraceful management agreement, agreed to by the board of Crown that is dominated by Lloyd Williams, which saw a $200 million fee for the management services. This is the management that has taken the share price of Crown and devastated it. This is management that had no idea what it was doing in the construction—ZW4SHERRYSenator Sherry—The fees did not move.3L6Conroy, Sen StephenSenator CONROY—No, the fees didn't move. That's exactly right, Senator Sherry. They continued to plummet Crown into the red. How do you lose money and run a casino? That is the question that, if I were a Crown shareholder, I would be asking. `How on earth have you lost money?' The Asian crisis had not even hit and they had already gone into the red.ZW4SHERRYSenator Sherry—That was his excuse.3L6Conroy, Sen StephenSenator CONROY—That was his excuse—exactly. The Asian crisis had not hit and Crown were losing money. And was there any comeback for the minor shareholders in Crown? No, they have had to cop a bath. I think in the last couple of weeks Crown shares have been trading below 60c, and that is only after the positive announcement that Crown were buying back their management rights and giving up on the fees. An analysis of that buyback was that the institutional shareholders and the minor shareholders actually voted to buy back those rights, but at an excessively generous price. But they were faced with Hobson's choice: you stick with the management structure and the management fees that you have got, and it is clearly outrageous, but if you reject the deal you will send your share price tumbling even further. That was the choice the poor small shareholder in Crown had to put up with, all because Ron Walker, the bagman for the Liberal Party, and Lloyd Williams were unable to separate out what was good for Hudson Conway from what was good for Crown shareholders. They had no concept of it.Brian Powers' resignation is a clear alarm bell, a clear signal regarding the sorts of corporate governance boards which they have now set up—two years too late for the majority of small shareholders in Crown, but they finally set one up. They brought in somebody with some credibility outside to try to appease the markets, to run their corporate governance board. That is what this amendment and the proposed inquiry will be able to talk about. It will be able to thrash out the sorts of independent directors, policies and powers that corporate governance boards need to keep major shareholders honest.Amendment not agreed to.12:36:003926Murray, Sen AndrewSenator MURRAY3M6WAAD00—I thank both major parties for their supportive remarks relevant to the previous amendment. I look forward to their taking up these issues further under the government's guidance under the CLER program. I ask leave of the Senate to move amendments 6 and 10, on sheet 951 revised, together.Leave granted.3M6Murray, Sen AndrewSenator MURRAY—I move:(6) Schedule 1, item 1, page 47 (table item 17), omit the table item.(10) Schedule 1, item 4, page 81 (lines 22 and 23), omit "(replaceable rule—see section 135) ".12:37:003927Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—It might speed things up if I indicate our position. The government is not opposed in principle to what Senator Murray is trying to do here, but we believe that the Labor amendment—which had similar wording, but slightly better wording from the point of view of the draftsmen in business law division—better achieves the result.3M6MURRAYSenator Murray—Could you refer me to the Labor amendment?H15Campbell, Sen IanSenator IAN CAMPBELL—It is opposition amendment No. 1. It is a part of their amendment No. 1, but I think that is a fairly omnibus sort of amendment. Labor have agreed to redraft it in a form of words that, I understand, achieves the same result. We would prefer to see the Labor amendment, with some slight redrafting, go ahead, and we will not oppose that.12:38:003927Murray, Sen AndrewSenator MURRAY3M6WAAD00—The parliamentary secretary has not said whether he will be supporting Labor amendment No. 1 which, as he has rightly pointed out, is a comprehensive one. It is 2½ pages. I assume from what he said that the Labor Party—and I will ask you to comment, Senator Sherry—may be prepared to extract that section from that amendment so that it can be put separately in case the government does not support your entire amendment No. 1 on sheet 958.I should point out briefly, if I may, a motivation for our amendment. The Investment and Financial Services Association, who yesterday were on the opposite side to us, are today on the same side as us. That is how it goes with lobbying groups. They were concerned that the bill did not include a key recommendation from the parliamentary Joint Committee on Corporations and Securities' report on the Draft Second Corporate Law Simplification Bill 1996. Recommendation No. 2 states:The committee recommends that the right of an individual director to call a meeting of members should be a mandatory rule for listed companies.That committee said:The committee accepts that recent events in relation to some companies have demonstrated a need for individual directors of listed companies to be able to act independently in the interests of all shareholders. The right to call a member's meeting gives some substance to this independence and it should not be a right that can be withdrawn through the constitution of a listed company.The Australian Democrats continue to support the joint committee's view. Therefore, I think the position of the Labor Party is seminal with respect to this amendment.12:40:003927Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—To make it clear for all senators and the Chair, I will point out what the coalition will not be opposing. We will not oppose that section of opposition amendment No. 1 on sheet 958 moved in the name of Senator Cook which relates to 409B—headed Application, parts (1) and (2); and 409C—headed Meetings of members, part (1).12:41:003927Sherry, Sen NickSenator SHERRYZW4TASALP00—For clarification, with respect to the two areas that you have indicated that you will not be opposing, is it appropriate that they be moved separately and inserted in lieu of the Democrats' amendments? We will obviously move our later amendment at that appropriate time, because it is much more comprehensive.H15CAMPBELLSenator Ian Campbell—Yes, that is a good idea.ZW4Sherry, Sen NickSenator SHERRY—As we are close to the consideration of this bill being interrupted to enable matters of public interest to be discussed, could I suggest, Senator Murray, that we hold this amendment over, sort out the wording at lunchtime and go on to the next amendment for the next few minutes.12:42:003927Murray, Sen AndrewSenator MURRAY3M6WAAD00—In view of the fact that we are going to have to consider this over lunch, and we have a few minutes left before consider ation of this bill is interrupted, I would draw your attention to page 81 of the bill, item 249C, which is affected by our amendment 10, and that goes to the question of the replaceable rule situation. Your amendments and ours actually do quite different things. I would be very happy if we could arrive at an accommodation between yourselves, ourselves and the government, but you should recognise that we are not trying to do the same thing. My amendments may, therefore, need to be put.12:43:003928Sherry, Sen NickSenator SHERRYZW4TASALP00—Yes, we have recognised that, Senator Murray. Certainly our intention is to try to resolve this during lunch.12:43:003928Conroy, Sen StephenSenator CONROY3L6VICALP00—I have a question to ask of the parliamentary secretary. I assume the part you were proposing was over the issue of 21 days and 28 days, or was it a different issue?12:43:003928Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—No, it is a different issue.12:44:003928Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:That the consideration of Democrat amendments Nos. 6 and 10 be deferred.Question resolved in the affirmative.3M6Murray, Sen AndrewSenator MURRAY—I would ask the parliamentary secretary whether it is the government's intention to support the next set of amendments which deal with the agenda issues.3928Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—No, we do not support them. However, if the vote on those is put now without debate, I am sure that you will get the result that you would desire.Amendments (by Senator Murray)—by leave—agreed to:(7) Schedule 1, item 4, page 78 (line 21) to page 79 (line 2), omit "chairman" (wherever occurring), substitute "chair".(8) Schedule 1, item 4, page 79 (line 16), omit "chairman", substitute "chair".(9) Schedule 1, item 4, page 79 (line 18), omit "chairman", substitute "chair". (12) Schedule 1, item 4, page 91 (lies 10 to 18), omit "chairman" (wherever occurring), substitute "chair".(13) Schedule 1, item 4, page 94 (lines 27 to 30), omit "chairman" (wherever occurring), substitute "chair".(15) Schedule 1, item 4, page 98 (lines 17 to 22), omit "chairman" (wherever occurring), substitute "chair".(16) Schedule 1, item 4, page 99 (line 5), omit "chairman", substitute "chair".(18) Schedule 1, item 4, page 99 (lines 15 to 21), omit "chairman" (wherever occurring), substitute "chair".(20) Schedule 1, item 4, page 99 (line 26), omit "chairman", substitute "chair".(21) Schedule 1, item 4, page 100 (line 7), omit "chairman", substitute "chair".(22) Schedule 1, item 4, page 100 (lines 20 to 26), omit "chairman" (wherever occurring), substitute "chair".(23) Schedule 1, item 4, page 102 (line 11), omit "chairman", substitute "chair".(24) Schedule 1, item 4, page 102 (line 16), omit "chairman", substitute "chair".(26) Schedule 1, item 4, page 103 (lines 18 to 21), omit "chairman" (wherever occurring), substitute "chair".(27) Schedule 1, item 4, page 114 (line 26) to page 115 (line 2), omit "chairman" (wherever occurring), substitute "chair".(28) Schedule 1, item 4, page 118 (lines 4 to 7), omit "chairman" (wherever occurring), substitute "chair".(29) Schedule 1, item 4, page 122 (line 20), omit "chairman", substitute "chair".(30) Schedule 1, item 4, page 123 (lines 6 to 12), omit "chairman" (wherever occurring), substitute "chair".(31) Schedule 1, item 4, page 123 (line 17), omit "chairman", substitute "chair".(32) Schedule 1, item 4, page 123 (line 27), omit "chairman", substitute "chair".(33) Schedule 1, item 4, page 124 (lines 14 to 16), omit "chairman" (wherever occurring), substitute "chair".Progress reported.Matters of Public Interest3928392812:45:003928Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Today I want to outline how, through a national network of second ministerial media officers and support staff, the Howard government has established a nationwide media monitoring network.From the outset I wish to make it clear that we have always taken the view that the discretion for allocating personal staff and their responsibilities lies with the government of the day. Provided the agreed ratio of government to opposition staff is maintained, we accept that government staffers can be tasked for a wide variety of responsibilities. What we object to in relation to the government's second media offices is the dishonest, shady and secretive manner in which the government established and maintained them. What we object to is the cant and hypocrisy of coalition frontbenchers who had so much to say about the National Media Liaison Service and the Ministerial Media Group when we were in government but who now sit silently at the table during Senate estimates, refusing to admit what the rest of the country now knows: that the Howard government, from the moment it was elected to office, established a nationwide media monitoring unit; that this unit was established in secrecy, in many cases funded unknowingly by the home departments of junior ministers allocated second media officers; that this unit, although the government denies its existence, reports directly to the office of the Prime Minister and has recently been doubled in size, presumably in anticipation of an impending federal election; and that this unit monitors opposition spokespersons and state premiers around Australia and provides material directly to ministers and also directly to the Liberal Party in Menzies House—all at taxpayers' expense, without so much as an announcement or an appropriation that can be scrutinised by the parliament.This government came to power promising leaner government. They boasted of reducing ministerial staff levels by 30 per cent. As an opposition, we copped the corresponding decrease in our own numbers sweet. As long as the ratio of government to opposition personal staff at 21 per cent was maintained, we would not have complained. However, what has really happened to government staffing levels is that they have risen from 292 to 326.5—an increase of 34.5. Departmental liaison officers are now at a record level of 67. Consultants working directly for, chosen by and reporting to ministers have been charged to departments. The cases of Mr Mansfield, Dr Webster and Dr Davies are classic examples of this occurring.Neither departmental liaison officers nor consultants are part of the government-opposition ratio, allowing the government to ratchet up their personal staffs without providing additional resources to the opposition. As well, the classification levels of many MOPS staff have been increased. The spirit of the agreement, which was supposed to maintain a nexus between government and opposition staff, has been broken by a government which promised loudly in opposition that things would be different. There is no better example of this sneaky, Nixonian sort of operation of the government than the establishment of their secret, nationwide media monitoring unit.Labor abolished the government information unit when we came to office in 1983 because of concerns about the appropriateness of many of the roles that it attempted to simultaneously perform. Instead, we established the National Media Liaison Service and the Ministerial Media Group, with separate functions—aNiMaLS to disseminate information about government programs and policies, and the MMG to carry out more overtly political media tasks for ministers.Whatever criticisms the then opposition may have had of our arrangements, they cannot deny that our media activities were established quite openly, with clear appropriations. They had published guidelines to govern their conduct. Indeed, senators Kemp and Abetz spent many hours in estimates questioning officials and ministers to satisfy themselves that these units functioned according to these guidelines. Nevertheless, this did not prevent the coalition promising that, when they came to power, things would be different. Total staff numbers would fall, government would be leaner and there would be no media monitoring or, as Senator Kemp labelled them `political hit squads financed by the taxpayer'. Indeed, Senator O'Chee stood in this chamber, during a debate on the National Media Liaison Service, on 7 June 1995 and said:. . . we would cut back on some of the government's taxpayer-funded self-promotion, because this money—and this is typical of Labor bureaucracies—which is detailed here, does not go to delivering a service; it goes to making the government look good.Imagine our surprise when, upon the coalition coming to government, we chanced upon the appointment of the so-called `second media officers'. All coalition ministers—cabinet and outer ministry alike—were allocated one press secretary. And then six ministers, apparently randomly, were allocated a second—and most of them were junior ministers. In no instance could we establish what particular circumstances warranted a second media officer for Senator Vanstone, Mr Reith, Mr Williams, Mr Smith, Mr Ruddock and Mr Jull.What about Mr Williams, for example? His duties were considered so light that he earns the dubious distinction of being one of the first attorneys since Federation not to sit in the cabinet. Yet the Prime Minister felt it necessary to approve a second media officer for him—and Mr Ruddock, Mr Smith and Mr Jull, all junior ministers at the time. Why? The opposition could well understand perhaps Senator Vanstone and Mr Reith requiring all of the extra media assistance that they could obtain, given their performance, but why, of all ministers, were these six allocated second media advisers?It became obvious: one was in New South Wales, one in Victoria, one in Queensland, one in South Australia, one in Western Australia and one in Tasmania, each with a designated home base in the respective state capital city—no public announcement, no appropriation and no line item budget entry. Indeed, the only public announcement by any of the ministers of the appointment of any of these second media staff was a press release by Senator Vanstone. There was no suggestion that this staffer was to perform any role other than that ordinarily carried out by a minister's press officer acting at their direction as a member of the minister's personal staff. In fact, when the opposition first raised the issue, we were met with a wall of dishonesty. Senator Kemp, in fact, denied that these activities could in any way be equated with aNiMaLS. We know now that in the case of Senator Hill he actually misled the estimates committee on 22 October 1996 when he said quite specifically that the role of the second media officer in Mr Ruddock's office was `To work to, in that instance, Mr Ruddock, to carry on the usual functions of a media officer . . . ' Someone should have told Mark Elliot, Karim Barbara or Sarah Baxter of those facts about that position before Mr Ruddock employed them.Gradually the truth began to dribble out. On the same day that Senator Hill gave his dishonest assurances that Mr Jull's second media adviser was `to enable Mr Jull to meet a broader requirement of communication within Queensland', Mr Jull was already beginning to fess up to the reality. He qualified Senator Hill's answer by stating:. . . the entitlement of a second media officer is part of a strategy to provide additional media resources in each state to promote coordination of media relations.Senator Parer went further during his memorable performance before the estimates committee. We were able to question him directly on 4 June on the circumstances surrounding the transfer of Mr Jull's second media officer to Senator Parer's office. Senator Parer's revelations clearly established that the role of the second media officers was related to the whole of government media monitoring on a state by state basis. But he insisted that the staffer involved—in this case a Mr Ryan—reported to and worked directly to him as a responsible minister.We asked why. Senator Parer explained that Wik and Century Zinc were issues of particular concern to the people of Queensland and that they fell within his portfolio responsibilities. We know Senator Parer has always his partywide responsibilities extremely seriously. Not only was he able to provide a statewide media monitoring resource for the federal government financed by DAS and his home department, we have since learnt that he apparently provided the stationery resources for the Queensland branch of the Liberal Party.The opposition is not alone in its sense of paranoia about what this media monitoring unit might be up to. Apparently its activities extend to monitoring the statements of the troublesome and recalcitrant state premiers. In fact, we know that Mr Hanke, the second media adviser on Minister Reith's staff, got a cheerio from Mr Kennett on Neil Mitchell's radio program on 6 November 1997. But when raised in estimates on 12 November 1997, Senator Hill assured us:We are not running a media monitoring operation of the type with which we are very familiar.This brings us to Mr Mark Elliot and Miss Sarah Baxter. The memorandum prepared under the signature of Mark Elliot and obtained by the opposition contained absolute proof that the government is maintaining a taxpayer-funded, secret media monitoring unit in every state despite Senator Hill's denials.The memorandum tells us that Senator Hill's explicit assurance that Mr Ruddock's second media officer works directly for his minister was not true, and that he misled the committee. The memorandum tells us that the baby aNiMaLS staff, in fact, report to the Prime Minister's office and the Liberal Party directly. The memorandum tells us that baby aNiMaLS staff are instructed to ignore requests to carry out work for their employing minister unless they have time. I have outlined in a media release some of the other aspects of this particular operation.Where did the information go? To the Minister for Immigration and Multicultural Affairs, who employed these people? Of course not. The transcript went directly to the Prime Minister's office to Mr Tony O'Leary. A copy was sent to Mr Lynton Crosby at the Liberal Party federal secretariat.Senator Kemp, when in opposition, called aNiMaLS a Labor Party rort and a political hit squad. Perhaps some of the people who made these statements will come into the chamber now and explain how Mr Elliot's role is consistent with the outrage that was expressed then. Perhaps Senator Abetz and Senator Hill will also explain their attitude to this situation now that they are in govern ment—a very different attitude to the one they expressed in opposition.We do not consider media monitoring outrageous but, like all taxpayer funded activity, it should be transparent and accountable. Baby aNiMaLS is not accountable; it has no guidelines; it is shrouded in secrecy and the costs are concealed dishonestly in home departments arbitrarily chosen for their geographical spread. This is something the coalition said it would not do in government. I intend at a later stage to speak at some length about the costs of the six media advisers, the six personal secretaries, that have now been engaged to double the unit resources of this secret media monitoring unit and about a range of other costs that are being borne by taxpayers in this.We know now, of course, that the operations of the government members secretariat employ 11 full-time staffers. In the media monitoring unit there are an awful lot—24 full-time hacks in total—being employed to support the Liberal Party. These are taxpayer funded political operatives working on media monitoring and campaigning. They got a bagging in the Liberal Party party room yesterday and at the joint party meeting that Mr Howard had to front up to.I seek leave to table some of the transcripts that give examples of the sort of material that is being provided by these units, one of which highlights John Laws's comment:Incidentally, it's lucky one of John Howard's `S' words isn't sincerity. . . cause we all remember and it is going to remain around to haunt him. . . in 1995 he said the GST would never, never be part of Liberal Policy.These are good examples of what is being done by this sleazy, slimy, secret operation on behalf of the Liberal Party. I seek leave to table the material which I have shown to Senator Ian Campbell, for the government.Leave granted.393113:00:003931Tierney, Sen JohnSenator TIERNEYO15NSWLP10—This is the second of two speeches that I will make on the e-commerce, or electronic commerce, revolution. Previously, I looked at the international dimensions of this phenomenon which will change forever the way we do business in Australia. I reported on Australia's recent e-commerce summit and a speech by Mr Ira Magaziner, the senior adviser on policy development on e-commerce to the President of the United States. As I have previously indicated, Mr Magaziner outlined the five principles on which the information economy is being developed in the United States: firstly, the private sector should lead Internet growth; secondly, it should be market driven, not regulated; thirdly, government intervention should be minimal; fourthly, the need to take heed of the medium that we are dealing with and its technologies; and, finally, e-commerce, or electronic commerce, is global.Magaziner's five principles actually leave a lot of questions to be answered: firstly, how will Australian business fare in such a globally deregulated world; secondly, how will consumers and others who are disempowered fare in such a deregulated world; thirdly, what is the legitimate role of a national government in such a worldwide market; fourthly, who will need protection and from what; and, finally, what structures and regulatory frameworks are appropriate in this new era of worldwide electronic commerce?On such issues we do `look through a glass darkly' as we head at a very rapid pace into this new world of e-commerce. As with any new technology, questions of how it should be regulated on a national basis are important. The Internet is internationally market driven, but there is a role for national government in terms of consumer protection, community standards of content, privacy, encryption and national security.The Howard government has recognised the electronic commerce potential and the challenge of developing an appropriate role for government. This is in stark contrast to the previous Labor government which let years be wasted in putting together, in a proper way, frameworks to regulate this new world of commerce that was coming with the information revolution. At the time, I referred to then minister Michael Lee as the `Rip Van Winkle' of communications policy.It is my estimate that this country has actually lost two years, but this has now been rapidly made up under the leadership of our Minister for Communications, the Information Economy and the Arts (Senator Alston), who has put in place a number of measures which help place a framework under this whole electronic commerce revolution. He has established a ministerial council to develop a whole of government action agenda because, obviously, something like e-commerce has a very wide ranging effect across the responsibilities of many government departments. Within his own department there has been established the National Office of the Information Economy, which has a private sector driven advisory board. Last month, Senator Alston announced the National Information-Economy Day, to be held on 5 September, which will link government, business, community and consumer groups to discuss the key issues and to make them more aware of the potential of the information economy.The National Office of the Information Economy has also conducted a large corporations awareness program which targets CEOs and peak industry bodies. Around Australia 15 regional summits have been held in key areas so that the spread of this new electronic commerce revolution will also go beyond the cities and out into regional Australia. The government has also launched a plan aimed at getting business on-line. The Department of Industry, Science and Tourism is implementing a framework to assist companies to adopt on-line technology.In April, the government moved to better protect consumer rights in the electronic commerce world. The Minister for Customs and Consumer Affairs (Mr Truss) has released a new set of principles developed by the National Advisory Council on Consumer Affairs. It underlines the point that, for electronic commerce to take off, we need consumers to be totally confident on the protocols and procedures and that, when they do undertake transactions, the money and the goods that are involved will move in proper ways, under proper protections. This set of principles for e-commerce which the minister has released complements the very extensive consumer protection laws that are in place in the country already—things such as the Trade Practices Act and fair trading laws. The set of principles asserts that e-commerce should be protected to the same degree as other forms of commerce, and, if we get that in place very quickly, it will mean that there will be a very sound legislative base underlying this new way of trading.In addition, at the end of April, the Attorney-General (Mr Williams) and Senator Alston announced copyright reforms which do have a very big impact on the world of e-commerce. The reforms include a new broad based technology neutral right of communication to the public, and, also, new measures for enforcement of commercial law in cyberspace. Clearly, these protective measures by the government are necessary as the information economy that is now developing will transform not only the way we do business but also the way that we work, live and play. Because of this, Australia really needs to be a leader in this information revolution—if you are not a leader, your economy will be left far behind. No business can ignore e-commerce and its potential. A leading venture capitalist in Silicon Valley summed it up this way:In this new age every business is an IT business. The Internet is touching and transforming all industries.Small and medium businesses are examining the Internet's potential. The Yellow Pages Small Business Index survey of e-commerce in Australian small and medium businesses found universal awareness that some businesses are now using the Internet for promoting or selling their products or services. One-third of small businesses and two-thirds of all medium businesses are connected to the Internet. Thirty-seven per cent of small businesses believe they have the potential to sell on the Internet and 54 per cent of medium businesses believe the same. The potential to use e-commerce is highest among businesses seeking significant growth. The Internet is perfect for small to medium enterprises because, for the first time, no matter whether they are city based or regionally based, it will give them access to international markets. The Deputy Prime Minister (Mr Tim Fischer) tells the story of the stockwhip manufacturer in remote Australia who sells his product on the Internet, internationally, to California—it is that sort of revolutionary change that we can now bring about in this new world of electronic commerce.A report was released last month called Statistics on E-commerce in Australia. It shows that business related Internet sites have more than doubled in the last five years. There are now at least 54,800 business sites. In 1997, there were 1½ billion electronic transactions. The e-commerce market that people are now linking into is not just Australian but worldwide. Five per cent of small businesses already have e-commerce, as do 12 per cent of medium businesses. Despite this rapid movement towards e-commerce in Australia, the minister for the information economy, Senator Alston, warns:Those businesses which capitalise on new opportunities are more likely to be internationally competitive in the 21st century, while those who wait and see what happens are likely to take a back seat in the information economy and may not even survive.That is why the government is moving so rapidly and setting up the right structures, the right laws—setting up strategies for businesses to gain a greater awareness of what is available in this new world of electronic commerce so Australia can better link internationally and extend its already quite considerable growth. In Australia alone, the on-line market is quite massive. The ABS found that the number of Australians using the Internet from the home has doubled every year since 1996. By the year 2002, it is forecast that 30 per cent of all retail transactions will be conducted on the Internet.Australia is joining the information revolution and the possibilities of e-commerce are vast. Apart from the business benefits, it will help, particularly in regional and rural Australia, to overcome the `tyranny of distance'. Industry and business can establish anywhere. The need in previous markets for rail and road out to where the product was being produced will become redundant for many of these new industries if they are on the Internet and linked with optic fibre. Regional and rural communities can shop and bank in this way, and, already, many farmers are finding with this new technology that they can do business from the farm without travelling great distances.It is benefiting areas in regional Australia like my own area of the Hunter, where the regional tourism organisation has just received a $200,000 grant from the Howard government to trial e-commerce in tourism and businesses. They have already developed very successful strategies overseas of letting people in other markets know that they exist and what the Hunter has to offer, but this is being done by traditional means such as brochures and videotapes. What is now available, what is now possible, is to promote the Hunter worldwide on the Internet, and this grant from the government will give this sort of move a great boost.So it is not only distance in Australia that is being overcome by this new technology but distance from the world. It has great potential for the development of our Australian economy. This government has set up the right policies and is moving at a considerably greater speed than the last government to put all this in place. With the support of business and with the support of consumers, we will move into a totally new era which will improve the way we live in Australia.393413:12:003934O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Many people avidly read letters to the editor in the various newspapers and periodicals that are published around this country, and someone was good enough to send to me a copy of a very interesting letter that appeared in the rural newspaper the Stock Journal recently. It was written by a Mr Bill Hunt of Bordertown in South Australia. He told the editor of that particular paper:It came as quite a surprise to wake up a few weeks ago to find that we, the farming population of Australia, had declared war on the wharfies.Mr Hunt had some very interesting views in this article, which I would like to share with the Senate now. He did say that he found it very interesting that farmers, through the NFF, apparently were seeking to condemn collective bargaining while seeking to justify the collective bargaining the rural sector calls `orderly marketing' and the compulsory nature of single desk commodity exports. Mr Hunt asked the editor how farmers could condemn as `rorts and perks' the conditions won by the unions for their members, when farmers sought to maintain the special conditions that they had won—things such as tax averaging, sales tax exemptions, registration concessions and family trusts. Mr Hunt told the editor that it was the view of many people in the bush that the NFF action on the docks had compromised its political neutrality. He asked:. . . is this really a business venture of the NFF, or a venture by a handful of politically ambitious "gung-ho" squatters, some of whom happen to be on the executive of the NFF?Bill said one thing was for sure: they did not ask the farmers when they took this action. He told the editor:If they had, they may have been surprised to find that, in comparison to all the other stuff that's going down here: like the collapse of the wool, beef and pigmeat industries; the wholesale closing down of country towns and infrastructure like banks, schools, railways and the like; the tenuous hold on services that we have in the bush; like the soon to be privatised Telstra, post and power; and like our alleged Minister for Agriculture who just sits Nero-like and watches rural Australia burn, that the few hundred lousy dollars saved per farm shifting containers is NFF all.They are very interesting words from Bill Hunt because Bill Hunt certainly was right when he questioned the motives behind the National Farmers Federation waterfront campaign. It was not a campaign about economic reform or improved productivity; it was really a campaign against an industrial union. It was a campaign that was conceived and implemented by a small group consisting of past and present officers of the NFF who were about to draw on the authority of the organisation and the resources of government to try to get the MUA.Bill was right when he said the NFF had lost its political neutrality. In fact that was gone the minute the NFF became an active player in the Reith-Howard waterfront plan. That occurred when the NFF signed up to the plan in Melbourne on 18 September last year. The organisation claimed that it was acting on behalf of rural Australia. But Bill Hunt was right again when he said that the NFF was not acting on behalf of the 100,000 farm families—it was acting on behalf of its president, Mr McGauchie, its former president, Mr McLachlan, its two former executive directors, Mr Trebeck and Mr Robb, a former industrial officer, Mr Houlihan, and its current industrial director, Mr Ferguson. What did Bill Hunt say about consultation? He said there had not been any. How do we know that?The Western Australian Farmers Federation were asking why the NFF was attacking the MUA. The Western Australian Farmers Federation asked: `Why do we want a fight on the docks?' That federation said it had a good working relationship with the MUA. So, naturally, why were they being involved in a fight with the Maritime Union with whom they had a good working relationship? Mr Ian McFarlane, who is a senior agri-politician and an NFF councillor—indeed, part of the NFF, I might say, and now the Liberal party candidate for Groom—complained publicly that he found out about the NFF move from an ABC journalist. Yet he is an NFF councillor. Obviously, you had to be in the club to know what was going on.The NFF initially tried to separate itself out from the plan and the P&C Stevedores operation. Executive director Dr Wendy Craik claimed that the only link between P&C and the National Farmers Federation was that they shared common directors. Unfortunately, her claim was somewhat weakened when it was discovered that the registered office of P&C was NFF House in Canberra. The NFF president, however, was far more up front. He said the NFF was going into the stevedoring business; this is a going concern. He was reported by AAP as saying that the stevedoring business was child's play. He said it would be easy to make money.However, the reality was that the National Farmers Federation was part of the wider plan—this conspiracy—to generate a dispute, to sack a whole work force, and to quickly replace it with another. In fact, on 3 April, Mr McGauchie, Mr Houlihan and Mr Ferguson sat down with Chris Corrigan from Patrick to discuss how best to manage the mass sacking of the whole Patrick work force and, of course, the P&C workers were ready to go.The plan was revealed in some detail by the senior counsel for the National Farmers Federation, Mr Jeffrey Meralls QC, in his submission to the High Court of Australia.He told the court that P&C had no other contracts and that if they lost their contract with Patrick P&C would be destroyed. He said that P&C would either have to sack its workers or incur enormous costs. He said, `Either alternative will seriously threaten its continued viability or destroy it as a commercial enterprise.' That is Mr Jeffrey Meralls QC, the senior advocate for the National Farmers Federation in a submission to the High Court.Mr Meralls was saying that, if P&C had to meet labour costs, the NFF company would have to find $8,700 a day—a big bill for Australian farmers for a political campaign, wouldn't you say? But farmers had no say in this campaign. It cost $8,700 a day and farmers around the country had no say in this matter, particularly when there were big bills that ought to have been run up on the issues that were of real concern for the bush. So Bill Hunt—YW4MACDONALDSenator Ian Macdonald—Who's that—Bill Hunt?8O6O'Brien, Sen KerrySenator O'BRIEN—Yes, Bill Hunt was right. After all the economic and social damage that the waterfront fiasco created, and the promises to Australian farmers that they would receive massive gains from the P&C exercise, and having promised nearly 400 workers—many boys from the bush, as we hear, and girls—that they had a bright future in the stevedoring business, where has it all finished up? Further waterfront reform is being negotiated by the parties and an agreement satisfactory to all parties has, in fact, been reached—just as it could have been and should have been in the first place. It is interesting to note that, in our recent inquiry, the Senate Rural and Regional Affairs and Transport Legislation Committee was told that there was basically an understanding that 217 waterfront positions could have gone if there had been funding from the government last December. What about the P&C workers? Unfortunately, they have gone as quickly as they came. Many of them feel exactly the same as Bill Hunt and many of his colleagues do—that the NFF has let them down. Interviewed on the ABC PM program, one P&C worker, David Garrett, said he had given up a good, well-paid job to work for the farmers. He said he understood that he was offered three years work, and then some, by the NFF. He was asked whether he thought all the risks in the P&C exercise were on his side and he said:Definitely, I don't blame the MUA for acting the way they did but I do blame our company for the way they acted. We never knew. None of us were ever told that this was going to happen. We thought we were only going to get a dock to ourselves, start working in competition, not actually take over the whole lot.He was wrong, of course, as we now know. Although the NFF had led Mr Garrett and his colleague to that view, the plan was quite different. In fact, James Ferguson told the Business Review Weekly that the commercial success of the operation was not the NFF's main objective; the aim was to change the culture on the docks. Mr Ferguson also said that if productivity increased then the NFF would probably pack up its tent and go home.Mr McGauchie's explanation for the failure of the P&C plan and the sacking of 400 workers was simple enough. He said it was the fault of the Federal Court, and I suppose the High Court. In other words, P&C would be okay if the 2,000 sacked workers had not pursued their legal rights through the court—P&C would have got away with it. If the courts had not found that there was an arguable case that the NFF, Mr Reith, Mr Howard and Chris Corrigan were parties to an unlawful conspiracy, perhaps they would have got away with it. Therefore, if there had not been an order to reinstate the whole work force maybe they would have got away with it and they would have been able to honour their commitment to the workers. But the court did not take that view and the NFF showed those 400 workers the door.Not only is Bill Hunt being let down by the NFF; he and the rest of rural Australia are being badly let down by the National Party generally, and by the minister, Mr Anderson, in particular. The rise of One Nation in the bush has not been the result of a sudden failing on the part of the National Party or the Liberal Party. Both have been letting people in rural Australia down for years and simply taking their vote for granted.While there has been recent speculation about how safe Mr Anderson might be in his seat of Gwydir, he has in fact been in trouble for some considerable time. While people in the bush quite reasonably expect Mr Anderson to work hard for them within government, the record shows they were sadly mistaken. In fact, he was in trouble from the beginning. Page 1 of the Northern Daily Leader of Wednesday, 8 May 1996, just two months after the Howard government term commenced, carried the headline, quoting Mr Anderson, `I won't quit.' It was a story about the minister being in breach of the Prime Minister's guidelines for ministerial conduct. Those guidelines, however, have now been abandoned by the Prime Minister.But a few months later that same paper carried a headline `No time for complacency', with a subheading `National Party has forgotten country people'. The Manilla Shire President and National Party Branch President, Mr Jim Maxwell, was quoted as saying `the National Party has completely forgotten country people', that `he is angry and disillusioned', and that he is `particularly angry with John Anderson, the local federal member for Gwydir'. He is also quoted as saying:John Anderson has completely deserted the people who put him there.There's a lot of anger coming from people who believe John Anderson doesn't care about them, that he's ignoring the grass roots.I am not the only one.People out here are convinced the Nationals have forgotten anyone who lives across the range.Mr Maxwell also said that the Nationals had become complacent, believing that `once a National voter, always a National voter'. He continues: Unless the Nationals speak up now, on behalf of the rural people who are struggling to survive, it'll be the end of the Nationals. This is July 1996. He was dead right, of course. Last year the Queensland grain growers called on the Prime Minister to replace Mr Anderson as minister just one day after they postponed a vote of no confidence in him. Mr McFarlane, the President of the Queensland Grain Growers Association, was also in that vein. (Time expired)393713:27:003937O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—At the urging of some of my colleagues in the coalition, I wish to place on record in this place today some comments I made yesterday. They relate to a phone call I received last week from a 78-year-old woman. She rang me up to tell me that I was not an Australian because I looked Asian. She rang me up to tell me that she voted for One Nation because she grew up in the days of the White Australia policy and she believed that it was immoral that people who looked like me should be allowed in this country.So I said to her, `What do I have to do to be Australian? Because my family has been in this country for 110 years.' She said, `It doesn't matter.' I said, `I have got to look English, have I?' And she said, `Yes.' I said, `But what about the Aborigines?' She said, `They're Australian too.' I said, `Let me just get this down for the record: you can look Aboriginal and be an Australian, or you can look English and be an Australian, but you can't look Asian and be an Australian.' And she said, `That's right.'I make these comments today not as a plea for me, because comments like that are like water off a duck's back for me, but for people who are not as articulate as I am or as articulate as other senators in this place. I make this plea for the many decent Australians for whom views like this are an affront to their fundamental right as Australians to live with dignity within the shores of this country.It is a fact that most of the people who voted for One Nation in Queensland on 13 June probably do not share those views and would probably be horrified by those views. But it is also a fact that they must understand that the people who do hold those views have made their home in the heart of the One Nation Party. They must also understand that these people, emboldened by what happened in Queensland, are now sallying forth with new vigour to spread again the politics of hatred and division. Rather than create one nation, they will tear this nation asunder in the pursuit of their prejudice.Of course, Mrs Hanson would say that this is not true. But let her own words be the test of whether this is so. She told Paul Lyneham on 60 Minutes quite recently:I am afraid that we might be swamped by Asians by the number we have coming in. All I ask for is a balance restored to the number of Asians coming into Australia . . . It sounds pretty innocuous, but the fact is the only way you can implement policies like that is to have quotas on the number of people coming to this country from particular parts of the world. That is, quotas imposed with no reference to what people may have to offer to Australia, but based solely upon the colour of a person's skin. Implicit in the suggestion that we should have quotas is the assumption that some people are morally superior solely on basis of the colour of their skin. Implicit in that is the assumption that some people are more deserving of a place in the sun than others.How would this be put in place? Are we to have an annual spectacle where we debate how many Lebanese and how many Indians and how many Japanese we are going to allow into the country? Would we have a formula that says, `Three Indonesians equal one Indian, two Indians equal one Chinese, but on no occasion should two Wongs make a white'?Views such as these are an affront to the fundamental right of each and every Australian to live their life in dignity. More importantly, in marginalising some Australians, in excluding them from the full participation in Australian society, we not only deprive them but we deprive ourselves of what they have to offer to us and the common good. This is a betrayal of all that Australia is, and all that Australia means and all that Australia can be. It is a betrayal of the principles of decency and a fair go on which this nation was built and to which we all subscribe. Importantly, it is a betrayal of all that we have done to be a beacon of hope and democracy to people less fortunate than ourselves.These views cannot be the views of a party that believes in creating one nation, for this is the politics of exclusion. And the politics of exclusion is also to be seen in the attitude that this One Nation party has towards trade because One Nation would create a fortress Australia, a fortress Australia which would lock us away behind tariff walls to prevent imports. And as we close our doors to the world, the rest of the world will close their doors to us.Their stated belief is that we do not need the rest of the world, but that is not true. Without the rest of the world, then who will buy the things that we produce? I make these comments not as a plea to reduce Australia's sovereignty, but a plea not to cut off our collective nose to spite our collective face.If One Nation had its way, then we would be forced to consume everything that we produce. For the record, that would mean that each and every Australian, in a One Nation world, would be forced every year to eat 98 kilos of beef, 297 kilos of sugar and 1,286 kilos of wheat, to buy 36 kilos of wool and 33 kilos of cotton. But then I suppose after drinking 30.8 litres of wine we may not know about it. But that is what their politics would do.The truth is this: we need those export dollars to maintain our standard of living. If One Nation has its way, we as a nation will be poorer because we will earn less but the cost of everything we produce will go up. And the people who will really be hurt are the working men and women of Australia and the poor and the elderly for whom cars, television sets, computers and clothes will cost more, but with less money to pay for them.The people who will be hurt will be the people who work in the tourism industry. In 1996, tourism from Asia alone was worth $8 billion. The waiters, the cooks, the cleaners, the taxi drivers and the bus drivers who depend on that money will be the ones who lose their jobs. Our software industry, a world-class industry, will be shackled by the politics of these people—a world-class indus try destroyed because they believe we can live without the rest of the world.They say that they are defending Australia. That is nonsense. This is not a defence of Australia. This is not going to create a strong Australia. What this is—let me make it very clear—is an admission by Mrs Hanson and her supporters that they do not believe that we can take on the rest of the world and win, that they do not believe that Australia can be competitive in the world marketplace, and an admission that they do not believe we can stride with greatness the world stage.I am not one of those people. I believe in the greatness of Australia. I will not stand by and allow these people to create for us a second-best future. I will not stand by and allow these people to destroy the jobs and opportunities of young Australians because they no longer have the faith that we can be great.Unlike Mrs Hanson, I believe that the greatness of our nation should not be hidden behind walls of fear and self-doubt.I believe that the working men and women of this country, freed from the shackles of an inefficient tax system and the excessive burdens of red tape, can produce the export dollars to keep our country rich.You only have to look at the success of our mining companies and our software developers and our construction companies to see that this is so.I believe in an Australia restricted only by the breadth of our imagination and the depth of our belief. Most importantly I believe the greatness that is Australia demands a world stage on which to showcase its glory. The world should know that Australia still aspires to be great and the world should know what Australia's citizens, all of them, can achieve together.Mr Acting Deputy President, ring out the bells and tell the world that there are still Australians with heart enough and courage enough to believe that we can be great. There are still Australians who will fight for the future of our country and there are still Australians who believe that the greatness of Australia does not lie in the past but in what we will achieve together in the future.393913:41:003939Lees, Sen MegSenator LEES8U4SAAD00—I want to speak briefly on the retirement today of the Hon. Elisabeth Kirkby as a member of the New South Wales Legislative Council. It is unusual for valedictories to be given in this chamber for members of another House of Parliament, but it is important to me, both personally and on behalf of the current team of Democrat senators, to formally record my very sincere thanks to Lis.Lis Kirkby has been an inspirational role model to the current generation of Democrat women and men alike. She joined the Australian Democrats in 1977 and first stood for election in that year. Later she was elected to the New South Wales Legislative Council, first taking up her seat in 1981.I also joined the Democrats in 1977 and throughout the 1980s, when I was working my way through a myriad of internal positions from branch secretary, lower house candidate, state president et cetera, Lis provided a powerful role model for me as a strong woman in politics.At the time of her election, Lis was one of only two female Democrats in parliament. The other, of course, was Janine Haines. At the end of her parliamentary career women MPs in the Democrats are almost the norm rather than the exception, with representation in all four parliaments. I know that this is a great source of pride to Lis as it is to me.It is not Lis's gender alone which makes her a great role model. It is the qualities that Lis has brought to the job that have set her apart, qualities that are not always evident in public life. They include a true compassion for those who are in need; a fierce loyalty to her friends and to her staff, most of whom have gone on to be good friends; a strong belief in the value of parliament as an institution; an intellectual rigour which has been evident over all of her 17 years in parliament and a commitment to real debate over public policy; an enduring commitment to progressive public policy and values such as toler ance; and a charm, grace and courtesy which is both part of the woman herself and part of her success.Lis is also a superb political campaigner. To observe her working a room of constituents, dealing with lobbyists, handling hostile media interviews, chairing a conference or handling internal party friction, all of which I have done over the years, is to watch a true professional at work. This has been reflected in our election results in that our best ever state election results in New South Wales have been when she has been leading the team.In this place it is unusual for an MP to last 17 years in office. This in itself is worthy of comment. It is a hard life that we all lead no matter which party or which parliament we are in. Lis has not only put up with all of this but the experience has not disillusioned her or made her cynical as it does so many who share the experiences.Lis was first elected when Don Chipp stood in my place and has outlasted six federal leaders and many more senators. At the beginning and at the end of her political career, Lis remains an optimist. I know that she believes in the power of persuasion, that most people are inherently good and that politics can be an honourable profession. I only hope that at the end of my career I can still share these views.I have no need to chronicle Lis's many achievements in the New South Wales parliament. My colleague Senator Vicki Bourne will do some of that in a moment. Nor do I need to be grave and serious in my remarks. After all, anyone who knows Lis will understand that she is not retiring but simply changing careers. I know that she leaves the parliament with friends on all sides of politics and we all expect to continue to see a great deal of her.I only wanted to place on the public record my own thanks to a successful politician who, through her own example, has been an inspiration to many in the Australian Democrats and also an inspiration to many others in public life, not only to Democrat senators and MLCs but also to party officers such as the national secretary, Sam Hudson and longtime campaign director, Stephen Swift, himself a former staffer. From all of us, I want to say to Lis, thanks for everything.394013:46:003940Bourne, Sen VickiSenator BOURNETW4NSWAD00—I am very pleased to join my colleague Senator Lees in paying tribute to our New South Wales colleague, the Hon. Elisabeth Kirkby, who as Meg has said, is intending to retire today from the New South Wales parliament.`The Honourable' is not always a title that fits comfortably with those who are entitled to use it, but it does with Lis. Lis is a very honourable person. I first met her as a fellow Democrat in 1977 and she was already very well-known by then for her acting, particularly in Number 96. I was struck at that stage by her very friendly manner, particularly to me and, I must admit, being young and rather naive at the time, I did not expect that from someone as famous as Lis was. That part in Number 96 followed Lis through the rest of her life. I know she formed very firm friendships with other cast members which exist to this day.I well remember the time when the two of us we were travelling through rural New South Wales together and taking calls on open-line radio. One listener rang to say she was pleased Lis had recovered from her temporary blindness. Lis politely pointed out that it was in fact her character in Number 96 who had been temporarily blinded, but she thanked the caller for her concern anyway.Lis is comfortable and happy in any company at all. She lives in the country near Temora. I have seen her out on her farm in wellingtons and jeans doing very farmer-like things and I have seen her in the city looking incredibly elegant. She is just comfortable wherever she is. She is comfortable in whatever company she finds herself. It is an enormous gift and a terrific talent and something that I wish I had more of. Unfortunately, I do not.She has been the longest serving Democrat in office, I think I can say. She has seen three Democrat senators leave and she is still there. Now that she leaves the New South Wales parliament, she leaves many friends in the parliament. I was fortunate enough to be there last Wednesday for her last budget speech and I was really pleased to see that New South Wales parliamentarians turned up and listened. Max Willis, the President of the New South Wales Legislative Council, was in the chair for the first half of her speech and the Deputy President, Johno Johnson was in the chair for the second half. I thought that was a lovely tribute to Lis and something that you do not always expect to see. It was very good of them to do it. It was really nice too that her grandson Hugh was in the gallery for that speech. He is only about 10 now. He will have that memory for the rest of his life.I see Lis not only as a colleague and a role model, although she is both of those, but certainly as a friend and somebody that I intend not to lose track of and not to lose touch with. I wish her well in everything she now decides to do and I am sure she will do it superbly, whatever it is, because that is what she has always done. I look forward to finding out what the next chapter is in this really quite extraordinary life.394013:50:003940Abetz, Sen EricSenator ABETZN26TASLP10—This afternoon, in the short time available, I wish to comment on some media stories that appeared in Tasmania in recent days. These media stories related to the now very well run and profitable Tasrail operation. For the first time in its 130-year history, Tasrail is finally running at a profit. It is not coincidental that, for the first time in its 130-year history, it is in fact in private ownership. And that, of course, is a matter that ought be considered by all Australians when they consider the privatisation of certain of our public instrumentalities around this country.The history of Tasrail was that for a long time it was run by the state government at a considerable loss. Thereafter, in the 1970s, Gough Whitlam's Labor government took it over and ran it as a federal enterprise—once again, continually losing money to the tune of millions of dollars per year. Under the excellent guidance of the former Minister for Transport and Regional Development, Mr Sharp, a program was undertaken whereby Tasrail would be privatised. I was very pleased to have been nominated by the minister to look after the Tasmanian aspect of that privatisation process.It would be fair to say that when it was first announced there were all the merchants of doom and gloom, including Labor senators saying that they would want a Senate inquiry into this proposal. They sought to do everything to destroy what was clearly a positive move on behalf of Tasrail and the people of Tasmania.After a while, even the unions came on side, because when you tracked the history of Tasrail, in my home state, you saw a railway in decline: job losses, continuous; rail closures, continuous—it was going in a downward spiral, faster and faster all the time. Yet in the media in Tasmania on Saturday, 20 June we were getting some very good stories, such as:Tasrail's new owner, Australian Transport Network, has underpinned its optimism in Tasmania's future with a two-year $12.5 million investment in a new fleet of locomotives.And the company announced that the fortunes of Tasrail had been turned around dramatically since they took over in November 1997, with a 20 per cent increase in business putting the rail network in the black for the first time in its 130-year history.Whilst governments continued to try to play trains and fiddled around, Tasrail continually lost. As soon as private enterprise took over, we have seen already a 20 per cent increase in the cartage of the goods that they are undertaking. Also, as part of the ongoing growth in rail under private ownership, there is now under construction at Burnie, in my home state of Tasmania, new cement trucks that will increase capacity from Railton's Goliath cement works to the wharf at Devonport. The article goes on to say:Other improvement programmes identified include upgrading lines through sleeper replacement, development of the Don River Railway workshops and installation of railway crossing signals along the North-West line.There is also talk of upgrading a number of the tracks.So instead of having a railway in government ownership under constant decline, what the Tasmanian economy and the Tasmanian people are now experiencing is a well-run Tasmanian rail network, under private ownership, making a profit and putting jobs back into the railway system and, indeed, the construction of the new carriages for the Goliath cement works.We are really seeing a boost to the Tasmanian economy and to the Tasmanian transport infrastructure. That has all been occasioned because the federal government, despite opposition from the Labor Party, the Democrats and Greens, took the decision that Tasrail ought be privatised. Jobs are now secure and, indeed, there will be growth in jobs. More cargo is now being taken by rail: there has been a 20 per cent growth.When people consider the privatisation of some of the other government instrumentalities they ought to have a look at the experience of Tasmanian Rail and come to realise that there are many facets of government enterprise at the moment which can clearly be undertaken more efficiently by the private sector and, what is more, create jobs, create investment and create infrastructure at no cost to the long-suffering taxpayer.In Tasmania's situation with the Tasrail network, the losses were about $8 million per annum which, because it was in effect the federal subsidy, was taken off the state government's grants each year and, as a result, the Tasmanian government had approximately $8 million less in its budget allocations. As a result of this, there is no longer a federal subsidy to Tasrail, as a result of which, the Tasmanian government and the taxpayers of Tasmania are relieved of that $8 million subsidy. All around it has been a win-win for the people of Tasmania and for the long-suffering taxpayers of this country.I would invite people who have a reactionary approach to the concept of privatisation to have a look at some of the achievements that can be made for the Australian people and for the benefit of industry and for the benefit of jobs growth in providing a private service where in the past governments have failed; governments of both persuasions and both state and federal have failed. Within a very short period of time private enterprise has prevailed, making a profit and providing greater investment, extending the rail network and increasing job opportunities especially, as you would know, Mr Acting Deputy President, in that depressed area of our home state of Tasmania, Burnie, which is a matter that I will seek to address later on today in relation to the delegation that is here visiting our parliament, concerned about the loss of jobs at the Burnie pulp mill.I believe that John Sharp who has just announced his retirement from the federal parliament ought to be congratulated for his initiative and for the tremendous work he did in achieving this excellent privatisation for the people of Tasmania and relieving the taxpayers of the burdens which they so unnecessarily had to bear over 130 years because there were those who believed that governments knew how to run trains. The fact is they do not. Private enterprise knows better and everybody is better off as a result.Sitting suspended from 1.58 p.m. to 2.00 p.m.Questions Without Notice394239423942Cook, Sen PeterSenator COOKRF4WAALP00—My question is to the Assistant Treasurer, Senator Kemp. Will the minister confirm that the Japanese economy is officially in recession, with their economy having shrunk by 0.7 per cent at the end of March this year and with a forecast further contraction of 0.5 per cent in 1998? How does the minister reconcile the recession in Japan with the Howard government's forecasts for the Japanese economy—forecasts of 0.25 per cent growth this year and 1.25 per cent growth in 1999? Given that Japan accounts for 20 per cent of Australia's total exports, will the minister advise the Senate of the impact of the Japanese recession on Australian exports?3942Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Thank you, Senator Cook, for that important question. Many Australians are looking closely at the Japanese economy in the hope that the recovery program announced by the Japanese government will be effected and effective. Senator Cook, it is correct that economic activity in Japan remains weak. Domestic demand has been flat for the last 12 months. The contribu tion to growth from net exports is weakening. Consumer and business confidence is low in Japan and this has been exacerbated by problems, which we have noted, in the financial sector. Growth through 1997 was largely supported by net exports but, in the face of the regional problems that we are all aware of, net exports weakened in the first quarter of 1998.The overall outlook for the Japanese economy is for little or no growth in 1998, but activity is expected to pick up during the course of the year in response to substantial government investment spending. Let me make this clear: the Australian government supports the substantial policy measures announced on 24 April by the government of Japan, aimed at achieving a demand led growth. We also welcome the recent announcement by the Japanese government of its determination to restructure its troubled financial sector as a matter of the highest urgency. This was noted at the recent Manila framework and the G7 deputies' meeting in Tokyo.Structural reform, particularly of the financial sector, is essential to help establish, in our view, a sound basis for a recovery and a return to sustainable economic growth in Japan. It will be important for the Japanese government to find the proper balance between the short-term measures designed to stimulate domestic demand and employment measures that help advance structural reform.In conclusion, Senator Cook may be aware of comments the Treasurer made recently about the economy in Japan. The Treasurer said that the situation in Japan today is very serious. He indicated that we had our officials in Tokyo on the weekend and we were one of the nations that put together a meeting between Asian nations, Australia, New Zealand and the G7 and they looked at the situation in Japan. As the Treasurer said, if the Japanese cannot fix their financial system there will be a serious threat to world growth. The Treasurer went on to say that the Japanese government has announced that it wants to deal with the problem and has set aside money to do so. What is required now, as the Treasurer said, is the political will to come in and take the tough decisions. He concluded by saying:But I must say it is very much in Australia's interests and the region's interests and the world's interests for decisive action in relation to the Japanese financial system.3943Cook, Sen PeterSenator COOKRF4WAALP00—Madam President, I ask a supplementary question. Thank you, Minister, for underlying the very serious situation in the Japanese economy, which goes to my point: in view of that very serious situation and the remarks being made by the Treasurer about it being `very serious,' do you now stand by the federal government's optimistic forecasts for a Japanese economic recovery? Those forecasts were: this year, 0.25 per cent growth; next year 1.25 per cent growth. Isn't it the case that the government has misunderstood in the budget the situation in Japan, casting serious doubt on the assumptions underlying the budget brought down by you last month?3943Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I am not sure that you were listening to the comprehensive and detailed answer I gave you.3L6CONROYSenator Conroy—Rubbish!WW4Senator KEMP—We would not have had the question if Senator Cook had been listening, Senator Conroy. I said that the outlook for Japan is for little or no growth in 1998 overall, but for activity to pick up during the course of the year in response to substantial government investment spending. That is what I said and, as you are aware, I mentioned the recovery program that was announced in Japan. I indicated also the announced reforms in relation to the financial sector. It is in all our interests that those reforms are put into effect quickly and responsibly. As a result, we can look forward to a recovery. But, as I said, the situation is serious.39433943Crane, Sen WinstonSenator CRANEUW4WALP10—My question without notice is to the Minister for Resources and Energy. The minister will be aware of a sharp fall in exploration expenditure within the gold mining industry, a major Australian export earner. Minister, what is the cause of this? What is the government doing to assist an essential industry to regional Australia?3943Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I would like to thank Senator Crane for that question. Senator Crane always has had a consuming interest in the gold industry, not only in regards to Australia as a whole but in regards to Western Australia in particular. Gold is our second largest export earner with exports this year valued at an estimated $5,600 million. It is the mainstay of many regional communities, both directly and indirectly. It has resulted in the establishment of a strong manufacturing base. For example—and this gives an idea of the spin-off—50 per cent of the market of Elphinstone, the major employer in Burnie, is reliant on the Western Australian gold industry.Producers have done well in an uncertain market caused by falling Asian demand and certainly over the extent and timing of future sales by European central banks. Production costs have come down by around seven per cent and the larger companies have been able to partially offset lower prices by forward selling and, of course, the lower valuation of the dollar.To find one of the major reasons why exploration is falling off, as asked for in the senator's question, we need go no further than an ATSIC report dated February this year. That ATSIC report says:There are some serious problems emerging with the use of the Right to Negotiate processes and these will require attention by us. In particular, while the passage of exploration licences through the Right to Negotiate Process has been fairly smooth, that is not the case for mining leases in Western Australia. Those mining leases are normally extensions of exploration rather than the start of a new mine but nonetheless it is on these leases where development ultimately takes place.The fact is that mining leases are being held up in the Right to Negotiate process—some 1,913 out of the 2,094 tenements submitted to the process remain subject to negotiation. Furthermore, the rate of objections by native title parties to the grant of exploration licences is starting to increase significantly which will mean further delays.The bottom line is that before the WA Government started using the Right to Negotiate process, about 2,800 tenements were in the system at any one time waiting for approval—after using the process the number has increased to 7,400. This must be a potent message for the electorate of WA which perceives its well being to be based on the mining industry.That is a direct quote from an ATSIC report of February this year. Gold exploration is expected to fall about 14 per cent this year. It will be the first fall in exploration expenditure in the industry for eight years. The blame for this, as ATSIC itself confirms, lies squarely with the unworkable Native Title Act, in particular the discriminatory lose-lose right to negotiate provisions. This downturn is the result of the failure of the Labor Party, of those opposite, to pass the government's native title bill and the 10-point plan.I held a round table with the gold industry in February this year. Senator Crane and I met last month with the gold industry working group which arose out of that round table. We were working through a number of issues with the gold industry, including taxation, infrastructure and trade barriers, but by far the greatest concern of the gold industry was native title and its inability to actually deliver. The point was made to us over and over again that of all the issues for the gold industry, including price, the one which is of greatest concern by far was the Native Title Act and the absolute necessity to pass the 10-point plan. (Time expired)3944Crane, Sen WinstonSenator CRANEUW4WALP10—Madam President, I ask a supplementary question. I understand, Minister, that in addition to the situation which exists in the mining industry, particularly the gold industry, there are currently a number of mines on-stream throughout Australia, including in New South Wales, Western Australia, Victoria and Tasmania. Could you explain the importance of getting the right to negotiate process right so that these mines may commence and create jobs?3944Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—There are currently 12 new gold mines under construction or committed in New South Wales, Western Australia, Victoria and Tasmania. They involve a capital expenditure of $800 million and will create thousands of new jobs in regional Australia if they are allowed to proceed. This government wants to keep the growth growing. We are interested in new jobs and new opportunities in regional areas for the manufacturers, small businesses and new industries in regional Australia, but without the 10-point plan it will not happen and those opposite will have to shoulder the blame.I remind those opposite of the comments made by AMEC, the Association of Mining and Exploration Companies, which said recently in their publication:The federal Labor opposition seems to have lost its way on native title and has been remarkably recalcitrant in addressing the nation's interest rather than matters of ideology and short-term political gains.39443944Bishop, Sen MarkSenator BISHOP2L6WAALP00—My question is directed to the Assistant Treasurer. Will the minister advise the Senate how large the black economy is in Australia in terms of tax revenue forgone? Where does Australia rate in terms of its black economy compared to other OECD nations? Can the minister name an OECD nation which has a GST and a smaller black economy than Australia?3944Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Thank you for the question, Senator Bishop. Senator Bishop, it was a great pity that you were not—I think I am right in saying this—at the Senate estimates committee where Senator Cook asked some distinctly non-probing questions in relation to the black economy. It makes particularly interesting reading. Before you accepted that question, you should have really—10000PRESIDENTThe PRESIDENT—Senator Kemp, direct your remarks to the chair.WW4Senator KEMP—Before that question was accepted, it would have been very advisable for Senator Bishop to closely read the transcript of that Senate estimates committee. I think the first point made was about the variety of estimates on the size of the black economy.2L6BISHOPSenator Bishop—What is your estimate?WW4Senator KEMP—What is your estimate!GB6COLLINSSenator Jacinta Collins—Well, what is it?WW4Senator KEMP—Oh! Senator Jacinta Collins has come into the debate. Oh, dear! Madam President, I am under acute pressure from over there, as you can hear, now that Senator Jacinta Collins has bought into this debate. The Senate estimates showed that there are a variety of estimates on the size of the cash economy, ranging between $5 and $15 billion. I advise Senator Bishop to read it closely on the basis of those particular estimates and how they were arrived at. There is no official estimate on the size of the economy.GB6COLLINSSenator Jacinta Collins—So you have got no benchmark!WW4Senator KEMP—I am under acute pressure from Senator Jacinta Collins, Madam President. I am really under pressure here. It might help Senator Jacinta Collins if she listened to an answer rather than chanting and calling out.Senator Jacinta Collins interjecting—WW4Senator KEMP—Here comes the chorus. The reason I urge Senator Bishop to read the Senate estimates Hansard —and I suspect, in relation to this question, that there may be some press people who wish to read it—is that what really happened was that Senator Cook made a goose of himself over this. What he was trying to establish was whether a broad based indirect tax would be more effective at tackling the cash economy than is the current system. Senator Bishop, I advise you to read very closely the evidence that was tendered to Senator Cook by the Secretary to the Treasury and others. In that you will find, I think, a pretty definitive answer to the incredibly lacklustre approach.GB6COLLINSSenator Jacinta Collins—Do you remember it?WW4Senator KEMP—The question was: what is the official size of the black economy? I have indicated that there are a range of estimates and I have quoted figures. I said there is no official figure.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Senator Kemp, just a moment. There have been interjections throughout this question which make it difficult for the minister to answer. The level of interjection at this stage is totally unacceptable.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order!WW4Senator KEMP—It is not actually difficult to answer the question; it is difficult to be heard because of the noise. The question was: what is the official estimate of the size of the cash economy? The answer was that there were a variety of estimates given. They are set out in detail in the Senate estimates Hansard . There is no official figure. The range that was given in the Hansard was between $5 billion and $15 billion.Opposition senators interjecting—WW4Senator KEMP—That is what I said. No-one listens—that is the trouble. They are all yelling out. Senator Jacinta Collins is coming in hard and making an untelling point. That was stated, Senator. (Time expired)3945Bishop, Sen MarkSenator BISHOP2L6WAALP00—Madam President, I ask a supplementary question. On the basis that you have told us there are no official estimates of the size of the black economy, Minister, on what empirical evidence did the Prime Minister rely when he stated that a GST would recover $15 billion lost to the black economy? Is the minister aware that, when Canada introduced its GST, there was a huge increase in the black economy caused by bartering and by increased cash transactions?3945Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Again, this is such an ordinary question.XE4BOLKUSSenator Bolkus—Then why can't you answer it?WW4Senator KEMP—Do you know what the answer to the question was in Senate estimates? The answer was:Senator Kemp —If you perhaps were less cute and read out the full quote, Senator, it might assist the committee.The full quote was then read out. It was indicated that one estimate of the size of the cash economy was $15 billion, et cetera. That question was asked. Was it definitively answered? That is what I have to ask.One thing we know is that the Labor Party did virtually nothing on this issue in its 13 years. Of course, there is an increasing fear in the Labor Party that the sort of tax reform we are bringing in is tackling a range of problems which the Labor Party were never prepared to tackle. 39463946Ferris, Sen JeannieSenator FERRIS5L6SALP10—My question is to the Leader of the Government in the Senate, and it relates to yesterday's exciting announcement of the $9 billion high-speed rail link between Melbourne and Darwin. Can the minister outline—Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Just a moment, Senator Ferris, I cannot hear you. Order!5L6Senator FERRIS—I will begin my question again so that the minister can hear it. It relates to yesterday's exciting announcement of the $9 billion high-speed rail link between Melbourne and Darwin. Will the minister outline the potential benefits of this project to regional Australia? What is his response to claims that this project will endanger the viability of the Adelaide-Darwin rail link, a project to which the Howard government has already committed $100 million?Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Just a moment, Senator. There are far too many interjections.3946Hill, Sen RobertSenator HILLBH4SALPEnvironment10—This is an important question, and it gives me the opportunity to contrast the record of the former Labor government with that of the Howard government in relation to rail infrastructure. Everyone remembers the pitiful state in which the Labor government left Australian railways: 7,000 jobs lost in 13 years, the closure of South Australia's interstate passenger services, the closure of dozens of rail lines and broken promises to hundreds of railway workers. That is what Australians remember of Labor. It was a dismissal situation with very little hope for the future. Come the coalition government, and we inject some $2 billion to revitalise Australia's railway system.The Alice Springs to Darwin railway is well on track for the first time. Remember what Mr Hawke said 15 years ago. He said:I promise that only the Labor government can be trusted to build the Alice Springs-Darwin railway.They had 13 years in office and delivered nothing. What happened now is that the Howard government has committed $100 million of public money, complemented by two other coalition governments putting in a further $200 million and all of a sudden there is the prospect of viability. An announcement is expected about the end of October.Opposition senators interjecting—BH4Senator HILL—They laugh at this. Because they failed, they have to laugh at this government's achievements. An announcement is expected about the end of October. The potential is there: 2,000 jobs for South Australians during the construction phase, hundreds of millions of dollars being invested; a new avenue for the export of South Australia's resources; and national infrastructure is being developed.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my left are making far too much noise.BH4Senator HILL—We are delivering where the Labor government failed to deliver. Yesterday's announcement is another example of that: a $9 billion rail link between Melbourne and Darwin and potential for further national infrastructure development—something that all reasonable Australians will be pleased about. But, of course, Senator Bolkus and Senator Schacht thought they could win a cheap political point by saying that it undermined the South Australian project. One hundred million dollars is being put in by the Howard government.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There is far too much noise on my left. It is almost impossible for me to hear Senator Hill when I am only a short distance from him.BH4Senator HILL—One hundred million dollars has been put in by the Howard government for the Alice Springs-Darwin line. No public money is being put into the eastern states one, and yet Senator Bolkus said that in some way the government is favouring the eastern states. It is hard to develop any credible argument from that perspective.Senator Schacht interjecting—10000PRESIDENTThe PRESIDENT—Senator Schacht; cease shouting. BH4Senator HILL—To see the private sector for the first time coming up with major national railway infrastructure projects is something that is exciting and not to be knocked. It is giving great hope to this country, finally, after the dismal years of Labor, to see that the rail system is starting to come on track.There were further good announcements yesterday. Labor would have missed them, of course, because they are not interested in these things. There was also the announcement that the Great Southern Railways—the private owners of the interstate passenger service—announced the extension of the Ghan service from Alice Springs to Melbourne. This is more jobs. Finally, after 13 years of Labor we have a government that is ensuring that we have a modern, national railway infrastructure, and that is great news for Australia.(Time expired)3947Ferris, Sen JeannieSenator FERRIS5L6SALP10—Madam President, I ask a supplementary question. Would the minister please give some examples of significant infrastructure projects which are now benefiting all South Australians as a result of the Howard government's policies?3947Hill, Sen RobertSenator HILLBH4SALPEnvironment10—That is a fair question, too, because this government has invested an enormous amount of public money in the economy of South Australia and we are actually proud of that. We think it is important. It gets knocked by Senator Bolkus and Senator Schacht, but we think it is important:$138 million of federal money for the construction of the Mount Barker freeway only a few months ago; 1,500 jobs for the benefit of South Australia; $48 million for the Adelaide airport runway project; and $22 million from the Natural Heritage Trust to South Australia to do something for rural and regional South Australia.Add that to $100 million for the Alice Springs to Darwin railway and you will realise that this government—the coalition government; the Howard government—is investing more money in the capital infrastructure of South Australia than ever before. What a contrast to the dismal record of Labor. At least we are establishing this vitally important nation infrastructure. (Time expired)39473947Conroy, Sen StephenSenator CONROY3L6VICALP00—Thank you, Madam President—Senator Schacht interjecting—10000PRESIDENTThe PRESIDENT—Order! Senator Schacht! Senator Conroy is attempting to ask a question. You should at least have the courtesy to listen to your own questions.3L6Senator CONROY—My question is addressed to the Assistant Treasurer. Does the government support the banks' call for financial services to be zero rated while they sing the virtues of imposing a GST on every Australian household? Should banks be zero rated and therefore able to claim a rebate on the costs they have borne, while at the same time they continue to close branches in rural Australia and jack up bank fees at every available opportunity? Does the government support the banks getting a tax break under zero rating, while they continue to treat rural Australia and ordinary banking consumers, such as pensioners, with such contempt?3947Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The only people who treat taxpayers with contempt are the Labor Party at the moment, because the Labor Party apparently opposes tax reform. I think most Australians recognise that we have a system which needs to be basically reformed. The first point is that the people who are treating the Australian taxpayer with contempt are the Labor Party and the Labor Party's unwillingness to consider and discuss—UI4RAYSenator Robert Ray—Have a crack at the question, waffler!WW4Senator KEMP—I was asked about treating the taxpayer with contempt. What I am saying is that the only people I am aware of who are treating the Australian taxpayer with contempt are those in the Australian Labor Party. So that answers that part of question.UI4RAYSenator Robert Ray—The waffle machine is zero rated!WW4Senator KEMP—The person I would zero rate would be Robert Ray, actually, for his contribution to informed discussion in the parliament. I will answer that part of the question. We are aware that there is a widespread discussion in the community on tax reform, and various groups of people are putting forward particular views. At an appropriate time the Prime Minister will announce a detailed tax reform package. That tax reform package will be in the interests of Australian taxpayers. It will be a tax package which will encourage people to save, to invest and to create jobs. We are constructively tackling yet another major problem that was left to this government by the Australian Labor Party. What is the contribution you get from the Australian Labor Party? You get a question like that from Senator Conroy. That is the Labor Party's big contribution to tax reform. I can assure Senator Conroy that we will have a detailed, comprehensive package; a fair package which addresses the serious problems in the taxation system which was left to this government by the Australian Labor Party.What the community wants is for the Australian Labor Party to try to adopt a constructive attitude to tax reform. It expects the Labor Party, if they do not accept our tax reform proposals, to constructively address them. It is interesting to contrast the constructive attitude that ACOSS has taken in the lead-up to this debate on tax reform and the sort of attitude that the Labor Party are taking. It is quite interesting, when you contrast the two, just why the Labor Party are treating the taxpayer with contempt. I suggest that, if Senator Conroy wants to take a constructive role in tax reform, he sit down and do some hard work rather than branch stacking.3948Conroy, Sen StephenSenator CONROY3L6VICALP00—What the community wants is Senator Parer to pay tax. Madam President, I ask a supplementary question. Will the large donations made by the banks to the BCA tax campaign be tax deductible as legitimate business expenses?3948Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I do not give tax advice in question time to people like you. If you have a serious question, Senator, I am happy to provide you with a detailed answer. We welcome the constructive support that many groups are giving to tax reform.LD4ALSTONSenator Alston—Like ACOSS.WW4Senator KEMP—Like ACOSS, like the business groups. The Labor Party stands alone on this. The Labor Party alone apparently do not believe, if you can judge by their attitude rather than their words, that tax reform is necessary. That is why I repeat that I believe the Labor Party are treating Australian taxpayers with contempt.Distinguished Visitors394810000PRESIDENTThe PRESIDENT—Order! I draw the attention of honourable senators to the presence in the chamber of a parliamentary delegation from the Republic of Poland led by the Marshal of the Senate, Mrs Alicja Grzeskowiak. On behalf of honourable senators, I have pleasure in welcoming you to the Senate, and I trust that your visit to this country will be both informative and enjoyable. With the concurrence of senators, I invite the marshal to take a place on the floor.UNKNOWNHonourable SenatorsHonourable Senators—Hear, hear!Mrs Alicja Grzeskowiak was seated accordingly.Questions Without Notice394839483948Allison, Sen LynSenator ALLISON1M6VICAD00—My question is directed to the Minister for Resources and Energy. Minister, as action minister for the Jabiluka uranium mine, are you aware of the humiliation suffered by the Australian government at the UNESCO world heritage meeting last night in Paris? Are you aware that UNESCO member countries are sending—LD4ALSTONSenator Alston—Madam President, I raise a point of order. It is one thing to ask a question seeking factual information, but it is another thing altogether to colour it with a prejudgment which, on any view of the world, is not something that is accepted. It should not be part of the premise of a question. You should rule that part of it out of order.QD4BROWNSenator Brown—There is no point of order, Madam President. The senator is entitled to ask the question she wants. It is up to the minister to say whether or not he is aware and whether or not he believes the government has been humiliated.8U4LEESSenator Lees—On the point of order, Madam President: surely we have to listen to the question to determine whether or not the government is, or may possibly be, embarrassed. I ask that at least Senator Allison be allowed to ask the question before we turn to points of order.10000PRESIDENTThe PRESIDENT—It is a matter for the minister to deal with in his answer as to whether or not he accepts the description. There is no point of order.1M6Senator ALLISON—Thank you, Madam President. I will start again. Minister, as action minister for the Jabiluka uranium mine, are you aware of the humiliation suffered by the Australian government at the UNESCO world heritage meeting last night in Paris? Are you aware that UNESCO member countries are sending their top level world heritage team to investigate the cultural and environmental threats to Kakadu? Are you aware that the World Heritage Bureau has requested that all activities stop immediately until the inspection team has assessed the area? Are you aware that Kakadu may be placed on the world heritage in danger list? Will you give a commitment to Australian people right now that you will stop all mining preparation activities on site to meet the request of UNESCO?3949Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—My understanding is that the World Heritage Commission has spoken favourably about the way Australia handles its world heritage areas. I am a little surprised about the comment about humiliation because—UI4RAYSenator Robert Ray—You'd know all about that, Warwick!KI4Senator PARER—That is beneath you, Robert. What surprises me about the Democrats is that I thought their policy was to stop all uranium mining—the whole lot; Olympic Dam, Ranger and the development of Jabiluka.BH4HILLSenator Hill—And to stop greenhouse at the same time.KI4Senator PARER—Yes. I think ex-senator Peter Walsh used to refer to the fairies at the bottom of the garden—and you have gone back to it.What we have is a process in place whereby the ERA or the previous owner back in 1982 had agreements with the traditional owners to develop Jabiluka. This was transferred in about 1991, with the support of the Northern Land Council representing the traditional owners. When this government came into power, of course, it got rid of the ridiculous three-mine uranium policy—and I know that even Robert Ray agrees with me, because he told me one day when crossing the chamber when he was in government.BH4HILLSenator Hill—What is the Labor Party's policy now?KI4Senator PARER—Good question, Senator Hill: what is the Labor Party's policy?UI4RAYSenator Robert Ray—You said you paid tax at the same time!KI4Senator PARER—When we removed the three-mine policy, this meant that companies were able to develop mines in accordance with strict environmental principles. The ERA company was designated by me as a proponent over two years ago, and it went through the environmental process. Agreed: there is a group up there, one of the traditional owner groups, that is opposed to the development of the mine. I might say that that was the group that supported it and agreed to it back in 1981 or 1982 and that was reinforced in 1991.I would also point out that I know the opposition is coming from one particular group led by Ms Jackie Katona, who with Yvonne Margarula came to see me. I made the point very clearly that, if Jackie Katona was thinking of the Aborigines, I thought it was in their best interests to maximise the environmental, the economic and the social returns to the Aborigines.3949Allison, Sen LynSenator ALLISON1M6VICAD00—Madam President, I ask a supplementary question. The minister is obviously not aware of what happened in Paris last night, and no doubt that will come through fairly shortly. I ask again: Minister, will you and Minister Hill then proclaim the surrounding Kakadu world heritage area to protect it for future generations of Australians? Also, you mentioned the conditions which apply to the Kakadu Jabiluka uranium mine, one of the most important of which was the condition that there be a cultural management plan in place before construction of any mining operations. Why was this not done, and what other conditions have you conveniently overlooked?3950Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—Senator Allison, who belongs to a party that talked about keeping everyone honest, came into an estimates committee and made an outrageous claim about me in regard to mining the Barrier Reef. When I asked her, she said that she had it on good authority and was not going to dob anyone in.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my right will cease making so much noise.1M6ALLISONSenator Allison—Madam President, I raise a point of order as to relevance. I did not ask a question about the Great Barrier Reef; it was about the Kakadu National Park and the Jabiluka uranium mine.10000PRESIDENTThe PRESIDENT—I remind the senator of the supplementary question.KI4Senator PARER—Let me make the point again—and everyone knows this or should know it, although the Democrats would like to convince them otherwise: neither Jabiluka nor Ranger are within the Kakadu National Park. So let us make that very clear.I saw the article in the paper in regard to the heritage management plan. It was based on the failure, I might say, of the journalist to find out the actual conditions imposed on ERA by me. The environmental requirements require the carrying out of an archaeological survey on each area to be affected by the construction before construction work commences in that area. The six-monthly report advised that ERA had appointed an environmental officer as required by ER3. (Time expired)39503950Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—My question is to addressed to Senator Ellison, the Minister representing the Minister for Employment, Education, Training and Youth Affairs. Can the minister confirm that it is the government's intention not only to deny that many new job agencies are facing financial ruin, not only to deny them assistance to avert financial ruin but also to hasten their financial ruin by subjecting them to a GST? Is it true that job agencies will be hit by a GST, both by having to pay tax on inputs to the business and charge it on the outputs?Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! The behaviour of senators shouting across the chamber at each other is totally unacceptable.3950Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—That question really does relate more to Senator Kemp than me. But Senator Kemp has answered that question eloquently. In fact, I thought he succinctly described the coalition government's approach to tax reform and the benefits it would bring to Australians.The government has not announced that there will be any GST applicable to the jobs network system. Senator Jacinta Collins knows very well that this government is formulating its tax reform package and it has made no such announcement. That is a matter for the Treasurer to decide.But let me deal with that part of the question which does relate to the portfolio—and that relates to the assistance that this government gave those jobs network providers. I can tell the Senate that, in 19 sites across Australia, some 2,000 staff of jobs network providers attended for briefings from the department. Not only that, but we gave them a help desk in relation to computer matters so that jobs network providers could have that assistance. We also have on the Internet a jobs network members' information site where they can get information in relation to this. So what this government has done is not only set out the contract that is available to the jobs providers but given them assistance as well.Senator Collins has asked what we are going to do about these job providers, what assistance we are giving them and what we are going to do to help them. We have done a great deal in helping those jobs network providers. In relation to their individual success, it is up to them. It is a performance based system, and it is appropriate that it be so. We have contracted with more than 300 organisations, and more than 400 sites are involved in providing job seekers in Australia with more choice and more opportunity.3951Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—I ask a supplementary question. Did the minister really say that the GST's application to job agencies is a matter for Treasury to decide? My question was directed to whether the minister, not Senator Kemp, was standing up for job agencies in the negotiations about tax reform. How will job agencies recoup the additional expenses imposed on them by a GST? Will the government pay them higher fees for job placements, or will they be left with no option but to pass the costs on to their clients: employers and the unemployed?N26ABETZSenator Abetz—I raise a point of order, Madam President. Under standing order 73, hypothetical matters are not allowed to be asked. With due respect, in relation to a lot of questions from the opposition today, standing order 73 would be a very welcome read for them. That is clearly hypothetical. No announcement has been made in relation to a GST on anything, let alone on those job agencies, and I ask you to rule the question out of order.5K4FAULKNER Senator Faulkner—On the point of order, Madam President, I note that today you have allowed a number of questions and supplementary questions in relation to a GST. I can understand why Senator Abetz, a desperate member of the coalition government, does not want the opposition to be asking questions about the GST, but I would ask you to be consistent with the rulings you have made throughout question time today and to allow the opposition to question the government about the GST, as will the opposition right through to the election, and so will the Australian community.10000PRESIDENTThe PRESIDENT—Hypothetical material is not appropriate. It can be used as a descriptive matter, but no minister would be required or asked to answer anything that related to a hypothetical matter. But there are issues within the question that the minister may well want to make comment upon.RF4COOKSenator Cook—On the point of order, Madam President: the government, at a cost of $42 million to the Australian taxpayer, has got a task force to develop a GST for Austral ia. That is government policy. There is nothing hypothetical at all about this government and a GST.10000PRESIDENTThe PRESIDENT—I have ruled on that and have indicated that. You are merely seeking to reinforce my ruling, thank you, Senator Cook.3951Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—What I said in my answer was that the Treasurer will decide these matters; not Treasury but the Treasurer. The Hansard will prove me correct. It is obvious that Senator Collins is a great fan of Geoffrey Robertson, because this is a great deal to do with a hypothetical. The tax reform package will be for the benefit of all Australians.39513951Colston, Sen MalcolmSenator COLSTONPF4QLDIND00—My question is directed to Senator Kemp, the Assistant Treasurer. Is the minister aware of concerns such as those raised by the Gold Coast City Council relating to the coalition's amendment of item 192 of the Sales Tax (Exemptions and Classifications) Act 1992? Is it correct that this amendment will significantly impact on the financial viability of many local councils' community based business activities? Further, is it also the case that ratepayers around the nation will be able to thank the coalition for increased fees for important community services such as public swimming pools, community halls, public sporting complexes and camping grounds that will result from this amendment? Is this an example of the government balancing its own budget by passing on additional costs to the community?3951Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator Colston, I am aware of the issue that you have raised in particular, because this is a matter that you have be concerned about on previous occasions. In fact, if I recall, you also wrote to me on this particular matter. Senator Colston referred to section 192. The exemption provided by section 192 was being used in an unintended manner, with some part of the benefits at least going to the private sector through the development and refurbishment of projects such as shopping centres, hotels, casinos and apartment blocks. The government is aware that a Senate select committee either had or is holding an inquiry into this amendment.Senator Colston, the specific issue which you raise, and which I think you have raised with me by correspondence before, relates to the effect on local councils. The amendment contains two tests in relation to the use of property. The property must be occupied by what is termed an always exempt person or, alternatively, principally by a person who is providing services to an always exempt person. In the latter case, the property must be used principally for the provision of those services.The amendment referred to by Senator Colston includes a list of the types of properties which will be excluded from exemption regardless of whether they will be able to satisfy either of those two tests. In relation to Senator Colston's comments regarding local council facilities, I can advise him that local council facilities such as swimming pools, community halls and such things as entertainment venues would continue to qualify for an exemption where they are operated by a local council. Where these facilities are controlled and operated by a private agent, exemption may still apply if the arrangement is such that the private agent is providing a service to the local council. As I said, this is a matter which Senator Colston has shown some particular interest in before, and I think that he will be pleased with the answer that I have given. I certainly hope he will be.39523952McKiernan, Sen JamesSenator McKIERNAN1I4WAALP00—My question is directed to the minister representing the Attorney-General. Is the minister aware that a GST is likely to increase the cost of legal services by almost the full amount at which it is levied? Is the minister aware that a GST levied at a rate of 10 percent on our national legal services outlays of $5.25 billion would increase the cost of legal services for Australians by a staggering $525 million a year? It would make the average will cost $10 more, conveyancing on a home $50 more expensive and an average workers compensation case would be $800 extra. Has the government made any assessment of the impact of a GST on the ability of Australians to access justice? If not, why not?3952Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—I thank Senator McKiernan for the question and for demonstrating, as some of his colleagues already have, that they have no concept of the benefit of tax reform for Australia and no concept of the simple mechanics of a change in indirect taxes. They have no concept whatsoever, and so they confirm why it was that in 13 years they never properly reformed the tax system: they do not understand how it works. They do not understand about inputs and outputs and they look at any question of tax as being an add-on because that is what they did.We all remember the previous government's record in this respect. We remember the previous Prime Minister saying, `You are going to get these tax cuts.' They are now L-A-W law tax cuts—the tax cuts that were never delivered. The difference between the former government on tax and this government on tax is that we told the public what we were going to do before the last election. We told them we wanted to sell Telstra and we told them we had a family tax package, and we delivered. We will do the same before the next election and we will leave it up to the Australian people to decide.Senator McKiernan, the short answer to your question as to whether I agree with you that there would be a necessary increase of some $525 million is `no'. The simple reason I do not agree with you is that you do not understand about tax on inputs versus outputs and the deduction between the two. You do not understand the mechanics of it, so I cannot help you.3952McKiernan, Sen JamesSenator McKIERNAN1I4WAALP00—Madam President, I ask a supplementary question. I thank the minister for reminding the Senate of the Prime Minister's promise in the last election to never ever introduce a GST. That is the promise, minister, and thank you for reminding us. My question directed you to the impact of a GST on the battlers of this nation. You have very cleverly evaded that question, minister. Can I ask you to take the earlier part of the question—Government senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my right will cease interjecting. The minister is entitled to hear the question.1I4Senator McKIERNAN—Minister, I would like to know if the GST would increase the cost of an average family law matter by $1,200. Would it increase the cost of an average workers compensation case by $3,500? Would the government exempt legal services from a GST or would it take any other measures to counteract the effect of a GST that would otherwise prevent many ordinary mums and dads from having their day in court? Or will the government continue to attack the right of ordinary Australians, as you have done through your slashing of legal aid, massive increases in court and tribunal fees and cuts to services designed to keep Australian families together? (Time expired)3953Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—Senator McKiernan understands the point of the answer I gave him: that this government was honest with the Australian public last time about the initiatives it wanted to implement. We said we wanted to sell Telstra, we said we wanted to have a family tax package and a range of other initiatives, and we have done it. And we will do the same this time. We will go to the Australian people and tell them what we want to do, and they will decide. But, Senator McKiernan, if you keep displaying—by coming out with these spurious figures all over the place—that you have not the slightest concept of how any reform to the taxation system would work, you will not do yourself any good. Can I equally point out to you, Senator McKiernan, that the best legal advice keeps people out of their day in court.39533953Heffernan, Sen BillSenator HEFFERNANC16NSWLP10—My question is addressed to the Minister for Aboriginal and Torres Strait Islander Affairs. I draw the minister's attention to a report today that the ATSIC board has passed a resolution calling for the winding up of the Office of the Registrar of Aboriginal Corporations. Is it a fact that the Office of the Registrar of Aboriginal Corporations is most important to overseeing expenditure of taxpayers' money in indigenous affairs? What is the government's re sponse to this threat to public accountability of funding through ATSIC?3953Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I am aware that the board of ATSIC did pass a resolution calling for the registrar's office to be absorbed into the Office of Evaluation and Audit and calling for the termination of the registrar. I can assure the Senate that the Office of the Registrar of Aboriginal Corporations has my full confidence and, if any changes are to be made, they will be to further strengthen the office. The office does an outstanding job of ensuring proper accountability in indigenous affairs. I find it peculiar in the extreme that the ATSIC board would pass a motion calling for the winding-up of the office, particularly in light of the poor accountability record in indigenous affairs.We inherited that appalling record from Labor when we came to office, and we have taken strong steps to address it. I remind senators that this government put a special auditor into ATSIC when we first came to office, and I remind senators and ATSIC commissioners of what the special auditor found. The special auditor expressed serious reservations about 292 of the 1,200 ATSIC-funded organisations examined. In their last year of funding, these organisations received a total of $172.4 million and, with the help of the office of the registrar and the Office of Evaluation and Audit, we have taken concrete steps to clean up the problems of accountability that we inherited.Over the past 2½ years, 56 matters involving indigenous funding have been referred to the Federal Police and eight to the state police. It has been important to do that to ensure maximum outcomes from expenditure in indigenous affairs. The poor accountability that existed under Labor not only cheated taxpayers but also cheated indigenous Australians, and I can assure ATSIC commissioners, indigenous Australians and all taxpayers—indigenous and non-indigenous—that this government will not be abolishing the Office of the Registrar of Aboriginal Corporations.I also note that the same report includes objections by ATSIC commissioner Sugar Ray Robinson to the appointment of administrators to organisations that he controls. According to advice I have received, an audit of one of the organisations in question, the Goolburri Land Council, has revealed serious discrepancies. I am also advised that traditional elders in the area have signed a petition calling for the appointment of an administrator to the Goolburri Land Council and that staff were dismissed after they expressed concern that traditional owners were not being given proper recognition. Under those circumstances I believe the registrar would have failed in his duties if he did not appoint an administrator to the Goolburri Land Council.The article also refers to attempts by the registrar to open the books of the National Aboriginal and Islanders Legal Service, NAILS, of which commissioner Robinson is chairman. I am advised that there have also been serious complaints relating to NAILS and I would pose the question: if NAILS has nothing to hide, why refuse to allow the registrar to look at the books?I repeat that this government is committed to accountability, something Labor failed to do during its 13 years in office. Labor's failure was not only to taxpayers, but also to Aboriginal and Torres Strait Islanders, who should have received better outcomes from that expenditure. I make no apologies for our determination to ensure proper accountability. I repeat that I have full confidence in the office of the Registrar of Aboriginal Corporations.I would recommend to the opposition that they take that into account whenever any questions are asked about these matters, as was done in the last two weeks. When the question was asked at that time, I said that I would bring further matters to the Senate to explain the implications of the question that was asked by the opposition two weeks ago. When further matters arise I will be happy to bring them to the Senate as these events unfold.3954Heffernan, Sen BillSenator HEFFERNANC16NSWLP10—Minister, given the statement you have just made on the Goolburri Land Council and given ATSIC's view that they would like to shut down the Registrar of Aboriginal Corporations, does not this highlight once again the great commitment that and you and our government have to getting it right in the expenditure of money on ATSIC and our commitment to fair play and a fair go for ordinary Aboriginal people?3954Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank Senator Heffernan for the supplementary question. I am sure everybody in the Senate believes that at all times the funds that go to Aboriginal affairs should go to the needy and not the greedy. That is the criterion that we have established in this portfolio. I know that the overwhelming number of Aboriginal people of this country and the Torres Strait Islanders support that contention. So at all times we will ensure that the very necessary funding that needs to go into Aboriginal health, housing, education and employment goes to the people who need it. We have an enormous backlog that must be taken up. We will do so in the shortest period of time available so that we can reach standards that are equal to those of the rest of Australians, which Aboriginal people expect to have.BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper .Miscellaneous3954395415:02:003954Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—On 28 May I gave an answer to Senator McKiernan in relation to Jobs Network in Western Australia. There is a slight amendment which I table and which I seek leave to incorporate.Leave granted.The statement read as follows—I refer to Senator McKiernan's question without notice on 28 May 1998 which related to employment assistance with Jobs Network in Western Australia. During the course of my answer, I referred to an interjection by Senator Evans in relation to these services as they applied to Karratha. I stated that there had not been any tenders received from Karratha.I have since been advised that there were no successful tenders for the provision of Flex 1, 2 and 3 services in Karratha. There was however a successful tender from the WA Chamber of Commerce for a New Apprenticeship Centre in Karratha. My answer however with respect to Karratha involving a fee for service arrangement remains correct.395515:03:003955Cook, Sen PeterSenator COOKRF4WAALP00—I move:That the Senate take note of the answers given by the Assistant Treasurer (Senator Kemp) and the Minister for Schools, Vocational Education and Training (Senator Ellison) to questions without notice asked by Senators Bishop, Conroy, Jacinta Collins and McKiernan today, relating to a goods and services tax.Senators will know that during the lead-up to the last election some famous words escaped the lips of the Prime Minister (Mr Howard). They are captured on television for the world to see. In regard to the question of a GST: `I will never ever introduce a GST.' We have now $36 million of Australian taxpayers' money being set aside in the current budget to prepare the Australian people for the introduction of a GST. The Prime Minister said, `Never ever'. The budget says $36 million of Australian taxpayers' money, $10 million of which is to run a television campaign to sell the GST to a reluctant Australian electorate.When this government talks about tax reform, it means a GST. `Tax reform' is the nice language they use to coat the bitter pill of a goods and services tax in this country. In question time today, when posed several questions about what they mean, what they intend and when they will introduce such a formula, they ran scared.It is appropriate, therefore, for the opposition to canvass some of the myths that the government has given birth to about a GST. One of the biggest myths is that those who avoid tax in Australia will be caught under a GST, that is to say, the black economy in Australia will be wiped out. We know the evidence. Of all of the 26 countries in the OECD, Australia's black economy is amongst the smallest. What is the distinguishing feature of the countries with large black economies? The distinguishing feature is that all of them have a GST. It does not follow that when you introduce a GST you wipe out wholesale tax avoidance in the black economy. In fact, tax avoiders who are able to save money and find smarter ways of avoiding tax have a way of doing so even with a GST regime. So put a cross against the idea that you overcome tax avoidance. In any case, we know that this government will not overcome the tax avoidance engaged in by Senator Parer because it will not introduce a law on trusts to do so.What is the second big myth about a GST? The second big myth is that it will cut the costs of imports to exports and our export industry will be able to earn more dollars overseas. That is also a myth because we know that the exchange rate changes to correct the competitive advantage. The competitive advantage is nil. The competitive advantage to exporters becomes nil because of a variable floating exchange rate. We know that is to be a fact. So will there be more jobs under a GST? No, there will not be any more jobs under a GST. Why do we not go back to what Labor did when we supported manufacturing industry in this country? Manufacturing exports during the decade of Labor government grew by 15.7 per cent. What are they growing at now?—about three per cent. Who got it right on creating jobs through exports? We did. Who wants to get it wrong? You do. So let us cross off the list the idea that the GST will somehow improve Australia's competitive position.Let us go to the other great myth about a GST. The government says they will introduce it and it will remain fixed—it will not increase. We know all about that one. Of the 23 countries in the OECD with a GST, 21 of them have increased it after it was introduced. We know that John Hewson, a former Liberal leader, shone the light of truth upon you lot when he said, `Unless the GST is at 15 per cent, no-one will believe it, and if it is at 15 per cent, that is the level it should be at. Anything less is not enough.' A former Liberal leader exposed the current Liberal government. Who believes the myth from John Howard—the man who said, `Never ever will I do this'—when he says, `But I won't increase it when I do'? So that is another myth. Who wants a GST? The big end of town—the business community. They will pay the same tax as we will and as ordinary income earners in this country will. The rich pay the same tax as the middle and low income earners in this country. They say that is fair. Of course, it is fair for them, but it is not fair for the ordinary Australian because the ordinary Australian pays more out of their wage packet for housing, food and clothing than do wealthy Australians. They will all be taxed at the same level by a GST on the costs of food, clothing and housing. (Time expired)15:08:003956Knowles, Sen SusanSenator KNOWLESTH4WALP10—I rise to speak on this subject as well because I think that we are about to see one of the most scurrilous campaigns launched yet again from people on the other side who so wrongly assumed office in 1993 on the basis that they said that they would introduce tax cuts to Australian people. They said that they would not just promise tax cuts; they would put them into law. What happened? The moment they were elected, they rescinded the l-a-w tax cuts.Prior to that election, they also promised that they would not increase taxes. What happened? They increased taxes. The 10 per cent rate went to 12 per cent, the 20 per cent rate went to 22 per cent and the 30 per cent rate went to 32 per cent—and on the list goes. Not only that, they increased a whole range of wholesale sales taxes. They increased the petrol excise, they increased the Medicare levy, they increased company tax, they increased fringe benefits tax and they increased departure tax. And here is a mob that is trying to be credible on tax!Where in the world is the Labor tax policy? They have been in opposition for 2½ years. They have not released one single solitary policy.GB6COLLINSSenator Jacinta Collins—What's yours?TH4Knowles, Sen SusanSenator KNOWLES—The government has brought down three budgets. You should be able to gather what is in the tax policy through three budgets. I feel sorry for people like Senator Jacinta Collins. She is so far out of left field, she does not understand anything to do with tax. The question that Senator Collins asked today just highlighted her gross and utter ignorance in the whole area of tax.Then you get other questions about exempt rates. They do not have a clue about exempt rates—the difference between exempt and zero rating. They do not have a clue about the way in which the whole system flows on. They do not have a clue about the way in which the whole system works. Yet the worst part about all of this is that the Labor Party are talking, supposedly, about someone else's policy that they have not seen. Why do they keep coming in here talking about a policy that they have not seen, much less understanding the principle behind it?The only principle of tax that the Labor Party has ever understood is how to increase it. That is the basis on which they ran this country for 13 years. People only need to be reminded of their record. Their track record is crystal clear.GB6COLLINSSenator Jacinta Collins—You should join One Nation.TH4Knowles, Sen SusanSenator KNOWLES—Unfortunately, nit-wits like Senator Collins were not here then.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order!TH4Knowles, Sen SusanSenator KNOWLES—Sorry, I withdraw that. People who lack total understanding of the tax system like Senator Collins—GB6COLLINSSenator Jacinta Collins—How would you know?TH4Knowles, Sen SusanSenator KNOWLES—Because I have had to listen to you, you dill. That is why.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator Knowles, please withdraw that comment.TH4Knowles, Sen SusanSenator KNOWLES—If you want me to withdraw `dill', I withdraw `dill'. I am simply saying that people like Senator Collins should never be allowed to be let loose on this subject. The way in which the Labor Party are manipulating this whole story yet again is just a disgrace. These questions have been asked today from a wrong foundation. I thought Senator Bishop had more intelligence and more capability in this area, and yet the question that he asked of Senator Ellison was just breathtakingly silly.2L6BISHOPSenator Bishop—I asked Senator Kemp.TH4Knowles, Sen SusanSenator KNOWLES—Senator Kemp or whoever it was. It was just breathtakingly silly. It did not make sense. The problem is that we have now got this Labor Party yet again running a fear campaign based on total and utter misinformation. There is no respect for the truth. There never has been a respect for the truth in the way in which the Labor Party run this campaign. We saw it chapter and verse in 1993, and here we are seeing it again in 1998. I hope that the people of Australia will not be bluffed by a party that has not released one single solitary policy in 2½ years and has not given one hint of what their tax policy is going to be other than to do everything they did in 13 years in government.15:13:003957Conroy, Sen StephenSenator CONROY3L6VICALP00—The GST is unfair and inequitable, and the Liberals want to pretend that it is not. That is what this debate is about.The Liberals claim the GST will increase jobs. It does not. There is not any country anywhere in the world where you can show that the introduction of a GST has led to more jobs. The Liberals want you to believe that the GST is going to end the black economy. Again, there is not one single country in the world that you can point to where this has been the outcome. In fact, Canada, which is the most recent country to have introduced this, has actually had a massive increase in its black economy. The Liberals want you to believe that the GST will fix national savings. Again, there is not one country in the world that you can go to where it can be demonstrated that there has been an increase in national savings because of the introduction of a GST. They are the three big claims.It is particularly cruel of this government to walk around pretending that a GST is going to create jobs. The workers got sacked by Stan Wallis of Amcor last week in Burnie, Senator Watson—and you should be particularly concerned about this being a Tasmanian.VJ4WATSONSenator Watson—You know I am.3L6Conroy, Sen StephenSenator CONROY—Stan Wallis wants everybody to pay a GST: 10 per cent on food, 10 per cent on bread and 10 per cent on milk. He sacked those workers and he wants to run an advertising campaign in this country saying that the GST will get your job back, that the GST will create jobs for you. There is not one worker in Burnie who just lost their job who believes him.Business is about shifting the tax burden from themselves to the families and households. Stan Wallis, President of the Business Council of Australia, said on 27 May 1998:The GST holds out the prospect of significant reductions in the indirect tax burden currently borne by business.Where do you think that tax burden is going to go if it is not going to be borne by business? It is going to households. Ordinary Australians are going to be paying for their bread and their milk, they are going to be paying on education, and they are going to be paying on clothes and shoes.VJ4WATSONSenator Watson—You're in for a big surprise. What about the tax cuts?3L6Conroy, Sen StephenSenator CONROY—They are putting a hand in one pocket and they ae going to try to distract everybody with big, glossy advertising campaigns. They are going to dangle these tax cuts around, and they are going to be giving with one hand and taking back with the other. They are going to have their hand in your pocket every time you go down to the shop or to the footy or to the cinema or to McDonald's. They are all going up, and you have been putting them up.The real test here, as I said at the beginning, is whether this is going to be fair and equitable. There is one test in this country that we can easily apply to determine whether this package is going to be fair and equitable: is Senator Warwick Parer going to pay one cent extra in tax after this package is up?GB6COLLINSSenator Jacinta Collins—The Parer test!3L6Conroy, Sen StephenSenator CONROY—The Parer test is what we will be calling it, after the man who avoids all his income tax by setting up a family trust. He does not pay income tax; he avoids income tax by distributing his income, passing it around in his family trust. Are you going to tax family trusts? Are the 18 of you over on that side who avoid your income tax obligations by putting your income into trusts going to be worse off? Are you going to be paying more tax once this package sees the light of day? There will not be much time for people to examine it, but that will be the key test. Is Warwick Parer going to pay more tax after the tax reforms that you claim are fair are implemented? I am willing to bet he is not.The Prime Minister (Mr Howard) told this country that `never ever' would he introduce a GST, then he tried to tell you that he is never ever going to put the rate up. I have a bridge in Sydney I want to sell to anyone who believes that. That is what John Hewson blew the whistle on. John Hewson stood up and said, `You have to put a GST up around 15 per cent because, if you do not, it will always go up.' That is what everybody knows. You can stand there and try to pretend that `never ever' is only three years. You can pretend that all you want, but ordinary Australians are not going to be fooled. No glossy advertising campaign about hidden taxes is going to wash when they know the rate is going to go up, because you cannot promise or guarantee that it will not. If you put it in your budget, if you make it a revenue bill, this opposition has always said we will pass the budget bills. That is how you will do it. (Time expired)15:18:003958Watson, Sen JohnSenator WATSONVJ4TASLP10—We all know that the Australian tax system is unfair. It distorts the decisions of business and consumers, it is complicated and, above all, it needs reform. This Liberal government has the guts to provide that mechanism for reform. We will see that result shortly.Unfortunately, we now have a system where there are six different wholesale tax rates which are applied to the wholesale price of goods but, of course, not to services. We now have a system where there are taxes on taxes. I need not remind the Senate that our tax system was designed for the 1930s and is outdated. It is dominated by a manufacturing sector, targeted at domestic consumption. Times have changed but our tax system has not.The Labor Party, when they were in power, just imposed increases on an archaic system. What we propose is a complete reform of the tax system. What we propose is that, after Senator Conroy returns from the football or has spent his money on these sorts of activities, he will still have more money in his pocket because, as part of this tax reform, there will be significant income tax cuts that are going to be directed to those people—the middle income earners—who suffered too much under the Labor Party administration. These are the people who will be better off whether there is an indirect tax or not.Those tax cuts are going to come from the accumulated surplus, from all the bracket creeps that you dishonestly, in 13 years of government, took away from ordinary workers. We will restore equity to the blue-collar workers' pay packet and to the battlers of Australia. At the end of the day, the middle income workers will have more money for discretionary spending and more money to put away as savings for their retirement, because more than 2.4 million workers face being stranded on the top tax rate unless the system is radically overhauled. We intend to radically overhaul that system to provide the tax cuts from the accumulated surplus of bracket creep and so on, but not from a GST or any sort of tax that could be introduced.Let us look at the situation. By the year 2000, 36 per cent of taxpayers will be faced with a tax rate greater than 40 per cent. What hope, in such an environment, have the ordinary workers got? Each year, more and more Australians are being forced into paying higher tax rates, including more and more people moving into the top marginal rates.A lot has been said about the GST. In Australia we have taxes cascading on taxes. The result is that if you compare two economies alone—ours and New Zealand's—with this cascading of tax and no zero rating on exports, we have a situation that, given two identical firms with equal efficiencies—one in Australia and one in New Zealand—in terms of export prices Australia's prices are up here and New Zealand's prices are well below it. What hope have Australian exporters in competing with a country such as New Zealand, which has such a GST. What chance have exporters?What would be the result if Australia were to move to such a system? We would be competing on equal terms rather than being outpriced continuously. What does this mean? This means extra return to the exporters, extra jobs, higher prices for primary producers and higher prices for those who work in the industries. I put it to you: the only way that Australia is going to take a higher share of export trade is to improve our competitive system, and part of that reform is reviewing the tax situation. (Time expired)15:23:003959Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—After that performance, I would like to congratulate Senator Watson for at least an attempt to deal with some of the issues of substance in this debate about taxation, although I would have to say his contribution has been somewhat incredible, given his interpretation of the benefits of what the government is proposing to put forward. We still do not have significant light shed on precisely what tax reform means to this government.In my contribution to this debate, I would like to take a step back, partly in response to Senator Knowles's contribution, to the Fightback package because it seems that she has forgotten some of the issues that were dealt with during that period. If we reflect on the debate as it occurred some years ago, we see this government is overreacting to Fightback. Many commentators have suggested that the government learnt its lesson on Fightback in that it allowed far too much time for the public and the community to become aware of the implications of a GST, so this time they are holding back so that we will not be able to demonstrate the deficits in the government's tax reform package.I think anyone observing the events as they stand now would support the proposition that the government is holding back on giving any decent amount of information, particularly after its performance in question time today. The overreaction is that they are being far too defensive and, judging by what Senator Vanstone pointed out today, far too dishonest. She highlighted the contribution of the Prime Minister (Mr Howard) to the debate. Many of us in this debate have referred to the `never ever statement'. What I would like to highlight in my contribution is more than just the `never ever statement' but how incredible was the Prime Minister's claim that that was really in the context of never ever in this term.If you look at the statements that he has made, you will see even that explanation does not hold up. Our Prime Minister's comments on this issue simply do not hold up. John Howard said in a media conference in the Tweed Heads civic centre on 2 May 1995:. . . there's no way that a GST will ever be part of our policy.The reporter said, `Never ever?' John Howard said:Never ever. It's dead. It was killed by the voters in the last election.In a media release on 2 May 1995, John Howard said:A GST or anything resembling it is no longer Coalition policy. Nor will it be policy at any time in the future. It is completely off the political agenda. . . Those comments do not stand up in the light of the Prime Minister's explanation that he really meant in the current term. They just do not stand up. He said, `Never ever.' He said it was no longer part of coalition policy, nor would it ever be in the future.So how can Senator Knowles stand up today and say credibly, `You don't understand tax—you don't understand what we really mean,' when the Prime Minister says one thing one minute and something completely different the next? We know what you mean. What you mean is: business wants to pay less tax and we are a government which will shift it onto consumers. Who are those consumers? Those consumers are the battlers that John Howard convinced, to get elected, that he was going to make feel relaxed and comfortable. They are not relaxed and comfortable and they do not believe, and will not believe, that this government is about fair tax reform.Fair tax reform is not a GST. Tax reform is broader than a GST. Because the Labor Party says we do not support a GST because it is unfair, that does not mean that the Labor Party opposes tax reform. Tax reform is much broader than a GST. The Labor Party has participated in tax reform over history since the 1930s, as Senator Sherry pointed out. Our system is not inevitably changing towards a GST. As pointed out in the media recently, the United States do not have a GST.VJ4WATSONSenator Watson—They have something pretty close to it.GB6Collins, Sen JacintaSenator JACINTA COLLINS—No, they have nothing close to a GST. Senator Watson, you do not understand tax if you think the US system is close to a GST. It is a retail tax, actually more similar to a wholesale tax. It is just applied at a different level. It is not a value added tax. Unless you understand that, you do not understand the tax debate. The retail tax applied in the United States is far more similar to the wholesale sales tax that we have in place here. (Time expired)15:28:003960Chapman, Sen GrantSenator CHAPMANFF4SALP10—Nothing exemplifies more the fact that Jacinta Collins—GB6COLLINSSenator Jacinta Collins—Senator, please!FF4Chapman, Sen GrantSenator CHAPMAN—Senator Jacinta Collins is out of touch completely on this issue than her response to Senator Watson that he knows nothing about tax. No-one in this Senate would know more about tax issues than Senator Watson. That is the sort of nonsense we get from the Labor opposition.The opposition have also clearly confirmed again today in this debate that they are wreckers and not builders, that they are yet again embarking on a dishonest scare campaign against the urgent need for tax reform, and that is what every Australian needs to know. Australians know only too well the ramshackle nature of the tax system that we currently have in place and the urgent need for tax reform and that it is the Labor Party that is going to try to wreck this attempt at tax reform.It is no wonder they want to do that. In stark contrast to Senator Watson's deep knowledge of taxation issues, the only thing the Labor Party know about tax is the way in which they can raise more tax. That is the only interest of the Labor Party. It was their only interest when they were in government. They were a tax and spend government. They spent the whole 13 years in office seeking ways to raise more and more tax to feed their rapacious levels of government spending.VJ4WATSONSenator Watson—Who were the sufferers?FF4Chapman, Sen GrantSenator CHAPMAN—The sufferers were the average Australians. The average wage earners in this country were the sufferers under Labor. Not only did Labor increase a range of taxes but they also devised means of bringing forward tax revenue. Every year they sought to devise ways of bringing forward tax revenue that otherwise may have been collected further down the track, because they had this continual rapacious need to feed their spending habit.The most dishonest example of their increase in taxes was after the 1993 election. Having campaigned, as I said, in a false way against the coalition's proposals then for tax reform, they immediately, in that budget after the 1993 election, substantially increased wholesale sales tax. But that was not the only tax they increased during their term in office. They increased petrol excise to an enormous rate. When the last Liberal-National government left office, almost all of the money raised from fuel taxes was spent on roads. By the time Labor left office, a very small percentage was spent on roads. Something like 10 or 15 per cent of the fuel excise was spent on roads when Labor left office compared with nearly all of it when they came to office.They increased the Medicare levy. They increased company tax. They introduced and increased fringe benefits taxes. And they increased the departure tax. In contrast to that, they failed completely to deliver their promised tax cuts—the l-a-w tax cuts. Remember those? They were promised by then Prime Minister Keating in the 1993 election—they were actually written into legislation. They came back after the 1993 election and repealed that legislation and reneged on those tax cuts. They had 13 years in office to provide a fairer tax system. All they ever did was increase revenue and spending.What have we heard today from the opposition? We have heard reference to trusts. The Labor Party do not care about trusts. Trusts have been around for many years. They were certainly around during their 13 years in office and they did absolutely nothing about the issue of trusts. They only raise trusts now because of their vitriolic personal attack on Senator Parer. They are using trusts as a battering ram for their personal attack on Senator Parer and for nothing else. This government, while recognising that trusts do have a legitimate role as a business structure, has nevertheless acted to make illegal the inappropriate use of trusts. It is this government that has legislated to remove the capacity to trade in trust losses. It is this government that is introducing legislation to remove the capacity for dividend streaming. It is this government that has recognised that, where there are difficulties in regard to trusts, legislation is needed and it has introduced that.What are the Labor Party going to do with trusts? They are going to legislate on trusts to introduce de facto death duties. Mr Beazley has announced that the next Labor government in office will legislate so that every time control of a trust changes it will be regarded as a disposal of assets and hence a capital gains tax will apply.RF4COOKSenator Cook—No, no, no.FF4Chapman, Sen GrantSenator CHAPMAN—`No, no, no,' says Senator Cook. That is exactly what Mr Beazley has said. (Time expired) .10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Reynolds)—The time allocated for this debate has expired.Question resolved in the affirmative.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Before calling the clerk for petitions, I must say that I had great difficulty hearing Senator Chapman because of quite a lot of conversation from the advisers' boxes.FF4CHAPMANSenator Chapman—You missed great pearls of wisdom.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—That is why I was disappointed, Senator Chapman. I recognise that it is necessary for advice to be given, but please be aware of how the noise travels.396110001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:3961805F4Calvert Sen PaulTo the Honourable the President and Members of the Senate assembled in Parliament. The petition of certain citizens draws the attention of the Senate to the damaging impact of the Government's changes to post-secondary education. Upfront undergraduate fees; increased HECS fees and charges; cuts to student places; cuts to Austudy and Abstudy and decreased Commonwealth funding for universities are denying students fair access to university education. Your petitioners therefore ask the Senate to return post-secondary education to a system which is fair and accessible for Australians.Senator Calvert5F4Senator Calvert(from 80 citizens)396153DT6Bartlett 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 identity so that such discrimination or vilification be open to redress at a national level.Senator BartlettDT6Senator Bartlett(from 53 citizens)3961251TW4Bourne Sen VickiTo 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 251 citizens)396118115F4Calvert Sen PaulTo the Honourable the President and Members of the Senate assembled in Parliament. This petition of certain citizens of Australia draws to the attention of the House support of the undersigned for the establishment of radiotherapy services at Wagga Wagga and Albury/Wodonga.Your petitioners therefore pray that the House will commend the establishment of radiotherapy services at Wagga Wagga and Albury/Wodonga to treat cancer patients residing in the southwest region of New South Wales and north eastern Victoria.The House is advised that the Minister for Health, Dr Andrew Refshauge, MP has given `in principle' support to the proposed country-located "sister" clinics at Wagga Wagga and Albury/Wodonga.We, therefore, respectfully request the House to call on the Federal Minister for Health, Dr Michael Wooldridge MP, to urgently approve the provision of these vital radiotherapy services for country cancer patients who are now disadvantaged by being forced to attend metropolitan based services for long periods of treatment.Senator Calvert5F4Senator Calvert(from 1,811 citizens)Petitions received.Notices396239623962Tambling, Sen GrantSenator TAMBLING6E4NTCLP10—I give notice that, on 30 June 1998, I shall move:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the Wheat Marketing Legislation Amendment Bill 1998, allowing it to be considered during this period of sittings.I indicate to the Senate that the statement of reasons justifying the need for this bill to be considered during these sittings has previously been tabled and incorporated in Hansard .39623962Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator O'Chee and the Standing Committee on Regulations and Ordinances, and pursuant to notice given on the last day of sitting, I withdraw business of the Senate notices of motion Nos 1 and 2 standing in Senator O'Chee's name for today 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. 332.39623962Calvert, Sen PaulSenator CALVERT5F4TASLP10—At the request of Senator O'Chee, I give notice that, 15 sitting days after today, he will move:That the Migration Agents Regulations 1998, as contained in Statutory Rules 1998 No. 53 and made under the Migration Act 1958 , be disallowed.I seek leave to incorporate in Hansard a short summary of the matters raised by the committee.Leave granted.The summary read as follows—Migration Agents Regulations 1998Statutory Rules 1998 No. 53The regulations provide for the registration of migration agents. The committee has a number of concerns with these regulations including unclear provisions; possible restrictive qualifications; wide discretion with no parliamentary oversight; sanctions with no indication whether they are subject to independent review; no apparent safeguard for the requirement to provide records; and no provision for a client's money to be kept in a trust account. The committee has written to the minister for advice.39623962Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I give notice that, on the next day of sitting, Senator Brown and I will move:That the Senate—(a) notes that: (i) the meeting of the World Heritage Bureau held in Paris on 23 June 1998 expressed alarm at the threats to the cultural and natural world heritage values of the Kakadu World Heritage site from the proposed Jabiluka uranium mine, (ii) the bureau has decided to send a high-powered inspection team, which includes the Chairman of the World Heritage Committee, to investigate and report by December 1998 on the threats posed to the Kakadu World Heritage area, and (iii) the Minister for the Environment (Senator Hill) has indicated that he is not concerned by this criticism;(b) acknowledges the concerns expressed by the bureau; and(c) calls on the Australian Government to immediately halt any construction activity at the site of the proposed Jabiluka mine and to take no further action until the bureau has completed its report and considered the matter at its next meeting in Kyoto in December 1998.39633963Allison, Sen LynSenator ALLISON1M6VICAD00—I give notice that, on the next day of sitting, I shall move:That the Senate—(a) notes that: (i) Visy Industries Pty Ltd is establishing a new pulp mill in New South Wales which will process plantation timber rather than virgin native timber, (ii) the mill will recycle water, reduce chemical use and will not use chlorine in its operations, (iii) this value-adding operation stands in stark contrast to the $400 million worth of unprocessed woodchips that Australia exports annually, and (iv) companies such as Kimberley-Clark manufacture so-called recycled paper that actually includes content from virgin native forests and pre-consumer waste;(b) congratulates Visy Industries Pty Ltd for persisting with efforts to produce genuine recycled paper in light of the Coalition's actions which have discouraged its production and consumption, for example, by rescinding the sales tax exemption for recycled paper; and(c) urges the Coalition to reintroduce sales tax exemption for recycled paper so that Australia's native forests can be protected from woodchipping.39633963Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I give notice that, on the next day of sitting, I shall move:That the Senate—(a) notes that: (i) the Prime Minister (Mr Howard) seems determined to pursue a double dissolution election, making the 1998 winter sittings the last sittings of the Senate for this Parliament, and (ii) the likely result of a double dissolution, according to the latest Morgan Poll published in the Bulletin , will be that ten Coalition senators will lose their seats, possibly including three of the six National Party senators; and(b) sets time aside during the week beginning 28 June 1998 for valedictory speeches for Senators Gibson, McGauran, Synon, McGibbon, O'Chee, Macdonald, Eggleston, Lightfoot, Chapman and Ferris to allow the sacrificial lambs of the Prime Minister's suicidal dash to the polls to say a proper farewell to the Senate.Committees3963396339633963Calvert, Sen PaulSenator CALVERT5F4TASLP10—I present the eighth report of 1998 of the Selection of Bills Committee. I move:That the report be adopted.I seek leave to have the report incorporated in Hansard .Leave granted.The report read as follows—SELECTION OF BILLS COMMITTEEREPORT NO. 8 OF 19981. The Committee met on 23 June 1998.2. The committee resolved:That the following bill be referred to a committee:Bill titleStage at which referredLegislation committeeReporting dateWheat Marketing Legislation Amendment Bill 1998 (see appendix 1 for a statement of reasons for referral)immediatelyRural and Regional Affairs and Transport30 June 19983. The Committee resolved to recommend—That the following bills not be referred to committees:. Captioning for the Deaf and Hearing Impaired Bill 1998. Comprehensive Nuclear Test-Ban Treaty Bill 1998. Customs Tariff Amendment Bill (No. 2) 1998. Data-matching Program (Assistance and Tax) Amendment Bill 1998. Employee Protection (Wage Guarantee) Bill 1998 [No. 2]. Employment Security Bill 1998 [No. 2]. Health Care (Appropriation) Bill 1998. National Firearms Program Implementation Bill 1998. Passenger Movement Charge Amendment Bill 1998. Taxation Laws Amendment (Farm Management Deposits) Bill 1998. Taxation Laws Amendment (Landcare and Water Facility Tax Offset) Bill 1998. Telecommunications (Carrier Licence Charges) Amendment Bill 1998. Uranium Mining in or near Australian World Heritage Properties (Prohibition) Bill 1998. Veterans' Entitlements Amendment (Gold Card) Bill 1998.The Committee recommends accordingly.4. The committee deferred consideration of the following bills to the next meeting:(deferred from meeting of 31 March 1998). Australian Hearing Services Reform Bill 1998(deferred from meeting of 23 June 1998). Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998.5. The committee considered a proposal to refer the provisions of the Taxation Laws Amendment (Political Donations) Bill 1998 (see appendix 2) , and recommends that the provisions of the bill be referred to the Economics Legislation Committee. The committee did not reach a decision on a reporting date.(Paul Calvert)Chair24 June 1998Appendix 1Name of bill:Wheat Marketing Legislation Amendment Bill 1998 Reasons for referral/principal issues for consideration:The Grains Council of Australia voted 4-1 (NSW, Qld, S.A.,W.A. for—Vic. Against) the stalling of the second tranche of legislation in the Senate until the GCA was satisfied with the Memorandums & Articles of Association and until matters were resolved with the Government relating to "rollover relief" & "sunsetting provisions." Many in the industry still believe the Government has not properly answered the strong conflict of interest that exists between "A" & "B" class shareholders, Ownership & Control & most importantly the loss of the Single Desk marketing arrangement which is worth $14 / tonne to the industry. There is a serious threat of W.A. pulling out of any agreement and selling direct to the world against our other State growers. The Minister John Anderson has written an extraordinary letter to the WAFF threatening that any further discussion or delay on this issue is unacceptable—referring to a possible loss of the Single Desk & that "there may be very serious consequences for producers if there are any delays or amendments . . . ."There are clearly serious problems with this legislation and it is not considered in the National interest to pass it without examining all the opportunities available. It is certainly not acceptable to leave the industry vulnerable to takeover by overseas investors.Possible submissions or evidence from:Grains Council of Australia, all State grains bodies, Austock, Rural Action Movement, Pastoral & Graziers Association, multi-national food manufacturers, international commodity brokers, Australian Grains Industry Task Force.Committee to which bill is to be referred:Rural & Regional Affairs and Transport Legislation CommitteePossible hearing date(s):Not a priority, subject to Senate schedules.Possible reporting date:Not a priority, whenever it can be fitted in.(signed) Stephen ConroyWhip/Selection of Bills Committee memberAppendix 2Name of bill:Taxation Laws Amendment (Political Donations) Bill 1998Reasons for referral/principal issues for consideration:. Analysis of costings . Comparison to tax deductibility arrangements for other community organisations.. FeasibilityPossible submissions or evidence from:Committee to which bill is to be referred:Economics Legislation CommitteePossible hearing date(s):Possible reporting date:11 August 1998(signed) S. ConroyWhip/Selection of Bills Committee memberAmendment (by Senator Ian Campbell) agreed to:At the end of the motion, add the words:"and, in respect of the proposed referral of the provisions of the Taxation Laws Amendment (Political Donations) Bill 1998 to the Economics Legislation Committee, the committee report on 10 August 1998.".Motion, as amended, agreed to.Business39653965Motion (by Senator Ian Campbell)—by leave—agreed to:That consideration of the business before the Senate this day be interrupted at approximately 5.00 p.m., but not so as to interrupt a senator speaking, to enable Senator Crossin to make her first speech without any question before the chair.3965Motion (by Senator Chris Evans, at the request of Senator Bolkus) agreed to:That general business notice of motion No. 1175 standing in the name of Senator Bolkus for today, proposing an order for the production of a document by the Minister for Justice (Senator Vanstone), be postponed till the next day of sitting.3965Motion (by Senator Stott Despoja, at the request of Senator Bourne) agreed to:That general business notice of motion No. 1146 standing in the name of Senator Bourne for today, relating to the retention of census data, be postponed till the next day of sitting.3965Motion (by Senator Brown) agreed to:That business of the Senate notice of motion No. 1165 standing in the name of Senator Brown for today, relating to the wealth and assets of former Indonesian president Suharto, be postponed till the next day of sitting.3965Motion (by Senator Faulkner) agreed to:That general business notice of motion No. 1089 (relating to the definition of associated entities in the Commonwealth Electoral Act) and No. 1121 (the division of senators into two classes for the purposes of rotation) standing in the name of Senator Faulkner for today, be postponed till the next day of sitting.3965Motion (by Senator Margetts) agreed to:That business of the Senate notice of motion No. 3 standing in the name of Senator Margetts for today, relating to the reference of a matter to the Foreign Affairs, Defence and Trade References Committee, be postponed till the next day of sitting.3965Motion (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.3965Motion (by Senator Chris Evans, at the request of Senator Conroy) agreed to:That business of the Senate 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.3965Motion (by Senator Chris Evans, at the request of Senator George Campbell) agreed to:That business of the Senate notice of motion No. 1174 standing in the name of Senator George Campbell for today, relating to religious minorities, be postponed till the next day of sitting.3965Motion (by Senator O'Brien) agreed to:That business of the Senate notice of motion No. 1166 standing in the name of Senator O'Brien for today, relating to the importation of pig meat, be postponed till the next day of sitting.Miscellaneous3966Motion (by Senator Carr) agreed to:That the Senate—(a) notes yet another departure from the Department of Employment, Education, Training and Youth Affairs in the resignation of the First Assistant Secretary of the Schools Division, Mr Bill Daniels; and(b) acknowledges Mr Daniels' 28 years of experience and expertise in the education portfolio area and regrets the loss of corporate knowledge which his departure will bring.Committees396639663966Motion (by Senator Chris Evans, at the request of Senator Jacinta Collins) agreed to:That the time for the presentation of the report of the Economics References Committee on promoting Australian industry be extended to 11 August 1998.39663966Motion (by Senator Cook) proposed:(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.15:49:003966Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I seek leave to amend the motion and to speak briefly to the amendment.Leave granted.WW4Kemp, Sen RodSenator KEMP—I move:Omit all words after "That" insert: "the following matters be referred to the Joint Standing Committee on Public Accounts and Audit for inquiry and report by the last sitting day in December 1998:(a) the equitable treatment of taxpayers by the Australian Taxation Office;(b) the development of tax planning arrangements since 1985 and the adequacy of legislative and administrative responses since that time to tax planning techniques;(c) the adequacy of Australia's existing taxation laws to deal with increasing sophistication in tax planning arrangements, first identified in reports to the previous government, including the 1985 Tax Reform White Paper and the House of Representatives Standing Committee on Finance and Public Administration Report, March 1991, Follow the Yellow Brick Road ; and(d) the capacity of the Australian Taxation Office to ensure compliance of taxpayers under continued ad hoc changes to the tax system, compared to a program of fundamental reform to tax arrangements.The amendment I have moved is currently being circulated in the chamber. Essentially the amendment refers the inquiry to the proper place—the Joint Standing Committee of Public Accounts and Audit—rather than the proposal that we have before us in this chamber.If there is a serious desire to have an inquiry, that is the body which has the expertise, that is the body which has the standing, and that is the body which has already carried out a number of inquiries into issues related to the tax office. I would hope that the Senate would support that proposal by the government.Let me make it clear that we do not see a need for this inquiry and we will oppose the motion moved by Senator Cook. On the other hand, we recognise—and this has been confirmed in my discussions with non-government senators—that there is a disposition to have an inquiry. If that is the case, then I believe that the amendment I have moved will deal with the issues that Senator Cook has raised and a number of other issues, but it will deal with them in a more expeditious fashion.I had a feeling when I first saw this proposal that it was a political stunt. My views on this were confirmed when a journalist told me that the Labor Party is briefing the gallery to say that this will have the effect of drawing resources away—they said—from tax reform. It looks like a political stunt; it sort of smells like a political stunt. The evidence seems to be mounting already that it is a political stunt, particularly if the information that I have received is correct. Therefore, I can only draw the conclusion that this is precisely what it is. Therefore, it is not a serious inquiry to deal with serious issues. If it is a serious inquiry to deal with serious issues, the one place that it should go to is the Joint Standing Committee of Public Accounts and Audit.The fact of the matter is that the ATO is already subject to substantial parliamentary and other external scrutiny. The tax office receives really quite extensive—almost immense—scrutiny from a very wide variety of bodies and range of forums. Senator Cook as a former minister with an interest in finance and tax matters should already know this. The tax office annual report has a whole chapter on the scrutiny of the ATO.The ways in which the tax office is subject to scrutiny include the review by the Joint Committee of Public Accounts and Audit and the ATO reports quarterly to the JCPAA on the status of the implementation of the recommendations of the JCPAA's reports. An assessment of tax followed the committee's major inquiry into the operations of the tax office in 1993. There are various other committees which review the tax office and, of course, in particular the tax office is reviewed by the Senate estimates committee.I might say it came as a great surprise to me when we had Mr Carmody and his officers recently before the Senate estimates committee that so comparatively little time was spent by the Labor Party asking questions in the tax area and following up on some of the issues which Senator Cook is obviously concerned about. It surprised me, because I would have thought it was an important priority for the Labor Party and it followed some media coverage of a variety of issues. There was very little interest from the Labor Party on this matter.The Australian National Audit Office has conducted a number of reviews of various aspects of the tax office in recent years, including the ATO's tax debt collection processes, sales tax administration, client services provided to the public by individuals in the non-business line and the ATO's approach to client service and its risk management practices. These have all been covered, discussed and debated.The tax office does not lack scrutiny. It is extensively scrutinised. If there is a disposition by the Senate to have an inquiry, let us make sure we do the inquiry properly. Let us put it to the body that has the expertise to deal with it. It sounds and looks like a political stunt, and if the information I have already received from the press gallery is correct, there is evidence of a political stunt. It seems to me that the Senate would be in a better position to make sure that this was done in a serious way by referring these issues to the relevant committee, which is the joint standing committee that I have referred to.If the Senate believes there is a case for an inquiry, this is the vehicle that should carry out the inquiry. The JCPAA is unquestionably the most appropriate committee of the parliament for an inquiry of this type. I urge the Senate to accept the amendment to the proposal put by Senator Cook.15:55:003967Cook, Sen PeterSenator COOKRF4WAALP00—by leave—Two things have happened in the amendment. Firstly, the government have chosen to refer this matter to a joint parliamentary committee, a committee of the House of Representatives and the Senate, and to take it away from the Senate, which was my original motion. Secondly, they have changed the terms of reference. Our terms of reference are set out in the Senate notes.I have not seen the terms of reference before that the government has just now submitted, but in the few minutes available to me I have cast my eyes over them. Some of the things require a bit further study than what I can undertake at the moment. One of the notable exceptions that is not included in the government's terms of reference but which is included in the notice that I gave to the Senate yesterday is that I had a second clause which said that witnesses coming before the Senate inquiry would have extended to them parliamentary privilege in order to give evidence, so that they can give evidence freely without attack. I do not know what the government's position on that matter is. It is not clear from the terms of reference they have circulated. I regard that as being important.Since knowledge of this move came to light, my office has been contacted and people have said that they would be willing under oath—but under parliamentary privilege—to give evidence, which they would not be prepared to do if parliamentary privilege did not extend to them. In terms of a public inquiry into a matter so fundamental as tax, anyone who has a viewpoint—particularly those who fear injury if they express it publicly—should be able to come to a parliamentary committee and be protected when they give their true information and opinions to that committee. I draw that defect in the government's position to the attention of the Senate.The other point is that the minister has said in moving his amendment that we in the Labor Party were not very interested during the Senate estimates process of exercising scrutiny of the tax office and that this is the reason now why presumably we should be refused the opportunity to take the scrutiny of the tax office to the full blown level of a Senate inquiry. I do not understand that argument in logic. We did, of course, spend a fair amount of time inquiring of the tax office during the estimates procedure. In fact, the amount of time we spent caused us to believe that an inquiry such as this was necessary.The third point that has been made by the minister is that this is a political stunt. Can I take a moment of the Senate to address that allegation? The government have said that tax reform is on the agenda. They have announced that in lights. They have written it in the sky. They have told all Australians and they have budgeted in this current budget $10 million of Australian taxpayers' money to `educate'—in their terms—the Australian community, through an advertising campaign, on their version of tax reform. They have put tax issues on the agenda.If this is a political stunt in asking the tax office—which is the statutory authority that collects tax on behalf of the government—to come before a committee of this Senate for scrutiny at a time when tax is a central debate in the Australian economy, I think the minister ought to go back and re-examine his own motives. One can simply conclude that he makes that allegation against us as a slur and in an attempt to divert attention from the real issue.What is fundamental to a debate on tax reform in Australia is the role, the significance, the procedures and the actions of the Australian Taxation Office. One of the things that Australians want to know about when it comes to a debate about tax reform is to what extent do wealthy Australians evade tax? How many ordinary Australians have to pay more tax because those who have the means to evade tax through family trust arrangements or whatever get away with it so that the tax take has to be imposed on the back of ordinary Australians at a greater level than is necessary? That is a fundamental question about tax reform. How effective the procedures of the tax office are in tracking down and bringing tax cheats to book is an important matter in this debate. That is not a stunt. That is a matter of sober national significance.I now turn to the next argument raised by the minister: that is, there are a number of other bodies that scrutinise the tax office and, therefore, there is no reason for the Senate to do so. There are a number of bodies that scrutinise the tax office, but I think the Senate's interest is an important interest in looking at issues that, from a political point of view, from a legislative point of view and from a Senate point of view, ought to be examined by this chamber and not left to other bodies to do. To ask this chamber to forgo its rights and to delegate them to a joint committee is unfair.The important distinction about a joint committee that one must remember is that, if as the pundits widely predict, after the end of next week's sitting the Prime Minister announces his tax package and then in the week after calls a federal election, the joint parliamentary committee goes out of existence automatically. That ends the inquiry. It ceases to exist. The other thing to remember is that a joint parliamentary committee would give the government control over the election of a chairman, the terms of reference of that committee and the timing of meetings of that committee. The third thing to remember about a joint parliamentary committee is that only those senators nominated by this chamber—and there is a limited number of them—can sit on the joint parliamentary committee. Yet as far as the Senate economics committee, which is the obvious vehicle to conduct this inquiry, is concerned those senators who are participating members—and there is a large number of them—can be engaged in this inquiry. To shift it out of this chamber, to put it between both chambers, is to deny this chamber the chance to fully investigate the issues of the Australian Taxation Office.As I have said, the tax debate is upon us. A key issue in that debate is the role of the tax office. A big question in the tax debate is about tax avoidance. We would like to examine the Australian Taxation Office in terms of its high wealth individuals task force, how much money is being spent, how many of those high wealth individuals pay their full measure of tax, what other steps are necessary to ensure that they are made to pay their full measure. We would like to look at issues such as what leakage there is in tax collections. Do we collect our full measure of tax across the board? Where is the tax system haemorrhaging? What can be done about that? They are matters of inquiry.It is also important to remember that recently the Channel 9 program Sunday ran a feature item on the tax office and made a number of allegations about the conduct of the tax office. One allegation it made was that there is a mates' rate network which operates at senior levels in the Australian Taxation Office. I do not know if that allegation is true. I hope it is not, but it is an allegation made by a serious independent investigative journalist program, and it deserves some examination in the context of this whole debate. It made other allegations too. I do not propose to go into them now. But there are issues of the high wealth individuals task force, the question of trusts and whether or not trusts are used to minimise the taxation by those wealthy enough to be able to afford high priced lawyers and smart accountants to get out of their full measure of tax which ordinary Australians cannot afford to do.There is a question of salary repackaging to avoid the full measure of tax being paid and the implications of that in the wider economy and so forth. These are not stunt questions; these are important questions. In the context of the wider debate on taxation in Australia, they are vital questions and they go to the very heart of that debate. Governments can do a number of things to tighten up the tax system, as can the administrators of it. To have the view of the administrators under the scrutiny of a Senate committee is an appropriate decision of this chamber, and I would be very happy to move accordingly. I note that the government has submitted its proposed terms of reference. I am not sure that in every respect those terms of reference are the same. In any case, it would put such an inquiry outside this chamber when it rightfully belongs in it.16:06:003969Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—by leave—This inquiry is well overdue. The issue is about equity. People have been asked to look at new and supposedly more equitable tax systems. It is only fair that they have confidence in the system in place. I believe that the original wording from Senator Cook is far more appropriate than the proposal for the amendment by Senator Kemp. Therefore, I signal that I will be prepared to support the original proposed inquiry by Senator Cook and not the amendment by Senator Kemp.16:06:003970Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I am a member of both the JCPAA and the economics committee, so I talk with reference to both those committees. I am also the Democrats finance and taxation spokesperson, so these are issues that matter to me. I did view both the programs on Channel 9 which I gather have prompted this inquiry. My view is that the ATO is bound to include some sinners and will not be composed of saints, but I doubt that as an organisation it is any more or less a body of integrity than any other government department.What concerns me is that the nature of a media documentary such as that does not enable the department itself to respond fully and in detail to the allegations made and to illustrate in full its procedures and how it deals with matters. Accordingly, the Australian Democrats do not prejudge the issue at hand but believe that the public's confidence in the integrity of the ATO has been sufficiently damaged by those allegations to warrant an inquiry which should be speedily wrapped up and would give all the relevant parties the opportunity to respond appropriately, both those making the complaints and those defending themselves.I then have to move to the question of the committee at hand. It is my opinion, as I have so advised both the government and the Labor Party, that the JCPAA is the better committee on a number of grounds; namely, that it has continuity in terms of its audit process and its understanding of the issues—and I have checked with the JCPAA as to its ongoing oversight in this area. Secondly, it has the experience.There is, however, both a virtue and a weakness in the JCPAA. The virtue is that it tries to arrive at a common position. Minority reports are unknown. That gives it great weight and authority because it speaks with one voice. But I suspect that on this issue minorities may well be a possibility and that, therefore, the JCPAA would be a difficult forum. However, I did advise both the government and the Labor Party that it is my view that, if it is the Labor Party's motion, that party is entitled to nominate any committee of its choosing. What is more, the committee of its choosing is a Senate committee of considerable reputation. Therefore, on behalf of my party, I would not oppose that committee, even though I indicate to the Senate my belief that the JCPAA would be the better committee.The third issue is that of timing. My view is that, in view of the seriousness of the allegations which have been made concerning the ATO, it would be desirable to have as early a reporting date as possible to be found, and that is not for me to dictate to the Labor Party, the government or the Senate. If indeed other matters were to arise out of the inquiry, it would be preferable for a further inquiry to be held after that event. But I think an immediate and early response to the serious allegations should be made.To some extent I think that puts to rest the government's fears that this is a stunt. I do not regard it as a stunt because the issues were not raised by the Labor Party; they were raised externally in the public interest. Therefore, it is appropriate for the Senate to respond in the manner that the Labor Party have laid out. Accordingly, in these respects, I hope my remarks will assist the Senate in guiding it to a conclusion. Question put: That the amendment (Senator Kemp's ) be agreed to.16:15:00The Senate divided. (The President—Senator the Hon. Margaret Reid)33Abetz, E. Alston, R. K. R.Boswell, R. L. D. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferris, J. Gibson, B. F.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.33Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Conroy, S.Cook, P. F. S. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. Murphy, S. M.Murray, A. Neal, B. J.O'Brien, K. W. K. Quirke, J. A.Ray, R. F. Reynolds, M.Schacht, C. C. Stott Despoja, N.Woodley, J.Brownhill, D. G. C. Sherry, N.Ferguson, A. B. McKiernan, J. P.Hill, R. M. Cooney, B.Minchin, N. H. West, S. M.* denotes tellerQuestion so resolved in the negative. Question put: That the motion (Senator Cook's ) be agreed to.16:19:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Conroy, S.Cook, P. F. S. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *Faulkner, J. P.Forshaw, M. G. Gibbs, B.Harradine, B. Hogg, J.Lees, M. H. Lundy, K.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Stott Despoja, N. Woodley, J.33Abetz, E. Alston, R. K. R.Boswell, R. L. D. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferris, J. Gibson, B. F.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Cooney, B. Hill, R. M.McKiernan, J. P. Ferguson, A. B.Sherry, N. Brownhill, D. G. C.West, S. M. Minchin, N. H.* denotes tellerQuestion so resolved in the affirmative.Miscellaneous3971Motion (by Senator Faulkner) put:That there be laid on the table by the Leader of the Government in the Senate (Senator Hill), no later than 3.15 pm on 29 June 1998, the following documents:In relation to all advertising, promotional, information and/or public relations campaigns planned, commissioned or undertaken by any Commonwealth department or agency since March 1996, where the estimated or final cost, whichever is higher, of the campaign exceeded $500 000:(a) all briefs requesting research to be carried out for the campaign by consultants, whether for qualitative or quantitative research; (b) all scoping studies carried out in preparation for these campaigns;(c) all research reports from consultants providing results of the research of any kind; and(d) acquittal documentation indicating the detailed costings of the research undertaken or planned. Question put:16:27:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *Faulkner, J. P.Forshaw, M. G. Gibbs, B.Harradine, B. Hogg, J.Lees, M. H. Lundy, K.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Stott Despoja, N. Woodley, J.34Abetz, E. Alston, R. K. R.Boswell, R. L. D. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferris, J. Gibson, B. F.Heffernan, W. Herron, J.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.Newman, J. M. O'Chee, W. G.Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Conroy, S. Ferguson, A. B.Sherry, N. Brownhill, D. G. C.West, S. M. Hill, R. M.* denotes tellerQuestion so resolved in the negative.Miscellaneous3972Motion (by Senator Stott Despoja) agreed to:That the Senate—(a) recognises the vital contribution of the Australian Youth Policy and Action Coalition (AYPAC) to the development of policy affecting young Australians through its effective and comprehensive representation of young people;(b) deplores the Government's short-sighted and mean-spirited replacement of AYPAC with a twice-yearly consultation with a select few young people, in contravention of a promise it made in 1996 to `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';(d) rejects the notion that a twice-yearly meeting of 50 young people without funding to carry out vital research into the effect of policies on young people and advise the Government on a year-round basis constitutes adequate consultation of young people and their concerns;(e) condemns a reduction of almost $140 000 in funding to the representation of young people in policy development; and(f) urges the Government to reverse this decision and restore funding to AYPAC so it can continue its invaluable work.Committees397239723972Motion (by Senator Allison) agreed to: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.Miscellaneous3972Motion (by Senator Allison, at the request of Senator Stott Despoja), agreed to:That the Senate—(a) congratulates the national youth broadcaster, Triple J, on its Rock Enrol campaign; and(b) encourages all young Australians 17 years and older to enrol to vote.Miscellaneous397316:31:003973Brown, Sen BobSenator BROWNQD4TASAG00—I ask that general notice of motion No. 1159, which stands in my name, be taken as formal. Just to help the Senate I will read it out. It states:That the Senate—(a) notes the call by Xanana Gusmao for the Senate to reconsider its rejection of a motion calling for his unhindered release and for self-determination for East Timor; and(b) calls on President Habibie's government to release Xanana Gusmao immediately and unconditionally and to hold a free and fair referendum on the question of independence for East Timor.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—Is there any objection to that motion being taken as formal? There is objection, Senator Brown.3973Contingent motion (by Senator Brown) agreed to:That so much of the standing orders be suspended as would prevent Senator Brown moving a motion relating to the conduct of the business of the Senate, namely, a motion to give precedence to general business notice of motion No. 1159.3973Motion (by Senator Brown) agreed to:That general business notice of motion No. 1159 may be moved immediately and have precedence over all other business today till determined.397316:31:003973Brown, Sen BobSenator BROWNQD4TASAG00—I move:That the Senate—(a) notes the call by Xanana Gusmao for the Senate to reconsider its rejection of a motion calling for his unhindered release and for self-determination for East Timor; and(b) calls on President Habibie's government to release Xanana Gusmao immediately and unconditionally and to hold a free and fair referendum on the question of independence for East Timor.This motion is an extremely important one. It calls for the release of the East Timorese leader Xanana Gusmao, who was arrested some three years ago and who has been held in the top security prison in Jakarta Cipinang Prison because of his leadership of the struggle for the independence of East Timor. As honourable senators will know, the travail of East Timor has been extraordinary. Since the invasion by Indonesia, hundreds of thousands of East Timorese have died. There has been enormous torture, repression of civil rights and suffering in that military occupied country.Australia has sided with the Suharto dictatorship throughout those years, from 1975. One thing that has come out of the recent uprising in Indonesia, which has seen the fall of the Suharto government, has been renewed moves around the world and hope, not just in East Timor but globally, that East Timorese will now be given the opportunity, at last, to express their wish for self-determination and independence.I want to read to the Senate a letter that has been smuggled from Cipinang Prison in Indonesia which comes from Xanana Gusmao and from Budiman Sujatmiko, who is the leader of the People's Democratic Party of Indonesia. It says:To: John Howard, Prime Minister of AustraliaTo: All members of the Australian ParliamentTo: All the Australian peopleAll of us who are political prisoners of Suharto's New Order (now under President Habibie) were shocked and disappointed when the Prime Minister John Howard called Mr President Suharto a caring, sensitive and wise leader when the prime minister Howard first visited Indonesia. We now hope that he has taken note of what the Indonesian and East Timorese people really think of the former president. They came out onto the streets in hundreds and thousands at the risk of death to force him to resign.We are also shocked and disappointed when we found out that in March 1998 a big majority of the members of the Australian Senate voted AGAINST the resolution to ask Suharto to release the political prisoners or to at least guarantee them a speedy and free trial. All of us, representing Indonesians fighting for democracy and East Timorese fighting for freedom, appeal to the government of the PM Howard to firmly urge President Habibie to immediately release ALL political prisoners and guarantee all democratic rights recognised in UN declarations.We humbly request the Australian Senate to reconsider its position and to urge the new government in Indonesia to release all political prisoners, including kidnapped activists.I should point out that the latest information from Indonesia is that there are still some 160 political prisoners, including 12 from the PRD. The whereabouts of 10 people who were kidnapped for political reasons are still unknown. Two others who were kidnapped have been found dead. The letter continues:We appeal to the Australian government to change its position in East Timor and to become a champion of self-determination for East Timor.To the Australian people, we offer our thanks to all those people who have actively campaigned in support of democratic rights in Indonesia and self-determination in East Timor.We appeal to you to continue your efforts because we all know that we have still not secured either real democracy or self-determination. The people of our country have won a victory in battle, but we still must win the war.To all Australians who are sympathetic to our struggle, we urge you to join all collective efforts to pressure your government to change its position so it becomes a government which formally demands self-determination in East Timor and political freedom in Indonesia. The Australian, East Timorese and Indonesian people are all neighbours who value the same thing: FREEDOM!That is the letter from Xanana Gusmao and Budiman Sujatmiko. I follow that letter with an appeal to the Senate to support this motion which puts into real terms the appeal that is in that letter. Beyond that, I appeal to the Howard government to change its policy of siding with the military and the policies of the discredited Suharto government which have so cruelly repressed the people of East Timor.Let it be understood in this place that, if Australia had the guts, the gumption and the courage at the political level that the ordinary people of East Timor have shown in the face of military occupation, and if we were to back their completely reasonable yearning for the same civil rights and democratic freedoms that we have in this country, the whole world would follow suit, and the East Timorese would at last see the light at the end of the tunnel of their travail and their day of freedom coming forward. That is an appeal directly to John Howard: do not ignore the suffering of the East Timorese any longer. Have the gumption yourself, Prime Minister, to understand that not only the East Timorese but also the majority of Australians want you to put pressure on President Habibie and the Indonesian military to free Xanana Gusmao and other political prisoners in Indonesia and to give the East Timorese their right to self-determination.16:41:003974Hill, Sen RobertSenator HILLBH4SALPEnvironment10—There is much in this motion. I am anticipating an amendment. I am not sure if it was moved before I got here.RF4COOKSenator Cook—No. I was going to take the call but you took it in front of me.BH4Hill, Sen RobertSenator HILL—In the motion as it is going to be amended—because we will support it being amended—I see much that I can support. Regrettably, we cannot go as far as supporting the motion as a whole because there are still a couple of aspects in it that are unacceptable to us at this time.The real issue is how Australia can encourage a continuation of the progress that we have seen over the last few months. By progress, I mean an improved human rights outcome, steps towards what would be generally accepted as democratic progress and that there has been greater liberalisation of press and broadcasting laws. Out of that progress, we believe not only that the people of Indonesia will gain the freedoms to which we believe all humankind is entitled but also that it can be relevant to an economic structure that can give the Indonesian people a greater hope for economic prosperity in the future.We have not hesitated in applauding the changes that have occurred in recent times, particularly the release of political prisoners. We, of course, condemn the holding of political prisoners anywhere. We welcome the fact that Indonesia has started the process of release of political prisoners, and we would urge the Indonesian government to continue that until all political prisoners are released, and released as quickly as possible.We have also welcomed the fact that President Habibie has made what we think are positive suggestions in relation to the East Timor problem. We support the fact that he has suggested some form of special status and the implementation of a range of reform measures which will improve the situation on the ground in the province. Whilst it is not clear yet what `special status' might encompass, we welcome any statement that indicates that the Habibie government is thinking flexibly about the political dimension of the East Timor issue and looking for ways to bring about a resolution.As you might recall, the Australian government has long advocated that the Indonesian government should grant increased autonomy to the East Timorese and reduce the military presence in the province. We remain committed to that goal. We have not sought to dictate to the Indonesian government which individual prisoners should be released and on what terms and conditions. We believe that that is something for the new presidency in Indonesia to wrestle with. We have set the spirit within which we would hope that they would act, which is, as I have said, that all political prisoners be released as soon as possible. We have also not gone as far as what this motion says in relation to self-determination; our position, which was the position of the previous Labor government in this country, remains that we would wish to see increased autonomy in East Timor and a reduction of the military presence.In summary, we believe that this amended motion will talk about taking immediate steps to ensure full respect of human rights, and such parts of the motion should obviously be supported in full. There are still aspects of the motion in its proposed amended form with which the government cannot formally agree, but I would hope that those who might nevertheless read this motion, which I expect to be carried in the chamber today, will understand that while there may be differences on detail across the political spectrum in Australia there is no doubt that we all wish to see a substantially improved human rights situation in East Timor. We want to see the sorts of freedoms that we believe all people are entitled to. We want to see Indonesia come through its time of political change with as little stress and difficulty as possible. We, as a friendly neighbour and supporter, would want Australia to do whatever it can reasonably do to support this process of change in Indonesia in a peaceful and constructive way.16:18:003975Cook, Sen PeterSenator COOKRF4WAALP00—I move:Omit all words after "Senate—", substitute:"(a) recalls its motion concerning East Timor of 24 November 1997;(b) expresses the view that changing circumstances have opened an opportunity to achieve real progress toward a just and lasting settlement of the East Timor conflict;(c) notes Indonesian President Habibie's recent offer to grant a `special status' for East Timor;(d) calls on the Indonesian Government (i) to immediately and unconditionally release Xanana Gusmao and other East Timorese resistance members still held in Indonesian prisons; (ii) to take immediate steps to ensure full respect for the human rights of all East Timorese, including allowing unhindered access to East Timor by independent media and international human rights organisations; (iii) to engage in substantive dialogue with all concerned parties, in conjunction with the United Nations, to achieve a just, comprehensive and internationally acceptable settlement of the East Timor issue; and(e) affirms the Senate's considered view that no just and lasting settlement of the East Timor conflict is likely in the absence of a process of negotiation through which the people of East Timor can exercise their right of self-determination."This is an amendment to the motion moved by Senator Brown. I acknowledge that Senator Brown has taken the initiative by bringing this matter before the chamber and I acknowledge the remarks of the Leader of the Government in the Senate, Senator Hill, just now completed, in which he does lay the foundation for substantial cross-chamber agreement between all parties on a number of significant points. That is a welcome position.The chamber speaks on those points I think unanimously, although we would cleave to our position to be more explicit on the points set out in my amendment, notably the immediate and unconditional release of prisoner Xanana Gusmao and other East Timorese resistance members still held in Indonesian prisons and immediate steps to ensure full respect for the human rights of all East Timorese, including allowing unhindered access to East Timor by independent media and international human rights organisations. I will not complete the reading of my entire amendment, but they were the points that the government specifically singled out as points of difference. I want to have them on the record as being the points that we still stand by.On behalf of the Labor opposition I would like to make a few further brief remarks in relation to this amendment, the effect of which is to substitute new language in the place of the text of Senator Brown's motion. I told the Senate on 24 November last year that Labor had reviewed its approach to East Timor and to the East Timor conflict. It is Labor's considered view that no lasting solution to the conflict in East Timor is likely in the absence of a process of negotiation through which the people of East Timor can exercise their right of self-determination. This approach was endorsed unanimously by Labor's national conference in January.Our view concerning the issue of self-determination has been expressed very clearly and firmly by my colleague, the shadow minister for foreign affairs, the Hon. Laurie Brereton, to the Indonesian ambassador to Australia and, importantly, directly to the Indonesian foreign minister, Mr Ali Alitas. Some months on from Labor's national conference, political change in Indonesia has opened a real opportunity to achieve long overdue progress towards a just and lasting settlement of the conflict in East Timor. President Habibie's recent statement that he is prepared to grant a `special status' for East Timor within Indonesia is encouraging, but it does fall short of what is likely to be required to achieve a just and lasting resolution of this issue. Senators in this place will be aware that the East Timorese church leader and Nobel peace prize laureate Bishop Belo is to hold talks with President Habibie in Indonesia later today. Bishop Belo is reported to have said that President Habibie's offer may provide a transitional solution to the East Timor conflict, but would have to be followed by an act of self-determination to achieve a lasting settlement. Progress towards a settlement of the East Timor conflict will require immediate measures to encourage reconciliation and build confidence in East Timor. Foremost among these measures is the immediate release of Xanana Gusmao and unhindered access to East Timor by independent media and human rights organisations to ensure the human rights of all East Timorese are respected.We also want to see a major reduction in the oppressive Indonesian military presence in the territory. At the same time, Labor considers the Australian government should be absolutely clear about what is likely to be necessary to achieve an internationally acceptable resolution of the East Timor conflict. To this end, we have called on the government to join with us in a bipartisan approach to help accomplish a lasting settlement, believing that such a settlement is unlikely without a process of negotiation through which the people of East Timor can exercise their right of self-determination.The question Australia faces is how we can help to turn the present opportunity into real progress on this issue. The difficulty involved should not be underestimated, given the continuing economic and political uncertainty in Indonesia and East Timor, but Australia is duty-bound to do everything that it can to help resolve this conflict. In international affairs, especially in regard to issues such as this, we have to be thoughtful in the language we employ and mindful to say and do things which will encourage real progress and not just make ourselves feel good.For that reason Labor has moved an amendment to Senator Brown's motion. The amendment is a carefully considered statement which will very clearly register the Australian Senate's views in respect of the immediate measures necessary to improve the situation in East Timor and the steps which are likely to be required to achieve a just and a lasting settlement. Such a message would be a particularly timely and helpful one in the light of the discussions that are being held between Bishop Belo and President Habibie today. I commend our amendment to the Senate.16:53:003977Bourne, Sen VickiSenator BOURNETW4NSWAD00—I am sure that all honourable senators will recall the Australian Democrats' first senator from New South Wales, Colin Mason, who entered this place—the other place down the hill, really—in 1978, only about three years after the dreadful events in East Timor. He was a friend of many of the Australian journalists who were killed when Indonesia invaded East Timor and one of the causes which he took up with an absolute vengeance and which he never let go of until he retired was that of East Timor. Having worked for Senator Mason, this issue was one of the things which I learnt about from him and which I then took up myself from 1990.Any motion calling for the release of Xanana Gusmao, for a resolution of the East Timor situation, is one that the Democrats will always support. One of the most important things that Australia has to resolve within our own community is our attitude to our nearest neighbours to the north, particularly our attitude to our neighbours in East Timor because, of course, we have ties that go back centuries with these people. In particular, there are the ties that we forged during World War II when East Timorese, to their own severe detriment, protected Australians. We have to acknowledge that, and we have to be able to get past the terrible problems that we have had in acknowledging Australia's debt to East Timor and in acknowledging that something has to be done there.I believe many members and senators do acknowledge that and do want to see us get past it. They do want to see something happen that will show that Australia does care and that Australia really does want to be part of a just solution in East Timor. That number was always fairly large and I think it is now growing. What is changing now is not only the situation in East Timor—which, of course, is changing substantially and for the better—but also Australia's official reaction to what is happening in East Timor and to what should happen in East Timor. Slowly but surely that is changing and it will not take too much longer, I hope, before we realise that a just solution can happen only when we start saying as a country—as New Zealand already has—it is not a final solution that East Timor is a part of Indonesia. New Zealand has already acknowledged that East Timor is not necessarily and may not necessarily be a part of Indonesia forever. Once we can get over that hurdle, World War III will not erupt but we will then be able to have the leadership role that I think we should have always have had in this region and, in particular, on this question.I would like to share one thing that happened when I was in a delegation to Indonesia several years ago. We tried to get into East Timor. Unfortunately, we could not but we did get to West Timor. When we went there we went to a memorial to Australian soldiers who had been killed in West Timor during World War II. It was a very rocky, spare and sparse area and there was hardly anybody around. We were all standing there, we had a little ceremony and we put some flowers down. I remember that Senator Schacht was there.When we lifted our heads up from a prayer and I turned around, there were West Timorese people standing behind us, mostly old men and young children. I think it was Senator Schacht who went over and asked them what they were doing there. They had not been there before; they had just come and formed behind us while we were having this little ceremony. One of the old men said, `We remember what you did for us. We will never forget you.' That was tragic because it made me realise that we had forgotten and they had not, and that we still owed them more than they owed us.I will be definitely be supporting the opposition's amendment because I think it goes further than Senator Brown's original motion. I certainly acknowledge the letter that he mentioned from Xanana Gusmao. I think that is very important. It is really wonderful that, even from gaol in Indonesia, Mr Gusmao is still writing letters, still knows what is going on in different parliaments and is still keeping us up to the mark on that. I certainly acknowledge that letter. I think it is an excellent thing, and I am really pleased that Senator Brown has read it out.One of the things that I have always said, which is in this amendment and which is so important if we are going to see a just resolution, is that of allowing unhindered access to East Timor by independent media and by international human rights organisations. We should be pushing that yet again.The last thing I want to mention is that in November 1994 the Joint Standing Committee on Foreign Affairs, Defence and Trade brought down a review of Australia's efforts to promote and to protect human rights. In that review, we did look at East Timor—obviously, you could not do such a review without looking at East Timor—and across the board all senators and members involved in that review made recommendations and statements on East Timor. It is important to say that in November 1994 Labor, Liberal, Democrat, Green and Independent members of this parliament all agreed to the statement that we believe:. . . that, in relation to East Timor, if there is to be any prospect of peace, there should be an enduring and just resolution of the Dili massacre—the release of political prisoners and those detained as a consequence of peaceful demonstration, devolution of appropriate powers to the province and the reduction of the combat military forces.That is the absolute minimum that everybody agreed to because, as we all know, when you are writing a committee report you never get the maximum that individuals want. I certainly wanted more and I remember Senator Margetts and Senator Harradine wanted more. But the absolute minimum that everybody agreed to was that.It is important to remember that while, as a country, we do not have a particularly good record on East Timor, the majority of the members of this parliament have since the mid-1970s wanted a just resolution in East Timor and have always been doing things—even small things like making sure there are statements in committee reports—to bring that about. I look forward to this motion being passed. I certainly hope it is. It is terribly important that Xanana Gusmao is released totally unconditionally. There is no other way to do it.It is important that we do go straight into proper negotiations leading to self-determination. It is important that the East Timorese people themselves are able to vote on their future. Heaven knows, if Indonesia is doing the right thing and everything is absolutely wonderful there, the East Timorese people will determine for themselves whether they want to stay. But if they do not want to stay within the Indonesian conglomerate then they should not have to. Even though there have been dramatic steps forward in Indonesia recently—and I look forward to them going even further forward—it is terribly important that the problem of East Timor—and Aceh and West Papua; there are so many there—is solved. I would love to see the Senate move one more motion. We have done quite a few in the past. This is another one. I would love to see one more motion pushing us in the right direction.17:02:003978Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I will not speak long. I would prefer to leave it to my colleague Senator Brown to speak on behalf of both the Greens (WA) and the Australian Greens on this issue. I would like to put on the record that the Greens (WA) will be supporting the motion. I would also like to put on the record my appreciation to the ALP for taking this motion to heart and doing the work which I know must have been necessary to get this level of agreement within the ALP. I hope that the change in policy in the ALP will survive if there is a change of government. I know that it is sometimes difficult, but I would like to believe that that will continue and that we can develop a very positive attitude to assisting with self-determination in East Timor.The issue of a referendum is obviously dear to the hearts of many people in East Timor, but I am sure that the message that will come from the motion, even as amended, will be a very positive one and it leaves us something very positive to build on.17:03:003979Brown, Sen BobSenator BROWNQD4TASAG00—I thank all the contributors to this debate. I should mention the particular role of Max Lane, a former Sydney university lecturer, national coordinator of ASIET and director of the Australian Pacific Institute, in enabling us to hear the words of Xanana Gusmao and other leaders through that letter brought from Indonesia. The Greens would have preferred to have had the motion calling for an act of self-determination for East Timor to the Indonesian authorities as it stood. But we understand that there is a quickening evolution in the policies of both the major parties and that, while the amendment falls short of calling for an act of self-determination, the Labor Party has worked hard to come up with the wording which at least recognises that there can be no just and lasting settlement in East Timor until, through a process of negotiation, the people of East Timor can exercise their right of self-determination.I reiterate that Australians at large want to see the East Timorese unshackled, the prisoners out of gaol, the end of the threats of violence, killings, rape, torture and repression of civil rights in East Timor. Successive governments in this country have failed to reflect the feeling of the vast majority of people right around Australia in wanting to see freedom for our East Timorese neighbours. This is one small step in the direction of achieving that freedom and properly reflecting the feelings of Australians as against those of governments past and present.With that in mind, we accept the amendment from the Labor Party and will be pleased to see this motion go through the Senate and be transmitted back to give more hope to the people of East Timor as they move towards that inevitable day when they do have freedom again in the sun.Amendment agreed to.Motion, as amended, agreed to.First Speech397910000PRESIDENTThe PRESIDENT—Pursuant to order, I now call Senator Crossin for her first speech. I remind honourable senators that this is Senator Crossin's first speech. Therefore, I ask that the usual courtesies be extended to her.17:06:003979Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—I am humble and proud to stand before you as the new Labor senator representing the people of the Northern Territory. I regard it as a great honour to be chosen by my party colleagues, and they can be assured that I will do my utmost to represent all Territorians. I would like to begin by acknowledging the Ngunnawal people, the traditional owners on whose land this Parliament House was built. My life in the Northern Territory began at Yirrkala on the Gove Peninsula where I arrived in 1981 to teach. I would like to thank the Yolngu people in their own language.Nhamirr bukmak? Manymak walnga nganapurr nhinan ngarra ga gurrutumirr ngarrak, ngunhal Yirrkala wangangur. Yolngu walal ngarrak djaka, ga gurrutu gathar ngarrak ga marnggikungal ngarran Yolngu Romgu. Buku—wekan mhuma, wanga—watangun Yolngun, nhe ngarrak, djaka. Those words translated mean thank you for welcoming my family and I, for allowing us to live on your land and for the opportunity to understand your culture. I give a public undertaking to work hard to represent them and to continue to respect and acknowledge their rights.My presence in this chamber today would not have been possible without encouragement and support of many people. It is an opportune time that I pay tribute to and sincerely thank my husband, Mark, who has always given me advice and support and whose political judgment I appreciate and value, and my four children—Paul, Melinda, Amanda and little Kate. My appreciation and thanks goes also to my mother and father, Clare and Albert Borlase, and my sister, Anne, and her husband, Peter Stacey—all of whom have been supportive and tolerant of my ambitions. To my very dear friends Sue Murphy, Graham and Gillian Mitchener and my colleagues, I have always appreciated your guidance, assistance and encouragement.Growing up in Kensington, Melbourne, instilled in me a strong sense of social justice and fairness. I will always remember this rich, multicultural, working-class community that now provides me with a sense of history and one of the reasons for my involvement in the Labor movement today. I have been a member of the Labor Party for 17 years and have been involved at every level of party politics from the local branch to national conference. My involvement in a large number of community groups provides me with an insight into understanding Territorians and their needs, and I promise to energetically represent their interests during my time in the Senate.As I am constantly reminded, Bob Collins will be a challenging act to follow. He is highly and widely recognised and regarded in the Territory as having been an outstanding representative for all Territorians. He was renowned for his wit and his wisdom. I am aware he was acknowledged by both his political friends and foes as one of the most effective debaters in the Territory and federal parliaments.Robert Lindsay Collins served as the Labor senator for the Northern Territory for over 10 years and spent 10 years before that in the Northern Territory parliament acting as opposition leader from 1981 to 1986. As you know, Bob made history when he became the first Territorian to be appointed to the federal ministry and later to federal cabinet. Bob's record of service as a minister of some six years is a worthy legacy any politician would be proud to own, but to have made his contribution as a cabinet minister and senator representing the Northern Territory makes his achievements infinitely more impressive. I, too, am proud to be making a little piece of history myself by becoming the Territory's first female member of federal parliament.Women have and will continue to play an important role in both the life and development of the Northern Territory. I would like to take a few minutes to pay tribute to just a few of these. As some honourable senators may be aware, Territory women, including Aboriginal women, were the first in Australia, along with South Australian women, to win the vote and the right to stand for parliament. The legislation was passed in the parliament of South Australia, which then had responsi bility for the Territory, in 1894 and was gazetted in 1895. Territory women voted in their first election in 1896 and were the first women in Australia, along with their South Australian sisters, to vote in the federal referendum on federation in 1898. They voted overwhelmingly in favour of federation hoping it would bring the Territory closer to self-government.It took a while for women to get elected into parliament in the Territory. The first woman took her seat in 1960, followed by such other prominent politicians as Dawn Lawrie, who is currently the Territory's Anti-discrimination Commissioner, and Labor women June D'Rozario and Pam O'Neill, who in 1981 became the first female deputy leader from a major political party. We currently have a talented Territory Labor leader in Maggie Hickey, who is the first female Leader of the Opposition in the NT. It is my desire that Maggie Hickey becomes the Territory's first Labor Chief Minister or Premier. I intend to dedicate time as a member of parliament encouraging other women to stand for political office. It is important that there are more women directly involved in the decision making bodies of this country and that these bodies truly reflect the gender profile of the electorate.The Northern Territory is an electoral division with an area in excess of 1.3 million square kilometres, with a coastline of some 6,200 kilometres. The electorate includes the territories of Cocos (Keeling) Islands and Christmas Island. The main towns include the city of Darwin, Alice Springs and a number of regional centres such as Katherine, Tennant Creek, Nhulunbuy, Jabiru and Yulara. The Territory is an electorate that has often been referred to as the last frontier and, although not the largest by area in Australia, it is geographically the most dispersed. It is also home to a diverse range of geographical treasures such as Uluru and Kakadu National Park, to name only a few. So it provides both unique challenges and opportunities.The mining of uranium adjacent to Kakadu within the Jabiluka lease has gained not only national but international attention during the past two years. This lease is completely surrounded by the Kakadu park, which is one of only 17 world heritage properties listed for both natural and cultural values. It should also be noted that construction on this proposed mine has commenced, despite the cultural heritage management plan not being completed and despite this being one of the conditions laid down by the Commonwealth government.I support the efforts of Yvonne Margarula, who is ably supported by Jacqui Katona—two fellow Territorians that I know dearly—in leading a delegation to Paris to seek a recommendation from UNESCO's world heritage bureau that Kakadu be placed on an in danger list. The Jabiluka project is rejected by the overwhelming majority of Australians. More than 80 per cent of Australians do not want mining in national parks and more than 60 per cent do not want uranium mines. A significant number of Australians are saying that they have gone as far into the nuclear industry as they want to go. I am also one of those Australians.Geographical uniqueness is not the only special feature of the Territory. The people of my electorate form a rich tapestry of differing backgrounds and traditions. The cultural diversity of the Northern Territory forms a most endearing and welcoming feature of life in northern Australia. The Territory has its own special set of circumstances and needs. Our population of under 200,000 is diverse and is spread across the bush and regional and urban centres. Almost one-quarter of Territorians are indigenous Australians. We enjoy a rich racial and ethnic mix of cultures from more than 50 countries. It is this aspect of the Territory to which I am pleased to have exposed my children. It is this diverse range of cultures and experience which families in the Territory value and celebrate. As a Territory senator, I will continue to promote the benefits of a tolerant, multicultural Australia.I have entered parliament at a time when the political scene in this country is undergoing significant historical change. Australia has established a proud international reputation for its policies on indigenous people and migrants, a reputation of which most Austral ians are proud and want their children to understand. We must continue to strive for a country that is built upon the foundations of unity rather than division, that promotes a community of inclusion and a lifestyle based on the principles of racial equality and equal opportunity.The rights and needs of indigenous Australians must be more seriously addressed by governments. It took many years for any government of this country to recognise in law Aboriginal rights to land, and the Howard government has failed to lead this country towards a peaceful and productive reconciliation. In my first speech in this chamber I would like to extend an apology to Aboriginal people, to those people whom I have personally met and to the stolen generation, who have been the innocent victims of many decades of poor and wrong public policy. I want to record my deep regret for the injustices suffered by indigenous Australians as a result of European settlement. In particular, I offer my personal apology for the hurt and harm caused by the forced removal of children from their families and for the effect of government policy on the human dignity and spirit of these indigenous Australians.I would also like to record my desire for reconciliation and for a better future for all Australians. I make a commitment to a united Australia which respects this land of ours, values Aboriginal and Torres Strait Islander heritage and provides justice and equity for all.I believe that my diverse experiences have led me here to represent the people of the Northern Territory. As a working mum who still drops her two-year-old daughter at child care every morning, I have direct experience in the child-care industry. Since being appointed as a senator, the single major issue over which I am stopped time and time again is that of child care and its impact upon working families. I believe the provision of and access to child care is at crisis level in this country. If we are to support families and strengthen their role in the community, which we have done through ratifying ILO convention 156, then we must more seriously address the crucial role that child care plays in our society. More and more families rely upon either one or both parents to work, and there is little recognition of the difficult and challenging role of single parents, particularly women, who choose to juggle a career and a family. Eight hundred million dollars worth of cuts in the last two coalition budgets, particularly to operating grants to community based centres and outside school hours care programs, has seen the quality of child care reduced, job losses in the sector and child-care fees escalating beyond the means of many working parents.In Darwin the community has been shocked by the recent announcement of the imminent closure of four child-care centres. This was labelled a necessary business decision by the centre operators and is a clear indication of how the coalition's policies are not working. These policies are placing a burden on the nation's families, and there are major policy inconsistencies in the government's approach to this. At a time when, in the labour market, the government's policy direction is allegedly promoting flexibility of working hours, the approach to child care is based in the 1960s, reflecting the work pattern of that time and not what you would hope for or expect as we enter a new millennium. These decisions do not reflect family friendly policies and are limiting the ability of businesses, particularly in the Northern Territory where there is a shortage of skilled labour, to attract and keep workers.I put on the record that it is unfortunate that there are no child-care facilities in this building for a politician like me. It may well be one of the reasons limiting the capacity of women to enter this arena. I call on governments to recognise and fund child care as the first stage of the lifelong education and learning process. It must be classified as an essential service, part of the formal education system, and must be substantially better funded than it currently is. It is time all levels of government realised child care should be free and accessible to families in this country.My involvement in the trade union movement as a union official with the Australian Education Union and the National Tertiary Education Union has shown me how vulnera ble workers are in the security of their employment and the lack of knowledge that individuals have about their working conditions and rights. I do not intend to provide detailed comment on the recent waterfront dispute, only to say that the trade union movement, along with the MUA, is here to stay. As our history will prove, the trade union movement continues to improve wages for all sectors of the work force and will ensure that there remains in our society an organised industrial labour movement to defend and promote the interests of Australian workers.The date 1 July is less than two weeks away, and this is the day that the scales of industrial relations in this country will be tipped in favour of the employer by the coalition government. Award conditions will be stripped back to only 20 allowable matters whether or not there is agreement at the workplace between employees and management to the contrary. Union members will retain limited award protection during this period of insecurity. The impact of the Workplace Relations Act will be felt by young people, rural and regional workers and women in part-time and casual employment, all of whom are generally underrepresented in unions and conscious of complying with the requirements of their employer in order to keep their jobs. The Workplace Relations Act discourages true workplace reform and regulates it in a punitive, limited manner. It fragments the work force and further marginalises women and youth and those workers who are engaged in fixed term or other forms of casual short-term employment. This act is another slight by the coalition government on the ordinary workers in Australia.During my term as a senator, I will actively support the move towards Australia becoming a republic as well as moves by the Northern Territory to become the seventh state of Australia. Territorians deserve to be granted statehood, and to secure the full range of rights that other Australians already enjoy. Territorians also deserve a modern constitution which provides us with a better, more democratic system of government in our region. The Northern Territory Legislative Assembly has adopted a bipartisan push for a grant of statehood by the centenary of Federation in 2001. Not all Territorians agree on the detail which must be attached to a grant of statehood. It is not the number of senators or the size of the population that should be seen as possible barriers to statehood. The main impediments are how and under what conditions do we move to statehood while ensuring that specific recognition is afforded to indigenous Territorians within a contemporary constitution. This issue should be decided by Territorians, not by the Northern Territory parliament.We should have a representative people's convention and not the recent sham which was imposed upon Territorians without an opportunity for all Territorians to determine the content of the territory's new constitution. The current Chief Minister's agenda is to be condemned as undemocratic and counterproductive. I call for the democratic process to be reinstalled.I believe that a new constitution for the Northern Territory should be a document of significance, a document which enjoys the overwhelming support of the people of the Northern Territory. It should secure rights and entitlements for Territorians and ensure those rights cannot be taken away on the whim of the politicians of the day, and, above all, it should provide a system of government which is both democratic and openly accountable to the people. Before statehood can be achieved, I also believe the territory government should come under scrutiny. With no freedom of information legislation, the territory government has remained unaccountable since self-government.In mentioning the accountability of governments, let us look at the record of the coalition government and its handling of regional Australia, particularly in my electorate of the Northern Territory. The economy of the territory and the importance of business and its reliance on regional development is crucial. The Northern Territory looks to the Commonwealth to provide it with most of its revenue. The manufacturing base of the territory is small, and the tourism industry continues to grow, along with the mining, fishing, horticultural, pastoral and cattle industries—but it is difficult, and it has not been made any easier with the policies of the Howard government.One of the first acts of this coalition government was to cut $250 million in regional projects as well as cutting general purpose funding to the Northern Territory by $12 million. In the Territory we have experienced massive cuts to the Public Service, which means not only jobs are taken out of the region but also vital services are removed. Offices that have closed in the Northern Territory include Darwin's office of the Department of Transport and Regional Development, AusAID—the Australian Agency for International Development—Radio Australia, the Office of Northern Development, and the Department of Finance's regional office.Let me make a comment about a number of these decisions. The Office of Northern Development was absolutely crucial in getting major development projects such as the MacArthur River mine and the Mount Todd mine off the ground. Cox's Peninsula transmitter station has closed down and may, quite possibly, now be sold for scrap metal. We heard how Australians in Jakarta during the recent trouble in Indonesia had trouble contacting the Australian Embassy for advice—for such purposes alone an effective Radio Australia is important. The Howard government has reduced funding to Batchelor College by six per cent, which has meant a cut of $334,000 and 20 places in 1998. Similarly, the Northern Territory University has suffered cuts under the Howard government as part of the massive reduction in funding in tertiary education. (Time expired)10000PRESIDENTThe PRESIDENT—Order! Senator, the time for your speech has concluded.7E4VANSTONESenator Vanstone—Madam President, I raise a point of order. I understood that at the commencement of Senator Crossin's speech you quite rightly reminded senators of the convention in this place that a new senator's first speech should be heard in silence. Unfortunately, I did not hear you say at the com mencement of that that the reciprocal convention is that first speeches are not meant to be self-indulgent or controversial.Opposition senators interjecting—7E4VANSTONESenator Vanstone—On this occasion, no-one on this side chose to not offer the proper courtesy. I, as everyone on this side does, support—Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order!7E4VANSTONESenator Vanstone—Madam President, I am quite happy to make the point to you and sit down. We are very happy to support that convention. We believe first speeches should be heard in silence, but it is a reciprocal convention. Either Senator Crossin was not informed of that, in which case I am very sorry for her, or she has chosen to take the courtesy that is extended and throw it back in government members' faces.10000PRESIDENTThe PRESIDENT—What is the point of order?7E4VANSTONESenator Vanstone—The point of order, Madam President, is that I ask you to take this up with the leaders of the parties to ascertain whether this is a convention worth maintaining, because it is not worth maintaining if new senators come in here and say what they damn well like.10000PRESIDENTThe PRESIDENT—There is no point of order, Senator. It is a matter of convention between the parties.17:28:003984Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam President—Opposition senators interjecting—7E4VANSTONESenator Vanstone—It's a convention, you know what it is.10000PRESIDENTThe PRESIDENT—Senator Vanstone! Senators on my left should note that their leader is standing, seeking the call.5K4Faulkner, Sen JohnSenator FAULKNER—I do not seek to take a point of order to make a comment on the same matter, but I do seek leave to make a short statement on the matter raised by Senator Vanstone.Leave granted.5K4Faulkner, Sen JohnSenator FAULKNER—Thank you, Madam President. Given that I think we have probably heard from Senator Vanstone one of the most extraordinary contributions—I have been here since 1989 and I have never heard a more inappropriate, intemperate or improper comment by any senator in the chamber than the one we have just heard from Senator Vanstone—might I say that I am surprised that senators on both sides of the chamber have not listened with interest and enjoyed an outstanding first speech from Senator Crossin.I also want to make the point that it is true to say in relation to first speeches in the Senate that their nature has changed over the last decade or so. I have heard many speeches from senators representing both of the coalition parties since I have been here that have been very partisan in their nature, and the courtesies that are expected of a first speech have been extended to all senators from all sides of the chamber on those occasions.I thought, when Senator Vanstone rose to her feet, that she was likely to suggest that some courtesy be extended to Senator Crossin by virtue of leave to finalise the comments that she cared to make for her first speech in the parliament. That is not the case, and Senator Crossin is unlikely to do that in this circumstance because of the appalling attitude of the government as expressed by Senator Vanstone that such leave would not be granted. Let me say that we are delighted on this side of the chamber that such an outstanding speech will stay in the Hansard record for the commencement of what we believe will be a wonderful career from our new senator from the Northern Territory.17:32:003984Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—I seek leave to speak briefly in response to Senator Faulkner.10000PRESIDENTThe PRESIDENT—Is leave granted?Opposition senators interjecting—7E4Vanstone, Sen AmandaSenator VANSTONE—Whether you grant leave or not, I do not mind. It is a question of responding to his request for leave. If you do not want to give me leave, that is fine.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Nobody has sought leave for any extension of time for Senator Crossin to speak.4J4SCHACHTSenator Schacht—Madam President, I raise a point of order. Senator Vanstone sought leave to make some remarks in reply to what Senator Faulkner said.7E4Vanstone, Sen AmandaSenator VANSTONE—And you denied it.4J4SCHACHTSenator Schacht—Nobody on this side denied leave. We may have made some comments about your performance, but we did not deny leave for you to make some further remarks.10000PRESIDENTThe PRESIDENT—Nobody denied leave.Leave granted.7E4Vanstone, Sen AmandaSenator VANSTONE—A slight change of heart obviously. Just briefly, in response to Senator Faulkner, I think he has understood the nature of the remarks. I made it perfectly clear at the commencement of what I was saying that I think convention has been broken by Senator Crossin. But I made it clear that it was quite possible that convention was broken because she simply was not informed about it. That was the reason that goodwill was extended on this side to listen to her speech in silence, because I do not blame Senator Crossin. I think she probably was not informed. All I simply did was ask that the matter be considered because a convention cannot stand if it is not understood on both sides. If someone wants to ask leave for Senator Crossin to continue her speech, as ill-informed as she appears to be as to the convention, we are happy to grant leave for her to finish.17:34:003985Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—Madam President, given the unfortunate circumstances, I seek leave to incorporate my speech in Hansard .Leave granted.The speech read as follows—This has resulted in $1.72 million and 115 places this year.These policies ignore the role of institutions in regional Australia and make no allowance for their remoteness. We have witnessed the closure of a number of departments at the NT University and subsequent job losses: a situation which cannot and must not continue. The town of Katherine is still waiting for its Medicare office and the Central Australian Family Resource Centre in Alice Springs has had their funding program abolished.There is a lot of pain and most of it is being felt in regional Australia.The current government has no commitment to maintaining, let alone improving the services and lifestyle of regional Territorians. Their policies seek to widen the already existing gap between urban and regional AustraliaIn concluding, Madame President, how could I not make a comment about the Prime Minister's statement yesterday on the railway.Territorians must be saying to themselves to day "not another announcement about the railway". This has been done time and time again.This is clearly a government who is seeking to regain the vote in Queensland and has little concern for Territorians.With two conflicting projects now on the drawing board, or should I say in the toy train box, neither proposal will benefit and will only seek to undermine investor confidence and the capacity to finally get the Alice Springs to Darwin railway up and running.The Northern Territory will miss out again under this government.Just like the promise of this government to `never, ever' introduce a GST, Territorians could quite rightly be convinced that this announcement will ensure that there will never, ever be a railway from Adelaide to Darwin as originally proposed.Labor has committed $300 million dollars, three times the amount promised by this government, to assisting the Alice Springs to Darwin railway.This is the railway that Territorians want. It is the railway that will best deliver a substantial infrastructure to all of the Territory, not just from Tennant Creek to Darwin and the most direct link for businesses to the southern and eastern seaboard.Madame President, my role as a senator is too ensure that Territory issues are back on the agenda, that Territorians are not ignored and that all Territorians will benefit from the policies of governments.Bills39853985Motion (by Senator Brown) agreed to:That the following bill be introduced: a bill for an act to alter the Constitution with respect to the qualification and disqualification of members of the Parliament and Parliamentary candidates.Motion (by Senator Brown) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.398617:34:003986Brown, Sen BobSenator BROWNQD4TASAG00—I move:That this bill be now read a second time.As every election approaches, 1.4 million teachers, posties and other public servants who might like to stand for parliament have to decide whether it is worth resigning their jobs in order to do so. Australian citizens who also are citizens of another country have to go to great lengths to repudiate their dual citizenship if they want to nominate for election.Section 44 of the constitution is the problem. It stops anyone who holds an `office of profit under the Crown' or who is a citizen of another country—as well as Australia—from nominating for parliament. This situation is discriminatory, and it deprives the federal parliament of a huge pool of talented potential politicians, including every public servant. At every recent election it has caused trouble and expense as someone unwittingly falls foul of the constitution.Everyone agrees that section 44 of the constitution should be changed. All parties supported a Greens' motion in the Senate to that effect in October 1996 and called on the government to bring forward a proposal for constitutional amendment. The Joint Standing Committee on Electoral Matters, reporting on the 1996 election, recommended:That at an appropriate time, such as in conjunction with the next Federal election, a referendum be held on a) applying the "office of profit" disqualification in section 44(iv) from the start of an MP's term, rather than from the time of nomination, and b) deleting section 44(i) on "foreign allegiance" and otherwise amending the Constitution to make Australian citizenship a necessary qualification for membership of the Parliament. (Rec. 39)The House of Representatives Standing Committee on Legal and Constitutional Affairs examined subsections 44(i) and 44(iv) of the constitution in detail, and it recommended that a referendum be held to amend them. The government's response to these recommendations has been supportive:Subject to the qualifications outlined below, the government would support amendments of subsections 44(i) and 44(iv) of the Constitution to overcome the shortcomings identified by the Committee. It accepts that constitutional and legislative action is the only realistic way in which to overcome these shortcomings. (Government response to the Report of the House of Representatives Standing Committee on Legal and Constitutional Affairs, `Aspects of Section 44 of the Constitution".Yet no bill for a referendum has been forthcoming in this place or the House of Representatives. This bill, the Greens' Constitution Alteration (Right to Stand for Parliament—Qualification of Members and Candidates) Bill, is the simplest way of amending the constitution to fix the problem. The cheapest time to hold a referendum is in conjunction with an election. No-one disputes the need for change. So let us get on with it.17:38:003986Calvert, Sen PaulSenator CALVERT5F4TASLP10—I move:That debate on the Constitution Alteration (Right to Stand for Parliament—Qualification of Members and Candidates) Bill 1998 be adjourned.Indefinitely preferably, but anyway.Question resolved in the affirmative.QD4BROWNSenator Brown—Madam Acting Deputy President, I raise a point of order. I hope that when Senator Calvert's motion was put forward it was not for the delay to be `indefinitely preferably'. If that is the case, I was not voting for it. If it was the usual motion to adjourn the matter, then I will support it. But I want this brought on quickly—and not adjourned indefinitely, as the government would have it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Knowles)—Senator Brown, the motion was to adjourn debate, and the motion was put to adjourn debate.Committees398639863986Motion (by Senator Calvert, at the request of Senator Ferguson)—by leave—agreed to: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 1998.1M6ALLISONSenator Allison—I seek leave to give notice of a motion, which will be very quick. If I could do that first, I would appreciate it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Knowles)— Senator Allison, we have long passed giving notices of motion today.1M6ALLISONSenator Allison—That is why I sought leave. I have been here for three hours.5K4FAULKNER Senator Faulkner—Leave is denied, Madam Acting Deputy President, but leave will be given in a short while after we have dealt with the next matter. Senator Harradine has indicated that he has an urgent commitment which is the reason we are trying to move this along with some alacrity. We will cooperate in a moment, but leave is denied.Miscellaneous398717:41:003987Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—I ask that a vote taken earlier this afternoon be recommitted. I will explain to the Senate what the situation is. Earlier this afternoon, during the Senate's consideration of formal notices of motion, I moved general business notice of motion No. 1160 standing in my name. During the vote on that division, because of an error in pairing arrangements—and the opposition takes responsibility for that error in those pairing arrangements—I think the will of the Senate and the electorate was not reflected. In other words, the opposition lost a division that otherwise I think would have found majority support amongst senators. Because of that, Madam Acting Deputy President, I propose to seek leave for the vote to be recommitted so that we can test the will of the Senate on this second occasion.Leave granted.5K4Faulkner, Sen JohnSenator FAULKNER—I move:That there be laid on the table by the Leader of the Government in the Senate (Senator Hill), no later than 3.15 pm on 29 June 1998, the following documents: In relation to all advertising, promotional, information and/or public relations campaigns planned, commissioned or undertaken by any Commonwealth department or agency since March 1996, where the estimated or final cost, whichever is higher, of the campaign exceeded $500 000:(a) all briefs requesting research to be carried out for the campaign by consultants, whether for qualitative or quantitative research;(b) all scoping studies carried out in preparation for these campaigns;(c) all research reports from consultants providing results of the research of any kind; and(d) acquittal documentation indicating the detailed costings of the research undertaken or planned.Question resolved in the affirmative.Business3987398717:43:003987Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I seek leave to move government business notice of motion No. 3, and to amend the motion.Leave granted.H15Campbell, Sen IanSenator IAN CAMPBELL—I amend government business notice of motion No. 3 by inserting a new paragraph 2(c), and renumbering the existing paragraph 2(c) as paragraph 2(d). I 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; (c) the sitting of the Senate shall be suspended from appoximately 12.30 p.m. for one hour until the ringing of the bells; and (d) the question for the adjournment of the Senate shall be proposed at 3.45 pm.Question resolved in the affirmative.Notices398839883988Allison, Sen LynSenator ALLISON1M6VICAD00—by leave—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 development of Hinchinbrook channel be extended to 17 September 1998.39883988Calvert, Sen PaulSenator CALVERT 5F4TASLP10—by leave—On behalf of Senator McGauran, I give notice that, on the next day of sitting, he will move:That the Joint Standing Committee on the National Capital and External Territories be authorised to hold a public hearing during the sitting of the Senate on Friday, 26 June 1998 from 9 a.m. for the purpose of taking evidence for the committee's inquiry into communications to and within Australia's external territories.Business39883988Motion (by Senator Ian Campbell)—by leave—agreed to:That consideration of government documents be not proceeded with this day and that government business continue till 7.20 p.m.Committees39883988398817:47:003988Cooney, Sen BarneySenator COONEYSF4VICALP00—I present the seventh report of 1998 of the Senate Standing Committee for the Scrutiny of Bills. In doing so, I thank all the committee staff who have so brilliantly served us over the years and those people who give us the words to use. I also lay on the table Scrutiny of Bills Alert Digest No. 8 of 1998 dated 24 June 1998.Ordered that the report be printed.3988398817:48:003988O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—I present the annual report of the Regulations and Ordinances Committee for 1996-97.Ordered that the report be printed.EU4O'Chee, Sen BillSenator O'CHEE—I seek leave to move a motion in relation to the report.Leave granted.EU4O'Chee, Sen BillSenator O'CHEE—I move:That the Senate take note of the report.I shall seek leave in a moment to incorporate my tabling statement, but first of all I pay tribute to the committee secretariat, who worked tirelessly, and to our new honorary legal adviser, Professor Jim Davis. Without their work, the work of the senators would be impossible. I should also say that all those senators who are members of the committee would undoubtedly say that this committee is one of the most enjoyable things they do in the parliament and it gives us a great sense of achievement, but it would not be possible without the committee secretariat.I seek leave to incorporate my tabling statement and continue my remarks later.Leave granted.The document read as follows—I present the Annual Report 1996-97 of the Standing Committee on Regulations and Ordinances with a special sense of achievement. The Committee scrutinises all disallowable instruments tabled in the Senate to ensure compliance with high standards of personal rights and parliamentary propriety and I urge all Senators to look at the Report. Even a brief glance will give an impression of the magnitude and variety of the Committee's activities.The main part of the Report details how the Committee carries out its core function of picking up possible deficiencies in legislative instruments and writing to Ministers for an undertaking to amend offending provision or for a detailed explanation justifying the provision. The Report gives specific instances of defects in legislative instruments implementing important legislative schemes. The index to the Report actually lists 165 instruments in respect of which the Committee has sought and received formal advice. This is a high proportion of the 1,791 instruments scrutinised and is an indication of the thoroughness with which the Committee approaches its task. The Committee is grateful for the cooperation which it has received in its task from Ministers and Chief Justices.The Report also includes special statements which the Committee makes to the Senate on different aspects of its work. One of these related to a Determination under the Native Title Act 1993 , which the Committee ascertained was invalid because it had never been tabled. In reply to the Committee the Minister advised that this invalidated thousands of administrative actions which could only be fixed by prejudicially retrospective amendment of the Act. Another statement was on regulations for drugs testing for the 2000 Olympic Games, which the Minister agreed to amend to meet our concerns. Another statement advised that the Federal Executive Council Handbook would be amended to meet our concerns about two separate matters. There are numbers of other statements which illustrate matters of particular interest during the year.The fate of the Legislative Instruments Bill 1996 is still uncertain, but the Report includes two special statements made by the Committee on apparent defects in the Bill and a paper on the Bill which I presented to the Fourth Commonwealth Conference on Delegated Legislation.Finally, I am pleased to report that the Annual Report will have a wide circulation this year. Last week Senator Kay Patterson presented a paper to the Annual Forum of the Australian Institute of Administrative Law on the role of the Committee in the accountability of the executive and the judiciary to Parliament. Senator Patterson, who was a speaker at the first session of the Forum, told the 250 delegates that they would each be sent a copy of the Annual Report. This is an appropriate action, which will disseminate detailed information on the Committee to the judges, academics, public servants and legal practitioners who attended the Forum.The Committee thanks the Senate for the support which it has received for its work.Debate adjourned.3989398917:49:003989Patterson, Sen KaySenator PATTERSONLI4VICLP10—I present a paper which was given by me on behalf of the Regulations and Ordinances Committee to the 1998 National Administrative Law Forum, held on 18 and 19 June 1998, and which was entitled The accountability of the executive and the judiciary to Parliament: the role of the Senate Standing Committee on Regulations and Ord inances . I seek leave to have the paper incorporated in HansardLeave granted.The paper read as follows—1998 NATIONAL ADMINISTRATIVE LAW FORUM18-19 JUNE 1998PAPER BY SENATOR KAY PATTERSON"The accountability of the executive and the judiciary to Parliament; the role of the Senate Standing Committee on Regulations and Ordinances"Abstract The paper discusses the accountability of the executive and the judiciary to Parliament, with an especial emphasis on scrutiny of legislative instruments by the Senate Standing Committee on Regulations and Ordinances. The theme of the paper is that there is a high level of such accountability, with case studies illustrating the types of concerns which the Committee raises with Ministers and Judges and the outcomes of the Committee's actions.IntroductionThe theme of this session is accountability and this paper will present a parliamentary perspective on the accountability of the executive and the judiciary to Parliament, with a particular emphasis on the role of the Senate Standing Committee on Regulations and Ordinances.The accountability of the executive to Parliament is well known. The Commonwealth, the States and the mainland territories all have systems of responsible government, which is also called parliamentary government. This is in direct contrast to other countries which may have, for instance, a government system based on the separation of powers. Under responsible government members of the executive government must effectively be members of parliament and are responsible to Parliament. If the executive loses the confidence of Parliament then a new executive must be formed which does have that confidence or a fresh election held, to choose a Parliament out of which an executive will be appointed. This is the broad, overall aspect of accountability of the executive to Parliament. On a day to day basis, however, the Parliament scrutinises the actions of the executive by questions to Ministers, by debates on executive policies and actions and by inquiries by parliamentary committees, especially estimates committees. Of course the executive government will normally be able to count on majority support in the lower house of Parliament and therefore it falls to second chambers such as the Senate to balance ministerial control of the lower house. Legislative scrutiny committeesThe two legislative scrutiny committees of the Senate, the Standing Committees for the Scrutiny of Bills and on Regulations and Ordinances, are among the most important bodies through which the legislative branch exercises this control over the executive. This paper will deal only with the activities of the Regulations and Ordinances Committee, but it should be remembered that its sister Scrutiny of Bills Committee operates in parallel with it, but to scrutinise proposed primary legislation rather than delegated legislation which has already been made.The Standing Committee on Regulations and Ordinances scrutinises every disallowable legislative instrument tabled in the Senate to ensure that these instruments comply with its high standards of personal rights and parliamentary propriety. This scrutiny is crucial, because the administrative details of almost every Commonwealth scheme are implemented by regulations or by a host of other subsidiary legislative instruments. Every year the Committee, assisted by its legal adviser, Professor Jim Davis of the law faculty of the Australian National University, detects hundreds of apparent defects or other matters worthy of comment in the almost 2,000 legislative instruments which the Committee scrutinises each year. This scrutiny is generally effective, with Ministers undertaking to amend many of these instruments to meet the Committee's concerns or giving explanations which satisfy the Committee. Such executive accountability has operated since the establishment of the Committee in 1932, which predates by decades the other bodies or processes now associated with the systematic scrutiny and supervision of the executive branch such as the Administrative Appeals Tribunal, the Ombudsman, the Administrative Review Council, the Freedom of Information Act 1982 and the Administrative Decisions (Judicial Review) Act 1977 .Parliamentary scrutiny of the judiciaryThe judiciary is also accountable to Parliament, which exercises a number of controls over federal courts. The Constitution itself provides for Parliament to exercise an obviously important, even decisive, role in the operations of the High Court. There are 10 sections in Chapter III of the Constitution, which deal with the judicial power of the Commonwealth, and nine out of the 10 refer to the Parliament. For instance, Parliament decides how many justices the High Court will have, subject to a minimum of three, and may fix their remuneration. Parliament may decide that High Court judges should be removed for proved misbehaviour or incapacity. Parliament decides the exceptions and rules of the appellate jurisdiction of the High Court. Parliament may make laws about the right of appeal to the Privy Council and, of course, has done so. Parliament may also confer additional original jurisdiction on the High Court and make laws conferring rights to proceed against the Commonwealth and the States in relation to all matters within the judicial power.The Parliament has exercised some of these powers in the High Court of Australia Act 1979 and the Judiciary Act 1903 . The High Court of Australia Act controls and directs the High Court in a number of ways which illustrate the prerogatives of Parliament. That Act provides for the number of justices to be seven, although Parliament could provide any number at all greater than three. The Act also provides for the qualifications of judges and here again Parliament could apparently provide for any qualifications at all. The Act also provides that justices are not capable of accepting or holding any other office of profit within Australia. Presumably without this provision justices could hold such an office. The Act provides detailed arrangements for the administration and procedures of the High Court, including a requirement to keep proper accounts and records of the affairs of the court and for the Auditor-General to audit the accounts and to report any irregularity. The Act also obliges the High Court to prepare an annual report for presentation to Parliament. The Act exempts the High Court from taxation by the Commonwealth, a State or Territory. Again, in the absence of this provision it may be that the High Court could be subject to such taxation. The Judiciary Act provides extensively for the actual operations of the High Court, including its general jurisdiction and power and procedures.The other federal courts are entirely creations of the Commonwealth Parliament. The Constitution actually refers to federal courts created by the Parliament. In fact, for the great majority of the time since Federation in 1901 Australia has not had a general federal court, relying instead on Parliament giving federal jurisdiction to State courts. The Federal Court is created by the Federal Court of Australia Act 1976 , which is 66 pages long and provides for all aspects of its operation, including its constitution, jurisdiction and proceedings. The Family Court is created similarly by the Family Law Act 1975 , which is 198 pages long and which similarly provides for all aspects of its operation. The Commonwealth Directory of December 1997 also refers to both the Australian Industrial Court and to the Industrial Relations Court of Australia, the functions of the latter being now exercised by the Federal Court. The fate of these two courts illustrates how Parliament can abolish a federal court as well as create them.The Parliament has, therefore, provided in Acts for detailed aspects of the operation of both the High Court and of the other federal courts. However, these Acts not only provide directly for these matters but also give power to others to make legislative instruments affecting the courts. In common with almost all other Acts the Acts controlling the High Court and creating the other federal courts provide for the Governor-General to make regulations with respect to specified matters. Any such regulations are subject to disallowance by either House of Parliament. The Acts controlling federal courts also provide for the judges of the courts to make rules of court. The Parliament has given all of the courts a general "necessary or convenient" power to make rules. The High Court has also been given more specific powers, for seven matters. Parliament has been a bit more expansive for the Family Court, giving it not only the general power but also 24 specific powers, and even more expansive for the Federal Court, giving it a general power and 32 specific powers. The different Acts all provide for the rules of court of each of the three courts to be subject to certain provisions of the Acts Interpretation Act 1901 , which provides generally that legislative instruments must be tabled in both Houses and are subject to other safeguards, as well as to the ultimate sanction of disallowance by either House.Parliament has other options in its supervision and control of federal courts and their judges. For instance, two Senate select committees in 1984 and a statutory parliamentary commission of inquiry established in 1986 inquired into the conduct of Justice Murphy of the High Court. It also exercises some degree of scrutiny of the courts' financial management through examination of their proposed appropriations, and annual reports, by the relevant Senate legislation committee. However, the most direct relationship between the Parliament and the judiciary has been developed through scrutiny by the Regulations and Ordinances Committee of all delegated legislation relating to the courts.This paper will now describe several case studies of scrutiny by the Standing Committee on Regulations and Ordinances of legislative instruments made both by judges and by members of the executive. In deference to the presence of Chief Justice Doyle and Justice Kenny the paper will first describe some instances of scrutiny of rules of court, which are of course subject to the same accountability to Parliament as legislative instruments made by the executive.The first public exercise of the right of the Regulations and Ordinances Committee to propose disallowance of rules of court occurred in 1982, when on Budget Day the then chair of the Committee gave notice of disallowance of rules of the High Court. The Committee had noted that there was possible prejudicial retrospectivity against individuals in respect of interest on judgement debts. On its face this was a breach of the Committee's principles. In accordance with normal practice, the notice had been given to enable the Committee to continue negotiating with the High Court to provide a satisfactory solution. The rules of court were duly remade, and the Committee publicly acknowledged the High Court's cooperation in the matter.Several other such instruments have been scrutinised, and as a result of the Committee's concern have been appropriately amended. But such scrutiny, and the attendant successful outcomes, have not been confined to the High Court. Two more recent examples involved the newly established Industrial Relations Court.The Industrial Relations Court Rules, Statutory Rules 1994 No 110, were made by nine judges of the Court, including the Chief Justice, on 30 March 1994 and expressed to come into effect on the same day. The Committee scrutinised the Rules in the same way as it scrutinises all other disallowable instruments and found substantial deficiencies. The Rules included numerous drafting errors and oversights, with many wrong references, including one to an office abolished some 10 years previously. More serious problems included a provision which expressly negated provisions of an Act without the judges having the power to do so and the fact that the Rules were not gazetted until 5 May 1994, more than five weeks after they came into effect. Under s.48(2) of the Acts Interpretation Act, which applied to the Rules, any instrument which adversely affects anyone except the Commonwealth is void if it takes effect before gazettal. The Committee accordingly wrote to the Chief Justice for his comments.The Chief Justice replied, advising that the Rules had been prepared under circumstances of great urgency and that he would consider what amendments were necessary. In relation to the delay in gazettal the Chief Justice advised that the delay could not prejudice anyone because the Rules were available publicly before gazettal. The Committee considered the reply and wrote again to the Chief Justice, advising that his comments on the availability of the Rules did not appear to be relevant to the question of validity and that in the opinion of the Committee the Rules were void, with all action taken under them similarly void. The Committee also informed the Chief Justice that in order to preserve its options it would give a notice of disallowance of the Rules.By this time the Rules had been amended, but to address matters not related to the Committee's concerns. The amending Rules included a number of deficiencies, about which the Committee also wrote to the Chief Justice. The Committee then received a letter from the Acting Chief Justice, advising that the Court had discussed the matter with officers of the Attorney-General's Department who had offered to assist the court with remaking the Rules so that a clearly valid set of Rules could be made available.The Committee then wrote to the Acting Chief Justice and to the Attorney-General for advice, noting that the undertaking to remake the Rules would certainly allow them to operate in the future with unambiguous validity but that there was a period of at least four months during which the apparently void Rules were administered. The Acting Chief Justice and the Minister for Justice replied, advising in effect that the Rules were procedural and therefore did not themselves adversely affect anyone. The Committee did not accept this advice but in the interests of the orderly administration of justice agreed to remove its notice of disallowance on the basis that the Rules would be repealed and remade. This subsequently occurred on 11 October 1994.The Committee had further correspondence with the Court when the Industrial Relations Court Rules (Amendment), Statutory Rules 1996 Nos 219 and 220, were not tabled within the required time and subsequently ceased to have effect. This was the first time for many years that statutory rules were not tabled, although other types of disallowable instrument frequently become void for this reason. In this case the Committee asked the Chief Justice for an assurance that the Rules were not administered between the dates upon which they ceased to have effect and the date upon which fresh Rules were made.The Committee also scrutinises the rules of the other federal courts. In relation to the Federal Court Rules the Committee earlier this year advised the Chief Justice that the Rules incorporated a legislative instrument which had become void more than four years earlier because it was never tabled in Parliament. The Chief Justice then advised the Committee that the provision would be removed.Scrutiny by the Regulations and Ordinances Committee of legislative instruments made by the executiveThe Committee's scrutiny of the rules of the federal courts, while important, is nevertheless only a small part of its operations. Most of the instruments which it scrutinises are made by the executive and it is these upon which the Committee spends most time. This paper will now describe its scrutiny of a number of such instruments which illustrate accountability of the executive for, firstly, provisions which breach personal rights and, secondly, provisions which breach parliamentary propriety.Personal rightsThe Committee's inquiry into Public Service Determination 1992/27 began on 27 April 1992 after it received a representation from a retired officer of the Australian Public Service, which drew attention to an apparent injustice affecting what turned out to be a substantial group of retired officers, although this was not disclosed at the time. The problem related to credits received in lieu of recreation leave, dating back to the early 1970s. Without going into details, a combination of factors resulted in retiring officers receiving less money than that to which they were fairly entitled. The amounts involved were not great, in most cases less than $1,000. The matter could have been resolved by either retrospective legislation or an act of grace payment, but the Departments involved declined to do this, on the basis that it was too hard to identify potential claimants and publicise the change. Accordingly an aggrieved officer approached the Merit Protection and Review Agency (MPRA), which after investigation found that the application of the law was unfair and inequitable. Armed with this finding the officer then approached the Department of Industrial Relations (DIR), who were responsible for the matter. Three days later an officer of DIR made Public Service Determination 1992/27, which effectively extinguished the rights of the officers affected by the injustice. The Explanatory Statement which accompanied the Determination did not advise of these effects. Also, the DIR did not consult with the officer or the MPRA or inform them after the Determination was made. The officer therefore came to the Committee. Shortly after this DIR discovered that the Determination had not been drafted properly and so made a second Determination (1992/46), the sole purpose of which was to correct the errors in the previous instrument. Again the Explanatory Statement did not advise that the Determination extinguished the rights of officers and again the DIR did not consult with those affected before it made the second Determination or inform them after it was made.This matter raised a number of concerns for the Committee. Firstly the Explanatory Statements for the two Determinations appeared to be misleading, both advising that they "clarified" the position. The Explanatory Statements even seemed to imply that they were to the benefit of all those affected. In fact the position was perfectly clear to the DIR and everyone else, but the two Determinations then actively altered the position to the detriment of those affected.Next, the Committee was concerned about the relationship between the MPRA and the DIR. The MPRA had been actively pursuing the matter with DIR, but DIR did not consult with the MPRA about its proposed course of action or inform it of developments even after they happened. This would have been a deficiency in any event. In the present case, however, there was an additional cause of concern. This was because the Committee had previously raised with DIR the question of review of discretions in Public Service Determinations. In each case the DIR replied that there was an adequate safeguard in that officers could go to the MPRA with any grievances. The Committee had always accepted those assurances and had refrained from taking further action. In the present case, however, the DIR had not only failed to implement recommendations of the MPRA but also had not even told those affected that it had done so.Finally, and most importantly, here was an obvious injustice which was entrenched by a legislative instrument and which needed to be addressed.The Committee first took action by asking its then Legal Adviser, Emeritus Professor Douglas Whalan AM, to prepare a special report on the Determinations and the representation. After the Committee considered this report it wrote to the Minister for Industrial Relations advising of its serious concerns and that it was disturbed by the whole matter, particularly by DIR ignoring recommendations of the MPRA in the way that it did. The Committee asked the Minister if the officer who made the Determinations, and other suitable officers, could attend upon the Committee at its next meeting. Also, in order to protect its options, the Committee advised the Minister that it would give a notice of disallowance of the Determinations.The Committee then presented a short report to the Senate about the matter. This was done by the Chair of the Committee at the time, Senator Patricia Giles. The Committee also wrote to the MPRA about the issues raised. The Minister replied to the Committee advising that he had asked DIR to cooperate fully with our inquiries and that the appropriate officers would appear before the Committee. The Minister also advised that he had asked DIR to provide the Committee with a paper on the matter as soon as possible.The officers of DIR duly met with the Committee and received what can be described as an unsympathetic reception. As an aside, this meeting illustrated one of the great strengths of the Committee, which is its non-political and non-partisan operation. In fact, the officials were questioned most closely by the late Senator Olive Zakharov and by Senator Kay Patterson, who are from opposite sides of the political fence but who united here in their efforts to see an injustice corrected. Under questioning by Olive Zakharov an official advised that the administrators of the Public Service Act 1922 had been aware of the problem for some 20 years and that about 30,000 people, alive and deceased, were affected. The gist of the official's answers were that there were now considerable administrative difficulties in identifying these people and the amounts to which they were entitled and in deciding a method of payment. The substance of the comments by members of the Committee were that these administrative difficulties was not such as to preclude action. The meeting concluded with the Committee asking the DIR officials to prepare another paper setting out ways in which as many people as possible who had been unfairly treated by the Determinations could be compensated.This paper from DIR advised that the best option would be to deal with the problem by direct appropriation through the current budget process and that this would be the basis of a submission to the Minister. The Committee then wrote to the Minister advising that it would be satisfied if the DIR option was adopted, but noted that another option was to amend the Public Service Act. The Minister then wrote to the Committee advising that he had written to the Prime Minister asking that the matter be dealt with by special budget appropriation. The Prime Minister then advised that in view of the actions of the Committee and of equity issues, the budget would include a one-line appropriation of $2.7 million with a further $1.4 million in the next year. The Committee thanked the Minister for his cooperation and presented a full report to the Senate.Outcome of caseThis case illustrates a number of aspects of the operations of the Committee. First, it is an instance of the effectiveness of the Committee in carrying out its mandate from the Senate to ensure that legislative instruments do not infringe personal rights. Most significant of all, the matter was raised by an individual, whom the Committee was willing to protect even if he had been the only person affected. In fact it is clear that without intervention by the Committee a serious injustice would have continued and affected thousands. The next conclusion is that the Committee has an appropriate variety of techniques for ensuring a satisfactory outcome in such cases. Here the Committee wrote to the Minister, reported to the Senate, gave notices of disallowance of the offending provisions, asked for officials to attend upon it and asked for officials to prepare an options paper. The Committee's concerns were also communicated to the Prime Minister.This matter also illustrates the high level of cooperation which the Committee receives from Ministers, with the Prime Minister, the Minister for Industrial Relations and the Minister for Finance all responding generously to its concerns. The reasons for this cooperation are, as mentioned previously, the non-partisan nature of its operations and secondly the fact that the Committee does not question policy, restricting itself to ensuring that legislative instruments do not breach personal rights or parliamentary propriety. The case also shows the flexibility of the Committee. The difficulty here could have been addressed either by amendment of the Act, by amendment of the Determinations or, as actually happened, by parliamentary appropriation. Any of these courses of action, which would have resulted in further parliamentary scrutiny, would have been acceptable. The case also illustrates that the concerns of the Committee are not theoretical or speculative. Here tens of thousands of employees were treated unfairly over two decades. The actions of the Committee removed a real and not a possible injustice. This matter also illustrates how the Committee complements and reinforces other agencies whose charter is to protect personal rights. For instance, the Committee ensures that discretions in legislative instruments will, where appropriate, be subject to review by the Administrative Appeals Tribunal. On other occasions the Committee has asked that certain matters should be referred to the Administrative Review Council and the Auditor-General. In the present case the Committee took account of findings by the MPRA. The Committee does not act in isolation but cooperates with other bodies whose function is to achieve the same outcomes as the Committee.The case also illustrates the insistence of the Committee that the Explanatory Statement which, due to previous activities of the Committee, now accompanies every legislative instrument, should genuinely explain what the instrument does and why it was made. In the present case the Explanatory Statements were misleading and this was a significant deficiency. Finally the case illustrates the need for openness, consultation and transparency, all of which were grievously lacking in the process and substance of the two Determinations.Parliamentary proprietyThe previous case illustrates a breach of personal rights by the executive, which was corrected by the Committee. Breaches of parliamentary propriety, however, present different problems and the following case studies are instances of these.The Tenth Amending Deed to Establish an Occupational Superannuation Scheme for Commonwealth Employees and Certain Other Persons among other things corrected some substantive errors in earlier deeds. The Explanatory Statement, however, advised that the Deed was administered to produce the intended outcomes pending the present corrections. The Committee wrote to the Minister noting that the scheme had been administered in the form it was intended, rather than the form in which it actually existed after being legally made under the authority of an Act of Parliament. The Minister wrote back advising that this was acceptable because the intended effect had been clearly set out in the Explanatory Statements for the earlier Deeds. The Committee wrote again to the Minister, asking under which provisions of Commonwealth law this had been done. At the Committee's suggestion the Minister then agreed to amend the enabling Act to validate the administrative actions.There was a similar problem with some Rules under the Life Insurance Act 1995 , which commenced on 18 September 1996. The Explanatory Statement, however, advised that the Rules would be administered as if they had taken effect on 1 January 1996 and that since that date the Rules had been administered according to their intent rather than their literal legal provisions. The Committee advised the Minister that this was a matter of some concern. If the Rules had no adverse effect on anybody then they could and should have been made retrospective to 1 January 1996. If, however, there were any adverse provisions then the amending Act should be amended to provide for prejudicial retrospectivity. The Committee emphasised that agencies should administer the actual provisions of legislation, not what the agency considered those provisions should be. The Minister then advised that he agreed with the Committee and that instructions had been given to apply strictly the earlier Rules and that a new Explanatory Statement would be produced which would be tabled in Parliament.Excessive delay is making legislative instruments when it is appropriate to do so may be a breach of parliamentary propriety. The enabling legislation for the Heard Island Wilderness Reserve Management Plan provided that a Plan must be made as soon as possible after it commenced, which was 11 January 1988. The Plan was not made, however, until 11 September 1995, more than seven years later. In reply to the Committee's query, the Minister advised that the delay was due to extensive, protracted and difficult consultation with interest groups. The Committee also raised the question of delay in relation to the Australian Pork Corporation Regulations, which provided a legal basis for that Corporation to pay pay-roll tax. In response to the Committee's query the Minister advised that the Corporation had been paying this tax for nine years although under no legal obligation to do so. The Committee advised that it was concerned that a Commonwealth agency had for years mistakenly paid these State and Territory taxes because of a failure to make the necessary legislative instrument.Personal rights and parliamentary proprietyThe next case raises issues of personal rights as well as parliamentary propriety. In the last 10 years regulations made under a variety of Acts have implemented United Nations total or partial sanctions against a number of countries, initially Iraq and Kuwait and then Yugoslavia and Libya. These presented especial difficulties for the Committee. The sanctions on their face affected personal rights to travel, while restrictions on imports, exports and foreign exchange transactions would affect adversely the right to earn a living. Also, the scheme of the sanctions was similar in each case, being a general prohibition subject to exemption by the Minister. In such cases this may be a breach of personal rights if there is no independent, external review of these decisions. Also, importantly, the regulations could have breached parliamentary propriety, in that they may have been more suitable for inclusion in a Bill which would be subject to all of the safeguards of parliamentary passage. In addition, the regulations were unusual in that their provisions were not directly authorised by the enabling Act or any other Act. Rather, the sanctions were the consequences of United Nations resolutions with which international law obliges Australia to comply.The Committee scrutinised these regulations in the usual way and at first glance they appeared to be a case where the matters dealt with should be included in an Act rather than be prescribed by regulations. However, the Committee took advice that Australia had a legal obligation to comply with sanctions imposed by the United Nations. As such the regulations did not impose any new duties but instead merely spelt out the details of duties which already existed. They therefore came within the classic function of legislative instruments and were acceptable as regulations rather than an Act. In relation to merits review of the discretions in the regulations, the Committee ascertained that these generally had to be exercised personally by the Minister; delegation was not possible. In such cases the Committee usually does not press for merits review. Also, in the circumstances, the regulations did not appear to operate harshly on individuals.In fact, the regulations illustrated the speed and flexibility which are among the main advantages of legislative instruments, implementing the United Nations sanctions faster than would normally be the case if done by Act. For instance, the initial three sets of regulations imposing sanctions on Iraq and Kuwait were made on 8 April 1990, only two days after the relevant United Nations resolutions. The initial regulations in relation to Yugoslavia were made on 2 June 1992, three days after the resolution.The report of the Committee in these regulations was the inspiration for the Charter of the United Nations Amendment Act 1993 , which provides almost entirely for the power to make regulations. The Minister's second reading speech and the Explanatory Memorandum both referred positively to the Committee's findings. The Minister explained that under the existing legislation it was not possible to apply strict new sanctions against Yugoslavia. For instance, it was not possible to freeze funds held in Australia by companies based in Yugoslavia. The new Act would give power to do this. In the five years that the amendments have been in force regulations have imposed sanctions upon Yugoslavia, Angola, Haiti, Libya, Bosnia and Herzegovina, Rwanda and Sierra Leone.ConclusionAs noted earlier, the theme of this session of the Forum is accountability and this paper has exam ined the broader aspects of the general accountability of the executive and the judiciary to Parliament, noting that in the case of the executive such accountability is total in the context of responsible government. In relation to the judiciary the paper noted that the Parliament controlled important aspects of the operation of the High Court and that the other federal courts were mere creations of Parliament. The accountability of the executive and the judiciary for legislative instruments made under the authority of Acts of Parliament is even greater, with the Standing Committee on Regulations and Ordinances exercising a mandate from the Senate to ensure that such instruments meet the highest standards of personal rights and parliamentary propriety. It should be noted that the Senate has never failed to accept a recommendation from the Committee in relation to disallowance of a legislative instrument, although this step is rarely necessary. In fact, it has been more than three years since the Committee resolved formally to recommend disallowance of a regulation unless the Minister on that same day undertook to amend it. In that case the Minister did so.It is appropriate to close with a quotation from the late Senator Ian Wood, who was a member of the Committee for 28 years and Chairman for 22 years. In successfully moving for the disallowance of a legislative instrument Senator Wood referred (Hansard, Vol S49, 17 August 1971, p.195) to a reported quotation from Sir Robert Garran, a counsel who helped draft the Constitution and the first Commonwealth Solicitor-General, that the Regulations and Ordinance Committee was the most important in Parliament, because "Its duty was to see that Parliament ran the country with legislation, not the Executive with regulations and ordinances."399539953995Hogg, Sen JohnSenator HOGG7L6QLDALP00—On behalf of Senator Reynolds, I present the 13th report of the Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Fund entitled Examination of 1996-97 Annual Reports in fulfilment of the committee's duties pursuant to section 206(c) of the Native Title Act 1993 .Ordered that the report be printed.3995399517:50:003995Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Gibson, on behalf of the Joint Committee of Public Accounts and Audit, I present report No. 360 entitled Internet Commerce—To buy or not to buy? . 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 report.The statement read as follows—This inquiry rates as one of the most important conducted by the Committee in recent times. The new communications and commercial opportunities created by the internet are profound and will dramatically influence not only Australia's economy but also the world economy.The inquiry focused on Australian small and medium enterprises and the operation of the customs screen free limit, the privacy regime, the administration of the taxation system, and the implications for Australia's tax base arising from the growth in internet commerce.Madam President, the Committee was advised during the inquiry that it was one of the few parliamentary committees in the OECD conducting a broad ranging inquiry into internet commerce. The Committee, therefore, will send the report to parliaments of other OECD countries in order to share our findings and generate debate.The key areas of the inquiry include:. the statistical data base;. taxation issues;. the customs screen free limit; and. privacy issues.[THE STATISTICAL DATABASE]Madam President, the Committee considers that its examination of the available statistical database was an essential part of this inquiry. I will briefly discuss some of the key statistical data.Currently, there are between 500 000 and 4 million internet users in Australia depending on different research reports and different measurement criteria. According to www.consult there were some 1 million regular internet users accessing the web once a week or more frequently in Australia in January 1998, although there were some 600 000 other less regular users. There are also an additional 500 000 email users with the ability to send and receive email over the internet.There are some 15 000 enterprises, consisting of both business and government, with a permanent access to the internet. The cost of permanent access to the internet in Australia is currently much higher than the United States and although not dissimilar to other countries in the region, it is a potential source of competitive disadvantage.In January 1998, there were some 54 800 enterprise websites in Australia, although only 21 600 were hosted in an on-line shopping mall or were part of a directory or listing service. The number of enterprise websites continues to grow at the rate of some 50 to 100 per day.It is likely that enterprise adoption of internet access and services will be somewhat slower than earlier predictions because of the time and resources required to properly develop internet business strategies and implementation plans, as well as the justification of the costs.Overall, Australia appears to be well positioned from the point of view of infrastructure services, and competitive commercial interests are driving internet and electronic use and adoption. It is likely that enterprise adoption will vary by industry, business size, market competition and market opportunities.[TAXATION ISSUES]I now move to taxation issues. The efficiency and effectiveness of tax administration is a key concern of the Committee.Madam President, the rise of internet commerce will present a range of challenges for tax administrations. The internet will transcend state and national borders and commerce will be global in every sense. Small and medium enterprises (SMEs), and more consumers than ever before, will have the opportunity to buy and sell goods internationally.Some of these goods and services will be downloaded electronically and the entire transaction will be protected by a sophisticated encryption system. In this case the first challenge for the tax administrator is to identify that a transaction has occurred and in what jurisdiction. The next task is to assess whether tax should be applied and how it should be paid.Internet commerce requires an international approach to taxation. For example, a business entity may be located in one country, have its web server in another country and then direct payments and other revenue to off-shore banking facilities and tax havens. What is most significant about this scenario is that it will be relatively cheap to do and potentially a wide range of people and SMEs could plan their affairs in this way. Tax administrations will have difficulty in determining and exercising tax jurisdiction. These are some of the reasons why tax administrations around the world are giving serious attention to the various implications of internet commerce.One of the key issues that came to the attention of the Committee was the debate surrounding international taxation sharing concepts such as source, residency and permanent establishment. These taxation concepts help to create a legal basis for tax jurisdiction.The onset of internet commerce will complicate the application and interpretation of these principals. The US Government has suggested that source concepts may lose relevance and be replaced with residency as the major taxing concept. Madam President, the Committee is yet to be convinced that the US preference for residency principles is either in Australia's best interests as a taxation formula or that it is an inevitable development. More time, research and international consultation is needed to explore how existing taxation concepts are interpreted and applied.Other OECD countries should critically review the applicability of existing taxation concepts such as source and residency and consider how these concepts can be adapted to the internet environment.In August 1997, the Australian Taxation Office (ATO) released the report Tax and the Internet which contained 29 draft recommendations. The ATO's overarching objective in its report was to achieve neutrality between the physical and electronic worlds.The Committee is confident that the ATO is correct in its finding that there will not be any appreciable impact on tax collections, arising from internet commerce, in the next one to two years. Beyond this period, however, it is difficult to make predictions.The Committee supports the ATO with its objective to continue measuring the risks to income tax and the tax system generally from internet commerce. In addition to this objective, the ATO should report its findings on a regular basis in its annual report.The Committee notes the potential for consumers to order and receive goods, such as music CDs and movie videos, over the internet. Sales tax does not apply to intangible goods. The Committee notes that in a GST environment, supply of functionally equivalent `products' should attract the same rate of tax, whether in tangible or intangible form. However, the supply of intangible products from outside the tax jurisdiction is a major issue for overseas GST/VAT regimes. These regimes are currently searching for solutions and it is clear that international cooperation and agreement will be necessary to achieve solutions to identifying and taxing electronic commerce.The Committee is seeking more information from Treasury and the ATO on international developments concerning possible strategies for collecting GST on products and services that are ordered and delivered electronically. For example, in the future it is possible that millions of Australians could be downloading music on to blank CDs in their own homes and the ATO could have significant problems with GST compliance.[THE CUSTOMS SCREEN FREE LIMIT]The customs `screen free limit' is a general term used to describe the duty and sales tax free limit and the commercial entry thresholds for imported goods. If the duty and sales tax on an imported good is less than $50 and the value of the consignment is below the commercial entry threshold then no customs duty is required and the consignment is screened free.The Australian Customs Service (Customs) does not record data on those imports that are screened free. In response to the Committee's inquiry, Customs commissioned a survey of low value goods. The Committee compared these results against the claims made by some retailing groups. This analysis was fundamental to determining the appropriateness of the duty and sales tax free limit, currently set at $50, and the commercial entry thresholds.Madam President, some Australian retailing groups advised the Committee that their viability was under threat from a combination of the screen free limit, an uncompetitive wholesale sales tax regime and the growth in internet commerce. It was claimed that the internet would lead to an increase in consumers taking advantage of the screen free limit.Madam President, the Committee has carefully examined the claims made by some retailing groups. The AC Nielsen survey results and data from Australia Post and the Australian Bureau of Statistics are not consistent with the claims made by various retailing groups.The AC Nielsen Survey data used for this inquiry is from stage two of a three stage survey. The survey involved the selection of 4 107 postal and screen free air cargo consignments during a two week period during November 1997. The survey showed that importations of fishing tackle, CDs and jewellery under the screen free limit were `very low'. It is possible to criticise the survey based on the size of the sample frame and the survey period of only two weeks. However, the Committee argues that it would be rash to radically reduce the duty and sales tax free limit without any evidence showing a significant increase in imported goods under the screen free limit.In view of the statistical evidence, the Committee recommends that:. the duty and sales tax free limit should remain at $50.. the commercial entry thresholds for both postal and non-postal consignments should immediately be set at $1000. . Australian Customs should proceed with stage three of the survey into low value goods and ensure that:- the right to conduct the survey is determined according to Australia Public Service tender procedures; and- a representative of the retailing industry is on the coordinating committee for the survey.. and Australian Customs must establish an ongoing data series which records statistical information on the quantity, value and type of goods entering Australia under the screen free limit.[PRIVACY ISSUES]Madam President, an effective privacy regime is a threshold issue for the successful development of internet commerce.The Committee took particular note of the arguments for and against a self-regulatory privacy regime. The Committee concludes that a light touch legislated privacy regime will be more effective than a self-regulatory approach. Privacy legislation for the private sector will ensure better coverage, receive international recognition, and will discourage state governments from passing their own legislation.Madam President, the Committee does not take this position lightly. Internet commerce must be left to develop in an environment in which the private sector responds to market forces. The role of government should be minimal and directed at providing certainty for both consumers and business through a light touch regulatory regime. In the case of privacy, there is overwhelming evidence for legislation.First, the Committee is not persuaded that a self-regulatory privacy regime will have sufficient enforcement provisions to ensure compliance. Madam President, in a legislated privacy regime, companies ignoring the legislation would be acting illegally and their business credibility could be destroyed if they were revealed. Under a self-regulatory approach, there is no legal incentive for a company to comply, and it is problematic that consumer confidence would be adversely affected if it was shown that a company was not complying with privacy principles.A second issue is the importance of consumer confidence in ensuring the growth of internet commerce. Internet users must have reasonable confidence that their privacy is protected.Third, there is not sufficient evidence showing that business supports a self-regulatory approach. For example, the Price Waterhouse Privacy Survey revealed that, of those businesses surveyed, 70 per cent supported legislation. In evidence to the inquiry, the National Australia Bank supported the introduction of legislation.Madam President, the Victorian Government has announced a proposal for a Data Protection Bill covering both the public and private sectors. The Victorian Minister for Multimedia, the Hon Mr Alan Stockdale, also commented that Victoria would vacate the field if the Commonwealth established a suitable privacy regime.If Victoria and other States pass their own privacy legislation then the Federal Government's self-regulatory privacy regime could be made redundant. The private sector would have a clear incentive to comply with a State legislated privacy regime and could ignore the Federal Government's self-regulatory approach. Under this scenario, the Federal Government would eventually be forced to legislate. During this chain of events, national corporations may have to comply with privacy legislation from a number of individual states which could introduce confusion and significantly add to compliance costs.For these reasons, the Committee recommends that the Government develop privacy legislation for the private sector.In conclusion, I would like to express the Committee's appreciation to those people who contributed to the inquiry by preparing submissions and giving evidence at public hearings.Finally, I wish to thank the members of the sectional committee for their time and dedication in conducting what has been a complex and rewarding inquiry. I also thank the secretariat staff who have assisted in the conduct of this inquiry:—the Secretary to the Committee, Margot Kerley; sectional committee Secretary, Stephen Boyd; and support staff Georgina Binks and Tiana Gray.Madam President, I commend the Report to the Senate.17:50:003998Hogg, Sen JohnSenator HOGG7L6QLDALP00—I want to make a few remarks on this particular report, because I was closely associated with the formulation of the report and the hearings associated with it. I believe that the report shows quite clearly that the Internet environment is not fully understood. We saw in the report itself that there are no reliable statistics available which show, firstly, the use of the Internet itself; secondly, its growth; and, thirdly, the extent of commerce on the Internet as such.The profile of a typical user was most interesting within the report as presented to the committee. It showed that the typical person using the Internet was a male, tertiary educated with high income, and aged between 20 and 49. I do not believe this reflects the users of the Internet at all, but nonetheless that is what was submitted to the committee. It shows the vast lack of information about the use of the Internet that exists even today. There is no doubt, though, that the profile of the users of the Internet is changing and changing rapidly.Evidence was presented to the committee which showed that between 300,000 and 1.6 million people were using the Internet in 1997. That is a vast range, and it shows the uncertainty that exists. Evidence on the growth of Internet usage within Australia was also quite wide and varied and, as such, one cannot place a great deal of reliance on the figures that government would need to make any judgment on its program in the future. The committee looked at the range of products that are currently being purchased—and this interested me in particular because it potentially affects the retail industry and workers in the retail industry. Pages 43 and 44 of the report show a wide range of services and goods that are being purchased over the Internet, but there is not a large number of retail products at this stage. It lists books, music, magazines, computer hardware, games and clothes; and, in the area of services: tickets, travel, food and personal computers. It is not a very exhaustive list, but I am sure that as the Internet grows and more people are hooked into it, the range of goods will grow. Of course, one must then be circumspect about the threat that will pose to retailers in Australia and the people they employ.Interestingly, the report noted that in 1997 some 250,000 notional users of the Internet spent an average of $150, which led to total spending through the Internet of $37.5 million. Whilst that is a guesstimate, the ATO estimates that for the year 2000 there will be $4.6 billion in Internet commerce, with $500 million of that in sales. In a very short space of time, we are looking at a substantial growth in Internet sales.Currently there are impediments to this, and the first is the cost of getting on-line to the Internet. That involves the purchase of either a PC or a laptop and then the cost of the service provider. This is an impediment to a number of people in our community to start off with, but there are other impediments to the use of the Internet for commerce purposes; namely, privacy, security and consumer protection. I believe that, once these are overcome, the Internet will become widely used for commerce, and therefore it is an ongoing concern for the government, no matter what its persuasion might be.Unfortunately, there are no reliable statistics available to assist government in meeting the changes that arise from the use of the Internet. The report did address in depth the issue of tax and this is an issue that is of great concern to government. Currently the legal basis for tax jurisdiction is based on the concepts of permanent establishment, source and residence. Of course, when we get into cyberspace, these things do not necessarily exist. Whilst today we may have tax havens that can be easily identified, a tax haven in cyberspace is not readily identifiable or accessible by government.The report recommends that the ATO continues to monitor tax risks, and this will be important into the future. This is the first time a report such as this has been done in Australia and it is the first time many of the problems that the Internet may cause have been drawn to the attention of this parliament, so that recommendation is very important. An equally important recommendation, which appears at page 107 of the report, is that the Australian Government should continue to support an international approach to taxation sharing arrangements, Internet operations and intra company profit shifting. It is only through an international approach that we can hope to overcome some of the difficulties we will be confronted with in the future.On the issue of retail sales, most pertinent in the report is the fact that there was a call for a lowering of the customs screen free limit; that is, the duty and sales tax payable—from $50 to nothing by some retailers—as they thought this would assist in stopping goods being purchased over the Internet and imported into Australia. Recommendation 9 on page 148 states:The customs duty and sales tax free limit should remain at $50.recommendation 10 states:The commercial entry thresholds for both postal and non-postal consignments should immediately be set at $1000.and recommendation 11 states:The Auditor-General should review the level of revenue leakage from customs screening, and suggest ways in which screening methodology could be improved.That is very important because evidence that came before the committee showed that there was a leakage as a result of the duty and sales tax free limit of $50 and that potential revenue was forgone by the Commonwealth in the order of $34 as a guesstimate, but in a physical basis of $41 million. It was seen by the committee that collecting all duty and sales on goods with a zero screen free limit would cost an additional $81.44 million whilst at the same time recovering $67 million, and this was seen to be counterproductive. Therefore the committee determined to retain the screen free limit of $50.It was seen that there should be growth for small to medium enterprises through the Internet but that during the growth phase of the Internet more imports would arise than exports. There are opportunities there, and Australian businesses need to be able to avail themselves of them. Last but not least, I want to briefly address consumer protection and privacy issues. The system is currently an open system and information can be collected without the knowledge of an individual who is using the Internet.Last but not least, I want to address consumer protection and privacy issues. The system is currently an open system, and information can be collected without the knowledge of an individual who is using the Internet. There are moves for secure electronic transaction systems and for cryptography to encrypt messages and transactions. The only problem with this is that it may lead to conflict with community needs for law enforcement and national security. Once consumer protection and privacy issues are satisfactorily addressed, undoubtedly the Internet will flourish. We need to protect our retailers and consumers as part of this process. The underlying message I would take out of this report is that we should be part of the change, not at arm's length, above all, and we should protect our sovereignty at all costs. I commend the report to the Senate.18:00:004000Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—I wish to speak on this report, Internet commerce—To buy or not to buy? I know that a number of our colleagues would also like to speak on this report, but there is a pressure of time here. My colleague Senator Hogg has made a number of the points that I would like to make, but I do believe that it is well worth stressing again the importance of this report. As Senator Hogg has said, this is the first time anything like this has been addressed by this government. We were advised in the hearings that not many other parliaments have actually tackled the issue as this report does.The first and principal reason was a concern that there might be a serious potential or already real loss of tax revenue through commerce on the Internet. It has certainly been interesting to find that the response of other countries and governments to our inquiry is strongly in praise of it, suggesting that it might be useful for other governments to be doing the same thing. There are a few points that I want to highlight. On page 4, paragraph 114 reads:The Committee's investigation of low value imported goods led to the first detailed study of the quantity, value and types of good entering Australia under the screen free limit. Australian Customs officials advised the Committee that this data would not have been collected were it not for the Committee's inquiry.Indeed, I think it is yet another case for why our parliamentary committee serves such an important purpose and properly can lead to different accountability from the bureaucracy. Here the Australian Customs Service point out that they have never provided this data, they have never done the research as they have never had to before and were provoked to do so by the request from our committee, the Joint Committee of Public Accounts and Audit. They have found it invaluable and will continue to do further research in that direction. So, apart from the data they provided, which Senator Hogg has referred to, the process of properly—I suppose I could say `managed'—addressed questions through the parliamentary committee process does serve the community very well indeed.Senator Hogg made a point regarding the data in this area. This report draws a bench line that says that data in this area is `wild to woolly', but at least we now have a report that points out how seriously insufficient the data is. From here maybe we will start to take steps to get some better data. The figures that he cited of, I think, 300,000 to 1.6 million users are slightly different from the page of data that I find in the same report that cites 500,000 to four million Internet users. I would suggest that the range between 500,000 and four million lacks precision. I am glad you laughed, Senator Parer; it is actually what I call heavy irony. But it indicates that by and large we have no idea.I am reminded that while we rush to make decisions about the Internet and information technology and concerns are raised about the potential for tax loss by commerce on the Internet, we also seem to forget that in many places in Australia people have no access to the Internet at all. Some will never have access because of the poverty of their own circumstance. Others will not because they have no access to the necessary cabling or infrastructure.I am reminded of a quote that I remember President Clinton gave when he addressed us here in the House of Representatives. He said that, while we can be concerned about the importance of information technology, we should not forget that something like 66 per cent of the world's population are two days walk from the nearest telephone. I think those figures would not accurately describe the number of people in Australia who lack access, but we certainly know that a significant number in our community do not have access. So, while we must be concerned at what is happening at the end of town that is very much involved in the area of commerce and trade, we must also be sure that we do not forget those people who do not have access. I turn to page 25, where the profile of a computer user is described. An average user is `male, tertiary educated, high income earning and aged between 20 to 49'. That is supposed to be data from June 1996 to December 1997. The next line or two down says:In the same period the user rate for females has increased from 12 per cent to 20 per cent.I join many people in this community who are concerned that this is another area that will discriminate against women. Government and parliaments must make the effort to ensure that computer accessibility is not yet another discrimination between haves and have-nots or, in this case, between men and women.The last point that I would like to make refers to a comment on page 20. It is evidence provided by Mr David Shetliffe in the transcript of 5 November. That is not the complete footnote, but if anyone wants it it is in the footnote on page 20 of this report. The evidence states:There are opportunities for retailers in rural areas to be more competitive, to access supplies at better rates and supply products to local consumers better than they currently can. By the same token, there are opportunities for city retailers to sell directly into country areas. Country consumers are likely to be beneficiaries of this kind of trade, and it will greatly increase the range of goods that they can get.I am currently chairing a Senate inquiry into regional unemployment. In a number of cases witnesses have been asked about the access to employment and trade and commerce through the Internet in rural and regional Australia. Most of the witnesses in rural and regional Australia have burst out laughing. They think it is very funny that we should consider the prospects of trade on the Internet when, as they say, they sometimes cannot even rely on their telephones working.So perhaps we should not overlook President Clinton's comments about the percentage of the world population that does not have access. In Australia, we should also be very concerned at the number of people in rural and regional Australia who have no access. If we build government policies or policies that might be designed to help rural and regional Australia but we do not have the basic facts and data about what is out in rural and regional Australia—or, indeed, in this case, what is not out there—we can make decisions that are very wrong.Finally I want to make some comments about a round table meeting we had of, amongst others, representatives from the tax office and the customs department, a small business representative from the fishing area, bank representatives and a major retailer. A number of points were raised at that round table meeting. The most important point, as far as I was concerned, was that all of the people there said that they had benefited enormously from it because, by and large, they never had the opportunity to talk to each other. This, of course, might be interesting if you are thinking about the private sector having a rare opportunity to speak to the public sector, but it is particularly interesting when you find one federal department saying that they rarely ever speak to another federal department. I thought that was a particularly interesting assessment. This is not to literally quote, but to paraphrase the benefits of this round table as I appreciated from the day.The other thing that was important was that all of these different departments and contributors used a different language. So, someone from Tax speaking to someone from Customs or someone from Customs speaking to someone from small business or the banking industry would need to be aware of the specificity of their language. Indeed, one of the benefits of that round table day was that a number of the people recognised those differences and difficulties that previously they had been completely unaware of.This is a very valuable and useful report, particularly in the data it has and the way it highlights what very significant further research and work needs to be done in this area. In commending the report, I seek leave to continue my remarks later.Leave granted; debate adjournedBills4002400218:09:004002O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—On behalf of Senator Ferguson, I present the report of the Economics Legislation Committee on the provisions of the Trade Practices Amendment (Country of Origin Representations) Bill 1998 , together with submissions and the Hansard record of proceedings.Ordered that the report be printed.Bills4002r413400218:09:004002O'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 Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 , together with submissions and the Hansard record of proceedings.Ordered that the report be printed.Parliamentary Zone400218:10:004002Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—In accordance with the provisions of the Parliament Act 1974, I present the following proposals by the National Capital Authority to carry out work within the parliamentary zone, together with supporting documentation: the establishment of an international flag display in the parliamentary zone; interim landscape works, Constitution Place, Parkes; introduction of parking restrictions along the West Block western car park access road, proposed on behalf of P&O Facilities Management; and introduction of parking restrictions at East Block car park, proposed on behalf of the National Archives of Australia. I seek leave to give notice of a motion relating to the proposal.Leave granted.KI4Parer, Sen WarwickSenator PARER—I give notice that, on the next day of sitting, I shall move:That, in accordance with section 5 of the Parliament Act 1974, the Senate approves the following proposals by the National Capital Authority:(a) establishment of an international flag display in the Parliamentary Zone;(b) interim landscape works, Constitution Place, Parkes;(c) introduction of parking restrictions along the West Block western car park access road, proposed on behalf of P&O Facilities Management; and(d) introduction of parking restrictions at East Block car park, proposed on behalf of the National Archives of AustraliaCommittees40034003400310000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—I have received a letter from the Leader of the Opposition in the Senate (Senator Faulkner) seeking a variation to the membership of a committee.Motion (by Senator Parer)—by leave—agreed to:That Senator McKiernan be appointed a participating member of the Rural and Regional Affairs and Transport Legislation Committee.Bills4003Message received from the House of Representatives agreeing to the amendment made by the Senate to the following bill: Australian Prudential Regulation Authority Bill 1998. Bills4003Message received from the House of Representatives returning the following bill without amendment:Financial Sector Reform (Consequential Amendments) Bill 1998. Bills4003r5444003Bill received from the House of Representatives.Motion (by Senator Ian Campbell) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.400318:13:004003Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That this bill be now read a second time.I seek leave to have the second reading speech incorporated in Hansard .Leave granted.The speech read as follows—The Taxation Laws Amendment (Landcare and Water Facility Tax Offset) Amendment Bill 1998 contains provisions which give effect to commitments in the Government's election statement, Reviving the Heartland , to "give farmers a choice between accelerated deductions for Landcare works under subdivisions 387-A and 387-B of the Income Tax Assessment Act 1997 (the act) or a tax rebate/credit set at the marginal tax rate of 34 cents in the dollar for qualifying expenditure".This is a significant initiative as part of the $1.25 billion Natural Heritage Trust to deliver the Government's objective of repairing past land and water degradation and achieving a faster, more effective shift to sustainable agriculture in Australia. Importantly, it provides an incentive for landholders to invest in works which are needed to ensure their future in agriculture and rehabilitate Australia's natural environment.The Government's policy objective in implementing the landcare and water conserving and conveying facility rebate is to assist low income farmers who, because of their low incomes, are most in need of assistance to invest in landcare works.Subdivisions 387-A and 387-B of the act contain provisions which allow certain taxpayers to claim income tax deductions for landcare expenditure and for expenditure on conserving and conveying of water respectively. Low income farmers who have a low effective tax rate have a much smaller incentive to invest in such works compared with higher income farmers who are likely to have a higher effective tax rate.This bill introduces an alternative tax rebate for low income farmers so as to improve their incentive to invest in landcare works. Taxpayers with taxable incomes of up to $20,700 a year will have the alternative of claiming a tax rebate in relation to eligible expenditure incurred from the start of the 1997-98 income year. There is a maximum rebate of $1,700 (based on expenditure of $5,000) for expenditure in a particular year that would otherwise be tax deductible under each of subdivisions 387-A and 387-B. This means the rebate can be claimed for up to $10,000 of eligible expenditure in any year if there is expenditure of $5,000 under each subdivision.The rebate for landcare expenditure is claimable in full in the year of the expenditure. This matches the treatment of the income tax deduction for such expenditure available under Subdivision 387-A. The rebate for expenditure on facilities for water conservation and conveyance is claimable equally over the three years beginning with the year of the expenditure. This matches the treatment of the income tax deduction for such expenditure available under Subdivision 387-B. In circumstances where taxpayers have chosen to take the rebate but have an insufficient income tax liability with which to absorb it, they will be able to carry forward the unused portion of their rebate.No taxpayers will be adversely affected by this measure. This proposed rebate provides an incentive for those taxpayers whose low taxable incomes would reduce the benefit of deductions to undertake new landcare and water conserving and conveying works. The economic benefit they can derive from the rebate reducing their tax liability can substantially exceed the benefit of taking income tax deductions at their marginal tax rate.The Government has set aside funding of $80 million over 4 years for the rebate. This funding will come from the Natural Heritage Trust Fund. There will be no additional compliance costs imposed on those taxpayers who wish to claim the rebate instead of the deductions otherwise available to them. They will simply have to maintain records of expenditure in the same manner as for the deductions.I commend the bill to the Senate.Debate (on motion by Senator Chris Evans) adjourned.Bills4004r5004004Bill received from the House of Representatives.Motion (by Senator Ian Campbell) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.400418:14:004004Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table a replacement explanatory memorandum and move:That this bill be now read a second time.I seek leave to have the second reading speech incorporated in Hansard .Leave granted.The speech read as follows—The Trade Practices Amendment (Country of Origin Representations) Bill is designed to restore public confidence in country of origin labelling claims.Persistent public complaints that many labels are misleading or dishonest have given consumers good reason to be sceptical about origin labelling claims. At the same time, recent court decisions have created confusion about the meaning of such commonly used terms as `Made in Australia' and `Product/Produce of Australia'. As a result, the market value of Australian origin claims has been eroded, to the point that producers and manufacturers are wary of making claims and many consumers are losing confidence in labelling altogether.The fundamental problem is obvious. Consumers want simple, clear and credible labels, based on consistent and reliable standards. Unfortunately, the Trade Practices Act 1974 does not provide such standards, only a general prohibition against false or misleading representations. The result has been shifting legal interpretations and general uncertainty. This legislation will address these problems and at last deliver clarity and confidence to labelling.The Trade Practices Act will be amended to establish, for the first time, a clear general test for country of origin labelling claims. This test will apply to all representations that goods are `Made in' a particular country. A separate, higher standard will be set for goods carrying the premium `Product/Produce of' label. To qualify for the `Made in Australia' label, a product will have to be substantially transformed in Australia and at least 50 per cent of the cost of producing or manufacturing the product must have occurred in Australia. The same test will, of course, apply to imported goods.These will be the minimum standards for goods to carry an unqualified claim of origin.The use of the substantial transformation test will align Australian law with international practice. Setting the threshold at 50 per cent will ensure that all goods labelled as `Made in Australia' will have the majority of their costs incurred in Australia.Some people may argue for a higher threshold but this would disadvantage many local industries always considered to be producing Australian products. These firms employ Australians and invest in Australia's future.Who would tell a person working at General Motors Holden or Ford that the cars they are making are not Australian, just because some of their components are imported ? Our trading partners do not hesitate to recognise these products as Australian; nor should we.A 50 per cent threshold recognises the integration of Australia into the global economy, and the realities of modern manufacturing. The test compares favourably with the regimes applied by other developed nations such as Canada, the United Kingdom and Japan. Indeed, Canada uses the same combination of a substantial transformation test supported by a content or value-added test.The Government recognises that consumers and producers also want to identify goods which are totally Australian or as near to it as possible.This legislation will restrict the application of `product of / produce of' labels to goods in which all significant ingredients or components, and all or virtually all production processes, have occurred in the country of origin.Local citrus growers, pork producers and other primary producers will be able to proudly label their products as `Product/Produce of Australia'. They will also know that products using a significant imported ingredient will not be entitled to the premium `Product of Australia' label.These statutory definitions underpinning the use of `Made in Australia' and `Product/Produce of Australia' claims are the core of the new policy framework for regulating country of origin labelling. However, these definitions alone will not always provide certainty or an outcome consistent with public expectations. In the past, efforts at reform have failed because the standards proposed have been rigid. An effective regulatory regime must be flexible as well as clear in its fundamental principles. Within the framework set by the legislation, the Government has made provision for further regulation in specific sectors if this is required. This flexibility does not compromise the strength of the fundamental standards being set for `Made in' and `Product/Produce of' claims. Further regulation will need to be consistent with the standards set by the Trade Practices Act. However, the framework will allow, where necessary, additional regulations to address circumstances in specific sectors. The food industry is an obvious case. Consumers often seek additional information on food products. The seasonal availability of ingredients, and the fact that some ingredients cannot be produced in Australia for climatic or other reasons, are distinctive characteristics of the industry. In light of these factors, the Government has asked the Australian New Zealand Food Authority to consider the need for such regulation in the food industry.Madam President, it is necessary to give the labelling regime the flexibility to address any irregularities which may arise. To protect the integrity of the regime, the Government has developed mechanisms which will allow key aspects of the general tests to be amplified by regulation. The method for calculating production or manufacturing costs, and the processes which may be included in the definition of a substantial transformation, could be refined through these provisions. In some cases, regulation could be used to confirm that unrealistic costs cannot be used to inflate Australian content levels. As it is not intended that unsophisticated processes, such as the conversion of concentrate to fruit juice, should qualify as a substantial transformation, the bill will allow for such processes to be excluded from the definition of substantial transformation. Appropriate public consultations will be required before such action is taken.Past proposals often sought to limit the range of permissible origin claims. This bill welcomes innovative marketing and will encourage the positive promotion of Australian content. One of its first effects will be to reinvigorate the well known and respected Australian Made logo which has fallen into disuse because of legal uncertainties and confusion generally about `Made in Australia' claims. This will deliver a real benefit to many Australian firms which, in the past, have relied on the logo to enhance their profile in the marketplace. The bill also includes provisions supporting new industry-based logos, encouraging further innovation.The changes proposed by the Government are significant and offer the only credible approach to a lasting solution of the issue. As an indication of its commitment, the Government has decided to implement a major public education and awareness campaign, supported by funding of $1.2 million in 1998/1999.The bill contains a number of miscellaneous amendments. Two of these amendments deliver major reforms promised in the Government's New Deal: Fair Deal package. One amendment will extend the ability of the Australian Competition and Consumer Commission to take representative actions on behalf of small business. The second amendment will provide for the appointment of a full time commissioner with a background in small business. Both amendments will enhance the capacity of the ACCC to assist small business.In conclusion, with this bill the Government is proposing an effective labelling scheme—a scheme which will set a realistic threshold for unqualified claims while supporting premium claims and industry specific marketing initiatives.Consumers will be able to buy Australian with confidence, knowing exactly what is meant by country of origin claims.Firms will be able to label with confidence, knowing exactly what tests they must satisfy to claim origin.I commend this bill to the Senate.Debate (on motion by Senator Chris Evans) adjourned.Bills4006r4054006Consideration resumed.18:15:004006Murray, Sen AndrewSenator MURRAY3M6WAAD00—We were in the situation where Democrats amendments 6 and 10, on sheet 951 revised, were deferred. My understanding is that the nature of the Labor Party's amendments are different in material respects to our own. Therefore my suggestion to the parliamentary secretary is that we move straight away to a vote on amendments 6 and 10. We can later consider the Labor Party amendments, which I think are a better position than the government's present bill, if my amendments go down. Parliamentary Secretary, perhaps you could react to that proposition.18:16:004006Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—That is my understanding. We had indicated that, with a slight bit of rewording, we would be in the position of not opposing the Labor amendment. Just to recap for the benefit of Senator Cook and his team: you will recall that before the debate on matters of public interest was called on we had indicated, as the government, that we would not be opposing your amendment, in a slightly revised form, and that that would be preferable to the Democrats amendment, which is currently under consideration by the committee of the whole. Senator Murray has indicated that we should perhaps proceed straight to the vote on his amendments, which I do not think he has high hopes for. He has also indicated he would be either supporting or not opposing the amendment you propose. I think that is the appropriate way to go. Senator Cook, your amendment would be the next one up should this amendment of the Democrats be defeated.18:18:004006Murray, Sen AndrewSenator MURRAY3M6WAAD00—For the benefit of Senator Cook, who has just come into the chamber, we are talking about items 6 and 10, on sheet 951 revised, to which I have spoken and to which we now wish to put the vote. Those particular amendments deal with the question of directors calling meetings.18:19:004006Cook, Sen PeterSenator COOKRF4WAALP00—Thank you for indulging me for my latecoming. My understanding is that we were going to move an amendment relating to the same subject as Democrats amendments 6 and 10.Amendments not agreed to.18:20:004006Cook, Sen PeterSenator COOKRF4WAALP00—I move:(1) Schedule 1, item 4, page 81 (after line 24), after section 249C, insert:249CA Calling of meetings of members of a listed company by a director (1) A director may call a meeting of the company's members. (2) This section applies only to a company that is: (a) incorporated in Australia; and (b) included in an official list of the Exchange. (3) This section applies despite anything in the company's constitution.The difference between my amendment and the bill is that my amendment covers public companies incorporated in Australia and listed on the official stock exchange.18:21:004007Murray, Sen AndrewSenator MURRAY3M6WAAD00—For the record, whilst this is a lesser version of ours—because ours attacked private companies as well as public companies—it is an improvement on the government bill and, accordingly, we support it.Amendment agreed to.18:22:004007Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:(11) Schedule 1, item 4, page 84 (line 4), omit "21", substitute "28".This amendment relates to whether the notice of meetings should be 21 days or 28 days. We commend the government's decision to increase it from 14 to 21; now the battle is whether it should be 28.There has been a long battle between those with a managerial philosophy who want decision making facilitated and those with a shareholder perspective who want time to consider the impact of board and management recommendations. Quite frankly, there are arguments on both sides, as the parliamentary secretary knows well.As a general rule, one would expect that, in any conflict between the two, it is investors and owners whose views should carry greater weight. The majority report summarised the arguments concerning section 249HL of the bill, which raised the required notice to be given for meetings from 14 to 21 days. The joint committee had previously recommended 28 days, which is an important point to note. Shareholder and investor groups continue to support the 28 days approach and the Australian Democrats see no reason to vary their support for 28 days.18:23:004007Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I think Senator Murray is quite right: there is a debate about this matter. When I first had to turn my mind to it, I had a number of conflicting views put to me. Some managers and directors are not overly opposed to 28 days because there are benefits in some respects. But a number of shareholders and shareholder groups are opposed to 28 days if they are trying to take action against a company and against directors and are trying to get something resolved. For example, if control of a company has passed and a group of dissident directors are quickly trying to organise an extraordinary general meeting, they want to move quickly. I know that, even under the current law, some groups of directors who have approached me believe that it is very hard to take action against directors who they believe are acting against the interests of shareholders.So if shareholders who believe that directors are acting against the interests of the company want to call an extraordinary general meeting, they have to go through the process of getting together enough minority shareholders to petition for an extraordinary general meeting and then have to wait 14 days. I think it is 14 days, but for the sake of the argument it does not really matter. The argument is that this is not a provision that is protecting directors from a meeting and that shorter periods are better for directors. Shorter periods are, for many minority shareholders, not a bad idea. They allow them to take action and get that action.I know that Senator Murray and people like Shann Turnbull—who try to promote shareholder activism, as I and the government do—would see that having to wait 28 days to have an extraordinary general meeting because of this new notice provision would be an eternity. I would like to put to bed the argument that having long notice periods is pro-shareholders and directors are opposed to it because it hurts them. Long notice periods can be quite harmful to shareholders trying to take action.The main source of support for 28 days is actually international funds. The push comes from people in Florida, and I am not saying this in a derogatory, xenophobic way. It comes from large international fund managers who would prefer to have 28 days because they are further away. I have put it to them—my friends from Florida, San Francisco and other places—that, with modern telecommunications and with the facilitation of electronic commerce that is in this bill and in the CLERP bills, the requirement for it is reducing as time goes by; it is not increasing.As with a number of these other matters, this does deserve further focus. Again, this was one of the amendments that was supported by the joint parliamentary committee in its initial inquiry. As you say, Senator Murray, the existing requirement is for 14 days. The government has extended it to 21 days. We thought that for the domestic mums and dads—which is the cliche of the 1990s—the mum and dad investors, who are the great bulk of shareholders in Australia, and even for institutions in Australia, so Australian institutional investors, 21 days is a 33 per cent increase on what they have at the moment. It is a long time for an institution, with all of their expert advisers on these matters, to make up its mind about how it is going to vote at an EGM or an AGM.But really the benefit you are trying to deliver is to foreign shareholders, and that is where I struck the balance. Twenty-one days is what we regard as a nice balance. Again, it is not something that I would seek to die in a ditch about or fight for the rest of my political life about. The government will oppose this. This is not one of the ones that we regard as a bit here or there. We do think that moving out to 28 days is quite a significant change: you are doubling the notice period. It is quite a significant change. The government at this stage remains opposed to 28 days.What I am prepared to say, however, is that I would be very pleased to see a bigger debate amongst the general corporate law community about 21 days versus 28 days. I have really not seen a lot of argument that favours 28 days. As for shareholder groups like the ACA and the Australian Shareholders Association, you cannot strongly oppose something like 28 days versus 21, but I know that the push for this comes from overseas because they want a bit of extra time in which to consider these things. That is a legitimate concern.When I try to balance these things, my general approach is to weight it in favour of the great bulk of shareholders in Australia and Australian institutions, who are not really worked up about whether it is 21 days or 28.There is a downside, Senator Murray, as you have suggested. The downside is it takes longer to get things done. I will reassert for the third time that it is a detriment to small shareholders who are trying to take action against directors who they believe are not acting in the interests of the shareholders. A case I have had put before me at least half a dozen times in Western Australia while I have been in this portfolio has been where a hundred shareholders want to get together and call an EGM because they think the directors are selling off company assets.Small shareholders come to me saying, `We are trying to get this EGM together; we want to stop these directors selling this mine'—or prospect or whatever—`but they are going to flog it off to someone else before we get to the EGM. Once we get to the EGM it is too late.' This is in a 14 day scenario. They have to get their petition together and organise the EGM and in the meantime these directors, they believe, are acting in this way. Longer notice periods can be to the significant detriment of small shareholders. I think we have found a balance. I am convinced about it, but it is something that could constructively be considered by the committee of which you are a member.18:30:004008Murray, Sen AndrewSenator MURRAY3M6WAAD00—Parliamentary Secretary, you do indeed put the case very well, because there genuinely is an alternative case. For the assistance of the committee I will quote from the Parliamentary Joint Committee on Corporations and Securities' November 1996 unanimous recommendation. This is what they said on notice of meetings:The bill proposes to increase the general notice period from the current 14 days to 21 days. Arguments were put that the period ought to be further extended to 28 days to enable overseas investors to cast a more fully informed vote. A 28-day notice period would seem to involve little additional inconvenience for the management of listed companies while providing shareholders, particularly foreign investors who, it was suggested, now own or manage 60 per cent of Australian equities, with a more realistic period of time to arrange for the casting of their votes.Senator Campbell properly puts the alternative argument. We heard this debate again at the second committee hearing in March. I thought it appropriate therefore to put it before the Senate as an issue of concern in view of the substantial number of significant public companies which are foreign owned and which have such a material impact on our stock exchange and our society. I would be interested to hear the views of the opposition.18:32:004009Cook, Sen PeterSenator COOKRF4WAALP00—Let me accommodate Senator Murray and, hopefully, the chamber with the opposition's views. In my speech in the second reading debate I emphasised that I thought the 28 day period was the appropriate period and referred to the unanimous cross-party recommendation of the original joint parliamentary committee review, to which Senator Andrew Murray has now referred. I also drew attention to the fact that the decision of the government to limit the time to 21 days has been criticised. You are right. My advice is that international investors are the source of that criticism. Looking at the world's major capital markets, the United States has a 30 day period, Germany has a 32 day period and France has a 30 day period.It is also my understanding that Dr Stephen Davis, the president of Davis Global Advisors of Newton, Massachusetts, wrote to you, Parliamentary Secretary, suggesting that, if the bill was passed in its present form, this measure would set Australia on a course that would place it behind the emerging international best practice of 28 to 30 days. That is where we are coming from.That seems to be a fairly reasonable amount of references to the time period. I do bear in mind the things that you have said. They are important. The question of shareholder control of companies is fundamental to our philosophy on this, and activist shareholders is pretty much the desired state of affairs. It is a question of whether the exception should make the rule or whether there are exceptions to a general rule that it is desirable to adopt. For those reasons, we will support the Democrat amendment.18:34:004009Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The opposition amendment would apply to listed companies. If the government is going to get stuck with this, we would prefer to support your amendment. The Democrat amendment, I think, applies to all companies. Would you be withdrawing your amendment? We would oppose both but in the end, obviously, when the bill goes back to the House of Representatives we will have to make up our mind as to what we can live with and what we cannot. On behalf of the government, I assure you that we would be a lot more comfortable with opposition amendment No. 2. I will vote against the Democrat amendment regardless, but we would be more comfortable with opposition amendment No. 2 than the one that Senator Murray is proposing.18:35:004009Cook, Sen PeterSenator COOKRF4WAALP00—Does Senator Murray's amendment cover private companies as well as public companies? If it does, I might have to commit the sin of simply supporting my own amendment and accepting the parliamentary secretary's proposition.18:35:004009Murray, Sen AndrewSenator MURRAY3M6WAAD00—Yes, it does, Senator Cook. I think the parliamentary secretary's proposed compromise meets very well the arguments he capably put and the arguments that you and I have put concerning international practice and the extent of international activity in our marketplace. I would be prepared to do that. I suggest we move to the vote on my amendment and then pick up the opposition's at a later date with the understanding that the government will support it.Amendment not agreed to.18:36:004009Cook, Sen PeterSenator COOKRF4WAALP00—I move:(2) Schedule 1, item 4, page 84 (after line 27), after section 249H, insert:249HA Amount of notice of meetings of listed company (1) Despite section 249H, at least 28 days notice must be given of a meeting of a company's members. (2) This section applies only to a company that is: (a) incorporated in Australia; and (b) included in an official list of the Exchange. (3) This section applies despite anything in the company's constitution.We have spoken on this matter. I do not need to speak any further.Amendment agreed to.Motion (by Senator Murray) proposed:(14) Schedule 1, item 4, page 96 (lines 8 to 17), omit subsection (4).18:37:004010Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—To speed up processes the government will not be opposing this amendment.Amendment agreed to.Amendment (by Senator Cook) proposed:(3) Schedule 1, item 4, page 96 (after line 21), after section 250B, insert:250BA Proxy documents—listed companies (1) In a notice of meeting for a meeting of the members of a company, the company: (a) must specify a place and a fax number; and (b) may specify an electronic address; for the purposes of receipt of proxy appointments. (2) This section applies only to a company that is: (a) incorporated in Australia; and (b) included in an official list of the Exchange. (3) This section applies despite anything in the company's constitution.18:37:004010Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate that the government will not be opposing opposition amendment No. 3.18:37:004010Murray, Sen AndrewSenator MURRAY3M6WAAD00—Just for the record, the Australian Democrats support this amendment.Amendment agreed to.Amendments (by Senator Murray)—by leave—proposed:(17) Schedule 1, item 4, page 99 (after line 14), after subsection 250J(1), insert: (1A) Before a vote is taken the chair must inform the meeting whether any proxy votes have been received and how the proxy votes are to be cast.(19) Schedule 1, item 4, page 99 (line 16), after "result", insert ", provided that the declaration reflects the show of hands and the votes of the proxies received".18:38:004010Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate that we will not be opposing Democrat amendments Nos 17 and 19.Amendments agreed to.18:38:004010Cook, Sen PeterSenator COOKRF4WAALP00—I move:(1) Schedule 1, item 4, page 99 (after line 21), after section 250J, insert:250JA Proxy documentsIn a notice of meeting for a meeting of the company's members the company: (a) must specify a place and fax number; and (b) may specify an electronic address;for the purpose of receipt of proxies250JB Disclosure of proxy votes(1) A company must record in the minutes of a meeting, in respect of each resolution in the notice of meeting, the total number of proxy votes exercisable by all proxies validly appointed and: (a) if the resolution is decided by show of hands, the total number of proxy votes in respect of which the appointments specified that: (i) the proxy is to vote for the resolution; and (ii) the proxy is to vote against the resolution; and (iii) the proxy is to abstain on the resolution; and (iv) the proxy may vote at the proxy's discretion; and (b) if the resolution is decided on a poll, the information specified in paragraph (a) and the total number of votes cast on the poll: (i) in favour of the resolution; and (ii) against the resolution; and (iii) abstaining on the resolution.(2) A company that must notify the Exchange of a resolution passed by members at a meeting of the company must, at the same time, provide to the Exchange the information specified in subsection (1). This amendment concerns proxies. I think the amendment is self-explanatory.18:39:004011Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—My advisers have told me that the opposition were not going to proceed with amendment No. 1 on sheet 1052. My advice was that the government had indicated to the opposition that we would be not opposing opposition amendment No. 3 on sheet 1055, which is an alternative. I indicate we would do that. I think procedurally, Senator Cook, you would be required to withdraw the amendment.18:40:004011Cook, Sen PeterSenator COOKRF4WAALP00—My advice now is that that is true. I, therefore, seek leave to withdraw the amendment.Leave granted.Amendment withdrawn.18:40:004011Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:(25) Schedule 1, item 4, page 102 (after line 19), at the end of Part 2G.2, add:Division 9—Election of directors250U Application of this Division (1) This Division applies to companies which become listed corporations after the commencement of this section. (2) All other listed corporations must: (a) at least 2 weeks but no more than 4 weeks before the next annual general meeting held after the commencement of this section, or at the second annual general meeting after commencement if there is insufficient time between commencement and the next annual general meeting, circulate a summary of the method of electing directors which is described in this Division, together with the opinion of its directors on matters relevant to the application of this method to the company; and (b) propose a resolution, at the next or second annual general meeting held after the commencement of this section (as the case may be), that the company elects that this Division apply to it. (3) Any resolution of a listed corporation which would result in this Division no longer applying to the company is invalid. (4) Nothing in this Division requires a company which was a listed corporation at the commencement of this section to propose a resolution at any annual general meeting, other than the next annual general meeting held after the commencement of this section, that this Division apply to the company, if the resolution under paragraph (2)(b) is defeated.250V Directors to be elected annually (1) All directorships of a company become vacant at the annual general meeting of that company. (2) The time at which directorships become vacant is immediately before the meeting proceeds to elect directors. (3) Unless precluded by the company's constitution, a person who has previously held a directorship of the company may nominate for re-election.250W Process of election (1) The election of directors must be conducted by a poll. (2) Each member of the company is entitled to the number of votes calculated using the following formula: V x S where: V is the number of directorship vacancies. S is the number of shares held by the member. (3) Members may cast their votes as they think fit in favour of any number of the nominees for directorships and members need not cast all of their votes.Democrat amendment No. 25 refers to the election of directors. I will briefly put the case, if I may. The existing method of electing company directors on a limited re-election pattern has been severely criticised for being undemocratic and unrepresentative and for denying the appropriate representation of minority interests. The current system of electing directors facilitates the dominance of control groups and lessens the possibility of support being expressed for particular directors. The result of this is that, for minority interests to be held, minorities must often rely on expensive and problematic remedies such as recourse to the legal system, the ASX rules and ASIC which reduces the attractiveness of investing, reduces genuine shareholder participation and facilitates fairly domineering managerial or board control.In order to avoid this situation, Shann Turnbull, who has been referred to before in this debate, and others propose a system of preferential voting, also described as cumulative voting, in listed companies for the election of directors in which all directors would be elected annually with each share obtaining as many votes as there are vacancies. In the United States this procedure is mandated as best practice by federal law for banks and for corporations in some states.To mandate this type of preferential voting for directors of listed companies the law would need to specify that the number of directors to be elected will be determined by the company's constitution, all directors would retire each year, each share will obtain as many votes as there were board vacancies and each shareholder could distribute as they thought fit all or some of the votes available to them from their shareholding to any number of those nominated as directors. The consequence of this optional preferential method is that shareholders can ascribe their votes to indicate their preference for a director or directors.Although the Australian Democrats believe that this system is desirable for all listed companies, we appreciate it may not be appropriate to require existing companies to change their constitutions. Accordingly, this recommendation applies to only newly listed companies, which we suggest should adopt this system. We also suggest that existing listed companies should be required to allow their shareholders to assess the new system and to vote on whether they wish to convert to it.This is another part of our governance proposals. This concerns a democratisation of companies. We believe this advances the corporate governance envelope. I anticipate the parliamentary secretary's response and I suggest to him, in view of his likely response, that, if this suggestion goes down, it could be referred to the committee as an appropriate matter to be considered and, what is more, considered with your blessing, not necessarily your support, but certainly your view that it should be viewed with concern.18:44:004012Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate that this is, undoubtedly as Senator Murray will admit, a very significant change in the voting method for directors, although it is well worthy of consideration. It would go forward to the joint parliamentary committee with my full blessing.18:44:004012Cook, Sen PeterSenator COOKRF4WAALP00—That assuages one of my concerns. We are sympathetic to this amendment, although we will not vote for it tonight. If the government will refer it to the Joint Parliamentary Committee on Corporations and Securities for consideration within the CLERP review, which is what I understand the parliamentary secretary to have said—he has just nodded in the affirmative; he has said that—then we will be satisfied that the virtuous parts of this amendment can be considered in that proper context. We support the government and oppose the amendment.Amendment not agreed to.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—We now move to opposition amendment 4, sheet 1055.Amendment (by Senator Cook)—proposed:(4) Page 104 (after line 4), after section 251A, insert:251AA Disclosure of proxy votes—listed companies (1) A company must record in the minutes of a meeting, in respect of each resolution in the notice of meeting, the total number of proxy votes exercisable by all proxies validly appointed and: (a) if the resolution is decided by a show of hands—the total number of proxy votes in respect of which the appointments specified that: (i) the proxy is to vote for the resolution; and (ii) the proxy is to vote against the resolution; and (iii) the proxy is to abstain on the resolution; and (iv) the proxy may vote at the proxy's discretion; and (b) if the resolution is decided on a poll—the information specified in paragraph (a) and the total number of votes cast on the poll: (i) in favour of the resolution; and (ii) against the resolution; and (iii) abstaining on the resolution. (2) A company that must notify the Exchange of a resolution passed by members at a meeting of the company must, at the same time, give the Exchange the information specified in subsection (1). (3) This section applies only to a company that is: (a) incorporated in Australia; and (b) included in an official list of the Exchange. (4) This section applies despite anything in the company's constitution.18:44:004013Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—We will not be opposing this.Amendment agreed to.18:45:004013Murray, Sen AndrewSenator MURRAY3M6WAAD00—I move:(34) Schedule 1, item 5, page 183 (line 26), at the end of subsection (4), add: ; and (d) whether, in the directors' opinion, the financial statement and notes are in accordance with this law, including: (i) section 296 (compliance with accounting standards); and (ii) section 297 (true and fair view).Democrat amendment 34 is on page 6 of revised sheet 951. It refers to the issue of the declaration on the financial statement. I suspect that this is another one on which the parliamentary secretary may have some strong opinions. The amendment actually says:whether, in the directors' opinion, the financial statement and notes are in accordance with this law, including: (i) section 296 (compliance with accounting standards); and (ii) section 297 (true and fair view).In our view it beefs up the nature of the directors' declaration regarding the company's financial statements and position. Accordingly, we commend it to the Senate.18:46:004013Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—We are not opposing this.Amendment agreed to.18:46:004013Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move:(35) Schedule 1, item 5, page 184 (after line 22), at the end of section 297 (but before the note), add: (2) If a public company operates in a foreign jurisdiction, a true and fair view under this section includes disclosure of any information that the company is required to disclose in that jurisdiction.(36) Schedule 1, item 5, page 185 (after line 21), after paragraph (1)(c), insert: (ca) if the entity is a public company that operates in a foreign jurisdiction—contain a summary of information that the company is required to disclose in that jurisdiction.(37) Schedule 1, item 5, page 185 (line 31), at the end of subsection (1), add: ; and (f) if the entity's operations are subject to any particular and significant environmental regulation under a law of the Commonwealth or of a State or Territory—details of the entity's performance in relation to environmental regulation.(38) Schedule 1, item 5, page 185 (after line 31), after subsection (1), insert: (1A) The directors' report must also include an analysis of information reasonably necessary to understand the overall financial position of the company, registered scheme or disclosing entity, including: (a) results of operations (both overall and in key industry and geographical segments); and (b) key strategic initiatives adopted; and (c) major commitments entered into and sources of funding for those commitments; and (d) unusual or infrequent events or transactions; and (e) likely future developments in the business; and (f) trends or events (both internal and external) that have had a significant effect, or are likely to have a significant effect, on the business.(39) Schedule 1, item 5, page 186 (after line 17), before paragraph (a), insert: (aa) the policies of the directors for determining the remuneration (including any incentives) of the directors and senior executives, and the relationship of these policies to the performance of the company;(41) Schedule 1, item 5, page 187 (line 8), after paragraph (g), insert: ; and (h) whether, during the reporting period, any proceedings were instituted against the company for any material breach by the company of the Corporations Law, or trade practices law, and, if so, a summary of the alleged breach and of the company's position in relation to it; and (i) whether, during the reporting period, any proceedings of the kind mentioned in paragraph (h) were concluded or settled and, if so, the terms of the conclusion or settlement.These amendments are also on page 6 of revised sheet 951. They refer to the question whereby a company operating in a foreign jurisdiction may in fact have information disclosed which is relevant to Australian shareholders or Australian authorities. Amendment 35 refers to a public company operating in a foreign jurisdiction, and says:If a public company operates in a foreign jurisdiction, a true and fair view under this section includes disclosure of any information that the company is required to disclose in that jurisdiction.Amendment 36 refers to a public company operating in a foreign jurisdiction, and says:If the entity is a public company that operates in a foreign jurisdiction—contain a summary of information that the company is required to disclose in that jurisdiction.I do want to draw amendment 37 to your attention, if I may. I was racing along a bit with the others even though they are very relevant, but amendment 37 says:If the entity's operations are subject to any particular and significant environmental regulation under a law of the Commonwealth or of a State or Territory—details of the entity's performance in relation to environmental regulation. It says that details of the entity's performance in relation to environmental regulation should be included. The reason we do that is not just our well-known attachment to environmental matters, but the fact that many companies are materially affected financially in terms of environmental situations. I think we only have to recall some of BHP's financial consequences for environmental matters to be well aware of that.I draw to the attention of the Senate two documents which are relevant. The first is Hugh Morgan's recent environmental progress report. Mr Morgan is Managing Director of WMC Ltd. It is a very commendable exercise by one of our major corporations to try to respond in a businesslike, practical and responsible manner to the very serious environmental issues which affect his company. He has produced this report voluntarily.There is another publication which I want to refer the Senate to. It is published by the chartered accountants in Australia. This is not some radical group; this is a very careful body. The publication is called Leadership. It is a discussion paper which was issued in January 1998, so it is current. It talks about the impact of environmental matters on the accountancy profession. A number of statistics are quoted in there. It says that more than two-thirds of users seek disclosure of environmental information in the annual report. It says that less than 10 per cent of preparers see environmental reporting as a threat to their company—in other words, they are not concerned about it. It says that 50 per cent of preparers do not support mandatory disclosure. That probably helps the argument that you are about to put, Senator Ian Campbell. It said, however, that 64 per cent of users would support an approach to have environmental matters included in annual reports.In summary, that is the intention of amendment 37. It is very particular. It says that if the entity's operations are subject to any particular and significant environmental regulation under a law of the Commonwealth or of a state or territory, details of the entity's performance should be included in the report. Given the nature of our environment, we think that is an important one to include.The other amendment I must refer to is amendment 41, which comes from a recommendation—you will recognise the recommendation, Parliamentary Secretary—in the report of the 1996 Joint Parliamentary Committee on Corporations and Securities on the draft bill. The amendment says:(h) whether, during the reporting period, any proceedings were instituted against the company for any material breach—not a minor breach; a material breach— by the company of the Corporations Law, or trade practices law, and, if so, a summary of the alleged breach and of the company's position in relation to it; and(i) whether, during the reporting period, any proceedings of the kind mentioned in paragraph (h)—which is the paragraph I just read— were concluded or settled and, if so, the terms of the conclusion or settlement.All those points I have laid out there will improve the nature of reporting which materially affects the value of shareholders' interests in companies and they have been carefully considered by a number of authorities and bodies. We therefore commend the amendments to the Senate.18:52:004015Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—As I understand it, we are dealing with amendments Nos 35 to 39 and amendment No. 41. Amendments Nos 35 and 36 are to do with foreign disclosure. These are matters I referred to in my closing of the second reading debate. They do add significant compliance costs to companies, but, most importantly, as I said in that speech, they do throw away sovereignty from Australia. Basically, if the SEC says `Thou shalt do this,' to the handful of Australian companies listed on the New York Stock Exchange—roughly 2,000 or thereabouts—then they would be required to report to their shareholders in Australia, information which may be entirely irrelevant to their shareholders.The reality is that the information that is required to be placed before shareholders on a foreign bourse is usually readily available thorough their databases. Certainly the information that is required to be disclosed to the New York Stock Exchange and to the SEC in the United States is available to anyone who wants to access it via the New York Stock Exchange's database—which has got an interesting acronym: it is called EDGAR—which is regarded as one of the most elaborate, accessible, successful information databases on the globe, I am told by the Americans who designed it.RF4COOKSenator Cook—Did they invent `EDGAR' and then fit the words to it?H15Campbell, Sen IanSenator IAN CAMPBELL—I do not know. I am sure means something like electronic data gathering and retrieval—how does that sound? Anyway, the Yanks say that it is a very good database. I am sure that the Australian Securities Commission would argue that theirs is even better, I am sure that the information technology industry thinks that they could come up with something better if you could pay them a few million dollars, and I am sure that, with the year 2000 approaching, EDGAR will have to be reinvented and improved for the new millennium.That is the problem with foreign disclosure. I think that the broad concept is not such a bad one, except that it does create unnecessary paperwork. It is not as simple, as Senator Conroy said this morning, as basically folding an envelope and sticking a stamp on some letters to some Australian shareholders. If you have to report something, you are actually requiring that information to be put in the annual reports. Of course, the information that is available through EDGAR or through the foreign bourses' data information and retrieval systems, be it in Europe or in the Unites States—the two main places where Australian companies list—or in Canada, for example, that is available instantaneously if you need it.The requirement of this amendment, as I understand it, is that it be put in the annual report. That would mean that the Australian shareholders would get that information up to eight months after the event occurred or after that disclosure was made, whereas, if they accessed it through the Internet or other electronic means, they could get it instantaneously. So we think that is the concern. The government is strongly opposed to this amendment. On the environmental law, I simply say that we believe strongly that the requirements of compliance with environmental law should be in environmental laws and not in the Corporations Law.In relation to the management discussion and analysis, again, I focused on that in the second reading debate, and I suggest that the approach that has been agreed by the Australian Stock Exchange be allowed to work. I do not know whether they have written to all people contributing to this debate, but I would be very happy, with the leave of the Senate, to incorporate in the Hansard letters that I have received, including one from the Managing Director of the Stock Exchange, Richard Humphry, who has outlined how they will be going about bringing in MD&A.I might just quote from that letter. It says that a working group has already been established. In fact, prior to the government's discussions on this matter, a working group was established with members of the Group of 100—for the information of the Senate, that is a group made up of the financial controllers and directors of the top 100 companies in Australia. The Group of 100 has been the strongest advocate of MD&As. It is on this working group, as is the ASX, the Institute of Company Directors, the Business Council, both of the accounting bodies, and the Securities Institute. The working group is working on a best practice guide, to be completed by the end of September, which will be incorporated under ASX listing rule 4.10.3.The letter goes on in some detail. They were going to do an annual review of that. I suggested to Mr Humphry and to others interested in this that it would be good to do a detailed and open public examination and report on the level of compliance with this best practice under listing rule 4.10.3 and to make a public report. I would be very happy if it were possible to get the agreement of the Senate to keep the MD&A out of federal law and allow it to operate through the self-regulatory organisational level of the Stock Exchange to ensure that that report was made at least to the Treasurer and that the Treasurer would undertake to table that report—not that I can commit the Treasurer to do that, but I would be certain that the Treasurer would not be opposed to doing that.I will therefore seek leave to incorporate that letter from Richard Humphry; a letter from IFSA, the Investment and Financial Services Association, again, strong proponents of MD&As who are pleased to see it going into the ASX rules rather than federal law; a letter from Bryce Denison, the National President of the Group of 100, saying that they are working constructively with the ASX to develop the best practice guide and that they see this as the appropriate way to proceed as opposed to seeking that it be put in the law; and, finally, the letter which has been quoted from extensively by Senator Sherry and others from the Securities Institute of Australia, which is making it quite clear that they would like to see it in the listing rules but would like to see it reviewed.The government would like to see it reviewed. We want to see it reported on. We would like to see a report from the Stock Exchange on compliance. We would like to see it as a matter of national debate. The threat hangs over these organisations that, if they do not make MD&As work through a self-regulatory way, the threat of federal legislation hangs over them. I think very few people in industry, particularly shareholder groups, would regard that the way that it is being proceeded with through the Stock Exchange mechanism is far more desirable than that proposed by the Democrat amendment. I seek leave to incorporate those documents in Hansard.Leave granted.The documents read as follows—ASXAUSTRALIAN STOCK EXCHANGEOffice of the Managing Director29 May 1998Senator The Hon. Ian CampbellParliamentary Secretary to the TreasurerParliament HouseCANBERRA 2600 By facsimile: (02) 6277 3958Dear SenatorManagement Discussion and Analysis (MD&A) ASX is currently participating in an MD&A Working Group which is preparing a comprehensive Statement of Best Practice in relation to `Review of Operations and Financial Condition' (which is similar to what MD&A is referred to as in the United Kingdom). The Working Group consists of representatives from the Group of l 00, ASX, Institute of Company Directors, Business Council of Australia, Australian Society of CPAs, Institute of Chartered Accountants and the Securities Institute of Australia. The Working Group is expected to complete its work by the end of September.As you are aware, ASX has a listing rule (4.10.3) which requires listed entities to include in their annual reports a statement of the main corporate governance practices that the entity had in place during the reporting period. This is supported by Appendix 4A to the Listing Rules which sets out an indicative list of corporate governance matters that an entity may take into account in making its disclosure. To assist listed entities meet their obligations under listing rule 4.10.3, ASX has recently published a Guidance Note which is subject to regular review. When the Working Group has finalised the MD&A statement of best practice, ASX is prepared to adopt it as part of Appendix 4A and a revised Guidance Note. The ASX conducts a formal review of responses under the listing rule for corporate governance and would take appropriate action if necessary.This best practice approach to MD&A is consistent with the approach which ASX has taken on corporate governance in general and which has been the subject of submissions to various Parliamentary Committees. It is also consistent with the approach adopted in the United Kingdom whereby the `Operating and Financial Reviews' is a non-statutory statement of best practice issued by the Accounting Standards Board and recommended by London Stock Exchange, Financial Reporting Council and the Hundred Group.Yours sincerelyRichard G HumphryMANAGING DIRECTOR & CHIEF EXECUTIVE OFFICERSECURITIES INSTITUTEOF AUSTRALIA29 May 1998Senator the Honourable Ian CampbellParliamentary Secretary to the TreasurerParliament HouseCANBERRA ACT 2600Dear Senator CampbellManagement Discussion and Analysis I refer to our discussion regarding a possible Listing Rule being introduced by the Australian Stock Exchange (ASX) to provide for listed companies to report to shareholders through management discussion and analysis (MD&A) under the corporate governance reporting requirements currently contained in those Listing Rules. We understand that the ASX proposes to introduce such an amendment at the earliest opportunity following finalisation of a Statement of Best Practice in September and that you will support this approach.The Securities Institute of Australia has long been a supporter of the requirement for listed companies to report to their shareholders through an MD&A requirement. We are satisfied that the introduction of this requirement into the Listing Rules with your agreement will be an advance on current reporting requirements and should be supported. By having an express requirement, companies will be on notice that the market will be assessing the quality of their reporting in this area and factoring that in to their assessment of those companies.With this in mind, if the Listing Rules provide for MD&A, we do not believe it is necessary at this stage to include a legislative requirement in the Corporations Law. However, we believe the record of compliance by listed companies with the requirement should be reviewed within two years of its introduction. Of course, if the review shows a poor record of compliance, the need for a legislative requirement would need to be revisited.We are copying this letter to the Opposition and the Democrats.Yours sincerelyJohn Garrett SIA (Aff)National Policy ManagerGroup of 100 Inc.29 May 1998Senator the Hon Ian CampbellParliamentary Secretary to the TreasurerParliament HouseCANBERRA ACT 2600Dear Senator CampbellThe Group of 100 is concerned about the delays in the passage of the Company Law Review Bill 1997, particularly as it applies to concise reports and equity accounting.We believe that the delays, particularly in respect of concise reports, will seriously disadvantage companies because these proposals promise significant cost savings to companies and their shareholders while enhancing the communication process. The Group of l00 has lobbied the Australian Accounting Standards Board to give a high priority to the preparation of an Accounting Standard to expedite implementation as soon as practicable after the proposals become law.We have previously written to you and the Joint Parliamentary Committee regarding the directors' report—discussion and analysis to express support for its inclusion in the Bill. The Group of 100 initiated Working Party is presently finalising a Statement of Best Practice and expect that it will be endorsed by the participating organisations, including the Australian Stock Exchange (ASX). We are also hopeful that the ASX will incorporate a reference to the Statement in the Corporate Governance section of its listing rules. We currently see this as a positive outcome of co-regulation.We have noted the Senate debates on these aspects of the Bill and believe that it would be unfortunate for the benefits to companies and their shareholders of issuing concise reports and adopting equity accounting are further delayed as a result of further debate about the Director's report proposals.We think that the issue of a Best Practice Statement supported by the ASX is a positive outcome in these circumstances and accordingly seek early passage of the Bill in its present form.Yours sincerelyBryce J H DenisonNational PresidentIFSASenator the Hon. Ian CampbellParliamentary Secretary to the TreasurerParliament HouseCANBERRA ACT 2600Facsimile: (02) 6277 3958Dear Senator CampbellManagement Discussion and Analysis (MD&A)As you are aware, IFSA has supported the mandatory inclusion in company annual reports of a general management discussion and analysis. We have, in fact, proposed that an amendment to this effect be incorporated in the Company Law Review Bill 1997.I am pleased, therefore, to hear that the ASX has indicated its preparedness to adopt, upon its completion, the best practice standard for the MD&A Statement, now under consideration by the industry working group. I understand that the working group expects to finalise an MD&A Statement best practice standard by about September 1958, at which time the ASX will adopt it as part of Appendix 4A to the Listing Rules and also as part of a revised guidance note to assist companies with the relevant Listing Rule. This is a welcome development as far as IFSA is concerned. We are of the view that this is a matter which is more appropriately dealt with by amendment of the ASX Listing Rules than by amendment of the Corporations Law.Yours sincerelyLynn RalphChief Executive OfficerRF4COOKSenator Cook—I want to make the point that the usual courtesy is to exchange correspondence. It has not happened; I am not going to complain about it. But I make that point in case someone wants to hold my colleagues to ransom on this matter later.19:03:004018Murray, Sen AndrewSenator MURRAY3M6WAAD00—Mr Temporary Chairman, it seems to me that amendment 39 should sit with amendment 40. Might I suggest that amendments 39 and 40 be dealt with together so that we look at 35 to 38.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—Senator Murray, you seek to postpone 39 to be dealt with 40 and you want to deal with 35 to 38 and 41 together. As I understand it, there is a request from Senator Harradine with regard to putting 41 as separately. I propose to put the question on that amendment separately.19:04:004018Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I ask whether the mover would consider dealing with 35 and 36 together, and 37 separately and perhaps 38 separately. As I understand it, amendment 38 seeks to insert a new subsection 299(1A), which adds a further requirement for the directors' annual report to include a full report of the financial affairs of the company. This is a question to both government and Senator Murray: is it not a fact that this sort of information is what one would normally expect to find in a company's audit report and/or the shareholder's prospectus in any event? There is some doubt as to whether the provision is really necessary.I am wondering what the government is proposing to do on this particular matter. Does it feel that this is necessary, or is it going along with this amendment? I am just wondering under those circumstances, frankly, in the government's view and in Senator Murray's view, whether it is really necessary since it would be the ordinary case that this information would be available in the audit report or the shareholder's prospectus.19:06:004019Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—The concept of a management discussion and analysis is a narrative report on the prospects of the company, which many successful Australian companies already put in annual reports but many do not. A lot of corporate governance experts believe it is a very useful guide to shareholders about the future prospects of a company. The proposal here is to make it a mandatory requirement for all large Australian companies. By `large' I do not mean big listed companies; I mean virtually everyone who has more than 50 members. I think that is the small/large test. This would apply to basically every reporting entity. Everyone who has to write an annual report would be required to put this in. So it would affect a lot of small and medium sized businesses.I think the Labor amendment, from memory, might restrict it to listed companies, which is obviously better. But the approach that we have pursued—firstly, in my rhetoric and, secondly, in the policy statements I have made on behalf of the government—is that the industry should be pushing these.We should have groups, such as the Group of 100, company directors and the IFSA, preceded by AIMA, encouraging the use of MD&As. The Stock Exchange, in response to that encouragement some months ago, Senator Harradine—through you, Mr Chairman—pulled together a working group of those sorts of groups that I have mentioned, with a view to forming a set of best practice guidelines to be incorporated under one of the ASX listing rules; 4(10)(iii) is the specific listing rule.Subsequent to forming that working group, the ASX has made a commitment to me in writing—which I have just incorporated in the Hansard—stating that it will incorporate this best practice guide and it will be reviewing it. I have asked the ASX, and it has agreed, to undertake an inquiry and make a report on the level of compliance with the requirement to do an MD&A and the effectiveness of it. In other words, is it actually improving corporate governance, is it helping shareholders make decisions and is it helping with the governance of our corporations? The ASX has stated that it will make that report, and make it a public report after two years of operation. We think that is a very commendable approach.There is no doubt that out there in the ether there is this strong threat of federal imposition of MD&A, and the reality of that is that we are sitting here in the Senate, talking about it right now—and they are cognisant of that. So there is a strong incentive for them to make it work, and there is a strong incentive for companies to have a serious look at making MD&As a part of their normal reporting process.The value of having it done through listing rules and having groups like the G100, the accounting bodies and the Securities Institute—who, again, are very strong supporters of an MD&A—oversighting it is that they can adjust the requirement in the listing rules. If after the first year of annual reports it is proved that the way the listing rule is framed it is not producing the results or that people are confused about it, then the flexibility exists for this working group to alter the listing rule to make it more sensible, make it more understandable, make it more effective. That is the benefit of it—it could be changed every six months, it could be changed every three months. We think that is a much more effective way to travel on MD&As.19:10:004019Murray, Sen AndrewSenator MURRAY3M6WAAD00—I would respond to Senator Harradine. The management discussion and analysis section of annual reports has been around as an issue for quite some time. It was the second Corporate Law Simplification Bill 1996 report from the joint committee which recommended that there should be an MD&A, as it is called, of the matters that members need to be informed on if they are to understand the overall financial position of the company.The parliamentary secretary is quite right in indicating that things have moved on, and the ASX is now in a position to present and to recommend a listing section. However, it is not true that there is universal acceptance of ASX's proposal, even though that is strongly advocated by it and strongly supported by some bodies. We did, in the most recent hearing, have a number of organisations—including the Australian Accounting Research Foundation—which felt that the MD&A was necessary in the bill; in particular, they felt it was necessary because it is a characteristic of major capital markets, such as the United States, the United Kingdom and Canada.The point that the parliamentary secretary is making is that the professional bodies all do agree that there should be an MD&A, and so does the ASX, but they want it to be voluntary. As I understand it, the ASX has made it clear that it is not a requirement to include MD&A, but its listings guide would be a matter of guidance. That is what concerns me, because it is my belief that an MD&A should be obligatory. It is vital that shareholders receive a minimum checklist of information required. That laid out in my amendment item 38, Senator Harradine, comes out of the deliberations of the joint committee—it is not something I have invented—and has wide support.If the bill had said, `Look, either you must have an MD&A of this kind, or you must do the ASX's listing,' I would have been more inclined to the parliamentary secretary's view. But it does not do that; it leaves it open, unless the ASX listing is abided with by the company. Where Senator Cook's amendment goes is to limit the MD&A only to publicly listed companies, whereas the MD&A requirement we have put is to a company of a certain size and up.That is a legitimate debate, but I have never understood why corporate entities of 50 or more should not still have to provide fundamental material, such as results of operations, key strategic initiatives and major commitments to their shareholders—even if it is 50 people. So, if you like, I take a fairly maximalist view, the Labor Party takes a view in between and the government takes a fairly flexible and open market view.Once again, it is a case of there being good arguments on a number of sides. But, at this juncture, I am not persuaded that the lack of an MD&A would not result in some problems for shareholders in the nature of reporting.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Murphy)—The question is that amendments 35 and 36 be agreed to.Question resolved in the negative.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I now propose that we consider Democrats amendment No. 37.19:15:004020Cook, Sen PeterSenator COOKRF4WAALP00—I have been sitting here listening to the ebb and flow of this discussion, but it is about time I came out of the closet and declared where I stand on some of these things. We did not support amendments 35 and 36 moved by the Democrats because we have got our own amendment No. 7 which we think covers that situation. We share with Senator Harradine, who raised the question about Democrat amendment 37 being dealt with separately, agreement that it should be dealt with separately. But on Democrat amendment No. 37 I would like to hear a little more argument, if I may.Let me indicate our view. In principle we can accept that amendment, but I am not sure that I understand the practical application of it. It is on the point of how practically it would operate that I would appreciate a little more background. It might be that we would therefore want to more explicitly word the amendment. Let me tell you what my problem is. Firstly, the idea of companies reporting about significant environmental regulation in their reports is an appropriate thing, we think. It would seem to me that what is being required here relates to a significant or a particular environmental regulation. I am not quite sure how you define `significant', though I am pretty sure how you might define `particular'. Leaving that aside for the moment, the details of the company's performance in relation to that regulation would be set out. This is self-assessment, I assume, in that they would set out in their report what the regulation was and describe in the first person for themselves how they believe they have performed up against that regulation.H15CAMPBELLSenator Ian Campbell—What happens if they don't?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Campbell, you can ask your question when it is your turn.RF4Cook, Sen PeterSenator COOK—Let me take the interjection, through you, Mr Temporary Chairman, because it does help the debate. What happens if they do not do that or if they do not do that adequately, given all the MD&A emphasis we have put on this debate thus far. My problem is that I do not disagree with the idea but I am still looking for how it will actually work effectively. That is what I would appreciate some more words on. Moving to amendment 38—19:17:004021Murray, Sen AndrewSenator MURRAY3M6WAAD00—Mr Temporary Chairman, we have three minutes left. Is that correct?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—That is correct.3M6Murray, Sen AndrewSenator MURRAY—Perhaps we should just deal with No. 37 and clear that out of the way. We can come to No. 38 tomorrow when we resume the debate, if that is satisfactory with you, Senator Cook.RF4COOKSenator Cook—Yes.3M6Murray, Sen AndrewSenator MURRAY—I was informed primarily in my approach to this matter by the document I outlined earlier to the Senate, which is a very good document by the chartered accountants in Australia on the impact of environmental matters on the accountancy profession. Simply put, modern environmental law, where it is significant and material—I do not mean specifications to do with a scrubber and a stack—can result in substantial consequences to corporations. We think it is appropriate, and so do the accountants, that it is reported on. You picked up the words `particular' and `significant'. I too had that debate with the draftsperson who put this together. There are some difficulties with it. Again I would suggest, with the support of the parliamentary secretary, that if this was to go down this element should be referred to the committee for examination. I do not believe it has been examined fully before.19:19:004021Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I indicate that I would be happy for the parliamentary committee to examine it. In principle, I would have thought that if there is an environmental regulator you would need to be responsible to that regulator.Progress reported.Adjournment402110000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—Order! It being 7.20 p.m., I propose the question:That the Senate do now adjourn.402119:20:004021Abetz, Sen EricSenator ABETZN26TASLP10—The decision by Labor and the Greens to block the proposed Wesley Vale pulp mill in my home state of Tasmania approximately a decade ago is now having horrendous social, environmental and economic consequences. The cheap political strategy of the time by Labor, in concert with the myopic Green movement, those 10 long years ago is unfortunately just a blur in the corporate memory of my fellow Tasmanians. But, as we consider the opportunities of the magnesite mine in Tasmania and other issues facing this nation, we need to reflect on and learn from the Wesley Vale experience.As a direct result of the actions of Labor's environment minister, Senator Graham Richardson, and the Greens' Christine Milne, we have had in Canberra this week a delegation of workers struggling to keep their jobs—they and 200-plus of their fellow workers now face unemployment. What happened those 10 years ago? A proposal to build a world-class paper pulp mill at a cost of $1 billion was announced. Christine Milne, now the Leader of the Greens, made her public debut and launched her political career fighting the proposal. Aided and abetted by Labor, she won.Senator Murphy interjecting—N26Abetz, Sen EricSenator ABETZ—Senator Murphy seems to be proud of Labor's achievement in scuttling the Wesley Vale mill. I simply ask, at what price?There are two devastating costs of this Labor-Greens victory. Firstly, environment ally, the decision was a disaster. The mill would have processed timber from a sustainable and environmentally friendly source. Further, the mill would have been a state-of-the-art plant, emitting minimal waste—less waste than all other comparable mills in the world. Remember the Greens' slogan? `Think globally, act locally'. They thought politically and acted selfishly, because by their actions they ensured the ongoing success of the mill elsewhere in the world, belching out its pollution. They preferred that to the clean mill which was proposed; they were hardly thinking globally. Further, the timber supply for other world pulp producers does not necessarily hail from a forest industry culture as meticulous and concerned about sustainable environmental practices as is Tasmania's.The Burnie pulp mill has been struggling for a long time. It needed new plant and equipment. Amcor, unfortunately, have not seen their way clear to provide that necessary investment, and they have therefore decided to close the mill. I trust they will change their mind. If we had had Wesley Vale up and running we would at least be using Tasmanian product and manufactured pulp in Burnie for the production of paper. Instead, we now face the very real prospect that the Burnie paper mill will be using pulp made from the rainforests of Indonesia—where there is no forest practices code or regional forest agreement, where there is not 40 per cent of the land mass set aside for reserves, and where there are not comprehensive and adequate reserves as there are in Tasmania; not to mention reafforestation.The Greens' actions will lead to extra market opportunities for Indonesia's rainforests and, ultimately, to their destruction. That is not a good environmental outcome, let alone a commonsense outcome. The Greens' lack of vision has allowed an old polluting mill to be favoured over a clean mill. Their lack of vision will now favour product from the unsustainable harvest of Indonesian rainforest over product from Tasmania's sustainable and well-regulated forests. Their actions are as environmentally destructive as they are socially and economically destructive. That is the second great cost of that politically motivated and short-sighted decision of Labor and the Greens taken all those years ago.For a small population of less than half a million people, a $1 billion investment would have been huge—in anyone's language. The benefits for jobs in construction, maintenance and supply would have had an ongoing, beneficial flow-through effect for our Tasmanian economy. The presence of such a mill would have been a great confidence boost to the people investing in the forest industry but, more importantly, it would have provided opportunities and security for the workers and their families and for local timber communities and towns. The potential benefits of all those jobs and of downstream processing were denied to our fellow Tasmanians. Their wellbeing was sacrificed on the altar of political expediency.Instead of having a world-class pulp mill, we are watching the demise of Burnie's pulp mill and, more importantly, the loss of many jobs, which will undoubtedly have the devastating flow-on social consequences of bankruptcy, mortgagee sales and family breakdowns. What is tragic is that people like Christine Milne and Graham Richardson built their so-called political careers and notoriety on the back of a decision which they must have known would have this devastating social impact. The so-called victory was cheap; the cost was very expensive indeed. That type of irresponsible, short-term politicking has devastating long-term consequences.I hope and pray that Tasmania will not be subjected to a similar campaign by Labor and the Greens on the proposed magnesite mine development in north-west Tasmania. The proposal is exciting and promises employment in a range of fields, together with real potential for downstream processing. Reject this magnesite mine proposal and you reject the aspirations of hundreds of Tasmanian workers and their families who desperately need employment opportunities. Reject this and you deny the state government desperately needed revenue for the provision of services to Tasmanians. Reject this and the prospect of another major development will be denied for another decade—with all the devastating consequences that involves.The effective and hardworking member for Braddon, Chris Miles, needs to be congratulated on his effective leadership on jobs. Under the previous Labor government, Amcor shed hundreds of jobs from its Burnie operations. Tioxide closed, with a loss of 200 jobs. What was Labor's response? Absolutely nothing. In stark contrast, after the recent announcement of job losses at Burnie's pulp mill, what did Chris Miles and the Liberal government do? Within 48 hours a cabinet subcommittee was in the city of Burnie, listening to the workers' and the community's concerns and aspirations. They are now preparing an assistance package—a response.For the magnesite mine proposal, Chris Miles initiated a visit by Senator Parer, Minister for Resources and Energy, and organised a public meeting to form a support group for this exciting development. That sort of proactive, pro-jobs initiative of Chris Miles and this government is what government should be all about: helping workers, families and communities. In the Mersey-Lyell region, which covers the electorate of Braddon, the employment trend collapsed by 11 per cent under Labor between 1989 and 1996. It is now rebuilding at six per cent and that is a substantial rate, but Chris Miles, our Tasmanian colleagues and I realise it needs to be increased.As the Tasmanian delegation which is here fights for jobs and a future—a fight which I fully support—it is important to cast a backward glance and remind ourselves what necessitated their visit. I trust the workers, their families and communities will understand that today's problems are the product of the Labor and Greens collusion those 10 years ago.Could I invite the workers and their families to help Labor and the Greens to understand their rejection of those tactics by rejecting Labor and the Greens at the next election? Job opportunities are the top priority for me, as they are for Chris Miles and my Liberal colleagues. Yet the alternative government hardly raises the issue of employment in question time or in public debate. Their record is appalling. After two years in opposition they find themselves without a jobs policy.On the other hand, the Liberal government is unapologetically pro-jobs. Our regret is that we predicted the social and economic consequences of the scuttling of the Wesley Vale mill and, unfortunately, we were unable to save it. Nevertheless, we will stand shoulder-to-shoulder with those who face the loss of jobs. Having said that, we are looking forward to, and will actively promote, the saving of jobs and the creation of new opportunities that the magnasite mine proposal provides.402319:31:004023Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I rise to speak on a very positive note in relation to forests. At the end of my short presentation I will be seeking leave to table the Western Australian Forest Alliance proposal for a comprehensive, adequate and representative forest conservation reserve system and sustainable timber production in Western Australia. The proposal will lead to a sustainable tourism industry, will provide a secure resource for that and will create an extra 1,250 jobs in that industry. The proposal adds to the three approaches that were released today by the Western Australian Regional Forest Agreement Steering Committee.The key elements are: increased regional employment and investment centred around an expanded plantation based timber industry and tourism; a sustainable timber industry based on plantations and the appropriate use of native forest timbers; a comprehensive, adequate and representative forest conservation reserve system to protect old growth and other conservation value forests; ecologically sustainable forest management based on clearly spelt out principles; structural adjustment funding to shift the timber industry onto a sustainable footing; the splitting of CALM, Conservation and Land Management, to remove the present conflicts of interest; and recognition of Aboriginal native title over crown forests.`Increased regional employment' looks at a net increase in timber industry employment of between 6,200 and 8,300 jobs, including the development of a pulp and paper industry, and an increase in tourism employment, as I mentioned, of 1,250 jobs. The `comprehensive, adequate and representative forest conservation system' looks at the addition of about 500,000 hectares of old growth and other high conservation value forest to the existing inadequate reserve system. It looks at increasing reserves by between 19 and 38 per cent. It involves ecologically sustainable forest management. Wouldn't that be nice for Western Australia? The components of ecologically sustainable management for both conservation and sustainable timber extraction are set out in the Western Australian Forest Alliance proposal.The proposal looks at a sustainable timber industry, low volume, high value added industry—a large timber industry based on the use of existing plantation resources employing 9,500 people. Far from shutting down the timber industry, it would lead to a larger and more sustainable industry and a future for that industry. Most importantly, it looks at structural adjustment funding, which has been left out of the proposals. Structural adjustment has been promised and is available, as demonstrated in other states finalising regional forest agreements.The Western Australia Forest Alliance proposal highlights the need for Commonwealth structural adjustment funds to be used to ensure a CAR reserve system and a shift to sustainable timber industry to assist those workers who need assistance in that adjustment. The splitting of Conservation and Land Management to remove conflicts of interest would lead to its replacement by a nature conservation agency and a sustainable wood production agency.What a relief this has been produced. It is a very positive outcome. It is more than has been produced so far in the official RFA process, which is seen by many to be a sham. I commend this proposal to the Senate and seek leave to table the Western Australian Forest Alliance proposal.Leave granted.402419:34:004024Cooney, Sen BarneySenator COONEYSF4VICALP00—The quality of democracy in any particular society is seen in its adherence to the rule of law, in the importance it places on human rights, in the ability of each person within it to have his or her interests given due consideration, and in government being exercised by those for whom the people have voted.Free speech is fundamental to democracy. Rancour, ridicule and rapacity inform much of the public debate in Australia. This is an unhappy fact, but is in accordance with the rights which prevail in a free society. Yet a community at its best will address great issues through exchanges which are fair, temperate, inclusive and enlightened. Debates are not fair, inclusive or enlightened if they are carried out in language which seems remote and arrogant through being technical, cryptic or in-house.Some economists claiming great authority speak in words calculated to exclude the general public from an effective part in determining the future of Australia. In doing so they turn lay people towards other persuaders. This at times leads good men and women to heed those who have simplistic, false and ugly solutions to the nation's problems.The member for Oxley, Pauline Hanson, has answers to the great problems of our country which will not resolve them but which will encourage envy, fear, hatred and turmoil. Yet the wellbeing of the community is best served not by belittling her, but by planning our future through sane, measured and reasonable debate. Public and unfettered exchanges between a range of parties proposing various policies is a sign of a healthy democracy, but life for Australians will be at its optimum where all groups, no matter how diverse otherwise, accept as fundamental the right of every person to be respected as a member of a universal humanity, to a fair opportunity to advance his or her health, wealth, beliefs and culture within a good society, to equality before the law, to due protection for his or her social wellbeing and to the assurance that his or her family and neighbours will enjoy the same entitlements.The best communities are those where there is a variety of views given public airing by their proponents, where there is keen and sustained debate, where there is freedom of expression, and where all this happens within a community informed by integrity, reason and a due regard by each of its members for all the others. A true community will ensure that no force within it can exercise arbitrary power. It will look to its institutions and to the people who administer them to secure for all its members a fair, decent, enlightened and safe life. The legislature, the executive and the judiciary can be despotic; so can the Public Service. Private enterprise can be autocratic; so can non-profit organisations. Associations, parties, clubs and movements can be dictatorial; so can individuals. Criminals can be tyrannical; so can police. The temptation to autocracy is a powerful one.Over the centuries, different societies have looked to a variety of measures to keep their members safe from arbitrary power. Generally, these arise from a common concept that there are fundamental principles which should forever prevail over the power held by any force within the community. The Ten Commandments, the Sermon on the Mount, the Bill of Rights, the constitution of the United States of America and the Universal Declaration of Human Rights are examples of this concept made manifest. Adherence to these principles will ensure that all within Australia live as they are entitled to do in a fair, enlightened and inclusive society.402519:38:004025Tambling, Sen GrantSenator TAMBLING6E4NTCLP10—I would like to take the opportunity this evening to welcome to the Senate my new Territory colleague, Labor Senator Trish Crossin. She was sworn in on Monday of this week and today in this place made her first speech which, as we came to know, was not without controversy and certainly created interest in the various issues she brings from the Territory.I acknowledge that Senator Crossin is the first female to represent the Northern Territory in federal parliament, and this is an important precedent. I have a preselected running mate this year in Maisie Austin, who I am sure at the next federal election will give Senator Crossin a very tough and hard fight in that election campaign.I noticed Senator Crossin's identification with the many complex and difficult issues and sociology of the Northern Territory. Particularly there is the ethnic mix of the Northern Territory, where Aboriginal Territorians and the migrants—I say that quite openly—from other Australian states and from overseas countries now clearly comprise the majority of Territorians.It is indeed a pity that the Australian Labor Party processes in selecting Senator Crossin reflected an extreme weakness. It took five months for her to replace the able and hardworking Bob Collins. It took five months—19 weeks—to make that change in this place, so the Northern Territory was unrepresented for that period. I think that that is indicative of the very serious internal problems in a Labor socialist party that is racked with tension, controversy and the inability to identify with what is a very unique Northern Territory community. Despite the attempted ALP federal intervention to install an Aboriginal senator into the parliament part way through that preselection process, the factions obviously came into play and the left triumphed over Bob Collins's previously moderate right-wing position. I humorously say to Senator Crossin that she is obviously well- placed here now because the exhaustive and thorough preselection process took so long, and it must have been an extreme test for her.From her first speech, it is obvious that Senator Crossin will be concentrating on social justice, the indigenous and radical and trade union oriented issues. I sincerely hope that she can reconcile these priorities against the very different Northern Territory demands which will be made of her by Territorians. I acknowledge that there were important parts in her speech, but the omissions are equally important. To me, they were patently obvious and reflect both her background and her interests. For example, probably the first and major issue that was omitted was the pioneering ventures by the Northern Territory for jobs and employment related to the important Asian and trade relationships that have been created and built up out of the Northern Territory. The second issue that I felt was an omission was the fact that Senator Crossin did not refer to the underpinning of Australia by our focus, very properly, on defence issues. The build-up of defence in northern Australia is vital, not only for security reasons in what is an unstable regional environment but also because of the economic importance of issues such as capital works, the employment of thousands of personnel who are now Territorians, and the social integration of defence as part of the Northern Territory. Defence were equally involved in the civilian community of the Northern Territory this year in the issue of the Katherine floods trauma. I think that was a major issue that ought always to be acknowledged.The third omission was the important and underpinning Northern Territory industry of tourism and its major impact on employment and the economy. Transport did not rate much of an interest in the speech Senator Crossin gave. Senator Crossin tabled some of her speech that she was not able to give and I know that, in those parts of her speech that were tabled, there is recognition of the railway initiatives being taken for a Darwin to Adelaide railway which reflect the other transport needs of the region.I was also astounded that Senator Crossin made no reference to important issues of tax reform or interest rates. Both are vitally important for Territory families. There have been family tax initiatives in the last two years which have benefited the Northern Territory and, as we know, the coming tax reforms will benefit the Territory even further. The five reductions in interest rates in two years has provided the business community of the Northern Territory with a major stimulus. Every home buyer and every home owner that has built in the last two years has gained a tremendous advantage.It is also concerning that a new senator would cut off the lifeline to jobs and industry in the Northern Territory by lining up with senators like Senator Brown and Senator Margetts against uranium mining. Uranium has been successfully mined and exported from the Territory for decades, and now promises to produce, in the next 20 years, $6 billion in income to the Northern Territory and $200 million in royalties for Aboriginal Territorians.It is also important that I rebut Senator Crossin's criticisms of the CLP government in the Northern Territory and the Howard government's support for the Northern Territory. No government can continually be so overwhelmingly endorsed by the electorate if the results are not on the table and the social needs are not being met. The history of a proud and vibrant community such as the Territory can only reflect on good government that is in touch with its electorate. The Northern Territory government does not deserve to be criticised in a blatantly political manner without reference to the credits that certainly are reflected.I would also remind Senator Crossin that, while she identified a number of changes made by the Howard government in public administration, in all of these functional areas of activity the government's support has, in effect, been better carried out by other departments and agencies of both the federal government and the Northern Territory government—a very significant change and move of resources. No-one can argue that development or services have, in any way, been impeded in the Northern Territory.The federal member for the Northern Territory, Nick Dondas, and I are very proud that the federal government budget, across some 55 Commonwealth departments and agencies, has increased by more than 10 per cent in each of the last Howard budgets in the Northern Territory at a time when national budgeting has necessarily had to be severely constrained because of the past delinquency and profligacy of the Hawke and Keating Labor administrations, which produced such disastrous economic underpinning of the Northern Territory. Young people, Northern Territory families, businesses and industry can rely on the efforts of the Country Liberal Party in the Northern Territory and the Liberal and National Party polices that have been and are being implemented nationally that impact on the Northern Territory.I am pleased to welcome Senator Crossin to this place. I look forward to engaging with her in lively debate in the interests of all our constituents.19:46:004027Senate adjourned at 7.46 p.m.Documents40274027The following government document was tabled:Higher Education Funding Act 1988 —Determinations made under the Act—Report for 1997.4027The following documents were tabled by the Clerk:Civil Aviation Act—Civil Aviation Regulations—Civil Aviation Orders—Directive—Part 105, dated 12, 14 [2], 19, 20 [2], 25, 28 [2] May; and 2 [10], 3 [2], 4 [2], 5 [7], 9 and 10 [2] June 1998.Corporations Act—Accounting Standard AASB 1004—Revenue.Defence Act—Defence Force Remuneration Tribunal—Determinations Nos 18 and 19 of 1998.Migration Act—Statement pursuant to subsection 91D(3)—Prescription of the People's Republic of China as a safe third country.Public Service Act— Locally Engaged Staff Determinations 1998/23-1998/26. Senior Executive Service Retirement on Benefit Determinations 1998/43-1998/52.Answers to Questions on Notice4028The following answers to questions were circulated:4028(Question No. 1155)11554028Faulkner, Sen JohnSenator Faulkner5K4NSWALP00 asked the Minister representing the Minister for Workplace Relations and Small Business, upon notice, on 23 April 1998:(1) What is the value of advertising placed by: (a) the department; and (b) agencies within the Minister's portfolio, on a month-by-month basis since March 1996.(2) What proportion of advertising placed by the department or portfolio agencies since March 1996 has been for: (a) print media; (b) radio; (c) television; or (d) other, and give details of other forms of advertising used.(3) (a) What proportion of advertising placed by the department or portfolio agencies since March 1996 has been placed through the Office of Government Information Advertising (OGIA); and (b) what mechanism has been used for that advertising not placed through OGIA.4028Alston, Sen RichardSenator AlstonLD4VICLPCommunications, the Information Economy and the Arts10—The answer to the honourable senator's question is as follows:(1) The value of advertising placed by the department and agencies within the Minister's portfolio since March 1996 is as follows (amounts in whole dollars):MonthAustralian Industrial Relations Commission1Australian Maritime Safety AuthorityComcare AustraliaNational Occupational Health & Safety Commission2Office of the Employment Advocate3Department of Workplace Relations & Small Business4Mar-9616,1801,0442,390Apr-967,9543,000544May-967,9071,6862,114Jun-969,2132,8451,346719Jul-9613,74810,4171,897Aug-967,0722,050601854Sep-968,085912277Oct-9614,0941003,613525Nov-964,5562,1008921,925Dec-968,051825Jan-974,2761,86948,776Feb-972,4736956,682Mar-978,3837481,722166,12719,451Apr-971,5762,2002,371May-9713,372460Jun-9726,4234,1127754,168Jul-972,7001,5501,2302,0791,527Aug-977,9128,3891,569Sep-9717,0525,0008,51414,197Oct-974,2961,0554,0743,491Nov-974,29695515,19918,369Dec-973,5791,7114,76613,540Jan-9815,3634,2003,524Feb-987,5822,40512,57915,54614,207Mar-982,29969023,64512,582Apr-981,1383,9305,7801,30021,135Totals219,58034,9309,67847,426251,000188,536Notes:1 Other than minor advertisements for the sale of goods, all other advertising by the Australian Industrial Relations Commission is the result of statutory obligations to advertise common rule applications and applications by employee and employer organisations in respect of the rules of these organisations. 2 The National Occupational Health and Safety Commission mainly advertises to fulfil statutory obligations, calling for comments on Draft Standards. The only advertising outside this description was of a corporate nature, raising awareness of both the Commission and the National Industrial Chemicals Notification and Assessment Scheme (NICNAS), placed in an annual Occupational Health and Safety feature in The Australian newspaper in February 1998.3 Apart from advertising placed in March 1997 to launch the Office of the Employment Advocate, most of this agency's funds have been spent to promote educational activities, such as upcoming workshops and seminars.4 The department spent $48,776 in January 1997 to launch the Workplace Relations Act 1996, $19,451 to launch the Office of the Employment Advocate and $21,135 to call for submissions on the Exposure Draft of the Franchising Code of Conduct.(2) All advertising funds described above were spent on print media.(3) (a) AIRC—100% OGIA; OEA—97% OGIA; NOHSC—100% OGIA.(b) AMSA—Direct/TMP Worldwide/Adcorp; COM—Direct to publishers; OEA—3% direct to publishers; Department:—TMP Worldwide/Davies Brothers Limited/Newsletter Information Services/Executive Media/direct to publishers.It should be noted that TMP Worldwide is the approved central placement agency under the OGIA tendering process.4029(Question No. 1170)11704029Allison, Sen LynSenator Allison1M6VICAD00 asked the Minister representing the Minister for Employment, Education, Training and Youth Affairs, upon notice, on 23 April 1998:(1) What is the number of non-graduate positions advertised by Recruitment Services Australia for the Commonwealth public service and other Commonwealth public sector agencies over the past 12 months.(2) How many of these positions have required applicants to pass tests.(3) How many applicants sat tests in that period.(4) (a) How many new non-graduate appointments have been made in the same period; and (b) in which agencies.(5) What are the average and the lowest test ratings accepted in the appointments which were made.4029Ellison, Sen ChrisSenator Ellison9X5WALPSchools, Vocational Education and Training10—The Minister for Employment, Education, Training and Youth Affairs has provided the following answer to the honourable senator's question:(1) Recruitment Services Australia (RSA) does not advertise specific numbers of positions. It gives Australian citizens and permanent residents reasonable opportunity to enter the Australian Public Service (APS) by advertising recruitment cam paigns at regular intervals, usually annually, for people interested in gaining traineeship, base level clerical and graduate trainee positions through the Public Sector Recruitment Test (PSRT) and Public Sector Recruitment Questionnaire (PSRQ). It also advertises Aboriginal Recruitment Test (ART) campaigns for Indigenous Australians interested in traineeship and base level clerical positions designated for Aboriginal and Torres Strait Islander people.Applicants gaining the required scores on tests are then eligible for referral to vacancies as they arise.(2) Public Service and Merit Protection Commission regulations require all applicants referred by RSA to permanent entry level positions to have gained at least minimum qualifying scores on the appropriate test instrument.(3) In the 12 months to 23 April 1998, a total of 26,723 people attempted the Public Sector Recruitment Test/Public Sector Recruitment Questionnaire and 888 sat the Aboriginal Recruitment Test.(4) (a) Over this period a total of 507 people have been appointed to permanent, non-graduate entry level positions in the Australian Public Service.(b) These appointments were made in the following agencies: Department of Defence, Industrial Patents Australia, Department of Immigration and Multicultural Affairs, Aboriginal and Torres Strait Islander Commission, Centrelink, Department of Tourism and Regional Development, Attorney General's Department, Department of Social Security, Australian Taxation Office, Australian Customs Service, Refugees Review Tribunal, Australian Bureau of Statistics, Department of Health and Family Services, Australian Protective Services and the Australian Industrial Registry.(5) For the Aboriginal Recruitment Test, applicants are referred based on their total standardised score and the application of additional selection criteria. The average total standardised score of applicants appointed through the Aboriginal Recruitment Test was 221 and the lowest was 193. The Public Sector Recruitment Test and Public Sector Recruitment Questionnaire together assess ten skills and attributes. Applicants are assigned ratings from 1 to 10 for each of these attributes and are referred to positions based on the minimum ratings agencies require for each one. Total standardised scores are only a consideration in selecting applicants for referral when there are more applicants meeting a position profile than it is possible to refer.The average test and questionnaire ratings accepted in the appointments that were made were: Working with Words—8; Working with Numbers—7; Problem Solving—7; General Ability—8; Goal Orientation—7; Team Work—8; Customer Service—8; Resourcefulness—7; Leadership—7; Workplace Learning/Adaptability—8.The lowest test and questionnaire ratings accepted in the appointments that were made were: Working with Words—5; Working with Numbers—5; Problem Solving—5; General Ability—5; Goal Orientation—5; Team Work—5; Customer Service—5; Resourcefulness—5; Leadership—5; Workplace Learning/Adaptability—5.The Public Sector Recruitment Test was introduced in 1997 so, during the period in question a total of 70 applicants were placed in permanent, non-graduate entry level positions on the basis of an earlier test instrument, the Administrative Service Test. For this test, applicants were referred based on their total standardised score and the application of additional selection criteria. The average total standardised score of applicants appointed through the Administrative Service Test was 320 and the lowest was 315.