1998-07-093817SENATE530101998-07-09The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.Bills5301r5275301The bill.Consideration resumed from 8 July.10000CHAIRMANThe CHAIRMAN—The committee is considering the Wheat Marketing Legislation Amendment Bill 1998 and Democrat amendment No. 1 moved by Senator Woodley. The question is that Senator Woodley's amendment be agreed to.09:32:005301Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I want to respond to some comments by Senator O'Brien and to press my amendment, because I am not sure that the chamber really understands all the implications of what we are debating. Senator O'Brien said that this tax amendment is really about self-interest, but you could say that about every issue that we have debated on the legislation. It is self-interest that the Western Australian Farmers Federation wants its model to be used. It is self-interest that the Grains Council wants the single desk selling mechanism to be preserved. It does not matter what part of the legislation you are dealing with, it is to do with self-interest. It is people within the wheat industry who are interested in the wheat industry, so your argument, Senator O'Brien, really does not hold up at all.I come back to the point that this is the one amendment that all of the industry agrees with. Of course it is self-interest. Who else would be interested in pressing issues which would be of benefit to the industry but the industry itself? So it does not really matter which part of the legislation we grab hold of, it is to do with self-interest. I heard what you said, but then I thought, `No, that doesn't hold up.'I want the committee to understand the implications of this amendment. I will try to facilitate that as briefly and as succinctly as I can. We are talking about a change at June 1999. The reason why I have said it is an amendment about equity is that, prior to June 1999, farmers who have equity in the wheat industry fund are able to convert their equity—either to cash it, at which point they pay tax, or to convert it into a farm asset, at which point it is then treated as a rollover that businesses can access—because it is not seen to be benefiting them in any way except that one asset in one particular area becomes an asset in another area. At the point when the farm or that asset is sold, taxation should apply.In June 1999, compulsorily, any equity in the WIF is then converted to shares in the Australian Wheat Board, and the industry is arguing that the rollover provision should continue. In other words, if a farmer converts his Australian Wheat Board equity into on-farm assets, that should be treated in the same way as it was prior to June 1999, and there should be a rollover provision and not a tax penalty. If the farmer converts his equity in the Australian Wheat Board after June 1999 into an off-farm asset, or cashes it out, then obviously he should pay tax at that point. It seems to me a very logical argument, and I am worried that the major parties at this point are again allowing Treasury and the Taxation Office to write policy. We have to get away from that. We have to look at what is good policy and then go to the tax office and Treasury and say, `This is good policy. We want you to make it work.' It should not be Treasury and the tax office leading all policy and controlling every policy issue.Another really big problem, if we do not agree to this particular amendment, is that up until June 1999 farmers will be able to convert their equity in WIF into either off-farm or on-farm assets and get the rollover provision. You are really saying to farmers, `Get in before June 1999. Convert your equity in WIF into on-farm assets and get the rollover provision.' And then, where is your capital? What will happen to the capital you want to establish the Australian Wheat Board and all of the structure that we are setting up to continue the operation of the whole industry?What you are saying to farmers is: `You had better, before June 1999, convert your WIF equity into on-farm assets, and you'll get the rollover provision.' Then what happens to the capital? It really is putting at risk the whole legislation by encouraging farmers to do something that we do not want them to do. We want them to keep equity in the WIF and then allow that to be converted into AWB shares so that we can have the corporate structure that the whole legislation is about. That is the reasoning behind the Democrats' belief that the support of the industry for our amendment is so important. We seek the support of the committee for our amendment for those reasons.09:38:005302Murray, Sen AndrewSenator MURRAY3M6WAAD00—I would like to add briefly to the remarks of my colleague Senator Woodley on this matter. I would be grateful if the parliamentary secretary would answer this particular point in her reply: the essential principle of taxation is that tax is only taken when the profit is realised. As far as I am concerned, this amendment does not affect that principle, and I would like you to indicate why, in that circumstance, the government would seek to oppose it.09:41:005302Troeth, Sen JudithSenator TROETHGX5VICLP10—What Senator Murray and Senator Woodley are saying, in effect, is that tax will never be payable on the equity or the profit that the wheat growers make, whenever they choose to act in a financial sense. They will already make a windfall profit from the privatisation of the AWB because they will inherit the value of the company. As I said last night in my response to the initial amendment that Senator Woodley spoke to, wheat growers have not paid any tax since 1989 and, if we proceed with this amendment, they will not pay tax when the units are converted to shares. They will not pay any tax until the shares are sold at some time in the future. We do not see that as an equitable position vis-a-vis any other taxpayer in the Australian community who has to abide by the rules of taxation and make a fair contribution. That is the reason why we are not supporting the amendment.09:41:005302Murray, Sen AndrewSenator MURRAY3M6WAAD00—I want to explore that a little more with the parliamentary secretary. The principle of taxation, again, is that profits may be taxed even when they are not distributed—as you know, there are withholding profits taxes and so on—the view being that when the profits have been realised, even if they are not distributed to the recipient, the shareholders or whatever form the entity takes, are still liable to taxation if they are withheld for some reason. Are you now saying that, despite the fact that the company has not distributed profits at any time to farmers, those profits are deemed to have been received and to have been utilised for the benefit of farmers and therefore should be taxed?At what stage have those farmers actually realised those profits to such an extent that it is now time for them to be taxed on them? How have they benefited from those profits? You say that they have not been taxed since 1989. The inference is, therefore, that the farmers have in fact received those profits and therefore should have been taxed.09:41:005302Troeth, Sen JudithSenator TROETHGX5VICLP10—Senator Murray, under this arrangement we are asking the wheat growers to pay tax only when the shares are realised. That is the point at which they will pay tax, but they pay tax only if they realise the value of their shares.3M6MURRAYSenator Murray—If they sell them?GX5Troeth, Sen JudithSenator TROETH—If they sell them, that is correct. Your amendment will make that sale tax free and, in line with the tax obligations of every other member of the community, we do not regard that as an equitable arrangement. That is why we are not supporting the amendment.09:42:005302O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I would like to make a brief response to Senator Woodley's comments. The position that the opposition took yesterday in relation to this amendment has not changed. Let me explain that the comments I made about self-interest were in response to Senator Woodley's comments that his amendment was supported by the industry in the broadest sense. My comments about self-interest were that we could understand that it would be so supported because, financially, it is in the interests of grain growers to get the best possible advantage they can in terms of the taxation of the sale of AWB B class shares in the future. But that does not mean it is fair; that does not mean it is equitable.The opposition's position is that we agree with the government that to have the WIF contributions when they are converted into the Australian Wheat Board B class shares treated as tax free means that those contributions have been treated as tax free all along. When the shares are sold, that portion of the value of the shares will continue to be treated as tax free. In addition, in effect, an indexation factor for the WIF contributions—the pre-May 1997 contributions—will also be treated as tax free. We consider that that is equitable. We agree that it would be unfair to the rest of the community if we moved beyond that point. So we do not agree that this is an inequitable proposition. My comments on self-interest were purely in relation to the suggestion that because this was supported by the broadest range of industry representatives—I was not saying that there is something wrong with that—that was quite understandable, but that did not mean it was necessarily right.09:45:005303Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Senator O'Brien, thank you for that explanation. I want to argue the equity issue in terms of the explanation I gave this morning. I guess the issue about self-interest that I was trying to get at was that, as I explained previously, the whole debate could be seen as self-interest. That is why at this point, when you have a coming together of the peak bodies in terms of their self-interest, that ought to at least give us pause to consider this issue. I take your point and I am thankful for that explanation.I still have problems, however, with the government and Labor Party argument in terms of unfairness to the rest of the community. Is the current treatment of the wheat industry fund also unfair, because that provision already exists? Are you saying that the current arrangement is also unfair? What I am saying is that, if it is an equitable arrangement and a fair arrangement now, why after June 1999 does it suddenly become unfair to say that the same tax treatment should continue? I would argue that it is not unfair now because taxation should apply at the point when people realise on their asset. It should not apply at the point when they are simply rolling over an asset into another on farm asset in order to continue operating as farmers. I cannot see the argument that it is unfair once they become Australian Wheat Board shares, if it is not unfair to have the same treatment as they now obtain while the asset is the wheat industry fund.09:48:005303Murray, Sen AndrewSenator MURRAY3M6WAAD00—I am concerned with the answer given to us by the Parliamentary Secretary to the Minister for Primary Industries and Energy (Senator Troeth). At present when you sell a share, if the difference between the cost you paid for the share and the price you receive for the share is positive, that difference is subject to capital gains tax on an indexed basis. That is what happens. This amendment does not interfere with that principle. If somebody has a share at a particular value in this company and sells it and makes a profit on it, they will pay capital gains tax. This amendment is not about giving anyone a tax-free benefit; it is about a tax deferral. The principle of rollover is that you allow an asset to continue in another form and you realise the benefit later. It is a tax deferral mechanism. Why should they pay a tax on the shares until they are sold? This amendment says:Notwithstanding any other provision in any other act, a B Class share which is taken to be issued to a person under subsection (1) is, for the purpose of establishing that person's liability for taxation, deemed to be an active asset . . . It does not say anything about sale. It is talking about the share in the hands of the person. Unless I am misunderstanding the effect of this, which I do not think I am, I believe what you are doing is requiring people to pay their tax prior to realisation of the asset. We are merely arguing that they should pay their tax once they realise the asset, once they receive the sale benefits.That is what we are talking about. We are talking about tax deferral; we are talking about rollover. We are not interfering with the standard and normal taxation principles which apply to anybody's income or profit. Perhaps the parliamentary secretary can explain to us why we are wrong. These, incidentally, are principles established for the whole taxation community. Rollover provisions do exist. Tax deferral does exist. This is not some new principle. We believe that, with regard to this particular company formation, we are actually arguing for a precedent which is already established, not for a new deal.09:50:005304Troeth, Sen JudithSenator TROETHGX5VICLP10—Senator Murray, I think you are missing the point somewhat here. Growers have already earned a considerable amount of money and, at this point, they will make a windfall profit from the privatisation of the AWB because they will inherit the value of the company, into which they have already put a good deal of money. The money they have put into, firstly, the wheat industry fund and now the privatised AWB has been tax deductible all along.A basic principle of taxation is that, if you get a deduction, you end up paying tax. You are concerned about deferral, but what you are doing is deferring the payment into depreciable assets which then will not pay tax. It is this deferment all along the way which the government is concerned about, because I would suspect that no other taxpayer in the Australian community is afforded this concession. From an equity point of view, we consider that, with the generous treatment the grains industry has already had, to take it beyond this point would not be acceptable.09:52:005304Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Thank you, Senator Troeth. Clearly, we could debate this all day and we are not going to change your mind. I think the government and the Labor Party, unless it has changed, have decided to follow the argument you are using. You are not convincing me. At this point, I guess, it is one of those occasions when we agree to disagree. I hear what you are saying, but I could continue to debate it. I see your point but, in fact, people convert assets continually and defer payment of tax. That is a principle which simply continues.While the levy which growers have put into the wheat industry fund has, in fact, attracted earnings, there could also be losses. There is no guarantee that there will be earnings from the Australian Wheat Board either. So we need to signal that. But we will not continue to debate it. I think we have put clearly the points that we want to make, the reasons why we are pressing the amendment. I guess the best thing to do is to have the vote.Amendment not agreed to.09:53:005304Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I move:(2) Schedule 1, item 4, page 11 (line 1), omit subsection (3), substitute:(3) At a meeting, 3 members, one of whom is a member nominated by the Grains Council, is a quorum.I understand that the government is supporting this amendment. It simply changes the way in which a quorum is constituted. This amendment is simply to ensure that, at the meeting which is referred to, in fact, this quorum will obtain rather than the two-member quorum, which is constituted in the present legislation.09:54:005304Troeth, Sen JudithSenator TROETHGX5VICLP10—The Wheat Export Authority obviously has an important role in ensuring that the conduct of the AWB in relation to the use of the export monopoly is such that the Australian community and wheat growers can be satisfied with its performance. It is important that meetings do have grower representation, and the government does support this motion.09:55:005304O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—In relation to this amendment, we have no problems with the wheat growers' representation on the Wheat Export Authority and, indeed, believe that it is appropriate that they should be there. We do think that, as a matter of good policy, to require their presence for the meetings to take place places the growers in a position where they could frustrate the meetings of the authority. I cannot imagine circumstances when that would occur, but this creates a possibility that it would.If a Grains Council representative is appointed to the authority, I cannot imagine why they would not attend. I do not believe that a meeting could be properly constituted if they were not given adequate notice or they were not given an opportunity to attend. No decision taken by the authority in those circumstances could have any credibility, nor could it ultimately stand the test of public scrutiny.It is for these reasons that we do not think it is necessarily good policy to enshrine in legislation, in effect, a de facto right of veto for the authority to meet by a representative of the Grains Council, but we can see that the numbers are here to carry this amendment. We think it would be sufficient that, were they given representation as a matter of right, their attendance would then be a matter of their representative's choice but, should they decide not to attend, that would not prevent the authority from meeting. We think that would be a better public policy position on the matter.Amendment agreed to.09:57:005305Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move:(1) Schedule 1, item 4, page 9 (line 21), at the end of subsection (4), add "and in accordance with a code of practice determined under section 6A".(2) Schedule 1, item 4, page 9 (after line 25), after section 6, insert:6A Procedures for appointment of members(1) The Minister must by writing determine a code of practice for nominations and appointments to the Authority that: (a) sets out general principles on which nominations and appointments of members to the Authority are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act.(3) The code of practice must include a requirement for any person appointed to make a declaration if he or she is a member of a political party.(4) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette .(5) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code.(6) In reviewing a code of practice, the Minister must invite the public to comment on the code.(7) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .6B Independence of AuthorityIn appointing members, the Minister must ensure that the balance of interests on the Authority is such that no one interest may dominate the Authority or derogate from its independence.These amendments relate to the appointment of members of the authority. It would not have passed the attention of participants in this debate, or indeed of the representatives of the various states, that the particular groups, individuals and farmer organisations involved in the wheat industry are powerful and sometimes competing characters.In any circumstance, it is the belief of the Democrats that, where you have strongly competing interests, you should always try to achieve a mechanism whereby the board or the governing authority represents all the interests and all conflicts can be appropriately resolved. It is particularly important not to allow any board or authority in these circumstances to be subject to capture.The government have indeed been alert to this problem and have specified that the authority—and I am referring to page 9 of the bill—should consist of a chairperson, two persons nominated by the Grains Council, a government member and one other member. They have tried to get a geographical spread. The bill states:One of the members referred to . . . must be a person who is ordinarily resident, at the time of appointment, in New South Wales, Victoria, Queensland or Tasmania. The other must be a person who is ordinarily resident, at the time of appointment, in Western Australia or South Australia.The reason the government have done that, quite properly, relates to where the weight of growers' interests resides. As we all know, Western Australia is a very strong state in wheat production, and most of the farmers are exceptionally capable in that enterprise.The amendments we have put reinforce that principle. In order that people were able to understand the philosophical and the practical origin of these amendments, I put a full submission on this particular issue to the Senate committee chaired by Senator Crane for consideration. It did not get much of a mention in the report, but I am quite certain that the members of the committee did read it and did understand the direction from which I was coming. Perhaps Senator Crane, since he is present, might make some remarks on the issue to clarify the approach of the committee.What we are seeking to do is to, as far as possible, depoliticise and make as independent and as representative as possible the authority concerned. We have set down procedures for appointment to members, which were not invented by the Democrats as some kind of little fetish we have but which were arrived at based on an extremely careful and considered report and mechanism adopted by the conservative government in the United Kingdom as to methods by which members should be appointed to various authorities. We have taken a leaf out of the book of the United Kingdom government.The procedures for appointment of members that we have laid out in this amendment ask that the minister, by writing, determine a code of practice for nominations and appointments to the authority; that the code sets out the general principles on which nomination and appointments of members to the authority are to be made—including but not limited to merit (which I would be surprised if anyone disagrees with); independent scrutiny of appointments, and it is a view of ours that appointments should be done on an independent basis; probity, which I would be surprised if anybody disagreed with; and openness and transparency—and sets out how these principles are to be applied to the selection of members.Some very cross words have been exchanged over this bill between the various farmer groups competing with the minister's view of how the world should proceed. I, for one, would not like to see the authority arrive at any situation where the members were not felt to be completely representative and reflective of the needs of the industry concerned. Under 6B of my second amendment we make the point that in appointing members the minister must ensure that the balance of interests on the authority is such that no one interest may dominate the authority or derogate from its independence. Quite frankly, that is unexceptional as well. As I indicated in my opening remarks, the government has tried to go that route by getting a geographical spread and other matters. We think this is a very good principle. It is very clear, very apparent and very open. We commend these principles and this approach to the government for this particular authority.10:03:005306Troeth, Sen JudithSenator TROETHGX5VICLP10—Senator Murray introduced similar amendments to the Senate on 24 November 1997, when the first tranche of the wheat legislation was introduced. The amendments were not agreed to by the Senate. I do thank Senator Murray for the thought that he has put into these amendments. While I am not opposed to the general thrust of that argument, I would argue that the proposed code of practice does nothing to advance the objectives proposed by Senator Murray. Indeed, current appointment processes are already consistent with the intent of what Senator Murray has put forward.Current appointment processes are based on merit, openness and transparency, and they already withstand independent scrutiny and probity. This amendment will only add to the departmental workload and increase costs unnecessarily. There is a system in place which already deals with the intent of the amendments. Requiring persons appointed to boards to make a declaration if they are a member of a political party could have a serious impact on the quality of boards. There are no legal imperatives as to why people need to disclose their political affiliations, and requiring people to do so could act as a disincentive for desirable candidates to seek membership of statutory authority boards. Furthermore, these amendments may be open to legal challenge through the courts. If the code of practice were disallowed, there could be a period where no code was in place, which would preclude the minister from making any appointments to a board. In summary, the amendments will add little to the process and are therefore opposed by the government.10:05:005307Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—These amendments are similar, if not identical, to those moved by Senator Murray when we dealt with the first tranche of legislation last year. We do not believe anything has changed since that point in time that would warrant us changing our view on it. Accordingly, we oppose the amendments. As I indicated in the previous debate last November, the motives are certainly well intentioned and well founded. I do not think anybody denies that. We all agree that appointments should be made on the basis of merit and on the basis of endeavouring to ensure that various interests are represented. Clearly, they should not be on the basis of pure political patronage or favours owed. The persons appointed should possess the skills that are warranted for carrying out the duties.In our view, as we said on the last occasion, this is window-dressing and is not necessary. The amendments still leave it within the gift of the minister to make the appointments. That is why we have suggested that it is window-dressing. We are not suggesting that it should not be the minister who makes the appointments, but at the end of the day the Democrats' proposal still leaves the power where it always has been.In our view, the general principles which are sought to be enshrined in the legislation are in practice in any event. There are measures available to ensure that where persons appointed to boards ultimately do not carry out their responsibilities properly or for some other reason may no longer deserve to remain on a board, or on an authority in this case, action can be taken to ensure that the situation is corrected. I note that proposal 6B in the amendments states:In appointing members, the Minister must ensure that the balance of interests on the Authority is such that no one interest may dominate the Authority or derogate from its independence.Again, that is a very noble sentiment, but I find that I am in a quandary on this occasion. If anything has been evident from all of the debate, discussion and indeed vigorous lobbying, et cetera, that has gone on over the restructuring of the Wheat Board, it is that there are a whole range of interests. I am not sure how large the authority would have to be or, alternatively, how small it would have to be to accommodate all of those interests or to ensure that no one interest prevailed over any otherOne of the problems we have been dealing with, and it was referred to in the debate yesterday, is an appearance—I would not want to suggest that it is a fact—that there is an east versus west divide in this industry. I can imagine that from time to time interests of one section of the industry may well predominate over the interests of the other. That may well be what competition is all about, which is one of the reasons why we often have some concerns about it—its unfettered range, as it were. In any event, we do not see any reason now to take a different position from what we adopted last year when we dealt with this matter and the Senate rejected the proposed amendments then. We will oppose them on this occasion.10:10:005307Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—If it were window dressing, Senator Forshaw, you probably would support it. The very fact that you are not supporting it suggests that it does have an effect. We are going to debate a very worthy amendment of your own soon that will ensure there is a balance of interests. I think that is really the background to the amendment that you will be presenting at a later stage in this debate. You do recognise that maybe the balance of interests has not always been observed in the process of getting to where we are today with this legislation.The Democrats move similar amendments to this one regularly because we do not have the belief that you have that all is hunky-dory in terms of boards of management of companies, authorities, semi-government bodies and quangos, et cetera. It is because of the disquiet in the community about the propriety of the operation of some of those boards that the Democrats continue to press what we believe to be very sensible amendments to try to get a balance and honesty into these boards. We believe that is what the Australian community want, and the very best practice in terms of management really takes account of the things that we are pressing in these amendments.10:12:005308Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The Greens (WA) indicate that we will be supporting these amendments in the interest of openness and transparency, and those are values and principles which we prize highly. I hope the Senate keeps putting up these kinds of proposals. They will not necessarily be driven by the major parties themselves but be driven more by the community who want to see the way governments are making decisions and the way their own money is being spent. There have been times, I know, when we have inched along on these issues, and eventually it has happened. I guess the push will come from the community, and eventually the major parties may catch up.Amendments not agreed to.10:14:005308Troeth, Sen JudithSenator TROETHGX5VICLP10—by leave—I move:(1) Schedule 1, item 9, page 14 (line 12), omit "until 1 July 2004".(2) Schedule 1, item 11, page 14 (lines 23 and 24), omit subsection (3C).(3) Schedule 1, item 13, page 15 (after line 12), after subsection (6), insert:(7) Before the end of 2004, the Authority must conduct a review of the following matters, and give the Minister a report on the review: (a) the operation of subsection (1A) in relation to nominated company B: (b) the conduct of nominated company B in relation to: (i) consultations for the purposes of subsection (3A); and (ii) the granting or withholding of approvals for the purposes of subsection (3B).Following consideration of the report by the Senate Rural and Regional Affairs and Transport Legislation Committee on this bill, the government has decided to remove the provisions in the bill which would have sunsetted the grower company's legislated export monopoly rights for wheat on 1 July 2004. The government has also decided to require the Wheat Export Authority to review these arrangements.The legislative provisions for the grower company monopoly for a prescribed period were put in place in recognition that the legislation would be reviewed under the national competition policy in 1999-2000. If the review found in favour of maintaining monopoly arrangements for wheat, the five-year time frame was seen as giving the grower company time to recognise its credentials and demonstrate sound arguments to put before parliament as to why the company should continue to hold its monopoly rights. However, the government does recognise the importance of providing certainty to wheat growers that their company will retain the right to export wheat without a consent from the Wheat Export Authority unless parliament decides otherwise. Therefore, the government has decided to amend the provisions in the bill to provide for no time limit to the grower company's right to export wheat.The government has also decided to require a review to ensure the performance of the pooling subsidiary company in regard to its use of the monopoly. These changes will have a minimal impact on the overall export monopoly arrangements. They will not remove the government's commitment to the national competition policy and the regular review of the legislation governing the wheat export arrangements. Further legislation will be required at some time to put in place permanent funding arrangements for the Wheat Export Authority. Obviously, the Grains Council of Australia and other parties will need to be consulted if these arrangements are to be based on a levy or a tax.10:16:005309O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—As previously indicated, the opposition will be supporting this amendment. This amendment reflects the view of both the government and opposition members of the Rural and Regional Affairs and Transport Legislation Committee with regard to a potential sunsetting of the single desk export monopoly provisions in the legislation. This amendment appears to remove the concerns over the preservation of the single desk which members of the committee have as expressed in both the committee's majority and minority reports.In the committee's hearings held last year on the first tranche of legislation, it was abundantly clear that there was overwhelming support for the maintenance of the single desk by grower representative organisations with some exclusions. The Pastoralists and Graziers Association of Western Australian apparently does not support the preservation of the single desk and would prefer a deregulated export wheat market over the arrangements which have been put in place with this legislation. As far as I can see, that position is not supported by growers in other states in any significant number, although we did have a submission from a grower in Victoria who had similar views. As I say, those views are obviously minority views.The opposition's view is that if there is to be a removal of single desk arrangements, that ought to be done completely transparently and through this parliament and not by an authority or other means. That proposition has the clear support of the Grains Council and, I suspect, as I said earlier, the overwhelming majority of representative organisations of grain growers around this country. We will support these amendments. They will allay a lot of the fears of growers that this process will ultimately lead to the removal of the single desk monopoly export provisions.10:19:005309Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—The Australian Democrats also support these amendments. The wheat marketing legislation has been through a real sausage machine process to get to this point. Original ly, the Democrats were prepared to move an amendment in line with, again, what all the industry bodies and many farmers were saying. I then had discussions with quite a lot of people in the government and the opposition. The government has brought in its own amendments. That is appropriate, because if we amend something and the government then rejects it in the House of Representatives we will be playing ping-pong, football or whatever you like to call it. It is better that we have government amendments because clearly the House of Representatives will, I imagine, agree to them. As far as I can see, they do cover the concerns raised by many people. The Democrats will support the amendments.Amendments agreed to.10:20:005309Troeth, Sen JudithSenator TROETHGX5VICLP10—At this stage, I seek leave to incorporate a letter which is in the public domain to the President of the Grains Council of Australia from the Australian Taxation Office. It sets out clearly the taxation issues concerning the wheat industry and the Taxation Office ruling on those issues.Leave granted.The letter read as follows—ATOCommissioner of Taxation2 Constitution Avenue Canberra ACTPO Box 9990, Civic Square ACT 2608Our Reference: 98/1046-3Contact Officer: Stephen Knipler Extn: 02621611963 July 1998Mr John LushPresidentGrains Council of AustraliaPO Box E10KINGSTON ACT 2604TAXATION ISSUES CONCERNING THE WHEAT INDUSTRY1. I am writing to confirm the tax consequences for wheat levy payers who are allocated units from the Wheat Industry Fund (WIF) or who have those units converted to shares in AWB Ltd.2. The advice is based on the operations of WIF and AWB Ltd and other publicly available information and does not refer to details of individual taxpayers. Units in WIF3. The WIF units are not subject to income tax or capital gains tax (CGT) on allocation to a wheat levy payer by WIF. However, a subsequent disposal of the units is only subject to the CGT provisions as the units are considered to be assets.4. I confirm that the ATO is bound by its previous advice that the cost base of the WIF units includes wheat levy contributions made before 7:30 pm AEST 13 May 1997, together with indexation. The Treasurer has indicated that he accepts this position.5. The ATO advice was on the basis that the statutory scheme was in place when wheat levy payments were made so that wheat growers knew when they paid the levy that the payment would entitle them to units in WIF. It is noted, however, that the ATO advice did not take into account that the wheat levy has the nature of a tax.6. Wheat levy contributions made after 7:30 pm AEST 13 May 1997 are excluded from the cost base of the WIF units, although indexation on these levy contributions will be included in the cost base.7. The WIF units allocated to a wheat levy payer constitute active assets for the purposes of the small business roll over relief provisions currently in Divisions 17A and 17B of Part IIIA of the Income Tax Assessment Act 1936. This is because the acquisition of these units is inherently connected with the business carried on by the wheat levy payers. Thus, that small business roll over relief from CGT may be available to a wheat levy payer who disposes of the WIF units.Shares in AWB8. I also confirm that the WIF unit holders will be eligible to exercise a choice to claim CGT roll over relief under Subdivision 124-B of Part 3 of the Income Tax Assessment Act 1997 when the units are converted to AWB Ltd shares.9. As with the WIF units, disposal of these AWB Ltd shares will be subject to the CGT provisions. The shares are deemed to have been acquired for an amount equal to the indexed cost base of the equivalent units in WIF, so that the cost base of the WIF units will become the cost base of the AWB Ltd shares.10. The AWB Ltd shares do not constitute active assets for the purposes of the small business roll over relief provisions. Shares of this nature are specifically excluded from constituting active assets. It is noted that an AWB Ltd share has significantly different characteristics from a WIF unit, for example it provides voting rights, rights to dividends, and is tradeable on the stock exchange.11. I trust this information is of assistance.Bob TomkinsDeputy Chief Tax Counsel 10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Chapman)—We now move to postponed amendments Nos 3 and 4 from the Greens (WA), which I understand are to be supplanted by some other proposed amendments. Perhaps Senator Margetts could clarify the situation for us.10:21:005310Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—When we dealt with this yesterday, Senator O'Brien indicated that there might be a form of wording that would be acceptable to both the opposition and farmers from Western Australia. I am grateful that the ALP has done that. So I seek leave to withdraw Greens (WA) amendments Nos 3 and 4 and hand the floor over to Senator Forshaw to outline the new form of words. It obviously still leaves it in the hands of the minister, but it is a disallowable instrument and it does look to different models. There is a question I would like to ask the parliamentary secretary to think about in the meantime. There was read into Hansard a letter from the Minister for Primary Industries and Energy, John Anderson, to Senator Crane in which he said that the memorandum and articles of association would be approved with adequate time for consultation through the Grains Council of Australia.It was useful that there was agreement that it would not be approved prior to 30 November, but I just ask whether a wider consultation could be guaranteed. It is not just the Grains Council of Australia. Hopefully, there will be support for this form of wording. If that is the case, before the memorandum and articles of association are approved prior to 30 November 1998, there will be a guarantee of wider consultation, especially on the other models that are being considered by the minister.Leave granted.10:23:005310Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—by leave—I move:(1) Clause 5, page 3 (line 2), after "1999", insert "but subject to subsection (1A)".(2) Clause 5, page 3 (after line 4), after subclause (1), insert: (1A) A determination under subsection (1) must not be made before the Minister has considered different models for the constitutions of nominated companies and caused a report to be prepared on the different models, including the Minister's preferred model. (1B) The Minister must cause copies of a report prepared under subsection (1A) to be laid before each House of the Parliament within 15 sitting days of that House after the Minister has received the report.(3) Clause 5, page 3 (after line 10), at the end of the clause, add:(5) A determination under subsection (1) is a disallowable instrument.These amendments have been circulated in the names of Senator Margetts and me. I will outline how this proposal has come about. When we adjourned last night, we had debated the proposed amendments Nos 3 and 4 moved by Senator Margetts. The opposition were not enamoured of that proposition, but we had some sympathy for the concept behind it and we tried to come up with some alterations or some different wording to maybe achieve an agreed outcome.That process has not been easy. Trying to do that in the limited time that was available between the adjournment last night and this morning, and having to consult with people in Western Australia, has led us to a position where the amendments have only just been able to be circulated and the wording finalised. I apologise to any senators who may have had a concern in that regard, but we have attempted, as far as possible, to deal with the matter expeditiously and to come back with a proposal that, hopefully, will be supported.We have endeavoured to provide a mechanism whereby the models for the constitutions, memorandums and articles of these companies would be properly considered by the minister before he makes a determination pursuant to clause 5 of the bill—that is, not later than 31 March 1999. We propose that the words `but subject to subsection (1A)' be inserted into item 1 of clause 5. That would then read `Not later than 31 March 1999, but subject to subsection (1A), the minister must make a written determination that amends the constitutions of the nominated companies'. Then new subclauses 1A and 1B would be inserted. They provide:(1A) A determination under subsection (1) must not be made before the Minister has considered different models for the constitutions of nominated companies and caused a report to be prepared on the different models, including the Minister's preferred model.(1B) The Minister must cause copies of a report prepared under subsection (1A) to be laid before each House of the Parliament within 15 sitting days of that House after the Minister has received the report.Finally, the third amendment would make the determination made pursuant to this section a disallowable instrument. In reality, that means that before the minister can make a determination, which he is required to do not later than 31 March 1999, he must consider and prepare a report on the different models for the constitutions of the companies and that that report must be submitted to the parliament. The report, of course, would include the minister's preferred model. There has to be, ultimately, a preferred model put forward by the minister. That is already a requirement implicit in the bill and, indeed, was something that would have been the case under the Greens (WA) proposed amendments.In one way, this proposal does strengthen the principle behind the Greens (WA) amendments. The proposal put forward originally was to have a report prepared by an independent body about the different models for the constitutions of the nominated companies, but there was no guarantee that the minister would necessarily take any of those into account. I suppose there is no guarantee at the end of the day that the minister will take them into account under our proposal either. He does however have to prepare a report on the different models as well as on his own preferred model.We believe that this will provide a mechanism whereby the competing views—I say `competing', but I should probably call them `alternative' views that exist within the industry today—on the ultimate structure of these companies, their memorandum of articles, and so on, will be able to be put forward by the different groups, that is, the Western Australian farmers group on the one hand and those which currently support the Grains Council grower corporate model on the other. A third one might come forward based on a cooperative model that has been floated. All these can and should be considered by the minister and a report prepared. Ultimately, the parliament will be able to give consideration to the minister's final determination. We believe, as I said, that that provides a mechanism and a time frame for the varying interests to put their proposals forward and for the matter to be resolved. We believe it is fair and equitable.There is a concern that has been strongly expressed by the Western Australian Farmers Federation that, when they put forward their model, it was not properly considered by the consultants. Indeed, as I am advised, in a report running to hundreds of pages their proposal was canvassed in about one page. I do not make any judgment about the accuracy or the veracity of their claim, other than what I have just said. But certainly there is a real feeling that their proposal has never been properly considered. We believe that it should at least be given that consideration before the matter is finally determined. After all, they do represent the major sector of the wheat export industry. We put forward these amendments in the spirit of compromise and in the spirit of attempting to deal with what is a pretty difficult situation.As I outlined last night, we feel that ultimately the only alternative, in the absence of some mechanism such as this, is adoption of the model that is on the table and which has been endorsed by the Grains Council and some of its affiliates. That may still be the case, but at least this will allow some further consideration. I am confident that, having given everybody the chance to have their last say, agreement will be reached. If not, a determination will be made, and will have to be accepted by the entire industry, to put an end to the matter. I appreciate the indulgence of Senator Margetts and other senators.10:34:005312Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Obviously I support the amendments in joint names. I wonder if the minister has a response to my specific request about the minister's consultation on the memorandum of understanding? While, hopefully, she readies herself to respond to that, I want to explain what the Greens (WA) have tried to do. Three weeks ago we thought we would have to deal with this in a very big rush, so we have been trying to give breathing space to the various parties, obviously in particular the Western Australian Farmers Federation. They felt that they were going to be steamrolled in this process, and many other people on the ground who were contacting them felt the same. A real opportunity for these views to be put and considered is very important, whatever the final outcome, in it being accepted and being workable.I do hope that not only a majority of the Senate but also the government sees the logic in this proposal. It is different from the one I put initially. Obviously, it puts trust in the minister to ensure that the report is done well and that a fair consideration is given these issues. In the meantime, it is important that people feel they are getting a proper hearing during the consultations and that the outcomes are the best possible. Whatever criteria you have for the outcome and whether or not the body is to be independent, it is important that farmers get a good outcome and that people feel that it is not just a profit driven outcome. I commend the amendments to the Senate.I also thank those members of the Senate who in the last few weeks have assisted in allowing that breathing space for these issues to at least be put on the table.10:36:005312Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I am very grateful to Senator Forshaw and Senator Margetts for doing this work. The issues that I think all of us want to get at are a breakdown in the industry and serious division between different parts of the industry. We want to make sure that the memorandums and articles of association will take up the concerns of the different positions that still exist within the industry. I am very grateful for this opportunity.I have been listening to the debate and I have also been taking some advice from advisers in trying to see the best way to go. There are risks with these amendments; there are risks in not passing these amendments. It is a real balancing act. The risk in passing these amendments is that, rather than there being a coming together, we will continue the division. That is the risk in passing the amendments. There is a risk in not passing the amendments that the same thing will obtain.I would like to read a letter that has been given to me by Senator Crane which I think is useful. It really does cover an assurance I was going to seek from the parliamentary secretary in any case.DX5MARGETTSSenator Margetts—Senator Crane has already done it.HX5Woodley, Sen JohnSenator WOODLEY—Okay. This is a letter from John Anderson. It is an assurance that he will not sign off on the M and As prior to November 1998 and will take account of the various issues which are being raised. I have also received assurance from the Grains Council that they will take very seriously the Western Australian Farmers Federation proposition, that they will take that into account. Obviously, they cannot prepare a letter at this very moment, but they will put that in writing. That is, for me, sufficient assurance that the concerns that are raised in these amendments will be taken up.I know I am putting an awful lot of trust in the minister at this point, but we have got a written assurance from him and I am prepared to do that. I think he knows that he and the industry are on notice that we cannot continue the division. I was certainly strongly inclined to see these amendments as solving the problem. I have taken advice. I can see other problems with the amendments, so at this stage I now will not support them. The assurances which are given will have to work, otherwise the problem I and others have raised will continue.10:40:005313O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I want to go back a couple of steps in the process to explain why I think it is important to consider these amendments. I understand that the advice that Senator Woodley has given may effectively be that the debate between the parties holding differing views as to the appropriate grower model will be reopened by the passage of amendment No. 2 in this package of amendments. In the Rural and Regional Affairs and Transport Legislation Committee inquiry into this bill it became clear that there is a total commitment to the grower corporate model as proposed and that there is not a fall-back strategy should there be serious problems with that approach. That is the evidence that the committee has received.I can understand that a lot of work has gone into the position that has now been arrived at by the working group of the Grains Council, the department, the minister's office and the minister. I am concerned that we still have a significant representative organisation, which represents a significant proportion of the export industry, saying that it is not convinced. If all those who are convinced that the grower corporate model as developed is the way to go are so confident about it that they do not have a fall-back strategy, that they do not have a way out if problems occur, then why would they have problems with the minister presenting the parliament with a report which considered the options and laid down for all concerned the reasons why the grower corporate model as proposed is the best option?I can understand that people have been going through the process for 10 years, they are on the home straight and approaching the winning post as they see it and they see this as extending the race a bit further, but the important thing is not to finish this race but to get it right. The important thing is that, whatever the divisions are, everybody who has been part of the process and who will be important to the ongoing success of the process has confidence in the outcome.These amendments simply require the minister to get alternative advice, given that there has been doubt cast, whether validly or not, on the BT assessment of the Western Australian cooperative model for the incorporated Australian Wheat Board. I have no reason to think that the advice of BT will not be supported by an independent body. The question for the parliamentary secretary is: does the minister share that view? If the minister shares that view, he would have no problems with obtaining that advice and laying it before the parliament. In the alterna tive, if the minister had some doubt that the BT advice would not necessarily be supported by an independent body, then perhaps the minister would not be happy to have this obligation placed on him because, at the end of the day, there may be laid before the public conflicting advice.So the question is: what do the protagonists of the currently supported grower corporate model see as the problem with this? Do they simply want the argument to go away and this will make it more difficult for the argument to go away? Do they have concerns about just how clear-cut the position is as to whether the grower corporate model is better than the cooperative model? They are issues that ought to be addressed.The opposition would prefer that these amendments be carried because ultimately, if there is confidence in BT and the minister has confidence in the model and the Grains Council has confidence in the model, why wouldn't it be supported by any report which is laid before the parliament? If there are significant grower organisations that are not yet convinced, why shouldn't they have their doubts allayed by this process? Why should we simply say, `Passing this now without this amendment will effectively put them in their box, so we should do that'? Why shouldn't we say, `They should have an opportunity to have this matter dealt with by full public scrutiny and in a way in which, effectively, the one-stream strategy that has been followed in this matter can be given as much authority as possible'? So we would think that the passage of these three amendments ought to follow.But if the chamber is not of the view that it should support all of the amendments the opposition's view would be that amendment No. 3 ought to be supported. That would simply say that the minister's determination on the M and As would be effectively a disallowable instrument, which would allow the Senate to take into account concerns that parties might have about determinations by the minister. The other evidence that the committee has is that, whether it be agreed or not, the minister has a final say on the structure of the memorandum and articles of the new company. Whether the Grains Council, the Western Australian Farmers Federation, the pastoralists and graziers or all of them disagree, at the end of the day, in the absence of this amendment, there will be no control over the exercise of discretion by the minister.Whatever else you support, we would be putting to the chamber that it is a matter of good public policy that amendment No. 3 be supported and that the determination by the minister on the memorandum and articles of association ought to become a disallowable instrument and be supported and passed into law. This would mean that that some time after November, when the minister makes a determination, if need be the Senate can consider whether that ought be allowed to stand or whether the minister ought to look at it again in the light of concerns which are raised by, for example, significant representative organisations of grain growers.10:48:005314Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I listened to the kind words that Senator Woodley said. However, what seems to be the problem is that we are relying on the letter that Senator Crane read into the Hansard yesterday. There are two many separations here. It has been mentioned by the parliamentary secretary that the Grains Council are driving the corporate model. However true that is, they obviously have an obligation to listen to their members, but they are in effect the proponent of the corporate model at this stage. All we have in this letter is:. . . subsidiaries could be approved by me without adequate time for consultation through [the] Grains Council . . . All the minister has agreed to do is consult with the proponent of the corporate model. The fact that the Grains Council are prepared at some stage in the future to say that they will consult with one of their member bodies is very good—and that, I would think, is probably part of their statutory obligation—but so far they have not effectively done that. We have not got any indication whether or not the minister himself is actually prepared to consider it.Let us assume that the Grains Council will now take a different view and will now actually consider models other than their preferred corporate model. That is all very well, but whatever they do the minister has the final say. If the minister himself is not actually writing or indicating in relation to either the M and As or consultation that he himself will be prepared to consider other models, we have not actually got anywhere. That is why these amendments are actually very important.I would still press the chamber to support the amendments because, as I say, there too many separations. They are not actually providing anybody with too much relief, given that so far the minister himself—no matter whether or not he is supposedly being driven by industry—has not been prepared to seriously consider either models. We have not got any of that or even any suggestion that that will happen. If the parliamentary secretary is going to provide to us the guarantee that the minister himself will consider seriously the other models, that will make a difference—but we have not heard that yet.10:50:005315Troeth, Sen JudithSenator TROETHGX5VICLP10—Firstly, in response to Senator Margetts, the reason that this legislation embodies the grower corporate model is that the minister has decided, after very long and thorough consultation with the grains industry, that this is the best model to suit the industry. With regard to Senator Crane's letter, I had not heard about that letter before it was read out yesterday, but the minister has given an assurance to Senator Crane that he will be consulting widely before the memorandum and articles are associated. That is the only thing that I have read into the letter.These amendments will not assist the cause of wheat growers or the wheat industry in any way. The development of this new industry structure has been under way for more than two years. Such amendments will simply lead to unnecessary delays which will be to the detriment of wheat growers. It has previously been discussed, in several comments made by me and other speakers, that the delay in the finalisation of the restructure has the potential to affect the commercial performance of the Australian Wheat Board. As I said yesterday, we are not indulging here in an academic treatise as to which is the best model for the wheat industry; we are talking about the income that is earned by wheat growers and the way in which they earn their living. For that reason, we should be getting on with assisting them with strong commercial arrangements for them to actually do that.The industry is already fully involved in the wording of the memoranda and articles or the constitutions, and they have the capacity to reach some sort of consensus through their own processes. The clear message from the people of the bush is that they do not like unnecessary intervention or involvement by the political system, and that is exactly what this amendment would result in. Yesterday, Senator Margetts spoke about participatory democracy. That process is the one that has been used in the final formulation of the grower corporate model. It is not the minister's preferred model, as you have mentioned in your amendment, it is industry's, but eventually government has to take the responsibility and government has to make a decision based on its discussions with the industry.The important thing is to pass this legislation so that we can have further discussions on the memorandum and articles, and that will happen, as I have assured you. The legislation that we have already debated is necessary. It deals with changes to the existing legislation. These amendments, on the other hand, are unnecessary as they provide unwelcome, formal political involvement in something that can be satisfactorily resolved by the industry itself. We would not support the amendment No. (3) either because this would further prolong the uncertainty to which the industry has been subjected for too long.Eventually, government has to make a decision. That is what it is elected to do. The minister is the executive officer of the government, in its own way, and he has the role of deciding what is going to happen. All I can say again is that, after long formal and informal consultation with industry, this is the model that the minister has decided will best suit the industry. That is what the government proposes to press ahead with.10:55:005316Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I think the Senate deserves an explanation from me as to why I am not supporting these three amendments. Certainly Senator Forshaw deserves that explanation. My decision not to support these amendments is marginal. It is not necessarily for all of the reasons given by the parliamentary secretary, because I believe the parliament is the final arbiter of these issues, but I have taken very clear advice from the Grains Council on this and it is on their advice that I reject the amendments.The issue that is important is a firm commitment from the Grains Council that they will consult in making their decision on the content of the memorandum and articles with the Western Australian Farmers Federation, and they will give me that commitment in writing. I will table that letter in the parliament once it is available. Obviously it is not available at this moment because of the logistics of doing that.In taking part in the debate, I can assure the Senate that that letter will be available and will be a commitment from the Grains Council. It will not simply be an agreement between the Grains Council and the minister but with the Western Australian Farmers Federation and, I presume, others who want to have further input into the content of the M and As. This commitment will be given through me and will come from the Grains Council in a written form. As I said, I will table that at a later time.In the debates in this place we sometimes have to make these kinds of decisions. It is with regret and with an apology to Senator Forshaw, because of his hard work on this, that I do indicate to the Senate the way in which the Democrats will vote on these amendments.10:57:005316Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The irony here is that the only opportunity groups like the Western Australian Farmers Federation have had to be part of this process or to have their models seriously considered has been the parliamentary process. The point of the parliamentary process and of having scrutiny through the parliament is that it gives communities a voice—a voice that they are not otherwise getting.The parliamentary secretary made it quite clear that there is a preferred model, that they are the government and that they are going to make that decision because they are the government. We have had the Grains Council come in to heavy us, suggesting that they do not want to have a report; they do not want to have to consider a report with the other models in it. What guarantees do we have that any other models will be considered? The Grains Council have said they do not want the report to have to be considered. They do not want it to be a disallowable instrument to enable the community and the people in the industry on the ground to actually have a say. That is what the parliamentary process is about or, at least, it should be—giving those people a voice. That is what the growers are asking for. They are asking for this voice.Yes, it is about people's incomes. It is about the decisions people make about their industry. The corporate model is what is holding sway. The ability to gain profits from the corporate model is what seems to be holding sway. It is not about what the growers want in their daily lives. They actually want the model that they have put their money into—strangely enough—to reflect their needs as growers. What an odd concept! They would like that report to reflect their needs. But the government are the government and they say they have a mandate, so let us do it. Okay, be it on your heads.10:59:005316Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—Senator Woodley, I do not need your apology, I need your vote. I will have another go and see if I can change your mind. Senator Woodley is placing his trust in the assurances given by the Grains Council and the minister. Frankly, when it comes to this minister, I do not have a great deal of faith in his assurances and I think, if you have been listening at all—GX5TROETHSenator Troeth—I rise on a point of order. I consider Senator Forshaw's remark to be a reflection on the minister, and I ask him to withdraw it.656Forshaw, Sen MichaelSenator FORSHAW—On the point of order, what I said was that I do not have a great deal of faith in this minister. That is not a reflection on the minister; it is an expression of my view. It is consistent with the views of most farmers out there, if you listen to some of the calls for his resignation.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Jacinta Collins)—On the point of order, that is the type of remark which is frequently made, and it is not unparliamentary.656Forshaw, Sen MichaelSenator FORSHAW—Frankly, I am not prepared, like you are, Senator Woodley, to accept the line, `Trust me, I'm the minister.' There are some ministers I trust, Senator Woodley included, but there are others I do not. It is being put by the parliamentary secretary that this will cause unnecessary delay. That is nonsense. Section 5 of the bill says:Not later than 31 March 1999, the Minister must make a written determination that amends the constitutions of the nominated companies.The minister has given an assurance that he would not be doing that before 30 November; I think that is the position. That is 4½ months away. Under that section of the bill he has to make this determination prior to the end of March next year, so there is already built into the legislation the minister's assurance that he would make a determination some time between 30 November this year and 31 March next year. The process we are suggesting will be completed well before that date. There is no way in the world that our amendments will delay it any further; it is a nonsense to argue that. The time lines have been set by the legislation and by the minister, and our amendments have been drafted with regard to the time lines that have been set and these restructuring changes in the industry. So, frankly, that assertion is rubbish.The second point that was put is that we should not be engaging in some academic treatise but rather we should be concerned about incomes. The inference is that we may be affecting the income or the earning capacity of wheat growers. Again, that is a furphy; it is spurious nonsense. This is not some academic treatise. The reason we are still here today debating this is that, as recently as two hours ago, my phone was ringing from grower representatives in Western Australia. There are people from other states as well who are still wanting to put forward the view that they are not happy with the government's proposals.This is not an academic exercise; this is an issue that is still alive out there in the industry. Whatever view you take—whether you support the position of the Grains Council, whether you support the position of Western Australian Farmers Federation or whether, as in the case that we have been putting forward, you support, ultimately, having some resolution of those positions—you cannot argue that this is somehow some academic exercise. This is about real wheat growers and real wheat grower organisations who still are putting forward to the parliament, through their representatives, their views on this legislation. We are not standing here having some academic argument; we are trying to solve a real problem. Notwithstanding Senator Woodley's rejection of our amendments, I think he should at least give us credit for attempting to solve a real problem.The government seems to think, and it is becoming increasingly evident, that all this is about is ramming this through, bludgeoning into submission the Western Australian Farmers Federation and their constituent members—who, I might point out again, represent the largest section of the export wheat industry—so the government can say, `Well, the legislation has been passed. Go away, it's all over.' We are trying to leave the door a bit open to allow them to have their say and ultimately have their issues addressed. I can give an assurance, because it has been put in writing to me, that the Western Australian Farmers Federation are quite prepared at the end of the day to accept the umpire's decision. All they have been asking for all along, and they have put it to Senate committee hearings on two occasions now, is a proper consideration of their concerns, not just, `Thank you very much. Sorry, but we are going to use the numbers and outvote you.'Senator Woodley has relied upon advice from the Grains Council. I have to say, with regard to the proposition that this will delay it because it will somehow give an impetus to the Western Australian Farmers Federation to engage in delaying tactics, I think you can put the boot on the other foot as well. It seems to me that one of the concerns that the Grains Council may well have is that they do not want this proposal because they may not be all that certain and confident that their own model will stand up. If, as Senator O'Brien has said, they are confident, if the minister is absolutely certain that he is right, and if the Grains Council is certain that they are right, then what have they got to fear from this process? They have nothing to fear from this process and, in fact, if they are right as they say they are, their credibility would be enhanced by adopting this procedure, because to date what has been put to us in the Senate committee is that the development of this has, to a large extent, excluded the Western Australians.Finally, I am disappointed that Senator Woodley cannot even agree to the third amendment. Senator Woodley, throughout this entire exercise from last year, has strongly supported the Senate having an inquiry, through the committee system, into the issues surrounding this legislation. I know you have supported that, as we have, because we were aware that this was not just some straightforward matter and that there were these varying views and differences of opinion.Our proposition is the logical extension of that process. Having given this legislation so much attention through the committee system and through this debate, the Senate would be failing in its duty if it did not finish off the process by ensuring that at the end of the day, when whatever final form the memorandum and articles and the constitutions of these companies is arrived at and determined by the minister, the parliament gets an opportunity to have a look at them.Unfortunately, under the current legislation, and because you will not support our amendments, the parliament will not get that opportunity. It seems to me that, to a large extent, it makes a lot of what we were on about in those committees irrelevant. I hope not, but I think we may still be in the position that we are in today—a lot of people being unhappy that ultimately the Senate did not conclude the task it started when it looked at this legislation through the committee process. I once again urge you to think again, have a change of heart and support the amendments.11:09:005318Troeth, Sen JudithSenator TROETHGX5VICLP10—I would like to add something to my comments on the amendments, which will probably further set Senator Woodley's mind at rest. The minister's determination is only for the initial memorandums and articles. After 1 July 1999, members of the company—that is, the growers—can alter them under the normal Corporations Law.656FORSHAWSenator Forshaw—It's because they're a public company. We know that.GX5Troeth, Sen JudithSenator TROETH—From what you were saying, members of the public who are listening may well imagine that this whole process is set in concrete. That is not so. There is ongoing opportunity for members of the industry to express their views in every way, and this legislation is setting the framework for going on with this sort of process. It is about handing industry to the people. I congratulate Senator Woodley for seeing the wood in this instance rather than individual trees, and I would certainly say that the government holds to its views.11:10:005318Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I am listening to this debate and taking account of all the opinions expressed; however, there is one stage in the process that has not been discussed yet. The Senate should continue its processes; that is a very strong argument Senator Forshaw has put to me. The problem is that, if we pass these amendments in the Senate, they have to go back to the House of Representatives, where they will be rejected. That is what I have a mind to. That will mean then that we are back in an argy-bargy situation.To me, accepting the assurances of the minister and the letter from the Grains Council, which I will table later today, is sufficient to overcome what would simply be a football match between the Senate and the House of Representatives if we pass these amendments because they are not going to be accepted by the government. They will be rejected in the House of Representatives, and then we are back again for the same debate.I am accepting the assurances of the minister—and I have the same concerns about some of the things he has done—but I am quite sure that the minister is not going renege on a written assurance, and certainly a written assurance from the Grains Council will also be far more solid in the end than amendments which will be rejected by the House of Representatives.11:12:005319Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would have thought that the written or other assurances from the minister and the Grains Council should mean that a disallowable instrument will ensure that those assurances, hopefully, will come to fruition. If they do not, why would we be frightened of a disallowable instrument?However, I would like to remind the parliamentary secretary that we know that the M and A's can be changed after the legislation goes through, because it is under the corporate model. Under the corporate model, people other than growers who are members can change the memorandum and articles. So, basically, that is the point we trying to make: under the corporate model, we end up in a situation where the growers feel that they may lose control. Going down that path and hoping that somehow or other things will come out in the wash is of concern to many people. They want to get it right first; they want to make sure their interests are looked after first.11:13:005319Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—I was going to make exactly the same point as Senator Margetts just did. I say to the parliamentary secretary: I think you should actually go back, sit down and read the legislation before you make some of the remarks you do. We are well aware of the processes involved here. We are well aware that, once these companies become publicly listed and shares can be traded, it is possible for the memorandum and articles of association to be altered in the way that would be prescribed, firstly, under the memorandums and articles of the companies themselves—because they will always set out the procedure for altering the articles—and, secondly, as long as it is in conformity with Corporations Law. We know that. That is the whole point. As Senator Margetts said, we are seeking to ensure that at the time the companies are going through the process of transfer, the memorandum and articles of association properly protect the interests of those who need to be protected.This is one of the major concerns of the Western Australian Farmers Federation: unless the memorandum and articles of association are protective of their rights and concerns, they will never get them changed back. That is what we are on about. That is why we are putting forward the proposition that the Senate should be able to look at the constitutions and the memorandums and articles of those associations and ensure that rights and interests are properly protected.11:15:005319Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Just briefly, the argument from Senator Woodley that the Senate should not be making changes that the government do not like means we would probably never make too many amendments here. At this time of year when we are being asked to sit extra weeks and we are being asked, quite irrationally, to sit extra fortnights to deal with a program that the rest of the community do not want, you kind of wonder who the government are representing. They are not representing the growers, the actual industry. They are not representing the people in the bush, who do not want Telstra being debated in the next week. Who exactly are the government representing in saying, `We've got to have what we want and nobody else gets a chance'? In the end, they have their own concept of who industry is, they have their own concept of what is their right once they have been elected and, somehow or other, the rest of the community are being cut out, and the electorate in this case are being cut out as well.11:16:005319Troeth, Sen JudithSenator TROETHGX5VICLP10—Senator Forshaw and Senator Margetts seem to have been badly advised in this instance. I would like to point out to them that only A class shareholders can change the memorandums and articles. Only growers can be A class shareholders. Furthermore, there is a vote weighting in favour of Western Australia because the votes are based on the level of production. Therefore, if Western Australia have, as you correctly point out, a higher level of production then the rest of Australia, the votes will be weighted in favour of Western Australia so they will have every opportunity to express their views.11:17:005320O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—What majority of A class shareholders will be required in a vote to change the memorandum? Will it be a simple majority or a larger than 50 per cent plus one majority? Whilst the minister is considering that, I want to question something Senator Woodley said. Senator Woodley, did I understand you correctly to be saying that the Grains Council representatives oppose amendment No. 3 in the package?11:18:005320Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Yes, that is so, Senator O'Brien. I must say—and I think it is important that I keep putting this on the record, although I do not want to necessarily prolong the debate—that Senator Margetts does make a strong argument and, certainly, I would never agree to the proposition that the Senate could not make amendments. That is not my position. But I do take notice of the fact that, if the government does not support this particular amendment, then what we are doing is simply ensuring another debate.I would of course press the amendment if I did not have a written assurance from the minister and if I was not going to have a written assurance from the Grains Council on these issues. Those assurances are a more solid basis for my belief that the concerns of the Western Australian Farmers Federation will be given serious and proper consideration, and that is why I will not be pressing an amendment which will not in the end succeed. I would never accept the proposition that I would not agree to an amendment because I do not think the Senate should make amendments. I just reject that completely. Because I have this other mechanism that I am depending on and because I believe that other mechanism will be a more solid basis for what we are trying to achieve, in this particular instance I will not support the amendments simply because I know that they will not succeed and I would prefer to depend upon those two written assurances.11:20:005320Troeth, Sen JudithSenator TROETHGX5VICLP10—In response to Senator O'Brien's query, I wish to advise him that the processes can be changed by a 75 per cent majority of A class shareholders and 50 per cent from each region.8O6O'BRIENSenator O'Brien—When you say that, is it both considerations or one or the other?GX5Troeth, Sen JudithSenator TROETH—It depends on the issue. In some instances, it is 75 per cent of A class shareholders; in other instances, it is 75 per cent plus 50 per cent from each region.11:21:005320O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Thank you, I had generally understood that to be the case. That raises the issue of, once the memorandum and articles are established, how simple it will be to change them. If there is commitment to them at the start, then that limitation is probably a good provision. It saves a situation where a simple majority will alter the memorandum and articles perhaps to the detriment of one particular group or another—whether it be in the interests of growers from Western Australia, New South Wales, Queensland, or all. I think that is a good provision. It in fact enhances the point that the opposition is making, particularly in relation to making the determination of the minister a disallowable instrument. If the determination of the minister is not a disallowable instrument, then it will be very difficult for parties that are affected negatively to turn that around.The evidence that the committee has, after taking evidence on this bill is that, ultimately, the decision on the final form of the memorandum and articles of association is the minister's. There may be total confidence. Frankly, I am quite surprised that the Grains Council does not wish to have any assurance at all about the final form of the memorandum and articles, that it is happy that the matter lies in the hands of the minister. Effectively, Senator Woodley, it has told you that it is happy not to have that assurance. I am, frankly, quite surprised. I had understood that it had a different view. I really find it difficult to understand why it would take that view, but I accept your assurance that that is its view.I return to the issue the Parliamentary Secretary to the Minister for Primary Industries and Energy (Senator Troeth) raised as to the question of the impact of the passage of these amendments and whether they could delay the whole process and to the issue I raised earlier in the debate on this matter. That is, when we debated the first tranche of the legislation, the parliamentary secretary relied upon assurances from the department that, if we passed the first tranche and not this particular bill, the Wheat Board could continue to operate. Subsequently, we were told by an officer of the department that that was not the case.The parliamentary secretary has not addressed that matter but is now saying, in relation to this matter, that somehow, if we pass these amendments, we will be holding up the process, we will be jeopardising the process, we will be getting in the way of this measure. Let me say this: this parliament is granting a private company an export monopoly which will, on the government's own admission, give growers shares in the company which will reflect the value, potentially, of that monopoly. That is what the parliament is doing, and to say on the one hand that we should do that but, on the other hand, that we should stand out of the way and let growers do what they wish, to me, is an absolute contradiction in terms.We are proceeding down the path of putting in place an orderly marketing arrangement for exporting Australian wheat, and the parliament is giving a significant concession to growers in this bill in that regard. We agree to do that. We do not agree that, in the process of setting that up, the minister should have unfettered control over the establishment of the memorandum and articles of association of the company and that the concerns which are outstanding from grower representatives in Western Australia should not be able to be dealt with in the way we suggest in a report presented to this parliament. You cannot have it both ways. You cannot say on the one hand that the parliament should do these things in the interests of growers but then that the parliament should not have concern about how the process is conducted.That is the reason we say these amendments ought to be carried. We can read the numbers. We hear what Senator Woodley says, but I think it is important that we place on the record that there is a strong justification for the position that we take. If the government and the Grains Council do not want this particular exercise of power to be reviewable and that is the way the Senate votes, that is a matter on which the government and the Grains Council may have to reflect in the future. Question put: That the amendments (Senator Forshaw's and Senator Margetts's ) be agreed to.11:31:00The committee divided. (The Chairman—Senator S. M. West)24Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Cooney, B.Crossin, P. M. Crowley, R. A.Denman, K. J. Evans, C. V.*Forshaw, M. G. Gibbs, B.Hogg, J. Lundy, K.Margetts, D. Murphy, S. M.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.37Abetz, E. Allison, L.Boswell, R. L. D. Bourne, V.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferguson, A. B.Ferris, J. Gibson, B. F.Harradine, B. Heffernan, W.*Herron, J. Hill, R. M.Knowles, S. C. Lees, M. H.Macdonald, I. Macdonald, S.McGauran, J. J. J. Minchin, N. H.Murray, A. Newman, J. M.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.Woodley, J.Conroy, S. Kemp, R.McKiernan, J. P. MacGibbon, D. J.Cook, P. F. S. Brownhill, D. G. C.Mackay, S. Alston, R. K. R.Collins, J. M. A. Bartlett, A. J. J.Faulkner, J. P. Stott Despoja, N.* denotes tellerQuestion so resolved in the negative.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I remind Senator Lightfoot that it is not appropriate after the tellers have been appointed to move from his seat to another position.656FORSHAWSenator Forshaw—Madam Deputy President, I raise a point of order. Did Senator Lightfoot actually vote?10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—No, he did not.Bill, as amended, agreed to.Bill reported with amendments; report adopted.5322Motion (by Senator Troeth) proposed:That this bill be now read a third time.11:35:005322O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—As I indicated earlier, there were a number of submissions made to the committee inquiring into this bill which indicated that support for the bill would be withdrawn if certain provisions in relation to tax were not adopted. As far as I can ascertain, no organisation is seeking now that this bill not be passed, given that those wishes as to tax were not approved by the Senate. The opposition will be supporting this bill.11:36:005322Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I have not had a chance to work out whether or not that applies to the Western Australian Farmers Federation. They wanted certain assurances. I am not sure that during the course of this debate their assurances have been recognised. I am not in a position to give that assurance that the Western Australian constituents feel happy with the passage of this bill.Question resolved in the affirmative.Bill read a third time.Bills5322r3975322Debate resumed from 26 March, on motion by Senator Ian Campbell:That this bill be now read a second time.11:37:005322Lundy, Sen KateSenator LUNDY7G6ACTALP00—The Intellectual Property Laws Amendment Bill 1998 , which the opposition will be supporting today, contains three major elements within it. The first is to implement the government's decision to allow an extension of patent term for up to an additional five years for pharmaceutical substances. This recognises the long time it takes to develop a substance and bring it to the market—time that effectively erodes the patent term available in which to recoup on investment.The bill will provide an effective and realistic patent life for pharmaceuticals closely reflecting that of other areas of innovation. The new arrangements will also allow manufacturers of generic drugs to undertake certain work prior to the expiry of the patent for the purposes of meeting pre-marketing approval requirements. Springboarding by manufacturers of generic drugs will be allowed after a patent extension has been granted.The second element is to provide for the introduction of a new regime for regulation of the patent attorney profession and to deregulate professional practice in trademarks and designs. This will allow greater choice of providers of professional services in the areas of patents and trademarks. The third is to make some minor changes of a technical nature to the patent regime, making it easier for applicants to transact business.Before I conclude, there are a few other points that I would like to make on the importance of this legislation. Intellectual property protection is a critical factor in the increasing cost of drugs and health care in the future. The impetus is the genetic revolution and fast moving developments in biotechnology. Those countries that do not keep step with developments in the protection that intellectual property affords will be at a disadvantage. Those countries that do not develop such intellectual property regimes will inevitably suffer, both in terms of their ability to attract the research and development dollar and in the products that are available to consumers.All the evidence points to the increasing economic importance that pharmaceuticals will have globally. By the years 2010 to 2020, projections are that between 20 and 25 per cent of the US GDP will be allocated to health care. A significant proportion of that will be on pharmaceuticals. In Australia, pharmaceutical spending is continuing to grow as a proportion of overall health spending. That is a good thing, for it is far better to dispense medicine to patients and cure them than to perform surgical procedures.To maximise Australia's stake in the growth of the use of pharmaceuticals, we need to manage that expansion properly. This legislation is vital to ensuring that Australia is a place that is attractive to international pharmaceutical investment as well as being a place that fosters the development of our own home-grown scientists. The legislation is vital to encouraging an environment of certainty for investment. The Intellectual Property Laws Amendment Bill 1998 is part of the mosaic that will attract investment. In the short term, that means increased costs in terms of the pharmaceutical benefits scheme, but the long-term benefits are clear.There have been some discussions with the pharmaceutical company Astra, primarily about the inclusion of their drug Losec. I understand that the government will not accept an amendment to include the Astra drug mainly on the grounds of cost, but there are also problems with generic manufacturers who may have started work, at some cost, in the expectation that the drug will go ex-patent soon. The opposition is of the view that the bill should go through, and it would be bad for the industry as a whole if the bill were held up at this stage.I would like to seek an assurance from the government today that it will further investigate Astra's claims that they have been unfairly excluded and that it undertakes to report back and introduce amending legislation if required. It is my understanding that the government is already committed to doing so in discussions about this bill, and I am seeking a commitment to this undertaking in this place today. In conclusion, the opposition will support this bill for the reasons I have just outlined.11:41:005323Lees, Sen MegSenator LEES8U4SAAD00—I rise to speak on the Intellectual Property Laws Amendment Bill 1998 . The Democrats support the continuing assistance to what is one of Australia's most important industries. Indeed, if you look at successful industries in this country—the wine, dairy and auto industries, the food processing industry generally and the pharmaceutical industry—they are some of our brightest lights. To this end, we support the extension of patent protection on certain pharmaceutical products.We have to note at this stage our pharmaceutical benefits scheme, because through that scheme we keep prices comparatively low in Australia. If you look at other developed countries, you will see that generally they pay considerably more for pharmaceuticals. I see this as a trade-off with the manufacturers. Looking at the amendment that I will be discussing later, while it is important to have some additional support for the industry, we do need to keep track of exactly how successful that actually is.Hopefully, providing pharmaceutical companies with additional assistance will increase research, development and, in particular, manufacturing here in Australia, and we will not see the results of Australian research going offshore. The evidence over the last decade is that Australia has provided the pharmaceutical industry, as a whole, with a favourable environment for growth. I believe that that has enabled us to keep the pharma ceutical benefits scheme running and not depress the industry sector as we have done so.There is obviously a large range of factors which encourage pharmaceutical companies and others to come here, set up, do their research, develop products and market them. That involves labour market issues, currency valuations, inflation, relevant infrastructure—everything from telecommunications to shipping, aviation and banking. I ask the government to consider all of this as we look at the patent extension in supporting the pharmaceutical industry. I think we need to look at a whole range of assistance measures that companies get in this country as a package.There are both advantages and disadvantages in granting extensions to pharmaceutical patents. We believe that we do have to balance that—the benefits of encouraging further research on one hand and the disadvantages of allowing the market monopolies on the other—because that will mean higher prices for consumers. In order to assess whether this balance has been achieved, the government needs to collect data. We are, after all, talking about expenditure of some $878 million, at least. The government could not give us some of the finer details when we asked for more detailed assessment, but we are looking at about that much over 10 years. Therefore, we have asked that the government be provided with more information from those companies that require their patents to be extended.I will speak more on this when we get to the committee stage. We also wish to acknowledge the concerns of Astra. We pursued its issue. The government has made it very clear that it is not prepared to support Astra at this time. I understand that the Greens will still go ahead with the amendment. We will be pursuing our amendment and, again, asking the government to consider that company—and perhaps there are some others—which will get into some difficulties once this goes through. We ask the government to keep an eye on what is happening on the ground in the industry and to come back to us with amendments if necessary.11:45:005324Brown, Sen BobSenator BROWNQD4TASAG00—At the outset I need to say that there is the question of the corporate ownership of intellectual property rights. Those listening might want to know exactly what this legislation is about. It is about extending patent rights for people who invent new drugs from a basic 20 years to 25 years. It includes developmental time and so on for getting those drugs on to the market. The aim of the extension is to encourage the development of new pharmaceuticals in Australia.As I will explain in a slightly longer dissertation on one aspect of this which worries me, a small group of drugs and, particularly, one manufacturer are disadvantaged by this process. They also have a current 20-year patent, but after 16 years they were given a four-year extension. Usually, after 15 years, other drugs have been given a five-year extension of patent. Because it is a case of 16 plus four making 20 instead of 15 plus five making 20, they are shut out of the five-year extension, which is quite patently unfair.The Intellectual Property Laws Amendment Bill, which we are dealing with, has three legislative changes. The one to do with the extension of patent life for pharmaceuticals that I was talking about is the one I am most concerned about. The object stated by the government is to provide an effective patent life more in line with that available to inventions in other fields of technology. It will also create a patent regime for pharmaceuticals which is in line with our competitors; that is, overseas competitors. Our major trading partners overseas support an effective 15-year patent life for pharmaceuticals. In shorthand terms, that means 10 years for development and 15 years on the shelf in the marketplace.There is a fundamental flaw in this legislation because, as I have just indicated, it fails to treat all the existing pharmaceutical patents equally. It fails to treat them equally because it arbitrarily excludes from its application a small group of drugs that are currently being used by many people in this country. The origin of this problem lies in the frequent and ad hoc changes that in the past have been made to the pharmaceutical patent regime. This has created a situation where these groups of patents are not being treated equally. This bill provides an opportunity to rectify the situation and to stop continuing discrepancies. But that opportunity has not been taken, so I am making a minor amendment to take that opportunity to overcome the inequity and deficiency. Without this amendment, the bill would remain unfair because it fails to provide equal treatment for all pharmaceutical patents. The patents cover similar types of compounds. There is just no logical basis for treating one group differently from another.The patents that I am referring to have been arbitrarily excluded from the bill. These patents have a standard 16-year life whose term at the time of the grant was due to expire before July 1995. A typical example of how this inequity discriminates against one compound is the case of an innovative drug that was ground breaking in its approach to the treatment of a common disease affecting people in the Australian community. That drug took 11.1 years to develop and it achieved marketing approval in Australia. A 20-year effective patent life left a patent life of only 8.9 years after its development.The government's stated objective is to provide a 15-year effective patent development by extending the whole patents to 25 years. However, this drug is in a category that has been excluded from the provisions of the bill, as I have explained. I want to know why, when other drugs that have taken similar or even less time to develop are eligible for patent extension of up to five years.The bill does not provide for an automatic extension to any patents. All patents have to satisfy the requirement of the Commissioner of Patents on an individual basis. Those criteria are set out in the bill. Only a small number of patents have been excluded from the provisions of the bill; they are the ones I have been referring to. The question has to be asked again: why? The government may argue on the grounds of cost; that is, the uncertainty of the cost implications for the pharmaceutical benefits scheme if this small group of drugs is added like all the rest. However, the government has available to it a suitable mechanism for controlling the price of pharmaceuticals through the pharmaceutical benefits scheme. Patent life should never be traded off as a way of controlling cost. One is a philosophical stance—that is, the protection of intellectual property—whereas the other is a short-term financial strategy.In extending patent laws under this bill, there will be an increase in the cost to the government. However, the decision to do so is in line with the government's own decision to accept the recommendations of the Productivity Commission report into the pharmaceutical industry. Those recommendations were embraced by the government enthusiastically. That enthusiasm was based on the idea of providing an environment to stimulate a research based pharmaceutical industry in this country.The government has stated that this is something that will give tangible benefits to Australia—and so have other speakers here this morning—particularly in the medium and longer term. Any minor incremental cost that my amendment will bring about will be offset by the benefits to the country of taking the philosophical stance of integrity without exception. I understand, by the way, that approaches have been made to the government by at least one of those research based companies with a patent excluded from the provisions of this bill and that that company has offered to help significantly minimise the costs that would be incurred by the government should the amendment that I have foreshadowed be made. I understand that the government has rejected that approach.Concerns have also been expressed about disadvantages that may flow to generic companies that have legitimately commenced springboarding activities. To translate that jargon: when the patent period of a company which invents a new successful drug expires, other companies can come in, make the same drug and slap a new name on it. They are called `generic companies'. The market becomes competitive. But, for the life of the patent, the company that invents the drug has the exclusive sale rights. This ability of other companies to develop the same sort of drug toward the end of the patent life, and then, when the patent life has ended, put it onto the market is called `springboarding'.Under my amendment, generic companies will be allowed to continue to springboard. This extended springboarding period will give rise to greater competition upon patent expiry, which can be very much to the advantage of a number of generic companies. In any case, the government's stated objective of the legislation is to `foster an environment in which research and development in Australia can flourish'. Most people who have watched the research and development of ideas in Australia have had to shake their heads in dismay not just in this area but right across the board because much of it gets little or no assistance; it is certainly not encouraged. How many ideas, how much intellectual property from Australia, go overseas to get the sort of support that is required to bring it to fruition?If you accept the position of the government, then the question about whose needs are paramount—the research and development based companies or the generic companies—has already been answered. It is clear that the aim of the legislation is to extend patent periods to pharmaceutical substances that have taken a long time to develop. This will delay the entry of the generic copies of those pharmaceuticals into the market. My amendment is consistent with this; the government's argument against the amendment—if it is not going to support the amendment, and I presume it is not going to—goes counter to that.Under my amendment, generic companies will be delayed in their entry to the market; however, their rights to enter the market remain exactly the same. Therefore, funds spent on springboarding will not be wasted. There will simply be a delay period. It will allow other companies to look at springboarding on these particular drugs anyway.Let us not forget here that it is a matter of fact that the generic companies are not the research and development strength of the industries. They are not involved in research and development to near the same extent as the research based pharmaceutical companies. There has been strong representations by the research and development based component of the industry to have all existing patents included in the provisions of the bill, as my amendment would do. In fact, that was the original position of the Australian Pharmaceutical Manufacturers Association.There has been extensive consultation between the government and the industry. It concerns me that, after this process, the government can still arrive at an unfair and fundamentally flawed piece of legislation. It should be good, comprehensive, across the board, fair to everybody legislation, but, because of this glitch, it is not. There has been an argument by the government that it could be exposed to successful litigation by generic companies which have been getting ready to make the patented drugs which have been excluded from this legislation. But my understanding—and the government might like to correct me on this—is that both independent and government legal advice says that that worry is not a real one, that there is no real basis for that.I will be moving amendments in the committee stage to make this legislation fair and apply across the board to all drugs which have been patented following development in this country, and to ensure that a very small group are not left out by dint of past inequities or, at least, the ad hoc way in which patents in this field have been managed in the past.11:58:005326Cooney, Sen BarneySenator COONEYSF4VICALP00—The Intellectual Property Laws Amendment Bill 1998 does a number of things. As Senator Brown discussed, it does things to patents relating to pharmaceutical substances. That has been dealt with. Senator Lundy, who is leading the opposition's argument in this matter, has discussed that and will discuss it further.I want to make some remarks about schedule 2 to the bill, which talks about patent attorneys and trade marks attorneys, and the changes that have been made in that respect. In that regard, I go to the second reading speech of the Minister for Customs and Consumer Affairs, Mr Truss. On the third page of the second reading speech, this paragraph appears:The bill proposes that the existing partnership arrangements for patent attorneys should be relaxed to improve the public's access to the professions by encouraging a broadening of the competitive base within the patent attorney profession. The proposed system will allow mixed partnerships with other professions where at least one member of the partnership is a registered patent attorney. However, patent attorney partners will still be required to prepare patent specifications.I want to talk about this concept that somehow competition will make the profession better than it was. I am not against competition—it is proper and right that professions should be made as productive, as good and as dedicated as possible—but whether or not those forces of competition are the way to do it is another matter. There is a concept in the community that says that, if you apply competition to the professions, things will become better by that factor alone, as if competition itself will produce the sorts of professions that we need.There is a danger in that concept. The old idea of professions was that people did the work or did a job because there was pride to be had in doing that job; that there was an ethic, a tradition, that upheld the way it was done and that the job should be done well because of those things. That idea seems to be disappearing. The Hon. Sir Daryl Dawson, who was a Justice of the High Court, had something to say about this matter in September 1995 in the context of the legal profession. I would like to quote from his speech because it illustrates what I am saying:One aspect of social trustee professionalism was a large degree of self-regulation by the profession itself. This was not only because it was the practitioners of the profession who alone possessed the knowledge necessary to ensure the maintenance of proper standards but also because it was they who, above all others, could be trusted to apply the appropriate discipline for the purpose.I want to emphasise the next passage. It says:With the change from the notion of a trust to that of a marketing exercise, reliance is placed upon market forces to produce services of the required standard. And because governments understand competition and the mechanisms necessary to ensure its existence, self-regulation is no longer seen as adequate and, indeed, is seen as inconsistent with a competitive environment.He goes on to say:There is an obvious tension between trust and competition which is reflected in an evident desire to remove from the professions, particularly the legal profession— because that is what he is talking about at that stage—the capacity to regulate their own activities and to introduce a greater degree of public control. It is the free play of market forces, not the voluntary maintenance of professional standards, in which we now place our faith and in this regard there is little distinction to be drawn between the practice of a profession and any other form of commercial activity.It is this concept that is introduced by this legislation. Indeed, there are changes made through this legislation to the Patents Act, the Trade Marks Act, the Designs Act and the Copyright Act—those acts which deal with intellectual property.There is a shift brought about by this legislation in the concept of how those people who help others with their problems—problems with trademarks, designs, copyrights and patents—carry out their task. There is a shift in the spirit, in the soul, of what is brought to the carrying out of an attorney's task. The point that His Honour made is that when this shift takes place—the shift from a reliance on dedication to the profession to a situation where competition is the force—there is a shift at the same time to greater regulation. That is, of course, illustrated in this legislation by section 227A, which talks about a `Professional Standards Board for Patent and Trade Marks Attorneys'. It is interesting to look at this particular section. It says:(1) The Professional Standards Board for Patent and Trade Marks Attorneys is establishedIt deals with the functions that that board is to perform. It says nothing about the constitution and membership of the Professional Standards Board, but the regulations make provisions in relation to that.So not only is there a shift in the presumptions that go behind what makes a profession but also when that shift occurs it is not brought into parliament but is sent off to be decided by whoever makes the relevant regulations in the terms of this bill. The point I want to make is that this bill is a very significant change to the way this community is to go about providing people to help those who want to properly register the products of their minds so that they can benefit from them.I was reading earlier a speech by Sir Winston Churchill. That is going back a long way and the Acting Deputy President, Senator Watson, and I are perhaps amongst the few people in this chamber who can remember those speeches. In July 1941 when the war was going on, in relation to production and people who were doing work, he said:They must have the power and authority to do their work, and be able to take a proper pride in it when it is done, and to be held accountable for it if it is not done.That sense of pride in your work—what was good about your work was not that you were going to make a great profit out of it but that you were going to have pride in it—seems to have disappeared and this legislation goes a long way to endorsing this new idea of competition efficiencies and market forces. Those concepts are good in themselves, but not when they are isolated and applied on their own and when they do not take into account the other great driving forces such as pride in your work, such as wanting to do a job because there is a great tradition of doing that job well and such as having a commitment to your client. Those concepts certainly do not appear in this legislation. When the second reading speech is looked at, those concepts do not appear to be much in contemplation there either. For example, the second reading speech says:The government has been concerned to ensure that the profession continues to offer a high quality service while being subject to competitive pressures.I think, unconsciously, there is an admission in that that competitive pressures, competitive forces, do not necessarily mean that you are going to have a high quality service. The second reading speech goes on:It wishes to ensure there are no undue barriers to competition in professional practice that might adversely affect the public interest.So the legislation allows practices to set up with only one patent attorney. An entity, no matter how many people are in it, can do the jobs and work that used to be done only by patent attorneys as long as it has one patent attorney in it. So in the name of competition, in the name of making things less costly, the sort of people who do the work do not have to be qualified to the extent that they used to be. There is a concept that somehow, if you can do it more cheaply, you are going to do it better—a proposition that just is not correct.In case people think I am looking to the past and saying the past is best, I quote Sir Daryl Dawson in his speech in September of 1995, where he said:As I have said, one should try to avoid nostalgia in attempting to assess the changed nature of the legal profession. There are good reasons for regarding those changes which have taken place, and those which are likely to take place, as improving the accessibility, efficiency and cost of legal services—Or, if I could interpolate in this context, `patent attorney services or services as far as designs or trademarks go'. His Honour continued:Nor do the changes necessarily mean a decrease in the financial returns from the practice of the law. According to a recent press report, the Australian Bureau of Statistics has revealed that solicitors' practices have doubled their pre-tax operating profit over a five year period from about $825,000 to more than $1.6 m. and legal services have boosted their gross legal income by 67 per cent.So he is saying there that a lot of these changes, far from producing fewer returns for the lawyers in this case, are returning more. If you look at this legislation where not exactly the same but similar strategies have been undertaken, is this going to lessen the cost? Is this going to lessen the return to those people who carry out work with designs, copyright, patents and trademarks?I think there is some considerable concern to be had about the matters produced by schedule 2 of this legislation. I notice that with proposed section 198 in the bill there is now going to be a register of patent attorneys and it is to be kept by a designated manager. Then there is a provision as to how the designated manager is to be appointed. That seems to show that, when we talk about freeing up the market and allowing market forces to apply, it is often a misnomer, a wrong concept, because, by the very fact of freeing the market up and by allowing all sorts of people who are not qualified to do the work that those who were qualified used to do, you allow more people to do it but you tighten up on the market. You have to regulate the market more.If I can anticipate a debate, it is the same sort of thing with Telstra. As soon as you privatise that and open that up to market forces, it does not free it up because you have to have a whole list of regulations and laws to ensure that the work which in the case of Telstra was carried out in the country before without any regulations is done. It is a very strange affair and something we have to look at with the present trends that we take in the professions, business and generally about freeing up the market. What does it really mean? It means opening up a lot of work to be done by those who are not as well qualified as those who used to do it, to enable them to do it. Because we get worried about what follows on from that, we then put up a new regime of regulations, which means that there is a lot more regulation—and that is done by legislative provisions—than there was before.I have some particular concerns about schedule 2. It is a great illustration of the sorts of issues associated with His Honour, Sir Daryl Dawson, who was regarded—as you may well remember, Mr Acting Deputy President—as a very conservative judge; he was often in the minority on things. He was the sort of judge that the minister presently in the chamber would have high regard for.KI4PARERSenator Parer—He didn't filibuster.SF4Cooney, Sen BarneySenator COONEY—I am a bit concerned that Senator Parer says this is a filibuster, because I am talking about the sorts of issues that we ought to be looking at. I think that simply a desire for more money or more profit is not the sole basis for going ahead in these areas; it would be a pity if that were the case. In spite of Senator Parer's interjection, I am sure he does not believe in that.I hope that the regime that goes ahead to control those who give services to those interested in obtaining trademarks, patents, design rights or copyrights means that they are better served in the future than perhaps is possible, given the basis that this act is going to present for them to perform.12:18:005329Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I thank honourable senators for their interest in the Intellectual Property Laws Amendment Bill 1998 and the amendment and for their comments. The bill fulfils the government's commitment in three areas. The first is the extension of the patent term for up to five years for pharmaceuticals. This recognises that the long development time, combined with considerable regulatory processes to register and market a new product, means that companies usually have considerably fewer years under patent in which to gain a return on their investment. The bill will provide an effective patent life which is closer to that available to innovations in other areas.These arrangements also make provisions for springboarding. This allows manufacturers of generic products to undertake certain activities, prior to the expiry of the patent, solely for the purpose of meeting premarketing regulatory approval requirements. Springboarding will be permitted any time after the extension has been granted.This bill has the support of the whole of the research based industry and of generic manufacturers. The government is aware that one company will not fully share the benefits of this legislation. The patent on the company's largest selling product, Losec, will expire in April 1999 and will not receive an extension of patent. The government will review this situation and the company's concern after the enactment of the legislation.The second area provides for reforms in the regulation of patent attorneys, allowing greater choice of providers of professional services in the areas of patents and trademarks. The government has been concerned to ensure that the profession continues to offer a high quality service while being subject to competitive pressures. It wishes to ensure there are no undue barriers to competition in professional practice. Technical qualifications will not be required for registration as trademark attorneys. It is these areas of lesser specialisation that the government considers should be opened up to greater competition.Restrictions on practice in patents will be retained, recognising the technical and de manding nature of patent law and the potentially high cost of poor quality applications. Access to the profession will be opened up by moving the education and examination functions of the Patent Attorneys Professional Standards Board to the universities.The third area of change will improve the ability of patent office officials to provide better, more cost-effective services. The amendment to clause 38 of the bill clarifies the rights of lawyers to use the title `registered trademark attorneys' in the transition to the new regime. This means that lawyers and patent attorneys will have the same rights to seek registration as trademark attorneys. These amendments will enable the government to meet its objectives of balancing a strong intellectual property system, with competent professional advice, against the benefits of greater competition.Question resolved in the affirmative.Bill read a second time.5330The bill.12:22:005330Lees, Sen MegSenator LEES8U4SAAD00—I move:(1) Schedule 1, item 3, page 7 (after line 13), after section 76, insert:76A Notification of extension to the Secretary, Health and Family Services In respect of each application for an extension approved by the Commissioner under section 76 in a financial year, the patent holder must lodge with the Secretary of the Department, before the end of the following financial year, a return setting out the following information: (a) details of the amount and origin of any Commonwealth funds spent in the research and development of the drug which was the subject of the application; and (b) the name of any body (i) with which the applicant has a contractual agreement; and (ii) which is in receipt of Commonwealth funds; and (c) the total amount spent on each type of research and development, including pre-clinical research and clinical trials, in respect of the drug which was the subject of the application.This amendment requires that those who are applying for the additional patent time provide some information to the government. The aim of this is to basically assess whether what the government is trying to do is actually working and whether the money that we are spending—as I said before, we are looking at over $800 million in a period of 10 years—is being put to best use. I think the wording is self-explanatory:the total amount spent on each type of research and development, including pre-clinical research and clinical trials, in respect of the drug which was the subject of the application.It is additional information from the company that is applying for the patent.12:22:005330Brown, Sen BobSenator BROWNQD4TASAG00—I support this amendment because it does just what Senator Lees says. It is a pretty important component of this. There are two reasons why the patent extensions might be attractive to companies. One is the added profitability of having an exclusive patent for another five years. The other one is the ability to be assured in research and development that that profitability will be the outcome. That is what companies are designed to do; they are designed to return a financial benefit to their shareholders. But, in so doing, it does provide research and development, which is in the interests of the Australian people.I support this amendment because it is a pretty commonsense amendment. It says to the companies benefiting from this legislation at, on the face of it, quite a deal of expense to the Australian taxpayers, `Show us the return in terms of research and development. Show us the outcomes which flow from this legislation in terms of increased research and development in the interests of helping Australians who are ill to be treated in a way which is going to improve their lives.' In short, it is saying, `Show us the benefit to the community as a whole, above and beyond the quite clear benefit that will come to the drug companies out of this legislation.'12:25:005330Lundy, Sen KateSenator LUNDY7G6ACTALP00—I would like to indicate that the opposition will also be supporting the Democrat amendment.12:25:005331Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—The government will agree to this amendment in the interests of getting the bill through the Senate. Applicant firms for patent extension will incur some modest additional compliance cost in the provision of this information. On the other hand, this additional data may be useful to the government in assessing the benefits and the costs of extending effective patent life. This would include links between R&D conducted in Australia and extended patent life.Amendment agreed to.12:25:005331Brown, Sen BobSenator BROWNQD4TASAG00—by leave—I move:(1) Schedule 1, item 8, page 11 (lines 5 to 7), omit "(other than a standard patent granted for a term of 16 years and whose term at the time of the grant was due to end before 1 July 1995)".(2) Schedule 1, page 11 (after line 7), at the end of the schedule, add:9 Transitional provisions(1) Within six months of the date of commencement of this Schedule, a patentee whose patent: (a) was granted for a term of 16 years; and (b) at the time of the grant was due to expire prior to 1 July 1995; and (c) received a four year extension under: (i) the Patents Amendment Act 1989 ; or (ii) the Patents Act 1990 ; and (d) has not expired by the date this Act receives Royal Assent; may apply for an extension under section 70 of the Patents Act 1990.(2) Any pharmaceutical patent which is eligible under subitem (1) for an extension, is deemed, upon application by the patentee to the Commissioner under section 70 of the Patents Act 1990 , to have been granted for a term of 20 years.(3) If the Commissioner refuses the patentee's application pursuant to section 74 or section 75 of the Patents Act 1990 , the deemed grant under subitem (2) is revoked and the patent exists on the terms which applied immediately before the application. (4) The rights conferred upon patentees under section 79 of the Patents Act 1990 , apply equally to a patentee who is eligible to apply to the Commissioner under section 70 of the Patents Act 1990 because of subitem (1).(5) The exclusive rights of a patentee whose patent is eligible pursuant to subitem (1) to apply for an extension under section 71 of the Patents Act 1990 are not infringed by a person exploiting: (a) a pharmaceutical substance per se that is in substance disclosed in the complete specification as a patent and in substance falls within the scope of the claim or claims of that specification; or (b) a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; solely for purposes in connection with: (c) having the goods included in the Australian Register of Therapeutic Goods, where the goods are intended for therapeutic use; or (d) obtaining similar regulatory approval under a law of a foreign country or part of a foreign country.In summing up the second reading debate, the minister said that the government will review the situation of unfairness that has arisen here, whereby companies which have had a term of 16 years for their patents are being excluded from the extended five-year period that covers those patents as against those companies which have 15-year terms but are getting the five-year extension. As I said earlier, the unfairness is such that the majority of drugs produced in the country under patent by the majority of companies have had a 15-year patent increased by five years, to 20 years, giving them an extra five years to give them a total of 25 years.There are a few drugs produced by a few companies which have had a 16-year term extended by four years to 20 years that are not being given the five-year extension. It is a pretty arbitrary piece of unfairness. I am moving these amendments because it is unfair and inequitable. I would like to hear the response from the minister on this. I would be very grateful if the minister would elaborate on that commitment to review the situation in the wake of this legislation to overcome this unfairness. What does the government have in mind there?12:27:005332Lundy, Sen KateSenator LUNDY7G6ACTALP00—The opposition is of the view that the bill should go through and that it would be bad for the industry as a whole if the bill was held up at this stage. As such, we will not be supporting Senator Brown's amendments. In doing so, as I said in my earlier comments, we too are interested in seeking an extrapolation of the minister's commitment that they will further investigate Astra's claims that they have been unfairly excluded, and that they undertake to report back and introduce amending legislation if required. It is my understanding that the government have already committed themselves to taking this course of action, and I look forward to the minister's comments.12:28:005332Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—The government will not support this amendment. The bill, in its current form, has the support of the pharmaceutical industry as a whole. The industry was thoroughly consulted during the development of the bill. The Australian Pharmaceutical Manufacturers Association strongly supports the bill in its current form and the generic manufacturers likewise support the bill.I am aware that one company has lobbied for this amendment to the bill. The government appreciates the concerns raised by this company which, in the case of one of its products, will not fully share the benefits of the legislation. However, the company has raised these concerns only recently—in fact, after the legislation passed through the House.The proposed amendment to the bill would, in the view of the government, create a number of problems. Generic pharmaceutical manufacturers would be likely to suffer significant commercial disadvantage if the proposed amendment were implemented. I am aware that a number of generic companies have already legitimately commenced development work, anticipating the patents affected by this amendment were due to expire. They have committed significant investment on these grounds. If the amendments were adopted, these generic companies would be prevented from entering the market for up to another five years. There would be a strong backlash from these generic producers if this amendment were adopted and if no transitional arrangement was provided, for example monetary compensation or compulsory licensing arrangements between the affected companies.As a further consequence of the proposed amendment, the government would incur additional costs through the pharmaceutical benefits scheme by the delayed entry of generics into the market. A provisional estimate of these additional costs would be of the order of $40 million to $60 million a year for the next five years. For these reasons, the government opposes this amendment.12:30:005332Brown, Sen BobSenator BROWNQD4TASAG00—The minister has made a pretty effective argument as to why the patent extension should not occur—that is, it would be cheaper for the government and cheaper for consumers—but it flies in the face of the incentive side of the argument, which is that research and development into effective drugs for people who are in ill health in Australia will be stimulated by this move.I am arguing that the amendments are necessary because it is quite unfair to single out a number of drugs by a small number of companies for different treatment. The arguments that the minister brings forward apply across the board, whichever way you take it. By the way, the Astra pharmaceutical company has been lobbying on this matter since last year and, so far as I am aware, this legislation came into the House of Representatives only a few weeks ago, so it is not quite right to say that it is a last-minute bid. But, even if it were, that is what the bicameral system is about. It gives the opportunity for people affected by legislation that comes into the House of Representatives—which, very often, is not flagged—to pick up on it and go to the house of review, which is the Senate. That is the function that we serve in this place. I think that the committee ought to hear from the minister a further elaboration or something more specific about how the government is going to review the situation in the wake of the passing of the legislation. Rather than put the committee to a one-page but very detailed and complicated explanatory memorandum to my proposed amendment, I seek the leave of the committee to incorporate that explanatory memorandum into Hansard.Leave granted.The document read as follows—EXPLANATORY MEMORANDUM TO PROPOSED AMENDMENT TO INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 19971. The object of the proposed amendments to the Intellectual Property Laws Amendment Bill 1997 (`Bill ') is to allow all existing pharmaceutical patents to apply for an extension of up to five years to provide all patents up to 15 years `effective patent life'. As the proposed legislation is currently drafted, the amendments do not apply to patents which were granted for a term of 16 years under the Patents Amendment Act 1989 or the Patents Act 1990 and which were due to expire prior to 1 July 1995, but which received a four year extension.2. So that patents which were granted for a term of 16 years and have received a four year extension are eligible to apply for an extension under the new provisions, the proposed amendments to the Bill delete the exclusion in clause 8 of Schedule 1 , and insert transitional provisions (`Transitional Provisions '). Clause 9 sets out the criteria for a patentee of a pharmaceutical patent to be eligible for an extension under the proposed section 70 of the Patents Act 1990 . Clause 9(d) specifies that patentees under the transitional provisions will be eligible to apply under section 70 if the patent has not expired at the time the Bill receives Royal Assent. This it to ensure that no patent is excluded from eligibility merely by reason of any delayed commencement date of the Schedule .3. So that patents which were granted for a term of 16 years and have received a four year extension (and are still in force at the time the Act receives Royal Assent) are eligible to apply for an extension under the new provisions, clause 10 of Schedule 1 of the Bill deems such patents to be granted for a 20 year term, when a patentee applies for an extension under the provisions. An application for extension must be made within six months of commencement.4. If the Commissioner refuses an application, pursuant to section 74 or section 75 , by a patentee of a deemed 20 year patent for an extension under the new provisions, the term of the deemed 20 year patent reverts to a 16 year patent plus a four year extension (clause 11 ). 5. Clause 12 ensures that patents eligible for extensions under the Transitional Provisions have the same rights as other twenty year patents under section 79 . That is, if an extension is granted after the patent has expired, the patentee's exclusive rights are protected until the extension is granted, as if the patent were in force.6. Under clause 13 , springboarding by generic pharmaceutical manufacturers preparing for market is permitted at any time. This is to ensure that generic pharmaceutical companies who may have already started springboarding pursuant to provisions under the Patents Amendment Act 1989 and the Patents Act 1990 , which permit springboarding during the last two years of the full year extension period, may continue to do so.12:32:005333Lees, Sen MegSenator LEES8U4SAAD00—I have a couple of questions for the minister on these amendments. Firstly, Minister, are you saying that by allowing the company—which I think all of us agree has been disadvantaged by this legislation—some additional support we are opening up a range of problems for other companies and a range of other issues, which would mean we would need to go back to square one with this legislation, or at least back to square four or five, because we would need to renegotiate with some of the other companies that you have been working with?As for some of your comments about the industry—that they do fully support this and that they have been negotiating this—we are now stretching back at least two years in these negotiations. Indeed, this was originally before the Labor government. As I come to my decision on what we do with these amendments, we have to acknowledge that this has been some time in formulation. While the industry agreed to the basic principles of what you were doing, I understood the date was arbitrary. You caught Astra out in that they agreed with the principle of what was being done but when they saw the fine print problems arose. Therefore, I ask you again, Minister: can we have a more specific amendment that deals just with the specific issue of Astra and does not open up the doors to all the other problems?12:34:005334Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—As I pointed out in my response, the problem areas are that we already have generic pharmaceutical manufacturers likely to suffer a commercial disadvantage if it were implemented and that there are a number of generic companies which have already legitimately commenced development work in anticipation of the patents affected by this amendment expiring. I also referred, in the response in the second reading debate, to the fact that the government has made a commitment to review the situation with Astra and the companies concerned after the enactment of the legislation, but the important thing is to get the legislation through.12:35:005334Cooney, Sen BarneySenator COONEYSF4VICALP00—What qualifications will the person need who may help the pharmaceutical company to extend this patent? Will he or she have to be fully qualified or would there be somebody in the firm who is not qualified but nevertheless works with the patent attorney who will be able to do it?KI4PARERSenator Parer—I think I mentioned in my second reading speech that with regard to trademarks—and you are not referring to that; you are talking about patent attorney—SF4Cooney, Sen BarneySenator COONEY—Perhaps I ought to clear this up. The new scheme is that patents, trademarks, designs, copyrights and what have you will be dealt with by a particular class of people. Can you follow that? I am asking you: if there is an extension of whatever the property mark is, who will be able to do it?12:36:005334Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I think I covered that by referring to the fact that access to the profession—and that is what you are talking about: your dearly beloved profession—will be opened up by moving the education and examination functions of the Patent Attorneys Professional Standards Board to the universities.SF4COONEYSenator Cooney—Which persons will be able to help do what we are now talking about? Will they have to have a qualification or will somebody who is not qualified in the firm where there is at least one person properly qualified be able to do it?KI4Parer, Sen WarwickSenator PARER—Any person, I understand, will be able to make that application, because it does not apply to drafting a specification.SF4COONEYSenator Cooney—That presently cannot be done, can it?KI4Parer, Sen WarwickSenator PARER—Yes, it can.12:37:005334Brown, Sen BobSenator BROWNQD4TASAG00—I thank the committee for its patience. I did ask the minister twice earlier what the review situation would be with Astra—or with other companies, because it is not just one company; there are a number that are affected. I asked for some detail on that. I am aware, from the contributions from other senators, that the amendments I have here are not going to go through, so the very real disadvantage I have spoken about will be there in the wake of this legislation.I would also like to ask the minister about his figures that one drug—I presume Losec—might cost up to $40 million a year if it were given the extended patent. On the figures the government has provided, all drugs given the extended patent would cost the government up to $160 million a year by the year 2005. It seems extraordinary that one drug would be able to account for 25 per cent of the total of all the drugs that are going to get this patent advantage in the country a little further down the line. To my mind, it puts some question into that figure.That is not such an important point. I am much more keen to hear what plans the minister has to really take up this issue and to overcome the unfair component. I hope he will not be offended if I say that I have heard often before how governments are going to review inequities in legislation afterwards, and it can simply be a word which means `do nothing' when the time comes.12:38:005334Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I think I have mentioned that the government is committed to the review. I am advised that the reason for the review—and you will appreciate this—is that there needs to be a balance of all the various interests. So it is not just the Astra request but also those other companies producing generic pharmaceuticals that have already legitimately commenced development work, anticipating that patents were due to expire. I am advised that the generic pharmaceuticals manufacturers would be likely to suffer significant commercial disadvantage. However, the commitment is to review the Astra request, taking into account all the various interests involved.With regard to your question concerning costs, I understand that there are a number involved in it, but the problem with Losec is that it is a very big product. I understand it is the biggest in the field by a long way.12:40:005335Brown, Sen BobSenator BROWNQD4TASAG00—I understood that, too, but I find those figures quite amazing just the same. That is not the important point. I cannot flog what seems to be a dead horse any further here. I would have liked to hear more specifics from the government about the review situation. It is a difficult one and I think it should have been fixed up with this amendment, but clearly it is not going to be. I think there is going to be a self-imposed requirement which is going to test the honour of the government to make sure it does do the right thing and that a review is undertaken with a view to action, not just to talking about the situation, because that has already happened.Amendments not agreed to.Bill, as amended, agreed to.Bill reported with amendment; report adopted.5335Bill (on motion by Senator Parer) read a third time.Bills5335r3865335Debate resumed from 24 March, on motion by Senator Troeth:That this bill be now read a second time. 12:42:005335Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—I indicate on behalf of the opposition that we support the Gas Pipelines Access (Commonwealth) Bill 1998 . The bill introduces competition into our gas markets to prevent the abuse of market power or monopoly power. This is a process that Labor supports because we started it back in 1991 when Alan Griffiths, the then minister, initiated the national gas industry strategy. To its credit, the current government has continued that process, culminating in a COAG decision in November 1997 which set the scene for this legislation to be introduced and complementary legislation to be introduced in the various states and one territory.What is being sought here is competition to ensure that the cost of our energy, particularly the cost of our gas, is regionally and internationally competitive. This gives industry the best chance of being internationally and regionally competitive, particularly in areas of downstream processing. In any successful Australian resource or downstream processing project, the rule of thumb is: one-third of the cost of the project will go to manpower; one-third of the cost to infrastructure and other; and one-third of the cost to energy. Therefore, if you can ensure energy is competitively available, you have a greater chance of affecting downstream processing and resource development projects occurring in Australia.The great challenge for our minerals and petroleum resource industries, and for policy makers, is to ensure that the great tradition we have had in Australia of being a bulk commodity exporter turns to our being a great downstream processor and adder of value. That means you need to turn iron ore into hot briquettes and/or steel, turn bauxite into alumina and aluminium, and down the value adding road you go. Energy is a very important, indeed vital, part of that process.Competition will be introduced by ensuring that producers of gas have fair and reasonable access on commercial terms to the pipeliners or the transmitters of gas. There are three parts of the gas cycle: wellhead production, transmission and distribution. There is already significant competition at the production end, particularly offshore, largely because of competitive bidding for petroleum exploration and production licences. However, it has invariably been the case that monopolies, public or private, have existed in the transmission of gas. There is a need, therefore, to introduce competition into the transmission of gas so that the transmitters—if they are in such a monopoly position—are effectively compelled under these arrangements to let a range of producers have access to the pipeline at fair and transparent rates.If you dissect the levels of competition in the wellhead production area, the transmission area and the distribution area, historically one of the great hidden areas of mark-up here has been in the distribution and retail areas. The next step of the competition process needs to be at the distribution or the retail end. This bill reflects all those things.While the opposition supports the bill and its passage now, there are a number of other matters on which we would like a response from the government before the bill is finally passed. Firstly, with respect to taxation implications, it was clearly an intention of the intergovernmental agreement that transitional measures not carry with them an additional tax burden. This would not be met if a pipeline owner covered by the access code was adversely affected by capital gains tax or petroleum resource rent tax by virtue of being required to transfer the pipeline to another legal entity. It is not proposed that this be remedied by amendment to this bill, but the opposition would like to know the government's attitude to the representations that have been made to it via the Department of Primary Industries and Energy, by APPEA, the relevant industry association, on this point. This issue needs to be addressed and fixed consistently with the intergovernmental agreement, and we support its resolution by the government consistent with clause 12.3 of the bill.Secondly, with respect to appeal rights, the opposition would like to know the government's attitude to a recent submission circulated by the Law Council of Australia which points to an inconsistency in relation to appeals from decisions of the Australian Competition Tribunal under the Trade Prac tices Act. We raise this issue at this time only by way of enquiry. The government has provided the opposition with its legal advisers' response to the Law Council of Australia's submission. On the basis of that response, we are not proposing to move any differing view from that contained in the legislation, but we would be interested in hearing the minister's formal response during the debate in this chamber.Thirdly, I note that the Western Australian legislation, recently introduced into the Western Australian Legislative Assembly, is to be considered in that parliament's autumn session, and consideration will be given to representation from sections of the Western Australian industry as to Western Australian variations, if any, from the national legislative model. For the record, as expressed in the House of Representatives, the opposition would like to be sure that industry and state consultation did occur in the crafting of the government's amendments adopted in the other place. The opposition has not received any representation on these amendments, which on the face of them, we acknowledge, appear to be minor.Finally, I note that the government has indicated to industry that the proposed gas industry regulation levy bill will not be proceeded with. It is important that the regulation is adequately resourced and we look forward to industry and government suggestions on this point. In conclusion, the opposition supports the bill. We started the process and we look forward to seeing it finished.12:50:005336Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I wish to thank Senator Forshaw for his contribution to this debate, and I also wish to comment on the addendum to the explanatory memorandum regarding the operation of clause 20 of the bill. I table an addendum to the revised explanatory memorandum relating to this bill. This deals with the taxation aspects of ring fencing of pipeline operations from other activities. The Commonwealth, states and territories have agreed as a general principle that there should be neither a benefit nor a loss to pipeline operators in meeting their obligations to separate pipeline oper ations from other activities. With regard to income tax, the new paragraph in the explanatory memorandum clarifies the government's intention that clause 20 will have no application in relation to income tax. I commend the bill to the Senate.Question resolved in the affirmative.Bill read a second time, and passed through its remaining stages without amendment or debate.Bills5337r4135337Debate resumed from 24 March, on motion by Senator Troeth:That this bill be now read a second time.12:53:005337Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—The Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 seeks to amend quite a number of acts. For the record, they are the Agricultural and Veterinary Chemicals (Administration) Act, the Australian Horticultural Corporation Act, the Australian Wine and Brandy Corporation Act, the Australian Wool Research and Promotion Organisation Act, the Dairy Produce Act, the Farm Household Support Act, the Fisheries Administration Act, the Horticultural Research and Development Corporation Act, the Petroleum (Submerged Lands) Act, the Pig Industry Act, the Primary Industries and Energy Research and Development Act, the Primary Industry Council Act, the Wheat Marketing Act, the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997.I am sure honourable senators will be pleased that I do not intend to speak in detail on each of the amendments that relates to each of those acts. I am tempted to but, as the Minister for Resources and Energy (Senator Parer) and Senator Calvert know, I am always short and to the point. Consequently, I will direct my remarks to those particular aspects of the bill that are of concern to the opposition.I might just say, however, that there are a whole range of amendments contained in this bill affecting each of those acts. They go to such things as giving these bodies full responsibility for the employment of their chief executive officers. That is achieved by removing the legislative requirement for the minister to approve the terms and conditions of employment, including remuneration of the principal employee. The amendments specifically prohibit the organisations, many of which are governed by those acts I read out, from delegating the responsibility. There are also amendments to the Agricultural and Veterinary Chemicals (Administration) Act and to the Australian Horticultural Corporation Act which we are supportive of.In the broad, the opposition supports the legislation, but there are two particular areas to which we wish to turn our attention. In due course we will be moving an amendment to delete provisions from the bill relating to the Fisheries Research and Development Corporation. The minister is aware of the issue that I am raising because the legislation, in respect of this particular section, was considered by the Senate Rural and Regional Affairs and Transport Legislation Committee, and a report was issued in June dealing with this particular matter.The effect of the bill specifically in this regard is to reduce the amount of money that would be available and paid to the Fisheries Research and Development Corporation by some $3.6 million. The explanatory memorandum states in respect of this part of the bill:The amendment to the Primary Industries and Energy Research and Development Corporation Act 1989 reduces the Commonwealth's contribution to the Fisheries Research and Development Corporation in the 1997-98 financial year by $3.612 million. Of the savings, $1.5 million is to go to the adjustment program for the South East Fishery and the balance towards helping to pull back the Budget deficit.The saving is made possible because the Corporation's sound financial management has left it with substantial reserves. It is also considered that the saving will leave the Corporation with sufficient funds to continue operations and will not affect research priorities in the long term.The Government remains a strong supporter of fisheries research and has set aside almost $8 million of Commonwealth funds in the budget under the Primary Industries and Energy Research and Development Act 1989 for fisheries research. This part of the legislation, as I said, was considered by the Senate legislation committee. In a dissenting report, my colleague Senator O'Brien and I indicated that we did not agree with that part of the legislation. We do not support the reduction in research and development funding that would be involved here. Accordingly, we will be proposing an amendment to delete clauses 44 and 45 from the bill. That would have the effect of ensuring that the payment would continue.Sitting suspended from 1.00 p.m. to 2.00 p.m.Questions Without Notice533853385338Murphy, Sen ShayneSenator MURPHYFX5TASALP00—My question is addressed to the Minister for Social Security. Yesterday, in answer to a question from Senator Jacinta Collins, the minister told the Senate that she thought a case of benefits being cut because dependent children had been transferred from Austudy to youth allowance was `rather strange'. Is the minister aware that Centrelink have confirmed to a veteran in Launceston who is in receipt of a disability support pension—YW4MACDONALDSenator Ian Macdonald—What is his name?FX5Senator MURPHY—His name is Mr Bullock, for your information, Senator Macdonald—that his entitlements have been cut because his 17-year-old son has been transferred from Austudy to youth allowance? Is this cut in support for this constituent an unintended consequence of the government's introduction of the youth allowance; and has the minister investigated this and rectified these `rather strange' consequences of this government's policies?LD4ALSTONSenator Alston—Madam President, I raise a point of order. Again, this is about the fifth occasion on which we have had supposed case studies or case histories. After that absolute fiasco the other day when Senator Carr tabled the document which demonstrated that what he was putting forward was based on a totally false and misleading impression of the circumstances of the family in question, then it is dangerous in the extreme to allow questions to be asked that may provide an entirely different picture of the circumstances to that of the reality. In those circumstances, Senator Murphy and others ought to be required to provide full details, or not be allowed to ask hypothetical questions.10000PRESIDENTThe PRESIDENT—Senator Alston, there is no point of order.5338Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—In answer to the senator's question, I have been advised by Centrelink that, contrary to the government's intentions and as a result of a systems error, some customers have received reduced pensions with the introduction of the youth allowance—and of course it was not part of the policy at all. Approximately 6,000 disability support, aged and single parenting payment pensioners had rates reduced by approximately $6 a fortnight, I am informed, and that affects their pension payments today.Centrelink have advised me that they are working on this problem and will fix the system tonight, 9 July. I am concerned, of course, for the people that this has happened to. But I am advised that the system will be processing the affected cases and will pay arrears to the affected customers by Wednesday of next week.53385338Ferris, Sen JeannieSenator FERRIS5L6SALP10—My question is addressed to the Leader of the Government in the Senate. I refer to the evidence that the minister provided yesterday to the Senate relating to the business dealings of a former Prime Minister which has significant implications for parliamentary standards and also the protection of the Commonwealth's revenue base. Can the minister inform the Senate of any new information he has received about Mr Keating's sale of his 50 per cent share in his piggery that has implications for the Commonwealth government and for the protection of our revenue base?5338Hill, Sen RobertSenator HILLBH4SALPEnvironment10—Yes. What I was criticising yesterday was the way in which the opposition, the Australian Labor Party, believed that it was legitimate to attack Senator Parer claiming that he was using a family trust as a tax dodge. Without any evidence of either tax avoidance or tax evasion, we had Labor senators, one after another, coming in here and attacking him in this way.Senator Faulkner accused him of having a dodgy pension scheme. Senator Murphy also picked it up and accused him of having a dodgy pension scheme. Senator Cook said that it amounted to a web of deceit, that it was a tax avoidance arrangement. And so one can go on. Senator Conroy was in it. Senator Ray was in it. He is not here today? He usually comes late, I know. He said it was a tax lurk. No reason, no evidence, no nothing—he said it was a tax lurk.5K4FAULKNER Senator Faulkner—Madam President, I raise a point of order. I know that you have been trying to enforce your ruling that remarks of a minister in answering a question be addressed through the chair. I would ask you to ensure on this occasion that Senator Hill does that. We are very happy for Senator Hill, of course, to trot out the many and varied sins and incompetencies of the minister for resources. But I would ask you that, as he does so, as he runs through that list of failures on the part of the minister for resources, he does so through the chair.10000PRESIDENTThe PRESIDENT—Senator Hill, I remind you of the standing orders.BH4Senator HILL—Certainly, Madam President. What I am doing is explaining the double standards of those of the Australian Labor Party. Therefore, presumably they are just as interested in the affairs of their previous Prime Minister, if there is evidence of managing those affairs in a way to minimise tax.It is true that I received overnight a trust statement relating to the sale of Mr Keating's 50 per cent interest in his piggery.5K4FAULKNER Senator Faulkner—Who from?BH4Senator HILL—Under the name of his solicitors, Gaden's Ridgeway, it indicates that $6,376,647.30 was paid in—and we know that the transaction was a $6 million transaction; we learnt that yesterday. But what is interesting is that the stamp duty that was paid was just under $5,000. That stamp duty equates to a sale of less than $1 million. So, at the very least, it evidences the fact that Mr Keating conducted his affairs in a way to minimise tax.Are those of the Labor Party going to get up here and accuse Mr Keating of a dodgy scheme, of a tax lurk, of tax avoidance arrangements? Of course they will not because that is one of their own; that would be to criticise one of their own. Senator Faulkner, if it is good enough for Senator Parer when you have no evidence, it is certainly good enough for Mr Keating when there is a bundle of evidence. I table the document to which I have referred.53395339O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—My question is directed to the Minister for Social Security. Is the minister aware that a constituent of hers and mine, a resident of Georgetown in Tasmania, will lose up to $100 a fortnight from her social security benefits as a result of being assessed as a dependent under the new youth allowance scheme? Is the minister aware that this constituent, who is 17 years old, lives with her partner and is expecting a child, has been advised by Centrelink she will be required to leave that relationship and return to her parent's house as a dependent child in order to access assistance? Is the minister further aware that an adviser in her Launceston office advised the constituent's mother that nothing could be done for her daughter? Can the minister confirm that the constituent was told that the minister could not change the law and anyway her predicament was `not my problem'?5339Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—I would certainly refute the aspersion that has been cast on the member of my staff, because I am sure that the person whom you are referring to has been giving caring and considerate attention to constituents for all the years she has been working for me. Having said that, I have already made it clear to the Senate that I will not make determinations on claimants for social security in this chamber, partly because so often senators in opposition have not given the full story or, alternatively, because the full story has not been given to them by a constituent. If you are happy to, Senator, after question time, I would be very glad to take the details from you and have it further investigated.5340O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Madam President, I ask a supplementary question. Minister, I have a letter from the constituent's mother which confirms the points I have made, and I am happy to supply you with a copy of that. Is the minister aware that her Launceston office also advised the writer of the letter that Senator Newman would not be available for an appointment because `she now resides in Canberra'? Is this true?5340Newman, Sen JocelynSenator NEWMANBE4TASLPSocial Security10—Now I know you're lying, Senator.10000PRESIDENTThe PRESIDENT—Senator Newman, perhaps you could phrase it differently. Withdraw that remark.BE4Senator NEWMAN—I will rephrase it to the extent that I know that no member of my staff would say it because it is not true. Like you, Senator, I have been locked up in this place for far too many weeks. We would all like to be home with our constituents.53405340Abetz, Sen EricSenator ABETZN26TASLP10—My question is directed to the Leader of the Government in the Senate. Can the leader inform the Senate of any additional information received from Indonesia regarding Mr Keating's multi-million dollar piggery deal, which has implications for parliamentary standards and the protection of the Commonwealth's revenue base? What would be the capital gains tax implications of such a transaction that he may wish to outline?5K4FAULKNER Senator Faulkner—Madam President, I rise on a point of order. A number of points of order have been taken in this chamber recently about hypothetical questions. I think they have been taken wrongly and unfairly, but on this occasion I draw your attention to the question that Senator Abetz has asked and ask you to rule it out of order. It is quite clearly contrary to standing orders. That is a hypothetical question.N26ABETZSenator Abetz—On the point of order, I remind Senator Faulkner and the Senate that I am not asking anything that is hypothetical. I am talking about additional information actually received, not fabricated like those from the other side. This is actual information received which has implications for parliamentary standards. That is clearly within the province of the Leader of the Government to answer. I also asked about the protection of the Commonwealth's revenue base. That is also something clearly within the province of the Leader of the Government to comment upon. So, Madam President, clearly all elements of the question are in order.10000PRESIDENTThe PRESIDENT—I believe that the question is in order but the manner of answering it may indicate a breach of the standing orders. I will deal with that if that is the case.5340Hill, Sen RobertSenator HILLBH4SALPEnvironment10—The point is that the Australian Labor Party have been making a big issue of conflict of interest and, to use Senator Robert Ray's expression, perceived conflict of interest. They have attacked our side and they have attacked our ministers on the basis of what they say is conflict of interest.In the case of Mr Keating, he was Prime Minister of this country when he was conducting this highly complex set of arrangements—he was selling his half interest in his pig venture to Indonesian businessmen while at the same time he was negotiating a defence treaty with the President of Indonesia. This is as a Prime Minister dealing with the highest matters of state with Indonesia while at the same time he was negotiating the sale of his piggery interest to Indonesians. What about a conflict of interest or perceived conflict of interest in that regard?Yes, we have received further information from Indonesia overnight. That information purports to be a statement of record of what Mr Keating's solicitor instructed in relation to dealing with the transaction.AW5CARRSenator Carr—Should he not have signed the treaty?10000PRESIDENTThe PRESIDENT—Senator Carr, cease interjecting!BH4Senator HILL—I have caused inquiries to be made this morning upon which I believe that the statement is authentic.AW5CARRSenator Carr—Oh, you believe, do you?BH4Senator HILL—The first paragraph states:"HE"—that is, His Excellency Mr Keating—is to sell the half-ownership of the Parkville and Glengallan piggeries to William Soeryadjaya for a purchase price of US$6,000,000.It goes on, at item 2:In order to reduce tax liability and to avoid any possible political backlashes—Senator Carr—the payment of the US$6 mil is structured in the following manner:It goes on to a series of structures. It tells us how the first instalment of $2.5 million would be divided into a direct fund transfer. Then it goes on to say:The remaining US$1.9 mil would be treated in a way that it would look like an equity injection of the same amount to the company, whereas it would actually be channelled out of the company for the benefit of "HE".The document then talks about the remaining $3.5 million, which it says would not be recorded in any official document.AW5CARRSenator Carr—So you would not have signed the treaty.BH4Senator HILL—Conflicts of interest! What does the Labor Party say about this? This was going on while this man was the Labor Prime Minister of Australia. Out of the Prime Minister's office he was seeking to sell his business to the Indonesians at the same time as he was negotiating defence treaties with the Indonesians. All this evidence suggests at the very least that he was conducting that transaction in a way to minimise taxation consequences and to minimise any political embarrassment. This is a serious matter and it should be considered as a serious matter. To further assist in that consideration, I table the document to which I have referred.53415341Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—My question is directed to the Minister for Resources and Energy.Government senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my right will behave in a way that will let Senator Parer hear this question.5K4Senator FAULKNER—I refer to the minister's statement yesterday that he had made clear to his staff the need to comply with the Prime Minister's directive to not participate in the Telstra share offer within 90 days of the float. Has he therefore sought details from his media adviser about the 1,600 Telstra shares Mr Baudino sought during the public offer which were registered in Mr Baudino's own name on 25 November 1997? What possible legitimate excuse could the minister's staff member have for this flagrant and deliberate breach of the Prime Minister's directive? Or what remedial action does the minister propose to take? Does the minister propose to extend the East Court defence to his staff now: blame your wife, blame your accountant, blame someone else but never take the responsibility yourself?10000PRESIDENTThe PRESIDENT—I think you just breached the standing orders, Senator.5341Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—Following the question raised by Senator Faulkner yesterday, I immediately initiated a thorough investigation into the claims made by him. Those investigations are going on.AW5CARRSenator Carr—How long does it take?KI4Senator PARER—You want to shoot from the hip like Sid Vicious over there. Those investigations are going on, and they are thorough. As part of that investigation, contact was made with Mr Baudino's stockbroker. The advice to date does not confirm the assertion of Senator Faulkner in his virulent adjournment speech last night. I will read from the letter to Mr Baudino from his stockbroker:Further to our telephone discussion, I confirm that you advised me of the guidelines regarding Telstra. I ensured you did not acquire shares in the float through your personal account, which I handle myself. I did not think it necessary to issue an instruction that Telstra shares were not to be acquired through the RL and OM Baudino investment account which, as you are aware, is operated on instructions from Mrs Baudino and your accountant.The Telstra shares in question were acquired through the public issue and, accordingly, the application was lodged by Henderson Charlton Jones Telstra processing unit and not handled by an individual adviser. As you will appreciate, there were over 10,000 applications processed by Henderson Charlton Jones for the Telstra issue. The original application for Telstra was made in RL and OM Baudino investment account. To our knowledge, it has been in that name and has not been transferred at any stage.UI4RAYSenator Robert Ray—It was once.KI4Senator PARER—No. Something went wrong. 5342Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—That is what the minister always says. Madam President, I ask a supplementary question. Can the minister confirm that the registered address of Mr Baudino's shareholding is Mr Baudino's home address and not the accountant's office? Is it not the case that the Telstra shareholding statement as well as the dividend advice statement in respect of dividends paid by Telstra on 31 March this year were sent to the registered shareholders' address as contained on the Telstra shareholder register? Does the minister stand by Mr Baudino's claim that he had no knowledge of his ownership of Telstra shares?5342Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I refer Senator Faulkner to the letter from one of the most respected stockbrokers in Queensland in response to part of that question. With regard to the other issues raised by Senator Faulkner, they will be part of the fairly thorough investigation that is going on.53425342Murray, Sen AndrewSenator MURRAY3M6WAAD00—My question is directed to the Leader of the Government in the Senate. There has been media coverage of some Liberals being concerned with One Nation's compliance with the Commonwealth Electoral Act. My question concerns bogus how-to-vote cards. Is the minister aware of the controversy surrounding the use of a bogus One Nation how-to-vote card by the Labor Party in the Queensland seat of Mansfield which was widely reported last weekend? If not, is the minister aware of a now infamous Nunawading incident in Victoria involving a bogus Nuclear Disarmament Party how-to-vote card and even a bogus Australian Democrats how-to-vote card used in the New South Wales seat of Robertson a few elections back? Does the minister agree that the use of these style of cards, which are intentionally designed to mislead and to pass off one thing as another, are now such a regular occurrence that voters should enjoy protection in law against their use?5342Hill, Sen RobertSenator HILLBH4SALPEnvironment10—Obviously we would be totally opposed to any use of such a card.UI4RAYSenator Robert Ray—Commenting on a current court matter; you wouldn't do that, would you?BH4Senator HILL—That is why I am a little delicate in my management of this. We are opposed to the use of a card which, to quote the senator, is `intentionally designed to mislead'. Every honourable senator would be opposed to it. The issue raised in the question was whether this practice had become so widespread that it justified legislative change. That is a matter that I wish to take up with the minister responsible for the electoral laws. Without doing that, it would also require an analysis of the capacity of the existing laws to deal with it. I will pursue the matter with the appropriate minister. We might be able to give Senator Murray some further response in due course.5342Murray, Sen AndrewSenator MURRAY3M6WAAD00—Madam President, I ask a supplementary question. Minister, thank you for that answer. I raised the question because of the recent publicity about the Liberals being concerned with One Nation. Is the minister aware that last week, in fact, your government rejected a number of Democrats' amendments to the Electoral Act which sought to improve the regulation of the use of how-to-vote cards in elections? Doesn't the minister agree that any possible challenge—for instance, the Mansfield case—could again reveal a problem in this area? I ask the minister: will the coalition now reconsider their support for legislation to protect voters against future acts of deliberate deception via bogus how-to-vote cards which, in our view, are fast becoming common?5342Hill, Sen RobertSenator HILLBH4SALPEnvironment10—I have said that I would take the question on notice and give the honourable senator a considered reply. I think the supplementary question really repeated the substance of the principal question, and that is: has this matter become so commonplace that it requires a legislative response and is the government prepared to so legislate? That is a matter that I will take on notice and give the response, as I had indicated.53435343Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—My question is directed to Senator Hill as the Leader of the Government in the Senate. Can the minister assure the Senate that no member of the Prime Minister's staff, employed under the Members of Parliament (Staff) Act, purchased Telstra Corporation shares, as required by the Prime Minister's directive? Is it not the case that, for a minister as closely involved with Telstra privatisation matters as the Prime Minister, this prohibition is not limited to the 90-day period that is relevant to other ministers? I ask: what measures did the Prime Minister take to ensure that his own staff understood the directive and fully complied with it?5343Hill, Sen RobertSenator HILLBH4SALPEnvironment10—It will not come as a surprise if I confess to honourable senators that I have not studied the share register. I do not know who purchased Telstra shares. Obviously, I cannot, therefore, give the assurance that is being sought of me, but I will refer the matter to the Prime Minister. I presume there is some basis for the question and, therefore, the substance of the matter will be investigated.5343Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam President, I ask a supplementary question. Is the Minister aware that Mr Geoffrey Ashton Cousins of Kirribilli, New South Wales, purchased 600 shares in the Telstra float? Is the minister also aware that Mr Cousins disposed of his Telstra shares on or about 30 December 1997 with a stag profit of some 66 per cent for holding them for five weeks? Is the minister aware that the same Mr Cousins is employed by the Prime Minister under Part 2 of the Members of Parliament (Staff) Act, and is listed as a Communications Strategist to the Prime Minister in the Parliament House communications directory? In light of these revelations, how is it possible for Mr Cousins to have complied with the Prime Minister's directive?5343Hill, Sen RobertSenator HILLBH4SALPEnvironment10—I have already said that I do not know whether any member of the staff of the Prime Minister purchased shares, either consistent with the directive or in breach of the directive. I have said that I would have the matter investigated and report back in due course. 53435343Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—My question is to Senator Hill, Minister representing the Treasurer. As the minister would be aware, as part of the national competition policy legislative review process, the National Competition Council is overseeing a review of state agreement acts with a view to seeing whether they are anti-competitive. Western Australia, which has about 120 of these acts, which read like a list of Western Australia's biggest environmental disasters, has argued that these acts should be exempt from competition policy. The list includes the Woodchipping Industry Agreement Act, the Iron and Steel (Mid West) Agreement Act—that is, Oakajee—and the Silicon (Kemerton) Agreement Act. As these acts generally include subsidies involving tax or royalty holidays, subsidised infrastructure, guaranteed buy-backs or cheap energy, I ask the minister why this indicative review process has not involved any public consultation. The WA Treasury has suggested to me that it might scare off investors if the WA public got a chance to comment on where large chunks of their money is going. Does the minister agree?5343Hill, Sen RobertSenator HILLBH4SALPEnvironment10—I thought that Senator Margetts might ask me this question today, but only thought of it shortly before question time. I have somewhat of a response for her. On the last part of the question, I find it hard to accept that the Treasury would suggest what she has put to the Senate. But, without that little bit of editorialising, I would respond that, as she knows, the competition principles agreement is an inter-governmental agreement on national competition policy which the Commonwealth and all state and territory governments signed up to in April 1995. As part of the competition principles agreement, all parties agreed to undertake a legislative review process whereby they would review all legislation which restricts competition.As I understand it, it is not a question of the NCC reviewing the state legislation; it is the state accepting to review its own legisla tion. The guiding principle of these reviews is that legislation should not restrict competition unless it can be demonstrated that the benefits of the restriction to the community as a whole outweigh the costs and that the objectives of that legislation can only be achieved by restricting competition.According to the competition principles agreement between the Commonwealth and the state and territory governments, each party is free to determine its own agenda for the reform of legislation that restricts competition. Competition policy does not prescribe outcomes, it only demands that all legislative restrictions to competition are subject to a public benefit test and that all legislative restrictions on competition are fully transparent at the end of the day.There has recently been some discussion about what constitutes `public benefit'. The term should be regarded in its widest possible sense, and would include anything of value to the community generally. I hope that is of assistance to Senator Margetts.5344Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Madam President, I ask a supplementary question. I thank the minister for the information so far. Senator Hill mentioned public benefits outweighing the costs. I believe that well-known consultants ACIL Economics had been involved in the process of reviewing state agreement acts on behalf of Western Australia and the Department of Resources Development. Is it not the case, Minister, that the public would actually appreciate the ability to put in information about whether public benefits and public cost are balanced, or equal, or in any way relevant? Would it not save the Commonwealth money if the public were involved in this process, so that the information in the review is accurate? Isn't giving the Department of Resources Development in Western Australia the role of reviewing their own acts, which they do not want reviewed, a case of leaving Dracula in charge of the blood bank?5344Hill, Sen RobertSenator HILLBH4SALPEnvironment10—As I understand it, the determination is made by the Western Australian government, and I really think that Senator Margetts should take her complaint up with the Western Australian government.DX5MARGETTSSenator Margetts—It is your legislation.BH4Senator HILL—She can argue out with the Western Australian government whether there is a public benefit in each individual case. Whether a public contribution to that decision making process would be useful is obviously something on which different people will have a different view. The determination as is being adopted in Western Australia is by the Western Australian government and, as I understand it, that is within the terms of the agreement that was reached between the Commonwealth and the states.53445344Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—My question is directed to Senator Hill, representing the Prime Minister. Can the minister confirm that, as required by the Prime Minister's code of ministerial conduct, at the time of commencing their employment ministerial consultants and members of ministers' staff are required to complete statements of private interests and, further, that the employing minister endorses the statement in writing after satisfying him or herself that there is no conflict of interest? Can the minister confirm that the Prime Minister's senior economic adviser, Mr Peter Crone, complied with these requirements when he joined the Prime Minister's staff late last year? Did Mr Crone declare his 1,000 Telstra shares and did the Prime Minister endorse Mr Crone's declaration? Can the minister also confirm that Mr Crone has, in the course of his responsibilities as senior economic adviser, been intimately involved in government deliberations relating to the privatisation of Telstra?5344Hill, Sen RobertSenator HILLBH4SALPEnvironment10—I do not know Mr Crone, let alone what shares he owns. But I will refer the question to the Prime Minister and get a response.5344Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam President, I ask a supplementary question. Isn't it the case that, according to the government's guidelines for staff, a staff member who possesses an interest which conflicts or might reasonably be thought to conflict with the duties of his or her office has three choices: to divest the interest forthwith, to secure his or her removal from the duties in question or to obtain authorisation from his or her superior or colleagues to continue to discharge the duties? I ask: which of these three choices did Mr Crone make?5345Hill, Sen RobertSenator HILLBH4SALPEnvironment10—It logically follows that I cannot answer that without referring to the Prime Minister. I will get a response as soon as possible.53455345Ferguson, Sen AlanSenator FERGUSONEP5SALP10—My question is directed to the Minister for Communications, the Information Economy and the Arts. Minister, can you inform the Senate what steps the government is taking to ensure that regional mobile phone users do not lose out as a result of Labor's disastrous 1992 decision to unilaterally phase out the analog AMPS mobile phone system in the year 2000? Minister, how does this initiative build on the series of measures which the Howard government has introduced to improve the lives of Australian fixed and mobile telephone users in its two years in power?5345Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—The contrast could not be more stark. Since we have been in government, in a little over two years not only have we made dramatic improvements for rural and regional users of telecommunications services—rolling out an ISDN capability to enable them to get high-speed access to the Internet, improving customer service guarantees, maintaining price caps and, in a whole range of ways, ensuring that the universal service obligation is fully complied with—but, over and above that, one of the biggest problems we inherited was the `absolutely disastrous' decision, as Senator Ferguson quite rightly describes it, made by none other than Mr Beazley, the relevant communications minister of the day.This was a technology specific decision. It was utterly oblivious to the real needs of rural users. It had no regard whatsoever to what might happen in the future in terms of new technologies. We have not heard a single word of apology for it ever since—not one word. All they have ever done is get out there and oppose, tooth and nail, things like our $250 million Networking the Nation initiative designed to at least try to assist people to get local Internet points of presence and to provide additional base stations for mobile telephone services.It is, I think, an historic achievement that today we are in a position to announce that the Telstra board has agreed to roll-out a new technology called CDMA—Code Division Multiple Access—which will cover all the existing analog areas, be fully compatible with existing AMPS networks and enable people to have a dual-mode handset. It will move seamlessly between the new digital technology and the old analog technologies. In other words, Madam President, in one fell swoop we are wiping out your disaster. It is their disaster, not yours, Madam President. You have done an excellent job, I hasten to add.The Labor Party made this decision, led by the minister for communications, the now Leader of the Opposition, in the full knowledge that it would require people who live in rural areas to have two mobile phones: an analog phone when they were near analog based stations and a digital phone when they came to the cities. That is the result that would occur after the year 2000.Why would they possibly do it, Madam President? Presumably because they could not give a damn about the bush. They were not interested in the consequences for consumers. I hope that at least they will have the decency to acknowledge that this decision today will go a very substantial way towards repairing that damage. It will make a huge difference to people who want to be in the 21st century and want to get decent and up-to-date mobile telephone services. They will still have to wait around for what I think will be a new digital era of low earth orbiting satellites but, in the meantime, they want to have the best access to mobile services.This is very important step forward. It is a damning indictment of what Labor did. They have never apologised in all those seven long years. I hope that they will now have the decency to put out a press release supporting it, but I very much doubt it.53455345Neal, Sen BelindaSenator NEALB36NSWALP00—My question is addressed to Senator Herron, the Minister representing the Minister for Health and Family Services. Is the minister aware of a booklet about child-care services circulated in June by the parliamentary secretary to the Minister for Health and Family Services, Trish Worth MP? Is he aware of the attached graph that shows that Commonwealth outlays on child care increasing each year from 1989-90 to 2000-2001? Does the minister concede that the graph is incorrect and that the real figures show child-care expenditure dropping substantially in 1997-98, in fact to well below their level in 1995-96, being the last year of the Labor government?5346Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I am very happy to reply to that question. There is good news in child care that the government has brought about. Some $4.7 billion has been allocated to child care over four years and there is an extra 71,000 places over that time. There are currently 495,000 families using formal child care and 600,000 children in care. By 2001-2002 allocations for child care will be 30 per cent higher than in Labor's last year of office.I am not familiar with the booklet that has been referred to, but the facts that I have just given would refute the general principle that is being proposed. The improved affordability that we have introduced for low and middle income families using outside child-care services will result in 71,000 families benefiting. Better planning has been introduced to ensure that child-care services will be established in areas of greatest need. Also better equity has been introduced by the withdrawal of the operational subsidy. For example, operational subsidy in community based centres meant that some 70,000 families received a $20 benefit denied to 200,000 Australian families using private centres.There is a continued commitment to quality. The government supports quality assurance in long day care services and the development of systems for family day care and outside school hours care. There is better information for families. The child-care access hotline—freecall 1800 670 305—provides up-to-date information for families about child-care services in their area and government help with the cost of care.I will check with Trish Worth as to the accuracy of the graph that has been referred to, but I am sure that the overall figures that I have just given the honourable senator are correct. There is no question about the funding that is being provided or the improvements that will be brought about. I contrast those improvements with Labor's legacy in child care. Not only did the government inherit a $10.5 billion debt and a $70 billion debt in the preceding seven years but the child-care industry was in disarray through Labor's poor management.From 1991 private child-care centres established in locations with no direction or support from government to indicate areas of greatest need. There was haphazard growth all over the country. Too many centres now exist in certain areas, creating an oversupply, while other areas have a great need and an undersupply. This poorly planned access to child care has created uncertainty in the child-care industry about their future viability due to too many centres in some areas.I think we should bring this to the Senate's attention because, under Labor, the low rate of child-care assistance provided to families in outside school hours care was totally inadequate to the needs of low and middle income families. Labor effectively prevented 51,000 families in outside school hours care from receiving any child-care assistance. Labor left us with a poorly planned child-care industry. The Howard government is fixing the foundations to provide better access for families to quality child care.If Labor want to play cheap politics in child care, spreading misinformation and developing so-called surveys to suit their political agenda, I ask them what their policies are in relation to child care. Have we heard one word? They got it in disarray. They have not produced any policies. There is some nitpicking going on about some graph or other, which I will check to see whether the statement that has just been proposed is accurate. We were left a legacy of disarray. We put the foundations in to fix it up and we are spending much more money to produce those changes. (Time expired)5347Neal, Sen BelindaSenator NEALB36NSWALP00—Madam President, I ask a supplementary question. When the minister confirms what is contained in his own government's budget documents—that expenditure in child care has substantially dropped in 1997-98—what will the minister do to inform those people who have been misled by the parliamentary secretary about what the real facts in child care are?5347Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank the honourable senator for the supplementary question. Talk about misinformation! I refer her to the Blacktown Advocate of Wednesday, 29 April, which states:Publicity surrounding federal government cuts to child-care funding has hurt local private child-care centres even though they never received the subsidy. Owner of Blacktown's Maldon kindergarten, Dick Leathers, said, "The recent bad publicity on child care funding would hurt—5K4FAULKNER Senator Faulkner—Madam President, on a point of order: I thought—and I am sure you would agree with me—Senator Herron was asked a fairly specific supplementary question and he is not answering it at all. He is not even attempting to answer it. I ask you to direct him to do so.10000PRESIDENTThe PRESIDENT—He is dealing with the topic that was raised, but I would remind the senator of the question that was asked.VW4Senator HERRON—Senator Neal believes everything she reads. Contrary to the views expressed in some media articles, the 1998-99 child-care budget does not cut a further $117 million from child-care funding. Are you happy with that, Senator Faulkner? That is the answer to the supplementary question.The figures have simply been revised on the basis of additional information about growth in places and patterns of demand. Actual changes between what is allocated and what is spent are not unusual. Senator Neal is not aware of that. I pointed out previously her problem with numeracy. In fact, in 1995-96 the Labor government's allocation of child-care assistance was $745.1 million, but actual expenditure was $657 million. I think Senator Neal should be aware of those facts before she asks silly questions. (Time expired)53475347Lees, Sen MegSenator LEES8U4SAAD00—My question is to the Minister representing the Treasurer. Minister, are you aware of the Australian Bureau of Statistics figures released today showing that business investment in research and development fell in the first year of your government by five per cent, ending a six-year run of growth? Will you agree that the $700 million worth of cuts to R&D tax concessions have been a major cause of this damaging windback? And, Minister, while we are talking about business, can you explain why the number of bankruptcies in Australia last year rose by 13 per cent—a record level—and why bankruptcies have risen by 43 per cent since your government took office?5347Hill, Sen RobertSenator HILLBH4SALPEnvironment10—It is true that there was a small fall in R&D. I might say it was a smaller decline than what many critics suggested would be the case but, of course, it is partly attributable to the overdue removal of the excesses due to the syndication component of the R&D tax concession—one of Labor's tax rorts, as we understand, that this government had to address.That ought to be balanced against the good prospects for investment in R&D for the future. In particular, I remind the Senate of the government's Investing for Growth statement of December last year, in which we committed $1 billion over a four-year period to encourage R&D growth. That is over a billion dollars, I repeat. Furthermore, the Investing for Growth statement commits substantial funds to the R&D start program. It also boosted the innovation investment fund. All of these will ultimately flow through and ensure that the R&D investment in this country is as strong as ever and, we would hope, stronger, in fact, than in the past.It is obviously necessary. I think anyone who has studied the subject would be aware that, while governments in Australia have traditionally been quite strong in their expenditure on R&D, the private sector, historically, has not been so strong. That is why we have taken action to encourage the private sector to invest for the future through the R&D start program. But we are not doing it in a way in which it can be used as a tax rort.So we are going through this process of change of structure, in effect, and I think that is the explanation for the small reduction that has occurred. In the long term, the prospects are good for Australian industry to be investing in research and development, which obviously is critical to maintaining a competitive edge.We have set the framework for that investment in the future. We have set the macro-economic environment with low interest rates, low taxation and low inflation that will give businesses the confidence in which to invest for their future. The prospects for the economic growth that will build upon those economic decisions taken by the government and upon the incentive provided through the R&D start program will bring benefits in the medium to long term. I would have thought that was the objective that all honourable senators would seek.5348Lees, Sen MegSenator LEES8U4SAAD00—Minister, in your answer you didn't touch at all on bankruptcies so I ask again: aren't you concerned that they are up 43 per cent? This is well before any of the suspected impact from what is happening in Asia occurs.Government senators interjecting—10000PRESIDENTThe PRESIDENT—Senators on my right will cease interjecting while a question is being asked.8U4Senator LEES—Thank you. Through you, Madam President, I ask a supplementary question: isn't the minister concerned that business investment growth was halved last year and will fall by a third again this year? Isn't it the case that this government's mix of economic policies is simply not helping new businesses get established and is certainly not assisting existing businesses to grow and expand?5348Hill, Sen RobertSenator HILLBH4SALPEnvironment10—That, of course, is a nonsense. The government's policies are all about encouraging businesses to grow and expand and employ. They are employing more now than ever before. That approach has been successful. The GDP rose strongly in the March quarter, which is inconsistent with what the honourable senator said. As I said, to a background of low inflation, low interest rates and low taxation, finally we have got a government in office that is prepared to control taxation growth. It is a bit cheeky, I might say, for Senator Lees, who represents a party that supports high interest rates and high borrowings, to ask this question of a government that supports low taxation, low interest rates and low inflation. We have set the scene for growth and for more jobs, and that is our purpose.53485348Cooney, Sen BarneySenator COONEYSF4VICALP00—My question is directed to Senator Vanstone, representing the Attorney-General. It is a question about privacy. When the government decided against a proposal to legislate to protect privacy in the private sector, did it ask the state governments not to implement like legislation? In any event, what attitude does the government take to Victoria's proposal to introduce privacy legislation in that state? What attitude does the government take to the recent recommendation of the Joint Committee of Public Accounts and Audit that the government introduce privacy legislation, with specific reference to information communications, to govern the use of personal information in the private sector?5348Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—I thank Senator Cooney for the question. It will be no surprise to Senator Cooney when I tell him that the Attorney-General has not provided a brief with respect to any comments he might want to make about Victorian legislation. The reason it will not surprise Senator Cooney is that he knows full well that it is not the Attorney's job to sit and pontificate on what one state might choose to do over another.As to any discussions the Attorney might have had with the states in relation to what they might choose to do in the privacy areas or others, I will refer Senator Cooney's question to the Attorney. If he wants to comment on private discussions he might have had, I am sure he will provide information and I will pass that on.The last part of Senator Cooney's question related to the findings of one of the Senate committees. In relation to any of those committees, the government would respond at a time it considered appropriate.5349Cooney, Sen BarneySenator COONEYSF4VICALP00—Madam President, I ask a supplementary question. I put that to the minister to give a context to the question of whether or not the federal government intends to do something about privacy in the private sector. It is not only those issues that I have already raised. The minister may want to look at, for example, an article in the Financial Review of the weekend before last in which a reference was made to Qantas, which is about to introduce a multimillion dollar system that will digitally capture every word its sales staff utter on the telephone and every keystroke they enter on a computer. Qantas will also be able to listen to whatever the customers say to their staff. It is in that context that I would seek to find out from the minister whether or not the federal government intends to do anything about privacy in the private sector.5349Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—Senator Cooney well understands the government's view with respect to this matter. This matter has been canvassed in this chamber on a number of occasions. I have not seen the particular article you are referring to but, as a matter of interest, I will look at it. I think you are indicating that you will be kind enough to send it to me and I would be grateful for that—with your usual charm.Senator Cooney, I understand you have a genuine interest in privacy matters. I only wish, when your party was in government, they had been more successful at protecting people's privacy. I know that some of the Australian Democrats also have a very strong interest in this issue. Where we differ is in the path we choose to follow to protect that privacy. That is the only difference. We are all at one in respect of the need to protect people's privacy; we simply have a difference of opinion about the best way to do it.53495349Calvert, Sen PaulSenator CALVERT5F4TASLP10—Madam President, my question is to Senator Vanstone, Minister for Justice. Minister, the Spanish government has refused to give Christopher Skase Spanish residency and has given him 15 days to leave the country. This action follows the successful cancellation and retrieval of the Australian passport given to Christopher Skase by the former Labor government. Does the cancellation of Mr Skase's Spanish residency mean he will be returning to Australia to face outstanding criminal charges? What is the minister's response to claims that the Australian government could reopen extradition proceedings? Is the government determined to pursue Skase and his assets?5349Vanstone, Sen AmandaSenator VANSTONE7E4SALPMinister for Justice10—I thank Senator Calvert for his question. Yes, as I was pleased to announce last night, the Spanish government has indicated to Mr Skase that they will refuse him permanent residency and, as I am advised, indicated to him that he has 15 days in which to leave. Equally, I made it clear last night and this morning that Mr Skase has a couple of weeks in which to appeal that decision. He has already appealed an earlier decision by the Spanish government to refuse him Spanish identity documents. That whole process follows on from the cancellation of his Australian passport—the new, 10-year, fresh Australian passport—given to him by the previous Labor government when he was in Spain and was wanted back in Australia.XE4BOLKUSSenator Bolkus—What does the Spanish government say, Amanda?7E4Senator VANSTONE—It follows the cancellation of that, the retrieval of it from the Spanish government and their refusal to provide identity documents.Senator Bolkus, in his usual form, has been out on the airwaves trying to cover up Labor's failures in this area and keeps saying, `Why don't they reopen the extradition?'—not realising how stupid he looks in doing that—XE4BOLKUSSenator Bolkus—You can start new ones. You cannot be that dumb.7E4Senator VANSTONE—When Mr Skase discarded the oxygen mask and the wheelchair—we all remember that—the former Labor Attorney-General sought advice. That advice was clear and unequivocal that it just was not on to proceed with reopening the extradition. It is a bit like a murder trial, in a sense; you have your chance at the trial, one wins and one loses. When Labor was in power they were in charge of the extradition and they lost.XE4BOLKUSSenator Bolkus—The Prime Minister told you to stop playing politics.10000PRESIDENTThe PRESIDENT—Senator Bolkus, I would ask you to cease interjecting. You have been doing it throughout this answer.XE4BOLKUSSenator Bolkus—Madam President, I raise a point of order. The Prime Minister made it very clear this morning that Senator Vanstone should stop playing politics with this issue. I am just bringing that fact to your attention. It is relevant to her answer and it is something that she needs to take into account.10000PRESIDENTThe PRESIDENT—There is no point of order.7E4Senator VANSTONE—Senator Bolkus knows full well that Mr Lavarch, the then Attorney-General, got two pieces of advice in 1995 following the failed extradition. He knows that that advice confirmed what I have just told you. This government has had that advice confirmed as well, and Senator Bolkus simply chooses to ignore this.The last part of the question was whether this government intends to continue the chase for Skase, made as hard as it is by the monumental failure in 1994. We do intend, unequivocally, to pursue this matter. I believe Australians very much resent ill-gotten wealth. We are a fairly fair-minded nation and we respect people who gain wealth through hard work and talent but have no respect for people who build up their assets by other means. Many people believe that Mr Skase built his fortune by squirrelling away what was, effectively, other people's money. Many people believe that he played fast and loose with other people's hard-earned money. What they want to see is the truth brought out in the Australian courts. They do not prejudge the matter, they want to see the truth brought out.Australians have no respect for ill-gotten gains. That is why they are now asking how a former trade union official could become a multimillionaire on a politician's salary, like Paul Keating apparently did, and why they are asking: where did that money come from?53505350West, Sen SueSenator WEST1X4NSWALP00—My question is to Senator Ellison, Minister for Schools, Vocational Education and Training. Has the minister been informed of the closure of two Jobs Network providers, the Winning Edge offices in Richmond and St Marys, less than two months after the Jobs Network start-up date? Will the government now heed the warnings of Mr David Thompson, Chief Executive of Jobs Australia, who has stated that the two Winning Edge offices could be followed by `a substantial number of others'? Is the minister going to investigate the reasons for these closures to prevent Mr Thompson's prediction coming true? Or will the loss of two providers just be dismissed by the government as a consequence of Dr Kemp's `market forces'?5350Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—The truth is that Winning Edge wrote a letter to my department, which stated:This letter is to confirm that Winning Edge continues to provide service in the Richmond and St Marys areas. The administration and pre-screening work for these two sites have been transferred to our offices in Mt Druitt and Penrith, however job seekers may still register and resumes will still be collected for job applications in all four sites.Those two offices have not closed. This is yet another attempt by the opposition to mislead the public in relation to Job Network. These two offices have not closed. Equally, the member for Batman issued a misleading statement that these two offices had closed. They have not closed—I repeat: not closed. This is another attempt by the opposition simply to mislead the public on this issue.5350West, Sen SueSenator WEST1X4NSWALP00—Madam President, I ask a supplementary question. Why is it then that there has been a reduction in services in two of these offices? It is alleged by the minister that they have not closed. But there is a reduction in service level. How many of these enterprises within the Job Network have also undertaken a reduction in services to the clients?5350Ellison, Sen ChrisSenator ELLISON9X5WALPSchools, Vocational Education and Training10—As Winning Edge has maintained, it is still operating four offices. It is still providing those services to job seekers. End of story.BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper . Miscellaneous535153515351Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—Yesterday in question time, Senator Brown asked me, in my capacity as representing the Minister for Primary Industries and Energy, a question in regard to the funding of the Hume Dam. The minister has now provided me with a response, and I seek leave to have it incorporated in Hansard .Leave granted.The response read as follows—IssueSenator Brown asked a question in the Senate on 8 July 1998 if up to $48m has been diverted from the MD2001 program to fund capital works on Hume Dam rather than being used for environmental purposesResponseSenator Brown has some fundamental misunderstandings about the role of Hume Dam, the Natural Heritage Trust and MDB initiative funding.Hume Dam is central to the managed operations of River Murray flows to support sustainable agriculture, the people of SA in particular, and river and floodplain environments.With regards to the Natural Heritage Trust Senator Brown implies use of trust funds for remedial works on Hume Dam falls outside the scope of the trust. He is ignoring the fact that trust funds are able to be spent for the purposes of supporting natural resource management and sustainable agriculture as well as the environment. I refer him to part 3 of the act.With regard to the Natural Heritage Trust each Commonwealth dollar for MD2001 is matched in total by the states 1:1. However under MDB initiative arrangements for Hume Dam, each Commonwealth dollar attracts three state dollars (one each from NSW, Victoria and SA).The necessary reallocation of $11.523m over four years is needed to ensure the Hume Dam is able to generate sustainable agriculture and environmental benefits. This reallocation will not result in the loss of $48m as asserted by Senator Brown. I would like to emphasise to Senator Brown that the current federal budget allocates some $43m to MDB dedicated natural resource management programs. This continues an upward trend in such funding and compares to around $13.8m for similar activities in the last year of the Keating government.Senator Brown has asked a related question on notice and further details will be provided in the response to that question.53515351Minchin, Sen NickSenator MINCHINJX4SALPSpecial Minister of State;Minister Assisting the Prime Minister10—On Wednesday 8 July, Senator Ray asked me a supplementary question without notice regarding the release of information under the Freedom of Information Act. Senator Ray's question was specifically in relation to the release of information under the act in regard to the Kennedy report. I will now read the reply.As Senator Ray should know, due process for a response to a request under the Freedom of Information Act to the Department of Finance and Administration is a matter for the department, not the minister. Due process was followed in this matter, and I was neither consulted on nor advised of the department's decision or the reasons for it.I am advised that the department's response to the freedom of information request included details of the process which applicants may follow should they be dissatisfied with the department's decision; that they may seek internal review of the decision within 30 days of receiving it; and, if still not satisfied following internal review, they may apply to the Administrative Appeals Tribunal for review of the original decision. I am also advised that these review rights were not exercised in this case, but I am sure that the department would give due consideration to a late request for review.535115:02:005351Neal, Sen BelindaSenator NEALB36NSWALP00—I move:That the Senate take note of the answer given by the Minister for Aboriginal and Torres Strait Islander Affairs (Senator Herron), in response to a question without notice asked by Senator Neal today, relating to child care.I must confess that I am consistently amazed by the persistent ignorance of the minister, and also the Minister for Health and Family Services (Dr Wooldridge) whom he represents, in relation to child care. Despite the protestations and, I suppose, the personal abuse that I received from Senator Herron, it does not seem to me that it is I who has a numeracy difficulty, when he does not understand that expenditure on child care in 1996-97 was $1,086 million and the following year, in 1997-98, was $973 million. If he cannot tell that that is a substantial drop in child-care expenditure, then it seems really not terribly amazing that this government is incapable of running a reasonable child-care policy.In the last financial year, despite all the incorrect statements that have been made by the government, there was a decrease in expenditure on child-care assistance of $117 million. I suppose that, when you look at it in that sort of way, when you just look at the money—and in government we talk about millions—that does not mean very much to us. But what it does mean is that very many families in Australia who used to be able to access child care no longer can. We have had the opportunity of going around Australia and talking to parents and to child-care operators. It is a very sad story that is being told of what is happening in child care and the sort of punishment that families who are struggling at the moment are receiving because of the money that has been removed out of child care by this government.We are constantly being told that people—it is generally the mothers—are having to make the choice between withdrawing from work altogether and putting their children in child care that is of lower quality, which can be described as backyard care. They feel that they have to make a choice between earning a reasonable income for their family, earning enough money to pay the mortgage and have a reasonable standard of living, and being sure that their children are in good quality care.The cuts that are being made in child care mean that many families who used to have to pay about $20 or $30 for a week of full-time care are now having to pay the gap between government assistance and the cost of child care of $50 or $60. If you multiply that for those families who have two or three children, you are looking at a substantial cost that very many families cannot afford.It really is pretty hypocritical of this government to persistently circulate graphs like the Parliamentary Secretary to the Minister for Health and Family Services (Ms Worth) did—someone who should know something about the reality—which shows a continual increase in expenditure on child care. She put this graph out in her own electorate to mislead the people in Adelaide into thinking that this government does care about child care, when the real expenditure on child care, as disclosed by the budget documents of this government, represents a substantial drop in the 1997-98 year.It seems amazing to me that, in his ignorance, Senator Herron came in here and said that he believes that expenditure keeps going up. He has not made any attempt to familiarise himself with what is really happening. He knows nothing about child care. For the most part, Senator Herron and most of this government think that the place for women is back in the home looking after the kids, and the government can save its money and put it in the pockets of big business and other people who finance this government's campaigns. I have been told over and over again by mothers who are going out to work that they do not appreciate the fact that they have to pay more, that they are being forced out of work and that they are not getting quality child care. (Time expired)15:08:005352Payne, Sen MariseSenator PAYNEM56NSWLP10—In response to Senator Neal's motion to take note of the answer given today by Senator Herron, it is indeed extraordinary to hear some of the words that come from those opposite on the question of child care. Senator Neal, for example, has accused us in the last five minutes of being a government incapable of running a reasonable child-care policy. As a member of the opposition, Senator Neal would know that it is through the behaviour of the previous government, through their maladministration of child care in this nation, that this government has had to make some serious policy decisions in relation to child care. For years and years under the previous government the expansion of private centres was unplanned and uncontrolled. Places were distributed unevenly, with oversupply in some areas and others with little or no access to service. What did this government do? What decision did this government make? It made a decision to introduce a comprehensive planning process for child care in Australia. For the first time, we have a process which actually looks at need and which operates on that basis, not the ad hoc, willy-nilly basis of the previous administration.It is very interesting that Senator Neal made the observation that she has had the opportunity to talk to parents and to hear the story that has been told; it is also an opportunity that I have had. I have heard from parents and from operators of centres in both private and community sectors. It was most interesting to hear that the private sector particularly, which looks after approximately 70 per cent of the children from low income families who are in care—70 per cent compared with 30 per cent in the community sector—have suffered. They have suffered because of the campaigns of misinformation run by opponents of the government's policy—misleading news put out by people who are trying to damage the child-care system in Australia.People from one end of this nation to the other have walked into private centres and said to the operator, `So, when are your fees going to rise?' Media misinformation and stories put about by the union movement and the community sector in Australia have resulted in a mass media campaign on child care across the board suggesting that all child-care fees are going to rise and that the government is entirely responsible for all changes in the child-care sector—ignoring the fact that award wages and other costs in relation to child care, such as administration, have risen.Unrestricted growth was responsible for many of these problems. This government chose to remove operational subsidies from community based child-care centres from 1 July 1997 to improve efficiency and equity within child-care centres. Seventy per cent of children from low income families were attending private centres which had never received an operational subsidy, yet, if your neighbour up the road was going to a community centre, they were subsidised. Where is the equity in that? There is no equity, and the government chose to address that issue.The government has provided for more than 220,000 Australian families through private centres that never received an operational subsidy and that had some right to ask questions of equity in relation to that. There are a number of other administrative changes which have been made which Senator Neal did not refer to; rather, she chose to continue the scaremongering and the attack on child care in this nation which is hurting all providers and, ultimately, hurting children.The national planning system that the government has adopted will direct the distribution of new child-care places to areas of greatest need, with a limit of 7,000 new private places per year from 27 April this year and for the calendar year of 1999. That is a very important planning step.There have also been changes made to outside school hours care, and Senator Neal referred to those briefly. What those changes mean is that tens of thousands of people will be eligible to receive child-care assistance for attending outside school hours care. This assistance has been extended to a much broader number of Australian families, a very important access issue for Australian families. The fee increases that have been alleged in child-care centres across Australia—7G6LUNDYSenator Lundy—So you obviously haven't suffered from an increase.M56Payne, Sen MariseSenator PAYNE—Perhaps Senator Lundy is in agreement with Senator Neal, who told me at a recent committee hearing on this issue that I was not qualified because I did not have children. (Time expired)15:13:005353Bishop, Bronwyn, MPSenator BISHOPSE4MackellarLPDefence Industry, Science and Personnel10—I wish to take note of the answer given by Senator Herron to a question from Senator Neal. Before I make my remarks, I would like to respond to a few of the issues just raised by Senator Payne. I too participated in the committee that went to nearly all states and territories around Australia. We heard evidence from 500 to 600 individual witnesses and groups about what was going on in the child-care industry in Australia.My memory is that, overwhelmingly, mothers complained about the ongoing closures of centres around Australia. They complained about the impact of less choice in the lifestyle they wished to pursue. They complained in some instances about being forced to leave the work force or having to take cuts in hours in paid employment. They complained about a decline in service quality in many centres. They complained about lay-offs of staff in child-care centres, and they complained about the undersupply of centres all around Australia in specific areas and localities because of changes occasioned by government policy and government funding in child care.Madam Deputy President, you would recall that from 1990 to 1996 the growth in child care and child-care funding in this country was one of the great successes of the previous government. It was greatly appreciated by families—by single income families, single parent families and low income families. It enabled parents and families to make real choices about looking after their children. It enabled parents to make choices about using the private sector, the community sector, out of school hours care, family day care and vacation care. The policies of the previous government enabled parents to make the best choice for their child or children, either to be cared for at home or in the informal sector or to be put in the formal care sector knowing that it would be properly regulated and that their children would be properly cared for.The opposition for the last two years has repeatedly alleged that the government has been engaged in massive cuts to child care and child-care funding around Australia. We have said repeatedly that this government has harmed the community care sector through cuts to operational subsidies. We have said that this government has harmed the private sector through the levelling out of child-care assistance payments which has resulted in increased gap fees to be paid by parents. We say that it has harmed parents through the ongoing and repeated closures of centres in every state and territory of this nation.Many times government ministers, parliamentary secretaries, senators and members of the House have categorically and repeatedly denied the allegations that the opposition has raised. Government members have repeatedly denied that there have been massive cuts in total Commonwealth outlays to child care. They have denied there have been massive and ongoing closures of child-care centres. They have denied there have been massive lay-offs of staff in child-care centres. Government members have repeatedly been on the public record not only denying that but saying that total child-care funding, total child-care Commonwealth outlays, have increased in real and absolute terms over the last two years in the life of this government. They have said that capital funding to centres has increased. They have said that child-care rebate payments have been increasing. They have said that child-care assistance payments are increasing, but the facts now are on the record.All of the allegations that we in the opposition have raised for the last two years have been proven to be 100 per cent true and they were proven by the documentation of the government in this year's budget papers, the 1998-99 budget papers. They show the truth. They show that actual funding for the financial year 1998-99 in the area of child care reduced from $1,086 million to $973 million, a total cut of over 10 per cent, a total cut of $113 million. The cutbacks on the government's own papers are in four specific areas. Operational subsidy payments have been cut from $143 million to $94 million, a cut of $50 million. The JET sole parent payment has been cut from almost $10 million to $5 million, a cut of $4.6 million. The child-care rebate has been cut from $131 million to $123 million, a cut of $8 million. Finally, child-care assistance has been cut from $718 million. (Time expired)15:18:005354Patterson, Sen KaySenator PATTERSONLI4VICLP10—I rise to speak on the question that was answered by Senator Herron today. This is just another example of Labor Party scaremongering.7G6LUNDYSenator Lundy—It is not. The facts are there.LI4Patterson, Sen KaySenator PATTERSON—I have been systematically going through what the Labor Party have been doing on all sorts of issues from nursing homes, to child care, to social security. Instead of actually criticising government policy, which is legitimate for an opposition—7G6LUNDYSenator Lundy—It's okay that we criticise it now.LI4Patterson, Sen KaySenator PATTERSON—They have actually misrepresented and lied about government policy over and over and over again. I have documented it and it is a litany of lies, a litany of misrepresentation of government policy, and again we saw it here today. We saw Senator Neal getting up and going on with it. Senator Herron referred to an article in the Blacktown Advocate which talked about an operator in the area around Blacktown in New South Wales. This front-page article in the newspaper stated:Publicity surrounding federal government cuts to child-care funding has hurt local private child-care centres even though they never received the subsidy.This operator said that their fees had gone up by $2 as a result of wage increases in 1998 and that, because of the scaremongering that was going on, people were assuming that they would not be able to afford to pay for their children to go into child care. That is the sort of thing that we have seen happening from this opposition. There have been no apologies from the opposition.We saw this same sort of misrepresentation about the nursing home policy. It does not matter what it is about; they go out and scare people, scare mothers of children, scare families, scare older people. They do not care who they scare, whatever it takes. Former Senator Richardson put it aptly in the title of the book he wrote about his time in the Labor Party, Whatever it Takes. That ought to be the Labor Party's motto, and I wish I had enough Latin to say it in Latin. `Whatever it takes' ought to be their motto. If it takes scaring people, if it takes scaring older people, if it takes scaring families, then the Labor Party will use that tactic irrespective of the truth.7G6LUNDYSenator Lundy—The facts are there.LI4Patterson, Sen KaySenator PATTERSON—We have a perfect example here of a private operator indicating that that is what is happening.7G6LUNDYSenator Lundy—We know what your policy is: any criticism is a lie.LI4Patterson, Sen KaySenator PATTERSON—When we came into government, child care was in absolute disarray. It was in disarray because of Labor's poor management. There was haphazard growth—Senator Lundy interjecting—LI4Patterson, Sen KaySenator PATTERSON—Madam Deputy President, if Senator Lundy wants to get up and speak on this, she can get up and speak on it. I sat in silence while senators on the other side spoke. I think I interjected once. Senator Lundy has flapped her jaws incessantly since I got up.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! Senator Patterson, would you please address the chair?LI4Patterson, Sen KaySenator PATTERSON—I am addressing the chair. I am telling you that she is flapping her jaws.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I would also expect better language from you.LI4Patterson, Sen KaySenator PATTERSON—It is her jaws. They are flapping. She cannot keep them shut while I am having a go. She can get up in a minute and have her turn. She does not like the truth. The Labor Party never likes the truth. The child-care industry was in disarray through Labor's poor management. There was haphazard growth in private centres. There was oversupply in a large number of areas and undersupply in others. Due to Labor's lack of responsible planning, there were pressures on the viability of the child-care sector. Also, there was pressure resulting from a fewer number of children being born and many four-year-olds going into preschool, for example, in Queensland and Western Australia.Labor also effectively prevented 51,000 working mothers who use outside school hours care from receiving any child-care assistance. We have actually introduced assistance for out of school hours care, but we never hear about that, we never hear about the positives.I just want to refer to a letter that the federal Minister for Family Services (Mr Warwick Smith) wrote in the Australian on 25 May trying to refute some of the misrepresentations and untruths that were being spread by Labor about child care. They went on that people had to stay at home instead of go to work because they could not afford child care. The ABS figures indicate that there are now:. . . more women . . . working both full-time and part-time than three years ago (an increase of 36,000 since April 1995).. . . . . . . . .The removal of operational subsidy addressed a significant inequity whereby community based centres (providing less than 30 per cent of all centre-based places) were receiving a subsidy not available to the remaining 70 per cent of centres.So 70 per cent of centres were providing child care, and only the remaining 30 per cent of them were receiving a subsidy. This meant that 70,000 families, regardless of their income—and a friend of mine who is a doctor said to me, `How come we get a subsidy for sending our child to child care? How do we get a subsidy?' (Time expired)15:23:005356O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—Given the comments from the government, I wonder why it is that the private sector, according to the government, seem to not have a problem with policy and really are saying that their only problem is this question of publicity. That is why they cannot fill their centres. That is why centres that have been built have closed or are about to close because they cannot get any people to fill their places.Is that really what the private sector are saying is the problem? It seems to me that they have said something quite different to the Senate inquiry where the private sector has been represented regularly. Their organisations and individual centre providers have told the Senate that they want changes in policy. They have enumerated those changes, and government members of the committee know it. The private sector is critical of this government's policy on child care. For this government to dress up the problem and say that it is all a question of so-called misinformation and ignore what the private sector are saying is admitting they have no idea what they are doing in child care.As to alleging that, as far as the opposition is concerned, it is a case of whatever it takes, let me remind the government that it is the Parliamentary Secretary to the Minister for Health and Family Services (Ms Worth) who, according to a letter that the parliamentary secretary has sent around to members and senators, has been egged on by the Minister for Family Services (Mr Warwick Smith) and is distributing misinformation—information which indicates that there is a continual growth in funding in child care. Senator Bishop has set out that there has been a reduction between 1996-97 and 1997-98 of $113 million, more than 10 per cent of funding.Is that the candour that this government treats the electors with? Is that the candour which Ms Worth, the member for Adelaide, uses in her circular which is enclosed with the bogus chart where she says:Enclosed is a guide to child care centres in my electorate. I have found it useful and I believe it has gone some way to counter some of the negative publicity that has had such a detrimental effect on many centres.Warwick Smith's office has suggested that I circulate it as you may choose to do something similar.They choose to circulate it knowing that it misrepresents the facts, and they have the gall to come in here and say we are misrepresenting the case. The facts are there in black and white. This government knows that outlays on child care fell by more than 10 per cent between 1996 and 1997.As I said, the private sector have identified one of the key problems they have—that is, the child-care assistance measures are inadequate. They have said that the cap on child-care assistance ought to be raised. That is a consistent message from private sector child-care centre providers all around Australia. That is a consistent message from the or ganisations that represent them as well as individual proprietors, but has this government heard the message? Obviously not.All they are telling the Australian public is that there is no problem. All they are telling the Australian public is, `It's only something to do with community based centres and local government centres. It's not a private sector problem. You can go there. There isn't a problem,' but the private sector is saying loud and clear that there is a problem. Clearly, this government is not hearing that, has not heard it and does not want to hear it because it does not intend to deal with it.That is the problem that child care has. That is the problem that this industry has. That is the problem that parents, whether they seek community based, local government or private sector child care, are facing—that is, the measures this government have introduced have made child care unaffordable. That is driving people out of child care. That is causing underutilisation of centres both community based and private sector. That is causing them to close. If this government does not realise it, it does not deserve to be in office. A lot of mothers who have come to the committee's inquiries have told us that they are absolutely disgusted with what this government is doing to child care. They think it is time that some changes took place. If you cannot hear them, you will lose the next election. (Time expired)15:28:005357Coonan, Sen HelenSenator COONAN2M6NSWLP10—I know this has been a very long week, but to trot out this very tired and discredited proposition on the Thursday of an extra sitting week shows the depths to which the opposition has to trawl to find a topic to take note of and to ask questions about. The two propositions that the opposition seems to be putting forward are, firstly, that the government's cuts to operational subsidies are causing closures and, secondly, that it is forcing women to leave the work force. Neither of these propositions bears scrutiny.Of course, Senator O'Brien referred to some other proposition in black and white. The proposition in black and white is that there has been real growth in government outlays on child care in 1997-98 dollars. Of course, the opposition does not like this because it is pretty graphic evidence of the fact that its argument is blown to pieces. The graph that Trish Worth has put out is entirely for the purpose of countering the false information, the fear campaign, that is constantly being put out by those on the other side who rely almost entirely on anecdotes.7G6LUNDYSenator Lundy—On people's experience—that's what we rely on—not books, but people's experience.2M6Coonan, Sen HelenSenator COONAN—Why don't those in the opposition ever try to get their facts and figures right? I can understand that Senator Lundy is practically apoplectic about this because she does not like the fact that closure of child-care centres was brought about, as we all know—let us go through it again—by a glut of child-care centres for two- to five-year-olds, this of course having been caused by the Labor government having expanded the non-means tested child-care fee relief in 1991 which triggered an unplanned, unchecked expansion in the child-care market.Let us just continue with this proposition, if those on the other side can control themselves long enough. The result was total disarray, complete and utter disarray, with oversupply in some areas and virtually no child care in needy areas or for difficult placements.7G6LUNDYSenator Lundy—Here we go.2M6Coonan, Sen HelenSenator COONAN—Of course Senator Lundy does not like that; apparently Labor is not interested in the fact that there is an oversupply in some areas where people with children with disabilities cannot get a place. The operational subsidy to community based centres meant that funding went to only 30 per cent of total child-care centres, whereas 70 per cent of child-care places were being operated by the private sector, without being given a subsidy, for only $4 extra per child. Madam Deputy President, wouldn't that $4 figure—private centres operating for only $4 extra than those getting huge subsidies at taxpayers' expense, which really is not disputed—suggest to you that in fact the way the operational centres are run might not be economical, that perhaps that was the reason for the differential?The bulk of child-care services have been able to operate without a subsidy, and the coalition government has simply sought to create a fair and equitable system that targets families most in need in areas where there is an undersupply. That is an entirely defensible proposition. The government has made $8.5 million available to help the community based centres restructure and become more efficient. So it is not as though the government has hung these centres out to dry; there is a lot of money and assistance there to help them operate more efficiently.The Commonwealth government is in fact spending more on child care than ever before. An amount of $1.2 billion has been allocated this year, as those opposite well know. This is an increase of 18 per cent since Labor's last year in office—and I know that those opposite do not like it, but that is an incontrovertible fact. An estimated $4.9 billion will be spent on child care over the next four years, and 3,000 new places will be allocated. The reason that people do drop out of the workplace is much more multifaceted than just problems with child care. It is dictated much more by availability of jobs. In fact, the all-female participation rate has held steady, as those opposite well know.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—The time for the debate has expired.Question resolved in the affirmative.Bills5358r4135358Debate resumed.15:34:005358Murray, Sen AndrewSenator MURRAY3M6WAAD00—In speaking in the second reading debate on the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 , I would address one area of concern the Democrats have. The Senate would be aware that I have circulated item 849 revised. That amendment of ours refers to some 10 different acts covered by this bill.The bill has attended to questions of board membership and of employee relationships. The Democrats are concerned to ensure that, wherever appointments are made to the governing organ of public authorities—whether they be institutions set up by legislation, independent statutory authorities or quasi government agencies—that the process by which these appointments are made is, and is seen to be, transparent, accountable, open and honest.The adage of `jobs for the boys' should be an anachronism in 1998. Notwithstanding this, there is a widespread public perception that it is not. Many appear to believe that government appointments result in patronage to handsomely remunerated positions. This perception can damage the reputation of these bodies, as in the public eye they are then seen as being controlled by persons who lack the appropriate independence and who may not be as meritorious as they might be.The Democrats are of the opinion that, while this is often not so, and many outstanding appointments have been made by both the previous and present governments, nevertheless this is a matter which has to be addressed. In truth, there is little empirical evidence that can be brought to bear to rebut this perception. It is still the case that appointments to statutory authorities are left largely to the discretion of the minister with the relevant portfolio responsibility. In the absence of umbrella legislation to correct this situation in a systematic fashion, the Democrats will have to argue for each piece of legislation dealing with these bodies to include standard provisions setting out an accountable regime governing such appointments made by ministers.The 1995 Nolan committee, which reviewed the processes for making public appointments in the United Kingdom, set out the following principles to guide and inform the making of such appointments: firstly, a minister should not be involved in an appointment where he or she has a financial or personal interest; secondly, ministers must act within the law, which includes its safeguards against discrimination on grounds of gender or race; thirdly, all public appointments should be governed by the overriding principle of appointment on merit; fourthly, except in limited circumstances, political affiliation should not be a criterion for appointment; fifthly, selection on merit should take account of the need to appoint boards which include a balance of skills and backgrounds; sixthly, the basis on which members are appointed and how they are expected to fulfil their roles should be explicit; and, seventh, the range of skills and backgrounds which are sought should be clearly specified.Those Nolan Committee guidelines provide only a basic framework for ensuring that proper practices are followed in the making of government appointments. They do not necessarily represent best practice; rather they set out what should really be taken for granted in a modern, democratic system of accountable government. Indeed, the United Kingdom Conservative government accepted fully the Nolan Committee's recommendations on public appointments. The office of Commissioner for Public Appointments was subsequently created, with a similar level of independence from the government as the Auditor-General, to provide an effective avenue of external scrutiny.The commissioner subsequently developed a code of practice for public appointments, which came into force on 1 July 1996. The code regulates, inter alia, appointments to non-departmental public bodies. It sets out seven principles upon which such appointments must be based. Those seven principles are: ministerial responsibility, merit, independent scrutiny, equal opportunity, probity, openness and transparency, and proportionality. The code provides mandatory guidelines for the application of these principles.A comparison of these reforms with the current practice of government in the federal sphere in Australia shows clearly that we lag well behind the United Kingdom in this respect. We not only lack the external scrutiny mechanism in the form of the Commissioner for Public Appointments but, more fundamentally, do not have even basic procedural safeguards. This should be redressed as a matter of public importance, with a far higher priority attached to it than has hitherto been the case.The public must have trust and confidence that a minister will not allow improper or irrelevant considerations or personal interests to influence public appointments. Indeed, this relationship is in some respects analogous to those of a fiduciary nature, such as trustee and beneficiary, in that it is founded on a high degree of trust and confidence. Yet where a breach of duty occurs in a fiduciary relationship, the person to whom the duty is owed has access to a range of equitable remedies. This is not the case where a minister acts for improper purposes in making an appointment.There is no law to prohibit a minister from doing this or, where the appointment has been made, to make the appointment voidable. This omission is addressed in the recommended amendments to the bill, which I will move, which require that all appointments to the authority be made in accordance with a published code of practice. I might say—and it is self-evident whenever you raise these issues—that such codes and such amendments are not in the interests of those who wish to assume power. They very much like to be able to dish out the jobs.The code of practice is intended not to act as a mere guideline to ministers in making appointments but to regulate by law the way in which the minister exercises the power of appointment. The content of the code of practice is designed to accommodate those principles designated as fundamental by the Nolan Committee and the United Kingdom Commissioner for Public Appointments, as outlined earlier.A further provision requires that, even where the code of practice has been adhered to in determining an appointment, the minister will be further obliged to consider the impact of the appointee on the overall complexion of the authority. This provision is aimed at ensuring that `capture' of the authority by any particular interest group cannot occur. It is essential that boards are genuinely representative of the inevitably divergent views of those groups affected by their actions. Without this requirement, the potential remains for appointments to be made to boards of persons who are well qualified but who all hold similar views on key areas of policy. This must be avoided, not simply because it is good public policy practice to do so but to maintain the credibility of the authority in its area of operation.Some senators who have been party to some of the debates in which we have been involved where we have raised these issues might know that these issues represent a campaign by us to lift standards in the area of ministerial appointments and to arrive at a situation where the public can be guaranteed that appointments are made as objectively and as much in the public interest as possible. It is not our intention to imply that all or most appointments are made for improper motives. It is a fact—and I repeat what I said earlier—that both this government and the previous government have made many outstanding appointments. Nevertheless, we are concerned that the public perception of jobs for the boys and, hopefully, jobs for the girls needs to be ended. I will address these matters at greater length in the committee stage.15:43:005360Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—by leave—Before the sitting was suspended for lunch, I indicated that the opposition was opposed to those sections of the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 that would reduce the funding available for 1997-98 for the Fisheries Research and Development Corporation. We believe that this is an unfair penalty on the body, given that the basis upon which these funds are to be recovered by the government is that, in their words, the corporation has demonstrated prudent financial management. To some extent, it is a victim of its own success.We believe that the move is short-sighted. It has the potential to damage long-term research and development work within the fisheries industry. We will be opposing those measures, and an amendment has been circulated to that effect. I know that my colleague Senator O'Brien, who has participated in the proceedings of the Senate Rural and Regional Affairs and Transport Legislation Committee when it dealt with this issue, will have a lot more to say about it.I will now turn to some other aspects of the legislation relating to amendments to the Petroleum (Submerged Lands) Act. Firstly, at proposed sections 40 and 41 of the bill there are amendments which I could describe in general terms as being related to the setting of seabed boundaries agreed between the Australian government and the Indonesian government by way of treaty. As honourable senators are aware, there are certain treaties in force between Australia and Indonesia relating to exploration and seismic work for petroleum and similar resources within the territory or, as it is referred to, exclusive economic zone.When the bill was debated in the House, my colleague the shadow minister, the honourable member for Perth, Mr Stephen Smith, raised certain legal issues and sought clarification on just what would be the impact upon Australia of these changes and, in particular, with respect to the operation of the United Nations Convention on the Law of the Sea provisions. That convention, as I am advised, can result in a country being required to make available to the other treaty nation marine scientific research that may have been gathered in relation to the seabed within the water column.The concerns that my colleague Mr Smith raised were that, whilst we may be carrying out research on the seabed in relation to petroleum, gas or other resources found beneath the seabed for the purposes of petroleum exploration and production, we may also gather other scientific research and whether we would be obliged to make it available to the other treaty nation, being Indonesia.Mr Smith, the shadow minister, advises me that he has now, after seeking this information, received appropriate advice from the government. Accordingly, I will put these comments into the record. The shadow minister has been provided with a copy of the Commonwealth's legal advice on this point. The conclusion of that advice is that seismic research carried out pursuant to a permit under the Petroleum (Submerged Lands) Act for petroleum exploration and exploitation is not subject to the marine scientific research provisions of the United Nations Convention on the Law of the Sea or the 1997 treaty. Consequently, the provisions of this legal advice, as provided by the government, meet the central point raised by the shadow minister, the member for Perth, Mr Smith. On that basis, we do not seek to take the matter any further in these deliberations within the Senate. The shadow minister has indicated that he may wish to make some further comments at another stage on this issue, particularly when the bill returns to the other place.The second issue that I raise on behalf of the opposition relates to the subsequent extensive set of amendments that will be moved by the government to this legislation which have been circulated in the chamber. I am advised that these substantial and detailed amendments were provided to the shadow minister for resources and energy only on Wednesday last week, not yesterday. On that basis, we on the opposition side have had limited opportunity to consider the amendments and not much opportunity for anything more than a cursory consultation with the relevant industry associations and individual members of the industry itself. It is fair and true to say that, on the basis of our consultations, industry supports these measures and supports their passage at this time.The urgency suggested by the government in respect of these matters is said to be based on proposed new projects and the possible expansion of the existing project which forms Australia's liquefied natural gas industry. The shadow minister and the opposition generally have made it clear that we support that expansion. The current regrettable aspect from our national point of view is that these expansions or new projects now seem further away as a result of the Asian economic difficulties. On that basis, we would have thought that this was precisely an area where detailed consultation with the opposition could and should have occurred in the run-up to the introduction of these amendments. It is a matter of considerable regret that this has not occurred.Frankly, given the current Asian economic climate, the argument as to urgency is tenuous. If this amendment is passed today, for instance, will the Japanese wish to offer the piece of paper that they could not offer at LNG12 recently in respect of the North West Shelf project? Will the Koreans produce a piece of paper for the Gorgon project? We think not. On the same basis, if the amendment is not passed this week or next, will the Japanese or the Koreans say that the failure to pass was the fatal straw that broke the expansion or the new project's back? Again, we think not. It is, however, fair to say that this is one of the issues that will fall for relevant consideration by the customers in the context of these LNG expansions or new projects.There is an issue here which we are happy to address at this point of time: the opposition certainly supports the notion or the principle that there should be secure title over gas resources to support long-term LNG contracts. We have no difficulty in the principle of an LNG supplier's production licence remaining in force at the very least until the expiry of the LNG contract. This principle is sensible, is important to the industry in the long term and is one which we support.Whether the detail of the amendments effect that in the best way or whether there are alternative ways of achieving that are questions that would have been helped by the presence of some sensible consultation, to which I have already referred. For example, there may be legitimate reservations about the notion of an indefinite production licence period, particularly given that the amendments apply across the board and not just in respect of LNG projects.What domestic implications, if any, does this have in the new era of competitive gas arrangements? There may be a structure available, for example, where the production licence period is a definite period but longer than the longest long-term LNG contract in that production area.It is, of course, acknowledged that sections 105 and 106 of the act which relate to cancellation of a licence remain in place. These do give protection if the conditions of production are not met. My colleague the shadow minister will no doubt pursue these and other technical matters in the other place in due course.We support the expansion of Australia's LNG industry, we support the principle that these amendments reflect and, in the context of limited consultation, we support the passage of these amendments. In conclusion, we support the bill as it has been presented, with the exception of the amendment the opposition will be moving in respect of the fisheries research and development issue. We will express our view on the amendments to be moved by Senator Murray later in the committee stage.15:54:005362O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I want to address my remarks on the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 to clauses 44 to 48, which have been the subject of a reference to the Rural and Regional Affairs and Transport Legislation Committee for a report to the Senate. It is interesting to note that the effect of those clauses was to reduce the moneys appropriated to the Fisheries Research and Development Corporation by $3,612,000 for the year 1997-1998. I make the point that we are now in the financial year 1998-99 dealing with this piece of legislation. Obviously, it was not a priority to deal with this matter within the financial year in which the moneys were supposed to be reduced.As I understand it, those moneys have in fact been paid to the Fisheries Research and Development Corporation on the understanding that, if this bill passes, those moneys will be paid back to the government. So the moneys are in the hands of the Fisheries Research and Development Corporation at the moment. As I understand the evidence of the Fisheries Research and Development Corporation to the committee, as a result of this bill and expecting that the government will get the $3.6 million back, they have scaled back the expenditure proposals for the future and spread that cost over the next four years.It was suggested early in the process that the Fisheries Research and Development Corporation had substantial reserves and that they could simply pay this money to the government—they had all these projects committed along the way, therefore, they must have had reserves. It was suggested at one stage, I think by the minister, that they had reserves of $33 million. Of course, the Fisheries Research and Development Corporation do not have `reserves' as such. They have pro jects to which they have made commitments and they have moneys in hand to meet those commitments. So the effect of the reduction is not to take moneys from reserves. Quite properly, the Fisheries Research and Development Corporation will have to meet their contracts in relation to research and development projects funded, but the cut in funding will reduce the size and/or the number of research and development projects in the fishing industry funded in the future, particularly in the next four years.I want to deal with that aspect because the fishing industry is a particularly important industry for the state of Tasmania, the state which I represent in the Senate. Fishing and aquaculture are important contributors to the Tasmanian economy. They are also contributors to the social wellbeing of many of its towns and cities. Some of the regions, particularly in the Huon area south of Hobart, are heavily reliant upon the employment generated in the fishing industry and the aquaculture industry.It has been suggested that the number of people employed in the fishing and aquaculture industries in that region now outstrips the number of people employed in forestry. I think that is a development which is important, given the difficulties that that region experiences in terms of high unemployment and a lack of available jobs. The creation of and the building of these industries has been critical for the survival of communities in that region, and many other regions in Tasmania rely on this industry.The industry, of course, relies on growth as well as the maintenance of existing opportunities. Research and development is a basic building block for future growth, especially in the important value adding components of the industry, as well as for sustainable fishing practices into the future.In Tasmania there are well over 1,000 commercial fishermen, there are 65 seafood processors and there are over 95 marine farmers who operate over 150 marine farm leases in Tasmania. The Tasmanian Fishing Industry Federation is the peak body that represents these groups locally and through the Australian Seafood Industry Council nationally. The total value of the industry is around $200 million annually for Tasmania.Sea fisheries and aquaculture provide employment for around 7,000 Tasmanians in the catching and post-catch sectors. Approximately 60 per cent is exported. The remainder helps provide the basis of a thriving tourism and hospitality industry. In Tasmania, the main products are Atlantic salmon—an industry which generates $65 million in income—abalone, rock lobsters, oysters, mussels and general scale fish.I must say the Tasmanian economy and seafood industries have received a good deal of attention—and deservedly so—in their relationship with the FRDC. It has to be said that, for every dollar invested in cash with the FRDC, Tasmania receives $15 in research and development investment which is of benefit to the state. The FRDC will invest almost $2.5 million in research and development funds provided to Tasmanian research and development providers in this current financial year. This is on the assumption that there are no further cuts imposed on the organisation. In fact, for the Tasmanian economy overall, the total figure is $3.3 million. The difference between this figure and the one I mentioned earlier is that this includes research and development undertaken in Tasmania but of benefit to other fisheries, for example, Commonwealth fisheries, mainly through funds going to the CSIRO fisheries research centre located in Tasmania.What sorts of projects are being funded? One of the major projects to be conducted by Tasmanian based researchers will examine harvest strategies, performance indicators and monitoring strategies for the South-East Fishery. There has been a lot said about the South-East Fishery and the adjustment program in that area. The South-East Fishery is one of Australia's principal fisheries with an annual commercial catch of more than 24,000 tonnes, which is worth more than $55 million. It harvests a range of species from just north of Sydney, south to Cape Jervis in South Australia, and out to the 200-mile limit of the Australian exclusive economic zone.Scientists in this program will develop performance indicators and harvest strategies for the South-East Fishery to help achieve the appropriate balance between the objectives of long-term resource sustainability and maximisation of economic gains for the nation. The overall objective remains ecologically sustainable development. The project is to be conducted by the CSIRO Division of Marine Research. It will receive $99,000 from the FRDC in this financial year and up to $208,000 over the three-year life of the project.Another project to be conducted by the CSIRO is the analysis of the early life history of southern Australian fish species to assist in the management of fisheries resources. One objective of the project will be to produce an atlas for southern fish species covering information such as timing and location of spawning, larval distribution and larval growth and dispersal patterns. The project is to receive $118,000 from the FRDC in 1998 and up to $371,000 over three years.Another project to be conducted in this area by the Tasmanian Parks and Wildlife Service aims to reduce the accidental hooking of albatross on long-lines set for tuna. Apparently, albatross dive to take tuna baits off long-lines as they are being set from commercial fishing vessels and some have become accidentally hooked. Fishing related mortality has been implicated in a fall in the numbers of the six species of albatross. The Parks and Wildlife Service project involves designing and testing an underwater line setting device to keep baits and hooks out of the reach of albatross. The results will be compared with other equipment and bait setting techniques currently in use. This project is to receive $68,000 in 1998-99 and up to a total of $91,600 over two years.In addition, the University of Tasmania is to be funded to conduct research on aquaculture feed for Atlantic salmon. The Australian salmon aquaculture industry is world class but to maintain this position commercial feed development needs to continue to advance. There are great trade pressures on this industry as well as pressures which emerge from time to time in relation to quarantine matters. But in this particular project, the objective is to formulate feeds for testing in commercial type conditions and to transfer the results to ingredient producers, feed manufacturers, salmon and trout farmers and the scientific community. That project is to receive $66,000 in 1998-99, and up to a total of $205,000 over three years.That is the sort of project that the FRDC has funded. As I outlined earlier, we are talking about an industry which is of great importance to the state of Tasmania. What consequences would there be for my state if these funding cut proposals were put into effect? Mr Dundas-Smith, who is the Executive Director of the FRDC, in his evidence to the committee asked himself a rhetorical question and then answered it. He said:Will the $3.6 million impact on future R&D? Absolutely, and I want to pick up on that one.Apart from the downstream effects on industry, there is another aspect to this. This document says that the FRDC should take control and coordinate all the fisheries and marine research. The only way you can do that is to invest jointly in projects. So any lessening of our ability to fund projects means lessening of our ability to ensure there is no duplication, to ensure that research is properly directed in Australia.It could be argued—and I have heard it here today—that the government has actually invested more money in fisheries and marine. If that is referring to money that is going into the Australian Institute of Marine Science and CSIRO, for example, that money is used to partner projects that we fund.That is, the FRDC fund.Very rarely will CSIRO and AIMS go out and spend research money on projects that we do not plan, fund and manage. As this document has recognised, we set the priorities through a very elaborate structure nationwide called fisheries research advisory bodies in every state. In some states they are appointed by state ministers to determine the priorities.Subsequent to his giving evidence, the department and the minister sought to attack some of the statements made by Mr Dundas-Smith in correspondence to the chair of the committee dated 15 June. Frankly, having read that correspondence, it seems to me that the government did not lay a glove on the evidence of Mr Dundas-Smith in terms of the significance of this body, the importance of its research, the fact that this organisation did not have reserves and it was not necessary for the government to make these cuts to fund, for example, the South-East Fishery adjustment project, even though it had taken $1.5 million from the allocation to be made to the FRDC to go to that project.Clearly, if you look at the budgetary position today—we are talking now in the 1998-99 financial year—this cut of $3.6 million is insignificant in that the government says it is moving to a surplus. But $3.6 million in research money will be significant for this industry, it will be significant for the fishing industry in Tasmania, it will be significant if it causes a cut in research, for example, in the aquaculture industry.The salmon industry in Tasmania has grown and has become a world-class industry. According to industry figures, that industry needs to continue to grow to survive. If it does not grow, its economy of scale will mean that it cannot compete with other producers around the world. It is good to have clean, disease-free status. But, ultimately, if it cannot compete on price and quality and if, because of lack of funds for research and development, it falls back in that regard, then the industry is in danger and, therefore, hundreds and thousands of jobs in Tasmania will be in danger.So what are we talking about? We are talking about a $3.6 million funding cut for the FRDC for one year. According to the information that I have been given, every dollar cut in Tasmania sees an effective cut of $15 in the research effort in Tasmania. That is the advice I have received from the Australian Seafood Industry Council. There is no information that I have seen that contradicts that information. So we are talking about a cut of $3.6 million for last financial year, money that the FRDC now has but money it will be asked to pay back to the government if this bill is passed.The impact on the government's budget position will be minimal. The government is saying it is going into a budget surplus. What is the importance of this $3.6 million? We are talking about a very small amount of money in terms of overall Commonwealth expenditure. Isn't it more important that the research effort of the fishing industry continue be cause, after all, isn't the fishing industry one of the industries that maintain the regional coastal economies around Australia, not just Tasmania, and isn't the fishery industry critical to the survival of towns in Tasmania, Western Australia, Queensland and the Northern Territory?Isn't it possible, as is proposed in the opposition's amendment, to leave this $3.6 million with the FRDC by deleting the provisions of the bill which would take that money away from them, allow them to continue their good work, allow the science of the fishing industry to continue to grow, and allow the industry and the environment outcomes in this Year of the Ocean to develop and prosper? This parliament would take a very positive step if it endorsed the opposition's amendments and rejected the government's proposal to withdraw this money from the FRDC.16:12:005365Murphy, Sen ShayneSenator MURPHYFX5TASALP00—It is of particular concern to me that the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 will remove $3.6 million, as my colleague Senator O'Brien has just been saying, because it is of fundamental importance to this country. We have an exclusive economic zone, in terms of water, that is twice the size of the land mass of this country. If we are to maximise the real benefits that we can get from such an exclusive economic zone in terms of fisheries management—and in other terms, but in this case fisheries management—then we must not decrease expenditure but increase expenditure.I understand CSIRO has assessed the resources to be potentially in the order of $30 billion. In my state—likewise in Senator O'Brien's state—aquaculture, fishing and fisheries are very important businesses. If we are to make those businesses grow, then we must not be cutting back on research endeavours. The efforts that go into research must be increased rather than decreased. Our state government, as you, Mr Deputy President Watson, would know, has taken away from the Launceston university and broken up the aquaculture centre which was at the forefront in providing leading-edge technology in many areas of aquaculture. We have lost some very valuable resources as a result of a reduction in expenditure on research.It is not good enough for the Commonwealth to walk away from its commitment to funding. The explanatory memorandum to this bill states:The saving is made possible because the Corporation's—that is, the Fisheries Research and Development Corporation's—sound financial management has left it with substantial reserves.That may well be the case, but I suggest to the government and the minister that, if that is the case, then maybe they are not making enough endeavour to conduct a greater effort in research and development in the area of fisheries.We know that, in terms of the supply and demand for fish as a food source, demand is going to far outstrip the capacity to supply, particularly from the natural fish stocks of the world's oceans. We know that in our own exclusive economic zone in the Southern Ocean—a matter which I raised with the minister in a question just yesterday—not only are we finding ourselves with little or no research in that area, in understanding the resources that may be available, but also we do not have a capacity to even protect those resources. As we know, the government, through the navy, has now arrested three vessels—as I said, I asked a question about one of them, the Aliza Glacial—and the government intends, or I think it intended, to apply some penalties with regard to the illegal fishing that was conducted. But I think it is highly likely, in respect of one vessel at least, that we are not going to have any capacity to apply any penalties because that vessel will be removed from our control, thus removing any real capacity we have to apply fines to the ship's master and officers. That is essentially the only capacity we have.I am quite surprised by the fact that the government had not taken steps to at least stop that sort of practice prior to this point in time, given that it knew that particular vessel did have a financial commitment to a third party in another country and that the government was well aware of the admiralty rules that apply insofar as these matters go. This has not been addressed by the government or, indeed, by the minister: whether or not the government is going to take any steps to ensure that will not be the case in the future.I congratulated the government at the time on its effort to capture those vessels, as it should. But it is important to note, whether we are talking about research and development or about the protection of resources that belong to this country, that cuts in expenditure, no matter where they go, have to be considered very seriously. It is not just the case in the area of aquaculture. General research is important, given that the CSIRO, the Fisheries Research Development Corporation and other bodies have identified that we know so little about the oceans that we have a legitimate control over.Little or no research is conducted into recreational fishing and the degree of pressure that recreational fishing applies on various fisheries, whether they be freshwater or saltwater ones. The federal government is the biggest collector of tax that is provided through the activities of recreational fishermen—probably in the area of a billion dollars—and yet the government cannot even find it within itself to give a commitment to funding for the recreational fishing body that has, in essence, been the one body that has been responsible for coordinating mostly voluntary research. I know the minister himself took a step not so long ago towards the protection of two fish species—namely, striped and black marlin—and I congratulate the government for taking that step.EU4O'CHEESenator O'Chee—Blue and black marlin.FX5Murphy, Sen ShayneSenator MURPHY—Sorry, blue and black marlin. It should have been for the lot, quite frankly, Senator O'Chee. I congratulated the minister for taking that step but it was taken only on the basis of research effort provided primarily through recreational fishermen.KI4PARERSenator Parer—What about the game fishermen?FX5Murphy, Sen ShayneSenator MURPHY—Game fishermen do come within my definition of recreational fishermen. `Game fishermen' really relates to the type of fishing, Minister.But the government will not provide a mere $70,000 to the peak organisation for recreational fishermen. Seventy thousand dollars was cut from the peak recreational fishing body—that is just not acceptable. Yet the minister and the government were only too pleased to actually launch a recreational fishing guide on etiquette and environmental management, again developed, albeit with some assistance from Commonwealth funding, by a recreational fishing body.This is from a government at a federal level. The states also have some responsibility, but it is not good enough for the Commonwealth to say, `Look, that is a state matter. It is their responsibility.' Yes, I agree it is in part their responsibility, but the Commonwealth, by and large, collects the greatest share of tax generated from the activities of recreational fishermen—as I said, some $900 million or maybe a billion dollars. Yet the Commonwealth would put substantially less—in this case we do not even put $70,000 into the peak body—than $5 million into overall research as it relates to recreational fishing.Of course, as was pointed out by Senator O'Brien, we are proposing amendments to ensure that the $3.612 million—which is really a drop in the ocean—does remain with the Fisheries Research and Development Corporation. Of that amount, $1.5 million is to go into the adjustment program for the South-East Fishery, but it is a drop in the ocean with regard to what we really need.If our country is to meet not just a part of the demand for fish as a source of food that is required in our part of the world but also other demands, we will need to double our efforts. We should be doubling our efforts because, at the end of the day, the growth in this industry is where employment can really be generated. The fishing industry is generally a large employer because it is pretty much a hands-on industry, and that is why we need to double those efforts. We should not, at any stage, be considering reducing expenditure in the area of research and development. If we do not increase that effort, all we are going to see is our natural fish resources being over fished and, in many instances, being wiped out.I notice, Minister, that the Japanese have failed to agree to our latest efforts with regard to the maintenance of what is, in my view, a way too high catch limit on southern bluefin tuna. We are now going to see further pressure placed on that fish stock, with the Japanese saying that they intend to proceed with the taking of an additional 1,400 tonnes over the agreed quota that they have, which is around 6,065 tonnes. That is another reason why we need to increase the scientific and research effort. I think, Minister, that you are sympathetic to that and I hope that you will double your efforts. I know Senator O'Chee has a partial interest in recreational fishing. I hope that you will double your efforts to try to make sure that we do maintain reasonable expenditure.If you look at the United States, for instance, two per cent of all of the tax revenue raised from recreational fishing—when it goes to tackle, boats and motors that are sold—is hypothecated directly back into research and development of the fishery. In New Zealand they take a different approach again. Those countries are progressing, improving and increasing the capacity of their fisheries. They will benefit from that. Indeed, they are already benefiting from that. The management techniques that are being employed are going to be crucial to the future of fisheries management. It is totally unacceptable—and I know the general public would find it totally unacceptable—to see reductions in expenditure on research and development in areas that are so critical to the future of this country and so critical to the development of an industry that could play such an important role in the employment of Australians and the maintenance of our quality of life.16:26:005367Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I thank honourable senators for their contributions. I would like to touch on a couple of issues. One of them was covered by both Senator O'Brien and Senator Murphy. They talked about the $3.6 million reduction in the Fisheries Research and Development Corporation's 1997-98 budget. We have gone over and over this issue and it has been examined comprehensively by the Rural and Regional Affairs and Transport Committee.As I explained to that committee, the previous government hopelessly mismanaged the South-East Fishery. I could not help but note, in Senator Murphy's speech in the second reading debate, that he talked about the importance of the South-East Fishery. When we came into government we found an absolute disaster in the South-East Fishery. Some operators had suffered huge financial losses as a result of the previous government's total incompetence. There was ongoing litigation and all this had to be addressed. We had to stabilise that fishery—and I think Senator Murphy will agree with that—by setting up an adjustment program. We decided in the public interest that it was more urgent and important to stabilise this very valuable South-East Fishery than to pay the FRDC its full unmatched contribution in 1997-98.With regard to government funding of fisheries, which is more generous than that to most of the agricultural industries, under the requirements of payments to the FRDC there is 0.25 per cent of gross value of production put up by the industry and 0.25 per cent put up by the government. That is a dollar for dollar type contribution based on gross value of production. In addition, the government pays a further 0.5 per cent of gross value of production into research for fisheries.We also considered the urgent importance of reducing a very large budget deficit, which we also inherited. We did not take the decision to reduce the FRDC's appropriation—and I point out that it was from the unmatched contribution—lightly or hastily. We made it after considering a number of far less palatable alternatives. The decision was the only sensible one that could be made in the circumstances.I foreshadow that I will be moving amendments in the committee stage to the Petroleum (Submerged Lands) Act. The Senate would be aware that liquefied natural gas export contracts are negotiated for very long terms. The new production licence system will guarantee security of licence for the full term of the contracts. This is something that the industry has been asking the government for for quite some time because of the necessity of that in order to secure long-term contracts with overseas buyers. The amendments replace the existing 21-year licence period with an indefinite period, subject to the qualification that production areas revert to the Commonwealth if petroleum is not recovered for five years. The amendments were supported by the states, the Northern Territory and the petroleum industry. I commend the bill to the Senate.Question resolved in the affirmative.Bill read a second time.5368The bill.16:30:005368Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I move:(1) Schedule 1, page 7 (after line 21), before item 40, insert:39A After section 38BAInsert:38BB Application by licensee for lease(1) If: (a) a licence is in force under paragraph 53(1)(c) or subsection 53(2) in respect of a block or blocks; and (b) no operations for the recovery of petroleum are being carried on under the licence in respect of an area (the unused area ): (i) that consists of, or consists of part of, the block or blocks; and (ii) in which petroleum has been found to exist;the licensee may, within the application period, apply to the Designated Authority for the grant by the Joint Authority of a lease in respect of the unused area.(2) An application under subsection (1): (a) is to be in accordance with an approved form; and (b) is to be made in an approved manner; and (c) is to be accompanied by particulars of: (i) the proposals of the applicant for work and expenditure in respect of the unused area; and (ii) the commercial viability of the recovery of petroleum from the unused area at the time of the application, and particulars of the possible future commercial viability of the recovery of petroleum from that area; and (d) may set out any other matters that the applicant wishes to be considered; and (e) is to be accompanied by the prescribed fee.(3) The Designated Authority may, at any time, by written notice served on the applicant, require the applicant to give, within the period stated in the notice, further written information in connection with the application.(4) The application period in respect of an application under this section by a licensee is the period of 5 years that began on: (a) the day on which the licence was granted; or (b) if any operations for the recovery of petroleum have been carried on under the licence in respect of the unused area—the last day on which any such operations were so carried on.38BC Grant or refusal of lease in relation to application by licensee(1) If: (a) an application has been made under section 38BB; and (b) the applicant has given any further information as and when required by the Designated Authority under subsection 38BB(3); and (c) the Joint Authority is satisfied that recovery of petroleum from the unused area: (i) is not, at the time of the application, commercially viable; and (ii) is likely to become commercially viable within the period of 15 years after that time;the Joint Authority must, by written notice served on the applicant, inform the applicant that it is prepared to grant to the applicant a lease in respect of the unused area.(2) If an application has been made under section 38BB and: (a) the applicant has not given further information as and when required by the Designated Authority under subsection 38BB(3); or (b) the Joint Authority is not satisfied as to the matters referred to in paragraph (1)(c) in relation to the unused area; the Joint Authority must, by written notice served on the applicant, refuse to grant a lease to the applicant.(3) A notice under subsection (1) must contain: (a) a summary of the conditions subject to which the lease is to be granted; and (b) a statement to the effect that the application will lapse if the applicant does not make a request under subsection (4) in respect of the grant of the lease.(4) An applicant on whom a notice has been served under subsection (1) may, within one month after the date on which the notice was served, or within such further period, not exceeding one month, as the Designated Authority, on written application made to the Designated Authority before the end of the first-mentioned period of one month, allows, request the Joint Authority in writing to grant the lease to the applicant.(5) If an applicant on whom a notice has been served under subsection (1) has made a request under subsection (4) within the period applicable under subsection (4), the Joint Authority must grant to the applicant a retention lease in respect of the unused area.(6) If an applicant on whom a notice has been served under subsection (1) has not made a request under subsection (4) within the period applicable under subsection (4), the application lapses at the end of that period.(7) On the day on which a lease granted under this section in respect of an unused area comes into force, the licence in respect of the block or blocks of which the area consists or in which the area is included ceases to be in force in respect of the area.38BD Application of sections 38BB and 38BC where licence is transferredIf: (a) after an application has been made under subsection 38BB(1) in relation to an area consisting of or included in a block or blocks in respect of which a licence is in force; and (b) before a decision has been made by the Joint Authority under subsection 38BC(1) or (2) in relation to the application;a transfer of the licence is registered under section 78, sections 38BB and 38BC have effect, after the time of the transfer, as if any reference in those sections to the applicant were a reference to the transferee. 39B Section 53After "licence" (first occurring), insert "granted before the commencement of subsection (2)".39C Paragraph 53(c)Repeal the paragraph, substitute: (c) in the case of a licence granted by way of the second renewal of a licence—indefinitely.39D At the end of section 53Add:(2) Subject to this Part, a licence granted after the commencement of this subsection remains in force indefinitely.39E After section 53Insert:53A Termination of licence if no operations for 5 years(1) If no operations for the recovery of petroleum under a licence referred to in paragraph 53(1)(c) or subsection 53(2) have been carried on for a continuous period of at least 5 years, the Joint Authority may, by written notice served on the licensee, inform the licensee that the Joint Authority proposes to terminate the licence after the end of one month after the notice is served.(2) At any time after the end of one month after the notice referred to in subsection (1) is served on the licensee, the Joint Authority may, by written notice served on the licensee, terminate the licence.(3) In working out for the purposes of subsection (1) the duration of the period in which no operations for the recovery of petroleum were carried on under a licence, any period in which no such operations were carried on because of circumstances beyond the licensee's control is to be disregarded.39F Subsection 54(1)After "licensee", insert "under a licence to which paragraph 53(1)(a) or (b) applies".39G Paragraph 55(1)(c) and (d)Repeal the paragraphs, substitute: (c) must if: (i) the application is in respect of the first renewal of the licence; or (ii) the application is in respect of a renewal of the licence other than the first renewal and operations for the recovery of petroleum have been carried on in the licence area within 5 years before the application for the renewal was made; or (d) may in any other case; 39H Compensation—constitutional safety-net(1) If: (a) apart from this item, the operation of any of items 39A to 39G would result in the acquisition of property from a person otherwise than on just terms; and (b) the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution;the Commonwealth is liable to pay compensation of a reasonable amount to the person in respect of the acquisition.(2) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia for the recovery from the Commonwealth of such reasonable amount of compensation as the Court determines.(3) In this section: acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution. just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.I table a supplementary explanatory memorandum to the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 relating to the government amendment. This memorandum was circulated in the chamber on 30 June 1998.The bill already contains amendments to the Petroleum (Submerged Lands) Act 1967, and the government now seeks to add to the bill by moving a small number of further amendments to the same act. The new amendments are designed to achieve important resource security objectives for the oil and gas industry in the Australian offshore area. The amendments will provide greater certainty for companies proposing major development projects.The amendments have the support of the industry, the states and the Northern Territory, which have been involved substantially in developing the proposed changes to the act. This has occurred through the process of a review of the petroleum legislation that commenced some time ago and has been brought to finalisation during the last year. Further proposals emanating from the review may be presented to the parliament at a later date, but the current proposals are the ones that the government considers very time sensitive. Several multibillion dollar liquefied natural gas export projects are under consideration, requiring very long-term commitments from both the buyers and the sellers of the liquefied natural gas. The buyers need assurance that the Australian suppliers have secure title over the offshore gas resources to support the long-term contracts. The amendments I am introducing address this issue and, if they are implemented in the near future, will greatly enhance the likelihood of significant benefits to the Australian economy. Honourable senators will know that the supply of LNG and gas to the world markets is a very competitive industry.The amendments include changes to the term of a production licence with an associated change to conditions under which retention leases may be granted. There are likely to be reduced administrative costs for both government and industry in the changes to the term of production licences through the elimination of periodic licence renewals. The Commonwealth will continue to collect the same level of annual fees as currently collected while the licences are in force. The production licence renewal fee of $1,200 is not a significant source of government revenue, particularly as there are, on average, only one or two renewals a year. I commend this amendment to honourable senators.16:33:005370Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—As I indicated in the second reading debate, the opposition will support the amendment moved by the government. I do not think I need to repeat any of those arguments or remarks.Amendment agreed to.16:34:005370Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move:Amendments of the Australian Horticultural Corporation Act 1987(1) Schedule 1, page 3 (after line 19), after item 3, insert:3A At the end of subsection 16(1)Add "on the basis of merit".3B After subsection 16(3)Insert: (3A) Appointments to the Corporation under this section must be made in accord ance with a code of practice determined under section 16A.3C After section 16 Insert:16A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Corporation that: (a) sets out general principles on which nominations and appointments of members to the Corporation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .16B Independence of Corporation In appointing members, the Minister must ensure that the balance of interests on the Corporation is such that no one interest may dominate the Corporation or derogate from its independence.(2) Schedule 1, page 3 (after line 27), after item 7, insert:7A Subsection 80(1)After "request, insert "and in accordance with the code of practice determined under section 16A".(3) Schedule 1, page 4 (after line 3), after item 8, insert:8A Subsection 87(2)Omit "regulations", substitute "code of practice determined under section 16A".8B Subsection 87(3)Repeal the subsection. Amendments of the Australian Wine and Brandy Corporation Act 1980(4) Schedule 1, page 4 (after line 14), before item 12, insert:12A At the end of subsection 13(2)Add "and on the basis of merit".12B After subsection 13(15) Insert: (5A) Appointments to the Corporation under this section must be made in accordance with a code of practice determined under section 13A.12C After section 13Insert:13A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Corporation that: (a) sets out general principles on which nominations and appointments of members to the Corporation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .13B Independence of Corporation In appointing members, the Minister must ensure that the balance of interests on the Corporation is such that no one interest may dominate the Corporation or derogate from its independence. 12D At the end of paragraph 29B(b)Add ", in accordance with the code of practice determined under section 13A".12E Subsection 29H(z)After "Minister", insert "in accordance with the codes of practice determined under section 13A".Amendments of the Australian Wool Research and Promotion Organisation Act 1993(5) Schedule 1, page 5 (after line 6), before item 17, insert:17A At the end of subsection 28(3)Add "and on the basis of merit".17B After subsection 28(5)Insert: (5A) Appointments to the Organisation under this section must be made in accordance with a code of practice determined under section 28A.17C After section 28Insert:28A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Organisation that: (a) sets out general principles on which nominations and appointments of members to the Organisation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 . 28B Independence of Organisation In appointing members, the Minister must ensure that the balance of interests on the Organisation is such that no one interest may dominate the Organisation or derogate from its independence.17D At the end of subsection 37(2)Add "and in accordance with the code of practice determined under section 28A".Amendments of the Dairy Produce Act 1986(6) Schedule 1, page 5 (after line 15), before item 21, insert:21A Subsection 33(2)After "Minister" (first occurring), insert "on the basis of merit".21B After subsection 33(3) (3AA) Appointments to the Corporation under this section must be made in accordance with the code of practice determined under section 33A.(7) Schedule 1, page 5 (after line 17), after item 21, insert:21C After section 33Insert:33A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Corporation that: (a) sets out general principles on which nominations and appointments of members to the Corporation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .33B Independence of Corporation In appointing members, the Minister must ensure that the balance of interests on the Corporation is such that no one interest may dominate the Corporation or derogate from its independence.21D Subsection 41(4) Repeal the subsection, substitute: (4) Appointments to the Selection Committee under this section must be made in accordance with the code of practice determined under section 33A.Amendments of the Fisheries Administration Act 1991(8) Schedule 1, page 7 (after line 4), before item 33, insert:33A At the end of subsection 12(1)Add "on the basis of merit".33B After section 11Insert:11A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Authority that: (a) sets out general principles on which nominations and appointments of members to the Authority are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .11B Independence of Authority In appointing members, the Minister must ensure that the balance of interests on the Authority is such that no one interest may dominate the Authority or derogate from its independence.33C At the end of subsection 25(1) Add "in accordance with the code of practice determined under section 11A".33D Subsection 28(1) Repeal the subsection, substitute: (1) Where the Presiding Member receives a request under section 27, he or she must establish an Australian Fisheries Management Authority section committee in accordance with the code of practice determined under section 11A for the purpose of nominating a person or persons for appointment to the Authority.33E Subsection 29(2)After "writing", insert "in accordance with the code of practice determined under section 11A".Amendments of the Horticultural Research and Development Corporation Act 1987(9) Schedule 1, page 7 (after line 12), before item 36, insert:36A At the end of subsection 15(1)Add "on the basis of merit".36B After subsection 5(3)Insert: (3A) Appointments to the Corporation under this section must be made in accordance with the code of practice determined under section 15A.36C After section 15Insert:15A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Corporation that: (a) sets out general principles on which nominations and appointments of members to the Corporation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .15B Independence of Corporation In appointing members, the Minister must ensure that the balance of interests on the Corporation is such that no one interest may dominate the Corporation or derogate from its independence.(10) Schedule 1, page 7 (after line 20), after item 39, insert:39A At the end of subsection 57(1)Add "in accordance with the code of practice determined under section 15A".39B Subsection 67(1)After "Committee", insert "in accordance with the code of practice determined under section 15A".39C Subsections 67(3) and (3A)Repeal the subsections.Amendments of the Pig Industry Act 1986(11) Schedule 1, page 13 (after line 1), before item 42, insert:42A Subsection 10(2)After "Minister", insert "on the basis of merit".42B After subsection 10(3)Insert: (3A) Appointments to the Corporation under this section must be made in accordance with a code of practice determined under section 10A.42C After section 10Insert: 10A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to the Corporation that: (a) sets out general principles on which nominations and appointments of members to the Corporation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .10B Independence of Corporation In appointing members, the Minister must ensure that the balance of interests on the Corporation is such that no one interest may dominate the Corporation or derogate from its independence.(12) Schedule 1, page 13 (after line 5), after item 43, insert:43A Subsection 42(2)After "Minister", insert "in accordance with the code of practice determined under section 10A".Amendments of the Primary Industries and Energy Research and Development Act 1989(13) Schedule 1, page 13 (after line 7), before item 44, insert:44A At the end of subsection 17(1)Add "on the basis of merit and in accordance with the code of practice determined under section 17A".44B After section 17Insert: 17A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to a Corporation that: (a) sets out general principles on which nominations and appointments of members to a Corporation are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .17B Independence of Corporation In appointing members, the Minister must ensure that the balance of interests on a Corporation is such that no one interest may dominate a Corporation or derogate from its independence.(14) Schedule 1, page 14 (after line 6), after item 48, insert:48A At the end of subsection 98(1)Add "on the basis of merit and in accordance with the code of practice determined under section 17A".48B At the end of subsection 122(1)Add "in accordance with the code of practice determined under section 17A".48C Paragraph 124(2)(b)After "Minister", insert "in accordance with the code of practice determined under section 17A".48D Subsections 124(3), (4) and (5)Repeal the subsections. 48E At the end of paragraph 124(2)(b)Add ", in accordance with the code of practice determined under section 17A".48F Subsections 124(5), (6) and (7)Repeal the subsections.48G After subsection 126(2)Insert: (2A) Appointments to the Selection Committee under this section must be made in accordance with a code of practice determined under section 17A.48H Subsections 126(5), (6) and (7)Repeal the subsections.Amendments of the Primary Industry Councils Act 1991(15) Schedule 1, page 14 (after line 9), after item 49, insert:49A At the end of subsection 15(1)Add "on the basis of merit".49B Subsection 15(3)Repeal the subsection, substitute: (3) Appointments to councils under this section must be in accordance with a code of practice determined under section 15A.49C After section 15 15A Procedures for appointment of members (1) The Minister must by writing determine a code of practice for nominations and appointments to councils that: (a) sets out general principles on which nominations and appointments of members to councils are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .15B Independence of councils In appointing members, the Minister must ensure that the balance of interests on councils is such that no one interest may dominate councils or derogate from its independence.Amendments of the Wheat Marketing Act 1989(16) Schedule 1, page 14 (after line 13), after item 50, insert:50A At the end of subsection 15(2)Add "and on the basis of merit".50B At the end of subsection 15(3)Add: (3) "and in accordance with a code of practice determined under section 15B".50C After section 15Insert:15B Procedures for appointment of ordinary members (1) The Minister must by writing determine a code of practice for appointments to the Board that: (a) sets out general principles on which appointments of ordinary members to the Board are to be made, including, but not limited to: (i) merit; and (ii) independent scrutiny of appointments; and (iii) probity; and (iv) openness and transparency; and (b) sets out how these principles are to be applied to the selection of members. (2) The code of practice must include principles relating to the appointment of any selection committee constituted under this Act. (3) After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette . (4) Not later than every third anniversary after a code of practice has been determined, the Minister must review the code. (5) In reviewing a code of practice, the Minister must invite the public to comment on the code. (6) A code of practice determined under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 .15C Independence of Board In appointing ordinary members, the Minister must ensure that the balance of interests on the Board is such that no one interest may dominate the Board or derogate from its independence.50D Paragraph 29(1)(a)After "Board" (last occurring), insert ", in accordance with the code of practice determined under section 15B".50E Section 30Repeal the section.Earlier today we dealt with the Wheat Marketing Legislation Amendment Bill 1998 . In rejecting some of the amendments to that bill, the parliamentary secretary drew particular attention to a clause which related to procedures for appointments of members. These amendments we have drawn up provide for the procedures for appointments of members of all boards and authorities, and there are some 10 different boards and authorities affected by these omnibus amendments to an omnibus bill.Earlier today the parliamentary secretary drew particular attention to the section that bothered her, which was that the proposed code of practice must include a requirement for any person appointed to make a declaration if he or she is a member of a political party. That was put in deliberately by me, and it was done so because of the widespread perception, and the occasional reality, that people are appointed as a kind of benefit—as a gift—to boards or authorities because they are members of a political party. In some cases, it is entirely appropriate that a member of a political party or a former politician should be on a board or authority, because they may have particular experience, particular expertise or a particular background which makes that entirely appropriate. But it needs to be above board.Nevertheless, despite the fact that I believe for good sound public policy reasons such political allegiance should be disclosed when you take any office which is at the patronage of the minister or of the government—despite that belief—I have withdrawn that clause from all the amendments I moved in an attempt to make this a little more attractive for the government to accept.I spoke at length on the origin, background and reasoning behind these amendments during the second reading debate. The minister was here at the time and no doubt noted what I said. I am aware that the shadow minister understands these arguments because he has heard them expressed before. Accordingly, I do not intend to speak at length on these matters because I took the opportunity to do so during the second reading debate. But I wish to note for the record that the amendments seek to do a number of things. They do not take the right of appointment away from a minister. That would be foolish, as it is in the power of government, and should be in the power of government, to make appointments. The amendments seek to ensure that there is a set of guidelines, set through a code of practice, which provide procedures for the appointment of members and which put down as a matter of statutory record and requirement that those appointments should be on merit, independent scrutiny of appointments, probity, openness and transparency. In particular, I draw your attention to the section which states:In appointing members, the Minister must ensure that the balance of interests on a Corporation is such that no one interest may dominate a Corporation or derogate from its independence.In other words, we are seeking to avoid capture. It has been said by the government, unfairly, I believe, that because the Labor Party were in government for 13 years certain very critical boards, authorities and organisations were stacked with Labor appointees. It is true that they were Labor appointees because they were in government. But many of those appointees were particularly strong and capable. There have been statements from government to the effect that it is now their turn, for the next 13 years if they are in government, to appoint their set of appointees.I do not think it actually works like that. I think both the previous government and this government have made some exceptionally good and capable appointments, and that fact should be acknowledged. Nevertheless, there is that feeling, that perception, in the community. It is the Democrats' intention to put on record our belief that in accountability these very good characteristics we are laying out here, which have been tried and tested by the Conservative government in the United Kingdom, should be adopted on a similar basis as standard government practice for appointments in Australia. It is with those thoughts in mind that the Australian Democrats have moved amendments 1 to 16 on revised sheet 849, and I commend them to the Senate.16:40:005377Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—The government opposes Senator Murray's amendments. We are committed to appointing boards on a merit basis. We believe the amendments will add a great deal of complexity to the appointment process, without actually increasing its probity. The process of appointing board members to primary industry statutory authorities is already a very complex one.In the main, board members are nominated by a selection committee established under the relevant act. A minister cannot nominate his or her own board members. All a minister can do is accept or reject the nominations. I am advised that the amendments would mean that appointments would be open to legal challenge through the courts. Not only could the validity of any appointment be challenged but there is a risk that the validity of any action by a board resulting from that appointment could also be challenged. I am particularly concerned about the section of the amendments that would require board members to make a declaration if they are a member of a political party.3M6MURRAYSenator Murray—Madam Chairman, I raise a point of order. I draw to the attention of the minister that I specifically told him that that has been withdrawn.KI4Parer, Sen WarwickSenator PARER—I am sorry; I missed that. I withdraw that comment. I might just say that, on the occasions I have been involved in the appointment of people to boards, I have never asked them what their political affiliations were, and they have never offered to tell me. I have made a number of board appointments over the past three years, and I am only interested in getting the best people for the job. I remember that, when I first came in, the chairman of one of the selection committees asked me if I had any special desires in the selection of potential candidates. I told him, `Yes, I do; just get the best people.' This somewhat surprised him, which made my eyebrows go up a bit. I wondered what the previous government might have done, although I am not accusing them of anything. He did come back and ask me again, `Are you sure you don't have anything special you would like me to consider?' I said, `Yes, I do; just get the best people.' The government opposes these amendments.16:42:005378Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—Having heard that last comment, I am almost persuaded to think again. Senator Parer, I object strongly to that slur on the previous government. We do not support these amendments and, as Senator Murray is aware, we have had this debate in respect of other legislation and we put our views on the record then.In brief, again, we do not believe the amendments will advance the principle, if you like, that underpins them. As I said before, we think they are largely window-dressing. I agree with Senator Murray when he says that he is trying to deal with a perception. There is a perception, a belief, out there in the community that people who may be appointed to boards are appointed as a result of political favours or whatever. As we know, that is something that is often fuelled by the media. When you consider the unfortunate general view that applies to the status of politicians and ex-politicians who might happen to be appointed to boards, I think that at the end of the day it is something we are going to have to live with. It is a perception that can probably only be changed by fair and unbiased reporting and by education.In that respect, I noticed an article in the Financial Review yesterday by Malcolm McGregor. I am one of many politicians over the years who have borne the brunt of Malcolm's spleen when he has vented it and when he has got stuck into politicians mercilessly as a bunch of boneheaded layabouts and whatever. He actually wrote a column yesterday which praised the integrity of the overwhelming bulk of members of parliament who work hard, and I invite all members of the public to read it. Unfortunately, not all members of the public will get to see that article. If there was more of that, then maybe some of the perceptions that we know do exist would not be as strongly felt.My point is that, in endeavouring to overcome a perception that something is wrong in the method of appointments, we should not create another perception. That is what this legislation does; it creates a perception that there will be an even stricter and greater application of these tests that are set out in the amendments than already is the case. I have said before and I will say again—and I support the minister on this—that I believe people who are chosen by governments and ministers for appointment invariably do have the requisite skills and are not simply put there as a result of political favours. I might say, as I have said also, that if people do not perform and if they do not demonstrate that they have the skills, expertise, integrity and appropriate independence, there are mechanisms in place by which that can be remedied.I will just conclude by relating one incident. A few years ago when the Labor government was in power and I was the general secretary of the Australian Workers Union, a union which had a great deal of involvement in the primary industries and energy sector, the then minister—I think it was John Kerin, but it may have been his successor, Simon Crean—established an advisory council for the primary industries area. I was nominated as a member of that because I represented the employee organisation that had most involvement in the industry. There was a balance on that committee. There were representatives from employer organisations. It included people like Lachlan McIntosh from the mining industry, and there were a range of representatives from other industry sectors, the CSIRO, the universities, the Conservation Council, and so on. Whilst it was not a board, I was privileged to be in such esteemed company.We sat down and had a couple of meetings, and we concluded that, having looked at all the other bodies that existed and were there to advise the government and this department, advise the minister and carry out all of the tasks that were required, we did not think we needed to exist. So we made probably the first and only ever recommendation of any government appointed committee or board that we should abolish ourselves, which we did, and everybody went back to their lives. It was a great idea at the time, and I just thought I would put that on the record for posterity, if nothing else. We oppose the amendments.16:49:005379Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I was not going to speak in this debate but I felt that perhaps I should. I would just say this: the experience in each state is different. If you have the New South Wales right running New South Wales, there are no problems. But if you have the experience that we have in Queensland, sometimes it is a little different, and I will not even say which particular government I am talking about. We believe that it is timely that these kinds of amendments are put in place because perceptions are important. We need to be able to counteract the perceptions in the community not simply by education or by trying to get the media, as was said, to report accurately, but in fact by taking legislative action which will demonstrate that we are fair dinkum about the whole issue of probity in the appointment of boards and in the subsequent decisions they make. I just add that to the debate and will leave it there.16:50:005379Murray, Sen AndrewSenator MURRAY3M6WAAD00—The Minister for Resources and Energy (Senator Parer) used his brief which referred to the fact that the government believes the legal status of some persons may be under some risk as a result of such amendments and such an approach. I remind the minister that this system is in place in the United Kingdom and there are no such problems there. Question put: That the amendments (Senator Murray's ) be agreed to.16:55:00The committee divided. (The Chairman—Senator S. M. West)7Allison, L. Bartlett, A. J. J. *Brown, B. Lees, M. H.Margetts, D. Murray, A.Woodley, J.50Bishop, M. Boswell, R. L. D.Calvert, P. H. Campbell, G.Carr, K. Chapman, H. G. P.Collins, J. M. A. Coonan, H.Cooney, B. Crane, W.Crossin, P. M. Crowley, R. A.Denman, K. J. Eggleston, A.Ellison, C. Evans, C. V.*Ferguson, A. B. Ferris, J.Forshaw, M. G. Gibbs, B.Gibson, B. F. Herron, J.Hogg, J. Knowles, S. C.Lundy, K. Macdonald, I.Macdonald, S. Mackay, S.McGauran, J. J. J. Minchin, N. H.Murphy, S. M. Neal, B. J.Newman, J. M. O'Brien, K. W. K.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Quirke, J. A. Ray, R. F.Reid, M. E. Reynolds, M.Schacht, C. C. Sherry, N.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W. West, S. M.Question so resolved in the negative.16:59:005379Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—The opposition opposes schedule 1, items 44 and 45 in the following terms:(1) Schedule 1, items 44 and 45, page 13 (lines 8 to 15).It has been covered quite adequately in the most eloquent submissions of Senator O'Brien and Senator Murphy and probably in the less than eloquent, but nevertheless supporting, submissions given by me.17:00:005380Parer, Sen WarwickSenator PARERKI4QLDLPResources and Energy10—I agree with Senator Forshaw that we have already covered this adequately. The government disagrees with the view put by the opposition.10000CHAIRMANThe CHAIRMAN—The question is that schedule 1, items 44 and 45 stand as printed. Question put.17:05:00The committee divided. (The Chairman—Senator S. M. West)32Abetz, E. Alston, R. K. R.Boswell, R. L. D. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferguson, A. B.Ferris, J. Gibson, B. F.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Minchin, N. H.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Watson, J. O. W.31Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *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.Sherry, N. West, S. M.Woodley, J.Brownhill, D. G. C. Cook, P. F. S.Calvert, P. H. Faulkner, J. P.Kemp, R. Conroy, S.MacGibbon, D. J. McKiernan, J. P.Payne, M. A.Bourne, V.Vanstone, A. E. Stott Despoja, N.* denotes tellerQuestion so resolved in the affirmative.Bill, as amended, agreed to.Bill reported with amendment; report adopted.5380Bill (on motion by Senator Parer) read a third time.Bills5380r2515380Debate resumed from 27 June, on motion by Senator Kemp:That this bill be now read a second time.17:10:005380Bolkus, Sen NickSenator BOLKUSXE4SAALP00—I cannot resist at the outset saying that not just the parliament but the whole country is waiting for this government to address the issue of Telstra, but it is taking a long and tortuous road to get to the legislation that we all seem to be waiting around for. In the meantime, we have before us the Copyright Amendment Bill 1997 . This bill contains some 11 schedules, which cover six important areas. I want to deal with each of these issues in turn.The first issue that we have to address is the question of moral rights. The record shows quite clearly that the ALP supports the incorporation of moral rights, including the attribution and integrity of a work, into Australian domestic law. The concept of moral rights is derived from European civil law, and is designed to protect the reputation of the creator of a work. Moral rights are different from the copyright in a work. Copyright is essentially concerned with the right to exploit a work commercially through reproduction, publication, transmission or adaptation.The philosophical basis of moral rights is, in part, a recognition that a work is an emanation of the author's personality such that an unauthorised distortion of that work would effect a slur on the personality of the author. However, moral rights do not apply to artistic works. For example, pursuant to this bill a literary work includes a textbook or even a computer program.In introducing a moral rights regime, let us acknowledge the fact that moral rights do not only apply to artistic works. This bill represents an attempt to implement Australia's international legal obligations under the 1971 revision of the Berne convention on copyright. The bill also follows the 1998 report of the Copyright Law Review Committee that recommended the introduction of a moral rights regime in Australia. At present, I think most people accept that moral rights are imperfectly protected by a patchwork of domestic laws, including the law of contract and defamation, the Trade Practices Act, the fair trading acts, the tort of passing off and current part IX of the Copyright Act.I do not propose to discuss in detail the provisions in respect of moral rights for the simple reason that last week the government withdrew its support for schedule 1 of the bill. I note that in doing so the government had the support of the Australian Democrats. In withdrawing schedule 1, the Attorney-General, Mr Williams, and the Minister for Communications, the Information Economy and the Arts, Senator Alston, gave a commitment that this aspect of the bill would be reintroduced before the end of this year, following consultation with interested parties to resolve differences on waiver of the rights. This delay is particularly concerning as the principal people to suffer from delay are those who are entitled to moral rights, and they will not have a regime in place to protect their interests.The principal difficulty in the negotiations has been the inability, I believe, within some parts of industry and screenwriters to agree on whether there should be an up-front waiver for moral rights. The Labor Party is of the view that a regime of moral rights which incorporates an up-front waiver of moral rights has the potential to see those rights become meaningless. They could be treated no differently from any other economic rights and traded away very quickly. This is because the up-front waiver concept would allow the economically dominant partner in the creative process, principally but not exclusively the producer, to force directors and all screenwriters to sign away their moral rights on a work. Such a provision, we believe, is inconsistent with a philosophical notion of moral rights.However, in saying so, it has to be said that the Labor Party has been mindful that some in industry have claimed that the imposition of a moral rights regime which does not provide an up-front waiver concept could result in an effective freeze on investment in the Australian film industry. Of course, no-one would want to see that. That is not a desirable outcome. However, we do note that other nations continue to have vibrant film industries despite the existence of rigid moral rights regimes in those countries.On behalf of the opposition, I once again put down our opposition to an up-front waiver provision. However, what we have said is that we would support the conduct of a review by the Copyright Law Review Committee into the effect of a moral rights regime on the Australian film industry, with such a review to be completed within 18 months of the entry into force of this legislation.On the other hand, the government has tended to support those within the industry calling for an up-front waiver. To some extent, I do not suppose that that is all that surprising. I also suspect that one reason why schedule 1 of the bill has been withdrawn is that the government is concerned that it may lose a vote on these amendments.So long after the debate has started in this area, so long after these issues were put up for consideration, we have a government once again not being able to take a decision and not being able to assert a position in this parliament. It is the same lack of leadership that we find so often in the national debate at the moment. So long after discussions, debates, parliamentary committees and so on, this government is basically abdicating its leadership role.As we can see from international experience, moral rights are not something to be feared. We recognise them, and the parliament should recognise that the creative talents of Australian film makers should be celebrated and respected through a strong moral rights regime. Our film industry is amongst the best in the world. It is built on the back of the extraordinary range of creative talents of our writers, directors and producers. It is in no-one's interests for these people not to be given the respect they deserve.The second main area relates to performing artists, musical composers and makers of cinematographic films. We believe there is a strong case for recognising performing rights for these people as the authors and makers of films. In particular, a rather powerful submission was put to the Senate Legal and Constitutional Committee by the Media, Entertainment and Arts Alliance as to why a performing artist should be given moral rights in relation to their work. The Labor members of that committee, together with the Australian Democrats member, stated that they saw considerable merit in the proposal. Once again we recognised international trends, and once again we proposed that this was a proposal that needed to be progressed. However, we did believe that insufficient consultation had occurred to allow for the recognition of the rights of performing artists and music composers at this time. So we call on the government—in fact, we called on the government eight months ago—to have this matter examined through the Copyright Law Review Committee. Had that examination been commenced then, we could very well have been in a position to have made a decision in this area during this debate. Unfortunately, we are not. It is an issue that we will be taking up during the committee stage.I now wish to turn to schedule 2 of the bill, which relates to employed journalists' copyright. I am glad to say that, probably because of intervention by Labor and Democrat senators during the Senate committee's consideration, this issue has produced a highly productive outcome. In the Senate committee report, we noted that the implementation of the schedule at that time would have resulted in the loss of valuable economic rights by journalists employed by some proprietors without compensation and a corresponding windfall gain by some publishers who would acquire those rights. This was the principal bone of contention between the proprietors and the Media, Entertainment and Arts Alliance. However, following the Senate committee's report, further negotiations between the parties have occurred, in particular with Australian Consolidated Press, the major publisher, which was yet to reach an enterprise bargain with employed journalists for the transfer of copyright. That was at that time. I am informed that an agreement has been concluded in recent days. As a consequence, the MEAA has written to the Combined Newspaper and Magazine Copyright Committee withdrawing its objections to these amendments. I now table a copy of the relevant letter.Needless to say, this was the Labor Party's preferred way of dealing with this issue. We are pleased that a resolution has been achieved. I place on record our appreciation to all the parties concerned for the constructive way in which this issue has been dealt with.Another issue that has arisen through this legislation is the question of media monitoring organisations. Once again, Labor and Democrat members of the Senate committee also recognised that these provisions may have had an unintended effect of causing considerable commercial hardship to some media monitoring companies. These companies perceive that the grant of copyright over the digital transmission of media services to the newspaper proprietors may place them in an uneconomic bargaining position. These rights over digital transmission include the right to transmit newspaper clippings electronically by fax, electronic mail or other on-line delivery mechanisms. As a result, the Australian Print Monitors organisation sought a statutory licence for the digital transmission of this copyright material. Such licence is subject to fair and equitable payment to the copyright owner on a basis determined by the Copyright Tribunal. As noted by Ms Catherine Hawkins, a senior government lawyer in the Intellectual Property Branch of the Commonwealth Attorney-General's Department, such a statutory licence scheme would probably breach Australia's international legal obligations pursuant to the TRIPS agreement. Accordingly, the establishment of such a scheme as suggested by the organisation is not supportable. Mr Creswell, the Assistant Secretary of the Intellectual Property Branch, also noted that making such a scheme subject to a licence fee determination by the Copyright Tribunal as once again suggested by the Print Monitors organisation would breach chapter 3 of the constitution by giving the tribunal the power to determine legal rights and obligations. Accordingly, we have found this approach not to be supportable either.However, the principal concern of the Print Monitors organisation is that, having been given control over the digital transmission rights, newspaper proprietors will use their market power to unfairly control the price of any licensing regime, therefore making their industry uneconomic. It is the view of the Labor Party that such abuses of market power are more appropriately addressed through the provisions of the Trade Practices Act. It was suggested in evidence that the inclusion in the act of the proposed section 35(4) may prevent the operation of the Trade Practices Act in this area. However, the advice of AGs was that part IV of the Trade Practices Act already applied. Given that all parties now agree that part IV of the act should apply to these provisions, we are proposing an amendment that will put this matter beyond doubt. On the basis of the expressed support, we anticipate that that amendment should not be objectionable to any party.I now move to the 15 per cent provision—the new section 35A. Labor and Democrats senators on the committee noted that substantial evidence was received as to the arbitrary nature of the government's decision that a right of restraint should be put in place preventing the photocopying of more than 15 per cent of a publication. We noted that this provision had the potential to be unworkable for businesses such as print monitoring companies—businesses which provide a useful commercial service to government, business and community organisations. Accordingly, we support the recommendation of government senators that the proposed new section 35A in schedule 2 of the bill should be deleted. I am pleased to see that the government, in its amendments, has accepted this recommendation.An issue which has become quite controversial over recent weeks has been parallel imports and copyright in accessories. Parallel imports are goods manufactured outside this jurisdiction by or under the authority of the owner of an industrial property right relating to these goods but imported by someone other than the authorised importer or distributor. Sections 37, 38, 102 and 103 of the Copyright Act provide that the importation of and subsequent dealing with a label or packaging without the consent of the holder of copyright and an artwork embodied on it infringes copyright.Section 37 provides that a person infringes copyright in a literary, dramatic, musical or artistic work if they import it without the copyright holder's consent. Section 102 makes a similar provision in relation to a cinematographic film or sound recording. Section 38 provides that a person infringes copyright in a literary, dramatic, artistic or musical work if they deal with that work when the work was imported without the copyright holder's consent. Section 135 of the Copyright Act provides the enforcement mechanism for breaches of these provisions. In essence, that mechanism allows for a notice of objection to be lodged with the Australian Customs Service, which is then empowered to seize the goods, giving the copyright holder time within which to lodge an action.Schedule 3 of the bill before us proposes amendments designed to prevent importers from blocking parallel imports on the basis of copyright in accessory items which are peripheral to the substantive goods. Schedule 3 also inserts the definition of a `non-infringing accessory'. These are accessories made in a World Trade Organisation country with the authorisation of the owner of the copyright in any work embodied in that accessory.The government's justification for these amendments in schedule 3 is that the use of copyright to ban parallel imports is `an improper restraint of trade'. Evidence before the committee argued that the current provisions of the bill support monopolistic prac tices, would prevent the operation of competition and would have a deleterious impact on free trade. Given that they have been in place for quite some time now, I find the wholesale way in which the government is putting such an argument to us a little difficult to sustain.As well, the government has argued that the provisions of the Copyright Act should only be used to prevent breaches of copyright and not to address issues such as product safety. Five principal arguments have been levied against this view. Firstly, there has been concern as to inferior quality items being imported, thereby damaging a product's reputation. Secondly, it is argued that parallel imported products can get a free ride in terms of advertising. Thirdly, opponents of this measure argue that Australian jobs will be put at risk. Fourthly, it was argued that profitability of companies, particularly those which have made long-term investment plans in recent years, could be affected. Finally, it was argued—and with some strength—that the economic assessment of this proposal and the economic case in support of it has not been adequately assessed.There is also concern that the government had not consulted adequately with industry groups or conducted the adequate economic modelling of the impact of the legislation. We note, for instance, that we are still receiving submissions from affected companies and industry groups which were not made aware of the government's proposals in this area.Our view is that, before we embark upon this particular measure, there should in fact be a thorough review of this issue, and that that can be done as a matter of priority. This inquiry should be sensitive to the competing needs of the different industry sectors and to the social costs involved with any job losses that may flow from the implementation of such a decision. In a sense, one could say there has been time during the deliberations of this measure for the government to have done that, but they have not. Industry has done this; they have produced some modelling. But, in the absence of further modelling from the non-industry side of the debate, it is important for us to hesitate and pause and, maybe, try to force government to ensure that a full assessment of the impact of this measure is made.The Labor members of the committee made it clear that we could not support the inclusion of schedule 3 of the bill at this time. We will move amendments to ensure that this measure, as proposed by the government, is not implemented. There are other amendments in the bill. Labor members support schedules 4 to 11, subject to the recommendations of the majority Senate committee report. I note that the government is intending to accept these matters as well.I want to raise two issues that are not covered in the bill. Section 135ZM, photocopying of visual material by educational institutions, needs to be addressed. I gather that, once again, after pressure through the committee, by Labor, Democrats and government senators, the government is now going to be moving an amendment to that particular provision. It is an amendment which both VI$COPY and the Labor Party will support. There is also a measure in respect of copyright in commissioned photographs. We will be suggesting amendments to the legislation to ensure that we can get a balanced outcome for copyright in this area.In many respects, this is a highly technical debate—deliberations of the committee over recent months have been evidence of that—but it is also a debate that does have impact across many industry sectors. The technical nature of the debate may conceal the important impact it does have on a whole range of Australian industries. As such, the parliament has spent quite some time deliberating on the measure. As I said earlier in the discussion, amendments will be proposed by us and by the government. Some decisions have not been taken, and I think there is regret in respect of that. As I said at the start, it is a debate that, in many ways, we were expecting to happen after priority had been given to the deliberations on the Telstra bill. It has not, but we are ready to go ahead with it.In closing, I seek leave to do what I indicated I would do earlier, and that is to table the letter from Chris Warren, Joint Federal Secretary of MEAA to Mr Gary Evans, chair of the Combined Newspaper and Magazine Copyright Committee.Leave granted.17:30:005385Lundy, Sen KateSenator LUNDY7G6ACTALP00—I rise to comment on the Copyright Amendment Bill 1997 . A whole range of issues has been raised throughout the debate, and certainly many of them were canvassed during the hearings of the Senate Legal and Constitutional Legislation Committee. We heard many representations on behalf of members of the arts community as to how copyright and the issue of protection of intellectual property affects everything, from the way they earn their income to the status of the Australian arts industry, whether it be literature, the production of films, the production of contemporary music or whatever.Before I turn to the specific issues within the Copyright Amendment Bill, I would like to comment on the way the government has managed this piece of legislation from the start. It is a reflection on the Minister for Communications, the Information Economy and the Arts (Senator Alston) and a reflection on the government as a whole that, once again, the government has brought forth a policy that is not based on the needs of those in the community which it affects. Indeed, it seems largely to be based—particularly with respect to matters that are also covered in Copyright Amendment Bill (No. 2) 1997 —on matters that suit the ideological position of a very few on that side of the chamber. Certainly the government's pursuance of these matters, against what we can see is overwhelming community opinion, leads us to the conclusion that we are not dealing with a government which governs on the basis of what is best for Australia. This is a government which gets fixated on certain ideological positions.Nonetheless, there are, of course, some very important issues contained in the Copyright Amendment Bill 1997. My colleague Senator Bolkus has mentioned many of them, but I would like to turn to the issue of moral rights, particularly the moral rights of screenwriters, and the issue of the up-front waiver. We explored these issues at length through the estimates process. Also, in our inquiry we explored the way the department have managed their consultations with those affected by this potential bill. We have, on many occasions, seen the government twist and turn under industry pressure. Ultimately, they changed their position on how they will deal with moral rights, including the moral rights of screenwriters, a number of times.It was interesting to see the public stance which this government took in the first instance. Their public stance was that they were doing something on behalf of artists, that this was a grand thing and that they had a minister who actually cared about intellectual property, moral rights and all the things that go with enhancing the ability of Australian artists to stake their claim and make a living out of their work, their creativity.Since then, we have seen the minister being systematically pushed and prodded by various players to the point where the issue of the waiver has become not just an item of practical consideration for those on all sides of the industry but, in fact, the mechanism by which the minister could orchestrate a complete backflip on the content of the original amendment. We heard at recent estimates hearings that Fox now require people, including screenwriters, to sign an up-front waiver on their moral rights, despite the fact that this bill has not even been dealt with. So industry practice is already predetermining the outcome of this bill.Of course, this has put the minister in a highly embarrassing position. Despite his pitch to sell the bill to the arts community, screenwriters and others, he now finds himself in a position where he has to completely back away. I think that the pressure that has been brought to bear on the minister is fairly typical because of the way he tends to conduct himself when such pressure is brought to bear. The minister takes note of those who have the loudest voices, those who can get closest to him and those that he chooses to listen to. In this case, it certainly is not the artists who are seeking protection of their moral rights with respect to their work.There are other points worth delving into in this legislation, including the way copyright is handled in the digital production of print media. This is an issue that the minister knows about, or should know about, only too well. It is something that is coming more and more to the forefront of our concern as we enter the digital age—I know the minister is very familiar with that particular term, or so he says—and as we consider the way we, as a country, deal with content.Of course, the copyright legislation and any laws relating to intellectual property form the foundation of Australia's content industries. In fact, in recent debates—for example, the debate relating to the implementation of this government's digital television plan—I referred at length to a recent report, produced by the OECD, about content industries and their economic meaning to various countries. One of the more interesting features of this report is that it states unequivocally that the key to developing content industries, in whatever capacity, lies within the intellectual property laws of any country. This report details the economic benefit of the various content industries, including the film industry, the contemporary music industry, the audiovisual or television industry, industries producing audio content through radio and, of course, new media industries encompassing online content and multimedia or CD-ROM based data and artworks.That whole scope of Australian content is an area that will determine the third wave of the technological revolution that this country is currently engaged in. This transition is showing that revenues in industry growth in the future will be largely contingent upon a given country's or a given economy's ability to manage content industries. So it is with great interest that we see this government do such extraordinary gymnastics about how they deal with intellectual property generally.The substance of this bill is really an ad hoc, thrown together, mishmash of concepts that try to appease some sections of the arts community who are seeking a greater protection of moral rights whilst on the other hand serve to not provide a scope or a vision about where we are heading with intellectual property, but to actually go some way to deconstructing it and to make more a piecemeal go of it. As I said before, that point is particular ly pertinent when we start to look at the content of the Copyright Amendment Bill (No. 2) 1997 and the issue of CD parallel importation, but I know I will have plenty of opportunity to dwell on that issue at some later point.I would like to continue to stress content industries, particularly in relation to the conglomerate of moral rights and intellectual property protection contained in this bill. It is worth noting that Australia currently leads the way when it comes to intellectual property protection. At the moment countries from just about every corner of the earth are looking to Australia and looking to our laws so they can best position themselves to take up laws that effectively promote and foster cultural development. I think that is the key point in all of this. We are not talking about dry, mechanical measures put in place just because that is one of the things that governments have to be mindful of; we are talking about an issue here that could do with a bit of vision and a bit of creativity from the government not just to keep Australia up to date with what is happening around the world but to position us in some position of advantage.If we had a minister who had any idea of what potential is contained within our content industries, we might see a bill before us that would enhance our intellectual property protection and that would go a step further to provide—and this would be quite novel for this government—a realistic incentive for artists to spend the time that they need to spend on, and allow them to be capable of extracting a living from, their creative work. The key for people to extract a living from their creative work is sound and workable intellectual property laws which provide a level of copyright protection that will guarantee them an income, whether it be returns through mechanical royalties or through the industry arrangements which in turn themselves foster investment and growth.The issue of the artists, the writers, the actors and everybody else who sells and shares their creativity with the rest of the world does require a bit of an ideological perspective or a philosophical perspective because it depends on how much we as a society value their contribution. If we as a society do not value their contribution, then we will not want to promote and foster it. If we do not want to foster or promote it, then we do not need to protect or enhance it. So any step by this government to undermine or diminish the level of intellectual property protection and copyright can be interpreted only as a neglect by this government to value that culture and creativity.Looking at this government's record, I do not think that is an unreasonable assessment to make about this government. If we look at their budgetary changes to their support for various industry sectors, particularly that of new media, content and film production, we see a classic case of cutback after cutback and the changing of structures that will not provide inspiration, support and added incentive for participants in these various industries but will give a clear message that this government is far more concerned about their respective major corporate interests than they are about fostering Australian culture.I can certainly list many examples where such cuts have been made, but it is worth mentioning just one in the context of these copyright bills—the cutting of the contemporary music fund. I think that in itself says many things to many artists, but it also says something to Australia's youth. If anything is important to young people in this country, it is their sense of identity that comes through their music.The other area where cuts have taken place that affect content and Australian pride, if you like, in what we produce in our culture is the ABC. Whilst these laws traverse journalists or other producers of content, the ABC's role of the public provider of such content is one that has been aired many a time in this place. Again that is worth traversing in the context of this bill. When a government does not commit to the promotion of Australian culture and actively disables the national broadcaster's ability to produce Australian product, then it starts to become a very comprehensive package of attack on who we are and what we are able to produce about ourselves.It is with interest that I also recall the implications of the recent digital TV bills. The respective opportunities contained within those bills are tempered by the fact that again the national broadcaster will be limited in its scope to take the most advantage of the production of digital content in years to come.I find with many of these debates—and the minister would know this as well, I am sure, in his capacity in his broad portfolio—that issues of intellectual property, convergence of technologies and even of telecommunications all merge and blend in a variety of ways. Unless you choose to look at each area in a very narrow straitjacket way, you find they all do touch and they all do position Australia quite effectively as a package. I think one of this government's greatest flaws is that it has refused to view the production and protection of Australian content in any `big picture' way.It refuses to look at it from the point of view of where we want to be in 10 or 20 years time, what status we want Australian culture to have, and what sorts of levels of penetration, of popularity, we want Australia to have in a global market down the track. This government has no such vision. It does work within the narrow confines of each of the specific portfolio areas or legislation. Its prompt is not the needs of the community or what is best for this country. Its prompt serves to be quite secular interests to which it dances a specific tune. The minister has received the nickname `the doormat' for very good reasons in this regard because consistently, with regard to just about any piece of legislation he has brought forward to this place, he has been acting not on behalf of the interests of Australia but clearly on behalf of specific corporate interests who have managed to press the right buttons within the cabinet.What we are dealing with today—some of the aspects of the Copyright Amendment Bill 1997 and certainly the Copyright Amendment Bill (No. 2) 1997—demonstrates that once again we are not dealing with a government which has brought these matters forward in the interests of the community and for the enhancement of Australia's future opportunities. We are dealing with a government which has brought forward these issues because it has been asked to by some very secular interests.In terms of tactics, one of the saddest things about it is that in the first instance—particularly with moral rights for screenwriters—the government sought to do it in a very exploitative way: to capitalise on the minor benefits that should emerge as part of this particular bill but not talk about all the offsets, all the downsides and all the amendments that it is subsequently going to bring through that will effectively undermine what was sought to be achieved.The other interesting side of it is—as we found through the estimates process—the way this government is so keen to silence its critics. I have spoken in this place before about the tactics of this government in its demonstration of how ineffective it is in providing leadership to this country. One of them is that it persistently tries, as part of its tactical strategy in government, to silence its critics. It tries to do this in two ways. It launches political attacks. We have seen Senator Alston become the master of the political attack, absurdly with regard to the ABC, the very organisation for which he has executive control. I think that will haunt Senator Alston for a long time.Secondly, there is its use of government money to effectively try to silence the community's voice. This is an issue that I will refer to with regard to Copyright Amendment Bill (No. 2) 1997, but I know the issues are canvassed in some peripheral ways within the Copyright Amendment Bill 1997. I refer to the expenditure of taxpayers' money on public campaigns to counter genuine community pressure for the government to change its views. We have seen with digital TV those glorious ads: `Senator Alston has done this great thing for us so we can bring you digital TV.'It seems that, if you are prepared to put Senator Alston's name on something and put it in a nice context, he will support you. But if you are not—if you are going to say in the public forum that Senator Alston is doing the wrong thing by the community—you do not just get ignored; you actually get a taxpayer funded campaign launched against you. I am referring, of course, to the mooted campaign by the minister to spend $750,000—nearly a million dollars—on a campaign to try to silence those voices in the community that laid such a loud and legitimate complaint at his feet about the devastating effects of many aspects of these packages of amendment bills.In concluding this contribution to the debate on the Copyright Amendment Bill 1997, I would like to say that a government without vision is bound to come up with legislation that does not reflect the needs of the community. It is bound to come up with legislation that represents the secular interests of those who know which buttons to press within the cabinet.17:50:005388Cooney, Sen BarneySenator COONEYSF4VICALP00—I do have some words to say about the Copyright Amendment Bill 1997 . I will start off by congratulating the government for amending section 135ZN of the Copyright Act. In that regard, I pay tribute to Anna Ward, the Executive Officer of Viscopy, who has worked for many years to have some justice done for visual artists, who have been shut out by the provisions of section 135ZN. The original intention of Viscopy, the Visual Arts Copyright Collection Agency, was to have section 135ZN repealed. But an amendment has been made which covers the concern that Anna Ward had. That is now to be put in place, as I understand it, and there is no dispute about that.This bill is a proposed amendment to the Copyright Act 1968. It is to be followed by another series of amendments, as I understand it, over the coming years. The second reading speech says:All in all, Madam President, this bill is a very substantial first instalment of the government's commitment to bringing about an up-to-date and workable Copyright Act.I know that Mr Michael Duffy, the former member for Holt, did a lot of good work in this area when he was Attorney-General. I would like to pay tribute to the work he did. He was followed by Mr Michael Lavarch, who also took forward a lot of work in this area.Earlier today some amendments were made to the intellectual property law by a bill that was discussed and passed earlier in the morning. That is what copyright is all about; it is about protecting certain sorts of property. Whether it be land or moveable property or intellectual property—that is, property that comes from the mind—property ought to be protected. Property matters should be seen in that context.I would like to illustrate what I mean by that by reading another part of the second reading speech, which talks about copyright packaging and labelling of imported goods. It says:In 1988 a report by the Copyright Law Review Committee recommended to the then government that copyright in packaging or labelling of imported goods should not be able to be used to control distribution of the goods.It is now proposed that people who import goods—whether they be toys or chocolates or any other commodity—and who bring them in or package them here in such a way that brings that packaging or that particular article within the terms of the Copyright Act should no longer have the protection of the Copyright Act because there is a distinction to be made between intellectual property and property of other sorts. That distinction is very difficult to understand because, if somebody can so arrange their goods, so produce a beautiful package or so produce a way of presenting their goods or their services, and that way comes within the terms of the Copyright Act, why should it not get that protection?We all say a Shakespearean play is a great work of art. No doubt, if he were writing these days, he would have the protection of the Copyright Act. But who is to say that a play that is produced today by someone who is unknown is not a great work? Is pottery not entitled to protection under the law that applies to intellectual property whereas a painting is? Is photography not to be protected by the law that applies to intellectual property when a painting is? Is classical music to be protected by that law but not jazz? If you see that the law protecting intellectual property is about protecting particular goods in particular circumstances, not a law that protects what might be called works of art as distinct from other sorts of works, then from that point of view it is proper that a particular type of good or a particular piece of pottery or a particular service be entitled to that protection.It was the situation for a while that literature itself was not protected enough. It was in that context that Charles Dickens, whom we have all no doubt read, made statements during his speeches to his American audiences when he went there in the middle part of the last century. Perhaps I could quote from one of his speeches, which was delivered on 7 February 1842 at Hartford. It does explain very well—in better words than I can because he was, of course, one of the great English authors—what the idea of protecting intellectual property is all about. He said:Gentlemen, as I have no secrets from you, in the spirit of confidence you have engendered between us, and as I have made a kind of compact with myself that I never will, while I remain in America, omit an opportunity of referring to a topic in which I and all others of my class on both sides of the water are equally interested—equally interested, there is no difference between us—I would beg leave to whisper in your ear two words, International Copyright.Charles Dickens went on:I use them in no sordid sense, believe me, and those that know me best, best know that. For myself, I would rather that my children coming after me, trudged in the mud, and knew by the general feeling of society that their father was beloved, and had been of some use, than I would have them ride in their carriages, and know by their banker's books that he was rich. But I do not see, I confess, why one should be obliged to make the choice, or why fame, besides playing that delightful reveille for which she is so justly celebrated, should not blow out of her trumpet a few notes of a different kind from those with which she has hitherto contented herself.He went on to say:It was well observed the other night by a beautiful speaker, whose words went to the heart of every man who heard him, that if there had existed any law in this respect, Scott might not have sunk beneath the mighty pressure on his brain, but might have lived to add new creatures of his fancy to the crowd which swarm about you in your summer walks and gather round your winter evening hearths.He went on to talk about the great characters that Sir Walter Scott had invented. What he was saying was simply this: that people are entitled to rewards for the efforts they put in. If those efforts are intellectual efforts—if they are from the sweat of the brow—then they should be rewarded. To make the distinction that is made here, that simply because the property that has been spoken about comes into a particular category—that is, it is not considered as artistic as it ought to be—it should be excluded from the protection that the Copyright Act gives to property, seems to me a simply absurd suggestion.It is said, `Oh well, we will give protection to what is presently protected by the Copyright Act through some other legislative provisions,' and, of course, those legislative provisions have not been forthcoming. It seems to me a mean approach to shut out from the protection otherwise given by this act a person or a company that has developed a product with a meritorious label, meritorious packaging and a meritorious way of putting itself forward.The other point I want to make in that regard is that when the protection is taken from such things, goods of an inferior quality or lower safety can be brought in. This is an argument that was put when this matter was heard by the Legal and Constitutional Legislation Committee. If these goods are going to be taken out of the coverage of these provisions, then other provisions should be brought in before they are taken out of this one. My view is that safety provisions should be brought in in some other act before these goods are taken out of the protection of this one.This bill goes to protecting other sorts of rights. The moral rights are now going to be considered apart from the present provisions. As I understand it, the government is taking away from the present debate much of the matters to do with moral rights and will consider that elsewhere. The philosophy behind this act—and perhaps more particularly one that we are going to discuss later under the Copyright Amendment Bill (No. 2) 1997 —is that copyright and protections of design, patents and trademarks are matters simply of establishing regimes which conform to market forces. Of course, that is not correct. In that context, I will quote from Dickens in a different speech, this time at Boston, but on the same trip. He put it very well to the dinner where he was guest speaker:But before I sit down, there is one topic on which I am desirous to lay particular stress. It has, or should have, a strong interest for us all, since to its literature every country must look for one great means of refining and improving its people, and one great source of national pride and honour.As we consider not only this particular bill but the next bill, and when we were considering earlier this morning changes to other acts that affect intellectual property, we have to remember that what we are talking about is not simply the production of profits. Certainly we are talking about those things, because that is what these bills are intent on protecting, amongst other things, but we are also talking about matters that go to, again in the words of Dickens, `Refining and improving our people'—he said `its people'—`and one great source of national pride and honour.' That is what we are talking about here. We are talking not simply about matters that go to the sorts of things that economists might talk about but about matters that go to the national spirit of Australia and to its sense of identity.I see that recognition is given to people who write articles—to journalists and to others, such as cartoonists, who produce material which is then copied. Those who copy the work of others should pay in so far as they make use of the intellectual property that they copy. This is another instance of how this law will develop and keep developing.Clearly technology guides us in many areas, and it guides us in the area of intellectual property as well. I am looking at the Copyright Act 1968. It is a tome—and I use that word advisedly—that is destined to increase as new ways of translating intellectual property around the world develop. The problem that exists in the government's approach is that they are looking at it too much in terms of finances. (Time expired)18:10:005390Allison, Sen LynSenator ALLISON1M6VICAD00—The Copyright Amendment Bill 1997 gives effect to reforms that were commenced as far back as 1994 and continued as part of the government's election commitments in rela tion to copyright law. The bill introduces comprehensive moral rights for authors of copyright works and for directors and producers of film. It amends the law in relation to employed journalists' works.The bill amends the law to prevent the owners of copyright in packaging and labelling of goods not protected by copyright from using that copyright to stop anyone from importing the goods. Amongst other matters, the bill also makes a number of amendments which tidy up the existing law.The Australian Democrats fully support the initiative to establish a moral rights regime in Australia. However, we do have some concerns with the bill as it is presently drafted, including the provisions related to a waiver of those rights. We also believe there is an argument to better cater for performers in this legislation, perhaps giving them the opportunity to obtain moral rights on a case by case basis.To this end the Australian Democrats will reluctantly support the government's amendment to split off and defer the schedule of this bill relating to the moral rights regime. In our view, whilst we would sooner be dealing with that now, it makes some sense to allow further discussions amongst the various industry and employee groups to see if resolution of these matters can be reached.I understand there was no agreed view about how to proceed, particularly on the question of the waiver. There is a fear that artists will have their negotiating position weakened under the bill. I also note that there was a discussion paper released in January this year by the Attorney-General (Mr Williams) and the Minister for Communications, the Information Economy and the Arts (Senator Alston) entitled `Performers Intellectual Property Rights', which proposes giving performers moral as well as other rights. The government is yet to respond to this process and, therefore, the position of performers in relation to moral rights also remains unresolved and is not addressed in the bill.Further questions remain in relation to Aboriginal artists and their situation. The Democrats believe that the parliament needs to very closely consider these matters, and to this end I will be meeting with various Aboriginal arts and performing bodies to discuss this further.For these reasons we will support deferral of the moral rights schedule in the bill, and we note and welcome the government's advice that these matters will come back to the chamber by the end of the year. We look forward to that so that Australia does indeed get a system of moral rights. We were also heartened by the speeches of the various Labor members last year in relation to their support for a moral rights regime. I say this because we know we may have an election between now and when we reconsider these moral rights provisions.I would now like to briefly tackle other aspects of the bill. Turning firstly to media monitoring services, the Australian Democrats are concerned at advice that we have had from companies providing media monitoring services, which was put to the inquiry into this bill, that the new proposals would extend publishers' control over media information services, in particular, the faxing of press clippings and the use of new technologies, including scanning and electronic transmission. The ability of independent suppliers of these services to provide a timely and efficient service could be seriously curtailed with the entry into the clipping service business via online technology of the publishers themselves. Some equality in the community in relation to access to information is a very serious matter.It is often said that information and knowledge is power, and many community groups presently rely on these media services, as do senators and large sections of industry. The service is used to keep these groups and companies up to date on matters within their direct sphere of interest, and we believe that is important. I must say that we were not persuaded that publishers sell fewer newspapers and magazines as a result of the clippings services.We will be moving amendments to the bill which allow reasonable access to newspapers and magazine articles for the purposes of facsimile and electronic transmission. We will also be supporting the deletion of proposed section 35A of the bill relating to a limit of 15 per cent copying of a publication. That was a unanimous recommendation of the Senate Legal and Constitutional Legislation Committee on the basis that it was unworkable. A number of representations were also made on behalf of journalists in this matter.Another important matter that we would like to have addressed relates to the situation of photographers. I have received many letters, as no doubt other senators have as well, and representations from photographers themselves. Under the Copyright Act, copyright in most commissioned works is first owned by the author of the work. The position is different for photographs, portraits and engravings. The act allows a photographer to negotiate with a client so that the photographer, rather than the client, owns copyright. In practical terms, however, it is very difficult for a photographer to convince a client, particularly a corporate client, to reverse the apparent intention of the legislature. The act grants a photographer a right of restraint. This right is, however, unsatisfactory for a number of reasons: the purpose for which the work was required may not have been made known to the photographer; it seems that the right of restraint only allows an injunction prior to the subsequent use and does not allow the creator to take legal action after the use has occurred; and the photographer is not entitled to license uses of the photograph which are outside the commissioned purpose.The inequities caused by the act are not just theoretical. For example, clients such as advertising agencies collect photographs commissioned for advertisements and reuse them or even license them to third parties. The photographers can find that they are competing in effect with their own previous work and not even being paid for the use of their previous work. The arbitrariness of the distinction between photographs and other commissioned works is obvious if one considers a project such as an advertising brochure or a magazine. In the absence of agreement, the freelance writers, cartoonists, graphic artists and illustrators all own copyright in the work commissioned from them. The copyright in the photographs, however, is vested in the client.This matter is not dealt with in the bill, but we will be moving amendments in this area. Subsection 35(5) of the act is particularly disadvantageous to photographers who are frequently commissioned to create work which is covered by this subsection. In essence, it is the person commissioning the work who holds copyright rather than the author. Of course, the right to privacy, et cetera of clients is essential in these matters, especially when we are considering wedding portraits, family portraits, et cetera. However, the Democrats believe that there should be a balance which also protects the photographer. We believe our amendments to subsection 35(5) will provide that balance.18:19:005392Murphy, Sen ShayneSenator MURPHYFX5TASALP00—The Copyright Amendment Bill 1997 , if passed, will give effect to reforms of the Copyright Act 1968. This was, unfortunately, announced by the government in its election policy statements. The first explanatory memorandum of the bill states:The Bill:. introduces comprehensive moral rights provisions for authors of copyright works and directors and producers of films;. amends the law in relation to ownership of copyright in the works of employed journalists to ensure that newspaper and magazine publishers have all electronic and residual rights in the journalists' works and a right to restrain large scale photocopying to protect circulation;. amends the law to prevent the owner of copyright in packaging and labelling of goods not protected by copyright from using that copyright to stop anyone from importing the goods;. will give the courts discretion in awarding the remedy of conversion damages for copyright infringement;. introduces a sampling scheme for copying done by governments to determine the amount of equitable remuneration to be payable to a relevant collecting society, instead of the present individual notification and payment to copyright owners; and. makes minor machinery, streamlining and tidying-up amendments to the provisions concerning: the Copyright Tribunal; border interception of infringing imports; and the statutory licences for copying by educational institutions and institutions assisting people with a disability.I particularly want to talk about schedule 3 of the bill. Schedule 3 intends to remove the right of importers to use packaging and labelling as it relates to imported goods. The explanatory memorandum says:Importers of goods that are not protected by copyright are presently able to use the importation provisions of the Copyright Act to control the importation of those goods through the copyright in the artistic and/or literary works on the packaging or labelling or through the copyright in accompanying materials such as instructional video and audio tapes.It goes on to say:There is no clear market information about the extent of this practice. It is believed to be quite widespread in some industries such as the liquor and toy industries. Other industries such as footwear and sunglasses also have reported instances of this practice.It says further:Removal of the ability to use copyright in this way would eliminate one of the means by which exclusive market access is able to be provided to certain distributors of such goods and would implement a recommendation of the Copyright Law Review Committee (CLRC).In 1988, that committee recommended that there be such changes as are proposed. I do not know what research the government did with regard to this, I do not know whether there is some obsession with alcohol and toys, but there are many more industries that will be affected by schedule 3 of this bill. I will come to those in a moment. The original explanatory memorandum then goes into three alternatives. The impact analysis, which is in effect three paragraphs long, says:The liquor and toy industries—as I have said, I do not know whether there is some leaning towards liquor and toys—have argued there will be an adverse impact on standards and unfair free rider activities regarding advertising. They suggest that, for example, advertising for Bailey's Irish Cream—I know that is a good old conservative drink—by the exclusive distributor will be utilised by competitors who import directly. They also suggest that competitors could import substandard models or products from currently non-utilised sources leading to greater potential for injury or death and product servicing costs. They say that their industries are price and service competitive so that no changes are necessary.Then it says:It is impossible to accept these industry submissions. Such products, and the circumstances of their sale, are independently regulated through a variety of other laws, for example, through food standards . . . As I said at the outset, I do not know what research the government did in respect of this particular aspect of the bill, but it obviously was not much. I cannot understand why the Democrats, as Senator Allison said, are `reluctantly supporting' the government in this instance. The Democrats often come in here and lecture us in respect of their position as it relates to small business and the like and how much support they give small business. I usually find the Democrats take a fairly good line in their research effort—checking out the circumstances and the impacts that legislation can possibly have, on small business in particular—but I have to say they have failed on this occasion, otherwise they would not be `reluctantly supporting' this legislation.The types of industries and businesses, particularly small business, for Senator Allison's benefit, that will be affected by this schedule of the bill are far greater than grog and toys. Submissions that I have received on the impact of this particular schedule have ranged far and wide from all sorts of industries—the sporting industry, the car industry and, of course, the alcohol and toy industries. It is across a whole range of industries. I cannot see where the government has done any research on the employment impacts of what it proposes here. One industry, the fishing industry, which I always hold dear to my heart, is very important in respect of this matter.I have received a huge number of representations from various small businesses around the country that have built their business on the basis that they import a particular product, brand name product, into this country. They expend a lot of money in the promotion of that product either in the local paper or on the electronic advertising mechanisms available to them. That, of course, has a flow-on effect.One of the points that is stated here in the impact analysis of the government with regard to the service, et cetera is a point that was raised by the people in the industry. Most consumers like to know that they can take goods back if something goes wrong with them, that they can take them back to a business that has been generally long and well established. They can feel secure in purchasing a product that, in turn, they can then take back if something goes wrong with it, if it gets damaged, in terms of warranty, et cetera. I think we all know that, even with the current use of the copyright law, there are many businesses in this country importing goods which become fly-by-nighters, and people who buy products from them then lose out.What are we really doing this for? The government says, `Has there been a huge outcry from the public that we need to change the law to actually provide something of benefit to the public? Is it going to make these products cheaper in the main? Is anyone suggesting that?' I think not. I think those people who are price conscious with regard to a lot of products already have a mechanism available to them to purchase those products, import those products, cheaper if they so desire. Most people can do it through Internet shopping and do so.But the fact remains that those people who may well have imported their product will take it back to the distributor or the retailer who is the primary seller of those particular products if something goes wrong with it. Schedule 3 of this bill, if passed, will remove that. Why would business people who are either retailing or distributing products want to remain in a situation of competing with every man and his dog who are importing products? Why would they want to do that?Surely the government must understand that there will be a huge impact on employment in the small business sector with regard to servicing, et cetera. There will be a huge impact in advertising. As I say, the fishing industry is always dear to my heart, and I think of all the advertising of distributors that appears in magazines. I think about all the papers that are produced specifically and paid for with promotional dollars from distributors and retailers.Sitting suspended from 6.30 p.m. to 7.30 p.m.FX5Murphy, Sen ShayneSenator MURPHY—As I was saying before the suspension of the sitting, it is very difficult to understand the government's approach to this matter purely on the basis of the research that they obviously have not done because of the impact that their proposals in this bill will have on so many small businesses in this country. I will quickly go to a couple of letters that I have received which outline some of the problems that will be experienced by people so far as the bill is concerned. This is a brief piece of correspondence that I received from Conquest Sports Pty Ltd:There are too many negatives to list individually, but the most important impacts on my business would be:a) Increase in subquality product without guarantee.b) An overall downgrading of brands.c) Reduction in principals investing in advertising, staff, etc.,d) Confusion over responsibility for faulty footwear.e) Increase in cheaper products in the short term at the expense of brand growth to the exclusive distributor (investor).f) Increase in the black market economy.All of those things are true. Another letter is from a person who employs 45 people, has a turnover of around $25 million per year and would obviously spend a significant amount of money in advertising both in printed form and in electronic form. You can go to a whole host of other people.But more importantly so far as sport in general is concerned, what about sponsorship? It has been by the very fact that you have had exclusive brand names that sports people in particular have been able to obtain sponsorship. Of such importance is this matter that the Sydney Olympics Games Committee wrote around—indeed, wrote to the government as well—saying that they had a very serious concern with the proposals put for ward by the government. In part, their letter states:It is a matter of public record that SOCOG licensed its intellectual property rights to Games' licensees and sponsors in order to raise revenue for, and preserve the financial integrity of, the Games. SOCOG is concerned that the Games' sponsors and licensees may be adversely affected by the proposed amendments.Obviously the government did not pay too much attention to that. Let us look at Reebok, one of the brand names, to see the teams that they sponsor that governments do not. They provide sponsorship dollars to the following teams: the Australian Wallabies, the Australian Olympic team, Essendon Football Club, Western Suburbs Football Club, Manly Rugby League Club, Cronulla Rugby League Club, Randwick Rugby Union Club, the Sydney Kings basketball team, the Perth Wildcats and the Newcastle Falcons.Reebok also sponsors the following individual athletes: Pat Rafter, Stuart Appelby, Emma George, John Eales, George Gregan, Tim Horan, Jason Little, Greg Welch, Geoff Toovey and Brad Bevan. Then they go into other events such as the Forster Ironman, the triathlon grand prix, Ford Australian open tennis championship and the Reebok three on three. Those are just the direct Reebok dollars. They also provide dollars indirectly through the stores that sell those products to a whole host of other sporting events at a local level.Why would those people want to continue that sort of sponsorship when there is no benefit for them? As I said before, why is the government so adamant about taking this decision and pushing this legislation through when there is no real tangible benefit—certainly no social benefit except they might claim that things will become cheaper, but that just does not hold up.I keep referring to this impact analysis because it clearly demonstrates the inadequacy of the government's research. We are going to subject people to imported products coming in which, in some instances, may well be cheaper. But we will open up a market in a way that the public benefit will be adverse to what the intention of the legislation really is. I have dealt with the fly-by-nighters and the issue whereby people can purchase imported products. In the case of the hundreds of employees that work for distributors in the fishing industry, so many jobs will be lost as well as the millions of dollars that are spent on advertising. No argument has come from the government with regard to how that will be maintained—none whatsoever. We have not heard verbally—nor is it contained in the explanatory memorandum in any way, shape or form—how they see this expenditure, a significant employing expenditure, being maintained.There was some concern, I have to say, from the government, because they decided that they had better move an amendment. So we get a supplementary explanatory memorandum that says that schedule 3 of the bill will not have effect until one year has expired after the bill receives royal assent. What is the purpose of that? What good does that do? It does not change anything. It does not take away any of the very valid arguments that were put up by the industries involved in the importation of many of these products. It does not take away any of the arguments that distributors have put up and the effect that this legislation will have on them.It would seem that this minister somehow thought he needed to introduce legislation. He had to make change, not unlike he has been proposing with respect to CDs. He had to do it. He locked himself in. He has suffered a number of defeats in this place. The gloss has certainly worn off Senator Alston being the Minister for Communications, the Information Economy and the Arts. He has done nothing in respect of the arts. He has bashed up the ABC. So he is really down to the wire here. There are two pieces of legislation, and he wants a win. Hopefully, the Senate tonight or tomorrow or the day after—we will wait and see what Senator Ian Campbell has to say—will not give him that win because he does not deserve it, not with legislation like this. Frankly, he is not fit to be the minister, and you lot over there are not fit to be the government.19:39:005395Murray, Sen AndrewSenator MURRAY3M6WAAD00—The Copyright Amendment Bill 1997 addresses a range of issues, but I want to limit my comments tonight to schedule 3. The essence of the schedule 3 amendments will be to allow goods which have copyrighted packages and labels to be imported into Australia without excessive copyright protection. The existing trademarks and contractual law is not changed and so the brand owners' proprietary interest in the brand will be maintained. It is the exclusive or restricted right to import the brand which is being affected by this bill.Schedule 3 follows the recommendations of the 1988 report of the Copyright Law Review Committee, CLRC. This report recommended packaging and labelling should not be used to control the marketing of imported goods. In that inquiry the CLRC found that distribution of some imported goods was being controlled by relying on the copyright in the packaging and labelling. The New South Wales Supreme Court case of Bailey v. Boccacio is a good example of what this bill is about. In that case a legally purchased and imported bottle of Bailey's Irish Cream was being sold for a lower price by the unauthorised importer than by the Australian distributor who was authorised by the trademark and product owner.The case turned on the argument that the lower priced import infringed copyright in the artistic work on the bottles labelled. The effect of this case is to say that if you own the copyright in the package or label you can control the import and distribution of whatever that package or label is attached to. In these circumstances, the product becomes secondary to the packaging. For those of us who have sampled Bailey's Irish Cream, I very much doubt that we tasted the label.This bill will put a stop to that practice. The government's proposed amendments in schedule 3 will allow the importation of what is called a `non-infringing accessory'—in other words, goods which have been legally purchased overseas which have a copyrighted package or label and which may be imported into Australia and sold without infringing the copyright. This is achieved by including new definitions of `infringing copy' of `accessory' and `non-infringing accessory' as well as various technical amendments. It is important to recognise that the copyright regime overall is maintained.As you would be aware, the Australian Democrats recently set out their reasons for rejecting the government's proposal to remove parallel import restrictions on sound recordings in the Senate Legal and Constitutional Legislation Committee minority report on the Copyright Amendment Bill (No. 2) 1997 . We believe that copyright on packaging and labelling is a different issue. As stated in that report, the Australian Democrats deal with each issue of the parallel importing provisions on their merits, balancing the interests of the copyright holder against the broader public interest.We say that sound recordings are the product and not the package, and the issues are therefore different. For sound recordings, the evidence before the committee clearly showed that removing parallel import restrictions would severely affect the Australian music industry. This effect, in our opinion, would not have outweighed the potential benefits claimed by the government. For packaging and labelling of products we do not think the same arguments apply. We believe that the benefits in this case outweigh the detriments. But there are detriments, and we must recognise that.We understand that there will be a need to change business practices. This can be done by the delayed implementation of this bill.This bill was referred to the Senate Legal and Constitutional Legislation Committee, and the report was produced in October 1997. In my minority report I said that this legislation deals with competitive inadequacies which result from copyright protection. In that report I also said:The Australian Democrats are opposed to oppressive, unnecessarily restrictive, predatory, monopolistic, oligopolistic or cartel like market behaviour, which can result from abuse of the protection afforded by copyright law.The committee considered a range of issues. Those economic issues were discussed at some length. Similarly, some of the broader community interests were also canvassed. They included issues such as product quality, free riding, jobs and health and safety issues. They are compelling concerns.However, the central issue in this matter is the role of copyright in packaging and labelling and the consequent effects on `non-infringing accessories' in our market. Evidence before the Senate committee showed that copyright is being used in some instances to unjustifiably limit imports. This is different from a copyrighted book or sound recording because in that case it is the product itself which is affected by copyright and which the purchaser is consuming. In the instances of a book, the copyright is in fact what you read. Where the product is not the same as the copyright, the copyright should not be used to compensate for contractual inadequacies in the arrangements between the owner, manufacturer, wholesaler and retailer. This bill will not wipe out exclusive dealership arrangements into Australia.FX5MURPHYSenator Murphy—It will just almost wipe it out.3M6Murray, Sen AndrewSenator MURRAY—It will still be possible for an Australian distributor to enter into arrangements with a brand originator to exclusively distribute in Australia where the originator agrees not to supply its products to any competitor.FX5MURPHYSenator Murphy—Not totally, just almost.3M6Murray, Sen AndrewSenator MURRAY—This will require the renegotiation of agreements and a shift in the arrangements for distribution. It will also lay more onus on brand originators to properly contract the distributors in all countries. Very frequently it is those brand owner and distributor contracts which are at risk.Since Senator Murphy has seen fit to interrupt my speech in this second reading debate in a manner that I did not do to him, I would like to quote to him some words.Importation into, and distribution in, Australia of a variety of goods has been effectively controlled and exclusively licensed by manufacturers by relying on ownership of the copyright in the labelling or packaging of the goods.The quote goes on:The CLRC observed that the design of packages and labels to make them subject to copyright is a common practice in many industries such as those relating to liquor, tobacco, perfumes and cosmetic products. It was strongly of the opinion that distributors of imported goods should not be able to control the market in Australia by the simple expedient of enclosing them in a copyright label or package. Usually, buyers of such goods are primarily interested in the goods themselves, and the packaging or labelling is of no interest or only of incidental interest.The quote says:The Government believes that the use of a copyright owner's exclusive importation rights over packaging or labelling to protect exclusive distribution arrangements for goods is an unintended use of copyright and is anti-competitive.FX5MURPHYSenator Murphy—What are you reading from?3M6Murray, Sen AndrewSenator MURRAY—The quote carries on:A change to the law to end this copyright control has attracted some criticism from those industries which rely on it to control the marketing of their goods in Australia. However, the Government regards it as indefensible to use copyright in this incidental way to deny consumers the possibility of lower prices and better access to goods.FX5MURPHYSenator Murphy—What is that?3M6Murray, Sen AndrewSenator MURRAY—The government referred to was the Labor government. The quote is from 18 December 1992 from Mr Duncan. They are your words.To return to my remarks. To counter the government's bill a number of groups formed the Brands Coalition with the aim of collecting enough information to show the destructive effects of this bill. That report has been circulated and it shows a number of businesses will be affected. These are companies which rely on marketing brands and maintaining their exclusivity based on the parallel import restrictions. This report did not examine any of the potential benefits claimed by the government which would result from cheaper imported goods and less restrained trade. The Brands Coalition report was useful only so far as it has shown that there is a need to allow businesses time to renegotiate the commercial agreements. I understand the government will move amendments to this effect and we will support them.It has been put to me that there has not been adequate consultation on this bill. For the Australian Democrats this is a serious concern. However, I have investigated this as far as I can and note the following. The reference for an inquiry was by the Labor government in 1983. The CLRC accepted submissions on this issue and reported in 1988. Legislative amendments were introduced by the Labor government in 1992 and laid on the table for three months for public comment. Some of their legislative amendments were released as an exposure draft in 1996. This bill was introduced into the House of Representatives on 18 June 1997, over 12 months ago, and the bill has been to the Senate Legal and Constitutional Legislation Committee which received 32 submissions on this issue and invited eight representations to the committee. For an issue before the Senate, this is significant consultation and we are unsure how much more consultation is possible. This has been a live issue for a number of years.The data supporting each side is relatively sparse, and I have attempted to seek out definitive materials. The contribution of the Brands Coalition has given us all some indication of the possible side effects on a number of businesses. However, this is not decisive data overall and the coalition has cherry-picked businesses and has not quantified the sorts of benefits which are possible. I appreciate that they are trying to defend their position, and they are perfectly entitled to do so, and accordingly have assisted us in the matter and I am grateful for it. But without the concrete evidence to rebut the facts of the Bailey v. Boccacio Pty Ltd case and the recommendations of the CLRC, the overall intention of both the present government and the previous government remain persuasive. Mr Duncan did put a firm and good case.Once this bill moves to the committee stage we are going to support the overall bill in schedule 3 but we will attend carefully to the arguments to be put to the various amendments. I note that we and the Labor Party have amendments.In the remaining time available to me, I will refer the Senate to my minority report. In that minority report we did remark that copyright is part of the protection afforded to commercial and creative persons and entities throughout the modern world. It is an essential right as well as an effective regulatory and market device. Copyright is one of a trio of such rights—trademarks, patent and copyright. Copyright is another reminder that markets are not as free as the extreme economic rationalist would say they are or have them be.Markets are constrained by intervention, controls and limits, and trademark, patent and copyright laws exhibit those characteristics. Competition is affected by those constraints and will continue to be so. Modern market capitalism is characterised by a very high emphasis on branded goods and the rights, protection, values and place accorded to them. The ownership of the brand is usually far more valuable than the right to distribute, market or manufacture the brand and it is copyright, trademark and patent law which protects and preserves the proprietary interest in the brand.Given our small share of and place in world trade it is not surprising that nearly all the important world brands are owned by foreigners and not by Australians. The exceptional values attached to brands means that the international and domestic campaigns on these matters are characterised by the best political lobbying that money can buy. While it is essential for Australia to be cognisant of and responsive to the practical and moral global issues that arise when considering these matters, its prime concern has to be whether changes proposed to copyright advance our national interest.The right to use, manufacture, distribute or market a brand is granted by the owner of that brand to various persons or entities in various countries. Parallel importing means imports of a brand into Australia by an entity other than the domestic authorised user, distributor or importer of a brand. Parallel importing does not attack the owner's proprietary interest in a brand; it attacks the exclusive or restricted right to import that brand. That exclusive or restricted right can only be protected by contractual obligations. It is not appropriate to use the customs law to do the job which should have been fulfilled by better contractual arrangements.The Copyright Act 1968 provides that the importation of, and subsequent dealing with, a label or packaging, and not the ingredients or constituents, without the consent of the holder of copyright in it, infringes copyright. At present, authorised or registered users use Customs to seize goods where a complaint of copyright infringement is made. A procedure is then followed to make such claims stick or to prosecute. There has been criticism of this practice for many years.In 1988, as I said to you earlier, the Copyright Law Review Committee did object to the anti-competitive way in which copyright provisions were being used. They objected to the restrictive practice of trying to `exclude others from marketing similar goods'. I have had, as no doubt other senators have had, a series of letters, some opposing the government's intention and some supporting it. Those letters are from small businesses on either side of the case.FX5MURPHYSenator Murphy—How many letters did you get opposing it versus those which support it?3M6Murray, Sen AndrewSenator MURRAY—About the same number. `Similar goods' can mean that goods are poorly differentiated and easily substitutable for other goods. The alternative view to that expressed by the CLRC is that where goods—FX5MURPHYSenator Murphy—I got one letter in support and the rest were in opposition.3M6Murray, Sen AndrewSenator MURRAY—That is about the most passion I have ever seen you show. Are you sure you have not got a personal interest in this matter? Do you have anything to declare? I have never seen you show any passion about anything, and here you are, suddenly getting passionate.5K4FAULKNER Senator Faulkner—You should have seen him in his preselection, Andrew.3M6Murray, Sen AndrewSenator MURRAY—I think that deep down it has something to do with fishing.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—It is late at night. I have some tolerance, but maybe we could get back to the main game.3M6Murray, Sen AndrewSenator MURRAY—My apologies, Madam Acting Deputy President. I am trying to ensure that I use the time appropriately. In 1988, as I mentioned, the Copyright Law Review Committee objected to the anti-competitive way in which copyright provisions were being used. They objected to the restrictive practice of trying to exclude others from marketing similar goods. `Similar goods' can mean that goods are poorly differentiated and easily substitutable for other goods. The alternative view to that expressed by the CLRC is that, where goods are similar to others available in the market and substitution by consumers for other acceptable goods is therefore easy, exclusive exportation of such brands is not a restrictive practice. Where, however, goods are different to others in that class available in the market and substitution is difficult, the exclusive exportation of such a product is a restrictive practice.It is expected that allowing parallel imports will result in significant price decreases to consumers. I believe the evidence that such a result is likely to be tenuous. It is possible, however. I do note it is the government's main argument. In assessing the merits of arguments concerning parallel importing, we should have regard to the pricing and other market behaviour of the ultimate beneficial owners of copyright in other markets as well as in Australia. If the behaviour is such that it results in Australians paying higher prices or having poorer availability than they otherwise would, then, plainly, that would be a matter for concern.The government's amendments to the act, through schedule 3 of the bill, seek to prevent importers from blocking parallel imports on the basis of copyright in accessory items which are peripheral to substantive goods. The Attorney-General (Mr Williams) has made it clear that these changes will not relax importation controls where the copyright owner has not consented to the manufacture of those goods.Arguments offered in favour of the government amendments are: to some extent, they will prevent monopolies from forming and will promote competition; they will free up trade; goods will be cheaper or, alternatively, the market price will be truer; the restriction on parallel imports does not protect and can hinder domestic manufacturing; restricting parallel imports hurt small business; and, health and safety and other standards are not affected.Arguments offered against the government amendments are: the parallel imported product may not be of the same quality or standard as the authorised imported product; parallel imported products get a free ride on advertising and marketing by the authorised distributor; Australian jobs would be at risk; parallel imports will not necessarily be significantly cheaper; parallel importing will inhibit the development of future markets in Australia; a strong case has not been made for the changes; and, alternative Australian legal remedies for preventing product imports on grounds of misrepresentation, health and safety and differing constituents are slow, costly, ineffective, impractical and inadequate in comparison to copyright law.FX5MURPHYSenator Murphy—What about product service?3M6Murray, Sen AndrewSenator MURRAY—Senator Murphy seems so ignorant. I was actually reading out a list of the support for your argument, which you failed to outline. These competing arguments are naturally influenced by a healthy dose of self-interest. That self-interest is not relevant. What is relevant are the arguments. With respect to the bill's provisions on parallel importing, apart from the fact that present copyright law does indeed restrain competition, no overwhelming argument prevails. It appears that the bill intends to address this issue without putting copyright holders and users at any substantial risk. Accordingly, as you can gather from Senator Murphy's reaction, the Australian Democrats are going to support the government's bill, but we will attend closely to the amendments to be put.19:58:005400Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—One thing I can agree with Senator Murray on is the importance of this piece of legislation. I think the Copyright Amendment Bill 1997 is certainly worthy of the close consideration that it has been receiving from senators from all sides of the chamber. As you would understand, Madam Acting Deputy President Crowley, the purpose of this bill is to amend the Copyright Act, primarily to address the issues of moral rights for authors, artists, film directors and producers and to modernise the existing provisions dealing with journalists' copyright so as to recognise a publisher's right to provide on-line electronic access to copyright material in electronic publications.AW5CARRSenator Carr—It is a big concern.5K4Faulkner, Sen JohnSenator FAULKNER—It is a major concern. I think I can say that the bill also modifies the law to remove an anomaly in the use of copyright on labels and printed material accompanying imported goods as a means of restricting the importation of the product itself.I think that the Labor Party has made a very strong case and a very clear case in this debate, and we have indicated that we support the incorporation of moral rights, including the attribution and integrity of a work, into Australian domestic law. Moral rights are designed to protect the reputation of a creator of a work.6L6GIBBSSenator Gibbs—And their livelihood, Senator.5K4Faulkner, Sen JohnSenator FAULKNER—Moral rights are different from copyright in a work. I will come back to Senator Gibbs's important—though, I might say, disorderly—interjection in a moment. Copyright is essentially concerned with the right to exploit a work commercially through reproduction, publication, transmission or adaptation. I read with interest, as I am sure many senators did, the Bills Digest in relation to this legislation. Often I think we do not give enough attention to the Bills Digest .ZW4SHERRYSenator Sherry—Why not?5K4Faulkner, Sen JohnSenator FAULKNER—I have got to say, Senator, that you know senators are busy—we have got a lot on our plates. But one thing that came through in the Bills Digest in relation to the bill is the longevity of the principles underpinning the concept of copyright. Modern copyright statutes in the Eng lish legal system can be traced to the Statute of Anne in 1709.ZW4SHERRYSenator Sherry—Did the Romans have copyright?5K4Faulkner, Sen JohnSenator FAULKNER—They did, but I will come back to the Romans in a moment.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—Order! Senator Sherry, if you are to interject, do it from your own chair, please.5K4Faulkner, Sen JohnSenator FAULKNER—Thank you for that protection, Madam Acting Deputy President. But even more interesting—and I would draw this principle to the attention of the member for Cowan, Mr Richard Evans—ZW4SHERRYSenator Sherry—Not Senator Evans.5K4Faulkner, Sen JohnSenator FAULKNER—Not Senator Evans, no—the censure of plagiarism can be traced back to the Greek and Roman worlds. The only thing that I think Mr Evans would have in common with the Roman world is that he would certainly drive people to the vomitorium with the sorts of speeches that he has made in the parliament. But the notion of moral rights is a much more modern concept. The philosophical basis of moral rights is, in part, a recognition that a work is an emanation of the author's personality, and an unauthorised distortion of the work would effect a slur on the personality of the author.LD4ALSTONSenator Alston—They have no idea.5K4Faulkner, Sen JohnSenator FAULKNER—Senator Alston would know all about slurs, wouldn't he? Here we have the chief slurrer. The Prime Minister's doormat has the hide to interject on me as I speak about moral rights in the chamber. But of course moral rights do not apply only to artistic works. For example, under this bill a literary work includes a text or a computer program. I am not planning to detail these provisions in this speech during the second reading debate because last week—Senator Alston interjecting—5K4Faulkner, Sen JohnSenator FAULKNER—I have got to say, Senator Alston, that last week the government withdrew its support for schedule 1 of the bill and, in withdrawing schedule 1 of this bill, the Attorney-General, Mr Williams, and you, Senator Alston, gave a commitment that this aspect of the bill would be reintroduced before the end of this year following consultation with interested parties to resolve differences on waiver of the rights.The fact that these differences exist is disappointing. The Labor Party had hoped that the parties would have been able to sort the matter out when negotiations arising from the Senate committee's report began last year. But, regrettably, those negotiations broke down—they broke down several weeks ago, as I understand it—and that has led to the current unsatisfactory situation that we face. I think this delay is of particular concern to senators, as the people who principally will suffer from the delay are those entitled to moral rights who will not have a regime in place to protect their interests.ZW4SHERRYSenator Sherry—This government hates journalists.AW5CARRSenator Carr—Especially the ABC.5K4Faulkner, Sen JohnSenator FAULKNER—This government hates everyone. The principal difficulty in the negotiations has been the inability of some within the industry and the screenwriters to agree on whether there should be an up-front waiver of moral rights.The Labor Party is firmly of the view that a regime of moral rights which incorporates an up-front waiver of moral rights has the potential to see those rights become meaningless. They could be treated no differently from any other economic rights and traded away. The Labor Party has put on record our opposition to an up-front waiver provision.We would support the conduct of a review by the Copyright Law Review Committee into the effect of the moral rights regime on the Australian film industry to be completed within, say, 18 months of the entry into force of this legislation. The Copyright Law Review Committee, as I understand it, has an admirable record over many years in considering the detail of Australia's intellectual property provisions and in making sensible and considered proposals for reform. The government, on the other hand, has supported those within the industry calling for an up-front waiver. I suspect one reason why schedule 1 of this bill has been withdrawn is that the government is concerned that it may lose a vote on those amendments. I call upon both the government and those in the industry who support an up-front waiver to reconsider their position.As is shown from the international experience of moral rights, they are not something to be feared. Rather, the creative talents of Australian film-makers should be celebrated and respected through a strong moral rights regime. Australia's film industry, in our view, is the best in the world and has been very strongly supported by the Labor Party and consistently supported by Labor governments in the past. It is built on the backs of the extraordinary creative talents of our writers, our directors and our producers. It is in the interests of no-one in the Australian film industry to see them crippled over this issue. If we approach moral rights from this perspective, then I believe we can ensure the continued vibrancy and profitability of our film industry. This is something I am sure all senators in the chamber would agree is most desirable and is achievable with a modicum of goodwill on all sides. I would not like to leave aside the important issue of schedule 2 of this bill.AX5EVANSSenator Chris Evans—No, leave it aside.5K4Faulkner, Sen JohnSenator FAULKNER—I wish you had not said that, Senator Evans. That schedule deals with employed journalists' copyright. I am glad that the intervention of Labor and Democrat senators during the Senate committee's consideration of this issue produced a highly productive outcome. In the Senate committee report we noted that the implementation of this schedule at that time would have resulted in the loss of valuable economic rights without compensation by journalists employed by some proprietors and a corresponding windfall gain by some publishers who would acquire those rights. This was the principal contention between the proprietors and the relevant union—the Media Entertainment and Arts Alliance.AW5CARRSenator Carr—It's a good union too.5K4Faulkner, Sen JohnSenator FAULKNER—It is a good union. Following the Senate committee report, further negotiations between the parties occurred. In particular, Australian Consolidat ed Press, which is the principal publisher yet to reach an enterprise bargain with its employed journalists for the transfer of copyright, concluded just such an arrangement. Accordingly, the Media Entertainment and Arts Alliance wrote to the combined newspaper and magazine copyright committee withdrawing its objection to these amendments. Needless to say, this was always the Labor Party's preferred means of dealing with this issue and we are delighted that it has been resolved in this way. I know I speak on behalf of my colleagues when I say that. I congratulate all the parties for the constructive way in which this issue has been dealt with. It stands in stark contrast to the way the Howard government does business.The Labor and Democrat members of the Senate committee also recognised that these provisions may have the unintended effect of causing considerable commercial hardship to some media monitoring companies. I want to focus on this because it is a very important element of the bill before us. All of us in parliament—all of us in the Senate—understand the utility, the importance of those media transcripts and the work undertaken by the media monitoring organisations. When you think about what they are collecting—the speeches of the Liberal senators and so forth—I personally remain of the view that it really does not add much to the sum knowledge of mankind, but I suppose they have got to do it. Be that as it may, their task is an invaluable one.I would be particularly interested in the view of the government regarding collection on days like today, like yesterday or like the day before, Tuesday of this week, when a large proportion of the clips and media transcripts collected regale readers with the multitude of sins of recidivist ministers like the Minister for Resources and Energy, Senator Parer. Where would we be without that material? I know that what we read about Senator Parer and his staff would not be very comfortable reading for this government, and nor should it be. But we on this side of the chamber have always acknowledged the importance of this sort of material. We also understand how it can be uncomfortable for a government like the incompetent government that is in office at the moment.These companies perceive that the grant of copyright over the digital transmission of media services to the newspaper proprietors may place them in an uneconomic bargaining position. These rights over digital transmission include the right to transmit newspaper clippings electronically by facsimile, electronic mail or other online delivery mechanisms. Fortunately, the government has in relation to this agreed to amend the explanatory memorandum of the bill—Senator Alston, if he knows anything about this legislation, will be able to confirm that—to reflect the fact that this is the—Senator Alston interjecting—5K4Faulkner, Sen JohnSenator FAULKNER—You're not doing that? What are you doing? What are you up to?LD4ALSTONSenator Alston—You don't normally amend explanatory memoranda.5K4Faulkner, Sen JohnSenator FAULKNER—You don't even know what you are up to.LD4ALSTONSenator Alston—On a point of order, Madam Acting Deputy President: it is an extraordinary performance for Senator Faulkner to pretend that what we have in mind is to amend an explanatory memorandum. If we are going to amend anything, it will be the bill before the chamber. I just hope he understands the proposition.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There is no point of order, as you know, Senator Alston.5K4Faulkner, Sen JohnSenator FAULKNER—You ought to tell those people that are spinning for the government that that is the case, Senator Alston.UI4RAYSenator Robert Ray—Why did you send them up to the gallery yesterday? That was a mistake.5K4Faulkner, Sen JohnSenator FAULKNER—That's right. But, Senator Alston, I thought you wanted, in fact, to see the ex. memo. reflect the fact that it is the intention that the Trade Practices Act should apply. Anyway, in these circumstances, I have got to say that the opposition is satisfied by the government's response to that matter and we will not be proceeding with our amendment in that particular regard.I would like, in the time remaining to me—and I am disappointed that I do not have more opportunity to canvass this important legislation—to turn to parallel imports and copyright in accessories. Parallel imports, of course, are goods manufactured outside the jurisdiction by or under the authority of the owner of an industrial property right relating to these goods but imported by someone other than the authorised importer or distributor.I note that my colleague the shadow Attorney-General, Senator Bolkus, has outlined in some detail the variety of concerns which have arisen over this issue, in particular in relation to the operation of competition in the marketplace, and I know that Senator Lundy and others have made some very telling contributions on this particular issue. Because of the fact that this has been subject to quite considerable debate, I do not want to canvass the arguments in detail here.But I think that it is important to touch briefly on the free rider problem, which is a common problem raised in this area, concerning parallel imports getting a free ride in advertising, marketing and consumer service conducted by an authorised Australian distributor. The Labor Party believes that these effects should be properly assessed before this schedule is enacted. Accordingly, we will be moving an amendment to allow such a study to be conducted by the Senate Economics References Committee. I would urge all senators in the chamber to support that important amendment.I know that the Democrats are usually the first ones in this place to berate someone else for taking a narrow economic rationalist approach to policy. They are the first ones to accuse us of not looking to examine the overall implications of a policy, including the social effects. But that is exactly, I have got to say to the Democrats, what they are proposing to do here. The Democrats are knowingly going to throw into doubt over 9,000 jobs and $3 billion in business turnover because they, too, have been struck by this ideological fixation. I hope that I have out lined for the Senate tonight a cogent case in relation to this particular issue.UNKNOWNOpposition senatorsOpposition senators— Absolutely. It was very strong.5K4Faulkner, Sen JohnSenator FAULKNER—I thank my colleagues and I urge all senators to oppose schedule 3 of the bill.20:19:005404Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—I think the first point to make about this particular debate tonight on the Copyright Amendment Bill 1997 —and I have watched it very closely from my room—is that we have had some excellent contributions from this side of the chamber. I do not often extend that even to the Democrats, but I did listen to Senator Allison's speech and Senator Murray's speech—GB6COLLINSSenator Jacinta Collins—No, no, no. Not that one.UI4Ray, Sen RobertSenator ROBERT RAY—I am sorry; I thought they elucidated the Democrats' position extremely well, so they have my congratulations. I also watched the speeches of my esteemed colleagues—Senator Bolkus, Senator Lundy, Senator Cooney, Senator Murphy and Senator Faulkner—and it did remind me, talking about copyright, of that great Sherlock Holmes episode that all hinged on the dog that did not bark, because that has occurred here tonight. We have not heard one contribution—not one contribution—from the government senators opposite. They are so uninterested in copyright they cannot even be bothered coming down to the chamber and defending their position. There is no National Party senator here.AW5CARRSenator Carr—Where's the cocky's corner?UI4Ray, Sen RobertSenator ROBERT RAY—Two Liberals only are in the chamber, both on duty. There is no interest whatsoever in the copyright issues and the changes being proposed in this legislation. I can remember them, Senator Carr, having the cheek, when they were in opposition, to criticise the then government for not putting up enough speakers on bills.AW5CARRSenator Carr—That's right. They're hypocrites.UI4Ray, Sen RobertSenator ROBERT RAY—They would put up 30 speakers on the appropriation bill, we would put up five and we were criticised. But what do we find now? We find this important bill before the Senate and they are still finishing dinner in the dining room. They are not interested in these crucial issues before the chamber.It is true to say that plagiarism has been a great problem through the ages. It is not easy to detect plagiarism. There are, of course, blatant examples of plagiarism. Do you know what has stopped plagiarism in this country more than anything else? It has not been legislation; it has not been academics—5K4FAULKNER Senator Faulkner—It's been self-discipline.UI4Ray, Sen RobertSenator ROBERT RAY—It has not even been self-discipline. It has been someone called Stuart Littlemore. Stuart Littlemore, through his program Media Watch , over almost a decade continually exposed those who would plagiarise. The program always did it by voice-over and highlighter pen. It was always one of the most entertaining 15 minutes known when he went to the issue of plagiarism. I must say it was taken—NB5CAMPBELLSenator George Campbell—And it was on the ABC.UI4Ray, Sen RobertSenator ROBERT RAY—Yes, Senator Campbell, it was on the ABC. But, of course, complaints from the Bulletin magazine and changed editorial policy—probably at the prompting of certain people that I wipe my feet on day in and day out; I will not identify them—meant that the negotiations to restore the program under proper conditions were removed, and Mr Littlemore had to move on. But time and time again, he was able to expose people stealing the works of others. On some occasions that led to them being removed from their employment—the ultimate sanction, I would have said. It was the ultimate sanction against them; they lost their jobs. That is the blatant form of plagiarism that I am sure everyone in the chamber would oppose.Then there is the second form of it, what we call the `poor footnoting' plagiarism, where people basically quote the ideas of others and do not properly attribute them. This is all the way through academia. It is all the way through books, through various journals and, occasionally, through newspapers—although I think we would all agree that it is not essential for newspapers to be full of footnotes; that would clog up the space. But provided acknowledgment is there in some part of the newspaper article that these ideas are representing someone else's, then we would not regard it as plagiarism. Poor footnoting over the years has been one of the great problems.The greatest problem, of course, is taking the ideas of others, and blending and rewriting them to so disguise them that you cannot detect it.7L6HOGGSenator Hogg—Demidenko.UI4Ray, Sen RobertSenator ROBERT RAY—My colleague mentions the Demidenko issue but, in fact, that was detected and was dealt with by having vigilant people. But that was not the cause celebre—we have had the great cause celebre. The worst breach of copyright I have ever seen occurred in this parliament. Honourable senators will recall a speech delivered in May 1996 by the member for Cowan in the other place. The member for Cowan gave a 20-minute speech which, by his standards, appeared unusually lucid, cogent and convincing. It appeared to be a well-researched and informed speech—all characteristics which my colleagues do not normally associate with the member for Cowan. In particular, the member for Werriwa (Mr Latham), listening to the member for Cowan's remarks, was sure that he had heard or read them somewhere before. It became apparent, on further investigation, that the member for Cowan had in fact lifted the greater part of his speech from an article entitled `The age of social transformation' by the respected management guru Mr Peter F. Drucker.The article by Mr Drucker had been published in the Atlantic Monthly in November 1994 and, I understand, had been supplied to members of a parliamentary committee of which the member for Cowan was a member. The member for Cowan delivered his speech in the House of Representatives without in any way acknowledging the fact that he was drawing extensively on the work of Mr Drucker. Indeed, the member did not just draw extensively on the works of Mr Drucker, he read great slabs of it into the Hansard as though it was his own work.NB5CAMPBELLSenator George Campbell—The great pity is that he would not have understood any of it.UI4Ray, Sen RobertSenator ROBERT RAY—Senator, that is a bit unkind. I do not know whether he understood it or not. The real question here is: what protection exists for authors whose intellectual property is stolen in this way, given the existence of parliamentary privilege?The truth is that privilege provided the member for Cowan with an absolute defence. His absolute protection accounts for his extraordinarily arrogant response when this issue was first raised in the House of Representatives by the member for Werriwa on 27 May 1996. He simply stated that he had written to Mr Drucker, advising him that he had raised the speech in parliament. There was no apology, no shame—nothing. There was just a letter to the author after the event—and after he had been busted—saying, `Here is a speech which I gave and which I have copied for you. Thought you might like a copy. Cheerio.' It is the worst example of plagiarism I have ever seen.It was only later, when the true extent of his plagiarism had become apparent, that he was forced into a humiliating and grovelling apology in the House. He even begged the Speaker to have the speech expunged from the records of parliament. He wanted his shame removed after he had been caught. That was his great regret: not that he had plagiarised and stolen ideas from others or that he had pompously put forward ideas and constructs that he was intellectually incapable of understanding let alone developing, but because he was caught. Of course, we know it is not possible to have these things expunged from Hansard—well, if you are chairman of the Economics Committee you can give it a good try. But, if not, you usually cannot expunge these things from Hansard. It does say to us that acts of thievery by parliamentarians who are too lazy to conduct their own research will result in their being caught out and people will be punished—not by way of fines, because privilege covers that, but by way of humiliation.That certainly had a very bad effect on the member for Cowan. It was only a little later that he became the great advocate for cat genocide in this country. It was only a few months later that he went out and wanted every moggy in Australia destroyed. It must have affected him, because that was his second apology within a few months.I have a bit of advice for the member for Cowan. If he comes down into our street and takes on my cat, he is in big trouble. I know the minister at the table, Senator Alston, would appreciate that. He would know that my cat, Mick, is named after someone we both admired in the past. I see Senator Alston gesticulating, and he has got him in one through sign language. I am pleased to see the minister is paying attention. The member for Cowan would have a lot of trouble because my cat is so obsequious and such a groveller to everyone in the street who looks like a can-opener that he would not just have me to defend him when the member for Cowan came down—not the plagiarist anymore but the cat genocider. He would have no chance whatsoever.Let me move on to a more serious aspect of copyright. It is one that my colleague Senator Carr might address later on because he has had more recent experience. There are constant breaches to copyright going on in Australia at the moment, that I understand and almost condone; that is, every school in Australia—AW5CARRSenator Carr—You're not going to have a go at schools, are you?UI4Ray, Sen RobertSenator ROBERT RAY—No, I am not. Every school in Australia basically is forced to breach copyright. There is no way, given the resources applied to schools, that teachers do not photocopy things they should not photocopy. It is not that these people want to act in a criminal way, and it is not as though these people are inclined to illegality. Frankly, with the lack of textbooks and with the lack of resource material that many schools have been faced with, it is much easier to put the book on the photocopier, not pay any royalties, and run it off.There are special provisions for schools; I understand that. But not a day goes by in schools where, in some form or other, copyright is not breached. It is not just a question of photocopying. Showing of videos has now become an essential tool in teaching, provided it is used correctly. There is no point in just going to school and showing the class a video; a whole range of techniques must be used to bring out the right responses in students to develop their analytical skills. But, certainly, showing a video to 20 or 30 people at a time breaches that very thing up front—that scrolled message about the conditions in which that video was produced and sold to individuals.The third area where copyright is often breached is school plays and school musicals; copyright is applicable to any of those things. It is for this reason that I am particularly narked at the attitude of Andrew Lloyd Webber, who will not allow any school—irrespective of royalties, but they would be too high anyway—to put on any of his productions. This affects the very people who are going to be interested in drama and musicals and go on to be the people generating that interest, who will buy theatre tickets and who will pay his way. He puts nothing whatsoever back into drama, back into musicals, et cetera, through this attitude. What you have seen in Victoria—I do not know about the other states—5K4FAULKNER Senator Faulkner—He wrote Cats .UI4Ray, Sen RobertSenator ROBERT RAY—He actually did Cats . You are right.AW5CARRSenator Carr—There is a symmetry.UI4Ray, Sen RobertSenator ROBERT RAY—There is some symmetry. But it is a pity, because a lot of schools now, through copyright—and this is one area they tend to obey it in because it is advertised everywhere—have had to reduce or eliminate plays and musicals from the repertoire and, as such, a lot of children are being deprived of what is really their right to a broad and widespread schooling, which a lot of us missed out on. When I went to school, we did not have school plays or musicals. You only did two things in your down time: you played football or you played cricket. That was it.5K4FAULKNER Senator Faulkner—Would you have got a part in a musical anyway?UI4Ray, Sen RobertSenator ROBERT RAY—Senator Faulkner raises the question about how I did in music. In fourth form in music there were 157 students and 156 passed.AW5CARRSenator Carr—Which school was that at?UI4Ray, Sen RobertSenator ROBERT RAY—This was Beaumaris High. I was the only one to fail. The test of passing and failing was that the music teacher asked you whether or not you enjoyed the course. If you said yes, you passed. I was the only contrary, obstinate person that, even at the age of 15—just to get in their face—said no, and I failed music in fourth form. I really might need an extension of time here. I am only halfway through the material.Let me raise another problem with copyright that came to my attention five or six years ago. This is to do with the on-selling of video movies and the small business man. One of the problems of copyright is that the very threat of invoking sanctions by a large conglomerate can have a massive effect on a small business. A small video outlet was run by two brothers at the Chadstone shopping centre. They sold home movies; they did not rent them. They were importing their videos from the UK. You got a wider range of videos at that stage; they were very restrictive in their output.The US producers and owners of these videos—even though copyright had been paid in England—prosecuted this particular company, and $60,000 was demanded of them. What was their choice? They could have contested it in the courts, but it would have cost them a couple of hundred thousand dollars. In the end, they had to give up their importing rights, and they had to pay the $60,000. Given the high rent there at the time, it meant their business suddenly went from a good business to a marginal business. So we have to understand when we are enforcing copyright that, if we give the powers to very powerful movie studios and distributors, we will see that power misused. I hope the provisions here are going to ameliorate that position rather than exploit it.Senator Faulkner mentioned that one of the key elements of this particular proposal is the way it affects journalists, and that must always put a government of the day in a difficult position, because often they have to make a choice between the rights of journalists and the rights of proprietors. We know the attitude that this government takes to journalists. It was only a few weeks ago that this government managed to put out this list known as the `black list'. These were journalists who were regarded as too pro-Labor. This was sent around to all the ministerial offices. So a certain person was to be avoided because he had been a media adviser to Bob Hawke. Another person was to be avoided because he was a media secretary way back in the Whitlam government days. Another was to be avoided because he was an assistant private secretary to Mr Chris Hurford, and on it goes. One was even black-listed because he had been the biographer of a particular Labor figure. There is another here who apparently was a media adviser to the Aboriginal affairs minister in Western Australia; she was blackballed on this particular list, and on it goes.It is a fair list. It actually lists press gallery journalists with coalition backgrounds: David Turnbull from Nine news who worked for Hewson and Reith. David Barnett—it is a big surprise that he is there! I wonder if they got that wrong—no they have not: David Barnett, freelance, Fraser media adviser. That is the nicest description of him I have heard for a long while.5K4FAULKNER Senator Faulkner—You certainly wouldn't mention the Howard biography, would you?UI4Ray, Sen RobertSenator ROBERT RAY—The Howard biography is now selling at $4 in Melbourne, and I tell you what Senator Faulkner: I am yet to buy it. I reckon it will go to a dollar—and then I will buy it.FX5MURPHYSenator Murphy—You could get one free!UI4Ray, Sen RobertSenator ROBERT RAY—I am not sure I will get one free, but I reckon I will get it for a dollar before Christmas—and I will buy it because I am a great believer in political biography. Then there is Nick Hordern, Reith media adviser. They are the three who are listed there for balance.So you always have to wonder about a government when it is drawing up legislation such as this. They have to be careful that they get the balance right with what are the justifiable rights of journalists without the government of the day obsequiously crawling to media proprietors—something that, of course, is not unique to this current minister, although he certainly has achieved perfection in this particular art form; it has occurred on other occasions. So how we resolve this will be an important consideration in the committee stage of this bill. I did want to make some comments about copyright as it applied in the Soviet Union and in China, but I might have to leave that for another time.20:39:005408Carr, Sen KimSenator CARRAW5VICALP00—This Copyright Amendment Bill (No. 2) 1997 is obviously very important, given the interest that is being expressed in it tonight. It is little wonder that the particular clauses in the bill should be given such attention. Senator Ray has just delivered a very erudite and humorous response to some of these questions which really goes to some basic considerations of the way in which the media are presented, the way in which information is conveyed in our society and the way in which creative property is in fact protected. I am afraid all too little of that is measured by this government's interest in these intellectual questions.This bill seeks to introduce by 11 schedules comprehensive moral rights provisions for authors of copyright works and for directors and producers of films and to amend the law in relation to the ownership of copyright in the works of employed journalists to ensure that newspaper and magazine publishers have all electronic and residual rights in journalists' works and a right to restrain large-scale photocopying to protect circulation.That particular clause is one that I would like to give consideration to. As Senator Ray has indicated, it is a serious problem in this country at the moment as a consequence of what is now a persistent neglect by governments at a state and federal level. Particularly with the election of Liberal governments in this country, we have seen a gradual retreat from the proper support for public education. Schoolteachers, who have a duty to provide the highest possible level of tuition to their students, are required to keep up to date with information and, as a consequence, are often placed in an invidious position where they in fact do break the law. I think this is happening all too often these days, where insufficient resources are provided for curriculum development in schools and, as a consequence, teachers are required to photocopy class sets of material simply because the books are not available.It is a simple, straightforward economic fact of life within the education system today. I am afraid it is increasingly becoming so. What occurs is that there are serious reductions in funding for education, as we have seen by this government which in real terms has reduced support for public schools by about $89 million. That flows directly through to the states and, of course, the states in turn have followed a similar pattern. For instance, my state of Victoria has seen the closure of nearly 400 hundred schools now, the removal of thousands of teachers and a reduction in the education budget of perhaps in excess of 20 per cent. That has meant that there are larger class sizes and fewer teachers about to provide an educational service to students.Invariably there are attempts made to shift what limited resources are available back to the school level, and that means that all too often it is the case that individual teachers have to take responsibility for the distribution of the very limited resources that are now provided, much less than ever has been the case in the past. They have to make very hard decisions about whether or not they buy a class set of books, or photocopy. As I have said, all too often these days the situation is that authors' work is being used in this manner, without the proper according and provision of financial support to them for the protection of their intellectual property rights.5K4FAULKNER Senator Faulkner—Was this an issue when you were a schoolteacher?AW5Carr, Sen KimSenator CARR—It certainly was a very serious issue. In fact, with the introduction of the gestetner this became apparent—1X4WESTSenator West—Are you that old?AW5Carr, Sen KimSenator CARR—Yes, I do recall the gestetner.UI4RAYSenator Robert Ray—He was around with the fordigraph.AW5Carr, Sen KimSenator CARR—Senator Ray draws my attention to the old fordigraph. Well, of course, we have moved through these various forms of technology to where we are today, where there are, of course, advanced photocopiers, and individual teachers are faced with this dilemma. Libraries are required to provide single copies of most texts, but they simply cannot provide the resources these days to have complete class sets.5K4FAULKNER Senator Faulkner—That would be a particular problem in Victoria with Mr Kennett's cutbacks.AW5Carr, Sen KimSenator CARR—That is a point I have made, Senator Faulkner. You are absolutely correct. But I will draw to the Senate's attention again that the closure of so many schools has meant that resources that were available are not necessarily being redistributed to other schools. What you are finding is that the increase in class sizes and declining teacher numbers within the school system has meant that there are limited—NB5CAMPBELLSenator George Campbell—Remember when those teachers at Maribyrnong and Footscray told us about all the strife they were in when trying to get resources for the kids.AW5Carr, Sen KimSenator CARR—That is exactly the case.LD4ALSTONSenator Alston—Tell us why you can't get a job on the frontbench.AW5Carr, Sen KimSenator CARR—I have, Senator Alston.5K4FAULKNER Senator Faulkner—Mr Acting Deputy President, on a point of order: I draw your attention to the fact that Senator Alston was being disorderly by interjecting a moment ago.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Ferguson)—There is no point of order, Senator Faulkner, as you may be aware.5K4FAULKNER Senator Faulkner—On a further point of order: with respect, I think there is a point of order. It is disorderly for any senator to interject during a contribution being made by another senator. I do not want to canvass your ruling but, with respect, I would ask you to reflect on that and give it a little further consideration. I think it is disorderly for any senator to interject.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Faulkner, I have reflected on it. I did not hear Senator Alston interject, so there is no point of order. I call Senator Carr.AW5Carr, Sen KimSenator CARR—Mr Acting Deputy President, I am pleased that your hearing is of such high order. I would like to reiterate that, particularly in Victoria—and Senator Alston has drawn my attention to the situation in that state, and he would be only too aware of today's headlines in regard to that state—Senator Sherry interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Carr would you resume your seat. Senator Sherry, interjecting is disorderly, as I have just been reminded by Senator Faulkner. Could you please refrain from interjecting?5K4FAULKNER Senator Faulkner—On a further point of order—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Yes, I did hear Senator Sherry.5K4FAULKNER Senator Faulkner—I was going to say that it appears that interjecting is only disorderly when it is Senator Sherry who is the interjector.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—On the point of order, Senator Faulkner, that is not the case. You may not have realised, but my attention was distracted just prior to you taking your earlier point of order so I did not hear Senator Alston, but I did hear Senator Sherry. I call Senator Carr.AW5Carr, Sen KimSenator CARR—The question before us is the issue of copyright, as I was trying to explain before I was so rudely interrupted by Senator Alston. There are serious concerns about whether this government is providing adequate resources to the education system in this country to prevent the widespread abuse of copyright and whether or not there has been adequate protection for the authors' intellectual property rights within the educa tion system. I think more money should be provided to assist with the protection of intellectual property rights for authors in regard to our education system. Provision is made within this legislation for some electronic production and distribution of materials, but quite inadequate provision is provided in regard to printed materials, which is still the foundation stone of our education system in this country.This bill also seeks to amend the law to prevent the owner of copyright in packaging and labelling of goods not protected by copyright from using that copyright to stop anyone from importing the goods. It also seeks to give the courts discretion in awarding the remedy of conversion damages for copyright infringement. It introduces a sampling scheme for copying done by governments to determine the amount of equitable remuneration to be payable to a relevant collecting society, instead of the present individual notification and payment to copyright owners. The bill makes minor machinery, streamlining and tidying-up amendments to the provisions concerning the Copyright Tribunal, border interception of infringing imports and the statutory licences for copying by educational institutions and institutions assisting people with a disability. Senator Faulkner has drawn particular attention to those measures.GB6COLLINSSenator Jacinta Collins—And Senator Bolkus.AW5Carr, Sen KimSenator CARR—Senator Bolkus, Senator Lundy, Senator Murphy and Senator Ray have highlighted the concerns the Labor Party has with each of those measures. My concern is particularly with the amendment contained in schedule 3 of this bill. Schedule 3 of the bill, in regard to parallel imports and copyright and accessories, is an important issue.NB5CAMPBELLSenator George Campbell—It is outrageous.AW5Carr, Sen KimSenator CARR—This is a matter of grave concern to me. It is an attempt by this government to essentially let slide through this parliament, as Senator Campbell has highlighted, outrageous provisions which essentially will see the globalisation of copyright. NB5CAMPBELLSenator George Campbell—All those T-shirts we printed.10000PRESIDENTThe PRESIDENT—Order! Senator Carr resume your seat. Senator Campbell, it was made quite clear by Senator Faulkner, when he objected to interjections, that he wanted Senator Carr to be heard in silence, so I would ask you please to remain silent while Senator Carr finishes his speech. I call Senator Carr.AW5Carr, Sen KimSenator CARR—Thank you once again, Mr Acting Deputy President, for your concern to ensure that I am heard in silence. The question of copyright is one that this parliament has had the constitutional obligation to consider for some time. It is a fundamental principle outlined in the original federation framework in terms of the question of copyright being a matter for the Australian parliament to consider.Australia's international obligations in regard to copyright are ones that I think we have always taken very seriously within this parliament. While various measures have been taken over time to strengthen our performance in these matters, I do think a great deal more needs to be done. Various measures were attempted during the period of the Labor government and lapsed in the run up to the last election. This government is essentially seeking to reintroduce measures which were under consideration.There are areas in regard to schedule 3 which do concern me, particularly in so far as they affect Australia's good international reputation. While generally we can say that Australia does have a good reputation in regard to its compliance with international agreements dealing with intellectual property rights, there are some gaps. There are some considerable gaps in regard to the question of moral rights in terms of copyright legislation. Australia has only limited protection from moral rights and, as a consequence, it has not been possible in this country to allow persons or an institution to buy, say, a work of art or to modify a display in a fashion which the artist would consider denigrates his or her reputation. In the notes that I have seen, various questions arise with regard to sculptured works, which we know was an example given to us on many occasions in the committee considerations of these issues. Australia, nonetheless, has to acknowledge that it has an important role to play in trying to act as a brake on the globalisation of intellectual property rights, which will be to the detriment of individual artists within this country. When considering schedule 3 of the Copyright Amendment Bill 1997 —GB6COLLINSSenator Jacinta Collins—Not enough consideration.AW5Carr, Sen KimSenator CARR—There has not been adequate attention paid to these basic questions.Senator Murphy interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order!AW5Carr, Sen KimSenator CARR—Do you want me to sit down again?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Yes. I am concerned that you get the protection that Senator Faulkner thinks you require to finish the speech, Senator Carr. So I would ask members on my left to please not interject.AW5Carr, Sen KimSenator CARR—Once again, Mr Acting Deputy President, your diligence is refreshing. You would be very interested to know that, frankly, this government has failed the fundamental test on this question. I am sure you would agree with me on that proposition.We could ask the question: has the government sustained the need for the proposed changes to the Copyright Act through schedule 3? It certainly has not. Secondly, we would be entitled to ask: has the government consulted with Australian businesses and those affected parties in the preparation of this legislation? I notice that the Labor senators have unanimously replied `no' to that proposition. I am sure, Mr Acting Deputy President, that you would agree that there has been inadequate consultation on these matters.I look forward to Senator Campbell drawing our attention to the report. The government simply has not undertaken any analytical work on the implications of the proposed changes. It is seeking to justify the need for legislation on the basis of vague generalities and without any demonstration of the need for change in regard to the net benefit to the community.There have been various vague assertions by this government since the copyright law reform report in 1988 that that was sufficient grounds for consideration on the consultation issue. I reject that. The government must acknowledge the fact that it has not directly engaged the business community, the artistic community, in this country. I do not believe that there has been sufficient consultation prior to the introduction of this legislation on this schedule.The failure of the government to substantiate the need for proposed changes to the Copyright Act by way of a detailed analysis of the costs and benefits of the changes to the business community with regard to investment in jobs and to consumers with regard to the effects on price and availability and, of course, the questions of service and safety must be tested. The government must be asked to actually demonstrate in clear terms—and I trust the minister will, in due course, demonstrate in clear terms—the net benefit and the data on which the government's judgments have been made. We have heard very little from the Liberal Party on these questions. They thought this would just slip through without any attention. I am afraid they are in for a bit of a surprise on that issue.The community impact study undertaken by the international and independent firm Price Waterhouse does indicate to us that there are very serious implications of this bill and they ought to be clearly understood by this parliament.NB5CAMPBELLSenator George Campbell—I have got the report here.AW5Carr, Sen KimSenator CARR—Senator Campbell, no doubt, will be able to provide us with a detailed analysis of that report.NB5CAMPBELLSenator George Campbell—Senator George Campbell.AW5Carr, Sen KimSenator CARR—Senator George Campbell, that is. We have not heard from Senator Ian Campbell for some time. He is here! I am looking forward to his contribution on other matters.FX5MURPHYSenator Murphy—On moral rights.AW5Carr, Sen KimSenator CARR—There would be a very short debate from this government if it were on moral rights. On the question of parallel imports, the Price Waterhouse study demonstrates that there is a grave threat to over 9,000 jobs as a direct result of this government's actions. As to business turnover, there would be a reduction of some $3 billion in economic activity. The advertising expenditure may, in fact, be reduced by some $281 million. There is an increased risk for small and medium sized Australian companies in maintaining their current business and their capacity to develop future business opportunities.In addition, other suggested legal options suggested by the government to protect businesses, such as the trademark and health and safety laws, just do not help. The practical experience of Australian companies in these laws will not assist these companies in the marketplace. It is completely misleading for the government to continue to claim that other laws are suitable alternatives because I think the case is very clear that they simply are not. I trust that Senator George Campbell will be able to go in some detail to those questions.ZW4SHERRYSenator Sherry—What about the National Party?AW5Carr, Sen KimSenator CARR—We have not heard a word from the National Party on these issues. In fact, we hear very little from the National Party in this parliament on anything.NB5CAMPBELLSenator George Campbell—They are out celebrating their new mobile phones.AW5Carr, Sen KimSenator CARR—No doubt in due course we will get to discuss their latest weasel agreement with the government on the question of mobile phones, but on this issue, which is a very important question with regard to trademarks, we have not heard a word. In fact, we have heard nothing from anybody over there on the other side.There are real concerns being expressed about the threat to consumers, particularly of substandard products or products not designed or modified in Australia, and Senator Campbell has drawn my attention to the issue of mobile phones. We heard tonight on the news about the prospect of people now being able to `enjoy' the benefit of three mobile phones at any one time, if they can afford them. I can tell you that, when they privatise Telstra, none of them will work because you can guarantee that the service levels will go through the floor.Already, if we go, say, 50 kilometres from this great city, we do not have a mobile phone service, but they are going to propose to us that some new gadget at great expense will fix that. I say to you that, under a privatised Telstra, there will not be a service because they will not pay. You know the set up: no matter what the copyright arrangements, no matter what the brand name arrangements, you simply will not have a service available to you.The whole issue of consumer protection is a very basic one and ought be given proper consideration. In the absence of other legal mechanisms to protect consumer safety, appropriate protections under the copyright laws cannot be removed—which, of course, is what this government is proposing—unless other workable mechanisms are in place.Senator Bolkus interjecting—AW5Carr, Sen KimSenator CARR—There is some authoritative information being provided to me by Senator Bolkus and others to highlight the deep concerns that the Labor Party has about the question of consumer protection and about the failure of this government to stand up on these issues.Senator George Campbell interjecting—AW5Carr, Sen KimSenator CARR—Senator Campbell, it has to be understood—NB5CAMPBELLSenator George Campbell—George Campbell.AW5Carr, Sen KimSenator CARR—Senator George Campbell—how important it is for the Senate—10000PRESIDENTThe PRESIDENT—Senator Carr, you should be addressing your remarks to the chair not to one of your colleagues.AW5Carr, Sen KimSenator CARR—I notice that Madam President has joined us for this discussion. It suggests to me there might be other matters that she would like to hear from us on, and no doubt she will hear from us at some length on these questions. But I think you, Madam President, would be only too well aware how important it is for the Senate not to ignore the safety of Australians. I trust that you would not support any proposition being brought to this Senate that would harm the safety of Australians.I am afraid that is what this schedule does. That is a matter of great concern to me even if it is not a matter of great concern to the Liberal Party. It is a very unfortunate fact that the threat to Australian companies posed by these proposed changes to schedule 3 simply must be resisted by the Senate. I trust that any proposition advanced by the government will be defeated by this Senate, because I am sure this Senate will not ignore the safety of Australians. (Time expired)Motion (by Senator Ian Campbell) proposed:That the debate be now adjourned. Question put.21:06:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Abetz, E. Alston, R. K. R.Boswell, R. L. D. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Colston, M. A. Coonan, H.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Macdonald, I.Macdonald, S. McGauran, J. J. J.Minchin, N. H. Newman, J. M.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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Brownhill, D. G. C. Cook, P. F. S.Crane, W. Stott Despoja, N.Lightfoot, P. R. Bourne, V.MacGibbon, D. J. McKiernan, J. P.O'Chee, W. G. Conroy, S.* denotes tellerQuestion so resolved in the affirmative.Miscellaneous541321:10:005413Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I seek leave to move a motion relating to the days and hours of meeting and routine of business for the remainder of these sittings.Leave not granted.54135413Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Pursuant to contingent notice of motion No. 1, standing in the name of the Leader of the Government in the Senate (Senator Hill), I move:That so much of standing orders be suspended as would prevent Senator Hill moving a motion to provide for the consideration of a matter, namely a motion relating to the days and hours of meeting and routine of business.Last night Senator Troeth, who was handling a bill before this place, sought leave to put on notice a motion relating to the days and hours of sitting and was refused leave. She chose to table that motion so all honourable senators would be aware that the government was considering extending the sittings so that the business that we have been trying to complete for the past fortnight could be completed.As you know, Madam President, we are here tonight because certain senators, particularly members of the opposition, chose to spend last week doing their best to frustrate the government's program. The great testimony to that fact is that from 10.30 on the Monday night before last, until 9.30 on Thursday night the Senate spent no more than 7 hours and 40 minutes considering legislation, with the exception of the hour and a bit at lunch time on Thursday.I believe that the Australian taxpayers expect a couple of things from the Senate. They do expect it to be a vigorous house of review. They do expect it to be a chamber that sticks up for the rights of the states and ensures that the interests of the states within legislation are looked after more than in the other place. So they probably do not mind the Senate spending more time on legislation than the other place. This Senate has always given detailed consideration to bills.In the past two years since the coalition government was elected, this Senate has spent more time on bills than any other Senate in the history of Australia. This week we concluded a debate on the Native Title Amendment Bill 1997 [No. 2] , which was the longest debate in Australian history, beating all other bills. A number of other bills—in fact, four pieces of legislation—have taken up over 200 hours of the Senate's time, which is a testimony to the fact that this Senate takes more time on legislation.One might argue that this time had created quality debate, that it had created better quality legislation. One only needs to look at the quality of the speeches that were made in the debate on the second reading of the Copyright Amendment Bill 1997 this evening if one wants to make an estimation. I invite taxpayers who would want to receive the Hansard to look very closely at the contributions made by the Leader of the Opposition in the Senate, Senator Faulkner, the former manager of government business in this place, Senator Robert Ray, and the Leader of Opposition Business in the Senate, Senator Carr, to see whether the debate has been one of quality. One only needs to look at those speeches to see that they are designed to waste time and to obstruct. The taxpayers of Australia do not say to the Senate, `Don't give detailed consideration of legislation.' They do want the Senate to review legislation, but they also expect the Senate to deal with the legislative program of the government. We were not given leave to put this motion on notice last night. We were not given leave to debate it tonight. The opposition has made it quite clear: they will talk under wet cement to stop the government's legislative program being dealt with.They have ensured that the legislative program now has a backlog of over 50 pieces of legislation. So we are not dealing with packages like the migration bills which will deliver so many benefits to the Australian people. It has become impossible to bring the child support legislation on in these sittings. There are 50 pieces of legislation which deliver benefits to the Australian people. That is why with this obstruction, this constant delay, it is necessary to extend the sittings. We even need to suspend standing orders tonight because the opposition will not grant leave to debate this motion.The opposition have shown such little cooperation tonight that they have torn up any protocol between the whips. Senator Chris Evans, on the other side, has been chucked out of the process. The speakers' list has been taken over by Senator Faulkner, I presume. There is no decency between the two whips any more. They have misled us on a number of occasions. Senator Faulkner said that he was going to speak for 10 minutes, that there was no way he would speak for 20 minutes. I commend the motion.21:15:005414Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Let me first deal with the one substantive issue that the Manager of Government Business, Senator Campbell, raised in his contribution. He said that the opposition refused to give the government leave to move that motion. That is true. But, of course, the government had an opportunity at any time before lunch today to give a government business notice of motion. That was provided for in the order of the Senate when this extra sitting week was agreed to. There was no opportunity for any opposition or non-government notices of motion, but there was a capacity for the government to give notice this morning and this incompetent Manager of Government Business failed to do so. He dropped the ball again.Let me say this about the urgency motion before the chair: this issue is about the government's attempt to ram the Telstra legislation through the Senate. I want to make it absolutely clear that we do not consider that there is any urgency in the Telstra legislation. After all, even Mr Howard said that he would not proclaim such legislation until after the next election. This is the same Mr Howard who said he would not even contemplate full privatisation of Telstra during this term of parliament. And we are being asked by the government tonight to agree to Mr Howard's broken promise, his broken commitment to the Australian people. We are also being asked to try to cover up for the fact that the National Party, as members of the coalition government, have not got the guts, have not got the bottle, to stand up to John Howard. They are going to let their constituency down. They are going to let the bush down. They are going to roll over and agree with the Liberals. Each and every National Party senator is going to vote for the full privatisation of Telstra when this matter comes on for debate in this parliament.The Labor Party will stand behind the bush and the majority of the Australian people and we will fight to protect Telstra in full public ownership. The National Party will not do it, but I give this guarantee: the Labor Party will. We will fight on this issue.This has been done without any consultation at all from the government. The first I knew about this particular motion was a phone call to my office while I was not there. The message was taken in my office; the motion was dropped in the chamber. There was no consultation, no effort to go through the usual courtesies—a meeting with the leaders and whips. That is what is normally done in this place. No way would Senator Campbell or Senator Hill or others from the government extend those usual courtesies to the opposition or, I suspect, the minor parties, in relation to this particular issue.So do not come in here to debate with these mealy-mouthed words. The government had an opportunity to give a notice of motion this morning. They did not do it. They should have done it. They dropped the ball. They failed to do what they ought to have done so that that motion could have been debated properly tomorrow morning. They did not do that. They did not consult. Now they come in here, because they have blundered, they have failed, and propose that the opposition give leave so they can consummate a deal which has been done behind closed doors. The National Party has been bought for $400 million—we will hear the first part of the sale of Telstra package tomorrow. They are asking the Senate to agree with that. They are asking the Senate and the opposition to endorse that approach. We will not. We will stand and fight on Telstra; we will protect the interests of all the Australian community and, I can assure you, particularly those in the bush—in rural and regional Australia we will defend them. We will defend Telstra.21:20:005415Hill, Sen RobertSenator HILLBH4SALPEnvironment10—It sounds familiar. I remember the Labor Party saying it about Qantas. `We will defend Qantas,' they said. In actual fact they planned to sell it. `We will defend the Commonwealth Bank,' they said. In actual fact they intended to sell it. We know what the Labor Party intended to do with Telstra if they had won. They intended to sell it. Mr Beazley had already told the Telstra people that he intended to sell it. So this hypocrisy from the Labor Party is repeated.But we do not mind having the debate on Telstra. If the Labor Party decides that, for its political purposes, it ought to vote against the sale of Telstra then it should have the opportunity to do so.Senator Bolkus interjecting—10000PRESIDENTThe PRESIDENT—Senator Bolkus, you have continuously interjected during this debate. BH4Hill, Sen RobertSenator HILL—We on this side are not trying to gag the debate on Telstra. We are wanting the debate on Telstra to come on. We want to give the Australian Senate the opportunity to vote on it. We want to give the Labor Party the opportunity to vote `no' if that is what it intends to do. But by voting `no' a great opportunity to retire a large amount of debt, which would be for the benefit of all Australians, would be lost. Lower debt means lower interest rates, which is for the benefit of all Australians. And that is what this opposition, this Labor Party, is determined to avoid.The sale of Telstra also releases funds that can be used for other capital purposes—a social dividend for the Australian people. We sold, against the Labor Party's objection, one-third of Telstra and were able to set up the largest reinvestment in the natural capital of this country in the history of Australian government—over $1 billion reinvested from one capital asset, a telecommunications company, into another asset, our natural capital. We would say that that is a good investment for the Australian people. And it is possible to put part of the capital return from the sale of two-thirds of Telstra into other important social needs. It is true: the bush needs and deserves more, and the bush will get it from the coalition.Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are persistent interjections in the chamber which are totally disorderly. I ask senators to desist.BH4Hill, Sen RobertSenator HILL—We are seeking to implement policies that will provide us with the capital funds to enable us to be able to fund good social objectives in the bush. A government that is interested in the bush would be moving in this direction; an opposition like the Labor Party would be opposing it. Not surprisingly, in here today the Labor Party is going to oppose it. What a great missed opportunity that would be for the Australian people and, particularly, for rural and regional Australia.We are saying that, if the Telstra bill gets passed, basically, it will not be implemented until after the next election. Ultimately, the people of Australia can be the arbiters. What greater security, what better test, what better application of democracy could you have but to go down that path?We want the Telstra debate. We have said it all along. We want the debate to come on. We, in the government, are prepared to sit here and debate the bill, as the Australian people would expect us to. It is the ALP that says, `We are going to block debate on the bill'—not just, `We are going to vote against it,' but, `We are trying to block debate on the bill.' That is what the Labor Party is seeking to do. It is not only that—there are other important bills that we are wanting to get debated in this place. We have had this farce tonight on the copyright bill, the filibuster of the Labor Party, speaker after speaker, speaking for 20 minutes, added to the list and saying nothing. It was just to fill in time so that it can avoid this debate.The ALP has known all along that we wanted this debate and that we wanted time for this debate. I said that to Senator Faulkner many times. But the trouble is, courtesy with Senator Faulkner gets repaid with a mouthful of abuse. Tonight I rang Senator Faulkner's office to speak to him and he was unavailable, so I asked that it be communicated to him that after consultation we thought a better alternative was to sit Friday and Saturday and, if necessary, to come back a week later. (Time expired)21:25:005416Lees, Sen MegSenator LEES8U4SAAD00—I would like to pick up roughly where Senator Hill has left off, on his claim that he has always wanted this debate. If he had always wanted this debate, then I suggest that the bill should not have been taken off on Wednesday while quiet negotiations or whatever machinations were going on between the Liberal Party and the National Party at that stage. I do not see why we, now, in this place, should wear responsibility for that, nor should we suffer for that, nor should our families suffer for that.ZF4CROWLEYSenator Crowley—Madam President, I raise a point of order. I have heard any number of interjections from comrades opposite and very few of them are in their own seats. If they do want to contribute to this noisiness, can they please go back there.10000PRESIDENTThe PRESIDENT—If I find anybody interjecting out of their seat, they will be dealt with.8U4Lees, Sen MegSenator LEES—Senator Campbell has made a number of allegations that basically suggest that this place has not been earning its keep. I suggest to the government that it chose to bring the Wik bill back before us on three occasions. We, after all, dealt with it to the satisfaction of the Senate on the first occasion. They then chose—and it is obviously the government's prerogative to do so—to send it back again. We cannot fit that and everything else in simultaneously, nor can we be expected to do so.If you look at the total number of hours that this Senate has sat for this government, you will find that it is more than satisfactory, and, indeed, more than is regularly done. I also point out to the government that they chose to put the euthanasia debate on—yes, it is some time ago now, but that was again their decision to shuffle that up the list. While Telstra and Wik may not have been affected by that, certainly some of these other bills that we are dealing with have been around a while because they have been continuously shuffled down the list while the government shuffle up other priorities.Senator Herron interjecting—UI4RAYSenator Robert Ray—You hypocrite! Drag out your old speeches on long hours. Double standard Herron!Senator Herron interjecting—10000PRESIDENTThe PRESIDENT—Order! Senator Herron, you are out of your seat, and, in any event, it is out of order to shout across the chamber. Senator Ray, you are at least in your seat. Senator Lees, I am interested in what you have to say.8U4Lees, Sen MegSenator LEES—Thank you, Madam President, I am pleased that somebody is listening. If we do go back and look at the choices that this government has made, we would see that—we are gradually losing an audience, things will no doubt get quieter now—we have worked with the bills in the order that the government has presented them to us.AW5CARRSenator Carr—Good on you, Boris!10000PRESIDENTThe PRESIDENT—Senator Carr, if you shout across the chamber once more, you will be warned.8U4Lees, Sen MegSenator LEES—For the minister to comment that some of the debates—and on this instance, he is certainly right—have been longer than usual, I ask him: what is more important than the Wik bill that we have been dealing with? Did the government expect that that was a bill of minor consequence that we could rush through in a couple of days? I would suspect not. I do not think anyone ever thought that. We have dealt with it, as we have been required to do, on three occasions by the government.I pick up another point that both Senator Faulkner and Senator Campbell touched on, and that is the relationship between the whips. I just remind you that there are more than two whips in this place. I can speak on behalf of my whip, who is not here at the moment. As far as I know, she has not been involved in any discussions in the last 48 hours or more. I certainly have not been to a leaders and whips meeting for at least a fortnight. Minister, all you have been saying to Senator Bourne is, `This is the latest proposal.' You have not been involving her in any discussions. There is a big difference. I would like your definition of `discussion' because it is always, `This is what you are doing—end.' If you go back to a dictionary, that has got no bearing on the word `discussion'.The usual process is that, at leaders and whips meetings, we have a genuine opportunity for discussion—and for that I thank the government. I thought they were working reasonably well. Obviously, a directive has come from on high that, regardless of how the senators on my left or my right feel about it, the Telstra bill is important to the government's election strategy. Off go any leaders and whips discussions—it has just landed on our desks.I do not know how some of the senators on my left feel, but I know that some of us have families. This comes during the school holi days. As a single parent, I have enough trouble seeing my kids as it is with this job. I look at the pressures on our staff, the pressures on the attendants and the pressures on those who drive us. (Time expired)21:31:005418Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I will not be long because I know other speakers want to make their contributions, but I wish to indicate to the chamber that I understand the feeling around this place about sitting during this week in the first place. There are school holidays in a number of states and people need to have that well and truly in their minds.The intention of the government this week was to deal specifically with certain measures, particularly the Wik legislation and the Telstra legislation. The position is simply this: whether the government got their Wik bill through or whether they did not, it is my view that they are entitled to have the matter before the parliament and determined one way or the other. I think it is a reasonable proposition that we address the issue of Telstra and come to a conclusion. What the government is virtually proposing is that, if we can end it by Saturday night, there will probably be about 25 hours for debate on the matter. If we cannot deal with this particular matter in 25 hours, I think that there is something wrong.AX5EVANSSenator Chris Evans—I thought you were pro-family.6H4Harradine, Sen BrianSenator HARRADINE—Yes, pro-family. The only other alternative is to come back next week or the week after next. I believe that is the issue involved. Let us get over the matter.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many interjections.6H4Harradine, Sen BrianSenator HARRADINE—There is no deal about this. What I am saying is that clearly the government want us to deal with the matter. They are entitled to that. We have to look at the best way of doing that. The best way of doing it—as I see it, at least—is to get it over and done with so people can get home to their families, rather than our being dragged back here and trying to deal with it for two, three, four, five or six days next week or the week after. I think the proposition, if we all—Opposition senators interjecting—6H4Harradine, Sen BrianSenator HARRADINE—Are you ready to deal with it in 25 hours? Do you think 25 hours would be sufficient? If you do not think 25 hours is sufficient, then there is something wrong with you.21:34:005418Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—We were first of all asked to consider that we needed to sit this week. If you recall, Madam President, the Wik bill was not actually on the Notice Paper for this sitting. So the extra time that the Senate was required to sit to deal with the Native Title Bill—or the anti-Native Title Bill—was something that was extra to the program. It was not on the program; it was extra to the program. We asked, and the Labor Party asked again and again, whether or not the program was going to be available, but it was not available.I recall a number of examples in this chamber of Senator Harradine being asked to deal with a bill that he did not like. I am sure most honourable senators in the chamber can remember the times when Senator Harradine was asked, especially at the end of a session, to deal with a bill which he did not like. Some bills have gone off the agenda through this session—they have just disappeared.I wonder whether the government wanting to put through a bill is the issue here. What is the issue here? It is certainly not urgency—that has clearly been shown. The issue is not urgency. No argument has been made here that the bill has to be passed by a certain date. The only potential argument is political self-interest. I am sure no senators could honourably say that this Senate should ask to keep back the staff—senators' staff and House of Representatives' staff. Potentially, the Senate cost alone would be: air fares, $81,000; Comcar, $75,000; senators' travelling allowance, $55,000; senators' staff travel, $66,000; allowances, $75,000; and Department of the Senate staffing allowances, notice papers and journals, $50,000. That is a total of $402,000 for a bill that is not urgent and which will not be proclaimed until after an election. This does not even count the fact that, if the government want a bill through, they have to have the House of Representatives back as well, so you can at least double that cost. We are talking about the scandal of $1 million or more being used for a bill that is not going to be proclaimed.We had a huge scandal in Western Australia—the Dance scandal—involving a few hundred thousand dollars. That was important. That involved the government. But here we have a government, backed by Independent senators, that is prepared to spend a million dollars for nothing, not a single thing—all this for a bill that will not be proclaimed, has not got an urgent starting date and is not needed; a bill which the government said they were not going to deal with.So we have got a financial scandal of a $1 million plus simply to provide a pork barrel. Now is that honourable? Is that fair? Is that just? I would say it is not. Why have certain bills come on the agenda and why have certain bills gone off? It has nothing to do with the government saying that they should be on the agenda.I recall and agree that on occasions there have been migration bills which have been, I believe, unconscionable. I have joined with Senator Harradine in the past when governments—and it was the previous government—had certain migration bills at the end of a session and we believed that they were unconscionable and required extra debate within the community. I know that there have been occasions. We were all here on those occasions. I do recall Senator Harradine most lunch times coming in calling quorums every 15 minutes. People here will remember those occasions. I am not criticising that behaviour because I have also been involved in concern on bills that we believe should not have been rushed through at the end of the session.So it is not a precedent—that whatever governments do at the end of a session, if they want it, they should get it—because we all know that there are occasions when unconscionable bills should not be debated in the rush of the end of a session. We all know that has been a way in which governments have done the wrong things. If we get to the full part of this debate, I will give you the full reasons why this bill should not be debated in this time frame. I am happy to give that full conscious. Basically, we are being asked whether this is urgent. I will not support the motion for urgency because it is not and because it has not been substantiated in this debate. Question put: That the motion (Senator Ian Campbell's ) be agreed to.21:43:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative.5420Motion (by Senator Ian Campbell) proposed:That a motion relating to the days and hours of meeting and routine of business may be moved immediately and have precedence over all other business today until determined.Motion (by Senator Ian Campbell) proposed:That the question be now put. Question put.21:47:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative. Original question put: That the motion (Senator Ian Campbell's ) be agreed to. Original question put: That the motion (Senator Ian Campbell's ) be agreed to.21:50:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative.542121:53:005421Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That the order of the Senate of 2 July 1998, relating to the days and hours of meeting and routine of business for the remainder of the winter sittings, be varied as set out in the document circulated in the chamber.I also move:That the question be now put.QD4BROWNSenator Brown—Madam President, I raise a point of order. I ask that the clerk read the question so that we are aware of what we are debating.10000PRESIDENTThe PRESIDENT—The question first is that the motion be now put. That will be dealt with and then the clerk can read the motion. Question put.21:58:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative.DX5MARGETTSSenator Margetts—I move that so much of the standing orders be suspended—10000PRESIDENTThe PRESIDENT—There is a procedural motion that needs to be put.DX5MARGETTSSenator Margetts—Can I read it out first?10000PRESIDENTThe PRESIDENT—We have carried the closure and the next motion must be put.DX5MARGETTSSenator Margetts—If I may read it out, you will know whether or not—10000PRESIDENTThe PRESIDENT—The next motion should be put forthwith.DX5MARGETTSSenator Margetts—May I please read the sentence, then you will know what I am trying to say. It is `as would prevent me moving a motion that is to provide for debate on the motion moved by Senator Campbell.'10000PRESIDENTThe PRESIDENT—There is no provision for that. I shall put the motion moved by Senator Campbell. This matter follows pre cisely after the last motion. A contingent motion operates in different circumstances. There is no provision for debate on the motion in relation to which the motion has just been passed, and the motion should now be put.QD4BROWNSenator Brown—Madam President, I rise on a point of order. You did give a commitment that you would have the clerk read out the motion.10000PRESIDENTThe PRESIDENT—There is some doubt as to whether that is appropriate, but the clerk may read the motion.10001CLERKThe Clerk—The motion reads as follows:That the order of the Senate of 2 July 1998, relating to the hours of meeting and routine of business for this week, be modified to provide that:(1) On Thursday, 9 July 1998: (a) the question for the adjournment of the Senate not be proposed at 10.30 pm; and (b) if the Senate is sitting at midnight, the sitting of the Senate be suspended till 9.30 am on Friday, 10 July 1998.(2) On Friday, 10 July 1998: (a) the question for the adjournment of the Senate not be proposed at 3.45 pm; (b) the sitting of the Senate be suspended from 6.30 pm. till 7.30 pm; and (c) if the Senate is sitting at midnight, the sitting of the Senate be suspended till 9.30 am. on Saturday, 11 July 1998.(3) On Saturday, 11 July 1998: (a) the sitting of the Senate be suspended from 1 pm till 1.45 pm and from 6.30 pm till 7.30 pm; and (b) the question for the adjournment of the Senate not be proposed till after the Senate has completed its consideration of the Copyright Amendment Bill 1997, the Copyright Amendment Bill (No. 2) 1997 and the Telstra (Transition to Full Private Ownership) Bill 1998, but before that time a motion may be moved by a minister to suspend the sitting of the Senate till Monday, 20 July 1998 at 9.30 am.(4) On Monday, 20 July to Friday, 24 July: (a) the sitting of the Senate each day be suspended from 1 pm till 2 pm and 6.30 pm till 7.30 pm; and (b) if the Senate is sitting at midnight, the sitting of the Senate be suspended till 9.30 am the following day, except that on Friday, 24 July 1998, the sitting of the Senate continue till the Senate has completed its consideration of the bills set out in paragraph (3)(b)(5) The routine of business for each day shall be government business only, including the giving of government notices.(6) Notices of motion for the disallowance of a legislative instrument shall have precedence of government business on the day for which the notice has been given, or on such other day to which the notice has been postponed. Original question put: That the motion (Senator Ian Campbell's ) be agreed to.22:08:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative.Miscellaneous5423Motion (by Senator Ian Campbell) proposed:That intervening business be postponed till after consideration of government business order of the day No. 8, the Telstra (Transition to Full Private Ownership) Bill 1998.Motion (by Senator Ian Campbell) proposed:That the question be now put. Question put.22:11:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative. Original question put: That the motion (Senator Ian Campbell's ) be agreed to. Original question put: That the motion (Senator Ian Campbell's ) be agreed to.22:16:00The Senate divided. (The President—Senator the Hon. Margaret Reid)34Alston, R. K. R. Boswell, R. L. D.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. *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.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Cooney, B. 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. Sherry, N.West, S. M. Woodley, J.Abetz, E. Cook, P. F. S.Calvert, P. H. Bourne, V.MacGibbon, D. J. Conroy, S.Minchin, N. H. Stott Despoja,N.Parer, W. R. McKiernan, J. P.* denotes tellerQuestion so resolved in the affirmative.Bills5424r4825424Debate resumed from 13 May, on motion by Senator Newman:That this bill be now read a second time.10000PRESIDENTThe PRESIDENT—I call Senator Schacht.UI4RAYSenator Robert Ray—Madam President, can I raise a point of order before Senator Schacht begins? Could you reiterate to the chamber what the conditions are in regard to pecuniary interests in the Telstra bill? You did let us know once before, but I thought you might like to inform the chamber again before we started.10000PRESIDENTThe PRESIDENT—If anyone has any interest in this bill, any shares in Telstra, they may care to disclose them, but I would think they would all be disclosed on the register. This is still a matter that needs to be disclosed in the chamber and that is done when a senator speaks for the first time on the bill or when the vote is taken. I call Senator Schacht.22:19:005424Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—We have just seen in this last hour the most disgraceful performance by the government as they gagged through a procedural arrangement with no debate. I must say that, in my 11 years in the Senate, I do not think I have seen that happen before. I am surprised that someone such as Senator Harradine, who has always been a great advocate of the procedures and of the Senate as the house of review, would vote consistently to gag a debate over procedure matters. I only hope that this does not predicate that he has already done a deal with the government on the Telstra (Transition to Full Private Ownership) Bill 1998 .I must say that today we saw the scurrying around in the government benches as they did their deals. In fact today during the middle of a division, the Minister for Communications, the Information Economy and the Arts (Senator Alston) called Senator Harradine over when they were voting together. They chatted away.BH4HILLSenator Hill—That is a terrible thing to do, isn't it?4J4Schacht, Sen ChrisSenator SCHACHT—No. Unfortunately, for Senator Harradine, because he was attracted by the attention of Senator Alston, he did not realise that he voted against an opposition amendment that would have delivered $3 million of funding to fisheries in Tasmania. He was more interested in getting the latest word from Senator Alston than protecting the interests of his own constituents in Tasmania.H15CAMPBELLSenator Ian Campbell—Madam Acting Deputy President, on a point of order: it may not have been brought to Senator Schacht's attention, but we are debating the Telstra bill. He has been speaking for two minutes now and he has not even considered this. He seems to be highlighting the fact that he is a hypocrite for having voted continuously for gags during his term in government—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—Order! Senator Campbell—H15CAMPBELLSenator Ian Campbell—So I ask you to draw his attention to the standing order relating to relevance.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Campbell, firstly, you will withdraw that unparliamentary remark about Senator Schacht.H15CAMPBELLSenator Ian Campbell—The one about him being a hypocrite?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—That is the one.H15CAMPBELLSenator Ian Campbell—I withdraw it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Secondly, you know that there is no point of order. I call Senator Schacht.H15CAMPBELLSenator Ian Campbell—On the point of order, Madam Acting Deputy President: I would ask you to rule on relevance. Senator Schacht has spent two minutes talking about procedural motions and a bill that passed through this place today. I guess he is reflecting on a vote, so that is the second standing order he is flouting. I would ask you to rule that his speech should be relevant to the debate on the Telstra bill and that he should not talk about another bill or a procedural vote of this place.4J4Schacht, Sen ChrisSenator SCHACHT—On the point of order: I would have thought it was quite relevant to talk about the way the Telstra bill was brought into the Senate tonight, after unprecedented gagging arrangements—AW5CARRSenator Carr—Three times.4J4Schacht, Sen ChrisSenator SCHACHT—Yes, three times. There was no debate on any of the matters—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Schacht, what is your point of order?4J4Schacht, Sen ChrisSenator SCHACHT—My point of order is that it is quite relevant to talk about the process of how this bill was brought on in the Senate, and I think it is quite relevant to talk about it in a speech on the second reading.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—There is no point of order.4J4Schacht, Sen ChrisSenator SCHACHT—I was explaining the unprecedented way this bill was brought on. When the contingency motion was moved by the Manager of Government Business in the Senate (Senator Ian Campbell), a number of speakers on this side of the House spoke against it. They all pointed out that there is no urgency for this bill because, if it is carried, according to the Prime Minister (Mr Howard), if you can trust his promises, it will not be proclaimed until after the next election, if he wins the election.There is no urgency. The only urgency has to be a political deal between the forces in the coalition, and we have also been accused of filibustering other bills so this bill would not be brought on. For the last 2½ days, this bill was dropped to the bottom of the Senate red. It was not brought on for a very simple reason. As we saw in one division, Senator Alston came sprinting in from a cabinet meeting, sat down next to Senator O'Chee and showed him a document from cabinet obviously about some arrangement for funding in the bush. That was what was going on.Until Senator O'Chee, Senator Boswell and the other National Party senators gave Senator Alston the tick, he was not game to bring the bill on. In the end, they did their deal, of which only a minor part was announced today—there will be more announcements in the next few days by two-minute Tim, the Deputy Prime Minister of Australia.EU4O'CHEESenator O'Chee—On a point of order: it is quite unparliamentary to use anything other than the appropriate phrase to refer to the Deputy Prime Minister. Senator Schacht knows that. It is just part of his inflammatory remarks, and I suggest that it be withdrawn. In fact, I insist it be withdrawn.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Schacht, could you refer to our parliamentary colleagues by their proper name, please.4J4Schacht, Sen ChrisSenator SCHACHT—Thank you, I will, Madam Acting Deputy President. The Deputy Prime Minister (Mr Tim Fischer) today took over the press conference of the minister for communications when they announced the analog decision. You have never seen a more pathetic spectacle on the television screen. The Deputy Prime Minister was standing there telling the minister for communications, `Hold the mobile phone, Richard. This is what it looks like. This is what one of the new phones looks like.' Every time Richard, the minister for communications—Mr Fischer called him Richard—was asked to say something, Mr Fischer would interject. It was a pathetic performance. It gave no information about the detail of the new mobile telephone system, but that is supposed to be the first arrangement. Mr Fischer said that tomorrow he will give the first chapter of what the bush is going to get.Before I get to the actual deal that may be speculated about, I also want to draw attention, particularly Senator Harradine's, to advice that Senator Lees and I have received from the Clerk Assistant (Procedure) in the Senate, Rosemary Laing. This is a letter that has already been made freely available to the press, as these letters are entitled to be. It talks about what we are dealing with—legislation that will be carried and then proclaimed at an unnamed, unstated date some time after the next election. The letter, which I will seek leave to table later on, says:These provisions effectively provide for the open-ended commencement of the major policy decision contained in the Bill.There has long been parliamentary disquiet about this kind of open-ended commencement provision because it hands a blank cheque to the executive to determine whether the legislation passed by the Parliament is actually going to come into effect.In my 11 years here, Senator Harradine has consistently argued about process, about protecting the powers of the Senate, that issues come in here to be voted on and that you do not hand power off to the executive. The Clerk Assistant (Procedure) has made it quite clear that, if Senator Harradine votes for this bill, he is going against the procedures of the Senate. In fact, the Senate passed a motion in 1988 requiring the government to table a list of acts or provisions of acts which remained unproclaimed, together with explanations for the failure to proclaim them. (Quorum formed)What has been put forward here is unprecedented. It is not an urgent bill. If the Prime Minister is actually fair dinkum and is telling the truth, there is no reason for this bill to be put into place now. If the Prime Minister wins the next election, he will then claim his mandate, have the debate and put it through. I think we now know why he has put this proposal forward. There are two reasons we know of as to why this proposal came out of the blue back in the middle of March. There was no cabinet decision. There was no cabinet document from the minister for communications or any other minister proposing the full sale or the privatisation of Telstra. It was done off the cuff by the Prime Minister in time for the national convention of the Liberal Party to take the attention away from the grave difficulties Senator Parer found himself in over his conflict of interest. That was the first and only reason the Prime Minister came up with this stunt. It was to turn attention away from his own political difficulties.The next reason this is now capturing the Prime Minister's attention is in view of the holocaust on the National Party in Queensland at the last state election. Since the Queensland election, there has been not only in Queensland but right across Australia a range of public opinion polls that show that One Nation is going to take the baseball bat to the National Party in rural Australia. The Prime Minister realises he has a better chance of getting this bill through now under the present numbers in this Senate, even if he squeaks back into office after the next election. I think the way the polls are showing at the moment there will be a clear-cut majority by Kim Beazley at the next election. (Quorum formed)The Prime Minister wants this bill to go through so that, if he scrapes back into the parliament with a very small majority at the best for him and a Senate that will be significantly different, he will be able to proclaim the bill. I think what he is now facing, which all the opinion polls show, is that there is a real chance that, after the next election, if it is not a clear-cut majority with a Beazley Labor government, it will be a minority Howard government with One Nation House of Representatives members sitting on the crossbenches in the House of Representatives, replacing National Party House of Representatives members. It will be a minority government, but he will still be able to proclaim the bill.LD4ALSTONSenator Alston—Mr Deputy President, I raise a point of order. How could Senator Schacht's ramblings about One Nation and National parties and all sorts of press conferences have even the slightest thing to do with the debate on the Telstra bill?4J4SCHACHTSenator Schacht—On the point of order: I was outlining the political background of why the Prime Minister, in fear and loathing, has brought this legislation forward. That is an absolutely relevant thing to talk about in the speech on the second reading of this bill.LD4ALSTONSenator Alston—There is nothing in the bill about motivation. This bill is about the principle of privatisation. We know the Labor Party are dead scared because in government they privatised everything that moved, and we know Mr Beazley has said time and again that he is in favour of privatising Telstra. That is what the issue is about, not all this other nonsense.DT6BARTLETTSenator Bartlett—On the point of order: in relation to the first part, obvious the only reason we are debating this bill tonight is One Nation and the government's fear of it. In terms of the second part, I would ask you to rule Senator Alston out of order on a spurious point of order.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Chapman)—You are out of order, Senator Bartlett.Senator Brown interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I am ruling on the point of order; I do not need any further help, Senator Brown. It has always been the practice for speeches on the second reading to range fairly widely; nevertheless, Senator Schacht, you should make sure that your comments are relevant to the bill. I will listen carefully to the comments that you make.QD4BROWNSenator Brown—Mr Acting Deputy President, I raise a point of order: I would ask you to rule on the point of order made by Senator Alston whereupon he entered, having not been in the chamber during Senator Schacht's full delivery—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I have ruled on the point of order, Senator Brown.QD4BROWNSenator Brown—No, this is a new point of order. You could not have ruled on the point of order I am making now, which is that, in the a request for a point of order, he entered into a lengthy debate himself. And that is quite out of order, as you know, Mr Acting Deputy President.LD4ALSTONSenator Alston—On the point of order: I take the strongest exception to the proposal that I was not in the chamber during Senator Schacht's speech. Unfortunately, I have had to listen to every word of it.4J4SCHACHTSenator Schacht—That is not a point of order. The minister is not making a comment on any section of standing orders at all.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I might suggest that each of the points of order raised and the other comments in relation to those points of order have been frivolous. I would remind senators not to raise frivolous points of order. Let us get on with the debate.4J4Schacht, Sen ChrisSenator SCHACHT—So we know why the Prime Minister brought this bill on. Secondly, we know why the National Party had to be bought off—because of the fear and loathing amongst the National Party members out in the bush, knowing they are about to be decimated on this issue and a number of other issues; because of their abject failure over the last 40 to 50 years to deliver any economic good, any economic benefit, to the people who have loyally voted for them. That is why One Nation is now taking baseball bats to them—as the former Premier of Queensland once described, unfortunately, the Labor Party in Queensland at the last federal election. The baseball bats are now out in the bush against the National Party.Now we know there has been a deal done. It has not been announced in time for this debate. While some amount of money might get announced tomorrow when the Deputy Prime Minister is wandering around somewhere in rural Australia, there will be no detail. Other detail will be held back until the actual election campaign. I do not know how you can ask senators to support a bill when the details—the deal that you have had to do—will not be available to the rest of the Senate. It has been done in private. It has been done in private, I presume, with the Independent senators; it has been done in private with the National Party. People are being asked to vote here, sight unseen, on the most important issue of privatisation this country has ever faced—the privatisation of Australia's biggest, most profitable and most successful company that provides over 90 per cent of telecommunications services to all Australians. It is no wonder the bush is up in arms. I happened to read the West Australian newspaper yesterday that said a survey of the Pastoralists and Graziers Association of Western Australia—I would have thought that if there was one Labor voter amongst them that would be a generous estimate—found that 91 per cent of pastoralists and graziers were opposed to the privatisation of Telstra. So the bush is in flames over this issue. But the dopey members of the National Party have done a deal, have been bought off and have sold out their constituents.When the issue comes up in the coming election in the next two or three months, we in the Labor Party will enjoy going around the bush pointing out how the National Party, for a start, sold out to the Liberal Party. Why doesn't the National Party surrender now and merge with the Liberal Party and get the job over with? That is why those voters are going—in many ways in a misguided way—off to One Nation. They are sick and tired of the National Party and rural Liberals who have sold them out.Since the Prime Minister announced this decision for the full privatisation of Telstra in mid March of this year, in the first week every political commentator said, `What a genius. What a brilliant move. What a stunning move by the Prime Minister.' It will get him back on the front foot because the hapless Warwick Parer was destroying the government's reputation. But every published opinion poll taken since then—no matter where in Australia, whether nationwide, city wide, state wide, by margins of two to one or three to one—has shown that ordinary Australians totally oppose the further privatisation of Telstra. But this government, for ideological reasons, wants to go ahead with this.Senator Alston interjecting—4J4Schacht, Sen ChrisSenator SCHACHT—We hear the Minister for Communications, the Information Economy and the Arts interjecting. He is a doormat for the Prime Minister. He did not even know the Prime Minister was going to announce the decision at the national conference of the Liberal Party in Brisbane.LD4ALSTONSenator Alston—Oh really!4J4Schacht, Sen ChrisSenator SCHACHT—Absolutely.LD4ALSTONSenator Alston—You mean I wasted my time talking to him all that time.4J4Schacht, Sen ChrisSenator SCHACHT—You did not even put a cabinet submission in. There was no cabinet submission. There was no cabinet discussion.LD4ALSTONSenator Alston—That is true.4J4Schacht, Sen ChrisSenator SCHACHT—That is very true, because the Prime Minister, off the cuff, decided to take the decision.LD4ALSTONSenator Alston—Absolutely untrue.4J4Schacht, Sen ChrisSenator SCHACHT—That is typical of the process of this government on most things it tries to handle. There is no process. It is done on the run, off the cuff, trying to get over difficulties this government has in the wider community.One of the major arguments this government uses in favour of privatisation is to reduce national debt. I just want to point out that, on present indications, if Telstra is privatised and a further $40-odd billion is raised and is used to substantially pay off public debt—although I think because of negotiations we now are seeing more of it going sideways into carpet bags to pay off various sectional interests in the bush or anywhere else—it is true that if you take the current bond rate of around six per cent, assuming a reduction of public debt of $40 million, the interest saving would be around $2.4 billion, six per cent of the $40 billion.A number of independent financial analysts, who are in favour of privatisation, by the way, have projected that Telstra's dividend will grow at around 15 per cent per annum. That means that by the year 2002 the dividend to the Commonwealth government should exceed $2.4 billion. That means that by selling the rest of Telstra the government will benefit for the first four or five years but after that it would lose the dividend forever, because no-one anywhere in telecommunications will say that Telstra will be anything other than an increasingly profitable company.One of the things we have seen in the last two years from the impact of privatisation is that 27,000 people have been sacked from Telstra. Telstra have admitted at estimates committees that that saves them each year and every year thereafter $600 million of costs. Where is that going? Under the government's proposal that will go to the lucky shareholders. There may be one million of them. There may be 1½ million of them—35 per cent of them will be foreign. But the rest of Australia's 17-odd million people will dip out and not get anything, and in five years time they will be behind because of this government's decision.The communities will have to pay the cost of the impact of the social distress of 27,000 people being sacked, but the $600 million will go towards dividend payments. You would have thought at the very least that the $600 million would in the future, by way of dividend, go back into the public purse, not just for three or four years but every year thereafter. So when the minister announces in the next day or so that he may spend up to $1 billion extra on rural telecommunications, we ought to point out that $600 million alone is coming from the sacked 27,000 workers.We also ought to point out that every year in the bush Telstra, as stated in their annual report, are spending over $800 million on capital works. So any amount of money—$100 million here or $200 million there—is going to be insignificant for the long-term needs of telecommunications in this country. We argue that while Telstra will supply over 90 per cent of telecommunications in Australia—and in rural areas up to 100 per cent for the foreseeable future—it is better to have that in public ownership so the public, through their elected parliament and elected government, can argue how Telstra should plan and provide the services.We have seen what will happen to all the minister's promises about increased customer service guarantee when only last week a report came out on the monitoring from the Australian Telecommunications Authority. In the first 12 months of one-third privatisation, across the board services in the bush went down between 10 and 20 per cent from connecting times to reporting of fixing of faults. No wonder people in the bush do not trust this government and its promises that it will fix up the customer service guarantee and be able to cater for that when it is fully privatised.What did we see two days ago in Darwin? Frank Blount, the Chief Executive of Telstra, warned the government—and, in one sense, I appreciate his honesty—that they cannot take money out of Telstra for social needs or fiddle around with it because that would affect profit and commercial viability. We make no bones about it in the Labor Party that when this organisation is providing 90 per cent of communications to ordinary Australians we do want to be able to say to that organisation, and will say, `You will do certain things in the public good.' This minister has never told Telstra to fix it up. The ERCA committee, of which I am a member, has been dealing with these dreadful CoT cases; Telstra has dealt with them for the last couple of years. Even today we had to have a special private meeting with Telstra to try to find a resolution.LD4ALSTONSenator Alston—It doesn't sound too private if you're blabbing about it.4J4Schacht, Sen ChrisSenator SCHACHT—We had a case where Telstra had been told by the court to pay a Mrs Garms, a close friend of Senator Boswell, $300,000. This minister refused to back the court.LD4ALSTONSenator Alston—Mr Acting Deputy President, I rise on a point of order. Is this abuse of the parliament for Senator Schacht to be disclosing the deliberations of a private meeting?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Chapman)—There is no point of order, Minister.4J4Schacht, Sen ChrisSenator SCHACHT—I have not disclosed anything about that private meeting and will not. I have disclosed to you, Minister, what took place in the estimates public hearings. You even wrote a letter to Telstra saying, `Pay Mrs Garms the money.' What did Telstra do? They ripped it up and threw it on the floor. You could not even get them to pay the money. That is how weak and spineless you are. 10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Schacht, please address your remarks through the chair.4J4Schacht, Sen ChrisSenator SCHACHT—Through you, Mr Acting Deputy President, that is how weak and spineless this minister is in dealing with Telstra. He will not lift a finger—except that we got this announcement today that the Telstra board have made a commercial decision over the new mobile phone system. Of course, this was to get the government off the hook. This decision was made by management who favour privatisation so they are going to do this deal. But the point is that even that would not have been done if Telstra had been fully privatised. A fully privatised Telstra would have told the minister, `Go jump! We are not going to put a new commercial mobile phone system in in Australia.' They would not have done any of it. They would have laughed at you as they have before. This is the most spineless, weak-kneed minister of communications we have had in this country. Telstra tramples on him all the time and ignores him.LD4ALSTONSenator Alston—But you would have stood up to them, wouldn't you?4J4Schacht, Sen ChrisSenator SCHACHT—Absolutely. That is the difference, Minister. You have no courage. You roll over and say, `I am not going to do anything to direct Telstra, even for the public good.' That is why we believe that Telstra must always be maintained in public ownership—so that people will benefit.22:46:005430Harradine, Sen BrianSenator HARRADINE6H4TASIND00—by leave—I claim to have been misrepresented by the previous speaker and pursuant to standing order 190 I would like to make a personal explanation. The immediate past speaker, Senator Schacht, mentioned that I voted in this Senate, inadvertently, against a proposal which he said would have meant $3 million going to my state. I did not vote against that proposition—a proposition that would have meant $3 million going to my state. In fact, I had—perhaps it is premature to express it—taken action with the minister which will satisfactorily mean that the money will flow to that particular fisheries situation.22:47:005430Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I rise to speak on this Telstra (Transi tion to Full Private Ownership) Bill 1998 because I believe that telecommunications are very critical to this country and no more critical than in rural areas. It is worth pointing out to the Senate—and I intend taking some time to develop this—just how important communications are in rural areas. I do have some experience of that. I remember some years ago driving in the outback down a road towards Urandangi. As many of you know, the summer heat in Queensland is quite extreme. As I was driving down the road I had a problem deciding whether I would put the window up and stop any breeze at all coming through the car or put the window down. If I put the window up I would stop the dust from coming in and choking me to death, but I would cook. Those are the kinds of conditions that one experiences in western Queensland, which do affect the communications that people have.At that particular time, out near Urandangi in Western Queensland near the Northern Territory border, which many of you have visited I am sure, the only communication was through the Royal Flying Doctor Service network. And that still obtains today. At the time I was part of the Royal Flying Doctor network and used one of their transceivers to communicate.So it was of great interest to me to hear that, through the Telstra (Transition to Full Private Ownership) Bill 1998 and the package that is going to be delivered, no doubt in the next day or two, we are going to be able to deliver communications in the bush at a much higher level of technical excellence—that is, if you can believe the announcements that this government makes. That is my problem. For example, just recently I had the very distressing experience of debating in this place the Social Security and Veterans' Affairs Legislation Amendment (Retirement Assistance for Farmers) Bill 1998 . In one's experience, one must compare what governments say at one point on some particular piece of legislation with what they deliver on that legislation to judge whether you can trust them to deliver on other legislation. I am talking about the Telstra bill. One finds it hard to know whether or not one can trust a government when their behaviour is really one of extreme provocation.I am glad Senator Newman is here because I want to talk about the farmers retirement bill, which is one that your office was involved in. I did not appreciate the blackmail that your office was involved in with respect to this bill.BE4NEWMANSenator Newman—On a point of order, can I draw attention to the fact that Senator Woodley is not only speaking quite dishonestly about previous negotiations but also he is discussing a previous piece of legislation and he is not adhering to the requirement to be relevant to the bill before the Senate.AW5CARRSenator Carr—On the point of order: I understood the senator's speech. I heard him to be discussing the government's integrity. That ought to be a very short debate; nonetheless, it is entirely relevant to the issues, given the assurances that have been given on this bill.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Chapman)—On the point of order, Senator Newman, it is not appropriate for you to accuse Senator Woodley of dishonesty. Equally, it is not appropriate for him to accuse your office of blackmail. I ask you both to withdraw those comments.BE4NEWMANSenator Newman—I withdraw, and I trust the priest present will do the same.HX5Woodley, Sen JohnSenator WOODLEY—I will try to find another word to replace `blackmail'.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Withdraw unqualifiedly, please, Senator Woodley.HX5Woodley, Sen JohnSenator WOODLEY—I will try to find another word.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I do not want you to try to find another word. I have asked you to withdraw unqualifiedly.HX5Woodley, Sen JohnSenator WOODLEY—I will try to find another word.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Woodley, I did ask you to withdraw the word that you used.HX5Woodley, Sen JohnSenator WOODLEY—I withdraw the word `blackmail'. Now I have to try and find another word which will replace that because what I am describing—N26ABETZSenator Abetz—You cannot give a speech which is parliamentary, can you?HX5Woodley, Sen JohnSenator WOODLEY—I am not sure what Senator Abetz said, but I think it is important that he stay and hear what I am saying on the Telstra (Transition to Full Private Ownership) Bill 1998. We are apparently projecting some legislation which the government will proclaim after the next election. The problem is, even if we deal with this legislation and make some determination on it, how are people to know whether or not it is going to be proclaimed after the election? I am talking about the problem that people in the bush and in every community in Australia have in understanding whether or not this government will actually deliver what it says it will. There is a problem with this very bill. In a sense, if it is not going to be proclaimed, the Telstra (Transition to Full Private Ownership) Bill 1998 is a hypothetical piece of legislation.I have to use what happened to an actual bill to illustrate what will happen with a hypothetical bill if the government does not proclaim it. That is the problem I have. It is particularly relevant to the bush. This is the problem. I have travelled thousands of kilometres in western Queensland in the last 30-odd years and I will continue to do so. If I go and talk to them about the Telstra (Transition to Full Private Ownership Bill) 1998, I will have to say, `We have this hypothetical legislation which, after the next election, may be proclaimed by the government. If it is proclaimed and is sold, there may be a dividend which will deliver some benefits to people in the bush. However, you have to take into account what this government actually does with real legislation.'Last year, I think it was around September-October, the Minister for Primary Industries and Energy (Mr Anderson) announced his triple A package. At the time, he said that the retirement benefit should help about 10,000 farmers. The Democrats, and I think all of us, agreed with the policy. It was a very good policy. There was absolutely no problem whatsoever with that. It was an excellent policy and we agreed with it. It was an nounced that about 10,000 farmers would be helped. We then came to a hearing of the rural affairs committee and we discovered that the 2,000 farmers had become 2,100 farmers over three years.BE4NEWMANSenator Newman—You are dishonest.8O6O'BRIENSenator O'Brien—Mr Acting Deputy President, that was an unparliamentary remark by the minister and I ask her to withdraw it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Minister, that is an unparliamentary remark.BE4NEWMANSenator Newman—I withdraw it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Woodley, as I said earlier, second reading debates do tend to be fairly wide ranging, but I think you are going beyond the bounds of relevance for a speech on the second reading debate. I ask you to make your remarks more directly relevant to the bill.N26ABETZSenator Abetz—Why can't you speak about the benefits of this legislation?HX5Woodley, Sen JohnSenator WOODLEY—I do appreciate the interjection of Senator Abetz.Senator Ian Macdonald interjecting—HX5Woodley, Sen JohnSenator WOODLEY—I can only deal with one interjection at a time, Senator Macdonald. If you will wait, I will deal with Senator Abetz and then I will—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Woodley, perhaps you should ignore the interjections. That might be more appropriate.HX5Woodley, Sen JohnSenator WOODLEY—I thought they were adding something to the debate.YW4MACDONALDSenator Ian Macdonald—You are a disgrace to your profession.HX5Woodley, Sen JohnSenator WOODLEY—I beg your pardon, Senator Macdonald. I do take objection to that.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Macdonald, that is an unparliamentary comment.CX5MACDONALDSenator Sandy Macdonald—I withdraw it.HX5Woodley, Sen JohnSenator WOODLEY—Thank you. In seeking to promote the benefits of this hypothetical Telstra (Transition to Full Private Ownership) Bill—I think there may be hypo thetical benefits as well—in western Queensland, one of the problems will be the credibility of government promises. The government has promised—Senator Abetz, this is why I am dealing with your interjection—to deliver a number of benefits, called a `social bonus'. It is very important that people should be able to really trust that this government, if they are still in place after the election, will proclaim the bill and deliver that social bonus. But can people really trust that that will happen?N26ABETZSenator Abetz—We all know about Cheryl Kernot.HX5Woodley, Sen JohnSenator WOODLEY—We know about Cheryl Kernot! Perhaps I should not cast aspersions on former Senator Kernot; she is not here to answer. The problem with the farmers retirement bill is that eventually we discovered that there were 500 farmers who would be helped.When the Democrats—in response to the National Farmers Federation, Lifeline in Toowoomba, a number of rural counsellors and a whole lot of submissions which were both made through the inquiry which we held and later to me—tried to amend that bill so that it would be something like what the government was promising, I had a most amazing experience. In my office we began to get phone calls from farmers. I then received a letter from Senator Newman which explained what was going on, that is, if we moved any amendments to make that bill fit what the government had promised, the government would take the bill off the Notice Paper and tell the farmers that the Democrats were to blame for the fact that they were not able to get their benefit and that they would miss out. I had a number of calls from these farmers. They phoned me regularly, in tears, to say that—YW4MACDONALDSenator Ian Macdonald—Name them.HX5Woodley, Sen JohnSenator WOODLEY—I do not have the names here, but I would be happy, Senator Macdonald, because I have the letters in my office, to get them tomorrow and table them.I said to them, `Where did you get the information that the Democrats are going to stop you from getting your retirement?' They said, `We have been talking to Senator Newman's office.' I thought that was very curious. It was very curious that, when the Democrats tried to make the government fulfil its promise, the government used farmers who are in very dire circumstances to try to force the Democrats not to move any amendments. I talked to the various farmer organisations, and they said, `We don't think there are very many farmers at all who will qualify.'I had a phone call this morning—I am sure he will not mind my using his name—from Lex Buchanan, who is President of the Queensland Farmers Federation. He told me that he is outraged by the bill which finally passed. The Democrats certainly wanted to help those few farmers to whom the bill could apply. He was outraged that the government—BE4NEWMANSenator Newman—There were 2,100, as always intended.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Chapman)—Order! Senator Newman.HX5Woodley, Sen JohnSenator WOODLEY—I do not mind how many times you interject.BE4NEWMANSenator Newman—You might learn eventually.HX5Woodley, Sen JohnSenator WOODLEY—You might learn, Senator Newman. In any case, Lex Buchanan from the Queensland Farmers Federation said that he was outraged by the fact that the government had not been prepared to consider or even debate the Democrats' amendments. We had some comments before about democracy. I do not think they even know how to spell it, let alone practise it. In any case, Mr Buchanan said that he was certainly going to make sure that farmers throughout Queensland, rural counsellors and the rest know that the government would not debate the amendments which the Democrats tried to move. They will put pressure on this government to fulfil its promise.N26ABETZSenator Abetz—Have you got something to say about Telstra?HX5Woodley, Sen JohnSenator WOODLEY—Yes, I am getting to that, Senator Abetz. The problem is that I have to go to the farmers this time and say to them, having taken the government at face value, `There is a hypothetical piece of legislation called the Telstra (Transition to Full Private Ownership) Bill 1998 —10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I am glad you are returning to the bill, Senator Woodley.HX5Woodley, Sen JohnSenator WOODLEY—Yes. Thank you, Mr Acting Deputy President. You have been a real help in this whole debate in pulling me back. I know that I do tend to be a bit expansive and you are helping. I appreciate that—it ought to be acknowledged. You and I have at times had a few altercations, but you have been very helpful.If I go to people and say to them, `Look, there is a social bonus like the bonus which was promised under the farmers retirement bill. It is the same kind of bonus. It will be hundreds of millions of dollars. It is going to be a great thing,' we might find that, after the election, if we use the same scale I used before, that becomes less and less. They can only go on previous experience. They are not able to operate on a hypothetical promise. I think farmers in Queensland are becoming pretty cynical. That is why they voted the way they did in the Queensland election.N26ABETZSenator Abetz—They didn't vote Democrat, did they?HX5Woodley, Sen JohnSenator WOODLEY—No, they voted One Nation, Senator Abetz. I thought you had heard that or read the paper, but I guess Tasmania is a long way from Queensland. They sure voted for One Nation rather than the National and Liberal parties in Queensland.YW4MACDONALDSenator Ian Macdonald—How did the Democrats go?HX5Woodley, Sen JohnSenator WOODLEY—We did not do very well, Senator Macdonald. I do not mind admitting that. I have to tell you that we did not lose as badly as the—N26ABETZSenator Abetz—You did not lose any seats?HX5Woodley, Sen JohnSenator WOODLEY—No, we did not actually. But, anyway, let me get back to the Telstra (Transition to Full Private Ownership) Bill 1998 because I know that the Acting Deputy President may have to draw my attention to the bill we are discussing.The problem is: how am I going to go to farmers in Queensland and say to them, `There is a social bonus that will accrue to you from the sale of Telstra because this government has promised it. It has put up this hypothetical legislation and, after the election, it is going to be proclaimed and you are going to get all these millions of dollars worth of benefits'? They will say to me, `Oh, yeah. Are we going to divide those millions of dollars by the same proportion—10,000 being reduced to 500?' As Lex Buchanan said to me this morning, we could not find anyone in Queensland who would benefit. I am sure there must be some farmers in Queensland who will benefit. I hope there are because that is about the only experience that they will be able to convey which says this government actually delivers. I do not think farmers in Queensland because of their experience will be able to really believe that there will be a social benefit or a social bonus from the Telstra bill.It is hypothetical legislation because it is not going to be proclaimed until after the election. It is hypothetical legislation which is based on a promise but which the farmers in Queensland say from experience does not have any substance. That is the problem.I am sorry Senator Harradine has gone because I had a proposition to put to him that would have helped us all. The proposition I had to put to him was that we could all go home by dinnertime tomorrow. I am sure you want to hear that. All we really need to know is that Senator Harradine is going to vote against this bill, as he promised in 1996. If he tells us that, then that would enable us to know how the vote is going to go and—N26ABETZSenator Abetz—Have the Democrats ever changed their mind on an issue?HX5Woodley, Sen JohnSenator WOODLEY—No, we never have on this one.QD4BROWNSenator Brown—On a point of order, Mr Deputy President: I think that is a very important opportunity that the senator has offered Senator Harradine. I draw your attention to the state of the house so that he will have time to come and listen to what else there is to say. (Quorum formed)HX5Woodley, Sen JohnSenator WOODLEY—That is the offer I make to Senator Harradine. We could by lunchtime tomorrow finish the second reading debate and then debate the rest of the bill at a more appropriate and proper time. I do not know if Senator Harradine feels that that is an appropriate offer to make, but it seems to me that that would break the whole problem that we have got here in seeking to deal with this legislation. (Time expired)23:12:005434Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The Telstra (Transition to Full Private Ownership) Bill 1998 unequivocally and unashamedly relinquishes government control of yet another national asset. With the release of the Telstra reign comes a reduction in accountability and a reduction in the ability of the government to produce socially desirable outcomes. In the endless pursuit of debt reduction and budget surplus, the government once again is turning a blind eye to social and economic realities. The competitive realities are that the government is turning a blind eye to the fact that the telecommunications industry is not even close to being truly competitive. Its few tinkering amendments will not do the job. Privatising Telstra is likely to retard any move towards a competitive market. So the assumed gains from increased competition are highly questionable.The government is turning a blind eye to Australians and Australian values of quality of life and a fair go for all. The government is rubbing salt into the wounds of the people in the bush. The government is turning a blind eye to the fact that the sale of Telstra is highly questionable on economic grounds. The sale of Telstra on the current valuation of $40 billion would not produce a net economic benefit. Indeed, the more the government filibusters about the rural compensation package or the social bonus, the less debt is retired, the more interest is paid and the sale is even more an economic farce. The government is turning a blind eye to the fact that accountability to shareholders and accountability to customers are not always compatible, and we know it.What is the philosophy? The sale of Telstra neatly fits into the general coalition philosophy—the old less is more philosophy or the old no economic management is good economic management philosophy. They cannot get rid of the reins fast enough, it seems. The coalition have trotted out their hands-off philosophy both domestically and internationally, backed up by their unwavering belief that the market will deliver the pot of gold. They have a lot in common with former Prime Minister Keating in that regard. No matter if the pot of gold comes to only certain money speculators, multinational corporations and the like, the pot of gold is at the end of the rainbow of deregulation and privatisation, just you wait and see.The sale of Telstra is much more than just any other piece of the family silver being flogged off. Although it fits very neatly with the stampede towards privatisation through competition, the sale of Telstra plays a much more strategic role. The sale of Telstra allows the Treasurer, Mr Costello, to continue his facade that his economic policies are sound and it allows the Prime Minister (Mr Howard) to pork-barrel his little heart out in the lead-up to the election.Mr Costello has been smirking away as the media have fallen hook, line and sinker for his self-professed title of `good economic manager'. His rhetoric hit an all-time high during this year's budget when he was boasting about getting the house in order and getting the economic fundamentals right. Mind you, that was a time when those in rural and regional Australia were beginning to yell the loudest.Flogging off Telstra is an integral part of keeping up appearances. The sale of Telstra is just another entry in the budget accounting journal so the figures can bedazzle the media and attract a few pats on the back. As long as all the economists are smiling and the media continue to be hypnotised by a nice bottom line and there is a textbook tick from financial and economic commentators, the Treasurer can build up the rhetoric.Despite the fact that the current account deficit has blown out dramatically to $7.5 billion, despite the fact the Aussie dollar has hit the lowest point against the greenback in 12 years, despite the threat of an interest rate rise, Mr Costello is still parading the crown of a good, economic—YW4MACDONALDSenator Ian Macdonald—On a point of order, Mr Acting Deputy President: I draw your attention to standing order 187. To help you, I will read it:A senator shall not read a speech.I have been watching this senator now for four minutes solid and she has lifted her eyes once or twice but, quite clearly, she has got a set of notes and she keeps reading them. Mr Acting Deputy President, if this senator cannot debate this bill without reading a prepared text, she should not be speaking.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Chapman)—Senator Macdonald, I have enough information to rule on the point of order. I remind Senator Margetts that it is inappropriate to read a speech. She may have copious notes to which she is referring, but I just advise her to stick by the standing orders.DX5Margetts, Sen DeeSenator MARGETTS—Thank you, Mr Acting Deputy President, I am indebted to you. I would just like to point out that there are—Honourable senators interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order!DX5Margetts, Sen DeeSenator MARGETTS—Thank you, Mr Acting Deputy President. I would like to point out that there are facts and figures that I am quoting from, so I would like to get it right.Senator Ian Macdonald interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order!DX5Margetts, Sen DeeSenator MARGETTS—Australians may justifiably be puzzled why their dollar has slumped to near banana republic levels. The CAD, the current account deficit, is ballooning while their national economy is supposed to be humming along nicely. Would you say that the tag of good economic management is correct? I would say no. This bill epitomises the poor economic policies pursued by the coalition.Honourable senators interjecting—DX5Margetts, Sen DeeSenator MARGETTS—Is it good economic management to simply relinquish controls over levers that ensure equity and access for all citizens to the changing telecommunications industry in the future? Is it good economic management to endlessly pursue debt reduction regardless of whether the economic, social or environmental fabric of the nation is at risk?In the contents of the bill, we see that the government is attracted to privatisation as it provides a nice cosmetic effect on the budget balance in a handy little slush fund. A healthy bottom line is an obvious benefit to the government.YW4MACDONALDSenator Ian Macdonald—Now, you are not reading, are you?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Order!DX5Margetts, Sen DeeSenator MARGETTS—Mr Acting Deputy President, I would just like your assistance. I do not know if I should look at Senator Macdonald. I have looked at the chair but I am not sure that there is a standing order that says I should look at Senator Macdonald.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I suggest you address the chair, and I will control the chamber. Thank you.DX5Margetts, Sen DeeSenator MARGETTS—Thank you, very much. What are the economic benefits? It is important to note that the Office of Asset Sales refused to divulge to the committee crucial figures used in their calculations of the economic benefits. In particular, it was pointed out in the minority report that the estimated future dividend flows were not disclosed, on the basis that it would not be in the financial interests of the Commonwealth.YW4MACDONALDSenator Ian Macdonald—You are reading every word.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order!DX5Margetts, Sen DeeSenator MARGETTS—Obviously, the concepts of transparency, accountability and systematic analysis were not considered important by the government in this case, despite all the filibustering about the Charter of Budget Honesty. At the end of the day, there is no way to definitely determine wheth er the sale of Telstra will produce net economic benefits.The government's economic arithmetic bandied about in the press, however, has been strongly disputed. The first error in the government's projections is the calculation in interest savings on government loans. These estimations have been severely questioned. The government calculation of $4 billion worth of savings on interest repayment is more accurately estimated at $2.5 billion per annum. If you stack this interest saving against the ongoing losses, the hope of net economic benefits is nothing to be enthusiastic about. The sale of Telstra will, in fact, generate losses.YW4MACDONALDSenator Ian Macdonald—How? How?DX5Margetts, Sen DeeSenator MARGETTS—I will certainly be happy to tell you: first, public sector savings produced by profits of over $1 billion per annum, either paid into the Commonwealth or used as retained earnings by Telstra to finance investments—RD4BROWNHILLSenator Brownhill—Look at the amount of debt that will be retired.DX5Margetts, Sen DeeSenator MARGETTS—Mr Acting Deputy President, I was interjected on but it seems the person who interjected doesn't actually want to hear the answer. Secondly, the loss of franking credits: the government does not claim franking credits but private shareholders, however, are sure to claim those credits.Professor Quiggin estimates that this will be a cost to revenue of $600 million, rising to $1.8 billion within three years, if Telstra's profits continue to grow at their current rate. Professor Quiggin has estimated that by 2007 Australia would have sustained a loss of $9 billion and beyond that time the loss will increase. For the glory of contributing to the sweet surplus for the pork barrel, Australia will lose a revenue stream that could contribute to any number of socially desirable outcomes in the future.Consequently, the Greens (WA) are of the belief that the government should heed the warnings that the sale of Telstra is likely to produce a net loss at the current valuation of $40 billion that has been tossed around. The opposition did not want to hear that. I have already asked the Minister for Communications, the Information Economy and the Arts (Senator Alston) a question without notice based on Professor Quiggin's questioning of the government's calculation of the economic benefits of fully privatising Telstra. During the partial sale of Telstra, Professor Quiggin argued that the attainable sale price of Telstra was undervalued.O15TIERNEYSenator Tierney—We discredited that two years ago.DX5Margetts, Sen DeeSenator MARGETTS—He was right.QD4BROWNSenator Brown—On a point of order—O15TIERNEYSenator Tierney—He's intervening on his own—QD4BROWNSenator Brown—No, I am not. On a point of order, Mr Acting Deputy President: it is rude, disorderly and against the standing orders for members opposite to interject. I ask you to stop them from continuing to interject, because we are hearing a dissertation here which is worth listening to.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Brown, I would expect this to be a robust debate. I have observed the fact that you have interjected on many occasions in the past against speakers from other sides as well. But I will try to ensure that the House stays orderly during this debate. I call Senator Margetts and I would ask those interjectors on my right to remain silent.DX5Margetts, Sen DeeSenator MARGETTS—As I was saying—when I was interrupted—to those people who are saying, `He was discredited two years ago,' Professor Quiggin was proven right; they were proven wrong. They can interject all they like, but that is the truth. The government chose to dismiss his evidence out of hand—and, I recall, were very rude to him during the committee hearing—when the events were played out. It turned out that Professor Quiggin was spot on; Australia has sustained a loss from the partial sale. Despite the fact that Professor Quiggin's estimates turned out to be dead right, the minister still decided to shove his head in the sand.The very warm response that I received from the minister was that, `The last thing I would do is treat Professor Quiggin as any sort of sensible economic analyst on this issue.' The good minister finished his answer with the exceptionally uncompelling evidence that retaining Telstra in public ownership `is simply quite contrary to economic orthodoxy around the world'. That kind of argument is not only exceptionally weak but also downright hypocritical in light of the Managed Investments Bill 1997 . As honourable senators will recall, in that bill the government paid little heed to the fact that the single responsible entity structure that they were championing was totally at odds with the rest of the world, including the OECD. But they did it anyway, putting at risk the money of mums and dads to the extent of $85 billion.Let us look at the social bonus. Details of the size and content of the nebulous social bonus are not available and are not intended to be available to the Senate before the bill proceeds. I am sure they will be available before the election. The social bonus smells a lot like the last slush heritage fund that was linked to the partial sale of Telstra. What happened to that?It is unconscionable that the government holds the funding of the environment or social programs to ransom. It is unconscionable that the government is trying to squeeze this bill through the Senate to foot the bill for the carrots it will have to wave in front of Australians to try to gain their attention—again. Greens (WA) refuse to be bullied by these self-interested, bullying tactics. Moreover, the social bonus—or bush bandaid—detracts from the retirement of public debt and thus from interest savings.Will competition produce lower prices? Will governments claim that consumers will benefit as a result of increased competition and lower prices? Indeed, in the preamble to this bill the government claims:. . . it does not make good commercial sense . . . for telecommunications companies to be owned by the Government.It seems the government has tunnel vision here in relation to what makes good commercial sense and what will increase competition. They continually espouse a simplistic dichotomy: publicly owned equals inefficient and uncompetitive versus privately owned equals efficient and competitive. They did not seem to notice that when I asked a question a couple of days ago about competition policy, looking at 75 per cent private ownership of supermarkets. Gosh, is that not competitive? No, it is not when you do not have antitrust laws. If you are saying that whatever corporate Australia wants or corporate international wants they get, that is not competition and it does not produce good outcomes for consumers either. But that does not seem to matter to the coalition.The continued use of this simplistic dichotomy blinkers the government's view as to what amounts to a rational decision in the national interest. Efficiencies and greater profitability have no necessary connection with private ownership. These gains come from sound management, technological advances and proper regulation.Telstra is, effectively, a monopoly. It has a 99 per cent market share of the local loop, an 85 per cent market share of international calls and an 80 per cent share of mobile calls. Telstra's competitors fear that a privately owned, profit driven Telstra would have the power and motivation to aggressively achieve a stronger monopoly position. Remember, Australia does not have the antitrust laws. The effect of privatisation would be to undermine the tenuous emergence of competition in the telecommunications sector. So we would actually be doing exactly the opposite of the stated goals.This has created job losses and a reduction in capital expenditure, which have occurred since the partial privatisation of Telstra—and that is very telling. Telstra freely admits that a significant cost cutting regime exists. What have consumers seen? I guess they have spent a lot longer on the end of the phone trying to get through. The government is arguing that the full sale of Telstra will bring `further efficiencies'. How do they define `efficiencies'? They also suggest that further competition will push down prices. That is not very likely when a near monopoly has very little market incentive to lower its prices.Over 17,000 jobs have been lost since the partial privatisation of Telstra. Not only are there severe economic flow-on effects for the individuals sacked but there are also signifi cant effects on the economy as a whole associated with unemployment—and we know it. In addition, employees who were lucky enough to keep their jobs are stretched beyond what is reasonable.Let us look at the equity for rural and regional Australia. The critical importance of telecommunications to the bush cannot be understated. The people of rural and regional Australia are seeing banks, shops and people desert their towns. Telecommunications become even more vital in those circumstances. Quality telecommunications services that are affordable provide a ray of hope for people in the bush as many other services abandon their communities. Telecommunications services can potentially fill the broadening abyss left in the areas of finance, education, health, trade and commerce.What about the universal service obligation? The USO is an explicit recognition that a profit driven telecommunications company will not naturally provide satisfactory service to all Australians. It is unlikely that the board of Telstra will take the universal service obligations lying down. The provision and payment of the USOs is directly against the profit based interests of the shareholders. We have seen evidence given to the committee that those people who do not like that included in Telstra want that to be taken as a separate item in the budget.What about customer service? Customer service under a partially privatised Telstra is on the downward slide already. Full privatisation would accelerate this trend. And accountability? Currently, the Telstra Corporation Act 1991 contains a provision in section 9 that allows the minister to issue written directions to the board of Telstra concerning the exercise of the powers of Telstra. The ministerial power was specifically provided so that the minister could protect the national interest. Obviously, in the minister's opinion, the national interest was never at risk, because the power has not been used. The government tried to repeal this direction in the partial sale bill, claiming that such a direction was inconsistent with a privatised Telstra. The same tired old argument is being used again to axe the ministerial power under section 9. That is how much they care about that ability to work in the public interest.What are the flow-on benefits for research? We know that Telstra has been at the forefront of research, and that is obviously going to go down the tube. I move:Omit all words after "That", substitute:(1) The Senate is of the view that the open-ended commencement of the sale provisions in the bill is an unacceptable political tactic which: (a) undermines the legislative function of the Parliament; (b) erodes the accountability of the executive to the Parliament; (c) is at odds with the Legislation Handbook and current drafting rules; (d) is inconsistent with the concerns expressed by the Senate with open-ended commencement provisions as long ago as 1988 and which are now reflected in standing order 139; (e) is at odds with the inclusion in the forward estimates in the 1998-99 Budget Papers of amounts representing Telstra sale proceeds; (f) potentially wastes significant public funds expended in legislative development and scrutiny to date; and (g) potentially wastes the time and resources of individuals and organisations who made submissions and gave evidence to the Environment, Recreation, Communications and the Arts References Committee's inquiry into the bill.(2) Further consideration of the bill be postponed until after the following reviews have been completed and the reports of the reviews tabled in both Houses of the Parliament: (a) the Digital Data Review under subsection 486(1) of the Telecommunications Act 1997 , as required by section 141 of that Act; (b) the investigation of AMPS Regional Coverage under subsection 510(3) of the Telecommunications Act 1997 ; and (c) the Australian Communications Authority inquiry on review of the Customer Service Guarantee.We have been told, `This bill is urgent; we have got to have it now,' and we have been told that the debate has to be gagged so that the bill can be passed. But three major re views have not been completed: the digital data review, the investigation of AMPS regional coverage and the Australian Communications Authority inquiry—all major functions. They are vital to the way the bill operates and vital to the consideration of the bill, yet we are not even given a chance to look at them before we are being asked to vote on the bill and the structure of the bill. I have to seriously question the integrity and the ethics of a government which tries a political swindle using the rhetoric of a mandate.Quite obviously there is a whole range of reasons why people vote for a particular party in an election. Maybe they could register a protest vote—there are all sorts of reasons—maybe they want to see tax reform proceed in a certain way, or maybe it is just the way they have always voted, but that does not mean to say they have voted for a particular bill. It is not only misleading but downright wrong to suggest that the government, should it be re-elected, suddenly has some kind of mandate to sell Telstra when clearly the majority of people in Australia do not want it. What kind of mandate is that? It is a false mandate. It is absolutely fallacious to assume that even half the electorate was thinking of Telstra when their vote was cast.It is as fallacious as the threat of a race based election if there were a double dissolution. The reality is that any election would be fought out on a number of grounds, and it is ridiculous to think otherwise. This kind of political jawboning completely distorts concepts of legitimacy and democracy. It is a deceptive and obstructive way to conduct important political debates in Australia.23:34:005439Carr, Sen KimSenator CARRAW5VICALP00—The majority—TH4KNOWLESSenator Knowles—This will be good!AW5Carr, Sen KimSenator CARR—Even you, despite the fact that you obviously had far too much to drink tonight. In fact, what you have here—LI4PATTERSONSenator Patterson—That is appalling.TH4KNOWLESSenator Knowles—Withdraw!10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Senator Carr, would you withdraw that reflection.AW5Carr, Sen KimSenator CARR—I withdraw. Mr Acting Deputy President, you would be only too well aware of the drunken party that is occurring out in the lobby while we are supposed to be discussing—LI4PATTERSONSenator Patterson—I rise on a point of order. Senator Carr is casting aspersions on all senators on this side. I find it totally inappropriate, and I ask you to ask him to withdraw it.AW5Carr, Sen KimSenator CARR—Withdraw what? There is a drunken party going on outside.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Carr, I think we can do without those sorts of comments.AW5Carr, Sen KimSenator CARR—It is absolutely true.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I think it is fair to both sides that you withdraw.AW5Carr, Sen KimSenator CARR—Thank you very much for your advice, Mr Acting Deputy President. The big question that has to be asked is: why do a majority of Australians so strenuously oppose the full privatisation of Telstra? Why is it that they have such deep concerns?TH4KNOWLESSenator Knowles—He did not withdraw, did he?LI4PATTERSONSenator Patterson—I rise on a point of order. Senator Carr did not withdraw. He cast aspersions on all senators on this side.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I think he withdrew that reflection on the other side. Is that correct?AW5Carr, Sen KimSenator CARR—Yes, I did. Why is it that a majority of Australians so deeply resent the actions of this government to try to plunder their assets when it comes to the privatisation of Telstra? Why is it that they are so concerned about the dishonest and deceitful way in which this government operates? Why is it that they are so concerned about the way in which a government goes to the public, says that it will privatise one-third of Telstra, then sneaks back in here in the middle of the night to put forward a motion to present to this parliament a proposition to fully privatise Telstra? Why is it?The reasons are very straightforward. There is deep concern right across this country, but particularly in regional and rural Australia, about the impact that such measures are going to have on the access to advanced telecommunications services. There is very deep concern about the already evident decline in services that have been provided as a result of the partial privatisation of Telstra in regard to the availability, the quality and the price of services. There is very deep concern about the impact such proposals are going to have on the public finances of this country. There is enormous concern about the impact such proposals will have on the foreign ownership levels of the privatised Telstra. There is enormous concern—huge concern—already being expressed by many hundreds of thousands of Australians about the impact such proposals are going to have on employment levels, particularly in regional Australia. There is huge concern about the impact the privatisation of Telstra will have on local manufacturing.What do we hear from cockies corner down here? Not one word. In fact, the real question being asked right across Australia these days is: when will Tim Fischer and the National Party actually get off their knees to the Liberal Party and Mr John Howard? Why is it that so many Australians understand that Mr Howard is obviously the weakest Prime Minister this country has seen since perhaps Billy Hughes? What they do not understand is that Tim Fischer is the weakest Deputy Prime Minister since Earl Page. The fact remains that what we have seen in recent days is a desperate attempt by this government to patch up a sordid arrangement to try to lock in some support from some senators in this chamber who, quite clearly, do not have the gumption to defend their constituents, to defend the philosophical position they ought to be defending and to defend the commitments they have made in public too.We have seen, for instance, the statements made by De-Anne Kelly, the federal member for Dawson, who has blown the whistle on you lot. She makes it perfectly clear that she is not going to be supporting the full privatisation of Telstra. Recently, in the last 24 hours, she has indicated the enormous price that is going to be paid by those sena tors who are willing to go along with these sordid arrangements with regard to the deal recently patched up by Tim Fischer, the Minister for Communications, the Information Economy and the Arts (Senator Alston) and this Prime Minister.We have seen all of this before. We saw it last time when the partial privatisation was considered and various attempts were made to secure support of particular interests within this Senate. They were told at that time that commitments were undertaken—in fact on 11 December 1996 Senator Colston for one indicated that there was a commitment from Minister Alston and, of course, the chief executive of Telstra that there would be no reduction in the employment of Telstra workers below 3.4 per cent, and that was supposed to be before 1999.From the results of the surveys and the positions put to this Senate by Telstra itself, we have seen already in the case of Queensland that there has been a reduction in jobs of some 11.96 per cent, particularly in rural parts of Queensland. From a figure of 3,260, 390 employees have been removed from Telstra. In the case of Tasmania where the commitment was given that there would be 170 extra jobs, if we look at the figures, there are in fact 147 fewer jobs. In fact, in the country areas of Tasmania there has been a reduction in employment of some 30.49 per cent.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Order! Would those senators standing in the chamber please resume their seats.AW5Carr, Sen KimSenator CARR—We see that there has been a reduction in the country regions of Victoria of 15.9 per cent. There has been a removal of some 573 positions from 3,601 positions. In Western Australia we see a reduction of 14.3 per cent, and Senator Lightfoot blithely goes on and says, `What a great proposal this is.' There has not been one word out of conservative senators about defending jobs in the provincial parts of their states. In South Australian rural areas the number of jobs lost has now reached 19.8 per cent, but there has not been one word from that lot over there.This sort of weak, snivelling approach, crawling in here in the middle of the night to try to get this sort of proposition up, is now par for the course. What we have to understand is that this is a government that is actually committed to a reduction in the standard of living of ordinary Australians. But then it does not care what the cost is of these privatisations; there is no interest expressed about the consequences of its actions, particularly in terms of the reductions of job opportunities for workers of Telstra. There is not the slightest hint of concern about the implications for the loss of service quality to consumers as a result of the removal of what appear to be 17,722 jobs up to February this year. That is a 23 per cent cut in the number of jobs right across Telstra in 20 months. But there has not been one whisper from over there about the effects that might have on particular regions of this country.I ask you: why is it that Tim Fischer will not get off his knees? Why is it that the National Party are so determined to grovel before the Liberal Party? Why is it that they are so committed to get on their knees when it comes to questions of such fundamental importance to the people of rural and provincial Australia?The integral part of this privatisation proposal is to actually undermine the economic capacity of Telstra to provide the broad based community service that it has done for many a generation. One of our strongest companies has undergone one of the biggest corporate restructures we have ever seen in this country. Why is that? It is because there is a particular ideological drive by this government to actually produce what they see is a result for the benefit of shareholders—not the 18 million Australians that currently own Telstra, not the 18 million citizens of this country that draw benefit from the ownership of what is a highly successful public enterprise. No, it is for the benefit of the few.This is demonstrated very clearly in terms of the approach taken to employment. As I said, these actions have a direct impact in terms of the service quality for consumers. Five weeks after the last federal election a project team known as Project Mercury was established by Telstra management, which established, among other things, a particular drive to remove, as they said in their papers at the time, papers which are all canvassed in the Senate committee report entitled Telstra: to sell or not to sell?, some 24,000 Telstra jobs by July 1998. We see in retrospect that that is precisely what they have achieved.The aim of Project Mercury was:(a) reducing labour costs by employing contractors at lower wage rates than those of Telstra award workers;(b) taking other labour costs of balance sheet through other mechanisms such as joint ventures;(c) disposal of assets in areas considered `non-core'; and(d) releasing millions of dollars of investment fundsThe main purpose of this was to increase the value of the company, as measured by the Stock Exchange, by reducing the cost of labour employed by Telstra. Outsourcing, of course, was the main means by which this was to be achieved. The Project Mercury documents, which we were able to secure through various means and provide to the Senate references committee, demonstrated that the Project Mercury steering group on 28 May 1996 discussed and resolved:. . . that outsourcing will be [the] preferred outcome when the cost benefit of outsourcing is equal or marginal to retaining inhouse. This will assist in bridging the gap between Telstra and best practice in relation to headcount benchmarking.A device was demonstrated in regard to objectives that they said were consistent with privatisation. Those who argue that job losses are really all about a device whereby we respond to the pressures of competition ought to read the papers presented by the Project Mercury team. That team quite clearly demonstrated that the real issue here is privatisation. That is the imperative in terms of driving down employment numbers in Telstra. Recently, Telstra announced that their intention was to shed a total of 25,500 jobs over a four-year period and they then upped that by another 2,000 jobs, so they are intending to remove 27,500 positions over a four-year period. This whole debate, I repeat, is really driven by the desire to secure privatisation, to increase the share value of Telstra and to ensure that, through that prac tice, there is a higher return to shareholders, irrespective of the impact on the quality of service delivery and the economic activity in any particular region, particularly in regional Australia.Of the submissions that we did receive—given that very limited time was available to the Senate legislation committee to consider this matter on this occasion—we again saw very considerable concern being expressed right around Australia in the opinions of various community groups and state governments, even conservative state governments. There was great concern about the impact of what Frank Blount has been reported as saying—that is, of Telstra's need to focus on what he calls `the delivery of increased shareholder value'. In that process, as we have seen by the ACA reports, for two consecutive quarters there has actually been a decline in the level of service provided by Telstra to customers across Australia.To this, the minister says, `We've had a lot of bad weather. We've had floods in the middle of Australia. We've had droughts and all sorts of other pestilence that have arrived and undermined us.' That is not the situation in Victoria, where quite clearly the reports demonstrate substantial drops in the very levels that we say Telstra use as their key benchmark to establish their measure of customer satisfaction. That includes telephone connections, telephone repairs and a whole range of other services, such as the capacity to answer the telephone when you ring up for directory assistance.All those measures have absolutely nothing to do with the weather, particularly in the case of Victoria. For that matter, in the case of Victoria, they have absolutely nothing to do with the issue of remoteness, which is the other great excuse that Telstra have used for the decline in the quality of service provided. It has everything to do with the fact that there has been such a massive drop in the number of workers employed by Telstra to undertake those fundamental and simple tasks, such as making sure the phone is actually connected or making sure the phone services are repaired. You simply cannot do those tasks when you remove the number of employees who have been removed by Telstra management.I might note that the real beneficiaries of the Telstra privatisation have been management, who have been able to demand market salaries. They are always the great advocates for privatisation in all of these debates about public enterprise. It is always pushed by the management, who are the first beneficiaries of market competitiveness.When government senators go back to their home towns and look the people who actually elected them in the eye, they need to ask them whether they have been able to provide a service to their constituents in terms of this miserable sell-out that has been presented as a fait accompli by the Prime Minister over the last 24 hours. We were told that there will be an incentive for people to support this proposition. We were told 24 hours ago by Senator O'Chee, if I recall correctly, that when we get this deal on the table it will be a revolutionary proposition. There is nothing revolutionary about the National Party being bought off. That has been an integral part of their history. It has been absolutely critical to their history. There is no revolutionary new discovery there.The National Party also say, `When we get the deal out in the open, we'll be able to vote with a clear conscience.' Since when has a clear conscience—or a conscience even—been an integral part of the way in which the National Party behave in these issues? What we have seen throughout their history is generally a commitment to defend regional and rural areas. That has gone out the window under this new regime, under the leadership of the current Leader of the National Party, Tim Fischer. The real criterion here is how low one can grovel to the Liberal Party. That is why the National Party are being cut to pieces throughout regional and rural Australia, because fundamentally they do not have the backbone to stand up and defend the interests of the people who actually elected them.We have seen substantial job losses in recent times in Victoria, with 3,000 positions having been lost there. Victoria has suffered disproportionately as a consequence of the actions of this government to strip out the resources of this once great Australian company as part of the miserable arrangements entered into last time to secure support for the partial privatisation of Telstra. National Party MPs in Queensland and New South Wales have said absolutely nothing about those job losses. But in Victoria, where there are areas which still do not even have a mobile phone service—and I note that this is particularly the case in Gippsland—we have heard absolutely nothing from some federal senators. The Melbourne Herald Sun states:In the 12 months to March, more jobs were axed in Victoria than any other state. Senator McGauran stayed silent, despite the loss of more than 3000 Victorian jobs, including 573 regional posts.His brother, Peter McGauran, said nothing as Sale lost almost 20 per cent of its Telstra workers in his seat of Gippsland. And fellow National John Forrest in Mallee kept quiet, along with a host of Liberals in regional seats.As the Senate debates the Telstra sale, Queensland senators such as Ron Boswell and Bill O'Chee and NSW senator Sandy Macdonald can say they did their part for the bush.We have not heard anything about them doing their part for the bush here, and I do not expect we will. The truth remains that Jeff Kennett—and in fact I am sorry I have to confess this here—was right. I say that the Premier of Victoria, Jeff Kennett, was right. He was right about this: Senator McGauran just was not up to it, is not up to it. I noticed he is No. 2 on the ticket for the coalition in Victoria, and I look forward to Jeff Kennett endorsing that ticket, since he has paid such particular attention to removing what was once the third person on that ticket, Senator Synon.It demonstrates the deep crisis that exists within the coalition. A very deep crisis exists between the National Party and the Liberal Party but, quite clearly, it has been resolved in favour of the Liberal Party because the National Party just does not have what it takes. As I say, Tim Fischer is clearly the weakest Deputy Prime Minister, the weakest Leader of the National Party we have seen since Earl Page. We have also seen the deep crisis that is now emerging about the leadership of the Liberal Party. For instance, the Australian Business Review Weekly today highlights that:. . . among 150 top executives surveyed, John Howard is only narrowly ahead now of Peter Costello as the preferred Prime Minister—that is, 35 per cent to 33 per cent . . . What you have is a very deep concern within the power base of the Liberal Party itself about the failure of this Prime Minister, his weak and sneaky efforts, to actually represent what have been regarded as traditional Liberal values, which he no longer can do, to the effect where we see now that, on the issue of One Nation:. . . 83 per cent of the 150 CEO's polled indicating that they felt that the Prime Minister handled One Nation unsatisfactorily.(Time expired)23:54:005444Lundy, Sen KateSenator LUNDY7G6ACTALP00—My understanding was that, in fact, Senator Boswell was listed to speak next. But, with respect to comments made by my colleague Senator Carr, it is quite obvious that we are not going to hear from these people in this debate, or certainly on the second reading, which is a great shame because we know that the National Party and anyone in this place who represents those in rural and regional Australia have a grave consideration to make in their voting on this bill. I say that because rural and regional Australia is suffering and is at a disadvantage with respect to the privatisation of Telstra.A privatised Telstra will face a conflict of interest that cannot be resolved. Is their priority the needs of all Australians or in fact the wants of their shareholders? I do not believe that these two points can coexist. Because of the high level of cross-subsidisation that is essential for a country the size of Australia, Telstra shareholders will not be willing to accept reduced profits to maintain a standard telecommunications service for remote and regional consumers.Our geography means that equity and access to an affordable telecommunications service require two things. They require a legislative framework that provides for a universal service obligation, a community service guarantee, sanctions maintained by a regulatory authority and, indeed, fines if services are not up to scratch, but they also need a government that has a will to represent the public interest.The attention required by our rural and regional areas can be delivered only through the ministerial responsibility and hoping that that minister acts in the interests of the public. It is this public interest that cannot be horse traded within the context of this debate on this bill to sell off the rest of Telstra. Will it be left to the taxpayers, the majority of whom will not own Telstra shares, to pay for the service that a publicly owned national carrier should be delivering or, under a privatised Telstra, will the dividend be redirected in some way to subsidise it?There is no way under a fully privatised Telstra that Telstra would tolerate a continued enhancement of the regulatory framework that can, under the government's proposals, only serve to even more greatly regulate what is theoretically a sector that has been deregulated. This presents an interesting conflict for the government. On the one hand it talks about deregulation, it talks about allowing Telstra to compete freely in a competitive market and encourage other players to come in, yet what do we hear today? We hear today that the government is actually going to introduce a plethora of requirements, of further regulations, to ensure Telstra provides for the interests of those it has neglected.So we have a government talking about deregulation, about privatisation, on the one hand and yet, to maintain the level of service required, we know that it can only do that by re-regulating. The nature of that re-regulation, obviously, is completely contingent upon the will of the government of the day. We know through overseas experience that telecommunications carriers do not tolerate a high level of regulation, particularly if it impinges upon their ability to extract a profit from their given market. We have seen time and time again, particularly in the US, examples where carriers have challenged legislation that has put in place, or has attempted to put in place, a requirement on them to either service a levy or provide some sort of base level community service. I am gravely concerned that this is the direction in which we are heading with respect to Telstra, if it is privatised.There is one particular case in the US that I think is worth mentioning. A few years ago, President Clinton tried to legislate for a USO-style levy for the provision of a high bandwidth backbone to educational institutions throughout the US. The levy was designed to spread the cost across all carriers and provide an essential service in enhancing the access of all American students to the Internet. But what happened? Do you think he had any luck? No, the carriers basically challenged him in court and they won. It was not possible because the corporate entities that were required to provide this service had the legal muscle, the clout, with which to defeat the government in their efforts.Sitting suspended from midnight to 9.30 a.m. (Friday, 9 July 1998)