1999-04-193912SENATE369301999-04-19The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 12.30 p.m., and read prayers.Bills3693r706Billsr704Billsr7053693Debate resumed from 31 March, on motion by Senator Ian Campbell:That these bills be now read a second time.upon which Senator Faulkner had moved by way of amendment in respect of Appropriation Bill (No. 4) 1998-99:At the end of the motion, add—"but the Senate is of the view that the $19.433 million spent on the community education and information program on the tax system is an improper use of public money"12:31:003693Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—When I was last speaking on the Appropriation (Parliamentary Departments) Bill (No. 2) 1998-99 and associated bills on 31 March 1999, I was addressing the very important issue of whether a new nuclear reactor should be built in Australia and, if so, whether it should be located at Lucas Heights or at some other location within Australia. I had brought to the attention of the Senate the fact that this government had made a decision in 1997 to locate Australia's next nuclear reactor at Lucas Heights without any proper consideration of the very important issues involved in such a major expenditure of Commonwealth funds.We are talking here about an initial expenditure of some $286 million. That is the figure that the Minister for Science and Technology at the time, Mr McGauran, announced would be the cost for construction of a new reactor at Lucas Heights. Of course, that is only the initial expenditure. On top of that, if such a reactor is built you then have to operate it for at least 40 years—that has been the time that the current reactor at Lucas Heights has operated for—involving expenditure of hundreds of millions of dollars. So you have to add an amount, which is unknown but which certainly runs into hundreds of millions of dollars, for the continued operation of a new reactor.On top of that, of course, you have the decommissioning costs that are associated with decommissioning the two reactors currently located at Lucas Heights. Not many people in the community know that there are in fact two reactors at Lucas Heights, not just one. There are two reactors, one of which has already been shut down and the other, the HIFAR or high flux reactor, is due to be shut down and decommissioned in about the year 2004. This new reactor will be the third reactor that will have been located at Lucas Heights, an area within a couple of kilometres of a population in the Sutherland Shire of over 100,000 people. So you have that additional expenditure for decommissioning.At the end of the 40-year period, when this new reactor would be due for decommissioning, you would then have additional costs. So we are talking here about a decision which commits Australia to hundreds upon hundreds of millions of dollars into one nuclear research reactor facility at Lucas Heights. This was an issue that was directly addressed by the McKinnon review in 1993, an independent inquiry set up at the time by the then Labor government to look at whether we needed a new reactor once the HIFAR reactor was closed.Because of the incredible investment that that requires and the possibility that such hundreds and hundreds of millions of dollars of funds may be better directed to other areas of medical and scientific research in the new millennium, there should be a proper, thorough, exhaustive analysis before any positive decision is made about a new nuclear reactor in Australia. I have taken the Senate on previous occasions to the recommendations of the McKinnon review. One of the crucial recommendations of that McKinnon review in 1993 was with respect to looking at alternative sites to the Lucas Heights site, where the current reactors are located.As I have reminded the Senate, when the reactor started operating at Lucas Heights in 1958 it was considered an area very remote from Sydney. But, over the past 20 years particularly, there has been a massive explosion in population in and around that area.WP6LIGHTFOOTSenator Lightfoot—Can you use another expression for that, please?656Forshaw, Sen MichaelSenator FORSHAW—There has. As honourable senators know, the federal seat of Hughes, which encompasses this area, is significantly over quota as a result of that population expansion. A particular recommendation of the McKinnon review on a new reactor said:If a decision were to be made to construct a new reactor, it would not necessarily best be placed at Lucas Heights. An appropriate site would best be decided after exhaustive search, taking into account community views.One thing that has happened in respect of the decision made by this government—and, indeed, of the environmental impact statement that has been conducted in respect of the proposed new reactor at Lucas Heights—is that there has been no exhaustive search of alternative sites in this country, and there has certainly not been adequate community consultation.As I said, the McKinnon review stated that there should be an exhaustive search of alternative sites. When ANSTO and the government departments appeared before the Senate Economics Committee that is looking at this issue at the moment and is due to bring down its report at the end of May, we were told by ANSTO and the department, `Oh yes, there has been consideration of alternative sites throughout Australia, but none of them is suitable or as suitable as Lucas Heights.' So we asked, `Can you tell us which sites you have looked at?' They said, `We cannot tell you that.' `Why not?' `Well, that is covered by cabinet confidentiality.' Well, what a joke. Here we have a recommendation of a government appointed independent inquiry that says there has to be an exhaustive analysis of alternative sites and there has to be consideration of community attitudes, and yet we have this government and ANSTO saying, `Oh yes, we have looked at alternative sites but we can't tell you where they are.' I seriously question whether there has been indeed any proper consideration of alternative sites.What makes this process even more reprehensible is the attitude of this government that they can just roll over the top of communities, particularly the community of the Sutherland Shire, saying, `You will have another reactor. Simply because you have the current two reactors, you have to have the third one.' They ignore recommendations of earlier reports. They have tried to dress up the EIS as having considered this issue. The EIS summary—a very nicely produced coloured booklet of 26 pages summarising three volumes which are each about four inches thick and run to hundreds and hundreds of pages—says on page 11:An assessment of the suitability of Lucas Heights and other sites is made in the draft EIS.I then went to the draft EIS documents. And what does it say in the draft EIS about consideration of alternative sites? It says:ANSTO has advised the Senate Economics References Committee that a process involving consideration of alternative sites, subsequent to the Research Reactor Review —that is the McKinnon review I referred to earlier—was conducted by officers within the Department of Industry, Science and Tourism, with input from ANSTO. The site selection criteria indicated that greenfield sites, which fulfil accessibility, health and safety, environmental protection and availability of resources criteria, are available with proximity to Canberra, Sydney, Melbourne, Brisbane, Adelaide, Perth and some regional centres. In addition, the costing methods comparing locating a replacement reactor at Lucas Heights and alternative sites were reviewed by the Commonwealth Department of Finance.The following sentence is very significant:This process was conducted prior to the preparation of this Draft EIS and has not been reviewed as part of the scope of this Draft EIS.The summary says that there has been consideration of alternative sites but the actual draft EIS prepared says, `No, we did not consider any of that information or that material, because it had previously been done by ANSTO and by the department.' But as I said, when we in the Senate committee asked the department and asked ANSTO to tell us what alternative sites had been looked at, they said, `We can't tell you.' What a classic catch-22. Here we have an EIS that the minister for the environment says has been thorough and rigorous and has tested all of these concerns and issues; and yet when you go into that document you discover that they have not really considered one of the most important issues that was raised in the McKinnon review—that is, that you should not just assume that Lucas Heights should be the site of the next nuclear reactor but you should look at a whole range of alternative sites. But let us face it: ANSTO, which was the major provider of information to the EIS in respect of siting and other issues, has a vested interest in keeping all of the nuclear activities located in the Lucas Heights area, irrespective of what the people of the region might think.I close on one further point—and there is much more to be said about this issue, as we will find in coming weeks. Recently, serious incidents occurred at the Lucas Heights reactor when a fuel rod was dropped onto the floor of the warehouse. It took ANSTO five weeks to notify the Sutherland Shire Council of that incident. It was only after employees of the ANSTO Lucas Heights facility leaked the details to the media and they were published on the front page of the local paper that ANSTO finally got off their backsides and told Sutherland council what had happened. That is a disgraceful approach by a government enterprise. (Time expired)12:43:003695Hogg, Sen JohnSenator HOGG7L6QLDALP00—I rise in the debate on the appropriation bills to specifically look at a couple of things in respect of my state. One particular issue is that of the lack of savings that has taken place and continues to take place under this government. The government have still done nothing about the savings rate to attempt to encourage Australians to save. There was a farcical attempt back in the 1997-98 budget but that was a complete flop. It fell flat on its face and did nothing to stimulate the savings by Australians.Since that failed attempt by the government, there has been a pressing need for the issue of savings to be addressed in Australia, but the government have done nothing to address that. In its stead, with a lack of growth of savings, we have seen a growth in the gambling industry in Australia, where people see this as a means of trying to in some way supplement their lifestyle and to provide a bank for their future.One has only to look at what has happened with the explosion of gambling, whether it be in Tattslotto, TAB, registered clubs, casinos and other forms of online gambling. There is no doubt at all that this has taken away from the issue of savings. Many Australians, unfortunately, see this as a substitute means of getting all of their savings in one hit. If one knows anything about the issue of gambling, it is a slippery road once one places one's hopes and fortunes in that area.Unfortunately, this has now caused a culture which determines that people are going to go down the path of not saving and also not in any way planning for their future because they see no hope under this current government. Why have people gone down this path? In my estimation they have gone down this path primarily because this government has destroyed hope for people, it has destroyed careers and, most importantly, it has destroyed job security.Job security is one thing that people cling to as a means of giving them some hope for planning their future and some hope for being able to live a reasonable life in society today. But this government, by all of their actions, have done everything possible to remove hope, job security and the prospect of a real career. The government have set about destroying the basis for employment and the employment relationship in this nation by seeking to destroy the award system and the industrial relations system. One can see the despair that is coming out now in those who have unfortunately lost their jobs as a result of the policies of this government. It has led to no incentive, it has led to no hope and it has led to no future for people. So we have people who are purely and simply living for today. This is a sad indictment of our society today and a reflection on the policies of this government. In particular I want to look at a place I visited recently in the Wide Bay area. It is interesting that in the Wide Bay area in Queensland the unemployment rate was around 9.6 per cent in February, according to the latest ABS statistics. When one looks deeper into those statistics one sees that teenage full-time unemployment in that region is 30.4 per cent. That is not uncharacteristic of the unemployment rate for teenagers in Australia but, nonetheless, it is still excessively high.When one looks at that region one sees that there are 4,700 who are long-term unemployed and who have been given no hope or prospect of a job by this government. This government have turned their backs on rural and regional parts of Australia such as the Wide Bay region. The country people are now feeling the effects of the cutbacks, particularly in areas such as labour market programs. The people there are suffering the fate of being long-term unemployed.There is no doubt that the long-term unemployed and the unemployment problem in general are causing major social problems within those regions. This is one of the things that came to my attention during my visit to this region: that there are many social consequences as a result of the long-term unemployment not only of young people but also of adults. It was put to me during my visit there that the manifestations of those problems are violence—whether that be domestic violence or violence against other people in the community—and illness, particularly mental illness. It was pointed out to me that there is a high incidence of mental illness in the area brought about by the stress that has been caused as a result of people finding themselves permanently unemployed. Other manifestations of this problem are drug and alcohol abuse, family breakdown and suicide.It was put to me on my visit to the Maryborough region within the Wide Bay district that this particular area has a problem with the suicide rate for men. Attention is often drawn to the suicide rate for youth, but it was drawn to my attention that the suicide rate for men compared to youth is of the order of five to one. Whilst people must condemn the suicide rate for youth and the tragedy that goes with that, one must equally condemn the prospect of the male to youth ratio being five to one.People are given their dignity and the opportunity to take pride in themselves through the ability to work—to have a meaningful job that provides them with an income through which they can sustain their life and lifestyle. Without true and meaningful employment, people lose their dignity, they lose their self-respect and they lose their self-esteem. When they lose those qualities, then they are prone to such problems as mental illness, drug and alcohol abuse, suicide and family breakdown. All of these have consequences for the budget and for our society in the broadest sense.What was particularly drawn to my attention was the lack of funding for many of the support services in these areas where there is high regional unemployment. There is a distinct lack of government funding to help the support services to address the attendant problems that arise as a result of the despair that many people feel in unemployment. This is one of the tragedies of our society today, that a government such as the government we have cannot see and get to the core of those problems and address them. That means providing people with real, meaningful jobs by which they can earn a living and support their family and meet their family's needs.In the interim, the government must also look at supporting those support services where people suffer violence, illness, drug and alcohol abuse and family breakdown and are also potentially suicidal. If they do not, then we will keep seeing people go down a never ending spiral of despair and become a burden on society. The lack of funding for counselling, for example, and many other services in the Maryborough-Wide Bay area was drawn to my attention. This government has failed to address that issue. In many instances support services do not even exist. If they do exist in some form or other, then the people that are affected, whether it be with a drug and alcohol problem or a family breakdown problem, have to travel large distances to get the appropriate assistance. This is begging the question, in a sense, because these people do not have the resources or the capacity to do the travelling to avail themselves of the assistance needed to get them out of the downward spiral that they are in.What we have is the dog chasing its tail. These people just go round in a never ending circle and never break the circle of despair that they are in. If there were real employment for these people, then the opportunity would be there for them to break the cycle and pick up meaningful income, providing meaningful lifestyles which would assist them out of the traps that they find themselves in.I have paid particular attention to crisis accommodation. The result of people finding themselves in prolonged unemployment and prolonged difficulties is that, with the problems of domestic violence, mental illness, or even family breakdown, one of the first requirements they invariably have is for crisis accommodation. This is the basic necessity of life to many of them, but one finds that there is a distinct lack of crisis accommodation for them.One finds, for example, that there is not necessarily even proportionally equal funding of the various forms of crisis accommodation. That is not necessarily a reflection of the lobbying capacity of the various groups. There are generally women's refuges, family emergency housing services, youth services and a men's refuge service in the area. Not all are equally funded or equally sustained to meet the needs of people who, invariably, are in the position they are in for one reason, and that is that they cannot get a real, meaningful job which will sustain them.If we are going to provide some sort of albeit limited hope to these people, there needs to be a mechanism which will enable them, firstly, to get the very basic essentials such as crisis accommodation, appropriate counselling and appropriate assistance and then to have the appropriate job infrastructures in place so that they can get back to being a normal part of life.But the government's answer to the lack of employment in areas such as the Wide Bay district is to put in Work for the Dole schemes—and not only Work for the Dole schemes, but more Work for the Dole schemes. Of course, that does not solve the unemployment crisis. It does not solve the problems of these people who are long-term unemployed, particularly young people and those males in many of these rural and regional areas who have been thrown out of work where they have performed the role, over a long period, of being the breadwinner.The Work for the Dole scheme, which the government have championed, does not service the needs of the community and does not generate long-term sustainable jobs. It does not provide them—it never has and never will. It does not provide the job skills and the job training that people need to get long-term sustainable jobs. And this is what is needed in regions such as the Wide Bay area—jobs that people can relate to, from which they can earn a meaningful income and sustain a life and lifestyle.The response of the government is a miserable Work for the Dole scheme. Whilst it has been beaten up and made to sound as though it is the panacea, it does not address the specific issue that these people are faced with—a lack of work which leads to the consequential social and personal problems that they suffer.The government have an obligation to provide an environment in which real, meaningful jobs can be provided to people, and that is not casual employment. There is some misunderstanding with the government that casual employment will provide people with a real sustainable income for their lifestyle. Casual employment has, over the years, been shown to do nothing else other than to, firstly, make the worker more vulnerable, secondly, put the worker at the beck and call of the employer and, thirdly, employ the person for substantially fewer hours than they could work which would sustain them in a reasonable lifestyle. Casual employees do not have the benefit, the opportunity, to gain credit through a bank, a credit union or any other financial institution because they do not have the income to sustain themselves.What we need to see is this government seriously tackling the issue of unemployment, not giving us something such as casual employment as a second-best guess at answering the problem. We need to see a concerted effort by the government to create real employment in areas such as the Wide Bay district based on centres like Maryborough and Hervey Bay. It is interesting that, at the last federal election, the despair and deceit was reflected in the primary vote that was registered in that electorate. The sitting member scraped in. Interestingly, One Nation was able to achieve its highest primary vote anywhere in Australia of 26.33 per cent. The member's margin was cut from 18 per cent to 2.86 per cent—a swing of 15.23 per cent.This is a case of people speaking loudly and clearly of their dissatisfaction with the traps that they are placed in in these regional areas. They want to be taken out of the traps that they are in. They want real jobs, they want to be able to sustain themselves and, in the despair in which they find themselves, they turn to One Nation and vote against the sitting member, as occurred on that occasion. The people in these areas want a fair go. They want to be able to sustain themselves in full-time employment. They want to be able to raise their families. (Time expired)13:03:003698Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I also rise to speak on these appropriation bills which obviously deal with the specific issue of where public money is being spent. But what is equally significant with bills such as these is where the public money is not being spent. One of the key areas where this is extremely evident is in the area of the environment. Before the 1996 election, we saw something that was probably close to unprecedented, where the sale of a major public utility was linked to a completely unrelated activity—that is, the government's responsibility to ensure that our environment is protected for current and future generations.It barely goes without saying—but, given the performance of this government, it obviously does need to be repeated as often as possible—that it is not just a matter of saving the environment for the sake of feeling good about having a few more furry animals around the place. Protecting the environment in terms of its current and future health is crucial and fundamental to the economic wellbeing of this country. One example here, amongst many, is the Great Barrier Reef Marine Park. This is an area that is obviously of enormous environmental benefit but is equally of massive economic benefit, particularly to my home state of Queensland and the central and far northern parts of Queensland. It fundamentally underpins a major part of the economy and employment in that region. If we have governments that are not willing to play their part in providing enough resources and assistance to ensuring this area is maintained as healthily as possible, we will see massive negative impacts in an employment sense for that region. We will also see the loss of a great environmental asset for the people of Queensland and the people of Australia as a whole.It was of great concern to the Australian Democrats at the time, back in 1996, that adequate protection of the environment was linked to something completely unrelated, such as the sale or part-sale of a public asset in the form of Telstra. We are still seeing that ongoing practice of policy blackmail being continued by the government. This is bad enough in itself. However, one of the big problems with budgetary expenditure since that time—and it has continued in the most recent budget and in the appropriation bills flowing on from that—is that the money that was promised to be spent as additional money on the environment as a result of the sale of a third of Telstra has in many cases not been spent.The money that has been spent has been used to fill up existing environmental programs, core environmental programs, that would otherwise have run out of funding. In other words, it has not been funding on top of existing funding for the environment. It has been used to replace money that was going to be spent on the environment but that has been taken away and used in other areas or used to build up the surplus.The Australian people have been fundamentally misled in this regard. This is something people need to keep in mind. I am sure the Senate as a whole will be keeping it in mind when they look at areas where the issue of trustworthiness of this government comes into play, whether it be the sale of further parts of Telstra or other crucial areas such as taxation reform and some of the supposed government commitments that link to that.In recent times we have seen significant environmental programs—and again I use one that is important to my state of Queensland as an example: the sugar coast rescue package, which was particularly targeted at saving the mahogany glider from extinction—other endangered species programs and world heritage funding, which is crucial for managing world heritage areas, something which is undeniably a core responsibility of the federal government. Any area that Australia as a nation has put forward for recognition as a world heritage area we clearly as a nation have a responsibility to manage adequately and to ensure that its world heritage status is protected into the future. Unfortunately, we are now seeing examples where world heritage areas are being degraded to such an extent that their world heritage status is under threat. That is clearly an embarrassment to Australia internationally. If that was the only problem, then it would be something we could wear, but obviously the potential loss of world heritage status is linked to the downgrading of the environment. That is undesirable for our own individual interests in Australia and the economic effects that flow from that.An additional concern over this misuse of Natural Heritage Trust funding that occurred following the sale of the first part of Telstra is that it is being used to replace existing environment funding. What will happen when that funding runs out? The Minister for the Environment and Heritage will have a very hard time reinstating funding for core environment programs from the hard-nosed Treasury and Finance officials who, when they do manage to get a savings from somewhere, are extremely reluctant to have it clawed back. Even an environment minister totally committed to protecting the environment—something which is debatable in relation to the current minister—would have a very hard time dragging extra money from Treasury that the Department of the Environment and Heritage has given up willingly or otherwise in recent times under the cloak of Natural Heritage Trust funding. It does again lead to concern that we may be forced to endure more blackmail on the part of government about selling more public assets just to keep environment funding up to a basic level.The record of the government in funding its environmental responsibilities is not a record to be proud of. The issue of Jabiluka has had significant coverage in recent months. Our failure to stand up and protect our world heritage responsibilities on Hinchinbrook Island has been highlighted for many years now. We have failed to stop land clearing, a major threat again to my home state of Queensland. Those sorts of activities are doing 10 times more damage than the NHT could possibly hope to deal with and again show the short-sightedness of saving a little money in government expenditure at the expense of much greater damage and much higher costs to fix or clean up down the track or, if we do not act in that regard, the economic damage from the loss of employment and economic opportunities that will occur from that long-term degradation of the environment.There are other issues. As mentioned already, the Great Barrier Reef Marine Park scientists left, right and centre are highlighting the ongoing deterioration of the Great Barrier Reef Marine Park from any number of different activities. There has been some degree of action from this government on one or two of those areas, and any positive activity is to be welcomed, but clearly not enough is being done even to meet our legal and constitutional obligations in this area. Clearly the Great Barrier Reef Marine Park Authority is struggling with its responsibilities because of the lack of adequate funding that is being provided for its absolutely crucial role.Funding for the problem of acid sulfate soil, which has been a major problem for our oceans, rivers and marine environment, has been cut. It is worth emphasising, and people often do not realise, that Australia's land mass is smaller than the area covered by our oceans. We are actually a larger marine nation than we are a land based nation, and yet the amount of attention we give it as a country in terms of public consciousness and the amount of attention government gives it is woefully inadequate. It requires a major shift in our focus as a nation to recognise the amount of marine environment we have responsibility for. It is something which is crucial not just from an environmental point of view but also for long-term economic opportunities as well.We have even had funding cuts for basic issues such as research into the significant damage that the cane toad has been causing and continues to cause—something that I think all Australians would be aware of. It is a major environmental pest, causing major environmental damage, yet the funding for research to deal with that threat has been cut in recent times. I do not know whether we have just given up on it. If we have, it is a sad reflection on the determination of this government to persevere with dealing with major environmental problems. As people may know, the cane toad population has been expanding across Australia. Quite soon it is likely to reach the Kakadu National Park area and if it does it will put the potential damage from the Jabiluka uranium mine in the shade. Yet we are doing virtually nothing to try to deal with that threat.We have seen a significant expansion in the number of uranium mines that this government is keen to encourage at the same time as ruling out the inevitable end product of increasing our contribution to the nuclear fuel cycle—somewhere to store the nuclear waste. Unfortunately, more and more eyes are being turned towards Australia as a suitable place for that nuclear waste. Undoubtedly and inevitably, some of that nuclear waste will be the end product of the uranium that has been dug up here in Australia. In that sense I suppose you could say we deserve what we get. Clearly the vast majority of Australian people, along with the Democrats and apparently still this government, continue to strongly oppose the establishment of a nuclear waste dump to take international nuclear waste here in Australia.We have seen completely inadequate funding and completely inadequate attention being given to our responsibility as a global citizen to address the significant problem of greenhouse gas emissions. This is another issue which scientists from all political and scientific spectrums recognise as a significant threat to the future of our planet and it is something that we as an industrialised country have a particular responsibility to be seen to be trying to address, yet again there is lack of action in that area. We have even seen measures such as those contained in the tax package. Something that has got a lot of attention in the tax inquiries of the Senate committees is the likely impact from the tax package of a significant increase in the use of diesel fuel, despite the ongoing increase of pollution problems and respiratory and other health problems that will flow from that.I guess in lots of ways we should not be surprised that the government is in effect running down the environment budget, given its record on the environment in many areas, but the Democrats believe it is essential that we continue to express concern about it and continue to try and press this government to reconsider its position and reconsider its responsibilities and try and do a bit better in the future. I guess we can live in hope that we may have some improvement in the budget that we will see brought down in less than a month's time now, although I must say that my hopes are not terribly high. Certainly the early draft that has been leaked from the department does not give much hope for any improvement in funding and the importance that this government gives to environmental issues.One of those areas where clearly there is a great threat is the future of funding for endangered species protection. It is an area that is already suffering from inadequate funding, and unfortunately it looks likely to be suffering even more cuts in the upcoming budget. There are many other areas apart from that which are also crucial—many which perhaps are not as sexy as saving mahogany gliders and hairy-nosed wombats and cuddly furry creatures but which are equally crucial for our economic and environmental long-term future. This is particularly so in areas such as research. Research is in real danger, whether it be research for developing renewable energy opportunities, research through organisations such as the CSIRO to improve our record on biodiversity, research to explore opportunities for dealing with threats to the environment—issues such as the Murray-Darling Basin, Waterwatch and National Wetlands programs—or general water research programs through the CSIRO.Our national pollutant inventory is in danger. There is completely inadequate funding for Coastcare and Clean Oceans—this following on from the Year of the Ocean last year. There are inadequate responses and funding for dealing with the significant problem of illegal fishing, something which again has obvious economic impacts as well as environmental impacts. A lot of marine research programs are not being given adequate funding already and are under threat. I think it is important to emphasise the lack of attention that is being paid to our marine environment and its size as part of our overall area of national responsibility and, indeed, as part of the opportunities for future scientific research as well as economic opportunities.There is time to reinstate funding for these programs, and I hope that the minister is able to do better than has been done in the last budget and in bills such as these. As I say, I do not hold out great hopes, but certainly the Democrats will be closely watching this area of expenditure in the upcoming budget, both in terms of its bottom line adequacy, which is something which clearly this government has failed on previously, and in terms of whether it will continue its sleight of hand—its pea and thimble trick—where it tries to cover up declining funding for the environment by plugging the gaps with the remaining amount of funding from the sale of the first third of Telstra. I hope senators keep that in mind when they consider any attempts from this government to sell any more of Telstra, particularly if they try and engage in the process of blackmail of linking sales of public assets to providing adequate bottom line budget funding for areas of basic responsibility. And, as we get into the next century, I am sure all Australians agree that the environment is a fundamental area that needs basic funding, not just from the point of view of envi ronmental protection but from the point of view of protecting the long-term future of the Australian economy.13:20:003701Cooney, Sen BarneySenator COONEYSF4VICALP00—In this appropriations debate, I want to touch upon the rule of law both at home and overseas. Recently in Melbourne, at the corner of Latrobe and William Streets, the Attorney-General, Daryl Williams, opened courts which are to be used by the Commonwealth. The High Court, the Federal Court and the Family Court will be there. That is a project that has a long history, going back to the time when Lionel Bowen was Attorney-General and then continued by Michael Duffy, Michael Lavarch and the present Attorney-General, Daryl Williams. The judiciary is the third arm of government and is therefore crucial to the sort of society in which we live. It is good to see that a court opposite the Flagstaff Gardens has been set up so that the third arm of government will be properly housed and able to carry on its quite vital work.Besides the Attorney-General, Mr Justice Gleeson spoke and of course so did Chief Justice Black of the Federal Court—a most outstanding jurist, a person from the Melbourne bar who is respected throughout the profession and the community—as did Justice Nicholson, also from the Victorian bar and also a person much respected throughout the length and breadth of the land.People might ask, `Why talk about this issue during appropriations?' I talk about this issue during the appropriations because the courts must be properly funded and must have the ability to carry out the functions as they are equipped to do in terms of the intellect and the skill that they bring. They also need to be properly housed, and that has now happened with the opening of that court. But they also need the ability to call upon a profession that is able to put the case that should be put on behalf of the people, the litigants, that come before the court—hopefully there are clients—and that is the point that I want to make.It is not good enough simply to have good courts and good judges and proper facilities for them to operate with; we also need the ability of people to put their case before the courts so that the courts can properly adjudicate upon those matters. Unfortunately, that is not happening in all cases that come before the courts now. There is a lack of resources so that people can put their cases before the courts. In fact, Chief Justice Black of the Federal Court has recognised this and has set up a pro bono system of people who come along and help those who have cases of special importance to present them. At the moment there is a lack of sufficient legal aid to have people properly represented before the courts. That has been the subject of speeches in this place before and of reports.I want to indicate the importance of the rule of law and in that context I want to quote a passage from a speech that Sir Winston Churchill gave in the House of Commons in March or April 1954. The passage is quoted with approval by Sir Alfred Denning—as he then was before he later became Lord Denning—in his book The Road to Justice:The principle of the complete independence of the Judiciary from the Executive is the foundation of many things in our island life. It has been widely imitated in varying degrees throughout the free world. It is perhaps one of the deepest gulfs between us and all forms of totalitarian rule. The only subordination which a judge knows in his judicial capacity is that which he owes to the existing body of legal doctrine enunciated in years past by his brethren on the bench, past and present, and upon the laws passed by Parliament which have received the Royal assent. The judge has not only to do justice between man and man.Sir Winston was talking back in 1954; I am sure these days you would say not only would he do justice between man and man but between woman and man and between woman and woman. He goes on to say:He also—and this is one of his most important functions considered incomprehensible in some large parts of the world—has to do justice between the citizens and the State. . . . The British Judiciary, with its traditions and record, is one of the most greatest living assets of our race and people and the independence of the Judiciary is a part of our message to the ever-growing world which is rising so swiftly around us."Mr Acting Deputy President Watson, everybody knows the events of the Second World War—and you and I, being the age we are, remember them—and the part Sir Winston played in them and it is interesting to see that he, with that experience, says that what is really needed to see justice done is some sort of judicial system.Of course people have tried to get that going over the years with varying success, but if we could get that concept of the rule of law inculcated in the culture of the world we would perhaps not have the sorts of problems we have had in Northern Ireland and now in Kosovo, in the Middle East and in Sri Lanka for example. If you take those four cases as typical of many others, you can see that a lot of problems arise through a lack of respect held by one group for another. Whether that disrepect arises from differences of race, religion or some other thing, nevertheless a lack of respect does arise—a lack of the ability, if you like, to see that people are people and not simply examples of a particular race or religion and therefore able to be slaughtered or to be treated in another bad way. There is a need for a concept of the rule of law where everybody is seen as a person—as a brother and sister, if you like—rather than as an enemy.There has been an attempt to get this concept going over the years. The origin of the concept of the rule of law was the Atlantic Charter of 14 August 1941. It was at that time that President Roosevelt and Winston Churchill set out principles that now have ramifications in the various conventions and treaties of the United Nations. Fundamentally, the two ideas that those great—and I use that word advisedly—men had were that there ought to be economic justice and social security, and that there should be a set of legal rights whereby people are protected from the arbitrary power of others. From the Atlantic Charter grew the United Nations, the Universal Declaration of Human Rights, and so on.Given the problems that are now occurring in Europe, it does seem that those great concepts are under real pressure. But from these sorts of pressures—as in the case of the Atlantic Charter—agreements do come. There will never be a situation where it is completely this way, but it is to be hoped that, more and more, dissension around the world can be settled in a peaceable way and not in the dreadful way it is presently being decided in Kosovo.The point I want to make is that the rule of law is an overriding concept that should apply not only to the domestic scene but also to the international sphere. It is easier to make it apply here because the culture of Australia, fortunately, is one of looking for peaceful solutions. We have the force of the state to keep people in order and to make them obey the laws that are handed down. That is not the situation so much in the international sphere, and that is why the international culture should be changed as much as possible through conventions like the International Convention on Civil and Political Rights.It would be a bad thing if our regard for the rule of law were to be weakened. I think, particularly after the Wik decision, there was a danger that that would happen here, when there were some quite unjustified attacks made on the High Court—there have been attacks made upon that body in other contexts as well, but that is one that comes to my mind. The danger is that if you denigrate the High Court—if you reduce the respect that it ought to hold—then the very culture of society is prejudiced and the rule of law is not quite so ready to operate.It also happens when politicians go on a law and order campaign. Of course people should be corrected, and of course criminals should be caught and punished, but all that must be done in proportion. There is always the danger—especially in times of campaigns, whether they be federal campaigns or state campaigns—for those seeking office to talk about law and order in such a way as to reduce the respect for and the authority of the courts. That, again, reduces the ability of the courts to perform the function of the third arm of government and to see that peace and good order is kept in the community in a fair and equitable way.We cannot expect a rule of law to develop throughout the globe if we ourselves do not show respect for the instruments by which it is introduced into society. Fundamentally, the courts fulfil that function. We should look for an increase in the respect that we give to courts not only here but where they exist overseas. Further, we should insist, to the extent possible, that matters are settled according to the law. Every now and then people do go to arms—people are entitled to defend themselves, and that is a fact of history. It is also a fact of history—if you go back to the ancient laws that were meant to be universal, such as the Ten Commandments—that people have always looked for a world and a society based on justice and rules administered by courts. In conclusion, I simply say that Europe, the Middle East, Sri Lanka and Northern Ireland would all be better off if the rule of law and the elements needed to keep it going had been better adopted.13:38:003703Allison, Sen LynSenator ALLISON1M6VICAD00—We have heard very little from the government in some time about the funding of schools, and I think it is regrettable that the appropriation bills give no extra money to government schools. As the Senate will recall, the government's statement that $2.5 billion extra was being put into schools over five years turned out to be completely false. We did not get any press releases from Dr Kemp to this effect, of course, but he did say in a speech early last year that that figure had become $2 billion. During the following estimates session, that figure dropped down to $1.9 billion, and we know that most of that will be taken up in additional enrolments and in inflation.There has been some work more recently behind the scenes on the ERI—that funding mechanism for private schools—to fiddle around the edges of private school funding. No doubt the next budget will rearrange the deck chairs for schools without affecting its precious bottom line and without addressing the very serious problems of resources for government schools. As we know, the enrolment benchmark adjustment will again rip money out of government schools—possibly around $20 million this year, although we will not know until we have seen the enrolments—and of course the EBA is cumulative, so every year it roughly doubles. Lack of resources in government schools is already a major problem, even without the inequities that the EBA has within it.A couple of months ago, the Australian Education Union did a survey of schools in my home state of Victoria, and that survey was responded to by 287 school principals. As the AEU said, it paints a disturbing picture of a state school system in decline due to lack of government funding.I want to highlight some of the issues that the survey raised. It said:The results confirm increasing class sizes, reduced educational programs, teachers forced to teach subjects which they are not qualified for, declining building maintenance and poor levels of student welfare support.The principals' spokesperson, Mr Kevin Pope, said:This is the first time that principals have been able to respond and set the record straight on key educational issues.The survey indicated that 90 per cent of principals said they do not have sufficient and appropriate resources to ensure quality programs in their schools; 62 per cent of principals rated the government's performance as poor or very poor—this is the Victorian state government; and 95 per cent said that the state budget failed to resolve the resources issues in their schools. On the issue of class sizes, the survey bears out the official figures sought by the AEU and provided under freedom of information. It says:Of particular concern is the fact that 33% of schools have class sizes of 30 and over. 12% of schools surveyed have class sizes of 30 and over in the crucial Prep to Year 2 levels where students develop basic literacy and numeracy skills.On the subject of class sizes, I draw to the Senate's attention the fact that in America the President recently announced that an extra $1.2 billion would be spent hiring more than 30,000 new teachers for the early grades of schooling. The 1999-2000 funds are seen as a `downpayment' on the President's plan to hire, overall, 100,000 teachers over seven years to reduce average class sizes in grades 1-3 to 18 students per teacher. Vice-President Gore said:There is nothing more important to America's future prosperity than giving our children a world-class education . . . This initiative will help reach that goal by providing smaller classes and highly qualified teachers.That funding will go to the states, which will distribute it to school districts—80 per cent of it based on child poverty and 20 per cent on school enrolments. Local school districts can use these funds directly for hiring teachers in grades 1 to 3, based on their needs.The US Department of Education has gone in this direction following a report which it issued last year, entitled Reducing class size: what do we know? According to that report, research indicates that reduced class size is related to increased student learning. If we are serious about literacy in this country, we need to address this issue at the prep through to grades 1 or 2 level.Looking specifically at class sizes in Victoria—and I am sure this applies in other states, although Victoria has certainly gone backwards since it has had a coalition government in place—33 per cent of schools have classes with 30 or more students. Three per cent of schools have seven or more classes with more than 30 students in them, 19 per cent have two classes with more than 30 students, and so it goes on, adding up to 33 per cent. In terms of prep to grade 2, 12 per cent of schools said that they have classes of 30-plus students. Only 18 per cent of prep to grade 2 classes have up to 20 students, and the rest—82 per cent—have considerably higher numbers than the states are working towards.In the survey, 79 per cent of principals said that programs have been cut at their schools since 1991. Sixty-one per cent said that programs have been cut at their schools since 1996—that is, of course, the period since the federal coalition came to power—and some schools are sacrificing school programs to keep class sizes down. Some have let class sizes rise to keep programs, and many have both cut programs and increased class sizes in order to balance the books.The survey also found that 88 per cent of principals say that the staffing policies of the Department of Education in Victoria make it difficult to staff programs according to student needs—that refers to the direction by the Victorian state government to schools to put a third of their teachers on contract. The survey report states:As an example, 43% of schools are using unqualified teachers to teach language subjects. 37% of schools have other subjects taught by teachers not fully qualified to teach those areas.The survey also found that 60 per cent of principals rate the level of student welfare provided by the Victorian state government as poor or very poor and that such a lack of support for students with learning difficulties or who are from troubled homes can only increase the dropout rate, the youth unemployment rate and, I would suggest, it is a factor in relation to the drug abuse that we see in some of our schools.In terms of school fundraising, 93 per cent of principals indicated that school-raised funds are important for running the school, providing an average of 33 per cent of their schools' running costs. Workload was seen to be a major problem, with the workload of teachers at 97 per cent, principals at 98 per cent and support staff at 96 per cent.The subject of school maintenance was also raised in the survey, with 27 per cent of principals regarding their buildings as being in a poor or very poor state; 42 per cent believe their school requires a major refurbishment to bring it up to scratch; 78 per cent believe their maintenance budget is not sufficient, and 53 per cent of schools have received no funds to address urgent maintenance needs. So the result is that over a quarter of schools are in an unsatisfactory state and another 50 per cent are heading in that direction.I think this survey is an indictment of both the Victorian state and federal government policies and funding levels in terms of government schools. Yet we are likely to see in the budget another nail in the coffin, as it were, of government schools with this government talking about different ways of funding both private and public schools.Another subject which is worthy of note by the Senate—and which is, I guess, a consequence of this government's 1996 budget—is the government's initiative to broadband particular programs. One of those was bilingual programs for Aboriginal and Torres Strait Islander students. A report by ACER, the Australian Council of Educational Research, recently looked at the question of bilingual programs in schools and at literacy generally for Aboriginal and Torres Strait Islander primary school students.The report shows that teachers and schools can enhance the English literacy skills of Aboriginal and Torres Strait Islander students by adjusting their strategies and that the key to having a positive impact on literacy skills amongst these students lies in attempting to deal with the broader issues such as health, absenteeism and home-school liaison. A statement on the report says a key finding of the report was:Learning was often dependent on the extent to which teachers were able to appreciate the richness of Aboriginal language as a language in its own right, and work out ways of helping students to make the transition from the Aboriginal English used at home to the Standard Australian English used in the classroom. Teachers and Aboriginal and Torres Strait Islander Education Workers in these schools constantly and consciously modelled Standard Australian English while at the same time acknowledging the value of the cultural and linguistic background of their Aboriginal students.Unfortunately, the Northern Territory government has given away the programs it had in place to allow Aboriginal and Torres Strait Islander students to learn both in their own language and in English. I recall that when the education committee went to the Northern Territory early last year, or the end of the year before, we went to a bilingual school at Maningrida where we saw the benefit of that program. But, like so many other casualties of the broadbanding process, this program is one which will go, in spite of the fact that our most pre-eminent educational institution in terms of research has strongly supported it.So it is a great pity that the appropriations bills do not deal with this question of funding for government schools. I hope—even though I am pessimistic about it—that the budget coming up in May recognises some of the problems that I have already highlighted and that are apparent from the Australian Education Union's survey. No doubt these are issues being faced by other states as well, and I urge the government to think very seriously about the sorts of things that are needed—things like more teachers and more help in schools where language and social disadvantage hinder literacy development. There is still a problem in that we have very few early intervention literacy specialists in primary schools, and every primary school ought to have one.We should be funding a facilitator in every school to help engage parents in their children's learning. We need to have a specialist literacy support worker in high schools. The literacy problems do not just stop in primary schools; they go on into secondary schools. We should be looking at guaranteed access for four-year-olds for preschool. I think there is plenty of evidence to show that, where these are targeted at schools where there are inclined to be higher literacy problems, they work very well.We should be looking at improving the quality of teaching through professional development, through national registration and accreditation of teacher education courses, and national standards and guidelines. We should be strengthening the professional status of our teachers. Of course, we also need to look at much greater levels of funding for integration of the two per cent of children in Australia who have special needs. We need to look at assistance for isolated students to improve retention rates, which are still amongst the worst in this country, aside from our Aboriginal and Torres Strait Islander students. We need to see targeted assistance for the poorest 25 per cent of schools.The common youth allowance means that many 15- to 18-year-olds will now be required to stay on at school unless they have jobs. There is no indication at this stage as to whether the government's program for assisting some of those schools to develop special courses and special programs is working. I think we need to see in-school counselling services for drug and substance abuse and for suicide prevention. The Democrats would certainly like to see the integration of education and health and community services in our schools, including support for homeless students. I was in a school just out of Warrnambool a few weeks ago which had scratched together some money in order to employ a social worker, whose job was liaison between students, their parents and the school. That was a very effective program. I would like to see that type of program properly funded and in all schools. This social worker was initially employed for a one- or two-day engagement, but she was so valuable that the school eventually increased, when it could afford to, her employment.Finally, I think it has been demonstrated that the way we deal with information technology is pretty ad hoc and that there is certainly an underfunding of those services in our schools. I hope that the government takes on board what is being said by so many Australians. Roughly 80 per cent of Australians would like to see education properly funded in this country. Many of them would be only too happy to pay a little extra tax in order to be sure that their children and the children of others are properly educated in this country.It is time we gave education the priority it deserves. It is time that we stopped looking at cuts and started looking at effective programs which can make a difference. We talk a lot about literacy, we talk a lot about testing, but not too much is said about how we are going to pay for really effective schools for really effective education.13:56:003706Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I thank honourable senators for their contribution in the debate on Appropriation (Parliamentary Departments) Bill (No. 2) 1998-99 , Appropriation Bill (No. 3) 1998-99 and Appropriation Bill (No. 4) 1998-99. A second reading amendment, which the government opposes, has been moved by Senator Faulkner. The government would simply say that its actions were proper and have been found to be so by the Australian National Audit Office in relation to that aspect dealt with by the motion. But, as we have the new tax system legislation pending, I will not take it any further. I commend the bills to the Senate. Amendment agreed to.Original question, as amended, resolved in the affirmative.Bills read a second time.3707Bills (on motion by Senator Ellison) read a third time.Miscellaneous37073707Motion (by Senator Ellison) proposed:That the committee approves the statement on the Issues from the Advance to the Minister for Finance as a final charge for the year ended 30 June 1998.13:58:003707Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Of course, we have just had the spectacle in relation to the appropriation bills of the government accepting their guilt on the issue of the unconscionable $20 million advertising campaign that was conducted in the lead-up to the last election. This expenditure is totally unprecedented in the history of Australian politics. I think it is quite extraordinary that not only did such a second reading amendment find favour in the Senate—many would expect that that might be the case, given that the government does not in its own right hold a majority here—but the government, so ashamed of its own behaviour, did not even see fit to divide on this issue.The opposition has, for many months, drawn attention to what we consider to be an absolutely flagrant abuse of taxpayers' money—an abuse of power on the part of this government in terms of this totally improper and unprecedented use of taxpayers' money. We have never seen, in the history of Australian politics, a government spend so much money in the lead-up to an election campaign. We have never seen a situation where those moneys were spent not on advertising and promoting a government program but on promoting a policy that the government intended to take to the election itself.Progress reported.Ministerial Arrangements370714:00:003707Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—by leave—I inform the Senate that Senator Robert Hill, the Minister for the Environment and Heritage and Minister representing the Prime Minister, the Minister for Trade, the Minister for Foreign Affairs, and the Minister for Forestry and Conservation will be absent from the Senate for question time this week. Senator Hill is attending the seventh session of the Commission on Sustainable Development in New York. During Senator Hill's absence, I shall take questions relating to the Prime Minister's portfolio, the Trade portfolio and the Foreign Affairs portfolio. Senator Minchin will take questions relating to the Environment and Heritage portfolio, and the Forestry and Conservation portfolio.14:02:003707Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—by leave—As you, Madam President, would be aware, it is not normally the case that the opposition comments when the Leader or Acting Leader of the Government in the Senate makes a statement about ministerial arrangements. I wanted to point out on this occasion the absolute hypocrisy of the government in relation to this issue. Time and again, when the Labor Party was itself in government and found that a minister was required to be absent, whether overseas on ministerial business or caught up in a ministerial council or some unavoidable appointment in Australia, we had Senator Hill claiming on behalf of the then opposition that those ministers should be present in the chamber.I point out the cant and hypocrisy in the statements that Senator Hill made at that time. The record stands for itself. I commend the Hansard record of 16 November 1993, 6 December 1993, 22 March 1994, 11 May 1994, 19 September 1994, 23 March 1995, 25 September 1995 and 14 November 1995, when Senator Hill, on behalf of the then opposition, strenuously objected when Senator Gareth Evans—the then Leader of the Government in the Senate—or another minister was absent from the chamber during question time. In fact, I will quote Senator Hill from 16 October 1995, when Senator Evans—who was then not the Minister for the Environment but the Minister for Foreign Affairs—announced that he would be absent, and then was absent, from the chamber. What did Senator Hill say? Let me quote him:. . . forget the responsibilities of the government and ministers to this parliament because he has better things to do.He said of Senator Evans that he ought to recognise his responsibility to the Australian parliament. I quote him again:This minister puts his other activities ahead of that responsibility and for that I think he should be condemned.He went on in that same statement at great length to say:In the view of the coalition this is unsatisfactory and he should meet his first responsibility and that is his responsibility to the Australian parliament.We do not engage here in an exercise of hypocrisy. We do accept—unlike the coalition—that ministers of the Crown have responsibilities that might take them away from this parliament and from a sitting of the Senate on certain occasions. We are not critical of that, but we are critical of the consistent hypocrisy that Senator Hill showed during his period as opposition leader.There is no way in the world that the coalition, when in opposition, would have accepted the situation where Senator Hill did not himself deliver, but had a member of his staff deliver, a letter to my office late on Friday, 16 April last week, saying that Senator Hill would be absent from the chamber today and for the remainder of the week. If that situation had been repeated when Labor was in government, we would have had this chamber up-ended for at least half an hour before question time commenced. There is a serious issue here of consistency, and the Liberal Party in coalition government stands condemned for the most hypocritical approach imaginable to this issue.We do accept that Senator Hill has business overseas. We are unhappy that the Prime Minister has seen fit to have his doormat represent him here in the Senate chamber this week. But we will not be engaging in the same sort of whingeing hypocrisy that we saw from Senator Hill and the Liberals throughout the life of the last Labor government, when consistently the then opposition drew attention to such absences from the chamber. However, we do ask that Senator Hill and the government show a little more courtesy than they showed on this occasion. Obviously, the dates for the Commission on Sustainable Development were well known—probably when the Senate determined to sit in this week—and it is unsatisfactory for the parliament to be informed just a couple of days prior to Senator Hill's absence that he would be overseas. That is a substantive point, and we would ask that the government lift its game.Questions Without Notice370837083708Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—My question is directed to the Minister representing the Prime Minister, Senator Alston. Is the minister aware of comments by Victorian Premier, Jeff Kennett, to the effect that Victoria `may as well not have' federal ministers from that state, including the minister himself and the Assistant Treasurer, Senator Kemp, because `they're not advocates for Victoria, they don't go into bat for us on anything'? What action has the Prime Minister taken to improve the poor relationship between Victorian ministers and the state Premier, and what action has the minister or any of his colleagues taken to reassure Mr Kennett that they are actually trying to do their best?3708Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—If you put the organ grinder and the monkey together, what you get is really a complaint that Senator Hill was not here to hear the first bit of entertainment. It is a reasonable proposition but it is not a serious question in the context of national politics, because there is clearly a whole raft of other issues. Having said that, let me say that there is a good working relationship with the Victorian Premier and with several other premiers, including Premier Beattie and Premier Carr. I am sure you are aware of their very supportive remarks of the federal government at the last Premiers Conference when Premier Beattie actually said that the government has a mandate to get its tax package through the Senate. Mr Carr, straight after the last election, made similar comments—that governments with a majority in the lower house should not be held hostage to fortune by minorities in the upper house.We take the view that it is important to get on with all premiers and we are delighted that Premiers Beattie and Carr are so supportive of us that they are prepared to walk away from you lot. Do you know why? They know the big lesson from last time around. They know that in opposition you are entitled to oppose but that what the Australian public will not abide is unprincipled opposition. In other words, if they think you have a genuine philosophical point of difference, then they can accept that and maybe even respect it—but not when you have opportunistic opposition where you support one thing in government and another in opposition. Remember what Mrs Kernot had to say? I do not know whether she has ever recanted, but what she effectively said was, `I am not so worried about Labor in opposition on Telstra; what worries me is what they would do in government.' That is the problem. As far as Mr Kennett is concerned, what the Prime Minister did to ensure that relationships were very harmonious was to come out and make some complimentary remarks about the calibre of those in the cabinet from Victoria.But the essential point of difference is this. At the end of the day, they are not just there to represent Victorian interests. I know you blokes cannot understand this. If you are here, there is only one reason why: because the union said you could have a run on the ball or because some sort of factional deal was done that put you in, irrespective of merit. Look at Senator Carr. Can anyone suggest for a moment that he is here on merit? Of course not. These blokes are here because deals were done that put them here. You are not here simply to represent your state. Cast your mind back to Edmund Burke. You have probably never heard of Edmund Burke; you are probably lost with Burke and Wills. Edmund Burke actually made a very important distinction about why you are elected to parliament. You are there not beholden to the interests that put you there; you are there to represent the interests of the community at large. That is what you have to understand. I am sure Senator Ray in his heart of hearts knows all this. I am delighted that Days of our Lives is obviously not on today and he has managed to get into question time at the very beginning of the session, and that is highly commendable, but I think he understands that at the end of the day Victoria will not be neglected by this federal government. What I suggest you do, if you are really worried about Victoria's interests, is get yourself a decent leader down there and get a decent team together, but I am afraid it is too late.3709Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—Madam President, on the assumption Sesame Street has not started early, I ask a supplementary question. When the minister refers to people being in this chamber on their merit and not as a result of factional deals, is he asserting that Senator Synon was demoted down the ticket in Victoria on the basis of ability or that it was a factional deal? Coming back to Mr Kennett's comments, is the minister saying that Mr Kennett has retracted his remarks about Victorian ministers, that he has retracted his remarks about Victoria being dudded at the Grants Commission, and that he has retracted his remarks that he believes that parliament might as well move to Sydney because you and your colleagues are basically useless?3709Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—That is a very liberal paraphrase of what I understood Mr Kennett to be saying. The fact is that he did feel the need to get something off his chest in the lead-up to the Premiers Conference. You understand that as well as we do. If Senator Ray is something other than the absentee member for Victoria Park—in other words, if he is really here and concerned about Victoria's interests—then start standing up for them and tell us where Victoria is being neglected.UI4RAYSenator Robert Ray—We are not in cabinet.LD4Senator ALSTON—But I am always sufficiently open-minded to take account of quality advice. So if you have something to say on the subject, by all means say it, but I have not heard a word from you. There are a lot of issues like the one about Sydney-centric government and Victoria being left behind, but I have never heard a word out of you. I suppose you are too busy on the phone giving Senator Conroy his instructions, but just go back to looking at Victoria's issues and you will have a lot to say. (Time expired)37103710Synon, Sen KarenSenator SYNONFQ6VICLP10—Madam President, my question—5K4FAULKNER Senator Faulkner—Only 73 days to go.LD4ALSTONSenator Alston—I raise a point of order, Madam President. One can understand Senator Faulkner's acute level of frustration, but is it appropriate for him, effectively having wasted the first 10 minutes, to now ensure that Senator Synon has the utmost difficulty in asking a question? I ask you, when he does it repeatedly, to bring him to order.10000PRESIDENTThe PRESIDENT—It is disorderly to keep interjecting.5K4FAULKNER Senator Faulkner—Madam President, on that point of order, I do hope that if Senator Alston continues his habit of taking spurious points of order you will pull him up, sit him down and apply the standing orders of the Senate fairly in relation to interjections.FQ6Senator SYNON—My question of a substantive policy nature and not of personalities is directed to the Minister representing the Prime Minister, Senator Alston. Under the dynamic economic management of the Howard government, the Australian economy stands as a powerhouse of the region and the fastest growing economy in the OECD. Minister, what measures has the Howard government taken to achieve this strong economic growth? Further, will the minister inform the Senate of the latest labour force figures—which the opposition certainly will not want to hear—and outline how the government will continue to encourage this strong and sustained job growth?3710Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I certainly acknowledge Senator Synon's very keen and ongoing interest in substantive policy issues. That is really what it ought to be all about, but once again there only seems to be one side interested in policy. Senator Synon quite rightly draws attention to what others have described as the `miracle economy'. Paul Krugman might be somewhat controversial, but I have not read too many people quarrelling with his assessment, because it all stacks up when you look at these numbers. Look at the real numbers. The real numbers are not those that get you onto the drip for life and keep you in here irrespective; the real numbers are what drive the economy. That is where the funds come from to pay for all the burdens that you impose on the taxpayer.GDP grew by 1.1 per cent in the last quarter, annualised at 4.7 per cent. All the forecasts suggest continuing robust economic growth. Inflation on a headline basis was 1.6 per cent through the year to the December quarter. It has been under two per cent for the last two years—the best sustained inflation outcome in over 30 years. What was the average under Labor? Over five per cent. Unemployment is 7.4 per cent. Where did it get to in the 13 years under Labor? It managed to get up to 11.2 per cent—about a 50 per cent higher figure than we have achieved in the last three years. Unemployment is now down to its lowest level since 1990.The absolutely fundamental outcomes of the responsible economic management that has been put in place by the government are reflected in the home loan interest rates, which are now around 6.5 per cent. How high did they get under Labor? They were 17 per cent. These are horrific numbers. When you draw that comparison, you can understand why they ran a mile and why they do not want to go back to you under any circumstances. What that translates to is an interest saving of over $330 a month on a $100,000 home loan.Job Network is finding more jobs and attracting more vacancies than the old CES. Private health insurance rebates and increased funds for health have been made available, as well as increased funds for education. There are an additional 71,000 child-care places. We do not pretend for a moment that the game is over and that we do not need to do any more. It is a never ending challenge, but I think everyone who looks at the figures would have to say that we are well on track. In terms of the labour force, the figures that came out only a few days ago showed that youth unemployment continued its fall in trend terms to reach 23.4 per cent—the lowest level since January 1991. Male employment grew by 18,100, largely as a result of an increase in male full-time jobs. You say that is what it is all about; that is what is being delivered.The premiers understand that, if you are to fix up the tax system, you need to secure the revenue base. You need to add to those numbers by having a comprehensive overhaul of the taxation system. If we do not do that, the premiers understand as well as we do—and of course you do in your heart of hearts—that you will not be able to have increased spending on hospitals, roads, schools, bridges and the like. Therefore, it is critically important to acknowledge what it is that has taken the Australian economy to where it is. It is not just good luck or happenstance—it is good economic management. It is in the teeth of criticism from the other side of politics, who have never espoused the sensible policy decisions but who have been utterly opportunistic. We will not be distracted. We will continue to address the issues.37113711Cook, Sen PeterSenator COOKRF4WAALP00—Madam President, my question is to the Minister representing the Prime Minister, Senator Alston. Was the Prime Minister's mistaken claim on regional television that Australian workers pay more income tax than any country in the OECD except Denmark a deliberate attempt to mislead Australians, or was it the result of poor staff work? Will the Prime Minister correct the record in the parliament now? Will he apologise to Channel 7 for using their airwaves to spread misinformation? Can the minister also confirm that the Prime Minister, in his fireside chat to regional Australia, claimed that Australian workers paid 23 per cent of their wages in tax compared to 18 per cent in America, 17 per cent in Britain and 10 per cent in France? Can the minister confirm that these figures come directly from table 1 of the OECD report and that that report lists Australia after Belgium, Finland and Sweden, as well as Denmark?3711Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—This is a classic case study for all those who are wanting to do PhDs on how some people succeed in politics and others do not. All they have to do is look at the way Senator Cook reacted to a snide and dishonest little exercise on the part of Mr Crean. If you just took Mr Crean's proposition at face value and you saw how it was retold in the media, there might be a basis for a question. I am not saying in any shape or form that it could be substantiated or justified, but if you believed Mr Crean for a moment—which we do not—then you might have some basis for asking a question. But when you read the press release put out by the Prime Minister following that program, you would at the very least have had the intellectual challenge of having to distinguish your position from that of the Prime Minister. So what do you do? You take the easy way out—you do not address the rebuttal. In other words, you just take what Mr Crean says as fact and you think that by recycling and peddling that you can make some progress.Let me tell you this. In his prime address, the Prime Minister said:According to a recent study by the OECD, Australian workers on average wages pay more in income tax than workers in any other industrialised country in the world except Denmark.Those words were based on the statement contained in table 2. The OECD report also contained table 1. There is no law that says if you quote table 2 you cannot quote from table 1 at the same time, is there? I do not think there is. But what you want to pretend is that because he used some table 2 figures, then everything else he said must have derived from table 2 as well. That is simply not the case. In giving those statistics, he quoted from table 1—about 23 per cent of average Australian workers' wages is consumed by income tax compared with 18 per cent in America, et cetera. In other words, he quoted from both table 1 and table 2. If you are too lazy to go back and look at all the facts and to understand what the Prime Minister's response has been, then naturally enough you will get it fundamentally wrong. At the end of the day I suppose that is where you want to be. You want to try and muddy the waters. You want to try and pretend that something was said that was not said. You have failed absolutely abysmally. You have not even attempted to refute the Prime Minister's statement. Therefore there is nothing to apologise for, nothing that was got wrong. The only thing that was got wrong was got wrong by you, in misunderstanding the difference between table 1 and table 2.3712Cook, Sen PeterSenator COOKRF4WAALP00—That is the slipperiest answer I have ever heard in politics. Minister, can you then explain why the Prime Minister yesterday issued a press release, as you have said, claiming he was quoting from table 2 of the report, when that table relates to an entirely different matter and contains totally different figures to those quoted by the Prime Minister?3712Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Once again, let us be clear. Table 1 refers to the percentage of gross wage earnings paid in income tax and employees' social security contributions. Table 2 refers to income tax plus employees' and employers' social security contributions as a percentage of labour costs. There is absolutely nothing to say that you cannot quote from either one or the other or both, and that is exactly what the Prime Minister did. I am sorry that you cannot walk and chew gum at the same time, but he can and he did very successfully. The editorial from the Australian newspaper on 6 April made that overall point: that only Denmark ranks higher in a survey of the level of income tax paid on an average wage as a proportion of gross wages in the 28 nations making up the OECD.Senator Cook interjecting—LD4Senator ALSTON—Do you say that somehow you should not quote from table 1? Do you say, `Once you have quoted from table 2 you are stuck with it,' or vice versa?10000PRESIDENTThe PRESIDENT—Senator Alston, your remarks should be directed to the Chair.LD4Senator ALSTON—Well, of course, Madam President, that is a nonsense proposition. (Time expired)37123712Coonan, Sen HelenSenator COONAN2M6NSWLP10—My question is directed to the Assistant Treasurer, Senator Kemp. The recent Premiers Conference was unprecedented, at least in recent Australian political history, as all state and territory leaders left Canberra satisfied that the conference had achieved a positive resolution that would see them emerge better off. Will the Assistant Treasurer inform the Senate how the Australian states and territories will be better off as a result of the Premiers Conference?3712Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I thank Senator Coonan for that very important question. It is true that after the last Premiers Conference quite a number of very happy chappies left Canberra, it has to be said, as a result of the agreement that was reached. Senator Coonan is a senator from Australia's most populous state and like us all has a great interest in the result of the Premiers Conference. The extraordinarily successful Premiers Conference represents a landmark agreement that will transform Commonwealth-state financial relations in this country. The Commonwealth government has agreed to provide the states and territories with a guaranteed, stable source of revenue to fund important community services. They in turn will abolish nine inefficient state taxes, which will remove their reliance on these growth reducing taxes and charges. Importantly, the agreement will end the states' and territories' reliance on current financial assistance grants—the so-called FAGs.In each transitional year of the implementation of the GST the Commonwealth will compensate any state whose budgetary position is temporarily worse off, and as the GST revenue increases each state will receive a larger financial gain. The new Commonwealth-State Housing Agreement has also been established to provide funding to meet increased public housing costs. Senator Coonan, your Premier was unambiguous about his views on the government's right to implement a legislative program. If I can quote Senator Carr—and this is what Senator Carr, the ALP Premier—YW4MACDONALDSenator Ian Macdonald—Mr Carr.WW4Senator KEMP—Mr Carr. I never quote Senator Kim Carr. This is what Premier Carr said:My view is that a government with a majority in any lower house ought to be able to implement its program, not subject to frustration by upper house, state or federal, and be judged by the people three or four years down the track.Let me stress that this is a comment from a recently elected Labor Premier, and I think that sends a very clear message. Premier Carr commented after the Premiers Conference:I would put it this way. I have long been a child of the Whitlam era, of the view that when governments win elections they do have mandates. As someone who subscribes to an old-fashioned reformist belief that lower house majorities ought to prevail, I am very uncomfortable with upper houses blocking the will of the government of the day.That is the view of Premier Carr. The New South Wales Treasurer, Mr Michael Egan, agrees with his Premier. This is what the Labor Treasurer of New South Wales said:The real purpose of an election is to determine the will of the people and to appoint a government with a mandate to govern.Premier Peter Beattie, the Labor Premier of the third-largest state, Queensland, said that the Howard government had got a mandate for the GST at the last election, and that of course he would not be obstructionist. Significantly, there were very supportive comments from Premier Jim Bacon of Tasmania, a Labor Premier. He said:I am the first Tasmanian leader to go to Canberra and come away not worse off.(Time expired)37133713Hogg, Sen JohnSenator HOGG7L6QLDALP00—My question is to Senator Alston representing the Minister for Foreign Affairs. Can the minister confirm the foreign minister's assessment that the Indonesian government in Jakarta is not `in favour of the sorts of activities that have been taking place' in East Timor? Can the minister advise whether this assessment encompasses the leadership of ABRI and in particular Defence Minister Wiranto? Can the minister also inform the Senate, in light of Mr Downer's view that rogue elements within the Indonesian army are culpable for the unfolding tragedy in East Timor, what representations the Australian government has made to the civilian leadership in Jakarta beyond the making of, in Mr Downer's words, `the right noises'? 3713Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I think it is fair to say that the government is very concerned about the situation in East Timor, particularly the response of the Indonesian government. What Mr Downer was pointing to was that the Indonesian government is not monolithic and, in particular, the relationship between the civilian government and the military is probably a lot more complex than it is in this country where there is a clear policy superiority in the Australian context vested in the hands of the civilian minister. As far as ABRI is concerned, I think what Mr Downer was pointing to was that there would appear to be some elements of the old guard who prefer the old regime to the quite substantial changes that have been implemented and the further changes foreshadowed by the Prime Minister. Certainly, President Habibie has indicated that he does wish the situation in East Timor to be resolved in terms of not only the escalating violence but also the killings that have been given wide publicity in recent times.It is the view of the Australian government that from the President down there is a commitment to try to ensure that the government and the armed forces act as decisively as possible to stop the violence. We do not underestimate the difficulties that are faced by the Indonesian government in ensuring that, throughout the armed forces, that approach is implemented. It is therefore imperative in the Australian government's view that the armed forces disarm the militias and that those responsible for the violence be brought to account. We have made our views known on a number of occasions, certainly through our ambassador to Jakarta in discussions with Foreign Minister Alitas and presidential adviser Dewi Fortuna Anwar as recently as 17 April.The Prime Minister has indicated that he will contact President Habibie further. We certainly support an impartial investigation of the most recent deplorable incidents resulting in loss of life. We are trying to address these matters at different levels. We understand the difficulties faced by the Indonesian government, but we do think that they have a very important leadership role in terms of the actions of ABRI. We very much hope that the government's view will prevail.37143714Bourne, Sen VickiSenator BOURNETW4NSWAD00—My question is also to Senator Alston on the same subject. My question refers to the report compiled for the Minister for Foreign Affairs by two Australian diplomats in East Timor following the massacre in Liquica last week. According to the Australian investigation, how many deaths occurred in Liquica as a result of the militia attacks on 6 April? Did the investigation establish any involvement by ABRI in the massacre either directly or through lack of intervention? If the Australian government does not believe that General Wiranto is involved in the violence in East Timor, will the government be making representations to President Habibie to request that he place generals in East Timor who will follow his orders for the maintenance of peace and order in that territory? If the violence leads to Jakarta abandoning the autonomy vote which is scheduled for July or August, what does the Australian government plan to do?3714Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I think it is not helpful and perhaps not even sensible to look well down the track in terms of the responses which might be unfolding. In terms of the recent events about which we are very concerned and any report by the embassy in relation to the events at Liquica, which has been visited by embassy officers, it is not a matter that the government would be in the habit of releasing a report on, certainly at this stage. The visit was conducted to obtain a more accurate picture of what occurred in order to decide the appropriate Australian response. The release of the report, which contains the names of those who provided information, might well compromise the safety of contacts who spoke to our embassy.It is also correct to say that it is always very difficult to obtain an accurate picture of what occurred because you will get conflicting estimates of both the extent of the fatalities and the nature of the violence. Certainly, the extent of ABRI's involvement is a matter of particular concern. ABRI's estimate is one that has been provided to the government. But, again, I do not think that we would necessarily want to take any estimate of the nature and extent of the violence or the killings as being the final word on the subject.The government does not see that it would serve any useful purpose to release that report, but it will certainly hopefully help to inform any decisions that the Australian government might take and certainly help to make us more aware of whatever contribution we might be able to make down the track. We do, I might say, welcome the Indonesian government's stated support for the National Commission for Human Rights fact finding mission currently in East Timor and for access to Liquica by the ICRC. The government also welcomes President Habibie's support for the establishment of a peace commission on East Timor under the auspices of Komnas Ham.3714Bourne, Sen VickiSenator BOURNETW4NSWAD00—Madam President, I ask a supplementary question. I thank the minister. I am aware of the circumstances he is working under; he is not even the minister representing in general. I am not asking for the release of any names of any informants or anything like that, but what I would like to know is how many deaths were estimated to have occurred in Liquica as a result of the militia attacks on 6 April. I am sure there is a figure in that report which would not harm anybody if it became public. Will the government make representations to the President of Indonesia that he put people in charge in ABRI in Indonesia who will do what he has asked and what he has commanded them to do, which is to restore law and order, because it looks from the outside as if that is not happening?3714Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The government has no reason to believe that President Habibie does not have a commitment to ensuring that those who are based in East Timor, either the representatives of the government directly or representatives of the armed forces, have that commitment. That is certainly a matter that I am sure will be further explored by the Prime Minister in any further discussions with President Habibie about the matter.I do not think anyone can contest that there have been killings both in Liquica on 5 and 6 April and in Dili over the weekend of 17 and 18 April. Once again, to simply publicise a number, which may or may not be an accurate one at this stage, we do not believe would contribute to any sensible resolution of the problem. I think the more important matter of principle is to try and ensure that the Indonesian government is very much aware of Australia's concerns and those of the international community and that whatever can be done from the highest levels is done. As I say, we have no reason to believe that President Habibie does not have that commitment, but that matter will nonetheless be reinforced by the Prime Minister. (Time expired)37153715Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—My question is directed to Senator Alston, representing the Prime Minister. Can the minister confirm that on the Sunday program yesterday the Prime Minister said, `it could be possible that the arrangement whereby pensions are always 25 per cent of male average weekly earnings, that the amount of that could over time be higher than the CPI, plus 1½ per cent', that Laurie Oakes prompted, `Could swallow up the 1½ per cent?' and that Mr Howard responded, `Yeah. Well, that has always been the case'? Hasn't the Prime Minister now finally confirmed what everybody knows—that the government's compensation package for pensioners will be eroded to zero, while the GST is forever?3715Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I did see a newspaper report of remarks to that effect, I think in the Canberra Times . I am not in a position to make any comment on it, but the last thing I would do is take Senator Faulkner's assessment of it at face value. Going to the thrust of his question, the fact is that everything he needs to know and more is contained in an article that appears in the Financial Review today over the name of the Treasurer. What Mr Costello spells out there, chapter and verse, is that what Professor Warren noted in his study was that, on average, there appear to be no groups who are losers from the new tax system. He pointed out:The Government will be increasing pensions and other social security payments by 4 per cent from the day the GST commences. Pensioners will not have to wait for indexation adjustments to follow prices—for the first time, they will get increases before any price rise.After that, pension and other social security indexation will be paid so that benefits will be 1.5 per cent higher than the full Consumer Price Index, with no discounting for tobacco or anything else.He went on to talk about Professor Warren and the National Centre for Social and Economic Modelling having missed the point with much of their study. He stated:They seem to have thought the Government's policy is to provide a fixed pension increase of 3.4 per cent . . . regardless of prices . . . This is not so. It is at least 4 per cent and no discounting. If the CPI goes higher indexation increases to be always 1.5 per cent above it. The 1.5 per cent "buffer" . . . ensures that even if . . . some people have above-average cost of living effects, they will still be covered. And it means those with lower than average costs will do even better.And on he went. He then said:. . . pensions will increase by an up-front 4 per cent and be maintained at 1.5 per cent more than prices. If, in the future, 25 per cent of MTAWE—that is, male total average weekly earnings—is higher, then pensions will rise again, rising further in front of prices. In this scenario pensioners get higher real increases.Once again, what you have is an up-front commitment to ensuring that those on low incomes are fully protected. How does that stand in marked contrast to what Labor did—and you have never resiled from this, have you?—with its l-a-w law? It is bad enough to fundamentally welsh on the most solemn of commitments, but what you did in the 1993-94 budget, without a cent of compensation for low income earners, was increase wholesale sales taxes by two per cent; put petrol up by 7c and 5c; increase excise on tobacco by 15 per cent; tighten the safety net for the Pharmaceutical Benefits Scheme; restrict access to Medicare benefits; for optometry services reduce the growth; and push the pension age for women up to 65. Then in 1995-96—you were repeat offenders—you increased the Medicare levy by 0.1 per cent; increased tobacco tax by 10 per cent; and tried to impose a tax on the family home through the builders hardware tax.When we are talking about compensation for tax increases, we have put it on the table. We have a very fair and equitable proposal that I think has been spelt out chapter and verse by the Treasurer. It stands in absolutely stark contrast to your total failure to provide even one cent of compensation—something which you have not only not apologised for but which, presumably, you would do again if ever you got the chance.3716Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam President, I ask a supplementary question. I thank the minister for drawing my attention to today's Financial Review article. I notice that the minister did not quote that Mr Costello said in today's Financial Review :The two promises—that is, the CPI plus 1.5 per cent and the 25 per cent of MTAWE benchmark—do not erode one another . . . Can the minister explain Mr Costello's statement in the light of Mr Howard's acceptance that the existing MTAWE benchmark will in fact swallow up the CPI plus 1.5 per cent? Who's lying here—Mr Howard or Mr Costello?10000PRESIDENTThe PRESIDENT—Senator, I do not think that is the appropriate way to phrase your question.5K4Senator FAULKNER—I will rephrase it, Madam President. Who's telling the truth—Mr Howard or Mr Costello?3716Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I can simply assure the Senate that in relation to these matters, as in all others, both the Prime Minister and the Treasurer have told the absolute truth. They have been quite transparent in their approach. They have had a deep commitment to ensuring that those on low incomes will be fully compensated. If Senator Faulkner is grateful to me for drawing his attention to the article, can I suggest he goes that one step further and actually reads it?37163716Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—My question is to the Minister representing the Minister for Health and Aged Care, Senator Herron. Does the minister agree that the explosion at Maralinga on 21 March this year, which has led to the suspension of the clean-up operation at the site of the British nuclear tests, throws serious doubt on the entire clean-up operation at Maralinga? Will the minister make the results of the investigations under way at Maralinga available to the parliament as soon as they are finalised, rather than wait for the quarterly report of the Australian Radiation Protection and Nuclear Safety Agency? Can the minister also advise if the British government has been informed about the explosion? Finally, what assurance can the minister give that there will not be a repeat of this serious incident, either on resumption of in situ vitrification or under the proposed hybrid plan, which would still include vitrification?3716Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank Senator Margetts for the question and acknowledge her concern about radiation problems, as we all share those concerns. I also know that Senator Margetts received a briefing on the Maralinga incident from the Australian Radiation Protection and Nuclear Safety Agency. The agency is monitoring the radiation safety aspects of the Maralinga clean-up, both for workers involved and for the environmental and public health outcomes of the operation. The Department of Industry, Science and Resources have ordered a thorough investigation of the incident by the project managers, which will then be independently audited. I suggest to Senator Margetts that this is the proper process that should occur and that she should wait until that process concludes. While the investigation is still under way, the Australian Radiation Protection and Nuclear Safety Agency has ascertained that no staff were present within the exclusion zone at the time of the incident and there were no off site consequences nor any long-term implications for the radiological status of the site.At present, the reason for the explosion, as it were, or the gas leak, is not understood. It was apparently due to a mix of debris. On the basis of previous melts, the percentage of plutonium was estimated to be less than 100 grams in 400 tonnes, or less than 0.000025 per cent. Quantities of other radioactive materials are unknown but extremely unlikely to be of any significance compared to the plutonium, which is the reason for the process being used. The plutonium present in the pits as oxide is not combustible. I will check further with the minister to see if there is anything that can be added to that answer, and I will relay it back to Senator Margetts.3717Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Madam President, by way of supplementary: can the minister advise how long the audit process is expected to take? I certainly would not agree that 100 grams of plutonium is something we should not consider very serious. What confidence can the community have that disposal of radioactive and toxic substances such as those at Maralinga can be carried out safely when incidents such as the explosion at Maralinga happened during the carrying out of what effectively is still an experimental process?3717Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I understand that there are other processes that are being investigated in relation to this. I think we can accept with confidence that the Australian Radiation Protection and Nuclear Safety Agency is taking a keen interest in what is occurring in everybody's interests. I have not got a date for the conclusion of that investigation but, as I said in my previous answer, I think it should be allowed to follow due process so that a correct investigation can occur. Recommendations will then be put to the minister.37173717Sherry, Sen NickSenator SHERRYZW4TASALP00—My question is to Senator Alston, the Minister representing the Prime Minister. I ask whether the minister can confirm the statement made by the Prime Minister yesterday on the Sunday program that:By the year 2010 the states will be somewhere in the order of $15 billion to $20 billion a year better off than they would have been if the present system were to continue.3717Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I do not have the transcript of that program. If Senator Sherry has got it, then presumably the answer is self-evident.3717Sherry, Sen NickSenator SHERRYZW4TASALP00—Obviously the minister does not know, and it is a very important issue. It is a fairly remarkable admission, frankly. So will the minister take the question on notice and return to the Senate with a detailed answer as soon as possible? It is a very important issue.3717Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—As I understood the question, it was: `Did Mr Howard say something on the Sunday program yesterday?' That is a matter of record, so presumably that will speak for itself. I will have a look at the transcript and send you a copy.37173717Knowles, Sen SusanSenator KNOWLESTH4WALP10—My question is to the Minister representing the Minister for Education, Training and Youth Affairs, Senator Ellison. The Howard government has had a strong and ongoing commitment to young Australians, which has been clearly demonstrated by the number of youth and training initiatives introduced by this government. Could the minister please inform the Senate of some of these initiatives, particularly the one that has had the most outstanding success—that is, the New Apprenticeship Scheme?3717Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—At the outset, I thank Senator Knowles for that important question and acknowledge her commitment in relation to matters which affect the youth of this country. The Howard government is totally committed to seeing that the young people of Australia are well trained and properly skilled for the work force which they are about to enter.It is no surprise that, since 1996 when the Howard government came to power, there has been an increase of some 60,000 new apprenticeships, an increase of 60,000 people in training, which is a credit to the Howard government's reinvigoration of the training and apprenticeship system. That initiative was launched on 1 January last year, and it signified the introduction of flexibility for both the employer and the new apprentices. It allowed choice in training providers, and it also streamlined regulation which governed that training system. It expanded training opportunities in areas of rapid job growth, including new areas such as agriculture, sport, tourism and multimedia—all areas where we know there are great opportunities opening up for young people.AW5CARRSenator Carr—Why has the failure rate gone up by 40 per cent?9X5Senator ELLISON—The government has also provided 200 new apprenticeship centres which, as Senator Carr might be interested to know, are not only simplifying access to apprenticeships for young people but also providing support for employers. That is something which is of great assistance to employers in opening up opportunities for young people. But, in addition to that, we have provided some $43 million for the new Apprenticeship Access Program.AW5CARRSenator Carr—What are you doing about the rorts?10000PRESIDENTThe PRESIDENT—Senator Carr, you are persistently interjecting.9X5Senator ELLISON—That is pretraining, if you like, which is allowed to be accessed by those people who need that preliminary training before being able to successfully participate in new apprenticeships. It is noteworthy that, for the first time, the number of people in apprenticeships and traineeships has now cracked the 200,000 mark. For the first time ever we have a record number of people in training: some 206,000 people in training. That is a significant achievement and one which points to the success of this government's initiatives in training and apprenticeships. I might add that the figures released last week by the National Centre for Vocational Education Research show increasingly strong growth in apprenticeship and traineeship numbers since that new apprenticeship initiative I have mentioned which occurred on 1 January last year.The figure of 206,000 is an increase of some 57 per cent on the figure of 131,000 which occurred in 1994 when Labor was last in power. That figure of 206,000 is an outstanding increase on what the Labor government could do. It is an indication that this government is committed to ensuring that the young people of Australia are job ready, that they do have the training necessary to meet their obligations in the work force. The success, of course, is in the numbers that I have mentioned.But we have to look to the future. The federal government has announced that it will provide $485 million in financial incentives to employers and new apprentices for 200,000 commencements over the period May 1998 to November 1999. We will not just rest on that record figure, but we will do more because we realise that more has to be done. We are committed to providing 200,000 new places between May this year and November next year. This is an outstanding result; it is just one of the success stories of the Howard government in providing young Australians with further opportunities in training and securing a future for themselves. (Time expired)Distinguished Visitors371810000PRESIDENTThe PRESIDENT—Order! I draw the attention of honourable senators to the presence in the President's gallery of former distinguished South Australian senator Mr Tony Messner. I welcome you to Canberra and trust that you will have a pleasant visit.Questions Without Notice371837183718Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—My question is directed to Senator Alston, the Acting Leader of the Government in the Senate. Is the minister aware of a statement by Minister Newman in the Senate on 16 February that `this government's GST package will help the poor and the needy'? Minister, how can this be so when, according to the government's own cameos, a single income couple with two dependent children, one aged under five years, earning $25,000 a year would only receive $21 per week to offset the new 10 per cent tax while the same type of family earning $75,000 a year would gain $121 per week?3718Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Unfortunately this is the union mind-set; in other words, `We're not so concerned about whether you're better off; we're concerned about how you stand relative to someone else.' So, if we are interested in a compensation package that is better than the existing arrangements and you improve someone's lot, what you say is, `Ah, well, if it doesn't improve it by exactly the same amount'—as some other group you can point to—`then it's not worth doing.' That is the old command economy. That is classic relativities nonsense that I thought, when you were in government, you threw out the window. You believed in enterprise bargaining. You did not want equal outcomes. But here we go again, trying to pretend that somehow people lose as a result of our compensation package. Senator Evans did not get up and say that in as many words because he knows that the opposite is the case. What you do is point to the fact that you do not have precisely equal outcomes for all groups. But that is a very, very different proposition to saying that someone is worse off as a result of the changes—they are not.3L6CONROYSenator Conroy—We didn't ask that.LD4Senator ALSTON—I know he didn't ask it. That is my point. That is where they do not want to know. You are into the politics of envy. What you do is go along to the commission and say, `I don't care whether Fred Smith gets another hundred bucks a week as a result of productivity changes in the workplace; that's not good enough because someone else at the same workplace is getting a hundred and fifty.' So it is a very bad outcome for Fred, is it? Of course it is not. Fred is $100 a week better off. That is what you are doing here. You are trying to pretend that, because you do not have a sameness of outcomes, people will lose. They do not. Let me say it time and again; as Mr Costello said:Professor Warren found that on average there appeared to be no groups who were losers. The fact is no group is worse off. The position of low income earners and pensioners has been safeguarded and it is therefore a fair package.If Senator Evans wants to pretend that somehow this debate is about whether everyone gets the exact amount, then he is on another planet. He is not arguing the case; he is simply demonstrating why it is that Labor so comprehensively lost the last election.3719Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—Madam President, I ask a supplementary question. I thank the minister for his answer, but I would point out to him that there are two issues at stake: one is the adequacy of compensation, and the other goes to the question of fairness. My question goes to that issue of fairness. Is the minister aware that the wealthier family's benefit is larger not only as a dollar amount but also as a proportion of income? The $25,000 family gains by 3.9 per cent of their income, while the $75,000 household gains by 12.5 per cent, well in excess of any possible inflationary effects of the new tax. Minister, is $21 for a family on $25,000 per annum and $121 for a family earning $75,000 per annum this government's idea of family values?3719Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—More than 20 years ago I went to Cuba. What I discovered was that, at the height of the system that you blokes were in love with, they had differentials of four to one between professional groups and unskilled workers. In other words, even Fidel Castro understood the need to have people on different levels. It might be an unfortunate fact of life that some people are born with more opportunities than others, and some people acquire more skills than others, but even Fidel Castro did not argue for an equality of outcomes. That is what you want. That is really what you are saying. It does not matter that some people earn more. Otherwise you would not have a progressive income tax scheme, would you? Do you resent the fact that high income people pay more taxes in order to subsidise those who are on low income earnings? This is a very fair package, and no-one has been able to demonstrate that anyone is worse off. (Time expired)37193719Allison, Sen LynSenator ALLISON1M6VICAD00—My question is directed to the Minister for Family and Community Services. I refer the minister to her statement of 9 April where she said:. . . significant progress had been made towards providing unmet needs in disability service provision.How is it that the minister can make such a statement when the Australian Institute of Health and Welfare estimates the cost of unmet need to be $293 million, of which $37.5 million is needed for accommodation alone? Why has this government put no additional funding on the table at the meeting of ministers responsible for disability services on 9 April?3720Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I am glad to have the opportunity to answer that question because there is an agreement and a recognition across all governments in Australia—state, territory and federal—that there is unmet need in disability services. The quantum of that unmet need was demonstrated by the Australian Institute of Health and Welfare to be in the area of about $300 million. That was in a report which was provided to all governments at the disability ministers conference recently. I am very concerned that a decade—two decades perhaps; I cannot quantify that—of inattention to the needs of people with disabilities has now left our country, not any particular government, with this level of need for people who are some of the most vulnerable in our country. At the signing of the Commonwealth-State Disability Agreement last year, it was agreed between the governments that the Commonwealth would convene a meeting of the governments within 12 months. The last signatory to that agreement was in June last year, and I convened this meeting in April, which I think is the quote you were referring to.As part of the disability agreement, a clause recognised that this meeting would be convened by the minister. It went on to say—and I forget the exact words—`Subsequently the ministers or the governments will determine how that will be met.' That is exactly what happened. I convened the meeting. The ministers endorsed the receipt of that important report from the Australian Institute of Health and Welfare. I indicated at that meeting that the Commonwealth was prepared to make a contribution to the unmet needs of people with disabilities.I then asked the state representatives whether they were prepared to make that commitment, and they were not prepared to make that commitment at that time. While the media coverage subsequent to the meeting has been that the Commonwealth refused to make a commitment, it was not expected in the Commonwealth-State Disability Agreement that the money was going to be discussed at that meeting. It was to be an assessment of the need and an acceptance of what the scale of the need was. That was done. If you look at the communique, all levels of government—Commonwealth, state and territory—agreed that there was a shared role for meeting that need. It is now up to negotiations between the states, the territories and the Commonwealth to work out the degree of that sharing. We have made it quite clear to the states that we are prepared to make our contribution to that need.Since the signing of that agreement in June last year, the Commonwealth has made two further commitments to the disabled in areas which are traditionally the responsibility of the states—namely, respite for older carers of older people with disabilities and carers of profoundly disabled young people. All those millions of dollars in those commitments go to helping to meet the unmet need because they are respite areas, which is one of the three areas which the governments have all recognised. Accommodation, respite and day services are the high priority areas. So, while the outcomes might have been less than those with disabilities might have hoped, I believe progress has been made. Most of the disability organisations that I spoke to have expected it to take quite a while for that to be determined. (Time expired)3720Allison, Sen LynSenator ALLISON1M6VICAD00—Madam President, I ask a supplementary question. I am pleased to hear that the government is very concerned over its apparent inability to meet these unmet needs, but people with disabilities are getting impatient. I ask the minister: exactly how much was the offer made to the states by the federal government and by the minister? What does the minister say to the 5,000 parents of children with severe and profound disabilities who cannot get proper supported accommodation? What does the minister say to the many elderly parents of disabled people and middle aged children who save the government millions of dollars by their personal sacrifices and who continue to be neglected and offended by the government's inaction?3720Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I consulted pretty widely after I got this portfolio and before I met with the state and territory ministers about this. Consistently wherever I spoke to people they acknowledged that it had taken many years for this unmet need to reach this level and that it would not be achieved quickly in terms of dealing with it but that people with goodwill should be able to make a start. I believe we have made a start.1M6ALLISONSenator Allison—How much was it?BE4Senator NEWMAN—I did not quantify the amount because I said to you at the beginning that nobody quantified their offer. We agreed, however, that we do have a shared role. You would be interested no doubt that some state representatives were suggesting that the role was to be met entirely—100 per cent—by the Commonwealth. By the end of the meeting it was being acknowledged that it was a shared role, which is more realistic. The accommodation provision has been largely and historically a state role over many years. We are trying to help. (Time expired)LD4ALSTONSenator Alston—Madam President, I ask that further questions be placed on the Notice Paper .Questions Without Notice3721372115:08:003721Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—I move:That the Senate take note of the answers given by the Minister for Communications, Information Technology and the Arts (Senator Alston), to questions without notice asked today.It was really painful to watch Senator Alston try to defend the indefensible. It was painful to watch the Prime Minister's personal doormat, Senator Alston, attempt to put the lie to what Mr Kennett said about Victorian cabinet ministers, particularly the Acting Leader of the Government. He really did fail on both counts in the chamber today. Senator Alston today has pulled the doormat out from under neath the GST and he has pulled the doormat out from underneath the Prime Minister's credibility and integrity.I want to go to the issue raised in the very important question asked by Senator Cook. During John Howard's fireside chat on regional television promoting the GST and Telstra privatisation, he quoted a recent OECD study which he claimed proved that Australian workers pay more in income tax than workers in any other OECD country except Denmark. His statement is totally inaccurate on two counts. Firstly, the table that he refers to is income tax minus social security contributions. The OECD advises readers on page 63 that valid comparisons between countries should be made only when both figures are combined. To exclude social security contributions, as the Prime Minister has done, is to present false and meaningless comparisons. When social security contributions are included, the full picture shows that Australia is the 12th lowest taxing country in the OECD. Secondly, even if you accept Mr Howard's false premise that social security contributions are not relevant to the personal income tax burden, his claim is still factually incorrect. On that basis, Australia is not second to Denmark but is fifth after Denmark, 35 per cent; Belgium, 28 per cent; Finland, 28 per cent; and Sweden, 29 per cent. The Prime Minister had no answer to Laurie Oakes on the Sunday program when, after attempting to fudge on this very important issue, he was finally pressured to concede, `Well, I will have a look at the table.'What did he do, having had a look at the table? He issued another dodgy press release claiming that he was referring to a completely different table, table 2, of the report. It is not difficult to prove that that is another falsehood from the Prime Minister and his office. Firstly, table 2 refers to a completely different matter. It refers to income tax as a percentage of labour costs, while during his fireside chat he was explicitly referring to tax as a percentage of wages. Mr Howard said:In fact 23 per cent of the average Australian worker's wage is consumed by income tax com pared with 18 per cent in America, 17 per cent in Britain and 10 per cent in France.The figures he used come directly from table 1 of the OECD report. It is clear that Mr Howard was not referring to table 2 at all; he was inaccurately quoting from table 1. The table 2 defence is a pathetic one—Senator Alston has bought it. What would you expect from a Victorian cabinet minister? It is a pathetic attempt to cover up a blatantly misleading statement.The Prime Minister is too proud, too arrogant, to simply retract the statement that he made and to apologise for misleading the public. The Prime Minister would never let his humility get the better of him. What began as a serious—but perhaps not fatal—factual inaccuracy has now grown into a farcical and petulant cover-up by the Prime Minister. What you normally do in these circumstances if you make a mistake is that you come clean, and that is what Mr Howard should have done. He should have come clean, but he finds it very hard to do this. His deceit was exposed by Laurie Oakes on Channel 9 yesterday. The Prime Minister, when he had been found out, looked like a bunny in the headlights. Afterwards there was this attempt to cover up, with his press office running around the gallery pretending the figures were in another table. No-one believed them; no-one should. I seek leave to table OECD tables 1 and 2.Leave granted.(Time expired)15:13:003722Knowles, Sen SusanSenator KNOWLESTH4WALP10—Isn't it interesting that we have the Labor Party coming in here and talking about deceit and dishonesty? If anyone knew the meaning of those two words, Senator Faulkner, it would have to be the Labor Party, because that is exactly what successive Labor governments did to the people of Australia over 13 long years. And, let us face it, there has been no diminution whatsoever of that deceit and that dishonesty in the three and a bit years that the Labor Party have been in opposition.If anyone has ever seen anything to equal the dishonesty and the deceit of Labor, then have a look at the process that has gone on since the last election. As the editorial in one of yesterday's papers said, `The people of Australia voted on this. Let's get on with it. Stop the Labor Party. Stop them stopping the government being able to legislate for what they promised the people of this country.' We hear them carry on ad nauseam about the responsibility of government, but they will not allow this government to govern. The question that needs to be asked is: if the tax legislation goes through, will the Labor opposition—if ever re-elected to government—repeal the legislation? The answer is no. They know at the bottom of their hearts that the tax system needs to be reformed, yet they will not implement the will of the Australian people to let that happen—and happen expeditiously. No; we had to have committees go into the same thing over and over again.We have seen in the questions from the opposition today a repeat of all of those things that have been run for the last six months, since the government was re-elected. We have the allegations made by the opposition in question time today that certain people are going to be worse off. There is no credibility in their position whatsoever. They increased taxes when in opposition way and above whatever increases this new tax system is likely to result in. Not even the wildest estimate has put price increases for the new tax system above the government's estimate. Yet the opposition's mates said to the Senate committees that the price impact of their tax increases was up to 24 per cent. What did the Labor government do about it? They didn't give a single cent in compensation over 13 years. And here they are complaining about compensation that goes ahead and stays ahead of the cost of living increases.We had opposition senators on the inquiries saying that what the Labor government did in terms of CPI increases for pensioners was adequate. Isn't it amazing how the story changes once they are in opposition? They thought CPI increases were adequate when they were in government and yet now a four per cent increase in pensions up-front and a 1½ per cent continued buffer above the CPI are inadequate. Why was it okay to just have CPI increases on their own when there was a 24 per cent price rise and yet now a four per cent increase in pensions plus a 1½ per cent buffer above the CPI are inadequate? It is duplicitous in the extreme.The dishonesty of the Labor opposition has no end. They come in here again today—needless to say, we will hear it throughout the week—and say that there are inconsistencies in the package, yet they have not once said that they will repeal it if elected to government. Why not? Why don't you come clean? Will you repeal it or won't you? The answer, I am sure, will be that they will not. The questions that have been asked today have been so lame, so predictable and so able to be knocked down by Senator Alston, as they were. Why do the opposition now want to take another half-hour of the Senate's time to prolong this dreadful debate?15:18:003723Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—On the eve of the Premiers Conference Mr Kennett said that Mr Costello, Mr Reith, Senator Alston, Dr Wooldridge, Dr Kemp and Senator Rodney Kemp are not worth having because they do not go into bat for Victoria on anything. Mr Kennett said:We may as well not have them. We have never got any support from federal ministers on anything, fundamentally. We have always had to go it alone.He finished off this particular character assessment, or assassination, if you like, of Victorian cabinet ministers by saying:So much is being centralised and focused in Sydney, if someone said to me that Parliament House was being moved to Sydney I wouldn't be surprised.Should we give Mr Kennett's claims credence? After all, he is pushing a very parochial barrow. He is playing the old bludge card that every state government plays, blaming the federal government for all the sins of the world whilst taking credit for any federal funding that comes into the state. You have to take that into account, but he is basically right. For once the Premier of Victoria has got it right. With the exception of Mr Costello—I have to be honest here in the appraisal; you have to exempt him—the rest of the Victorian ministers are just drivel; they are useless.It is interesting—I wasn't present but others were—that after this government won they all went off to the Grand Prix. They were all down in their cups. They weren't actually celebrating the victory of national government. All the Liberals were complaining how they got dudded by Mr Howard in the ministerial arrangements. That is what they complained about. They weren't boasting about having taken the Grand Prix off poor old South Australia. They were all complaining that they had been dudded by the Prime Minister. Senator Rod Kemp was dudded—he wasn't even made a minister. He had to wait for the March draft, until poor old Senator Short got shunted off to London, to take his spot in the team.What really amazes me about this is why would Jeffrey Kennett think Victorian ministers would stand up to the Prime Minister? Can you think of one minister in the state government of Victoria who would stand up to Jeffrey Kennett as Premier? This is the Liberal system. This is institutionalised sycophancy. This is the way the Liberal political patronage system works. It is democratic centralism better than any Trotskyist can develop: elect a leader, put all the power in the leader, then everyone else below has to grovel to get up the greasy pole. That is the Liberal method. So why would Mr Jeffrey Kennett, Premier of Victoria, expect his colleagues in the federal ministry to stand up for Victoria?We all know that the Prime Minister is very Sydney-centric, that he lives in Sydney, that he can't even be bothered living in Canberra and that most of the decisions he makes are for the benefit of his home town. But why would Mr Kennett expect the likes of Senator Alston to stand up for Victoria? He has never stood up for anything in the cabinet. He is known as the weak reed from Victoria. You just wipe and clean your shoes on Senator Alston whenever an issue comes up.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I hope you are not reflecting on an honourable senator, Senator Ray.UI4Ray, Sen RobertSenator ROBERT RAY—I really don't want to reflect on doormats, Madam Deputy President. Senator Alston is giving doormats a bad name. Someone, somewhere in this country, has to defend doormats. We can't continue to describe Senator Alston's behaviour as being that of a doormat.When does he stand up for Melbourne? We have seen no evidence of it. The Premier of Victoria comes out and attacks him as useless. Has he got the guts to stand up and defend himself, inside or outside the chamber? No. He is just scared he might go Senator Synon's way. The Premier of Victoria has written off poor old Senator McGauran—I will not go into all those quotes again. He has got rid of Senator Synon, he wants to get rid of Mr Andrews and now he is adding to the list. After all, Senator Alston had to put in for 20 preselections before he finally got into parliament.LD4ALSTONSenator Alston—Twenty-five.UI4Ray, Sen RobertSenator ROBERT RAY—Sorry, 25. He wore out a Melway chasing around Melbourne looking for a preselection and finally got it by dudding the rules and not facing the full preselection. We cannot allow Mr Kennett to get rid of him after all that effort he put in. We know that Victoria returns a majority of federal Labor members to the House of Representatives and that is his complaint with Senator Alston and the others. (Time expired) .15:23:003724Gibson, Sen BrianSenator GIBSONBX5TASLP10—I rise to speak on the motion to take note of answers. Senator Robert Ray has just attacked my colleague Senator Alston, our leader in the Senate. It is ironic, on this historic day, when the taxation bills are going to be debated in this chamber in one of the most momentous and important debates facing this nation for many years, that here we are wasting time because the Labor Party has decided to attack our current leader. The Labor Party knows that senators are elected by their state, not to represent their state but to take part in the Australian government. As Senator Alston said, Edmund Burke clearly laid out the principles of doing this many years ago. That is basically what we are doing. We are on about running proper government. How can the opposition know what effect particular senators have? Everybody knows that key decisions are taken in cabinet; that they are not taken in parliament or in the public arena. So it is just playing politics to criticise senators for what is going on. As I said before, this is what is happening on this momentous day, when the tax debate will hopefully start some time later today in this chamber and when the most pressing problem facing Australia is taxation reform.The Howard government has done a great job over the last several years in reforming the economy, getting government expenditure back on track, reducing government debt and interest rates and increasing employment. Australia is now regarded very highly by the rest of the world because of the management of the Australian government with its charter of budget honesty and the accrual budgeting which it has brought in.Now we are moving into tax reform. Everyone knows that the Australian tax system needs reform. The former Labor government put forward proposals for changing tax but could not get there because of its union mates. That was the trouble. Now that we are in government and our next priority is reforming taxation, what are they doing? They are criticising senators on our side about trivial matters.UI4RAYSenator Robert Ray—Jeff Kennett is not us.ZW4SHERRYSenator Sherry—You are defending him.BX5Gibson, Sen BrianSenator GIBSON—Yes, but you know as well as I do that it does not matter what noises are made out in the public arena—UI4RAYSenator Robert Ray—So Jeff Kennett is mad, is he?BX5Gibson, Sen BrianSenator GIBSON—No. I am not saying that. The important thing is that people work behind the scenes and work together as teams. Within the coalition there is effective team work—that is what is going on.Later today, we will debate tax reform. The government has put an excellent package before the Australian community, a new tax system. It is largely to do with reforming the unfairness of the existing tax system—the poor incentives for people to work and to save—and the unfairness of the indirect tax system, which is a great mess. We are getting rid of 10 indirect taxes, reducing income tax rates so that people on average weekly earn ings and below will face marginal tax rates of 30 cents in the dollar, rather than the current rates of 34 cents and 43 cents in the dollar which are destroying the incentive for people to work. We want people to want to work and to be able to work and save, and hence to invest. That is what we are on about.The GST is part of the reform of the indirect tax system. We are getting rid of the wholesale sales tax which the Labor Party kept pushing up in 1993 and 1994, and we are getting rid of excise. We are reducing excise on fuels and we are reducing the wholesale sales tax. (Time expired)15:28:003725Carr, Sen KimSenator CARRAW5VICALP00—Senator Gibson says that the Liberal and National parties work as a team. No-one has told Mr Kennett that this is a team at work. In the past, we have seen him comment upon Liberal and National Party relationships. For instance, he made it very clear in regard to Senator McGauran. He said, `He was making an absolute geek of himself' and that `Senator McGauran should resign because of the erratic comments which he made so often. He is, unfortunately, not our best senator.' Mr Kennett also indicated that `he continually questions his worthiness to represent the views of Victorians in the Senate and, frankly, he unfortunately just is not up to the task.'We have also seen what Mr Kennett said about Senator Synon. He said that he was so appalled by Senator Synon's behaviour and performance in this place, that she was a dud, that her role in the Senate served only as a pro-Costello number in a future leadership bid and therefore she deserved to be dumped. Mr Kennett has not stopped there. He has gone on to discuss the merits of Victoria's cabinet ministers. In this regard, I say that he is absolutely right. It is not very often that I agree with Mr Kennett. When he points out that various ministers representing Victoria have not done their job very well, I think he is absolutely right. In fact, he has belled the cat. Mr Kennett has pointed out that Mr Costello, the Treasurer, recently failed to stand up to the Sydney-centric views of the Prime Minister. He has pointed out that Victoria was dudded by the Grants Commis sion proposal, and that Mr Howard—if anyone needed any evidence of his attitude toward Sydney—was only there to defend the interests of Sydney versus those of Melbourne. We have seen Senator Kemp, the Assistant Treasurer, do nothing other than demonstrate his cowering obsequiousness to the financial interests coming out of Sydney. We have seen this with Dr Wooldridge, whose administration led to the gutting of the health system in Victoria. Under Dr Kemp we have seen the gutting of the education system in Victoria as a direct result of Liberal government policies. We have seen these statements being made again and again by Victorian ministers pointing out what damaging effect this government in Canberra is having on the education policies in Victoria.We have seen the policies being pursued by Mr Reith in industrial relations—the draconian measures that have, for instance, been taken in regard to the waterfront. We have seen the attitudes to the Victorian manufacturing industry. We have seen again and again the policies of government being pursued to the great detriment of the people of Victoria. We have, of course, seen that with regard to Senator Alston—Senator Alston, the lap-dog of the media interests in Sydney.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Please do not reflect upon senators, Senator Carr.AW5Carr, Sen KimSenator CARR—He is not able to represent the interests of Victoria effectively. He is not able to do other than meet the demands of the media moguls in Sydney. The Prime Minister's doormat has not been able to effectively stand up for the interests of Melbourne. We can see it no more clearly than in the case of the ABC, where the various attacks upon the ABC have led to disproportionate cuts to programming and to staffing in Melbourne. Even now, Melbourne's weekend weather reports come out of Sydney, and so often they forget what city they are in. It is only too often that we hear the reports from the middle of Melbourne giving us a detailed weather forecast for Sydney. This is the policy under this government.There is real interest being shown in the way in which Senator Alston spends his time in this country. An examination of the records since the 1996 federal election shows that Senator Alston has claimed 90 nights in Sydney; that is, 90 nights of TA claims come out of Sydney—90 nights in 27 months. It is obvious that he has very important work to do in Sydney. Obviously it is extremely important: 90 nights in Sydney. He spent 10 nights in Brisbane, nine nights in Perth, five nights in Adelaide, one night in Darwin and one night in Hobart. We have to ask ourselves: what sort of distribution of the minister's time would account for this? One has to ask: what is he doing in Sydney? Is he not pandering to the interests of the media moguls in Sydney? He is certainly not there to defend the interests of Melbourne. You have to ask yourself again and again.What has happened is that Jeff Kennett has drawn to the government's attention their failure in regard to private health insurance, the TCF, the pharmaceutical industry, the Work for the Dole program, the preamble and the drug strategy. What we see is Jeff Kennett offering advice to these ministers in this government, and what we also see is the failure of these ministers to have even the courage to defend themselves, let alone the interests of Melbourne. (Time expired)15:33:003726Chapman, Sen GrantSenator CHAPMANFF4SALP10—It is very clear from what we have heard in the chamber this afternoon in response to the questions that were answered earlier that the Labor Party have no understanding of the principles of government, and they certainly have no understanding of the principles of the federal system of government that we have in Australia.Clearly, it is the role of Premier Jeff Kennett in Victoria to promote the interests of his state at all times and in all forums. That is his job. He is the leader of the state of Victoria as the Premier of that state. But what our opponents over the way do not understand is that that is not the role of the Commonwealth government. It is not the role of the Commonwealth government to promote only Victoria; it is the role of the Commonwealth government to govern in the interests of all Australians—not just your state, Senator Carr, but all Australians—and that is exactly what they are doing. That is, of course, in fulfilment of the commitment made by the Prime Minister when this government was elected: that we would be a government for all Australians. Those Victorian MPs and senators who happen to be members of the cabinet also have that responsibility. It is not their responsibility to govern for Victoria; it is their responsibility to govern for all Australians—and that is exactly what they are doing. So let us have none of this nonsense that we are hearing from the Labor Party opposite where they confuse the role of the Victorian Premier with that of the Commonwealth government. This sort of comment that we hear opposite just reflects the disingenuous nature of the Labor Party in this chamber.Their other comments were again directed at tax reform. It seems the Labor Party will stop at nothing to propagate their scare campaign against tax reform, even at this late stage in the process. Today in question time they falsely accused the Prime Minister of making a deliberately misleading assertion on income tax in his television address on the Prime Television network on 12 April. The Prime Minister has already laid that false accusation to rest. In his address, the Prime Minister said:According to a recent study made by the OECD Australian workers on average wages pay more in income tax than workers in any other industrialised country in the world except Denmark.That is an accurate statement based on table 2, page 14 of the OECD report, The Tax Benefit Position of Employees, 1997 . The Labor Party are not satisfied with that. They then say, `Oh well, because he quoted some other figures from table 1, it was not table 2 he was quoting from at all when he made that statement. It must have been table 1.' But the fact is it was table 2 that the Prime Minister was quoting from, and that is clearly demonstrated because it is table 2 that shows that workers in Australia are the second highest taxed workers in the world as a percentage of labour costs. So let us lay that furphy completely to rest.The report's findings, of course, were not only commented on by the Prime Minister. They were commented on by the Australian in an editorial of 6 April 1999. So is the Australian also misleading? Of course it is not. It is using accurate figures put down by the OECD. This disingenuousness reflects the whole approach of the Labor Party to tax reform. Throughout the committee process we have seen their pathetic failed attempts to undermine the government's tax reform program.Just let me give you one example of this, and that, of course, is the way in which, particularly in the Senate select committee, they have asked economic modellers to undertake studies and economic modelling processes based on assumptions that are entirely unrealistic, assumptions that will never occur in real life. But that has not prevented the Labor Party from asking the economic modellers to undertake their studies on those quite unrealistic assumptions. And, even in those situations—let alone on the basis of assumptions that are realistic or assumptions that will actually occur in real life—the outcome of the economic modelling has been that they have struggled to find anyone who will be worse off as a result of the government's much needed tax reforms. And this is, as I say, the approach the Labor Party has adopted—a completely obstructive and completely unacceptable approach. It just reflects the way in which they operate in this chamber. (Time expired)10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! The time for the debate has expired.Question resolved in the affirmative.372710001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:372710DT6Bartlett Sen AndrewTo the Honourable the President and Members of the Senate assembled.The Petition of the undersigned draws attention to the potentially damaging effects of National Competition Policy on small business such as newsagents.Your petitioners ask the Senate in Parliament to call on the federal government to review the decisions of the Australian Consumer and Competition Tribunal which threaten the viability of newsagents and introduce legislation to override these decisions and preserve the current system of distribution for magazines and newspapers through Australian newsagents.Senator BartlettDT6Senator Bartlett(from 10 citizens)372773DT6Bartlett Sen AndrewTo the Honourable President and Members of the Senate in the Parliament assembled.The Petition of the undersigned call on the Federal Parliament to ensure that the current regulations relating to food content are retained by the Australian New Zealand Food Authority and that adequate food labelling is introduced which allows the Australian community to make a real choice when it comes to the purchase and consumption of food.Your Petitioners ask that the Senate support legislation which will ensure that all processed food products sold in Australia be fully labelled. This labelling must include: all additives percentage of ingredients nutritional information country of origin food derived from genetically engineered organismsSenator BartlettDT6Senator Bartlett(from 73 citizens)Petitions received.Notices37273727Senator Sherry to move, on the next day of sitting:That the Senate—(a) notes: (i) that the Prime Minister (Mr Howard) misled the Australian people when he said in his so-called tax reform broadcast on 12 April 1999 that Australia had the second highest income taxes and that only Denmark's are higher, (ii) that the Organisation for Economic Co-operation and Development (OECD) study he quoted shows that not just Denmark, but also Belgium, Sweden and Finland have higher income taxes than Australia and that Turkey has the same level, (iii) the further misleading comments of the Prime Minister, in the same broadcast on 12 April 1999, when he said, `In fact, 23 per cent of the average Australian worker's wage is consumed by income tax compared with 18 per cent in America, 17 per cent in Britain and only 10 per cent in France', and (iv) the same OECD study which lists all income taxes, including those called social security contributions, shows that out of 29 industrialised countries Australia ranks as the twelfth lowest, not the second highest, as the Prime Minister claimed; and(b) condemns the Prime Minister for yet another misleading claim in an attempt to justify the unfair goods and services tax.Senator MacGibbon to move, on the next day of sitting:That the Parliamentary Joint Committee on the Australian Security Intelligence Organization be authorised to hold public meetings during the sittings of the Senate, to take evidence for the committee's inquiry into the Australian Security Intelligence Organisation Legislation Amendment Bill 1999, at the following times:Tuesday, 27 April 1999—9 am to 2 pm and 3 pm to 10 pmWednesday, 28 April 1999—9 am to 2 pm and 3 pm to 5 pm.Senator Calvert, at the request of Senator Eggleston, to move, on the next day of sitting:That the time for the presentation of the report of the Environment, Communications, Information Technology and the Arts Legislation Committee on the provisions of the Radiocommunications Legislation Amendment Bill 1999 and 2 related bills be extended to 29 April 1999.Senator Woodley, also on behalf of Senator Crossin, to move, on the next day of sitting:That the Senate—(a) notes: (i) the initiative taken by the Council of Churches in Darwin to conduct a community forum on the subject of the Northern Territory's mandatory sentencing laws, (ii) that these laws have proved an embarrassment to the Northern Territory Government, and (iii) that the Chief Minister of the Northern Territory (Mr Burke) has announced in the media that he will move amendments to relax these mandatory sentencing laws; and (b) urges the Northern Territory Government to abandon its mandatory sentencing laws altogether.3728Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I give notice that, on the next day of sitting, I shall move:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the National Health Amendment Bill (No. 1) 1999 , allowing it to be considered during this period of sittings.I also table a statement of reasons justifying the need for this bill to be considered during this sittings and seek leave to have the statement incorporated in Hansard .Leave granted.The statement read as follows—Statement of Reasons for Introduction and Passage in the Autumn SittingsNational Health Amendment Bill (No. 1) 1999The purpose of the Bill is to introduce changes to the legislation governing the Pharmaceutical Benefits Scheme (PBS) to prevent the inappropriate export from Australia of medicines obtained under the PBS and subsidised by the Australian taxpayer.The Bill is designed to contribute to the continued viability and effectiveness of the PBS. It addresses a significant deficiency identified in the current legislation that, where inappropriate use or disposal of PBS medicines is discovered, action can be taken only against the person for whom the drugs were prescribed or to whom the drugs were supplied. The present legislation does not allow action to be taken when some other person is detected carrying or exporting medicines that have not been prescribed or supplied for the treatment of that person.The current legislative deficiency needs to be remedied urgently. Without a system of control over the export of drugs and medicinal preparations, the PBS will continue to be exposed to inappropriate practices which result in the Australian taxpayer funding supplies of medicines either for the treatment of persons who are not residents of Australia or for sale overseas on the black market.Circulated by authority of Senator the Hon. Grant Tambling, Parliamentary Secretary to the Minister for Health and Aged CareSenator Margetts, also on behalf of Senator Brown, to move, on the next day of sitting: That the Senate—(a) notes: (i) the motion in relation to the Government's Wine Equalisation Tax (WET) proposal that was moved in the Tasmanian House of Assembly, on 14 April 1999, by Ms Peg Putt of the Australian Greens and passed unanimously by all political parties, and (ii) the proposed motion in relation to the Government's WET proposal to be placed on notice on 20 April 1999 in the Western Australian Legislative Council by Dr Christine Sharp of the Greens (WA) which mirrors the Tasmanian motion;(b) recognises that small wineries are a vital part of the regional small business sector, providing employment and local cash flow, bringing in tourism dollars and export dollars and contributing to a positive image of Australia both locally and overseas;(c) is deeply concerned that the Federal Government's tax reform package containing an ad valorum tax on wine may destroy small wineries and believes that a volumetric tax would be preferable and more equitable; and(d) resolves to oppose the ad valorum wine tax and instead pursue a volumetric measure.Senator Calvert, at the request of Senator Knowles, to move, on the next day of sitting:That the Community Affairs Legislation Committee be authorised to hold a public meeting during the sitting of the Senate on 22 April 1999, from 3.45 pm, to take evidence for the committee's inquiry into the provisions of the Health Legislation Amendment Bill (No. 3) 1999.Miscellaneous3729372915:44:003729Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I seek leave to move a motion relating to the hours of meeting and routine of business for tomorrow.Leave not granted.H15Campbell, Sen IanSenator IAN CAMPBELL—Pursuant to contingent notice of motion No. 1, standing in the name of the Leader of the Government in the Senate, I move:That so much of the standing orders be suspended as would prevent Senator Hill moving a motion to provide for the consideration of a matter, namely a motion to vary the hours of meeting of the Senate and the routine of business for Tuesday, 20 April 1999.Unfortunately, because Senator Brown—for his own reasons—has refused me leave to move what would otherwise be considered a piece of routine rearrangement of the sitting hours, I will have to seek the support of the Senate to suspend the standing orders so that I can move a motion. The motion will simply be to enable the Senate to sit tomorrow morning—Tuesday morning. This is unusual in that the Senate does not usually sit on a Tuesday morning. Certainly, most of the parties hold caucus and party meetings then; I know the Democrats, the Labor Party and the coalition parties do. This very important part of the democratic process was envisaged by the founding fathers when they wrote the Constitution. We do not usually sit on Tuesday mornings because of those meetings. However, as the Senate is sitting alone this fortnight—the House of Representatives is not sitting—a number of colleagues approached me over recent days and suggested that we might sit on Tuesday to allow consideration of the new tax system package. Even though it is clear that a majority of senators see that as a sensible proposal, there are some—whose right it is, of course—who oppose the proposal to sit tomorrow morning.Furthermore, the motion seeks the approval of the Senate to sit tomorrow evening on the basis that bills relating to a new tax system be considered until the adjournment, that there be only second reading speeches and that there be an informal understanding that there will be no divisions or quorums. So it would allow those people who list their names to speak on those bills to do so, and for other senators to use the time as they wish. It is a good use of the time available in the Senate. Although this is an extraordinary change to the program, it is not unprecedented. We almost always seek changes to the program on a consensus if not a unanimous basis. However, sometimes this is very difficult to achieve; and one must respect the wishes of all senators in these things. But there is no doubt that there is a clear and overwhelming majority of senators who would be happy to sit tomorrow morning to consider the legislation in respect of a new tax system.ZW4SHERRYSenator Sherry—Bring on the GST; we want to get stuck into it.H15Campbell, Sen IanSenator IAN CAMPBELL—I know Senator Sherry is very keen to get up and give his speech on the second reading.5K4FAULKNER Senator Faulkner—It is a good one too.H15Campbell, Sen IanSenator IAN CAMPBELL—It is a good one? Did he write it himself?5K4FAULKNER Senator Faulkner—He always does.H15Campbell, Sen IanSenator IAN CAMPBELL—I am sure it will be good; I might even come to the chamber to listen to it. But, Madam Deputy President, that is why we are seeking to suspend standing orders and I urge all senators—or, if I cannot have all of them, at least a majority—to support the suspension.15:48:003730Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—The opposition will support this suspension of standing orders to allow the Manager of Government Business in the Senate to move the motion that he has outlined to us relating to sitting hours for tomorrow's sitting of the Senate. Let me make a couple of points in relation to this particular issue.It has become customary for the Senate to sit on a Tuesday morning in Senate-only sitting weeks. However, it is out of the question for this to happen when the House of Representatives is sitting because certainly the federal parliamentary Labor Party meets at that time. I think the coalition parties also have meetings at that time. There has always been a difficulty with the Senate sitting prior to 2 p.m. on Tuesdays. There have been a number of occasions when there have been proposals for the Senate to sit at 12.30 p.m. on a Tuesday. That is finding less favour now with coalition senators because apparently they have some sort of coalition Senate party room meeting at that time.In relation to the Senate sitting tomorrow morning, I think, in the circumstances, that is reasonable. I think it is also reasonable that the Senate sit tomorrow evening on the basis that the Manager of Government Business has outlined. I understand that tomorrow evening there will be second reading speeches only and that the question for the adjournment of the Senate will be put prior to the conclusion of the second reading debate so that we do not have a vote on the second reading tomorrow evening. My understanding is also that this has been developed on the basis not only of no divisions but also no quorums. It is on that basis that the opposition would be willing to support this motion.Let me, however, say this. The weakness in the debate we are having now is that this really should have been thought about before this sitting week. I say to the Manager of Government Business, through you, Madam Deputy President, that possibly one of the reasons we are having problems in dealing with this proposal is that there was not some thought given to sitting times prior to the Senate coming back for this Senate-only sitting week. I now flag with the chamber and the Manager of Government Business that I think a proposal for the Senate to sit on Tuesday, 27 April—given that senators will be coming back after the Monday public holiday for Anzac Day—ZW4SHERRYSenator Sherry—Not in Tasmania.5K4Faulkner, Sen JohnSenator FAULKNER—No public holiday?ZW4SHERRYSenator Sherry—No public holiday.5K4Faulkner, Sen JohnSenator FAULKNER—There is no proposal for the Senate to sit on Monday and I do not think that is going to change. I am flagging with the government and the Senate what I consider to be the inappropriateness of the Senate sitting on that Tuesday morning because a range of senators will be coming back from the weekend and some—not necessarily a majority—do travel on the morning of the Senate sittings. So I think that is out of the question. The government may have a proposition about sitting on the evening of 27 April; I suppose that can be given some consideration at a later stage.This is a gruelling Senate sitting schedule that we have. We in the opposition will look at these issues on a case-by-case basis. On this occasion the opposition will support the suspension and support the proposals of the manager. But I stress that perhaps some of this could have been averted if we had considered these sitting times in advance of the Senate coming back for this Senate sitting week. It is on that basis that I indicate the opposition's support for the suspension. If the substantive motion is as I understand it to be and as I outlined to the chamber, then the government will receive the opposition's support for the substantive motion also.15:53:003731Brown, Sen BobSenator BROWNQD4TASAG00—I did not grant leave for the Manager of Government Business in the Senate to move the substantive motion for a couple of reasons, and I will be blunt about them. Firstly, during a very important debate a couple of weeks ago affecting the establishment of a committee to look at what censorship should be applied to information technology in this place speakers from both sides of the house had an opportunity, by leave, to contribute. But the government, knowing that I was vitally concerned about that matter, refused me leave when my time came.The seeking of leave is a very important instrument to allow the Senate to proceed swiftly with its business, but it has to be applied with an equal hand all round. I, as a Green senator, am not prepared to get from the government different treatment from other members who have different points of view in the place. I have made it clear to Senator Campbell that I have not refused to give the government leave when it brings information into the Senate or when it rearranges committee arrangements, but I will not grant leave to the government when there is a proposal to alter structural arrangements for sittings. More important is the matter of the sittings being brought on tomorrow morning with no more than 24 hours notice as far as the Greens and, I understand, the Democrats are concerned.5K4FAULKNER Senator Faulkner—And the opposition.QD4Brown, Sen BobSenator BROWN—`And the opposition,' says Senator Faulkner.H15CAMPBELLSenator Ian Campbell—And the government.QD4Brown, Sen BobSenator BROWN—`And the government,' says Senator Campbell. That is not good enough, as Senator Faulkner has said. There needs to be a better way of looking ahead than that, and I will tell you why. We take our relationship with our constituents seriously. We make all sorts of arrangements for the half-days and hours off that we get during Senate sitting times to study up on the legislation that is coming up, to make contact with constituents in Tasmania and elsewhere around Australia, and to be able to establish some free time to do the things which we cannot do while on our feet or listening here in the chamber. That is critical to running a senatorial office properly.The government have to do better. They owe it to all individual members of the Senate to let them know where they stand as far as half-days or days of their precious time are concerned, because otherwise senators will have to cancel important engagements without notice—engagements that sometimes may have been set weeks or months ahead—or will be unable to carry out research work and so on which is very important to the electorate.The other reason—and I will be blunt about this as well—is that the government is urgently wanting to get more sitting time at the moment because it is in a panic to get through as much legislation as it can before 1 July, when the numbers in the Senate change to reflect the people's vote at the last national election. People will be aware that the House of Representatives is already constituted of people who were voted in at the last election, but this Senate is not. It is constituted according to the vote in 1996; the new Senate, as voted in this year by the Australian people, will not come into being until 1 July.I think it is wrong that the government should be trying to beat that date, because the numbers will be against it then, by rushing in as much legislation as possible now—legislation that includes such things as the GST itself, the sale of Telstra, environmental laws which have massive consequences for Australia's environment and which involve the government going back to the 1950s, legislation to validate the destruction of forests around this country through the Re gional Forest Agreement legislation, legislation to abolish union services at universities, the so-called voluntary student unionism and so on. I will not be party to the government getting an agenda through this Senate before the Senate properly reflects the vote of the people as of last March. For those reasons, I did not give leave and I will not support this motion. (Time expired)15:58:003732Lees, Sen MegSenator LEES8U4SAAD00—I support this suspension and I will give leave for the substantive motion to be moved. However, we do have problems with the substantive motion. It was not discussed with us. We understood today that it was decided with the Labor Party before we heard—5K4FAULKNER Senator Faulkner—Hang on! That is not right. We were consulted. That was all.8U4Lees, Sen MegSenator LEES—And you agreed well before anybody else—5K4FAULKNER Senator Faulkner—That's not true.8U4Lees, Sen MegSenator LEES—We were simply informed, Senator, that this was the motion to be brought in, and the Labor Party would be supporting it—end of story.H15CAMPBELLSenator Ian Campbell—We asked for your opinion.5K4FAULKNER Senator Faulkner—We were asked our opinion.8U4Lees, Sen MegSenator LEES—While it might be convenient for the two major parties, who do not have the rest of their members with us—5K4FAULKNER Senator Faulkner—When you don't understand what you are talking about, you should not—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order, Senator Faulkner!8U4Lees, Sen MegSenator LEES—I do understand, Senator Faulkner. I can count, thank you very much.5K4FAULKNER Senator Faulkner—You don't know what you are talking about. It is nonsense.8U4Lees, Sen MegSenator LEES—I can count, Senator Faulkner.5K4FAULKNER Senator Faulkner—You believe we are in a fix with the government about it. We are not. 10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator Faulkner, order, please! Senator Lees, address the chair.8U4Lees, Sen MegSenator LEES—As Senator Faulkner is so sensitive, I will simply rephrase what I am saying. By the time we knew anything of this motion it had already been agreed by the Labor Party that they would support it. Therefore, I say to the government: if you want some cooperation in this debate, which is already going to be highly complex—I understand we have even more bills in the package today; we now have over 30—handing something to us as fait accompli is not the way to start.If we want more time at some stage during this debate, we are only too happy to sit down with you. But let us look at the time we already have, including two Fridays—this week and next week—to make up for the fact that we have two public holidays. During the debate you wanted six full weeks. We assured you of six full weeks. But every Democrat senator is committed from 8.30 tomorrow morning until 2 o'clock at question time. While I understand you are not going to be requiring us to be in this place or to vote, we do not want the debate going on behind our backs.We are only too happy to discuss this tomorrow night when all of us do not have commitments, but all of us have commitments with meetings tomorrow morning until question time, which I think is a perfectly natural course of action, given that we thought we had negotiated with the government the actual program for these six weeks. I say to the government that there is no point in wasting time now deciding whether or not we are going to vote on it. We have a tax report that is extremely important and that we hope we can discuss immediately after this motion is finished. We do not wish to delay time. Therefore, bring on the motion, but I say to you very clearly: this is not the way to get cooperation as we head into what is going to be a very complex and long debate.16:01:003732Carr, Sen KimSenator CARRAW5VICALP00—Since Senator Lees has drawn attention to what she sees as the arrangements that have been made which she claims have been at the expense of the Democrats or involving the Labor Party in some arrangement which she regards as illegitimate, I place before the Senate the facts in this matter. Senator Campbell on behalf of the government put a request to us and sought our advice on this matter. He approached us on the basis that, as I understood it, he was putting the same case to everyone else. We have agreed with the government's position on the basis of the advice that was tendered to us—that is, the same request was being put to the other parties. We have not been advised of any dispute on these questions.As I understand it, these matters were similarly canvassed at the whips meeting. We were not advised of any disputation to this proposal through that process. So at both the managers level and at the whips level there has not been a position put to us that indicated that other parties in the Senate were opposed to this position. It is incorrect to make an assertion that we were part of any arrangement to do over the minor parties. Nothing could be further from the truth. A proposition was put to us. We were not advised of any contrary position, either through the managers or through the whips.This was the position we agreed to on the basis that there are not normally arrangements other than this when the Senate sits alone. This is the standard procedure that has been followed in recent times when the Senate sits alone on Tuesday mornings. That is the basis on which it was put to us. I believe that it was put to us—and I have no evidence to the contrary—in good faith. To my knowledge, Senator Campbell has not approached this matter on this particular occasion with any duplicity as far as I can tell. I look forward to this practice continuing. I trust that the same level of cooperation and courtesy is extended to the opposition on all matters. Senator Campbell has not always behaved in this way but, on this particular occasion, I have no reason to believe anything other than the proposition being put to us.16:03:003733Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—If the government is to realise its responsibilities in terms of good process, I believe that, instead of what we are seeing here—an attack, unfortunately, also by the opposition on other people in the Senate—what we should be seeing is all of the Senate standing up for process. Unfortunately, that is not what is happening here. From neither of the contributions of Senator Faulkner and Senator Carr have we been given any on-the-record indication of when this approach took place.H15CAMPBELLSenator Ian Campbell—Were you at the whips meeting?DX5Margetts, Sen DeeSenator MARGETTS—I was not able to be at the whips meeting.H15CAMPBELLSenator Ian Campbell—It was raised at the whips meeting.DX5Margetts, Sen DeeSenator MARGETTS—What I just asked was when the approach was made to the Labor Party. I did not say at the whips meeting. I believe that the statement at the whips meeting was leaving it too late. If we are to get proper process within this chamber we need not only the government but also the opposition calling the government to proper process, which means thinking about the fact that such decisions should be made at leaders and whips meetings—that is, so we all know what bills are on the timetable. The government has a responsibility to do this in the accepted process. We are hearing the Labor Party defend the government by saying, `This is normal process.' It is not. The normal process is to call together a meeting of leaders and whips to give enough time for the various members who all have time commitments—not just Senator Harradine, but all senators in this place—to work out how we can best arrange our time commitments.We have a lot of pressures on us. It would be reasonable if even a little bell had rung in the head of the ALP saying, `The proper process would have been to call a leaders and whips meeting to discuss the program.' I do not know, and I still have not heard officially, when this approach took place to the ALP, but I know that there have been many times when I have come into this chamber when maybe the Greens have been the only ones left out of a negotiated process. There are many times when either the Greens or the Democrats are left out. It might help in the future if the ALP were also to think, `What is proper process here?'I am not attacking the ALP for this decision; I am saying it is poor process on behalf of the government and if the opposition want good process in the future they need to also be aware of the fact there are other people's interests which they also need to look at—those of the electorate. We all need to make decisions. There have been things that have been let slip, such as when the government is required to give answers to estimates. It does not matter anymore. The government does not seem to mind because the ALP does not keep the government to those proper processes.We all have to work here to make sure the electorate are better served. They are not being well served. I do not believe I will oppose the motion for the vote to be taken, but we are not talking about a notice of motion; we are talking about an actual motion and this simply is not good process. We should have had a meeting last fortnight. We should have ongoing meetings to discuss the program so that we have some idea of what idea is urgent, the time available and the government's priorities. We are left in limbo.5K4FAULKNER Senator Faulkner—There was a Democrats representative at the whips meeting.DX5Margetts, Sen DeeSenator MARGETTS—There was a Greens representative at the whips meeting too. What we were presented with at the whips meeting was a statement by the government. We then processed it—as we do. We talked about it and said, `We knew nothing about this.' It is the proper thing to do to have these meetings and to have these decisions made properly—not dumped on us in this way. The opposition should be calling for better process as well.Question resolved in the affirmative.3734Motion (by Senator Ian Campbell, at the request of Senator Hill) agreed to:That a motion to vary the hours of meeting and routine of business for Tuesday, 20 April 1999 may be moved immediately and have precedence over all other business today till determined. 3734Motion (by Senator Ian Campbell) proposed:That on Tuesday, 20 April 1999:(a) the hours of meeting shall be 9.30 am to 12.45 pm, 2 pm to 6.30 pm, and 7.30 pm to 10.30 pm;(b) the routine of business from 9.30 am to 12.45 pm shall be government business only;(c) the routine of business from 7.30 pm to 9.50 pm shall be the government business order of the day relating to A New Tax System (Goods and Services Tax) Bill 1998 and 26 related bills, second reading speeches only; and(d) the question for the adjournment of the Senate shall be proposed at 9.50 pm.16:09:003734Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I move:Paragraph (a), omit "9.30 am to 12.45 pm,".Omit paragraph (b).This amendment would find a compromise between the proposal put by the government and the debate which we have had, in which various opinions have been expressed by various people, so that we would not sit tomorrow until 2 p.m., but we would sit tomorrow night. That would give the government extended hours of sitting but would allow us to fulfil the arrangements that many of us have made between the hours of 9.30 a.m. and 2 o'clock tomorrow.16:10:003734Brown, Sen BobSenator BROWNQD4TASAG00—I understand the spirit of that amendment and I think it improves the situation, but I am going to oppose this motion for the reasons I put earlier. I am not going to support the acceleration of the program for this government to bring through a whole range of legislation before the duly elected Senate of 1 July arrives. We are in a situation where we do not have to hurry these matters. It is only a matter of the government counting its beans and recognising that it is not going to have the numbers to get through much of its legislation, including such things as the GST and Telstra, via the support of Senator Harradine and/or Senator Colston after that date. It is going to have to deal with the Democrats. It could equally be said that I am saying here that I want to have the numbers going the way I think is better. That reflects on my preference for the Democrats' policy direction over that of the Independents. What I am keen to put to the Senate here is that Mr Howard, the Prime Minister, has repeatedly said he has a mandate to do this and that, including the partial sale of Telstra and the pushing through of the 30 or so bills which add up to the new taxation regime, including the GST. If that is the argument for the House of Representatives, it applies equally validly to the Senate.I believe these pieces of legislation, which were very much at the fore during the debate leading up to the last election, ought to be dealt with by the Senate that was elected at the last election by the people of Australia. I believe the same applies to the Regional Forest Agreement legislation, which is a piece of government legislation to endorse the destruction of much of Australia's wild forest heritage and its wildlife in Western Australia, Tasmania, Victoria, New South Wales and Queensland.It also applies to voluntary student unionism. That was not something touted by the government before the last election. It knew better than to do that. But it has been brought in as a major item now. There are people lobbying today in the Senate to try to stop the government from being able to destroy union services at universities throughout this country. We all know that the unions have the backing of the administrations of universities throughout this country. That is another piece of legislation which, if we sit tomorrow in the morning and if we sit tomorrow night, is more likely to be brought in before the change of Senate make-up on 1 July.I am savvy to the fact that the government has counted the numbers and knows that its most favourable climate during this period of government is right now. But we have an obligation on this side of the parliament to be equally resolute in standing against the change of the already heavy sitting schedule between now and June, because that change is being made simply to foster the passage of government legislation against, I submit, the majority wishes of the duly elected Senate past 1 July and, in almost all instances, against the majority wishes of the Australian people.If the government is genuinely wedded to the idea that it gets a mandate at election time, then it must equally, logically and with commonsense be admitting of the idea that the Senate gets a mandate at election time. The electorate has the intelligence to work out the difference in the role and function of the two houses and how it wants them to work. What I can tell you is that the electorate did not give the government a majority in either place. In fact, it gave the government some 39 to 40 per cent of the vote in the House of Representatives, and the government did not do as well in the Senate.So if we pass this motion, we are actually aiding and abetting the government in its grand design to shove through as much legislation which is hostile to the interests of the majority in this place before we get a change in the Senate on 1 July. I just do not think that is good democratic process. I do not think that is fair on the voters of this country. It is not logical. It is totally inconsistent with the Prime Minister's own asseveration that he has a mandate. Well, the Senate has a mandate, too. The government is being totally inimical about a string of pieces of legislation and what the majority of Australians think about them. That applies to the sale of Telstra, it presumably applies to the GST, and it definitely applies to the forests.Let me expand on that matter: consistent polling in this country over the last 10 years has shown that more than 70 per cent of Australians want our wild forests protected. In Western Australia, where this issue has reached critical mass in recent months, the figure is 87 per cent. The government has 13 per cent support at best, if you give it all the undecideds, for what it wants to do in terms of giving the woodchip corporations a licence to destroy the magnificent jarrah and karri forests of south-west Western Australia; likewise for the world heritage forests and wildlife in Tasmania, the north-east highlands, the Tarkine, the Great Western Tiers and the southern forest; likewise for East Gippsland, the Otways and the other forest panoply of Victoria; and likewise for the forests of New South Wales and Queensland.I know that in the government offices there is jockeying for not only these pieces of legislation but a whole host more. The Manager of Government Business just a moment ago asked for an exemption for another piece of legislation to do with health to enable that to pass through before the winter break, and of course we have the budget coming up next month. That is going to get priority in here, as it should, but the whole design behind these extra sitting hours is that pieces of legislation which are unpopular in the public domain but which are very popular with the government and its supporters—not least those who put large amounts of money into its election coffers—will get through this house before the guillotine falls on the current numbers structure in the Senate at midnight on 30 June. That is why I do not support this motion. I am opposed for other reasons which I stated earlier, but that is the grand design behind this change of sittings. It is not the first time or the last time we are going to see it in the run-up to 30 June.I am not panicked by the government's wish to get through as much legislation as it can. I have been totally supportive of the fact that we have probably the heaviest sitting schedule in these months leading up to 30 June that we have had for a good number of years. I am not worried about working hard—I work certainly as hard as any other person in this place—but I am concerned that meeting the government's schedule means I will not meet my schedule to my constituents, all of whom I value. It means that I do not get to put the emphasis on issues which I think the government is derelict in not having on this agenda. That means I do get, one way or another, to support a schedule to rush through pieces of legislation which are inimical to the Greens constituency which I support. This is not good process for the people of Australia, and I do not support it.16:19:003736Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—I have heard the debate and I want to set the record straight about some of the issues that have been raised. Let me say something, first, about the way the opposition does business in this place. We have indicated to the government—albeit through a convoluted process that I now understand not all were engaged in, even though, as I understand it, minor party senators had the same level of courtesy, whether adequate or inadequate, that was extended to the opposition—that we would vote for the motion before the chair. We gave our commitment on that. We gave our word, and I intend for the opposition to honour that commitment. We are not a political party that indicates either publicly or privately that we will take a certain course of action and fails to honour that in difficult circumstances.Let me say this: the problem we have with the matter before the chamber is that it has not been raised before now by the Democrats. It was not raised in the whips meeting this morning by the Democrats. It was not raised in the whips meeting, as I understand it, by the representatives of the Greens. It was, to be fair, raised with me by Senator Brown, and I acknowledge the fact that Senator Brown had the courtesy to ring me today and outline what was going to be his course of action on this issue. We had a discussion on the telephone about this very matter when he indicated he would be refusing leave. I told him what the general approach of the opposition would be, although we did not canvass respective views of other political parties at that time.But our difficulty is that it has taken until now—until this point in the Senate's consideration of its business—to deal with this matter. There are things called telephones. There is a capacity for people to communicate much better than has occurred on this occasion. If I had known the full circumstances in relation to the Democrats, I would have extended the principle I spoke of in my earlier contribution today which went to senators returning on the morning of Tuesday, 27 April from a public holiday and giving very serious consideration to the question of a Democrats party room meeting.What is unique about the circumstances we have here is that, in relation to Senate only sitting weeks—as I have explained before—the major political parties that also have representation in the House of Representatives do have scheduled party meetings, ordinarily on a Tuesday morning. But there was no communication here from the Democrats to the opposition, and I reject and repudiate what Senator Lees said earlier in this chamber. I now hear that there is a proposal for the Democrats—who seem to have had extraordinary difficulty today in getting their act into gear—not to proceed with a matter of public importance on East Timor that they placed on the Senate's agenda and to defer it until tomorrow.TW4BOURNESenator Bourne—There is not.5K4Faulkner, Sen JohnSenator FAULKNER—That is what we have been told. Are you going to proceed with it?TW4BOURNESenator Bourne—After the GST.5K4Faulkner, Sen JohnSenator FAULKNER—They want to change the order. They do want to proceed with it, but after the GST report is brought down. It is a bit hard to keep up with what is happening.UI4RAYSenator Robert Ray—Bring back Robert Hill.5K4Faulkner, Sen JohnSenator FAULKNER—It was working better when Hilly was here, and that is incredible enough. But it is a bit hard to know what is happening. We are happy to cooperate. I say to the Democrats, through you, Mr Acting Deputy President: the opposition are happy to cooperate in this with you, as I have indicated privately to the Leader of the Democrats and the Democrats themselves. We are happy to cooperate and try to ensure, if that is your new position—TW4BOURNESenator Bourne—It is the original position.5K4Faulkner, Sen JohnSenator FAULKNER—It was not raised at the whips meeting, was it, Senator Bourne?Senator Bourne interjecting—5K4Faulkner, Sen JohnSenator FAULKNER—No, it was not, as she says; it was not raised at the whips meeting. Here we all are, being treated like mushrooms by the Democrats. They are engaged in a civil war in their party room over all these things, and it is a bit hard for us to know what they are doing.Opposition senators interjecting—5K4Faulkner, Sen JohnSenator FAULKNER—As I have always said, we are here to help. If we can assist you by facilitating the bringing down of the report before the MPI, we will do so, Senator Bourne. All you have to do in these circumstances is pick up the telephone and tell us. Old Alexander Graham Bell had the right idea; it is a good invention and I encourage you to use it.Let me say this seriously to the Senate chamber: while I am not willing to go back on the commitment that I made in relation to the sitting of the Senate tomorrow morning, I do hear what the Democrats now say and I do take it seriously. I do think there is a way of at least ameliorating what has become a difficult situation in this chamber. Regardless of who is responsible for it—and all we know is that it is not the opposition—as I say, we are here to help, so let's fix it up.UI4RAYSenator Robert Ray—Top patronising, John.5K4Faulkner, Sen JohnSenator FAULKNER—I heard Senator Ray's interjection; it will now be recorded in Hansard . I will foreshadow the moving of amendment 2(a), which I hope will assist in this situation. It will say that the routine of business from 9.30 a.m to 12.45 p.m. shall be the government business order of the day relating to A New Tax System (Goods and Services Tax) Bill 1998 and 26 associated bills, second reading speeches only. I hope that, if we do that and also have discussions between the whips and those who are responsible for the good management of business in the chamber, we might be able to have some sort of understanding in relation not only to divisions but to quorums as well.I commend to all senators in the chamber the amendment that I shall be moving in difficult circumstances. I say again that I do not want to delay this debate. Having not been fully apprised of minor parties' positions by the minor parties—apart from Senator Brown, as I have acknowledged, who rang me directly, which I appreciated—that is the best we can do in the circumstances. I will tell you one thing: having given our word, we will not back down. But I am willing to try to ensure that, firstly, this does not occur again—and I hope that all parties can cooperate in that—and, secondly, no-one is disadvantaged by a second reading debate occurring at that time. I commend to the chamber the foreshadowed amendment that I will progress at the appropriate time.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Watson)—Senator Ian Campbell has moved a motion to which Senator Woodley has moved amendments. The question is that Senator Woodley's amendments be agreed to.Question resolved in the negative.16:28:003738Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Mr Acting Deputy President—AW5CARRSenator Carr—Could `no divisions, no quorums' be clarified?H15Campbell, Sen IanSenator IAN CAMPBELL—I will be supporting the amendment foreshadowed by Senator Faulkner. In fact, if you look at what I said in the suspension of standing orders debate, I made it quite clear that the government will be considering the ANTS package with no divisions and no quorums. So I am quite happy to have that clarified in the motion itself. Just to clarify the process, I would say that I do try very hard to ensure that everybody in this place is `in the loop', to use a colloquialism, when it comes to managing government business. To do otherwise ensures that it is not managed efficiently.The issue of the extra sitting hours for tomorrow was raised by our whip, Senator Calvert, in the whips meeting at 10 o'clock this morning. Senator Calvert reported to me. My assistant adviser then rang all of the officers, including Senator Carr, Senator Bourne, Senator Margetts, Senator Colston, Senator Harradine and Senator Brown—where we left two messages, one on a mobile and one on a message bank in Parliament House. These calls took place between 11 and 11.30 a.m. All parties' whips or officers were given to understand that, as a result of the whips meeting, we would be proceeding with this proposal on the basis—as all of these things are put—that, if you have some feedback or objections, please let me know.I then spoke to Senator Vicki Bourne again, and Senator Bourne advised me that Senator Lees was not happy about it. I suggested to Senator Bourne that I had heard from Senator Brown at that stage that we would not have leave and that we would be moving a suspension of standing orders. I then sent a personally handwritten note in my ink with my signature to Senators Faulkner, Carr, Lees, Harradine, Colston, Margetts, Brown, Calvert, O'Brien and Bourne saying that this was the proposal. I said in this letter:Should you wish to discuss this matter further, I am available on extension 3955 or please grab me during question time.Senator Robert Ray interjecting—H15Campbell, Sen IanSenator IAN CAMPBELL—It's 3955 for a good time, Senator Ray. I say, genuinely, on the last line of this letter, `I seek your agreement to the motion.' I am not assuming it; I am not putting it on you. This was discussed with the whips. It was raised in the most informal way amongst all the people there. That was at 10 o'clock. At 11 o'clock we informed people that we decided to proceed with it, not ram it down your throat but take it to the Senate in the nicest possible way. Then an hour later I sought, in writing, your agreement and encouraged you to ring me on 3955 or grab me during question time. No-one grabbed me; no-one rang me, except for Senator Brown. I went to extensive lengths to consult with you about and discuss this proposal. Clearly, those efforts were not good enough for some people in this chamber, but I do appreciate the efforts of those senators who support this. I indicate that the government will support the very sensible amendment foreshadowed by Senator Faulkner.Amendment (by Senator Faulkner) agreed to:Paragraph (b), omit all words after "12.45 pm", substitute "shall be the government business order of the day relating to A New Tax System (Goods and Services Tax) Bill 1998 and 26 related bills, second reading speeches only".Motion, as amended, agreed to.Committees373937393739Motion (by Senator Calvert, at the request of Senator Ferguson)—by leave—proposed:That the Economics Legislation Committee be authorised to hold a public hearing during the sitting of the Senate on Monday, 19 April from 8.00 p.m., for the purpose of taking evidence for the committee's inquiry into the provisions of the Taxation Laws Amendment Bill (No. 4) 1998 .AW5CARRSenator Carr—Mr Acting Deputy President, I seek indulgence to move that the matter be adjourned to a later hour this day. We have conflicting advice on this particular matter.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Watson)—Senator Calvert, would you like to move that motion at a later hour?5F4CALVERTSenator Calvert—Yes.37393739Motion (by Senator Calvert, at the request of Senator Crane)—by leave—agreed to:That the time for the presentation of the report of the Rural and Regional Affairs and Transport Legislation Committee on the provisions of the Petroleum Retail Legislation Repeal Bill 1998 be extended to 12 May 1999.Notices37393739Motion (by Senator Woodley, at the request of Senator Allison and Senator Margetts) agreed to:That business of the Senate notice of motion no. 4 standing in the names of Senators Allison and Margetts for today, relating to the disallowance of the Disability Discrimination Amendment Regulations 1999 (No. 1) contained in Statutory Rules 1999 No. 40, be postponed till 21 April 1999.Motion (by Senator Brown) agreed to:That general business notice of motion no. 178 standing in his name for today, relating to superannuation pension benefits for members of parliament, be postponed till the next day of sitting.Motion (by Senator O'Brien, at the request of Senator Mackay) agreed to:That general business notice of motion no. 107 (proposing an order for the production of a document by the Minister representing the Minister for Transport and Regional Services (Senator Ian Macdonald)) and business of the Senate notice of motion no. 2 (reference of a matter to the Rural and Regional Affairs and Transport References Committee) standing in the name of Senator Mackay for today, be postponed till 22 April 1999.Motion (by Senator Margetts) agreed to:That general business notice of motion no. 176 standing in the names of Senators Margetts, Stott Despoja and Forshaw for today, relating to the proposed research reactor at Lucas Heights in Sydney, be postponed till the next day of sitting.Motion (by Senator Brown) agreed to:That general business notice of motion no. 150 standing in his name for today, proposing an order for the production of a document by the Minister representing the Minister for Defence (Senator Newman), be postponed till the next day of sitting.Motion (by Senator O'Brien, at the request of Senator Sherry) agreed to:That general business notice of motion no. 174 standing in the name of Senator Sherry for today, relating to superannuation, be postponed till the next day of sitting.Motion (by Senator Bourne, at the request of Senator Stott Despoja) agreed to:That general business notices of motion no. 172 (relating to reproductive cloning of human beings), no. 179 (voluntary student unionism) and no. 182 (the preamble to the Australian Constitution) standing in the name of Senator Stott Despoja for today, be postponed till 22 April 1999.Motion (by Senator O'Brien, at the request of Senator Forshaw) agreed to:That general business notice of motion no. 177 standing in the name of Senator Forshaw for today, relating to the New South Wales State election, be postponed till 22 April 1999.Motion (by Senator O'Brien, at the request of Senator Bolkus) agreed to:That business of the Senate notice of motion no. 3 standing in the name of Senator Bolkus for today, relating to the reference of matters to the Legal and Constitutional References Committee, be postponed till the next day of sitting.Leave of Absence3739Motion (by Senator O'Brien)—by leave—agreed to:That Senator Hutchins be granted leave of absence for the period 19 April 1999 to 30 April 1999 inclusive, on account of illness.Committees37403740374016:39:003740Ferguson, Sen AlanSenator FERGUSONEP5SALP10—by leave—I want to make a brief explanation about the hearing that was to have been held this evening on a bill that has been referred to the Senate Economics Legislation Committee. The secretary of the committee rang every member of that committee to see whether or not it would be okay to have a meeting tonight, provided we could get leave of the Senate to do so. We had no response. Everybody agreed that it could be held because we have to report at the start of next week.I had no idea then that the tax bill debate would be deferred so that, for instance, Senator Conroy, who is not on the committee but wishes to take part in it, could attend. If we cannot get a quorum or if it cannot go ahead, there is no reason why we should push ahead with it. I wanted to explain that every member was contacted. Everybody agreed that we should have the hearing tonight, which is why it is on the Notice Paper today.Notices37403740Motion (by Senator Woodley, at the request of Senator Allison) agreed to:That general business notice of motion no. 136 standing in the name of Senator Allison for today, relating to the appointment of a Select Committee on Superannuation and Financial Services, be postponed till 21 April 1999.Motion (by Senator Woodley, at the request of Senator Allison) agreed to:That business of the Senate notice of motion no. 1 standing in the name of Senator Allison for today, relating to the reference of matters to the Environment, Communications, Information Technology and the Arts References Committee, be postponed till 21 April 1999.Miscellaneous3740Motion (by Senator Reynolds) agreed to:That the Senate calls on the Prime Minister (Mr Howard) to formally recognise International Women's Day 1999 by:(a) reinstating a national agenda for women to conform with Australia's obligations under the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW);(b) implementing the 11 recommendations made by the United Nations CEDAW Committee in July 1997 when it formally reported its concern about the impact of government policies on women;(c) restoring resources and staffing levels to the Office of the Status of Women; and(d) initiating a full inquiry into the current punitive policies affecting women and families dependent on Centrelink for their basic living standards.Miscellaneous3740Motion (by Senator Bourne, also on behalf of Senator Margetts and Senator Cook) agreed to:That the Senate—(a) welcomes: (i) the Prime Minister of Vietnam, His Excellency Mr Phan Van Khai, to Australia, and (ii) the recent steps taken to improve the overall human rights situation in Vietnam, most notably the release of a number of people held in Vietnam for the peaceful expression of political or religious views under a Presidential Amnesty, including 13 people on whose behalf the Australian Government has expressed concern;(b) notes that a commitment has been given by the Government of Vietnam that further amnesties will be granted in 1999 and 2000;(c) encourages the Government of Vietnam to include in further amnesties all remaining prisoners detained for peaceful political and religious activities, including Mr Nguyen Dinh Huy, Mr Nguyen Ngoc Tan and United Buddhist Church of Vietnam clergy, Thich Thien Minh and Thich Hue Dang;(d) calls for the immediate release of Mr Nguyen Thanh Giang, arrested on 4 March 1999 for the peaceful dissemination of political views;(e) welcomes the fact that the Government of Vietnam invited the United Nations (UN) Rapporteur on Religious Intolerance to visit Vietnam in 1998, to look into the situation of religious freedom in that country;(f) calls on the Government of Vietnam to: (i) implement the recommendations of the UN Rapporteur concerning the relaxation or lifting of limitations placed on the exercise of the right to freedom of religion or belief, and (ii) lift the administrative detention order placed on the leader of the United Buddhist Church of Vietnam, Thich Huyen Quang; and(g) calls on the Australian Government to maintain an on-going and cooperative approach with the Government of Vietnam in dialogue on human rights issues.Miscellaneous3741Motion (by Senator Bourne, at the request of Senator Stott Despoja) agreed to:That the Senate—(a) notes that: (i) two hundred and fifty young people met in the National Youth Congress in Canberra, on 31 March 1999, to consider issues of importance to Australia's young people, and (ii) the report of the congress recommended that government adopt more youth-friendly policies and also consider issues such as an apology to the stolen generation; and(b) urges the Government to take note of these concerns, which echo the recommendations of the National Youth Roundtable, held in February 1999, and of the former peak youth body, the Australian Youth Policy and Action Coalition.Miscellaneous3741Motion (by Senator Brown) proposed:That the Senate—(a) notes: (i) the statements on the Channel 9 Sunday program by the New South Wales Premier (Mr Carr) that, `a modern Labor party, a modern social democratic party, must have a keen focus on saving the great natural areas of this continent', and (ii) the push by the Premier to be involved in reshaping the national environment platform of the Australian Labor Party (ALP); and(b) supports the Premier in his wish to change the national environment platform of the ALP so it better advocates the protection of Australia's great natural areas, including its wild forests.16:47:00The Senate divided. (The President—Senator the Hon. Margaret Reid)8Allison, L. Bartlett, A. J. J.Bourne, V. *Brown, B.Lees, M. H. Margetts, D.Murray, A. Woodley, J.48Bishop, T. M. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H.Campbell, G. Campbell, I. G.Carr, K. Chapman, H. G. P.Conroy, S. Coonan, H.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Eggleston, A. Ellison, C.Evans, C. V. Faulkner, J. P.Ferguson, A. B. Ferris, J.Forshaw, M. G. Gibbs, B.Gibson, B. F. Heffernan, W.Hogg, J. Kemp, R.Knowles, S. C. Lundy, K.Macdonald, S. Mackay, S.McGauran, J. J. J. Murphy, S. M.Newman, J. M. O'Brien, K. W. K.Parer, W. R. Patterson, K. C. L.Payne, M. A.Quirke, J. A. *Ray, R. F. Reid, M. E.Reynolds, M. Sherry, N.Synon, K. M. Tambling, G. E. J.Tierney, J. Vanstone, A. E.Watson, J. O. W. West, S. M.Question so resolved in the negative.Miscellaneous3741Motion (by Senator Bourne, at the request of Senator Stott Despoja), agreed to:That the Senate notes:(a) the launch of the 1999 Easter bilby by Haigh's Chocolates; (b) that the bilby is an endangered species;(c) that Haigh's Chocolates contributes proceeds from the chocolate Easter bilby sales to the Anti-Rabbit Research Foundation of Australia for a rabbit-free Australia; and(d) the work of the foundation involves the protection of endangered species and lessening the impact of rabbits on Australia's environment.Documents3742374210000PRESIDENTThe PRESIDENT—Pursuant to standing order 166, I present the document entitled Aboriginal Land Rights (Northern Territory) Act 1976—Elsey Land Claim No. 132: Report and recommendation of the Aboriginal Land Commissioner, Justice Gray, to the Minister for Aboriginal and Torres Strait Islander Affairs and to the Administrator of the Northern Territory which was presented to the Temporary Chair of Committees, Senator McKiernan, on 31 March 1999 after the Senate had adjourned. In accordance with the terms of the standing order, the publication of the document was authorised.3742374210000PRESIDENTThe PRESIDENT—In accordance with the provisions of the Auditor-General Act 1997, I present the following report of the Auditor-General: Report No. 35 of 1998-99: Performance Audit—The Service Pension—Department of Veterans' Affairs.16:54:003742West, Sen SueSenator WEST1X4NSWALP00—by leave—I move:That the Senate take note of the document.I seek leave to continue my remarks later.Leave granted; debate adjourned.Miscellaneous37423742374216:54:003742Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Sandy Macdonald, I present additional information received by the Foreign Affairs, Defence and Trade Legislation Committee relating to the additional estimates hearings for 1998-99.Bills3742r650Billsr643374216:55:003742Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Payne, I present the report of the Legal and Constitutional Legislation Committee on the Classification (Publications, Films and Computer Games) Amendment Bill 1998 and the Classification (Publications, Films and Computer Games) Charges Bill 1998 , together with submissions and the Hansard record of proceedings.Ordered that the report be printed.Committees37423742374216:55:003742Cook, Sen PeterSenator COOKRF4WAALP00—I present the report of the Select Committee on a New Tax System, together with submissions, the Hansard record of proceedings, documents presented to the committee and supplementary material.Ordered that the report be printed.RF4Cook, Sen PeterSenator COOK—by leave—I move:That the Senate take note of the report.The Select Committee on A New Tax System was commissioned on 25 November to inquire into and report by 9 April on the government's ANTS package and the 27 GST bills. We had to report on the economic impacts of this package by 18 February and we had an obligation to take into account reports by three Senate references committees that were tabled by 31 March before considering our conclusions. This has been a mammoth undertaking but we have completed it on time, to the detail required and focused on the issues involved.This inquiry received 1,544 submissions or supplementary submissions, conducted 23 public hearings, met in every Australian capital city and in regional Australia and heard an exhaustive list of witnesses from all types of organisations representing the entire spectrum of political thought and social, economic and business points of view. It is customary and appropriate to thank all those concerned for the efforts that they made to ensure that this inquiry did its job properly. I thank them.No undertaking of this dimension is without its difficulties. We encountered many. Later I intend to constructively make my views available on how the Senate could better handle these problems in the future. The government spent close to $20 million on delivering its tax package to the Australian community. This inquiry cost a small fraction of that amount. It was money well spent. For the first time, genuine consultation was engaged in across the community. We have heard every view that is held on the GST package. We have uncovered significant and irredeemable flaws. Without this inquiry the people of Australia would not have had the opportunity to make their considered views known and directly participate in the political process by bringing their concerns to the attention of this house of review. The fact that this committee has been able to do its job highlights a strength of our constitutional system. It serves as a warning to governments who wish to rush legislation through. Despite their efforts to avoid it, their proposed laws will be subjected to a close and public scrutiny in the public interest. I shall now turn to the findings.My colleagues and I assessed the evidence against three criteria: the universally accepted principles of taxation, that is, equity, efficiency and simplicity; the government's own declared rationale for the GST; and the criteria that appeared in the committee's terms of reference. Our conclusions are that this package is irredeemably unfair, excessively and inherently complex and without such benefits elsewhere as might render those disadvantages tolerable. In short, up until now it has been said there are two eternal truths about life: you cannot escape death or taxes. A third truth can now be added: you will never be able to compensate all the people all the time under the John Howard GST package. It is just not possible because this is a regressive tax.The rich and the poor will pay the same amount of tax. Therefore, the burden of this tax will be greater on those on low incomes than on the wealthy. In recognising this, the government has provided a compensation package. The fundamental problem with that compensation package is that it will not compensate fairly and ethically, for pensioners the compensation will be eroded away, and no government can guarantee that the compensation will last.The only certainty about this package is that a GST will continue forever but the compensation will not. The poor will be slugged, families will lose out. Therefore, Labor concludes that these bills should not be given the green light. They should be given the stop light, the red light, and the pedestrian signs should flash: `Do not cross'.Evidence before the committee has shown that the inflationary impact of the GST package will be at least four per cent in the first year, not the 1.9 per cent claimed by the government before the election. As a result, workers are likely to seek wage rises to compensate for this higher inflationary effect. Up to 120,000 jobs will be lost. The most severe job losses will be experienced in Tasmania, Queensland and regional Australia. Estimates of the number of Australians made worse off by the package range up to two million. The promised compensation for pensioners, veterans and disability pensioners will rapidly erode to nothing. Many self-funded retirees will be worse off. The GST discriminates against credit unions and other competitors to big banks. It will cause interest rates and fees and charges to rise.The GST package will damage the capacity of local government to provide vitally needed community services. The disparity between country and city petrol prices will increase. The GST package will encourage business to use more heavily polluting fuels at the expense of more environmentally friendly fuels. Many health and education costs of families will rise. Charities, community groups and sporting associations will face higher costs and have to cut their activities. House prices, rents and the cost of home renovations will also rise. As well as being unfair, the GST is being condemned as `devilishly complex'.The GST will reduce the competitiveness of small business and increase their paperwork burden. The promise to cut red tape in half will not be fulfilled; it will be reversed and doubled. Professional taxation bodies have called for the GST legislation to be rewritten and delayed. Most notably, the Institute of Taxation gave evidence to our inquiry that, if you did believe in this tax, you would not proceed further for another six to 12 months in order to remove the devil from the detail. They called for a specialist body of experts to review the legislation to ensure that even that legislation does the job that the government intends for it to do.The Insurance Council of Australia gave evidence to our inquiry that there was an unintended consequential cost in the transition phase of the application of this legislation of $2½ billion. They have since advised us that the government will not be remediating that cost. As a consequence, that cost burden will be shifted onto policyholders; an unintended consequence with no compensation. That is just one further example, of many given in evidence to our inquiry, of where extra costs than those anticipated by the government in its ANTS package and in its subsequent legislation will fall—in areas for which there is no additional compensation to offset those extra burdens. As a consequence, the cost impact of this legislation is not truly reflected.The inquiry served a very useful role in establishing the extent to which the extra cost burden will now be greater on ordinary Australians than previously anticipated by the government. If the last election had been a referendum on the GST then it would have lost on a majority of votes, and it would have lost on having a minority of support in a majority of states. This inquiry has served a national purpose in bringing to the attention of Australians, and causing Australian organisations to focus more deeply on, the true impacts of this legislation, and now I believe if the same question were put to the Australian people the view would be even stronger. It is unfair, and a large majority of Australians would hold that view.Eleven days ago in this building, in the concluding moments of this inquiry, Professor Ann Harding highlighted that, on the evidence of Treasury, the compensation package would erode over time. We agree with her conclusion. The significance of this finding cannot be underestimated. It means that those who are on age pensions and those who receive a pension for disability and because of services to this nation at the time of its darkest threat are on a war pension or in some other way depend on a fair go principle of Australian mateship will lose their compensation for a flat, regressive GST. If you cannot trust a Prime Minister to keep his word about the most fundamental commitment of Australia to protect the real needs of those that we have pinned our faith on in the past, you cannot trust a Prime Minister with this GST package. The Labor recommendation in this report is nine words long: the Senate should reject the GST in its entirety.17:05:003744Ferguson, Sen AlanSenator FERGUSONEP5SALP10—Senator Cook commenced his remarks by saying that the Labor Party had now reached three conclusions after listening to all the evidence. Nothing could be further from the truth because they made their conclusions prior to this inquiry ever starting. They made their decision prior to the inquiry even being called. They announced that they would oppose the tax package in total, and they have said nothing to change their view. So we have spent half a million dollars going around the countryside, having this inquiry, and the Labor Party have not changed their view from the minute that inquiry started.Government senators interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Senator Ferguson, just wait a moment. There is interruption on my right-hand side. You will have a chance to speak in the debate, as will those on the left-hand side in later stages. Proceed, Senator Ferguson. You are entitled to be heard.EP5Ferguson, Sen AlanSenator FERGUSON—Mr Acting Deputy President, thank you. There are two important facts emanating from this report, and two very important ones. Firstly, Professors Harding and Warren, who were the modellers selected by the committee to do the distributional modelling, said in the report that they gave to our committee—the NATSEM report—that under the most realistic assumptions there are no groups which will be worse off.Secondly, none of the leading economic modellers who presented evidence to this inquiry, who made submissions or who did work for the committee recommended that food be excluded from the GST. So we have those two key points. In Harding and Warren's most realistic assumptions in option 3B they modelled 547 different household types—from pensioners to families to self-funded retirees on all sorts of income levels—and found that every single household group would be better off.This should have never been called a Senate inquiry, because the term `inquiry' implies that the senators wish to use this mechanism of the Senate to listen to evidence prior to coming to a conclusion about the issues that are to be determined. This was never the case for anyone on this so-called inquiry, except, I may say, for Senator Harradine, who right throughout the inquiry has attended and who, as you will notice, has not added to this report.The government senators had the Gibson committee that went for 11 months and received over 700 submissions from interested bodies and persons throughout the Australian community, and they took those into account when formulating the tax package. Labor had a predetermined position, and they were only interested in listening to evidence that supported that predetermined position. Their policy decision was to oppose the proposed new tax system in total prior to the inquiry ever starting. They were not interested in listening to any evidence—however compelling that evidence was—that was contrary to their stated position. They verballed and abused witnesses who had positions contrary to their own.The Democrats had a predetermined position, reflecting the composition of their party. Senators from the lunar left to the more moderate centre came to an agreed position, and that agreed position was that food should be out, and that was as far as any of them could come to an agreement. They agreed on the need for tax reform, but food was out. And now their list has grown longer—no diesel fuel rebate or relief for regional Australians and many other things have been added to their list. The government's position has remained constant since the passage of the bills through the House of Representatives. Senator Harradine is the only senator who attended this inquiry on a regular basis who is still to determine his attitude to both bills, and he has made no comment in this report.I say that, in fact, this is not a Senate report, because with the acquiescence of the Democrats this is really a Labor report. And, if I want to be really specific, it is the Simon Crean report. The normal manner of preparing a report of such a committee is for the chairman to instruct the secretariat to prepare a draft report. This was done with the outline of the issues to be covered in this report approved unanimously by the committee. The secretariat delivered that report to the chairman's office on Monday of last week, with the intention of delivering it to the committee members on Tuesday. The original draft was then butchered by Labor Party staff intent on including political bias until it was scarcely able to be recognised as the original document. This was then not delivered to government senators or to Senator Murray until we sat down to deliberate on its proposed contents in a meeting that was called last Wednesday. Senators Conroy and Sherry did not even bother to attend that meeting for the deliberations.ZW4SHERRYSenator Sherry—We didn't have to.EP5Ferguson, Sen AlanSenator FERGUSON—Of course they did not have to, because they knew that Labor Party staff would do it for them. They did not even bother to attend, to turn up to the meeting, because they knew they would have very little say in what the Labor Party wanted to include in the final document. Because of the time factor, it became impossible to finalise anything that day. Those members who were present that day went away having come to a general agreement—and I put this as generally as I possibly can—that material could be added to balance any arguments that had been put forward, that in general nothing should be deleted and that 12 noon on Friday of last week should be the deadline for changes to the report.I spoke with Senator Cook on Thursday afternoon, prior to his departure for Perth, and we agreed on some changes and signed off on a number of chapters. Friday saw the greatest abuse of Senate procedure that I have ever witnessed in relation to a committee report. Before the deadline of 12 o'clock, I was faxed nine pages with some changes which government senators had asked the secretariat to comment on and to write. After the deadline I received 64 pages of changes.5L6FERRISSenator Ferris—What?EP5Ferguson, Sen AlanSenator FERGUSON—It was 64 pages of changes—not requested by Senator Cook, but demanded by Labor Party staff, including a member of the shadow Treasurer's staff. Those changes should never have been accepted, as a majority of the committee, including Senator Murray, had never sighted those changes nor agreed to them. But they were put in by Labor Party staff before Senator Cook even knew that they were going in. Senator Murray, like Pontius Pilate, had washed his hands of the process and indicated that if changes were okayed with Senator Cook he would support them. He had given that indication.The last change demanded by one of the shadow Treasurer's staff was faxed through to me at 5.25 p.m. last Friday night, by which time the chairman, because of Senator Murray's acquiescence, had carte blanche to include any changes that Labor Party staffers wanted to include. Is it any wonder that Mr Crean was able to speak so freely about what might be in the report that was tabled today, when his staff member was responsible for a large part of its content? And this report has been presented to the Senate today as a Senate report from a Senate committee.I want to comment on the work of the secretariat, who worked under tremendous duress over the concluding days of preparing this report. Because of the overtime demands and the lateness of the demands by the Labor Party and because the Labor Party ignored the deadline that was set for changes to the report, these staff members at the secretariat were required to work for over 30 hours nonstop in order to get this report to the printers. If the 12 o'clock deadline had been met, then the secretariat would have been able to get the report to the printers without having to work for 30 hours nonstop.Is it any wonder that there are some mistakes in the text of this report of over 500 pages, when it has been put together by the secretariat under duress and at the last minute after working for 30 hours nonstop? I have been involved in a number of committees in the seven years that I have been in this place. I have never worked on a committee where there has been so much ill-feeling. I have never worked on a committee where, in fact, I have seen witnesses harassed in the way that some witnesses were harassed during this inquiry. Because of the nature of the inquiry and the political predeterminations that had been made by the Labor Party prior to this inquiry ever taking place, whenever compelling evidence which supported the government's position was given that they did not approve of or which did not suit their own political ends, their only option seemed to be to either harass and sledge the witness or totally ignore that evidence. I hope that the standards of this select committee will not set a precedent for Senate inquiries in the future because, if they do, the Senate will be the worse for it. (Time expired)17:16:003746Murray, Sen AndrewSenator MURRAY3M6WAAD00—I want to start by commending the chairman of the committee, Senator Peter Cook, for the way in which he managed an exceptionally difficult situation. I also commend the deputy chair, Senator Alan Ferguson, for his assistance to the chair. Secondly, I want to remark on the great assistance—at times, even given to the Labor Party—by the three staff members provided by the Treasurer to the government senators. At times we were able to discuss matters with them. They were extremely helpful. It was very valuable having those three staff members from the Treasurer there.I also acknowledge the fact that the shadow Treasurer had his staff member there, quite rightly, as the opposition—if you like—to the Treasurer's man, and Senator Cook's staffer was also there. Again, they were very helpful to the passage of the inquiry. But most of all, I want to thank my own staffer, John Cherry, without whose valuable assistance, incredible professionalism and quite startling brilliance at times, the Democrats would not have got safely through this. So first of all, I acknowledge six people who are often not acknowledged; three from the Treasurer's department, two from the opposition and our own John Cherry. Thank you very much for your participation in this inquiry. Thank you too, to the secretariat: you, of course, made mistakes as you went along, but you are only human. I regard your contribution as contributing to the normal high standards that the Senate expects from the staff which service it.I will move on to the substance of the report before us. Firstly, I believe it was quite appropriate that this tax policy was taken to the people in the last election. It was utterly inappropriate that it was supported by a major taxpayer funded government advertising campaign. I think it was appropriate that all parties contested the principles before the people. However, those principles did not constitute legislation and it was utterly inappropriate that the Senate had to do a job which should otherwise have been done by the Treasurer first putting out a draft for community consultation. As a result, the parties were forced to draw lines in the sand prior to those bills having been properly tested by widespread community consultation. I would urge that the government's next package of business tax proposals first be put out to the community and only later, once the final form has been agreed on, that it be put to the parliament. We would have had a much quicker and less acrimonious process if that had occurred with this package.The result of the process we were put through was that a package emerged which the Treasurer insisted was perfect in every way. It could not be. It was referred to as Peter's Perfect Package, but it is now regarded as flawed in a number of ways. Intense political pressure resulted in the very rational and welcome changes put up by the Vos committee. In turn, intense Senate pressure has given the states an extra billion dollars worth of compensation to put towards their services, their industries and their jobs. That would never have occurred without the presence and pressure of the Senate. In that sense, the Senate has truly acted as a states house, by providing the pressure on the government to make it do the right thing by the states.The third area in which there is already a major shift is in the area of compensation. The Treasury, Mr Geoff Carmody, the Australian Food and Grocery Council, Professors Harding and Warren and Dr Hewson are amongst those who have claimed, quite rightly, that the compensation package is utterly and irredeemably flawed and that it needs major amendment to make this package fairer.I would remind you that Dr Hewson used some very emotive and chilling language. He said, `Stop the Goebbels chant.' Dr Hewson is a far right advocate of economic rationalism. He is not beloved by the Democrats. But I refer these remarks to the government. When he says that you are adopting the propaganda techniques of Nazi Germany, then take heed, because that is a man who has led the Liberal Party. He has said that you are adopting a situation of using a Goebbels chant. That does not reflect well on the government, nor on the senators or members who defend their package. I think it is a telling and awfully hurtful criticism. I, for one, am very glad he has made it, because the anti-Senate propaganda—which we have witnessed again today—is quite frankly unacceptable in terms of Australian political standards and in terms of the aspirations we all have for a responsible and representative democracy.We now also have to forecast major amendments. The Australian Democrats believe that, regardless of who deals with this package, there will be a deluge of amendments, including from the government, because what has happened over the three-month process of the Senate committee inquiry is that industry, business and community groups who had a wholehearted commitment to the government reform package, who had a belief in the intent of it, have started to look very, very critically at the actual impact of it. Even the strongest supporters of your package are saying to you that the transitional, definitional, contractual and practical effects of this package are such that it requires major amendment. You should not regard that as a slight; you should regard that as a necessary process which should be undertaken by this parliament.What is not distinguished in Australian political debate is the distinction between government and the parliament. The government is elected to run the country with the existing laws. The parliament is elected to do the legislative job, to write amendments to legislation which is proposed by government. Those are two entirely different functions. Therefore, it is no discredit to the government that the proposals put up by Treasury should be subject to amendment. It is the entirely proper process.I move now to the main recommendations of the Democrats. It is true, Senator Ferguson, that right from the start we said that if you took food out you would make this package fairer. The evidence has reinforced and confirmed that opinion, which was based on firm understanding. Let us go through it. Firstly, there is the efficiency principle. It is unequivocally true—and it will be seen in the select committee's report No. 1—that the economy of this country will be well served if a GST is introduced, whether food is in or out. In fact, if food is out, the economic situation improves. That is unequivocal.FF4CHAPMANSenator Chapman—Which modeller said that?3M6Murray, Sen AndrewSenator MURRAY—I forgive you, Senator Chapman. You were not at all the hearings of the inquiry, but I remind you of the government conclusion at the end of that Senate report, the first one, which accorded with that view. The whole argument about food now focuses on simplicity and equity. Let us talk about the simplicity principle—that is the whole issue of compliance costs.The government's explanatory memorandum, the regulatory impact statement, says that the imposition of a GST will result in $1.9 billion worth of costs being added to business. That is the compliance cost which the government is willingly putting in and which the ACCI and everybody else who are acolytes of this package think are perfectly acceptable. We think that is understated. It might be as high as $2.7 billion. The highest estimate given to the committee as to the cost to business of taking food out is $100 million—$100 million versus $1.9 billion. The lowest estimate, incidentally, is $24 million. On simplicity grounds you fail. You fail the argument, and there is very little firm evidence of that problem. (Time expired)10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—The time for the debate has expired.17:26:003748Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I seek leave to speak on the same issue for four minutes.Leave granted.DX5Margetts, Sen DeeSenator MARGETTS—The committee process has been very important. It has in fact confirmed the position of the Greens (WA) in relation to our initial concerns that the package is leading Australia in the wrong direction and that it cannot be fixed by tinkering at the edges. There are benefits in the process that has taken place. This has meant ex post facto consultation by government, even though the consultation should have gone on before they put the package together. How could anybody in the community say that they agreed or gave any sort of mandate if they did not know what was in the package? The government did not consult prior to the announcement, but this committee process has allowed the community to at least have a voice.The government have lacked commitment to the process. All along, despite what was given in evidence to the committee, they claimed they would not change the package. Contrast this to their commitment to consultation on the business tax. They are prepared to extend, to listen, to respond to the business community, but they are saying to the rest of the community, depending on who they are, `No. We have this set in concrete. No matter what mistakes we have made we do not want to listen.'The specific areas that have been disregarded relate to such things as the environment and public health. If we had a mass death, if we had someone lining other people up and shooting them—and we have had very tragic examples of that—there would be and should be a public outrage. The same or more people are likely, and have been clearly shown in the evidence, to be killed as a result of the increase in air pollution, but this government is choosing to ignore the evidence. There would be a worldwide news item if 60 or so extra people a year were shot, for instance, but the same number of people are likely to die from Australia carrying out one of the most stupid actions in terms of encouraging consumer behaviour which is harmful. Somehow or other this government wants to ignore those issues.We have had evidence in relation to the issue of alcohol. There will be social problems associated with that, but the government is choosing to put those aside as peripheral issues that will not be dealt with in this package, and they are not listening to them.The underlying reason for the GST, I believe, is that the government wants to do a better deal to shift taxation from business to the community. It is supposed to be about simplicity, but we know many more people in the community will have to deal with working out taxation and reporting to the government. We know that the simplicity will be for some but the extra complexity and cost will be for many, many more. This is really not good enough. We need to have a debate where these issues are brought forward. We need both sides of the chamber to be listening. This process will not have achieved its end without both sides of the chamber listening and responding to the needs of the community.Matters of Urgency3749374910000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—I inform the Senate that the President has received the following letter, dated 19 April 1999, from Senator Bourne:Dear Madam PresidentPursuant to standing order 75, I give notice that today I propose to move that, in the opinion of the Senate, the following is a matter of urgency:The acute escalation of the violence in East Timor which has created a campaign of terror which threatens to destroy any chance of a genuine and free act of self determination taking place there, and the Australian Government's responsibility to take a strong leadership role in doing anything possible to bring about a just and peaceful solution.Yours SincerelyVicki BourneSenator for New South WalesIs the proposal supported?More than the number of senators required by the standing orders having risen in their places—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.17:31:003749Bourne, Sen VickiSenator BOURNETW4NSWAD00—I move:That, in the opinion of the Senate, the following is a matter of urgency:The acute escalation of the violence in East Timor which has created a campaign of terror which threatens to destroy any chance of a genuine and free act of self determination taking place there, and the Australian Government's responsibility to take a strong leadership role in doing anything possible to bring about a just and peaceful solution.What we are witnessing in East Timor at the moment is a concerted campaign of violence, intimidation and harassment by groups of militia. All the evidence says that those militia are armed, aided and abetted by the Indonesian military. It is absolutely clear that ABRI is complicit in this latest campaign of terror and violence in East Timor. That campaign started with the illegal annexation 23 years ago and it continues to this day.The situation in East Timor is now in crisis. There have been killings in Liquica and Maubara last week and in Dili over the weekend. Despite Australian government investigations into the incident in Liquica, we are still none the wiser about the government's response because they refuse to provide details of the report that they have received. The way in which this government deals with the report's findings and presents its policy to the Habibie government for further action will present this government with the greatest test they have had so far of the integrity of Australian foreign policy. In doing so, it will also test the policies of previous governments of all political persuasions.This is the third time in almost 60 years that Australia has occupied a key role in a crisis facing East Timor. First of all, there was the situation during World War II, then there was the situation during the invasion 23 years ago and now we have this situation with ABRI funding militia and training militia to make sure, I am sure, that the free, fair act of self-determination does not happen. In those first two instances, as history will remind us, humanitarian disasters were the answer for the East Timorese. The current crisis and the way the government responds to it is the most significant and urgent chance so far to atone for our shameful past.If we let events overtake us, the Timorese will be trapped in yet another nightmare. Australia must take a lead role in the current East Timor crisis not only because of our relationship with the Indonesian government both in foreign and economic policy terms and the relationship the Australian government has with the Indonesian military but also because Indonesia is one of our closest neighbours, and our neighbours are in trouble and they need our help. Independent groups such as the Reformasi movement in Indonesia also look to Australia for guidance and assistance in this issue because of our strong human rights record and our rule of law. It is these groups who are now seeking our assistance. They want us to be part of an international mission into East Timor. They want us to use our good offices to persuade the Indonesian government to allow independent observers into that territory.We must act decisively now to persuade Indonesia to honour its commitment to allow the Timorese a free choice about their own future. The risk of civil war in East Timor is not an issue because civil war is not what is taking place. However, the effect of the self-determination process being successfully sabotaged has really quite unknown consequences. Pro-integrationist leaders have a relatively small following. It is unlikely they would have contemplated a violent resistance without the approval, the backing and the funding of the Indonesian military.There are Timorese who have reservations about independence. Those officials with links to the Indonesian government and armed forces fear for their future and they are able to mobilise support for their cause, but for most East Timorese the notion of independence is exciting. It presents a challenge hardly thought possible in the past, even two years ago. But with a change of government in Indonesia and the tide of support for true democracy and the current economic crisis still plaguing Asia, the time is right, right now, for East Timorese self-determination.The minister and the government are still referring to rogue elements in the military being responsible for these atrocities, but that is a very, very serious understatement. It is increasingly apparent that the militia's campaign is enjoying support all the way to ABRI's commanders in East Timor, if not further. That support—the reports that ABRI stand as willing accomplices to the acts of human rights violations and terror—indicates that ABRI have decided that they will halt the process of self-determination through covert means in a manner reminiscent of the events in 1975.It certainly appears that ABRI's agenda is different from the Indonesian government's, but this does not abrogate President Habibie's responsibilities. The military is still under the control and the command, supposedly, of President Habibie. It is the President who should demand that ABRI place generals on the ground in East Timor who are willing to follow his orders and that law and order should be maintained through peaceful means. ABRI cannot be controlled by Jakarta, and the Australian government knows that only too well. We therefore have the responsibility to ensure that we will make firm statements to our Indonesian counterparts and that we will not tolerate the perpetration of violence against innocent civilians.Naturally, we understand the need for President Habibie to save face on this matter, given that the independence of East Timor, provided with international aid, could precipitate the disintegration, as he sees it, or as ABRI sees it, of the Republic of Indonesia. I do not think that would happen. We understand that a vote for independence also has the potential to humiliate Jakarta because they have always maintained that East Timor would forever be a part of the Indonesian republic. So now we have the obvious solution—a hardened attitude by the military and the creation of an image of an East Timor torn apart by irreconcilable divisions.Even if there was no ABRI involvement, it is inconceivable that 15,000 troops could not prevent those most shocking incidents. We need a solution to the East Timor problem and we need it right now. We need an international mission in East Timor to assist in the restoration of peace and to investigate human rights violations. There is no rule of law there at the moment. The government will assert that this is impossible because they would not accept such a force, but it seems to us that Indonesia does not have to approve the installation of such a mission.So what is the Democrats' solution? Indonesia has illegally annexed East Timor for 23 years. We believe it is necessary to consider the following. One, demand the immediate installation of an international mission in East Timor, with some military presence, to monitor the performance and the movement of ABRI forces as well as to provide the mission with adequate security. Two, demand the immediate disarming of the militia and the end of the deliberate attempt to sabotage self-determination. Three, begin the process of charging those responsible with the violence of crimes against humanity, which would place the issue squarely in the international agenda, along with other perpetrators of crimes against humanity. We should call for the immediate suspension, pending an inquiry, of the ABRI commanding military officer, General Damiri, for his role in allowing the expansion of the militia groups. President Habibie should be reminded that East Timor is a disputed territory. The international community should use really firm language on this matter so that the Habibie government and the ABRI forces are left in no doubt about our international resolve. (Time expired)17:38:003751MacGibbon, Sen DavidSenator MacGIBBONYH4QLDLP10—This is the first decent matter of urgency we have had before the Senate for quite some while, and it is a topic that is vitally important for Australia. While we cannot control events in East Timor and therefore cannot control the outcomes, the outcomes are of vital interest to all Australians. It is very proper that this debate be raised in the Senate. I congratulate Senator Bourne for introducing the topic and for her contribution to the debate in such a reasoned and mature way.The advent of militia groups in the last month or so has raised the level of violence very considerably in East Timor, clearly to a level where you could describe it as a campaign of terror. The East Timorese people do not have a history of great peace within their own ranks, even before the annexation by Indonesia, but certainly the level of disruption and violence now within the community is the greatest it has been for many years.At lunchtime I was talking to a close friend of mine who was in Dili through Easter. He was talking this morning to two different residents in Dili. Both confirmed the continued pressure and the genuine widespread fear that is in the community at the present time. Clearly if that climate prevails, then the act of self-determination will be very difficult, if not quite impossible.The violence of course is part of a very complex political struggle going on for the control of East Timor. As someone with some interest in and knowledge of East Timor's history, both past and present, it needs to be said that Timorese affairs cannot be judged as an issue in black and white terms or in terms of saints and sinners, with the Indonesians as the sinners and the Timorese as the saints. There is a mixture of good and evil in all parties in Timor today.The second part of the motion relates to the Australian government's actions in relation to East Timor. The present government does take its responsibilities very seriously, as did the Labor government before it. This government has pursued every avenue, both in public and in private, in seeking a peaceful resolution to the problem. Let me give the Senate one telling example of the standing of the government and that is that there has been no criticism, either in public or in private, from the foreign policy elites in Australia about the actions of this government in relation to Timor. There has been some adverse criticism from those who are not as well informed as they might be of the complexity of events, but not one of the academics or the analysts who do have a deep understanding of Indonesian and Timorese affairs has criticised the actions of this government. They say that what has happened has been both correct and ahead of the action.The Senate must be aware that Australia is limited in what it can do in relation to the internal affairs of another sovereign power. Our greatest asset is the good links that we have built over the years—links that are of some depth and strength—with the Indonesian administration. Indonesian officials volunteer that Australia understands them better than any other Western democracy. We have used those links to say to the Indonesian administration, `There is a better way to go about conducting your affairs, particularly in relation to Timor.'Nothing could be more dramatic and prove the point better than the Prime Minister's letter to President Habibie on 19 December, when Australia changed its traditional position in relation to East Timor. On 27 January President Habibie announced a change to Indonesian policy on East Timor. Twelve months ago it would have been quite unthinkable that such a major change in Indonesian policy on a matter so central to their interests could have taken place.We cannot force our views on Indonesia any more than Indonesia can directly intervene in the affairs of Australia in relation to Tasmania, for example. All we can do is counsel and persuade. I think that the government has very effectively gone down that path. For the record, I would like to recount what has happened since 19 December, when Prime Minister Howard wrote to President Habibie.On 12 January 1999, Australia publicised its policy change. On 22 January the Australian ambassador to the UN spoke to the UN special representative about East Timor. On 27 January President Habibie announced his Indonesian policy change. On 23 to 25 February there was the Australian-Indonesian Ministerial Forum, which discussed East Timor. On 25 February Minister Downer met Minister Alatas. On the same day Mr Downer met Xanana Gusmao. On 26 February Mr Downer met President Habibie. On 27 February Mr Downer went to Portugal.On 21 to 28 February, Dr Ashton Calvert from DFAT visited New York and Washington on UN business in relation to Timor. On 4 to 6 March Ambassador McCarthy visited East Timor with Defence Attache Molan. On 11 March the CDF, Admiral Barrie, raised with General Wiranto violence in East Timor. On 12 March the Australian ambassador to the UN met the UN special representative on East Timor. On 14 to 18 March, the army attache visited East Timor. On 29 March the UN assessment mission met with Mr Downer and government officials. On 6 April Ambassador McCarthy expressed concern over the Liquica killings. On 7 April Mr McCarthy made the same representations to General Wiranto.On 9 to 13 April embassy officials visited East Timor. On 17 April the ambassador spoke with the presidential adviser, Dewi Fortuna Anwar, and Foreign Minister Alatas. And today, of course, Mr Howard announced that he had spoken to President Habibie and they have agreed to meet in the next seven to 10 days. That will involve the three Australian senior ministers in this event—Mr Howard, Mr Downer and Mr Moore—meeting with President Habibie, Mr Alatas and General Wiranto. It must be stressed that the government has done all that was possible to be done in the circumstances to influence the Indonesians to accommodate a different policy.The other important point to put before the Senate is that there is quite a change now in Indonesian public opinion compared to 10 years ago. There is a genuine debate going on in Indonesia today about all the issues that involve a modern democracy—civil rights, political rights, human rights, as well as economic changes. The fact that we are no longer talking to a monolithic view in Indonesia gives us hope that we can effect further change in the future.Despite all the political and economic disorders that Indonesia has gone through, it is a fact that in Indonesia today the community are looking forward very much to their election on 7 June when they can have their say. Having said that, I have no doubt that some elements in ABRI and some in the administration have been advising, arming and recruiting the militia on their lawless and anarchistic activities in East Timor. The tragedy is that it does not seem that President Habibie or the higher military command, about whom there is no evidence at all of complicity in these actions, are able to control it. While that is a very regrettable circumstance, you have to recognise that only rich countries can afford well-disciplined and well-controlled armed services. The poorer countries simply cannot afford that, and we are seeing a breakdown within the command and control in the armed forces in Indonesia at the present time.As well as the suggestions by Senator Bourne, I think one of the great requirements in Timor today is to have an effective police force. On Friday last week, President Habibie separated and demilitarised the police force from the military service, and that is the first time that has happened for 30 years. I think it would be a great advantage to have a demilitarised and depoliticised police force in East Timor which had conflict resolution skills.The interests of Australia are in seeing a peaceful resolution to the deteriorating situation in East Timor. In a way, Australia is in a no-win situation in the short term; in the long term, we are going to come out of this very well. I have every confidence that the policies followed by the government have been correct and they have been timely. The Australian public are entitled to support the government on what has been undertaken so far.17:48:003753Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—I welcome the opportunity to speak on this important matter of urgency before the Senate. The window of opportunity for an orderly and peaceful process of transition in East Timor is closing quickly. It is absolutely vital that Australia does all it can to ensure that the opportunity for a peaceful settlement is not lost. The latest actions by the pro-integrationist militias underline the urgent need for strong international pressure on the Indonesian government to allow the East Timorese to determine their future free from fear and free from intimidation.Labor has repeatedly warned that the Howard government's failure to apply any real pressure on Indonesia to immediately disarm the militias and accept a UN peacekeeping presence risks further deterioration of the situation in East Timor with potentially disastrous consequences. The East Timorese leadership and people have for months exercised great restraint in the face of continuing violence and provocation. Efforts to achieve a peaceful resolution of the East Timor conflict do need real support, not more platitudes from the Minister for Foreign Affairs, Mr Downer. The escalation of violence in East Timor over the weekend requires a strong and urgent response.The key point to make today is that, regrettably, the government is in danger of losing any ability to influence the course of events that are now unfolding in East Timor. Mr Howard's announcement today that he will visit Indonesia next week is a welcome one, but in our view it could well be a case of too little too late. The Foreign Minister, Mr Downer, summed up the Howard government's reactive East Timor diplomacy with his statement on ABC's AM program this morning that Australia's ambassador in Jakarta had `of course made appropriate noises to President Habibie'. They are Mr Downer's own words. While East Timorese are being killed and injured in their homes and churches, the Howard government con tinues its preference for soft words but no action to apply real pressure on Jakarta.Yesterday on the Sunday program, Prime Minister Howard said that he intended to speak to President Habibie. However, unless backed by strong action, words of concern are not much use. When large numbers of people are being killed, a quick telephone call is a hopelessly inadequate response. Thus, as I have said, we welcome the fact that the Prime Minister has indicated he will now visit Indonesia.For good measure, this morning Mr Downer again sought to absolve the Habibie government and the ABRI High Command by repeating his claim that blame lies with unidentified rogue elements in the Indonesian military. Mr Downer told AM:The Indonesian Government in Jakarta is not, in my view, in favour of the sort of activities that have been taking place. . . . it is clear that there are elements within the military who might on the one hand have a different view, and on the other do not appear to be prepared to take action on the ground.This really is, I think, best described as an apologia for Jakarta. It is the latest example of what we believe is the government's inadequate performance on East Timor.The world is now witnessing an horrific puppet show. The opposition believes that ABRI orchestrated the creation of the pro-integrationist militias and armed them and that it actively supports and encourages them. The militias, with the aid of lists which in all likelihood have been supplied by ABRI intelligence, are now hunting down East Timorese who are in favour of independence. Responsibility for these events rests with the highest level of ABRI and the Habibie government.In these circumstances, it is vital that the strongest international pressure be brought to bear on the Indonesian government to secure the disbandment and disarmament of the militias and the acceptance of a United Nations peacekeeping mission to verify an agreed cease-fire and process of disarmament. Plans to hold a ballot to decide East Timor's future may prove to be fraught with difficulty, perhaps even danger, in the absence of a process of disarmament verified by UN peacekeepers.So, when he sits down with President Habibie next week, Mr Howard must make it clear that a UN peacekeeping mission is essential to ensure that the East Timorese people are able to determine their future free from violence and intimidation. What is required is a clear Australian determination putting real pressure on Indonesia to accept an effective UN peacekeeping mission to verify an agreed cease-fire and process of disarmament and guarantee that the planned ballot is conducted in a free and peaceful environment.I believe that Labor has been forthright about the need for Australian leadership on the issue of East Timor. Only last week Labor shadow foreign minister, Mr Brereton, held discussions with Indonesian opposition leaders Megawati Sukarnoputri and Abdurrahman Wahid; the Indonesian Minister for Foreign Affairs, Ali Alatas; the Coordinating Minister for Economy, Finance and Industry, Ginandjar Kartasamita; and, of course, the East Timorese resistance leader, Xanana Gusmao. Mr Brereton also met with Domingos Policarpo of the pro-integrationist Forum for Unity, Democracy and Justice.In his discussions in Jakarta, Mr Brereton expressed strongly Labor's calls for the Indonesian government to take urgent action to disarm the pro-integrationist militias and accept early deployment of an effective United Nations peacekeeping presence in East Timor to verify an agreed cease-fire and process of disarmament. Labor repeats its call for the Howard government to take immediate action to refer the situation in East Timor to the United Nations Security Council.The situation in East Timor is intolerable, and the prospects for a free and fair process of consultation on the future of the territory now look extremely bleak. The Howard government must move without delay to refer the situation in East Timor to the Security Council. Chapter VI, articles 34 and 35, of the United Nations Charter empowers any member of the UN to refer to the Security Council any dispute or situation `which might lead to international friction or give rise to a dispute'.Urgent referral of the East Timor situation to the Security Council would be a vital step in putting real pressure on the Indonesian government to act in accordance with its clear responsibility to ensure peace in East Timor. Referral of the situation by Australia would set in motion Security Council consideration for urgent deployment of a UN peacekeeping mission in East Timor. In the absence of such action by Australia, we face the further prospect of atrocities with the Indonesian military, which is undeniably complicit, in our view, in the escalating violence.The Howard government cannot say that it was not warned of this matter. Labor first called for the deployment of an independent international monitoring presence in East Timor on 25 October last year. Since 4 February this year, Labor has repeatedly called on the Howard government to give an in principle commitment for Australian participation in the United Nations peacekeeping mission in East Timor. In response to Labor's calls for action to disarm the militias and for the deployment of a peacekeeping presence, Foreign Minister Downer talked of the prospect of body bags. When asked about ABRI's role in arming the militias, he first said that he did not know. Then he sought to absolve the ABRI High Command and the Habibie government by claiming that unarmed ABRI rogue elements were to blame. Only last Friday Mr Downer called on East Timor's victims to be more `saintly' while refusing to release the Australian embassy's report on the Liquica massacre.Mr Downer's performance on this issue, in our view, has been one of foreign policy impotence—foreign policy impotence cloaked in obfuscation. How many more people will have to die before the Howard government moves beyond appropriate noises and takes real action to pressure Jakarta to stop the killings? No real pressure has been forthcoming from the Howard government. Instead, against all the evidence, the Prime Minister, Mr Howard, and the Minister for Foreign Affairs, Mr Downer, apparently continue to hope that the problem will fix itself with an absolute minimum of Australian involvement. Presumably they will continue to do so until it is too late. We welcome the opportunity to put these views on the record today. I indicate that at the conclusion of this contribution the opposition has slightly reduced and curtailed its speaking time to allow a number of other speakers to address this important issue in the chamber today.18:04:003755Brown, Sen BobSenator BROWNQD4TASAG00—Firstly, I want to commend Senator Bourne and the Democrats for this motion on the most critical issue in our region of the world. I want to follow that up with a commendation for Senator Faulkner and the Labor Party's position on this issue. They are taking a strong stand to try to change the weak position that the Howard government is taking against not only the interests of the East Timorese but also the unspoken wishes of the majority of Australians who are horrified by what is happening on our northern doorstep. In this morning's Age , the report from Jenny Grant sums up the horrific position of people in East Timor. She writes:Yesterday morning, Mr Manuel Carrascalao went looking for protection from the only man in East Timor capable of providing it—Indonesian military commander, Colonel Tono Suratman.Mr Carrascalao, a prominent Dili citizen and independence supporter, was frightened the militias would attack his home where about 100 people were sheltering.He hoped the commander would send soldiers to guard the Portuguese colonial-style home.Colonel Suratman flatly refused, saying the military must remain neutral, according to Carrascalao family sources.Hours later Mr Carrascalao, terrified and shaking, barged into a meeting between Bishop Carlos Belo and the visiting Irish Foreign Minister, Mr David Andrews. "My son is dead!" he said.The story goes on to point out that the Carrascalaos, who are pro-independence, had been harbouring over 100 refugees in their house as these armed bandits built up a presence outside and proceeded to shoot into the house where it is thought that 20 or 30 people were shot dead yesterday.What that story underlines is that the Indonesian military is complicit. It says that it is being neutral in standing aside but, as the world knows, these militias are being armed by it. We know that it is complicit, that the militias are under its direction. The militias are being armed by the military. The military itself is responsible for what is happening.The question is: what about the Habibie government? It is terrifying that it appears that Dr Habibie himself is cowering before the military in Jakarta. Jakarta knows what is happening in Dili and is orchestrating the terrifying destruction and the killing of the people representing independence for East Timor. In that situation, Australia ought to be standing very strongly indeed for the right of the East Timorese people to self-determination. But instead of that, yesterday on Channel 9 Prime Minister Howard, in response to a question about the recent massacre, said:Well, we've heard . . . we've heard essentially what you've just described and it worries us a lot.What a weasel phrase! What a failure to use strong words where strong words were needed! Remember, the Indonesian authorities are monitoring every word that our Prime Minister says, and every word he says is a message. The message to Jakarta of the phrase `it worries us a lot' is one of weakness. In answer to a further question from Mr Laurie Oakes, Mr Howard said:Well, speak carefully because there are broader interests at stake.What interests? Are Australian commercial interests being put before the lives of the people of East Timor? Is it concern about the stability of the government in Jakarta? I do not know what it is. But the interests that are at stake here are the rights of the people of East Timor to self-determination. Mr Howard goes on to say:On the scale of things, if you're running the show in Jakarta, East Timor is not as important as some other parts of the country. But it's very important to us.He is excusing the Habibie government. Mr Howard is now at last following the Irish foreign minister who went to Bali way ahead of him. As the opposition has said, it seems too late, and we can take little heart from the Prime Minister's past performance. (Time expired)18:09:003756Tambling, Sen GrantSenator TAMBLING6E4NTCLP10—In considering this important urgency motion about East Timor, not only are the issues of violence, self-determination and leadership important but also we must go beyond the veils of secrecy and look at the complex and complicated motives in Indonesia and the various calls for action. Murder is an unacceptable loss of life and the killing of the innocent is a tragedy. Violence results in unacceptable injuries and intimidation and is nothing more than intolerance of different political views. Destruction of property produces an unacceptable waste of resources, whether it is done by individuals or rampaging militias. Turning to the credibility and reputation of leadership, we must look firstly at the national level of government and administration in Indonesia and acknowledge that it is in a period of change, flux and confusion. Secondly, the military and policing policies and influence demonstrate a collapse in command and control of ABRI in East Timor and Ambon. Discipline and restraint, stability and cooperation have been discarded and obvious bodgie elements lack responsibility. If there are individual commanders in East Timor who are involved in arming and supplying militia groups, then the Indonesian government and military leaders must come down hard on these people. They have an obligation to ensure the safety of all Timorese, irrespective of their politics or ethnicity.Thirdly, at the local community level, leadership inside East Timor displays entrenched cultural and historical differences and rivalries. It is difficult to ascertain who represents whom, particularly in those expressing a pro-Indonesian viewpoint. Again, confusion is apparent in the disparate groups. It is very important to look at and consider the events of recent months. The `capture and kill' mentality of differing groups will not result in permanent solutions. To destroy offices, the local newspaper, houses and vehicles and take away income support is totally counterproductive. History is repeating the mistakes of the 1970s.It is imperative that activists both in Australia and in East Timor realise the importance of a political solution that is accepted by all, after widespread consultation and negotiation, to end the current tensions and violence afflicting this close neighbour of ours. A resolution of the troubles wracking East Timor will not be easy—no-one is pretending that—but it is of vital importance. We do not need activists in Australia, particularly in Darwin, who are not fully aware of the facts, and who have not taken the trouble to make themselves aware of the facts, going off half-cocked and attracting media attention that does not do anyone's cause one iota of good.Unfortunately, the Australian Labor Party leadership and some other commentators on this issue are parroting populist lines so reminiscent of past mistakes. They do not give us any strategies or any tactics; there is no recognition of the important sovereignty and non-interventionist issues and principles to which we aspire and on which we make very important statements in the United Nations. Australia's example and role are important and, compared with the Labor Party, the coalition government have demonstrated that we are concerned. The example of Foreign Minister Alexander Downer and various Australian officials in meeting with their Indonesian counterparts nearly 20 times so far this year demonstrates the serious bona fides that we bring to the table. The Prime Minister, Mr Howard, will meet with President Habibie in the next few weeks and reinforce our commitment to peace in the region.Australia has indicated that, if necessary, it will take a broker's role in assisting with peacekeeping but to do that we must recognise the important international obligations of others—such as the United Nations Security Council and the former occupier of East Timor, Portugal. Reality dictates that unless Indonesia invites others in, there will be no role for UN personnel or engagement. Very necessary human and material resources are available from within Australia to be applied to the necessary tasks. I am certainly aware that the Northern Territory government has indicated to the Prime Minister the many areas of activity and capability that could be applied.We must also look for Indonesian leadership. Undoubtedly, and in fact, Australia has demanded that the Indonesian leadership actively disarm and disband rebel groups. The involvement of the Indonesian Reconciliation Commission is of vital importance. Hopefully, by working on personal relationships and actions of trust, the necessary bridges between factions, players and interest groups can be built in the lead-up to the mid-year elections and the subsequent plebiscites to determine East Timor's future status. Political resolution is paramount and, where necessary, trusted third parties such as the United Nations or Australia should be utilised in determining sovereignty issues and re-establishing humanitarian values.I share the concern of many of my Northern Territory constituents about the increasing level of violence in East Timor and other Indonesian provinces by paramilitary thugs and interest groups. Many Territorians have family or personal relationships with Indonesian or Timorese people and are naturally concerned for the life and safety of their friends. However, with regard to the bigger picture of looking to the future, we must have a long-term solution that will promote political stability and promise an economic future for the region. Killing, violence and looting must be removed from the equation. It will be the statesmanship of our Prime Minister and our Foreign Minister which will give a major example and clear guidance to the Indonesian leaders, the National Council of Timorese Resistance, and the Justice, Unity and Democracy Forum. They are all important players in this issue.The stakes are huge for Australia but, far more importantly, it is the lives and the wellbeing of Timorese people which must be our first concern. I have been concerned that so many people are just content to parrot and play to the media. That is not the role for Australia. It is not our role to play Big Brother. It is our role to be there in times when there are difficulties. We have a very important long-term responsibility for and obligation to Timor that goes back a long way and that is entrenched in Second World War history. We certainly have many other issues of engagement and responsibility with Indonesia. Indonesia is experiencing a very difficult year. Nobody is questioning that, particularly those who have connections with the eastern provinces. It is these issues that impact on East Timor and the Indonesian authorities that must be handled with maturity, confidence and goodwill.18:17:003758Macdonald, Sen SandySenator SANDY MACDONALDCX5NSWNP10—I share, with dismay, Senator Bourne's concern about the escalation of violence in East Timor. We have seen a weekend of misery in Dili. It is reported that at least 12 have been killed, and many more were killed by marauding armed militia in the preceding weeks. This is yet another unfortunate chapter in East Timor's sad and unsettled history.It is fair to say that all sides of Australian politics are determined to allow the East Timorese to find the security to which they are entitled. Events are moving very rapidly but the Australian government's policy has remained absolutely fixed on two points: first, that any transition in East Timor, be it towards greater autonomy or full independence, must be peaceful and orderly; and, second, that the East Timorese people must be fully consulted over the transition at all stages. These are matters that Foreign Minister Downer has made very clear to all parties involved, including President Habibie and Xanana Gusmao when he met them last month in Jakarta.There is no real purpose served, I believe, by looking back over the last 24 years; suffice it to say that the Portuguese decolonisation process, as flawed as it may have been at the time, was interrupted by the Indonesian takeover in 1975, as we all know. The ensuing 24 years have seen an increasing level of violence and hopelessness that has been reflected by the Indonesians'- dare I say it—progressive commitment on 28 January to provide the 850,000 East Timorese with a referendum to determine their future.Clearly, this renewed level of violence must severely threaten the possibility of a vote being held in July or August as planned, that vote being expected after the presidential elections on 7 June 1999. To give credit where it is due, it must be remembered that it was President Habibie who was instrumental in changing Indonesia's policy towards East Timor. As part of the stabilisation of the situation and the reduction of tensions on the ground in East Timor, the Australian government has made it very clear that the militia groups in Timor must be disarmed. Mind you, that is easier said than done, because it was the Indonesian military who provided the militia groups with those arms, so it would be quite difficult for the same people who provided the militia groups with those arms to go and take those arms off them.The recent violent incidents began after a pro-integration rally. Pro-integration militia leaders reportedly called on supporters to kill their opponents. Both the police and ABRI are reported to have stood by, the conclusion being that ABRI failed to act in a way that was directed by the President. The Australian government takes the view that the Indonesian government and armed forces are responsible for law and order for all citizens in the Indonesian archipelago, including, for the time being, East Timor. They clearly failed to do so in Liquica last week and now in Dili.The government of Indonesia and ABRI must act decisively and do so now. It is imperative that ABRI disarm and disband the militia as far as is possible and that those responsible for the violence and killings in Dili and elsewhere be brought to account. Following the reports of violence on Saturday, the Australian Ambassador, John McCarthy, spoke to Foreign Minister Alatas. He demanded that action be taken to end the violence and emphasised the serious damage being done to Indonesia's international reputation. The Australian army attache also spoke to a senior military commander in Dili. The Australian embassy is continuing to contact senior civil and military officers and militia spokesmen in Jakarta and Dili. The embassy has been speaking to the Indonesian authorities since early April about rumours of potential violence in Dili. On 11 April officers visited East Timor to investigate the Liquica killings and urged the deputy military commander in Dili to prevent any such attacks in Dili.The Australian government is committed to the UN peace process, which remains one of the key elements to a successful and peaceful outcome. One area where the Australian government has taken immediate action is to address the situation on the ground in the provision of humanitarian assistance. Australia is already the largest bilateral aid donor to East Timor by far, having committed approximately $7 million in development assistance for the financial year 1998-99. We have also provided, over several years, more than $5 million to assist the activities in East Timor of the International Committee of the Red Cross, as well as bilateral assistance in the areas of legal aid and human rights on the ground in East Timor. There is still a great deal more to be done, but we have certainly been part and parcel in making a very appropriate contribution.To finish, I want to put on record that Indonesia is our very close friend and neighbour with 200 million people. We are determined to work with Indonesia in the long term, to have a constructive relationship. Indonesians are very aware of the very strong view which we hold on East Timor. We encourage them in their courage to tackle the problem that they face and will do all we can to make it possible for them to find a peaceful solution for East Timor. It is very much in our interests as it is in theirs.18:24:003759Bourne, Sen VickiSenator BOURNETW4NSWAD00—I thank all senators for their contributions to the debate. The reality is that there are many East Timorese people who are, as we speak, being intimidated, harassed, terrified, injured or murdered. These people are as desperate as the people in Europe whom we see every night on the television news. The East Timorese are some of our closest neighbours. They are living in a country where we have at least some influence. It is time right now to use that influence to the absolute best of our ability. If ever there was a time for what the foreign minister derisively calls `megaphone diplomacy', now is that time. The situation in East Timor right now is absolutely desperate.I was encouraged by many of the things that were said today—I was discouraged by several. I was encouraged that the Prime Minister, the Minister for Foreign Affairs and the Minister for Defence are all to meet with their counterparts in Indonesia—I hope as soon as is humanly possible. I was encouraged by what Senator Sandy Macdonald said about our own defence forces contacting ABRI members and also about the humanitarian assistance that is going on. Some of the things that others have said are also desperately needed at the moment. For instance, I think it would be very good if, as Senator Faulkner said, we did contact the Security Council. We do have that right as a member of the United Nations. It is an excellent idea and I think we should be doing it. Naturally, I think all the suggestions I made are very good and should be looked at by the government. I will send them on to the foreign minister.It was just a couple of months ago that we found ourselves in the very pleasant situation of all agreeing, in this chamber and in this parliament—all parties and, I think, all independents as well—that the East Timorese people should be allowed to determine their own future. I know we all still agree that that is the case. I know we are all still working towards the one outcome. I think we should be a lot stronger in the way we work towards that.I think right now is the time for our megaphone diplomacy. Right now is the time, if we must, to get stuck into anybody whom we must get stuck into in Indonesia. We have to make ABRI accountable for their actions. They have taken appalling actions. They have to be accountable for them. They have to be accountable to General Wiranto and, if he is not in control, he must take control. That is something that the Prime Minister loves to tell us: if people are out of control, they have to be brought under control. These people are out of control. They need to be brought under control and that needs to happen right now.Question resolved in the affirmative.Committees3760376010000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Bartlett)—The President has received letters from the Leader of the Government in the Senate and the Leader of the Opposition in the Senate seeking variations in the membership of standing committees.Motion (by Senator Vanstone)—by leave—agreed to:That senators be appointed to committees as follows:Economics Legislation CommitteeSubstitute member: Senator O'Chee to substitute for Senator Watson on 5 May from 9.00 am till 5.30 pmEmployment, Workplace Relations, Small Business and Education Legislation CommitteeParticipating member: Senator Crowley.Finance and Public Administration Legislation CommitteeSubstitute member: Senator Ferguson to substitute for Senator Watson on 4 May from 12 noon until adjournment.Bills3760Messages from His Excellency the Governor-General were reported, informing the Senate that he had assented to the following laws: Agriculture, Fisheries and Forestry Legislation Amendment Bill (No. 2) 1998 Australian Sports Drug Agency Amendment Bill 1998 General Interest Charge (Imposition) Bill 1998 Judiciary Amendment Bill 1998 Motor Vehicle Standards Amendment Bill 1998 National Measurement Amendment (Utility Meters) Bill 1998 Rural Adjustment Amendment Bill 1998 Taxation Laws Amendment Bill (No. 3) 1999 Wildlife Protection (Regulation of Exports and Imports) Amendment Bill 1998 [1999] Assistance for Carers Legislation Amendment Bill 1999 Bounty (Ships) Amendment Bill 1999 Industry Research and Development Amendment Bill 1998 Taxation Laws Amendment Bill (No. 1) 1999 Bills3760r708Billsr695Billsr687Billsr688Billsr686Billsr683Billsr681Billsr7143760Bills received from the House of Representatives.18:28:003760Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I indicate to the Senate that those bills which have just been announced are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have three of the bills listed separately on the Notice Paper . I move:That these bills may proceed without formalities, may be taken together and be now read a first time.Question resolved in the affirmative.Bills read a first time.376018:29:003760Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I table a revised explanatory memorandum relating to the Taxation Laws Amendment Bill (No. 2) 1999 and the Primary Industries (Excise) Levies Bill 1999 and four associated bills and move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—CIVIL AVIATION AMENDMENT BILL 1998In July 1996 the Government announced that the Civil Aviation Safety Authority (CASA) would conduct a complete review of the civil aviation legislation in Australia, with the objectives of harmonising it with international standards of safety regulation and making it shorter, simpler, and easier to use and understand. This was also an election commitment in the Government's "Soaring into Tomorrow" aviation policy statement. The Morris `Plane Safe' Report and the Seaview Commission of Inquiry both supported the need for a review of Australian regulations and standards.The purpose of this bill is to facilitate the findings of the review and provides for the introduction of a new set of regulations that are harmonised with civil aviation laws internationally.The existing act contains various references to the "Civil Aviation Regulations". These references will be changed to "the regulations" or "regulations made under this act" or similar. In recognition of the fact that the safety regulation of aviation activities should not be based fundamentally on the commercial nature of an activity, it is proposed that the term commercial be removed from the act by replacing "domestic commercial flight" with "regulated domestic flight".The amendments also provide for new powers in relation to the retention and destruction of goods seized by CASA during the course of investigating breaches of the Civil Aviation Act 1988 and regulations.The power to retain seized goods for longer than 60 days and the power to destroy seized goods, are vested in courts. CASA must apply to courts for orders to retain or destroy the goods as the case may be. The former is required to assist in prosecutions for offences against the act or regulations and is needed in cases where difficulties arise when proceedings are delayed.The discretion to destroy dangerous goods seized is proposed because in practice, it is not always possible to return seized goods to their owner, and the airline or Customs do not want to accept the responsibility for the goods after the matter is finalised.Unless such goods are forfeited to the state under legislation relating to property used in the commission of an offence, CASA is required to store them indefinitely. This storage is expensive and has no purpose other than to ensure that CASA does not unlawfully dispose of goods which it does not own. The amendments proposed will permit a CASA investigator to apply to a court for an order that the goods be destroyed where the owner cannot be located or has refused to take possession of the goods.Clarification of CASA's ability to classify the fees charged by CASA under the Civil Aviation (Fees) Regulations as debts due to CASA is also included in the bill. Where regulations made under the act require the payment of a fee, and the fee is not paid by the due date, then the regulations should be able to prescribe a late payment penalty to be added to that fee. Consequently, a provision which enables the making of regulations which prescribe limited late payment penalties to be imposed is also included.The financial impacts of the proposed amendments have been assessed as being low. The regulatory changes which the bill facilitate, streamline many CASA requirements of industry and will assist in the manufacture of aircraft in Australia. The bill has no direct Budgetary impact. It is envisaged however, that the regulatory changes which will follow from the bill will reduce the costs borne by CASA in administering the civil aviation regulatory regime.The amendments proposed in this bill will facilitate the long awaited introduction of a regulatory regime for the Australian aviation industry which is not only harmonised with international practice but clear, concise and outcome focused. The Government's commitment to deliver this objective has been realised.TAXATION LAWS AMENDMENT BILL (No. 2) 1999The bill amends the income tax law to give effect to measures announced in previous Budgets and in other Government statements.This bill also honours a commitment made by the Prime Minister on 8 December 1997, when he announced, as part of the Investing for Growth Statement, a package of measures which are aimed at making Australia a more attractive regional financial centre by building on Australia's existing advantages to ensure its participation in the increasing global trade in financial services.The amendments relate to the exemption from interest withholding tax available under section 128F, the offshore banking unit concessional tax regime, the foreign investment fund and the thin capitalisation provisions of the Income Tax Assessment Act. These measures were first introduced into Parliament on 2 July 1998 and subsequently lapsed when Parliament was prorogued. Since that time consultation with Industry bodies has continued and the re-introduced measures reflect that dialogue. These changes were announced by the Treasurer on 13 August 1998. The exemption provided by the bill from the controlled foreign company measures represents an extension of the previously announced exemption from the foreign investment fund measures.To ensure taxpayers are not disadvantaged by the delay in implementation, the amendments are to continue to apply from 2 July 1998—the original date of introduction. The exemption from the foreign investment fund measures will continue to have effect for notional accounting periods of foreign investment funds ending on or after 2 July 1998. The exemption from the controlled foreign company measures will also have effect for statutory accounting periods of controlled foreign company ending on or after that date. The amendments are estimated to cost $22 million in a full year.This bill contains consequential amendments arising from changes to the capital loss rules in Taxation Laws Amendment Act (No. 2) of 1997. The technical amendments will not affect the practical effect of the debt forgiveness provisions. These amendments apply to debts forgiven after the date of introduction of this bill.The Income Tax Assessment Act 1997 is being amended to set a common base for the depreciation deductions for plant that can be claimed by exempt entities which first become taxable on or after 4 August 1997 in relation to plant they already own, and by taxable entities which purchase plant from an exempt entity in connection with the acquisition of a business on or after 4 August 1997.The remaining measures will prevent franking credit trading and dividend streaming, as announced in the 1997-98 Budget. These include a holding period rule and related payments rule for shares and interests in shares to ensure that only taxpayers who bear the economic risk of ownership of the shares or interests will be entitled to franking rebates and credits under the dividend imputation system and the intercompany dividend rebate. These benefits will also be denied on trust and partnership distributions which are equivalent to interest on a loan. One measure limits the source of franking credits available for trading.The amendments to trust and partnership distributions and those implementing the related payments rule and the limiting the source rule apply from 7.30 pm AEST, 13 May 1997. The holding period rule generally applies to shares and interests in shares acquired on or after 1 July 1997, with special provisions relating to trusts applying from 3.00 pm AEST 31 December 1997.On 10 October 1996 the Treasurer announced the Government's intention to amend the Income Tax Assessment Act 1997 to allow deductions for gifts of $2 or more to the Menzies Research Centre Public Fund.The Menzies Research Centre Public Fund will undertake research into economic, social, cultural and political policies to enhance the principles of individual liberty, free speech, competitive enterprise and democracy. The Centre will publish and disseminate the results of the research to the public.Full details of the measures in the bill are contained in the explanatory memorandum circulated to honourable senators.I commend the bill to the Senate.PRIMARY INDUSTRIES (EXCISE) LEVIES BILL 1999The Primary Industries Levies Amalgamation legislation will introduce administrative efficiencies and make the law more accessible those involved in agriculture, fisheries and forestry by:. amalgamating 40 primary industry levy and charge acts;. providing a framework for future levies and charges to be imposed by regulation;. making minor technical amendments to improve levies and charges legislation.This legislative package includes two main bills:. the Primary Industries (Excise) Levies Bill 1998; and. the Primary Industries (Customs) Charges Bill 1998and three related bills which are required to amend related existing legislation to take account of changes that will result from the passage of the two main bills.Primary industries levies and charges are imposed and administered by the Commonwealth at the request of, and on behalf of, industry organisations. They are generally only increased or introduced at the request of industry peak bodies.Many rural producers lack the size to individually undertake activities such as promotion or research and development which are necessary to the longer term development of their industries. The Government has long recognised this situation and provided a mechanism in the form of primary industries levies and charges to enable the collection of industry moneys to fund research and development, marketing and promotion, residue testing, and animal health programs.These activities play a valuable role in contributing to the international competitiveness of Australia's agricultural, fisheries and forestry industries and underpinning the exports of these sectors. The major delivery system for rural research and development, the Research and Development Corporation model, is financed by industry levies and matching Government contributions. The National Residue Survey program and the various animal health programs funded by levies play a crucial part in guaranteeing the integrity of our products in export markets. The marketing and promotion programs funded by primary industries levies and charges have established the "Australian" identity of so many of our products overseas and helped to build consumer awareness and loyalty.Industry has been consulted about the amalgamation package and is supportive because the proposed legislation will streamline the process of amending levy rates and introducing new levies. As members will recall the Government has established a set of principles for primary industry levy proposals. The principles require extensive consultation at grass roots level by industry bodies prior to a levy proposal being considered, so that a genuinely representative view is obtained.This legislative package represents a major step forward in the administration of primary industries levies and charges and has several important benefits.It will enable the Government to better service industry by simplifying the processes and reducing the long leadtimes surrounding changes to levies and charges and being more flexible and responsive to industry requests for such changes as well as for new or additional levies. It will introduce new efficiencies to the public sector by streamlining and improving the administration of levies and charges legislation. Finally it will reduce the call on the time of Parliament for the often involved process of making changes to levies and charges, by reducing the number of imposition acts that will have to be amended to affect changes in the future from the current 40 to two.The purpose of this bill is to:. amalgamate 27 existing primary industries levy acts;. provide a framework for future levies to be imposed by regulation; and. make minor technical amendments to improve levy legislation.I must emphasise at the outset that the amalgamation of existing levy acts does not involve any fundamental change to the levies imposed by those acts and does not result in the imposition of any new or additional levies. The existing levy acts are replaced by Schedules to the bill.Schedule 27 of the bill will allow the Governor-General, on the advice of the Minister, to make regulations imposing additional levies on primary industry products, whether or not they are already subject to levies. The Government intends that such additional levies would only occur following a request from industry. This will apply not only to those industries which already have levies in place, but also to industries which do not currently have levies in place, but at some stage in the future see sufficient benefit in these to approach the Government to request their introduction.The Government intends that such regulations will be required to be accompanied by a report setting out the extent to which the proposed levy or charge complies with the Government's general principles for new primary industry levies and charges, when tabled in Parliament and will be subject to disallowance by Parliament. In addition, the Office of Regulation Review examines new levies through its regulation impact process and a Regulation Impact Statement is required for each new levy or charge.As with existing levies, the operative rates for any new or additional levies will not be able to be set in excess of the maximum rates contained within the Schedules to the bill. These maximum rates are broadly in line with the maximum rates for levies of similar products and can only be changed by Parliament.I mentioned that the bill also includes some minor amendments. These amendments are for administrative reasons only and do not change the original policy intentions of the legislation. Nor do they affect existing levy rates.A minor but important technical amendment will correct the unforeseen consequences of legislative amendments in 1996 and 1997 to the Dairy Produce Levy (No. 1) Act 1986 which, in redefining the imposition of the Corporation, promotion, research and Australian Animal Health Council levies, inadvertently removed the provision for the collection of these levies beyond 30 June 2000. There was no policy basis for ceasing the collection of these levies on 1 July 2000. This amendment is needed to ensure the legislation reflects the Government's current policies with respect to the continued collection of dairy levies. Industry has been consulted on this matter and supports the proposed amendment.Other minor amendments include:. providing a threshold exempting growers from paying coarse grain levies where their total liability is less than $50 in a levy year, bringing the provisions of the coarse grains levy into line with other grain levies;. placing a limit on the delegated authority for the determination of declared value of deer velvet to senior officer level within the Department of Agriculture, Fisheries and Forestry; and. in the case of the levy on rice, providing for consultation with state marketing authorities in any State in which they exist. PRIMARY INDUSTRIES (CUSTOMS) CHARGES BILL 1999The purpose of this bill is to:. amalgamate 13 existing primary industries charge acts;provide a framework for future charges to be imposed by regulation; and. make minor technical amendments to improve existing levies and charges legislation.The structure of this bill is similar to the Levies bill. Schedules 1-13 replace the current charge acts.Schedule 14 allows the Governor-General, on the advice of the Minister, to make regulations imposing additional charges on primary industry products, whether or not they are already subject to charge. The same safeguards for the Levies bill will also apply.PRIMARY INDUSTRIES LEVIES AND CHARGES (CONSEQUENTIAL AMENDMENTS) BILL 1998The purpose of this bill is to:. repeal 40 existing levies and charges acts;provide for amendments to various acts consequential on the repeal of those levies and charges acts and the enactment of the new levies and charges bills;. provide for transitional arrangements to ensure a smooth and orderly transition from the old levies and charges acts to the new levies and charges bills; and. make minor technical amendments to improve levies and charges legislation.A minor technical amendment will extend to the Australian Capital Territory (ACT) and Northern Territory (NT) the corresponding exemption from levies and charges that applies to the States, thereby removing any potential criticisms regarding discriminatory treatment of the territories in existing legislation and would be consistent with the treatment of these territories in the Primary Industries Levies and Charges Collection Act 1991.NATIONAL RESIDUE SURVEY (EXCISE) LEVY AMENDMENT BILL 1999The purpose of this Bill is to:. provide for amendments to the National Residue Survey (Excise) Levy Act 1998 as a consequence of the repeal of levies and charges Acts and the enactment of the new levies and charges legislation; and. introduce a minor technical amendment to remove the 1 July 2000 sunset clause on the relevant National Residue Survey dairy levies. NATIONAL RESIDUE SURVEY (CUSTOMS) LEVY AMENDMENT BILL 1999The purpose of this bill is to provide for amendments to the National Residue Survey (Customs) Levy Act 1998 as a consequence of the repeal of levies and charges Acts and the enactment of the new levies and charges legislation.NAVIGATION AMENDMENT (EMPLOYMENT OF SEAFARERS) BILL 1998The Government is revising the Navigation Act 1912 to bring it up to date and into line with practices that are relevant to the operation of a modern and efficient shipping industry. This is being done in two stages. Stage 1, which is to be implemented through the Navigation Amendment (Employment of Seafarers) Bill 1998 now before the House, is aimed at removing employment related provisions in the act, which are inconsistent with the Workplace Relations Act 1996 and the concept of company employment. Stage 2 will involve a comprehensive rewrite of the act to make it a more efficient and effective regulatory tool.The Navigation Act has its origins in the British Merchant Shipping Act of 1894, and the employment related provisions were originally intended to cover situations where the majority of the crew of a ship were employed on a casual basis, with crew contracted to serve on a particular ship for a particular voyage. At the end of the voyage the crew was paid off with the employer having no further commitment regarding the employment of individual crew members. With the shift to company employment a number of provisions in the Navigation Act are no longer relevant.There is no doubt that both shipping and the legislation under which it operates are much in need of reform. The key element of the Government's policy to reform the Australian shipping industry is the introduction of company employment for all seafarers. This was a major recommendations in the 1997 report by the Shipping Reform Group titled `A Framework for Reform of Australian Shipping'.Under company employment the terms and conditions applying to seafarers are matters for negotiation between the seafarers and their employers. Legislative backing for such arrangements, which can be tailored to the needs of individual companies, can be obtained through the Workplace Relations Act.Not only are most of the current highly prescriptive employment provisions in the Navigation Act unnecessary, they are also inimical to the development of productive and trusting working relationships between seafarers and their employers.In summary, the major amendments in the bill will abolish the Marine Council and its functions, and will also remove provisions dealing with:. prohibition on demanding or receiving fees for the supply of seamen;. prohibition on using the crew of a ship engaged in overseas voyages for handling cargo or ballast while the ship is in an Australian port;requirements to enter into a prescribed form of `articles of agreement' covering conditions of employment; and. certain procedures for the discharge of seamen from service on a ship and methods for paying their wages.Abolition of the Marine CouncilThe Marine Council has previously dealt mainly with issues concerning the suitability of seamen for employment at sea and whether there is just cause to suspend a seaman from employment on ships. The Council may, for example, be called upon to consider what to do about seamen who report late for work. Under company employment it is the responsibility of the employer to deal with these matters and there is no need for a Government appointed body to perform such tasks.Accordingly, the bill provides for the repeal of sections 47, 48, 138 and 424.Fees for the Supply of SeamenAt present section 32 of the act prohibits demanding or receiving fees for the supply of seamen. This provision originally came from the British Merchant Shipping Act of 1894 and was intended to prohibit demanding payment from seamen for finding them jobs. This practice was generally known as crimping.There are many ship management and crewing agents around the world today that specialise in managing crewing matters, including supplying seamen, on behalf of shipowners and charge them for such services. Given this situation and the normal employment practices in Australia, section 32 is no longer appropriate and the bill provides for its repeal.Use of crew for handling cargo or ballastThe question of what limits should be placed on the work to be carried out by a ship's crew is a matter that should be determined by negotiation between employers and their seagoing employees.While as a general rule shore side stevedores carry out the loading and unloading of ships, there can be circumstances where it may be quite appropriate for the crew to handle goods that could fall under the broad description of cargo. Examples include the cleaning of holds, where the crew would need to handle residues of cargo and the loading of ships' stores. In any event, it is not appropriate for restrictions of this sort to be in the Navigation Act and the bill provides for the repeal of section 45 of the act dealing with this matter.Requirement to enter into a prescribed form of `Articles of Agreement'Articles of Agreement are in effect a contract of employment between the master of a ship, on behalf of the employer, and each member of the crew. The Navigation Act prescribes in great detail the procedures and content of Articles of Agreement. As such, this aspect of the Navigation Act is inconsistent with the aims of the Workplace Relations Act which are to give employers and employees a high degree of flexibility in making employment arrangements best suited to their needs.Articles of Agreement are provided for in ILO Convention 22, which dates back to 1926 when most seafarers were employed on a casual basis and the articles were the only legal instrument available to protect their interests. Given the moves in Australia to company employment and the aims of the Workplace Relations Act, it is quite appropriate for Australia and other parties to that convention to interpret it in a manner consistent with its own present day employment legislation.While the bill removes the prescriptive elements covering Articles of Agreement, it still leaves a requirement in section 46 that a ship shall not be taken to sea unless the employer has entered into an agreement with the master and seamen. Legislative backing for such an agreement can be obtained through the Workplace Relations Act. In line with this approach, the bill substitutes a redrafted section 46, and provides for the repeal of sections 46(2), (2A), (4), 4(A), 50, 53, 54, 55, 56 and 57.Procedures for the discharge of seamen and methods of paying wagesDivision 9 contains very detailed requirements covering procedures for discharging a seaman from serving on a ship. These procedures are no longer appropriate to company employment arrangements.However, some aspects of sections 61, 63, and 68 in Division 9, are relevant to assessing the nature and extent of a seafarer's service for the safety purposes covered by the International Maritime Organisation's Convention on the Standards of Training, Certification and Watchkeeping. These matters will in future be covered by Marine Orders made pursuant to section 15 of the Navigation Act. The bill provides for the repeal of all sections in Division 9.Division 10 contains another very detailed set of provisions covering how wages are to be paid to seafarers. One such provision is contained in section 70, under which a seaman has the right to have a up to three fourths of his or her wages paid to a grandparent, parent, wife, husband, brother, sister, child, or grandchild. Clearly, arrangements for paying wages to seafarers are matters that can, and should, be covered under company employment agreements.The bill provides for the repeal of all sections in Division 10 except sections 83, 85, 91 and 94, which deal with the rights of masters and seamen in respect of claims for wages and repatriation to their home port if the ship on which they are serving is lost or wrecked, or the owner or operator goes bankrupt during a voyage.Sections 132 and 132B contain provisions related to sick leave, which should be the subject of negotiations between an employer and seafarers, rather than being prescribed in the Navigation Act. Accordingly, these sections are to be repealed under amendments in the bill.Other significant amendmentsGiven the move to company employment there are several other provisions in the Navigation Act that are no longer appropriate and the bill provides for their repeal. Probably one of the most pedantic and unnecessary provisions in the act is the one that requires that the crew of a ship licensed to engage in the coasting trade be given access to a ship's library.With this in mind, the bill provides for the repeal of this and other provisions covering matters such as determinations by a government official of the home port to which a seamen is entitled to be returned after completing service on a ship, and reports to the Australian Maritime Safety Authority concerning the code of conduct applying to seafarers.It is interesting to note that a text book on shipping law written by two British barristers has noted that no other body of workers, except perhaps children, has been given the same protected position as seamen. While conditions in the shipping industry a hundred years ago might have justified the detailed employment provisions that have found their way into the Navigation Act, this is not the case today when Australian seafarers enjoy exceptionally good working conditions.There can be no doubt that legislation covering Australian seafarers needs to be greatly simplified and brought into line with that applying to other industries in this country.I commend the bill to the Senate.Debate (on motion by Senator Quirke) adjourned.Ordered that the Civil Aviation Amendment Bill 1998 , the Taxation Laws Amendment Bill (No. 2) 1999 and the Navigation Amendment (Employment of Seafarers) Bill 1998 be listed on the Notice Paper as separate orders of the day.Sitting suspended from 6.30 p.m. to 7.30 p.m.Bills3766r719Billsr7753766Bills received from the House of Representatives.19:30:003766Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10——I indicate to the Senate that those bills which have just been announced are being introduced together. After debate on the motion for the second reading has been adjourned, I will be moving a motion to have the bills listed separately on the Notice Paper . I move:That these bills may proceed without formalities, may be taken together and be now read a first time.Question resolved in the affirmative.Bills read a first time.376619:31:003766Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I table a revised explanatory memorandum relating to the Textile, Clothing and Footwear Strategic Investment Program Bill 1999 and move:That these bills be now read a second time.I seek leave to have the second reading speeches incorporated in Hansard .Leave granted.The speeches read as follows—TEXTILE, CLOTHING AND FOOTWEAR STRATEGIC INVESTMENT PROGRAM BILL 1999Honourable senators will be aware the Prime Minister announced in September 1997 the key elements of the government's response to the Industry Commission's review of the textile, clothing and footwear industries.The package of measures announced by the Prime Minister for the TCF industries included a tariff pause at levels scheduled for 2000, until 31 Decem ber 2004, and adjustment initiatives designed to promote sustainable and internationally competitive TCF industries into the next century. I will later introduce a separate bill, the Customs Tariff Amendment Bill, to implement the government's decision to reduce duties on TCF items from 1 January 2005.The proposed TCF strategic investment program bill allows for the establishment of the TCF Strategic Investment Program as the key initiative for the TCF industries. The TCF Strategic Investment Program is a five-year, $700 million package aimed at encouraging additional investment in the TCF industries to add value to the products of early stage processing. The program aims to help in the development of sustainable, internationally competitive TCF industries in Australia during the transition to a freer global trade environment, by providing incentives which will promote investment, innovation and value adding in these industries. The program will also provide incentives to areas which are heavily dependent on TCF manufacturing industries, primarily regional areas.The benefits available under the TCF strategic investment program will be paid as cash, annually and in arrears. All firms engaged in textile, clothing, footwear and leather manufacturing in Australia, as defined by the Australian Bureau of Statistics, will be eligible to apply for assistance under the program.The TCF strategic investment program will come into effect on 1 July 2000, following the termination of the TCF Import Credit Scheme on 30 June 2000. The benefits to be paid under the program for investment expenditure on new plant and buildings, research and development activities and value adding will be calculated as follows:(i) Up to 20 per cent of eligible investment expenditure on new plant and buildings;(ii) up to 45 per cent of expenditure on eligible research and development related activities (including product development expenditure, other than advertising and media related expenditure); and(iii) Up to five per cent of TCF value added by the company in Australia in the year of their claim.In addition to the mainstream application of the program, and recognising that restructuring of the TCF industries may have some adverse impact on employment opportunities, the program will support two specific initiatives to assist areas which are heavily dependent on TCF manufacturing industries:(i) Subject to satisfying the criteria for reconfiguration and adjustment, affected firms may apply for assistance under the SIP for the purchase of `state of the art' second-hand plant and equipment.(ii) Subject to meeting the specified criteria, authorised agencies in regions affected by restructuring in the TCF industries may be eligible to apply for assistance under the Commonwealth's existing Regional Adjustment Program to create employment opportunities in the affected regions.These initiatives will primarily benefit regional areas which are heavily dependent on TCF manufacturing industries.The TCF strategic investment program will minimise the risk of a successful World Trade Organisation (WTO) challenge. In line with the WTO's rules, the overall level of assistance to individual companies from the grant program will be limited to five per cent of its total sales of eligible products in the preceding twelve months.To comply with Australia's obligations under the Closer Economic Relations (CER) with new Zealand, sales to new Zealand would not receive payments under the scheme's value added provision and would not be included as sales for calculating the five per cent limit on overall subsidy payments.The proposed bill provides for in Part 1 Introduction; in Part 2 General Provisions of the TCF(SIP) Scheme; in Part 3 Supplementation of the Regional Assistance Program; in Part 4 Information Gathering Powers; in Part 5 Recovery of Scheme Debts; in Part 6 Offences; and in Part 7 Miscellaneous Provisions.The proposed bill provides for enabling powers for the minister to make a ministerial scheme pursuant to the new act, to be called the TCF(SIP) scheme, which will set out the necessary rules relating to the program.The Commonwealth Department of Industry, Science and Resources will administer the TCF Strategic Investment Program.TELECOMMUNICATIONS LAWS AMENDMENT (UNIVERSAL SERVICE CAP) BILL 1999Madam President, the Australian telecommunications regime includes universal service arrangements, to ensure that all Australians have reasonable and equitable access to a standard telephone service and to payphone services.The Telecommunications Act 1997 places a Universal Service Obligation (or `USO' for short) on one or more carriers, requiring them to ensure that these services are reasonably available to all Australians, wherever they may reside or carry on business. At present, Telstra is the carrier which fulfils the USO throughout Australia.The cost of fulfilling the USO is shared amongst all the carriers, in proportion to each carrier's market share. At the end of each financial year, Telstra puts in a claim for the cost of fulfilling the USO during that financial year. The Australian Communications Authority assesses that claim and rules on the actual cost, then bills the other carriers for their contributions. This assessment of the USO claim by the Australian Communications Authority ensures that an independent regulatory authority transparently assesses the cost of the USO in each year.A problem has now arisen with these arrangements. In previous years, under the equivalent provisions of the former Telecommunications Act 1991, Telstra, Optus and Vodafone simply agreed on an estimate of the cost of fulfilling the USO. The sum agreed was $230 million in 1993-94, to be increased by the Consumer Price Index each year. For the 1996-97 financial year, the agreed sum had increased to $252 million.The three carriers and the Australian Communications Authority used that time to develop a new model for estimating the cost of the USO. In September 1998, Telstra put in its claim for the 1997-98 financial year, using the new model. That claim was $1.828 billion, seven times the agreed cost for the previous year.While this amount needs to be assessed by the Australian Communications Authority, the government recognised that the claim had the potential to destabilise the entire industry and deter investment in Australian telecommunications. The government moved swiftly to alleviate the uncertainty hanging over the industry by an interim solution, pending a detailed review of the USO arrangements.On 12 October 1998 the government announced that the USO cost for 1997-98 would be capped at $253.32 million, which is the agreed cost for 1996-97 plus CPI. The government said that it would seek to reach an agreement with the industry for such a cap, but failing such an agreement, the government would introduce legislation to impose a cap.The government continues to negotiate with Telstra and the other carriers, seeking their agreement to a negotiated cap.In case an agreement is not reached, the government is today introducing legislation to cap the USO cost for the short term. This legislation will, therefore, serve as a fallback.This will be an interim solution only, to provide sufficient time for a measured and orderly review of future USO funding arrangements. While the terms of reference of this review have yet to be finalised by the government, it will broadly con sider the full range of options to fund the costs of the provision of loss making USO services, while promoting an Australian telecommunications industry that is efficient, competitive and responsive. This review will take into account the interests of all parties, including the universal service provider. It is in the best interests of the industry that sustainable competition takes place in a framework in which USO providers have appropriate incentives to sustain adequate investment and improve levels of service for all users.The government expects to carry out that review in 1999, and to enact any changes to USO funding arrangements before the commencement of the 2000-2001 financial year. In the interim, this problem could recur. Therefore, a cap will also be applied to financial years 1998-99 and 1999-2000.The legislation itself is quite simple. The Australian Communications Authority will continue its assessment of Telstra's claim for 1997-98. However, this legislation caps the USO cost to be used for working out industry contributions to Telstra for 1997-98 at a maximum of $253.32 million. Should the Australian Communications Authority assessment produce a lower figure, that is the amount which will apply.For 1998-99 and 1999-2000 the USO cost to be used for working out industry contributions to Telstra will be fixed at $253.32 million plus CPI. Telstra and the Australian Communications Authority will not need to repeat the process of calculating a USO cost for those two years.However, the minister will be given a power to change the amount for 1998-99 or 1999-2000, to allow for changes in circumstances. Such a change to the fixed cost will be by a disallowable instrument, so that the parliament may consider the proposed change.That sums up the legislation.The government is introducing legislation before the Australian Communications Authority completes its assessment of Telstra's claim for the following reasons. Firstly, once the assessment is completed, the Telecommunications Act gives the carriers only 28 days to pay their share of the USO cost. It would be too late by then to pass legislation. Secondly, it is necessary to follow up the government's 12 October announcement within a reasonable time if industry certainty is to be maintained.Finally, I would like to reassure the Senate that the government prepared this legislation determined that any cap should not put at risk Telstra's ability to fulfil the USO. In fact, recourse to this legislation as a short-term measure affects Telstra less severely than other carriers would be affected if a substantially increased claim is allowed without a properly detailed review. Under the interim solution proposed, Telstra can be expected to receive an amount comparable to last year, indexed to CPI for a three-year period. This outcome minimises instability in the industry while a longer term solution is implemented. In the meantime, the government can be satisfied that the USO will continue to be delivered, while long-term arrangements are being reviewed.I commend the bill to the Senate.Ordered that further consideration of the second reading of this bill be adjourned till the first day of sitting in the winter sittings 1999, in accordance with standing order 111.Ordered that these bills be listed on the Notice Paper as separate orders of the day.Bills3769Message received from the House of Representatives agreeing to the amendments made by the Senate to the following bills: A New Tax System (Fringe Benefits Reporting) Bill 1998 Health Legislation Amendment Bill (No. 2) 1999 Miscellaneous3769Consideration resumed.3769Question resolved in the affirmative.Resolution reported; report adopted.Bills3770r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Bills3770r763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7623770Debate resumed from 10 December 1998, 8 March 1999 and 31 March 1999 on motions by Senator Ian Campbell, Senator Ian Macdonald and Senator Patterson respectively:That these bills be now read a second time.19:33:003770Carr, Sen KimSenator CARRAW5VICALP00—I seek leave for the arrangements made regarding additional speaking times for five senators to be agreed to. Those senators are listed on the document circulated in the chamber.Leave granted.19:34:003770Cook, Sen PeterSenator COOKRF4WAALP00—We now have before us A New Tax System (Goods and Services Tax) Bill 1998 and 26 related bills, so now the Senate begins its debate on the GST bills. The package of bills before us, 27 in all, is, I think, certainly in my experience, the highest number of bills to be packaged together in one cognate debate in the Senate. There is, therefore, quite a lot to say. I will take some extra time in saying it.Before one word has been spoken in argument in this chamber on this legislation, the government has accused the Senate of obstruction. The Prime Minister did so again today. Therefore, let me post this on the record now: the Senate has a constitutional obligation to review legislation. We will do our duty and fulfil that obligation. Labor expects that progress in these bills can be completed though on or before 30 June this year.Let us consider the process leading up to today when we contemplate the issue of obstruction. There are 10 points worth making. Firstly, more than a year after they announced a tax package, the government released the ANTS document and did so in mid-August 1998. Secondly, this contained very little information but was rather, in general terms, a political document designed to confuse and, in our view, to mislead the public on most issues. Thirdly, at the same time the government used $20 million of taxpayers' money, aided and abetted by a $4 million advertising campaign from big business, to fund a campaign to mislead the Australian public. Fourthly, all the while they did not mention the real agenda, namely, imposing an unfair, job destroying GST on Australian families. Rather, they twisted the term `tax reform' to justify this unfair tax.Fifthly, two weeks after releasing ANTS, just prior to the House of Representatives reconvening, thereby allowing the government to be questioned on the tax package, the Prime Minister called a federal election. Sixthly, all through the campaign the government made a number of totally false assertions about the supposed benefit of the tax package and refused to acknowledge the substantial criticisms from the opposition and most other sections of the Australian community.Seventhly, despite this blanket propaganda campaign, a significant majority—51.4 per cent—of Australians voted for Labor and against the GST at the general elections. In the Senate the rejection of the GST was even stronger, with 61 per cent of the Senate votes cast against the GST. Eighthly, the government fought tooth and nail against any proper scrutiny of their proposals and rejected the simple and efficient Labor proposal, which was one select committee inquiry. Instead, the government agreed with the Democrats to the process which culminated today right on the agreed timetable.Ninthly, despite the government claiming that the Senate is obstructionist, not all of the tax bills are before the Senate. These were only introduced by the Treasurer into the House on 31 March and have not even been debated as yet. In addition, there are many pieces of legislation which are still not before the Senate at all. These include the changes to tobacco taxation and to fuel excise. And, most importantly, no anti-avoidance legislation has been presented at all. Tenthly, it should also be noted that Labor has already facilitated the passage of two bills reforming the social security and tax surcharges means test, which are now in operation. So, far from being obstructionist, Labor has met every deadline set by the government and has agreed to commence this debate immediately.It has only been through the Senate inquiry process that the truth on the GST has come into the public domain. Before turning to the key findings, I draw to the Senate's attention the article in today's Australian by the specialist taxation writer Mr George Megalogenis which details the five big untruths—or one could say `lies'—about the GST. Those are lies which have been exposed by the Senate inquiry. Of course there are many more too, which I will now address my remarks to.The key findings of the Senate inquiry have comprehensively established that the inflationary impact of the GST package will be at least four per cent in the first year, not 1.9 per cent as claimed by the government before the election; that, as a result, workers are likely to seek wage rises to compensate for this higher inflationary effect; that up to 120,000 jobs will be lost because of this tax; that the most severe job losses will be experienced in Tasmania, Queensland and regional Australia; that estimates of the number of Australians made worse off by the package range up to two million—indeed, in their findings the Australian Democrats claimed that up to five million people are likely to be losers; that the promised compensation for pensioners and veterans will rapidly erode to nothing; that many self-funded retirees will be worse off; that the GST discriminates against credit unions and other competitors to the big banks; that it will cause interest rates, fees and charges to rise; that the GST package will damage the capacity of local government to provide vitally needed community services; that the disparity between country and city petrol prices will increase; that the GST package will encourage business to use more heavily polluting fuels at the expense of more environmentally friendly fuels; that many health and education costs of families will rise; that charities, community groups and sporting associations will face higher costs and will have to cut their activities; that house prices, rents and the cost of home renovations will rise; that, as well as being unfair, the GST has been condemned as `devilishly complex'; that the GST will reduce the competitiveness of small business and increase their paperwork burden; and that professional taxation bodies have called for the GST legislation to be rewritten and delayed.The list of findings I have just highlighted, while extensive, is not a comprehensive list of all the problems of the GST. Quite literally, these are too numerous to mention. This is why the government is so terrified of this report. Every major assertion of the benefits of the GST has been shown to be false. Even the Prime Minister's preferred modeller Mr Chris Murphy could, on the most favourable assumptions for the government, only arrive at a net welfare gain of 65c per week for each and every Australian. Given this result it is, therefore, easy to see that there will be millions of losers from the GST.I would now like to expand on some of the committee's key findings. I begin by examining the tax package at the level of basic principle. Ever since Adam Smith the universally accepted principles of a sound taxation system have been equity, efficiency and simplicity—`equity' meaning that taxes are raised in a fair and progressive manner ac cording to the capacity of the taxpayer to contribute; `efficiency' referring to the ability of the taxation system to promote economic efficiency in the allocation of resources across the wider economy; and `simplicity' meaning that the tax system is easily understood and, therefore, tax obligations are not costly for taxpayers to comply with or for the government to administer and police effectively. Labor continues to agree that these three principles are the relevant ones by which the GST package should be judged. I should say that the GST package failed all of these tests and should be rejected on the basis of these fundamental tax principles.Incredibly, after 200 years of acceptance the Howard government has decided that these fundamental principles of a progressive taxation system should be reordered. I was staggered to find in the government's findings contained within the report at page 316 that suddenly equity rates last. The most important thing according to noted taxation experts Senators Ferguson, Gibson and O'Chee is efficiency. For 200 GST-free years equity was the most important principle in tax design. Now we find that those proposing the GST have relegated the issue of equity to be a third order issue. Labor has always known that the coalition does not care about fairness—whether in taxation, in industrial relations, in social policy or in any other area of public policy. We welcome and acknowledge the government's admission that they do not care how unfair the GST is, but we condemn them for it, and so does the Australian public.I am not afraid to list equity at the top of Labor's concerns because we are the party of equity and fairness, especially for the battlers in the community. The GST is a flat rate tax and, like all flat rate taxes, the lower a person's income the greater the impact of the tax on that person's living standards and, hence, their personal wellbeing. This basic dictum makes the GST regressive by nature. This is why massive compensation is necessary—even the government acknowledges that fact. As well as a flat tax being inherently regressive, the government's broad GST proposal is doubly unfair as it brings into the indirect tax net the essentials of life, which are currently untaxed.Low income households will pay much more GST as a proportion of their income than will high income households. This will hit hardest those least able to afford it—those on low incomes such as the unemployed, the retired and low paid workers with children. Incredibly, the government document—the ANTS document—contained the outrageous assumption that every household has the same spending pattern. Quite literally, the government claims that pensioners spend the same amount of their income on the necessities of life as do multi-millionaires. Nobody in Australia believes this and only one group—the government—blindly asserts this to be the fact. This is about as accurate as Mr Howard's promise that he would never ever introduce the GST.In response to the regressivity of the package, the government proposes a complex system of compensation comprising income tax cuts and increases in social security payments. This so-called compensation is also highly regressive and totally inadequate for large numbers of low and middle income Australians. This unfairness was repeatedly demonstrated in evidence before the committee. In fact, the only group providing evidence before the committee to claim that the package was not unfair was big business. The tax cuts for high income households far outweigh the increases in social security payments for lower income households. Unquestionably, these are the most unfair tax cuts ever proposed. Indeed, the proposals are so unfair that very little evidence was received from business groups supporting the design of the tax cuts.Examples from the government's own ANTS calculations show a single person earning $100,000 gets an extra $64 a week, 25 times the weekly benefit of the lowest income single person. A couple with no children earning $100,000 gets $80 a week, five times the benefit that the lowest income single income family with three children gets. Under the government's proposed income tax changes, the top 20 per cent of income earners get over 50 per cent of the benefits from the proposed income tax cuts. That leaves 80 per cent of income earners with less than 50 per cent of the proposed benefits. This is fairness Howard- and Costello-style—slug the poor to pay for tax cuts for those at the top.As well as the claimed benefits being totally unfairly distributed, evidence to the committee confirms that there are significant losers, numbered in the millions even after the so-called compensation package is taken into account. Even Treasury has confirmed that many people cannot be compensated due to the fact that they do not have a relationship with government that provides a channel for compensation. Those in this situation include: retirees living off their own savings or superannuation; working age people supported by workers compensation or transport accident compensation; the widowed bringing up children by drawing down life insurance payments they received upon bereavement; new migrants also fall into this category; many students, living off non-government funded scholarships; young Australians up to the age of 21 living at home; and low income farmers. It is estimated that these groups comprise up to another one million Australians who will not be able to be compensated for the effects of the GST at all.But the government's heartlessness does not stop there. They are trying to con millions of Australia's most vulnerable citizens—pensioners and veterans. Who could believe that a government would set out to deliberately and permanently lower the living standards of those people who have had to live through the Depression and defend this country in times of war? What kind of a government seeks to defraud our pensioners and veterans by proposing a so-called compensation which they know, and the Prime Minister has finally admitted, will erode to nothing in a few short years? Respected academics Professors Warren and Harding, business economists Mr Geoff Carmody and Mr Mitch Hook, social welfare organisation ACOSS and the Treasury have each independently confirmed that the already inadequate compensation for age pensioners and veterans will erode to nothing in a few years. This is considered unconscionable by Labor and is grounds, in itself, for the rejection of a GST. This attempted sleight of hand is clear proof that the Prime Minister has no intention of maintaining the so-called compensation into the future. Put simply, no compensation can ever be guaranteed to endure permanently and, therefore, the regressive GST should be rejected.The Senate should note that the Victorian Employers Chamber of Commerce and Industry, VECCI—a Victorian business group very close to the Treasurer and a strong supporter of the GST—has already called for $3 billion in welfare cuts in the upcoming budget. If this were delivered, it would effectively wipe out in one fell stroke the so-called GST compensation on offer from the government. We can expect VECCI and other like-minded business groups to continue to press for the elimination of the compensation in each and every budget until they succeed. This is another key reason why Labor opposes the GST. The tax goes on forever, but the compensation will be taken away.Not only is the GST totally unfair but the inquiry has also found that the so-called compensation is illusory and will not last. Labor argued both these points from the day the tax package was released, and its position has now been vindicated. Of course this is not the only thing that is wrong with the GST package—as well as being unfair, it is bad for the economy.As many Australians know, the GST will hurt their own families or the families of their friends or relatives. But they have been repeatedly told by this government that this is the price they will have to pay for the greater good of the Australian community as a whole, and what a price to pay. The government has provided nothing but rhetoric to support these supposed benefits that will flow from the GST. One of the first facts to come out of the then inquiry process was that the government had done no modelling at all to substantiate these empty claims. Indeed, Treasury, no doubt on instructions from the Treasurer, were specifically forbidden from assisting the committee in ascertaining what the supposed economic benefits to the economy were from the GST.Why, one would ask, if the benefits were so substantial, the gains so great, would the government want to suppress this good news? The simple answer is that there is no good news, there are no gains, the benefits do not exist. The government's main aim was to suppress the truth, and that has been their only motivating factor. Let us look at the evidence that was actually presented.Turning to employment, the government has produced no credible evidence to corroborate its repeated assertions that its GST will unleash a surge of employment growth across Australia. On the contrary, respected non-government economic modellers have found that the government's proposed ANTS measures would destroy large numbers of jobs across Australia, up to 120,000 in fact, with Tasmania and Queensland being the worst affected states. Even the Prime Minister's preferred modeller, Mr Chris Murphy, found Tasmania would lose 1,000 jobs and Queensland would lose 5,000 jobs. For Tasmania this is particularly devastating, given that it has continued to lag behind the rest of the nation on all the major leading economic indicators and has not been a beneficiary of the current relatively buoyant national economy.Professor Dixon from the Centre of Policy Studies at Monash University found that, besides the loss of up to 120,000 jobs, any jobs that are created in the early years will be due entirely to the fiscal stimulus associated with the income tax cuts and not due to the GST. In keeping with the government's totally unrealistic world view, they expect workers who lose their jobs in one industry sector will automatically be able to find alternative employment in other industries and/or regions. Given the government's paucity of training and skilling programs and its lack of geographical assistance in moving from low employment pockets to high employment opportunity, this simply will not happen.The ANTS package totally ignores the economic and social costs such displaced workers will face as a result of the GST. Yet this government does not propose to devote any resources to reskilling and other retraining initiatives, relocation assistance or region al development initiatives to assist workers or their families who will lose their jobs. Just like pensioners and veterans who will see their compensation vanish, displaced workers will be left to fend for themselves by a cold-hearted, mean-spirited government which has no interest in their plight or that of their families.On 15 April 1999 the latest consumer inflation expectation figures were released by Westpac bank and the Melbourne Institute. They reported further increases in their trend series for inflation expectations. Having stood at 3.2 per cent in late 1997, expected inflation now exceeds 4.5 per cent. Inflation expectations were highest among those supporting the ALP or minor parties. The Melbourne Institute said:. . . this is most likely due to divergent views about the impact of the GST.Westpac's chief economist argued:This is important because a possible threat to ongoing low inflation outcomes is rising inflation expectations. In terms of the consumer, this will filter through to final process via an acceleration in wage claims. The introduction of a GST and the associated inflationary impact will put upward pressure on nominal wages if consumers feel that the compensation package is insufficient and real disposable incomes will fall.The source was Westpac, `Australian inflation expectations stay up', 15 April this year.The next step in the chain of GST consequences would be for the Reserve Bank to increase interest rates in order to dampen down inflation. The simple fact is that on the single most important test for the GST, being will it generate one more job, as one of Australia's most respected economists, Professor Dixon stated:. . . the introduction of the consumption tax in a balanced situation is job-destroying.The source was Hansard , Senate select committee, 3 February 1999, page 529. I emphasise `job-destroying'. Given the government's proposed new tax system results in the destruction of jobs, it cannot be supported and should be rejected on this basis alone.Let me turn now to the balance of payments. The government's proposed changes to Australia's indirect tax arrangements would remove some relatively small amounts of tax which are currently embedded in the prices of Australia's traditional goods and exports. But at the same time the GST would worsen the international competitiveness of many of Australia's new, more modern and rapidly growing export industries such as tourism, education, health services and motion picture production. At the same time, the GST would stimulate additional imports of certain types of capital equipment which can only be sourced from overseas.Treasury's PRISMOD model does not predict an improvement in Australia's balance of payments following the implementation of the ANTS package. Not one piece of credible evidence was put before the committee from any source that the GST is the answer to Australia's chronic current account deficit problem, which has worsened under this government. On the question of promoting national savings, which some would argue is one of the most centrally important economic issues confronting any government in Australia today, the GST package consists in the government raiding future surpluses in order to fund income tax cuts, thus resulting in substantial national dissavings. On any objective macro-economic analysis, the GST will have a negligible benefit, if any, to the Australian economy and will destroy jobs.Let me turn to the efficiency of resource allocation as an economic measure. The Monash modelling found three things. Firstly, any economic efficiency gains from the tax package will be negligible even under the most favourable assumptions. Secondly, the package will cause a small decline in average Australian living standards. Thirdly, the existing tax system will collect revenue faster than growth in GDP. So the need for a GST to meet Australia's future revenue needs has not been proven by the government. The source of my quote is the Senate Select Committee on A New Tax System, February 1999, page 38. What is clear, therefore, is that the GST is not an economic panacea and certainly not the panacea the government would have the Australian public believe. Even the Prime Minister's own preferred modeller, Mr Chris Murphy, on the most favourable assumptions for the government, was only able to find a total welfare gain from the package of $607 million or one-fivehundredth of total consumption expenditure. My source is the Senate Select Committee on A New Tax System, February 1999, page 41.Let me go to the issue of the black economy and tax evasion. Contrary to the Howard government's repeated assertions, a GST is not an effective remedy for tax evasion or the growth of the cash economy. In a major study of GST tax systems around the world, the International Monetary Fund, the IMF, identified a range of methods by which such VAT type taxes can be evaded. The simplest techniques involve failure to register or exaggerated claims for GST input credits and/or failure to report or fully report taxable sales. More complex techniques involve the forgery of GST invoices, trade in GST invoices between registered and non-registered buyers, barter and the creation of short-lived bogus companies. The IMF's conclusion was:Like other taxes, VAT is evaded . . . Increasing rates for VAT makes the tax conspicuous and makes successful evasion all the more valuable to trader and public alike.Their source was the International Monetary Fund report Value added tax: international practice and problems , Washington DC, 1998, pages 304 to 306. Add to that point the findings in a recent survey of the international magazine The Economist on the black economy in OECD countries. In their findings, Australia came in in the lower quartile of a long list of OECD countries. The significant feature of that list was that all of the countries in that long list ahead of Australia had a goods and services tax and Australia did not. To those who would argue that this is a panacea for the black economy, it is not. International organisations say so. International practice proves so. Australians are increasingly coming to understand so.Let me turn to the issue of transport and the environment. The government's proposed tax changes will encourage business to use the more heavily polluting petroleum fuels at the expense of LPG, LNG and other more environmentally friendly fuels. They will encourage private cars at the expense of public transport. They will encourage road usage at the expense of railways. They will encourage more heavy transport vehicles onto Australia's roads by shifting freight away from railways. But for Australia's consumers the prices of transport services other than airfares, which fall by only 0.8 per cent, are predicted to rise even on the government's own modelling. That modelling shows that road transport will rise by 2.6 per cent and rail will rise by up to 5.8 per cent.On that evidence, the submission of the Australian Conservation Foundation told the environment references committee of this Senate:This tax reform package is the only example in recent years of an OECD country introducing a net reduction in fuel and energy related taxes and charges. Even the conservative International Energy Agency has urged Australia to increase fuel taxes to curb energy consumption.That is from the Senate select committee Hansard , 23 February 1999, page 2. The government's preferred modeller in arguing economic support for its tax package is Mr Chris Murphy. In the lead-up to the election campaign, Mr Chris Murphy, who is a private consultant running an economic consultancy, Econtech, from Canberra, ventured into the debate that was then gathering for the election campaign. As someone respected in business and as a supporter of the government, he asserted during the election campaign that the welfare gains—that is to say, the benefit to the Australian community—of the tax package would be $1 billion.Mr Murphy was commissioned by the Senate Select Committee on a New Tax System to model the welfare gains—that is, the benefit to the Australian community. When he was put within a rigorous framework, he drastically downgraded what he had told the Australian people before the election. He downgraded his estimate of welfare gains by 40 per cent, from $1 billion to $600 million. According to his modelling, as provided to the Senate select committee, the benefit to Australians of this tax package, on the most favourable assumptions to the government, would be 65c per week per Australian. That is not a benefit to write home about and, I repeat, that is on the most favourable assumptions.This morning in the Australian newspaper there appeared a chart under the by-line of a journalist who has followed the tax inquiry through its 23 hearings in every capital city in Australia—in this case—but not in regional Australia. That chart sets out a table of five things voters were not told about the GST. This is not the Labor Party saying this; this is a journalist who is respected as being a fair and honest reporter in financial circles. Let us review that chart. Under the heading `Election rhetoric', he says:John Howard and Peter Costello claimed everyone would be winners under the GST.Under the heading `Post-election reality', he says:Treasury officials admitted on April 8 that newly arrived migrants and others not on social security would miss out on GST compensation. Senate-commissioned research showed pensioners with no extra income would be only 36c better off on average and a single self-funded retiree with $10,000 in income would get just 6c on average.The second point under `Election rhetoric' says:Compensation for the GST would be adequate.The post-election reality is:Treasury officer Greg Smith conceded at the April 8 hearing that pensioners could see their compensation erode over time.The third point under `Election rhetoric' says:The GST would make the economy stronger and boost jobs.The post-election reality is:The government's preferred economic modeller, Chris Murphy, said the tax package would boost gross domestic product by only a fraction of 1 per cent over the long run. Treasury revealed on January 28 the tax package assumed no new jobs would be created.The fourth point under `Election rhetoric' says:The GST would increase prices by just 1.9 per cent on average when the full effects flowed through.The post-election reality is:Treasury told the first hearing on December 17 that the GST would boost inflation by 3.1 per cent in its first year, 2000-2001, after counting tobacco and housing costs.The final point under `Election rhetoric' says:Labor claims that the gap between city and country petrol prices would widen under the GST were wrong, Tim Fischer said on September 9.The post-election reality is:The Royal Automobile Association of SA, relying on research by—the ubiquitous—Chris Murphy, told the Senate hearing on February 22: `The current treatment of petrol excise under the tax package will widen the disparity between city and country petrol prices.'That is testimony from an independent, unsolicited source as to what the public were misled into believing before the election and what the truth is after the election, upon scrutiny and investigation by the Senate select committee on this bill.Let me draw my remarks to a conclusion. This is an unfair tax. As I said in my tabling of the report, the Senate should not show a green light to this legislation; it should show a red light to it—a stop sign light—and on the pedestrian crossing it should put up the sign `do not cross'. This legislation should not pass this Senate. The evidence before the inquiry makes that imperative.If the last election had been a referendum on a GST, a majority of Australians voted against it in a majority of states and it would have failed. On the investigations of the Senate references and select committees, that majority will have increased. Evidence from expert bodies, which I have not had time to cover, underline this fact with greater force.We expect the government to bring forward further amendments to its own legislation before they deal with this legislation in the Senate. If they do, they will show that our review has worked. This legislation should be stopped. In conclusion, I move:Omit all words after "That", substitute:"the Senate condemns the Government for:(a) seeking to introduce a GST which is an unnecessary, unfair, job destroying tax which discriminates against low and middle income earners, the aged and families;(b) putting at risk the low inflation environment delivered by Labor by proposing to intro duce an inflationary GST which will put at risk the low interest rates made possible by low inflation;(c) placing a higher priority on imposing a GST on Australian families that will make the tax system less equitable, rather than addressing tax avoidance loopholes, which would improve the equity of the tax system".20:14:003777Knowles, Sen SusanSenator KNOWLESTH4WALP10—Tonight we are discussing a new tax system for Australia, and I think it is particularly important that we actually focus on the reality and not the fiction. It has been difficult to have a rational debate about the issues surrounding tax reform due to so much misrepresentation by the opposition and the minor parties and so little comprehensive understanding of not just how it would work but why it would work. I have just been given a copy of the second reading amendment Senator Cook has moved. This would be laughable if it were not so serious. You just have to read the first couple of lines:"the Senate condemns the Government for:(a) seeking to introduce a GST which is an unnecessary, unfair, job destroying tax—Well, I'll be. This from the Labor Party that had over a million people unemployed, and here they are talking about an unfair tax. This from a party that knew nothing other than increasing taxes without any level of compensation. Then the amendment goes on to talk about the `low inflation environment delivered by Labor' and that the GST `will put at risk the low interest rates'. Truly! Senator Cook really does need to have another look at this. Who has delivered the lowest unemployment levels for years and years and years? Who has delivered the lowest interest rates for 30 years? Not Labor. It is the coalition government in three short years, and Labor have the audacity to move an amendment of that type.About 98 per cent of Labor senators have not the faintest idea of how taxes impinge on the business communities, or how they flow on to employment or how they flow on to the wider economy. The allegations that Labor senators and some of the witnesses during hearings made about record keeping, for example, would only have one presume that there is no record keeping going on in either the charitable sectors or the business sectors at the moment. It is just sheer and utter nonsense. There was so much evidence given to all the committees about the job creation aspect of a new tax system, which Senator Cook so clearly and cleverly overlooked.One only has to look at the reality of it from the view of someone who has been in business, and the business I was in prior to coming into the parliament paid every single solitary conceivable level of wholesale sales tax that there was. The complexity of that was one thing, but the cost of it was another. To have a warehouse full of tax, as opposed to a warehouse simply full of products, is absolutely like chalk and cheese. Labor simply continued to increase the level of the wholesale sales tax to ensure that those who were having to pay the taxes, the businesses, would have the tax sitting on their shelves before the products were sold. In the case of my business and others similar, where people are importing or buying in advance a large quantity of stock, they simply have to pay the tax up-front and have thousands and thousands and thousands of dollars, if not hundreds of thousands of dollars, committed to tax.Now we have the opposition and minor parties talking about the job destroying aspect of businesses not paying any tax until they collect it. It is double-dutch. Surely it is better for those businesses to have access to that money so they can go out and employ other people and let the businesses grow, let the economy grow, so everyone benefits—instead of having the tax sitting in a warehouse or on a shelf waiting for a product to be sold.That is one of the basic fundamentals that has been so difficult to get across to an opposition that have no understanding or no will to understand how a new tax system would work. Their answer for 13 years of government was simply to increase taxes at all costs. That in itself is pretty concerning because, let us face it, the Australian tax system is outdated, complex and unfair, yet we have a bunch of people who wrecked the Australian economy saying that they wish to continue with that complex, unfair and outdated system.There is no recognition by the opposition parties that the tax base continues to get smaller over time and that there has been too much emphasis and reliance placed upon the indirect tax system being paid for by a handful of industries. There has been no understanding or emphasis placed upon those who are having to pay higher marginal tax rates to the point where taxes are becoming unbearable for people. And how many times have we heard that given as an excuse for people not to work overtime? How many times have we heard people get a pay rise only to take home less money? That is all as a consequence of this current outdated, outmoded, unfixable tax system, unless you throw the whole lot out and start again.It does not seem to matter to the opposition parties. It is just knock, knock, knock, oppose, oppose, oppose. One of these days the people of Australia will be stunned to their bootstraps by the opposition parties coming out and supporting something the government does. As I said in an earlier debate this afternoon, the crucial test for the Labor Party in all of this is whether they will give a commitment during this debate that, if re-elected to government, they will repeal this legislation if it passes the parliament this year. I wish I was as sure of winning lotto next Saturday night as I am sure they will not give such a commitment, because they want it; they just do not want to be responsible for it.During the inquiries that have just been undertaken by the Senate at a cost to taxpayers of well over $1 million, it was nothing short of disgraceful that most of the participating Labor senators had not read the bill. It is one thing for witnesses to come along not having read the bill—some of them are genuinely confused about access to such information and, of course, some of them choose not to read the bill—but to have Labor chairmen and members of the committee not having read the bill, not knowing the basic contents, not knowing the basic exemptions, not knowing the basic parameters, is nothing short of disgraceful. Even whilst being unable to understand the unfairness of the current system, they still spent $1 million or more of taxpayers' money going through the charade or pretence of having a thing called an inquiry.The people of Australia now know that that inquiry was nothing other than a political exercise by the Labor Party. Nothing came out of it that would surprise anybody. It is unfair for the Labor Party to continue to oppose, oppose, oppose. It is unfair that ordinary Australians pay all those hidden taxes every day while others pay no tax at all on many luxury goods and services. The unfairness of the way in which the embedded taxes impinge on the final price of goods yet again has been something that has been grossly misrepresented.The committee on which I sat had Labor senators stating that a particular item was currently WST free—wholesale sales tax free. Repeatedly I tried to emphasise that people are currently paying embedded taxes. I was yelled at, screamed down, purely and simply not because—here I am prepared to give them the benefit of the doubt—Labor senators were trying to be downright rude and shut people up but because they did not understand the way in which the embedded taxes go through the whole system. Labor senators were encouraging more and more witnesses to talk about everything going up by 10 per cent. Nothing will be going up by 10 per cent because all the embedded taxes come off. If those senators had read the bill and the explanatory memorandum, they would have understood that. If they had bothered to do some homework on it, they would have understood it.If the system is not changed, and changed now, there is another factor that is equally worrying with the ramification of Labor's obstructionism. If we do not fix the tax system, a taxpayer on average earnings, shortly after the turn of the century—in other words, next year—will be paying almost $1 in tax for every $2 of additional income; in other words, they will be paying the top marginal rate. Does Labor care? No, it does not care. But that is the ramification.However, there is a further ramification. If we do not fix the tax system now, what do we do to secure the financial base for the Australian states and territories? Who will provide, and how will the provision take place, for the roads, police, bridges, schools and hospitals that Australians need? Every way we turn we have the Labor Party whingeing and crying about these matters. Yet they do not understand that, if the tax system is not fixed now, those things will be in jeopardy only next year.Those opposing the tax system have put their argument without any comprehension or understanding of the abolition of 10 other taxes. They completely and utterly ignore the fact that the wholesale sales tax system goes, plus nine other taxes. Listening to them you would believe that the entire tax system will stay in place, with the GST being imposed on top. That is nothing short of dishonest. There are 10 taxes to be removed, income tax is to be reduced, pensions are to be increased and the buffer for pension increases is to be put in place. But no, to listen to the opposition parties is to hear none of that. That is a very great shame because so many people out in the community are of that opinion now.I look back to the election of 1993, when the honesty of the Hewson package was defeated by the dishonesty of the then Labor government's approach. To this very day that still rocks me to the soles of my feet purely and simply because there is so much cynicism out there about the honesty of parliamentarians. We had a party with a leader who was prepared to be honest and go right through the whole system, with 700 pages of comprehensive, honest policy—and what happened? It got defeated by dishonesty. That is what happened.I just hope that that is not what happens this time because, without our plan including a goods and services tax, no government will be able to cut personal income tax by $13 billion and increase family benefits by $2 billion. If we do not fix the tax system, we will miss out on an important opportunity to further strengthen our economy. Equally, we will miss out on an opportunity to help our exporters to the tune of $4½ billion. Labor obviously believes that it is okay to tax exporters; the coalition does not. The coalition believes that the more we make in Australia, the more jobs are provided, the better our economy is and the more we can therefore export. But Labor want to oppose that; it is the knock-knock system again. Also astounding has been the sheer dishonesty of the opposition parties with regard to what is GST free and what is not, just as has been the argument that luxury cars will become cheaper. Luxury cars will not become cheaper; those opposite know that but will not say so. They keep on pushing the line.There were numerous times in the committee on which I sat when I had to remind Labor senators of pages 77, 78 and 79, pages that list supplies that are not taxable supplies and services that are not taxable services—and it just goes on and on from there. When I first raised that issue, they had not even seen those lists; they did not know that they existed. I was contradicted by the Labor Party when I mentioned that things like psychiatry and podiatry were GST free. `No, they're not,' I was told. I said, `Well, isn't that funny, because on my copy of the bill it says on page 79 that they are.' That was the level of study undertaken by Labor Party senators prior to the inquiry.Why Labor think that taxing exporters and simply misrepresenting the legislation are going to be of benefit to Australia, I do not know. Why can they not understand even what their own state premiers are saying? Their own state premiers have signed on purely and simply because they think it is a better deal. It is not just a better deal for the states; it is a better deal for Australia. The Labor Party are at the crossroads. Their own state premiers are saying, `Get on with it. Let's have a new tax system.' They are saying, `No, we are going to block it.' Why all the emphasis is being placed on Senator Harradine and Senator Colston in terms of making or breaking this system, I do not know, because the opposition parties could vote for it like that and it would be law. They are choosing not to because they think there is political mileage in it.The alleged wipe-out of compensation is something else. This is just absolutely amazing. As I said earlier today, there is a four per cent increase in all pensions up front. Labor never ever gave an increase in pensions for anything, for any tax increase. We are offering four per cent up front. In addition to that, there is a further 1½ per cent above the CPI, and that goes on and on and on. Yet Labor are saying that that is going to be eroded in time as prices go up. As prices go up—if they go up—the increases in pensions will stay 1½ per cent ahead of the price increases. What did Labor do? They simply kept the pension on the square at the CPI. There was nothing above it; there was no advance increase and nothing above. So what is the problem now? This is a huge advance on what they did, and they are complaining about it. It simply defies logic. Never mind; I have ceased trying to make logic out of their argument.There is also the question of taking food out of the system. A cursory look at the legislation of any country that has tried to do that will show you hundreds of pages of attempts to achieve the goal, and each and every one of those countries has failed. For that very reason the Retail Traders Association is saying, `Don't exempt food. Simplicity in the tax system is what we need now, not more complexity.' Huge food outlets like McDonald's are saying, `Don't do it. It raises too many inconsistencies and too many compliance costs.' We are trying to remove the compliance costs, not increase them. Yet there are elements in this parliament saying, `You've got to exempt food.' For heaven's sake!Let us look at what other countries have done and what a shemozzle that has been. Let us not replace one complex tax system with another. It is unfortunate that we have the tax system that we have now, but we simply cannot go on and pretend that it is going to get better overnight. It is not going to get better without tough decisions. It is about time low and middle income earners in Australia had a better deal. They are not going to get a better deal with the current system. They have to have a new system. They have to have a system whereby they are going to get many more benefits. We do not want them next year paying the top marginal rate of tax, and that is what Labor will have them pay. I simply say that now is the time. We simply cannot walk away from this opportunity, because another opportunity may not arise for a very long time. Australia cannot afford that time, the people of Australia cannot afford that time and, more importantly, future generations of Australia cannot afford that time.20:34:003781Bourne, Sen VickiSenator BOURNETW4NSWAD00—I would like to speak tonight about the impact of the A New Tax System (Goods and Services Tax) Bill 1998 and related bills on charities and not-for-profit organisations. If the government's tax legislation goes through the Senate unamended, it will have a devastating impact on charities and on not-for-profit organisations in Australia. We often take for granted the valuable contributions made by charities to Australian society. Most charities go about their work without promoting their own existence or advertising their achievements. They do not have large marketing budgets, and they prefer to spend their limited resources on providing vital services where these are needed rather than on flashy promotional campaigns.For millions of Australians every year charities provide a lifeline when they are desperate and have nowhere else to go. Charities step in when government programs have failed and when family networks and other support structures have broken down. They provide assistance to the most disadvantaged in times of crisis. But we should not see charities as just providing a safety net for those people who fall through the cracks in the system. Charities provide such services as surf-lifesaving, ambulances, first aid and child care. Almost all Australians will use at least one of those services during their lifetime. The work done by charities benefits all Australians in creating a more socially equitable society. Without charities, every one of us would be worse off.It is also important to recognise that the charitable sector performs work which would otherwise need to be undertaken by the government, thereby saving the government substantial sums every year. In recognition of the special contribution made by the charitable sector, governments have in the past exempted charities from a range of taxes. This has enabled charities to provide their valuable services at a low cost. The proposed legislation would significantly change current taxation policy for charities. It represents a fundamental shift from treating charities as a valuable community service to treating them as profit making businesses.The net effect of this tax legislation will be to drastically restrict the ability of the charitable sector to provide services such as health and aged care to disadvantaged Australians. The community affairs committee heard overwhelming evidence during the inquiry that the tax package as it stands would threaten the viability of many charities. Other major problems raised during the inquiry were that the legislation would introduce an artificial distinction between the commercial and non-commercial activities of charities and would significantly increase their compliance costs.It is important to remember that these charities are not profit making institutions. Any increase in costs to a charity does not simply get shaved off the profit margin; it means that fewer staff can be employed and fewer services can be provided. The Democrats do not believe that charities should have to increase their costs or decrease their services to people who rely on those services. We are concerned about the impact of a reduction in service provision on disadvantaged Australians. We are also concerned that under this legislation the charitable sector could lose highly skilled and committed staff. This does not make economic sense and it certainly does not make sense if we are striving for a more equitable and compassionate society. It is important to remember the hidden costs of not providing the vital services undertaken by charities. For example, if a homeless men's shelter is forced to turn people away due to a lack of resources, this results in more people sleeping rough. Those people then face a higher risk of assault and illness, with substantial flow-on effects to the health and law enforcement sectors.We need to look beyond the short-term economic gains of reaping a few extra dollars from charities to the longer term social and economic effects of this damaging tax policy. Of course, there are many charities which use commercial means to raise funds. For example, many charities run a shop or provide a service such as car washing in order to raise money. Charities can also charge commercial or near commercial rates for their services, as do Catholic not-for-profit hospitals. However, there is a fundamental difference between the commercial activities of charities and of businesses. The funds raised by charities are not passed on to the owners and shareholders in the same way as the profits of businesses are. Charities are required by law to direct all the funds they raise into their charitable activities. This means that the more money they make from their commercial activities, the more services they are able to provide to those who need them. It would seem counterproductive to restrict the capacity for charities to raise funds when all of the money raised goes back into the provision of much needed community services.It is also important to point out that charities often provide the unprofitable services that for-profit businesses avoid, and charities rely on the profitable sectors of their own organisations to do that. Less commercially attractive activities, such as the provision of free meals to street kids, are often subsidised by the more profitable quasi-commercial activities of a charity. Therefore, the distinction between the commercial and non-commercial activities of a charity is totally artificial.The Community Affairs References Committee heard evidence from right across the charitable sector that this legislation will cripple many not-for-profit organisations unless it is substantially amended. The government must listen to this irrefutable evidence and agree that it is nonsensical to try to fit St Vincent de Paul or the scouts into the same pattern as they fit BHP. I do not believe that the government has undertaken sufficient research to understand the impact of these taxation changes on the charitable sector. For example, representatives from the Department of Family and Community Services stated that the department had not done any work on the overall budgetary impact on charities and community based organisations. I recognise that the government has stated that it does not intend to cause a decrease in charitable services but I believe that there is overwhelming evidence that this will occur if the recommended taxation changes are made. That is why the Democrats will be moving significant amendments to this legislation as it affects the charitable sector. The Democrats believe that all activities of a charity, other than those that are clearly defined as commercial, should be GST free. When a body is exempt from income tax but not eligible for GST zero rating, a charity should be able to choose to be GST exempt for all their activities other than those that are clearly commercial.Another important aspect of the government's tax package is the change to fringe benefits tax as it affects charities. Fringe benefits tax exemptions have been an important vehicle, enabling charities to attract more employees with a higher level of skill. It is important to realise that community sector organisations have to compete with the private sector in attracting quality staff. In order to operate professionally, the charitable sector has to pay salaries that ensure that it attracts properly qualified staff. Salary packaging is used in many cases to bring salaries to the market price, not to pay people more than they would receive in the business world.The Democrats believe that there are significant community benefits in allowing some level of FBT exemption for charities. We appreciate that some level of FBT exemption is vital to enable the community sector to attract highly qualified and skilled workers who, even with a salary package, are often still earning less in terms of their purchasing power than they would earn in the private sector. Evidence provided to the committee indicates that most charities have used the current FBT exemption provisions responsibly and in order to employ more people—or people with more experience and skills—so that a better service can be provided to their clients.It is important to acknowledge that increasingly the charitable sector is competing for funding via competitive tender with private for-profit organisations. In order to compete for a tender, an organisation must have highly skilled staff with expertise in accounting and information technology, as well as management skills. I do not believe that many charities would be able to employ such people without some level of FBT exemption. The Senate inquiry has revealed that the effect of the changes to FBT would be to cut staffing levels and services in the charitable sector. Evidence provided to the committee was that, in many organisations, a cut in staffing levels of about one in three would occur as a result of the recommended FBT changes.It should be recognised that charities are often providing unprofitable services which the private sector would not otherwise provide. For example, the public and private not-for-profit hospital sector has a far greater percentage of less profitable patients than the for-profit hospitals. The proposed changes to FBT do not take into account the different roles of the not-for-profit and the for-profit service providers in areas such as health.Some charities made a strong argument that the FBT exemption can be seen as a form of direct subsidy by the government. Evidence was provided to the committee that funding from the Commonwealth to the states for community organisations has been reduced to take account of the revenue loss from this exemption. At the very least, the government should have addressed this issue before it significantly restricted the level of FBT exemption for charities.The Democrats support a 30 per cent cap on FBT exemptions for charities. We believe that the overwhelming evidence provided to the committee supports this level of exemption as being fair and appropriate. A 30 per cent cap would enable charities to continue their valuable work and contribution to Australian society. However, it is also important to stress that there is a need for continual monitoring of the impact of these changes during their introduction to ensure that these organisations are not adversely affected.The Democrats understand that many charities will face considerable compliance costs as a result of the tax changes. We recognise the difficulties that many organisations will have in competing with businesses for the fixed pool of funds to assist with compliance. Therefore, the Democrats believe that a separate allocation of $200 million should be made for not-for-profit organisations to help with their compliance costs.Due to the complexity and the comprehensiveness of these changes, the Democrats also support an amnesty period for the implementation of tax changes on charities. We understand that many charities and community based organisations rely heavily on unskilled and volunteer labour and that therefore the transition to a new taxation system may pose particular difficulties for them. We urge the government to consider providing an amnesty period of five years for penalties incurred by charities that rely heavily on volunteer labour.The Democrats also believe that, in recognition of the complexity of the taxation changes, the legislation should include a clause relating to due diligence to protect organisations making genuine mistakes in implementing the tax changes. Charitable organisations make a valuable contribution to Australian society. Since European settlement, charities have provided a vehicle where those more fortunate have been able to support those who are less fortunate. Today they are an important part of our democratic and civil society and they should be strengthened and preserved. The vast majority of Australians support the work of charities and many donate their time and money to specific organisations and causes. They do so knowing that their contributions will go directly into expanding and enhancing the work of their organisations.If this tax legislation passes the Senate unamended it will seriously undermine the position of charities in Australian society. For the first time many charities will be drawn into a tax system that does not take into account the fundamental differences between charities and for-profit businesses. If the legislation is not substantially amended, charities will face increased compliance costs and a reduction in their ability to attract skilled staff and will be forced to pass on the GST to their clients or absorb those costs themselves. This treatment of charities is unfair and miserly. It is also much less generous than that provided in Canada or the United Kingdom, where governments have moved to reduce the tax impost on their charities.The Democrats want to preserve the special place that charities have in Australian society. We will, therefore, be moving amendments that give charities a fair deal on tax and allow them to continue to provide their valuable services to our community.20:47:003784Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise today to speak against the government's goods and services tax, or GST, package. This government and many in the community, particularly those in the business sector, have sought to represent this debate as an argument between the progressive reformers and the dinosaurs—those who want a new tax system for the next millennium and those who are stuck to a tax system designed in the 1930s. The Prime Minister has repeatedly claimed that no-one will be worse off as a result of the GST package. As recently as yesterday, on the Sunday program, despite how foolish Laurie Oakes made him look, the Prime Minister was still maintaining that the package needed nothing more than finetuning.There is, however, one undeniable fact about this GST package. It is regressive. I mean this in every sense of the word. Even government senators cannot deny it. The simple fact is: why does the Prime Minister talk of a compensation package? It is because he has to talk about a compensation package for those who are affected badly by the GST. The very fact that there is a phrase `compensation package' means that this bill is regressive and unfair to many Australians. This is the starting point for the debate. Many Australians are being disadvantaged by the proposals to introduce a GST as part of a tax mix switch that is a shift away from income taxation to consumption taxation. This government is seeking to compensate these groups for the impact of its policies.I would like to reflect on the circumstances that led to the Prime Minister announcing his great tax adventure last year. The government was wallowing in scandal over the conduct of its ministers. It had developed a reputation as a do nothing government. The Premier of Victoria was ridiculing the Prime Minister's pre-1996 election commitment that he would not support a GST—`never ever'. Remember those famous words—`never ever'? He was never a willing participant in the tax debate. However, as the Liberal Party's big business mates grew more and more strident in their demands, he caved in. He was dragged kicking and screaming into the tax debate, not as he is now trying to pretend, not as he puts it: `This is the thing I have put myself on the line for.' He had no choice. Big business were pulling the strings and they told him: `If you do not get out there on tax reform, on the GST, you will be remembered'—the ultimate insult in Liberal Party ranks—`like the Fraser government.' That is as damning a criticism for Liberals as it gets.You may have hoped that, given this backflip, the Prime Minister would have invited the Australian public to join him in the debate. However, this was not to be. The government formed a Treasury committee whose membership has never been made public. Despite questions of the government, despite questions of the leading individuals on this tax committee, they have never willingly given a list of the names on this committee. When questioned about the activities of the committee before Senate estimates and other hearings, Treasury officials stated that there were no agendas and no minutes in writing. In fact, the Treasury official involved kept these details in his head—a truly miraculous performance from one of the Treasury officials. Big business was invited to put submissions into the Gibson committee, but this committee, as exposed by the former member for Lowe, a participant in that committee, was never intended to report. So we had a facade. The Gibson committee took hundreds of submissions but was never intended to report to the government.Then, with much fanfare, the package was publicly released. The single largest tax reform in the country's history was prepared in secret with no public consultation. You may then have hoped that there was an opportunity for some discussion. But no, the Australian public was subjected to a glossy advertising document and an abuse of taxpayers' money—some $20 million worth of abuse. Three weeks after it released the package the government called an election. Contrast this with the tax reform process embarked upon in 1985 by the former Labor government. The government released a comprehensive options paper months in advance of the tax summit. Public debate about the benefits of the various options reverberated across the country.The only debate that took place before the release of this government's package was from the front for big business, Australian's for a Fairer Tax System, or, as some have called it, `very rich Australians for their favourite tax system'. They spent $4 million complaining about the problems of the existing tax system. We all remember the glossy ads, the RIP, all of that stuff, but did we see a word from them about tax avoidance from trusts, a word from them about their future demands for lower business taxes—a lower capital gains tax perhaps was mentioned—or that the GST should be listed on a price tag, something that they now oppose. They went to great pains to tell ordinary Australians about how they were being ripped off by these hidden taxes. When you ask them, `Do you think that this 10 per cent tax should be listed on a docket, should be on a good in a shop or listed up front for services?' they all say, `Oh, no.' But they spent $4 million telling you how evil hidden taxes are.I cannot pass up the opportunity of mentioning ACOSS's role in the tax debate.ZW4SHERRYSenator Sherry—Don't pass that up.3L6Conroy, Sen StephenSenator CONROY—I could not possibly pass that up, thank you, Senator Sherry. ACOSS's willingness to participate in an alliance with business a year and a half to two years ago gave the Prime Minister the courage to break his word to the Australian people. What ACOSS did by signing up to be in the tax cart meant that the government suddenly found some backbone and an excuse to break their word, but ACOSS's participation in these forums, which I have always found astounding, can best be summed up by the comments from the Australian Catholic Social Justice Council. At the public hearing in Sydney on Friday, 5 March, Dr Battin, representing the Catholic Social Justice Council, had the following comment to make:. . . I was very sceptical of the position adopted by ACOSS from the word go, because it showed breathtaking naivety as far as I was concerned. Here it was pairing up with the business groups of Australia, thinking that they were genuinely going to go into a taxation system overhaul and do so honestly and with every intention of looking after the poor and neediest . . . I could not have said it better myself—absolutely conned. And you knew this was the case from day 1. What happened was that they said, `We don't want anybody coming along to our tax forum'—it was held here in Canberra—`who is in politics.'EP5FERGUSONSenator Ferguson—They did not want you!3L6Conroy, Sen StephenSenator CONROY—I wrote to them, Senator Ferguson, and said, `I would like to attend.' I have a longstanding interest in tax reform debate in this country. Despite Senator Ferguson suggesting that I was still in first grade in 1985, I was actually working in the parliament building for a member of parliament and was very active. Senator Quirke was there as well. I have a longstanding interest in this particular issue. Do you know, ACOSS never even wrote back to me. They did not even bother to write saying, `We acknowledge receipt of your letter.'The business groups meeting with ACOSS have loudly applauded the government's slashing of government spending by $10 billion, the reduction in tariffs, which has led to further significant reductions in revenue, the now defunct savings rebate, the health care rebate, the withdrawing of legislation that would have put a stop to the creation of bogus subcontractors. All of these things were championed by the same people cuddling up to ACOSS saying, `Come on, we really do care about the poor and disadvantaged in this community,' and ACOSS fell for it.The final straw for ACOSS must surely have been the call by the Victorian Economic Chamber of Commerce and Industry—VECCI as it is colloquially known—a participant in these meetings. Their people sat down with ACOSS across the table and said, `We're interested in tax reform. We want to make things better in this country.' And what did VECCI say six weeks ago? `We want a further $3 billion worth of expenditure cuts.' Did they tell ACOSS that? Did they have an advertising campaign on that? Did they contribute to the advertising campaign for Australians for fairer taxation? Of course they did not—an absolute fraud. That is what was going on.I have not even mentioned yet the two-faced approach of the Business Coalition for Tax Reform with respect to the business tax debate. All the business groups in this country are now saying, `The revenue neutrality principle for business tax reform, we can't have that. That's a bit rich.'ZW4SHERRYSenator Sherry—It is a bit rich, actually!3L6Conroy, Sen StephenSenator CONROY—It is very rich. So we have had the Business Coalition for Tax Reform championing tax reform and championing the neediest. It is as though almost all of them have joined the international socialists overnight. It is frightening. The true agenda has started to creep out.ZS6QUIRKESenator Quirke—You will be selling resistance on street corners.YW4MACDONALDSenator Ian Macdonald—You would be able to sign them up for one of your branches.3L6Conroy, Sen StephenSenator CONROY—We would not have them, Senator Macdonald. What we have seen is the business groups in this country conning ACOSS. They have been sending ACOSS up the aisle saying, `You get up there ACOSS. You tell everyone it is okay to have a GST. We can find a package that works.' And then they are out there behind the scenes dudding them. ACOSS seem to have woken up to it now, but I think it is too late.ZW4SHERRYSenator Sherry—It is too late.3L6Conroy, Sen StephenSenator CONROY—Thank you, Senator Sherry. ACOSS have allowed this debate to reach this chamber today. If ACOSS had had a bit of backbone at the beginning and stood by their principles, then we would not be here debating this today. That government would never have had the courage to go as far as they have gone.The government maintains that the GST package has been subjected to enormous scrutiny through the election campaign. Nothing could be further from the truth. As Chris Murphy—the Prime Minister's preferred macro-modeller—was forced to admit, his initial estimate of the economic welfare gain made during the election campaign had to be reduced by 40 per cent after the election. He did not mind running around the country, criticising other modellers saying, `What we've got here is this huge gain, a billion dollars.' During the election campaign, he criticised anybody who dared to criticise the government, but what we actually saw after the election when he had a bit more time to do a bit more study, talk to a few more industries about the elasticities involved, was that he had to revise backwards. You should sack somebody who delivers you a figure that is 40 per cent wrong, inside three months.Tragically for the country, Mr Murphy has made a motza out of this particular reform process. He has been able to trade on the fact that the Prime Minister has said to him that he is the preferred modeller and can get all these other community groups, business groups and other associations to sign him up, despite the fact that his most fundamental assessment of the tax reform process was wrong by 40 per cent. Maybe the market, the perfectly competitive free world market with perfect information, will catch up with Mr Murphy, but I doubt it.The government has denied that the compensation package eroded during the campaign. Right throughout the campaign the government continued to argue that the compensation package did not erode. During the campaign they said that jobs would be boosted, that inflation would be 1.9 per cent and that the gap between city and country petrol prices would be the same after the GST. The Australian people believed the Prime Minister on all of these claims and, despite receiving only 48 per cent of the two-party preferred vote, the government won a majority of seats in the lower house. But it was based on the fraudulent information that people were given in the ANTS package and right throughout the campaign.ZW4SHERRYSenator Sherry—Publicly funded.3L6Conroy, Sen StephenSenator CONROY—Publicly funded, before the campaign, with $20 million of your money to tell the Australian people untruths. However, as has been mentioned more than once, the parties opposed to the GST in the last election received 60 per cent plus of the vote in the Senate, and I was elected as part of that 60 per cent.Then we return to the post-election period and the government's conduct since the election. The government refused initially to even support an inquiry in the Senate. The Treasurer opposed any scrutiny. However, finally facing the reality of the numbers in the Senate, the government agreed to the inquiry that has concluded today. Despite the inquiry being the creation of the government's negotiations with the Democrats and promises of cooperation from the Treasurer, it quickly became apparent that the government had no intention of cooperating with this inquiry. Even at the first hearing in December last year the government had to be forced into bringing the architect of the package to the hearing. Ken Henry did not even come to that first hearing. That is the Ken Henry with the memory, with the minutes and with the agenda—the whole committee process inside Treasury—in his head.RF4COOKSenator Cook—The chairman of the secret committee.3L6Conroy, Sen StephenSenator CONROY—The chairman of the secret committee. Thank you, Senator Cook. How on earth could the other Treasury officials possibly answer questions about what was in Dr Henry's head? But, no, the government, embarrassed into a backflip again, finally provided Dr Henry. But did that mean more information for the senators at the hearings? I do not think so. By the end of the third hearing during which Treasury appeared before the committee not one single official from Treasury who worked on the tax package had appeared before us. Not one. Extraordinary. They come to bring you information and they bring you not one official who actually worked on the tax package in Treasury. Documents relevant to the terms of reference were withheld. FOI requests revealed more than the government officials.Senator Ferguson interjecting—3L6Conroy, Sen StephenSenator CONROY—Paul Cleary from the Sydney Morning Herald had to go through an extraordinary process, Senator Ferguson, through FOI to uncover documents that Treasury and the Treasurer were withholding. It was only after the FOI requests that the Treasurer tabled them and the Treasury admitted they existed. The blocking continued to the very end. On three occasions—not just one, but three occasions—Treasury officials sought to hide the fact that Treasury did begin to model tax reform with the government's macro-economic modeller called TRYM. On 17 December 1988, I asked the Treasury representative Dr Henry in the first hearing if they had a model to produce the macro indicators. Dr Henry's response was:Treasury does have a macro-economic model called TRYM.Dr Henry then went on to say:We have not attempted to develop a model which would be capable of analysing this package.. . . . . . . . .However, we have commissioned work to give us rough orders of magnitude of the sorts of effects one might expect on key macro-economic variables, like GDP in particular . . . I asked:What does TRYM do?Dr Henry's response was:TRYM is a dynamic macro-economic model.. . . . . . . . .TRYM is a model which we find useful for making projections about the likely behaviour of gross domestic product and of employment of key macro-economic variables.On 28 January 1999, I again asked Treasury about modelling by TRYM. Treasury representative Mr Greg Smith responded:I take it that the reason you are looking at the headings of those documents—these are the documents that only became available after FOI—is that you are wondering whether or not they are the very thing that we said we did not do, and they are not.He was quite emphatic about this: `and they are not'. Again on 8 April 1999 I asked Treasury representative Mr Smith about TRYM modelling. His response:I think it was Dr Henry because I was not involved at the time, but I think he said that the TRYM model—which is a macro-economic model—was not used to develop any macro-economic advice for the package.Senator Ferguson interjecting—3L6Conroy, Sen StephenSenator CONROY—That is a quote: `was not used to develop any macro-economic advice for the package', Senator Ferguson. That is the quote. Mr Smith then began to waver:I could not say that at no time has TRYM ever been used to produce aspects of outcomes.He began to waver. But Mr Smith finally agreed to take the question on notice and go back and check. And then last Friday Treasury provided the following advice, late in the day, after the final hearing—in fact, after the deadline to produce a report. What did they have to say? They said:Attempts were made to use TRYM at an early stage of the tax reform process to consider the broad impact of possible reform options. However, as TRYM is a highly aggregated macro-economic model, the judgment was formed that its results were not sufficiently useful to guide policy formation for a package of this type. As a result, TRYM was not used to model the tax package set out in ANTS.This is an extraordinary revelation. Treasury produced early point estimates and then decided its model was not up to it. This is the model they use for the budget—that is that massive economic document they produce once a year; a pretty contemporary model, one would have thought. This is the model they use for their national wage case submissions. There they were down at the Industrial Relations Commission a few months ago giving all this analysis of the economy—all the macro-variables you might want to discuss in a tax reform package, they are all there. And, on previous occasions, Treasury have used TRYM in other tax reform debates. Why did they stop? You have to ask the question. And the answer has become clear in this Senate inquiry. The results did not support the government's rhetoric. This is the final act from Treasury. But what is really outrageous is that Treasury sought to hide this from the committee over three hearings covering three months.I would like to turn now to the evidence that has been provided to the committee. But, first, there has been a lot of comment about the role of the committee, its cost and its relevance. The Senate committee process has provided the first opportunity for ordinary Australians to have their say on the GST. Unlike the secret Gibson committee, it was the first available opportunity for ordinary Australians to have their say about the GST. We received over 1,400 submissions and held hundreds of hours of hearings.I make the following point. The Senate is a house of review. Its role is the scrutiny of legislation. It is part of the democratic process. The government set a very tight reporting time frame, and this was kept. Despite the stress that happened on the committee, despite the claims that we were trying to delay it and that we were not serious about getting this through, this committee kept its deadline, the government's deadline that it asked for.EP5FERGUSONSenator Ferguson—No—3L6Conroy, Sen StephenSenator CONROY—You negotiated it with the Democrats. You voted for it, Senator Ferguson. The government negotiated it. The government did the deal on the timing. You cannot walk away from it now. But the committee worked, and it delivered. You cannot continue to bag the Senate committee process, saying it is irrelevant and costly, when it met the government's timetable. There have been many attempts to portray the Senate as deliberately frustrating the government's agenda. This is continually complained about—as it was a moment ago—by government senators on the other side. These claims are false and should be treated with contempt.It comes as no surprise, though, that government members did not want to discuss the report in their tabling speeches. It was through the first hearings in December that the package began to unravel. First, Treasury had to admit that they had not done the modelling of the full package. This was despite the Treasurer's claim that they had done lots of modelling. Let me be quite clear about this: the Treasurer persistently misled the Australian public in the lead-up to the last election. He was asked at the Press Club on 14 August, on the eve of the election, to confirm Treasury modelling, and he said, `We have done a lot of modelling.' That was the Treasurer.And, yet, Treasury were then forced in December—three or four months later—to admit that they had no figures, no modelling, for the GDP estimates, for employment, for unemployment, for revenue forecasts for the existing tax system, for revenue forecasts for the new package or for the national savings figures. You might ask yourself, `How on earth could the Treasury not have done those things?' It is an extraordinary admission in its own right. We have got the `single biggest tax reform in Australia's 100-year history', and the government did not ask Treasury to model it.What began to emerge as part of the Senate hearings? We have seen some serious modelling done by many people—by people who support the package, by people who do not support the package and by people who have got mixed views on the package. Professor Dixon's report showed that, depending on the assumptions you make—and assumptions in economic modelling are always critical—up to 100,000 jobs could be lost in the early years of the tax package if wages rise in response to the higher cost of living from the GST. He was prepared to state his assumption. He did a range of modelling, unlike some other modellers who were paid money by the Senate committee and who would not do modelling or work that was critical of the government. But Professor Dixon was quite firm about one thing: he said that any jobs that were created in the early years will be due entirely to income tax cuts and not to the GST. Professor Dixon actually did some modelling using some assumptions that were favourable to the government, and he found that there could be an increase in the employment level, but that it would have nothing to do with the GST; it would be because of good, old-fashioned, pump-priming Keynesian economics—$5 billion dollars ripped out of the system, ripped out of the surplus, and handed out to the government's mates, the rich. That is where the job stimulus comes from. He was quite specific. He said, `The GST is jobs destroying.'YW4MACDONALDSenator Ian Macdonald—Who said this?3L6Conroy, Sen StephenSenator CONROY—That is what Professor Dixon had to say.YW4MACDONALDSenator Ian Macdonald—Who is he?RF4COOKSenator Cook—You're pretty dumb if you don't know.YW4MACDONALDSenator Ian Macdonald—We can't all be as bright as you are!RF4COOKSenator Cook—I know that.3L6Conroy, Sen StephenSenator CONROY—When it came to any economic efficiency gains, what did Mr Murphy have to say? He said that the tax package produced negligible results. Mr Murphy, who did a range of estimates, unlike others, said that he, depending on which assumption he used, got an economic welfare gain of minus 0.2.Senator Ian Macdonald interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Bartlett)—Senators will not exchange conversation across the chamber.3L6Conroy, Sen StephenSenator CONROY—Thank you, Mr Acting Deputy President. Honourable senators interjecting—3L6Conroy, Sen StephenSenator CONROY—Protection from you two? You must be joking. Minus 0.2, that is what Professor Dixon found. Then we turn to the Prime Minister's preferred modeller, Mr Murphy, who was also contracted by the inquiry to provide evidence. What did Mr Murphy do? Apart from mea culpa on a 40 per cent reduction in his welfare gain, he came up with, on all of the government's most favourable assumptions, a net welfare gain of 0.2 per cent plus. Professor Dixon made the point, and Mr Murphy did not deny—EP5FERGUSONSenator Ferguson—What is that in dollars—$600,000?3L6Conroy, Sen StephenSenator CONROY—Six hundred million. They sat next to each other at the table and—Mr Murphy did not deny this—Professor Dixon pointed out—ZW4SHERRYSenator Sherry—That is 65c each.3L6Conroy, Sen StephenSenator CONROY—Thank you, Senator Sherry; 65c per Australian, that is the big claim from the government.ZW4SHERRYSenator Sherry—Average.3L6Conroy, Sen StephenSenator CONROY—Average.ZW4SHERRYSenator Sherry—The rich get more.3L6Conroy, Sen StephenSenator CONROY—Yes, the rich get more; the average is 65c. To pay for 10 per cent extra on GST, everyone is going to be 65c better off. The point was made by Professor Dixon that, when you are using these economic models, a statistical error between minus 0.2 per cent and positive 0.2 per cent results in roughly the same response. So what Dixon and Murphy got, within the bounds of statistical error, was the same result. But Mr Murphy, being the Prime Minister's preferred modeller, continues to run around the country trying to make the point that it is $600 million. As Senator Sherry has already interjected, that is 65c each. We have seen other examples of the government's overblown claims, like the following within the ANTS package:The tax reform package will deliver substantial long-term improvements in the operation of the economy to the benefit of all Australians. These improvements will be reflected in a higher economic growth. The combination of higher growth and improved work incentives will deliver more jobs and lower unemployment.That is the ANTS package. The Prime Minister said, `The tax plan is good for Australia. It will boost the growth and the strength of the Australian economy. It will generate more jobs.' That was on 13 August last year. He said, `This plan means a lot to me and the government because we believe that in the long run it will immeasurably strengthen the Australian economy and it will generate more jobs.' He also said, `Well I don't believe there will be short-term job losses from the introduction of our tax plan.' What about the Treasurer's rhetoric? `Bigger exports, more trade, more jobs, more growth.' That is the Treasurer. And yet the Prime Minister's preferred modeller and Professor Dixon and the Melbourne Institute and anybody who has modelled the entire package comes up with roughly the same result—negligible economic impact.But it gets much worse for the Prime Minister after that, because despite Mr Murphy's pro-GST leanings—and he was always up-front about that, he always stated categorically he supported the introduction of the GST—he found there would be job losses in some sectors. So while the Prime Minister told ordinary Australians, `I don't believe there will be short-term job losses from the introduction of our tax plan'—that is 30 September, the death knell for the election—the Prime Minister's preferred modeller, Mr Murphy, produced evidence to show that there would be job losses; that there would be job losses in Queensland and in Tasmania; job losses in the tourism industry and the education sector; and significant job losses in housing.What else did the Senate inquiry show about the government's ANTS package? It exploded the myth about the inflation figure of 1.9 per cent claimed by the government. They have claimed this now for the best part of six months. But what they did not tell you is that this is the second year figure. They did all their modelling, calculations and cameos not on the first year figure—not on how you will be in the first year—but in the second. They did not tell you what the first year inflation figure was.EP5FERGUSONSenator Ferguson—It is in the package.3L6Conroy, Sen StephenSenator CONROY—They did not. Senator Ferguson is interjecting from the other side of the chamber. I challenge him, right now, to find the figure of 2.5 per cent in the package, which is the first year conservative estimate. It is actually not in there. Senator Ferguson is not rushing out of the chamber right now to get the package, because he knows that it is not there. Feel free to run out and get it, Senator Ferguson. Treasury officials admitted it. They said, `There is a figure here of 1.9 and somewhere else in the document there is a 0.5 and if you put them together any ordinary average Australian could actually come up with that figure.' That was what they said, but they did not print it anywhere in the package. They did not want to tell you. That is just their dodgy figure, because what also came out in Senate inquiries was that they decided to take a number of inflationary effects out of their calculation. Tobacco, the single largest contributor at 0.3, was taken out. The Prime Minister did not say, `No-one will be worse off, unless you smoke.' He said, `No-one will be worse off.' He did not say, `If you smoke, you are going to be worse off,' but that is what they did. I declare a vested interest in that I do not smoke but, if you smoke and you walk into a shop and the prices have gone up, then you are worse off. It is not a notional figure. This is what will happen when an ordinary person who smokes walks into a shop and sees this increase. It is there in dollar terms in front of that person.They then pulled a second dodgy with the figure. They deleted further the effect of the first home owners scheme. They decided, in their own right, that they would say, `We will take out the first home owners scheme.' This is another 0.3. So, your first year figure was never 1.9; it was 2.5 plus 0.3 from smokes and plus 0.3 from housing. That is 3.1. Now we are beginning to get towards the real average figure based on the government's favourable assertions and assumptions.One of the key assumptions that this government made about the tax package was that on day one the full 100 per cent flowthrough of savings was going to come from the abolition of all those taxes—100 per cent flowthrough on day one. We saw witness after witness sit there and say, `The government have said that it is 100 per cent flowthrough on day one. We do not think that is a real world assumption.' We even got the ACCC in. The ACCC are the people in charge. The government have great faith in the ACCC. The government will not give them any money so they can do their job, but they have great faith in them. The ACCC said, `There is not one single competitive industry in this country. We cannot name one. We can name hundreds of examples of uncompetitive behaviour.' In fact, they went on to say, `If the economy was perfectly competitive, we would not exist. There would be no-one sitting here in front of you.' The ACCC are there to catch the rip-offs. That is their job. Allan Fels runs around this country all the time making sure people are not getting ripped off. That is the role of the ACCC.Senator Margetts interjecting—3L6Conroy, Sen StephenSenator CONROY—We would like to believe that, Senator Margetts. He does not mind the odd photo either. So we have seen brave assumptions by the government. All the modelling excludes the compliance costs. We have seen various estimates by the government absolutely shredded by reputable economists who are experts in the compliance field. Never mind the real world impact. Reputable economists have said that the recurrent ongoing compliance costs—that is not the first-year start-up effect costs, which are huge—are $2 billion. Let me make this point: the last time I checked $2 billion was bigger than $600 million. So even though this is a crude way to do it, the ongoing compliance costs are almost three times the size of the net welfare gain that this government is championing.You have to start asking yourself at some point: why are we doing this? On the one hand you have a gain of only $600 million, and on the other hand you have a loss of $2 billion. All of the modelling done by Treasury, by Dixon, by Murphy, by the Melbourne Institute, by Carmody and by everybody else does not include compliance costs. So you just assume them away. Welcome to the world of economic modelling—just assume the compliance costs away.We have seen from people who have been involved in the industry and are worried about the impact on the poor an absolute exposure of the government's other rort that they pulled in the package. They assumed that everybody has the same expenditure pattern. That means Jamie Packer and I, both single men, have exactly the same expenditure pattern. Not one reputable economist, not one economist who has supported the GST or the package, can agree with them. The evidence was overwhelming that this was a seriously flawed assumption. What does an assumption like that do? I want to turn to the St Vincent de Paul's submission to illustrate the hoax of that claim.They did a survey in the very short time that was available to them and they found that all of the goods that are currently not taxed by the WST would make up close to 60 per cent of the expenditure of someone on a low income—food, clothing, rent, household supplies. WST does not currently apply to all of those goods, but there are going to be big savings on new cars, petrol, computers and video machines. They found in their studies that the information Treasury was using was fundamentally flawed from the beginning. They went on to say that those families will not enjoy the forecast reductions in prices due to the removal of the wholesale sales tax on a number of items including the so-called luxury items like new motor cars, electronic equipment, jewellery, et cetera, and that this package was un-Australian. (Time expired)Government senators interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—Order, senators! Senator Conroy has had to deal with almost chronic interjections.5F4CALVERTSenator Calvert—You were about as even-handed as you were during the committee hearings.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Calvert, I object to that comment, but I will take it on the chin.21:27:003792Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—This is a package of 27 bills that I have to speak to in a total of 20 minutes. I was not part of the deal for the 40 minutes. What does this package say about the government? It says that the government is prepared to listen to the concerns of business by allowing an extensive and consultative review of business tax, but it says that the government has little regard for any of the comments that the rest of the community has on the structure of its tax system for the new millennium. It also says that the government has completely disregarded the environment. It says that the government is paying heed to international competitiveness, or so-called competitiveness, but is absolutely ignoring international environmental agreements and agencies. It says that the government is not concerned about the increasing gap between the rich and the poor and is prepared to risk making it worse.It also says that the government thinks little of issues of public health and is prepared to implement a tax package that increases air pollution and the risks of associated deaths, respiratory diseases and cancers. It says that the government is prepared to implement a tax structure on wine that exacerbates the multitude of problems associated with alcohol abuse. I foreshadow my second reading amendment, which spells out the immense public health repercussions of the current government proposals. I might need some advice on that. I have one foreshadowed amendment, which is also on the A New Tax System (Goods and Services Tax) Bill 1998 . The other amendment will be on the A New Tax System (Wine Equalisation Tax) Bill 1999 .10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—Senator, you are in order to foreshadow the goods and services tax amendment, but you are in order to move your wine equalisation tax amendment.DX5Margetts, Sen DeeSenator MARGETTS—Fine. I will do that before I finish tonight. The government only has concerns about compliance and other costs if they relate to business. When it comes to charities and non-profit organisations that are struggling to keep their head above water, the government is prepared to drastically increase their compliance costs and other costs.This package says that the government's backward thinking is not rising to the challenge of encouraging our job-rich sunrise industries like tourism, information technology, natural gas, renewable energy and the arts—the industries which have the potential to take Australia to a clean and green and prosperous future, those creating jobs, not destroying them. It says that the government would rather give its mates more of a helping hand by benefiting the dirty industries of the past era like mining and woodchipping, which are in many cases destroying jobs. This tax debate has shown the government's priorities to be clear and transparent. There could not be a more stark example than the reaction of different ministers to issues raised during the debate on the GST and the Ralph business tax proposals.Let me show you how this worked. The Minister for Industry, Science and Resources, Senator Minchin, on the one hand publicly declared his preparedness to go into bat in cabinet for mining and other capital intensive industries when John Ralph dared to even mention changes to accelerated depreciation. However, when the Australian Medical Association and the Australian Conservation Foundation jointly raised serious concerns about the health and environmental impacts of the changes to diesel excise, what do we hear? A deafening silence from the minister for health and the minister for the environment.The dichotomy is a stark one between business interests and the public interest, between profits and people, between money and the community. The way the Greens (WA) have approached and will be approaching this tax debate in the Senate says a lot about our priorities too. Our approach says that the Greens (WA) value meaningful community input. The Greens (WA) proposed in our election platform that the way to develop a tax package was through an inclusive tax reform commission and a Commonwealth-state finances review commission. The emphasis would be on informed community participation to reach as far as possible consensus in which the direct role of politicians and treasuries is kept at an arm's length. We proposed that assistance be given to the poor and marginalised to counter the weight of powerful and well-financed lobbyists.The Greens (WA) are appalled at the absolute abuse of process that has occurred at the hands of this government. We have a Prime Minister and a Treasurer who have repeated their stoic position. They claim that they will not accept any alterations. They will not accept any amendments. They will not accept any changes at all from the Senate. Let us take a moment to see exactly what they are saying when they flatly reject all of the Senate's amendments before they have even seen them—indeed, a flat rejection before the committee process was even completed. What the government are saying is that they will not tolerate input from the community—that is, their constituents, the voters, the electors, the people they are supposed to represent. What the government are saying is that they have absolutely no commitment to ensuring major policy changes are subject to any decent form of consultation. What they are saying is, `We know best and any comments from the community are ill-informed and not worthy of being listened to.'The Greens (WA) have continually repeated our deep concern that the review of business tax, the Ralph review, is not integrated with the Senate's consideration of the rest of the tax package. Last year I moved a sensible motion to ensure that the results of the Ralph review were known before the Senate debated the rest of the tax package. If this had been agreed to, we would now be able to directly compare the corporate welfare and other tax breaks handed out to business with the miserly compensation handed out to poor and low income people. This motion, however, was defeated.The Greens (WA) approach is that we believe that the taxation system is crucial and one of the most powerful policy tools available to government, when they have given away many of their others on the altar of free trade, to effect positive social, environmental and economic outcomes. The Greens (WA) have consistently argued that economic decisions need to be made with other values in mind rather than simply on the narrow conception of economics. Concepts of ecological sustainability, or ESD, equity and community and health need to be valued as highly as narrow and traditional economic views.Concepts of ESD and equity need to be fully integrated into the consultation and policy making process rather than assessed as mere afterthoughts, or forgotten entirely. The Green approach says that environmental sustainability would have been one of the major touchstones in the development of the ANTS package. Had this kind of integration occurred, we would not be in the Senate now looking at a tax package which is a full-frontal attack on the environment. This tax package will go down in history as a policy change that created short-term and long-term disaster for the environment and for the community.The approach of closing their eyes and ears to progressive ecological tax reforms means that the government have flown in the face of a range of international agreements that emphasise the integration of environmental and economic policies such as the Brundtland report, the Rio declaration and Agenda 21. Australia's credibility is reaching a new low. The government have also flown in the face of the OECD Council Recommendation on the Use of Economic Instruments in Environmental Policy, which was issued as early as 1991 and reiterated in 1997—that is, that member countries make a greater and more consistent use of economic instruments as a complement or a substitute to other policy instruments.This tax reform package is the only example in recent years of an OECD country introducing a net reduction in fuel and energy related taxes and charges. Even the conservative International Energy Agency has urged Australia to increase fuel taxes to curb energy consumption. Not only has this government ignored international opinion but it has flown in the face of the Industry Commission's recommendation in its report of July 1997, The role of economic instruments in managing the environment, at page 97, that economic instruments used to manage the environment should be extended in Australia.The government has flown in the face of its own national ESD strategy which says that the decision making process should effectively integrate both long-term and short-term economic, environmental, social and equity considerations and that cost-effective and flexible policy instruments should be adopted such as improved valuation, pricing and incentive mechanisms. So what is it doing instead? It is spending billions of dollars of taxpayers' money to increase the level of pollution in this country. It is spending billions of dollars for a negative environmental outcome.The ANTS package will neutralise a raft of other environmental initiatives such as the government's Living Cities program, its greenhouse strategy and its supposed commitment to rail and gas. The Treasurer, Mr Costello, has flown in the face of his own commitments when announcing the Productivity Commission's inquiry into the implementation of ecologically sustainable development by Commonwealth departments and agencies. He commented:Economic, social and environmental well-being are strongly linked. It follows that economic, social and environmental goals must be pursued in an integrated manner.Well, hear, hear! But how are this government doing it? They are ignoring their own policy advice and their own statements. They are ignoring their own commitments—the commitments this country has made in international fora. Obviously that was just a whole heap of hot air.This tax reform process presented the Treasurer and his government with a perfect opportunity to put their money where their mouth is—or to put the taxpayers' money, more importantly, where their mouth is. It seems the government are happy with just instituting a few inquiries here and there, and probably sweeping the recommendations under the carpet.The Treasury, in the development of the ANTS package, did not even bother to consult Environment Australia. Did we expect they would? One would think so. If they are so adamant there is not going to be a problem, why would they not consult? Needless to say, there is not one mention of the environment in the whole ANTS package, yet there are enormous impacts on the environment, as the Senate committee adequately brought out. The committee report was absolutely damning in this area.This is such a wasted opportunity. There are so many positive examples of integrated ecological tax reform that Australia could have followed if the policy will had been present. Countries like Sweden, Norway, the Netherlands, Finland, Denmark and Germany are showing that ecological tax reform can provide significant revenue and the double dividend of environmental protection and increased employment. It could be a real win-win situation, and that is why people like Tony Blair in the UK are getting on the bandwagon and getting serious about working out how to implement the strategies. This is the topic of my second reading amendment.While the Californian Air Resources Board has decided to list diesel as a toxic air contaminant on the basis of strong health and scientific evidence, what is our government doing? It is encouraging its use. It is actually subsidising the use by more and more people with city Toorak tractors.The Greens' approach is to use the taxation system—any commonsense would show you that that is what you should be doing—to make our society fairer, to increase progressivity and to give additional assistance to those who need it most. At the outset, ACOSS branded the ANTS package as unfair, unbalanced and unacceptable. The huge range of evidence given to the committee has largely substantiated ACOSS's initial assessment.The GST is unfair, especially for low income earners, pensioners, self-funded retirees, the unemployed and women. The NATSEM study expressed serious concerns that the compensation package was inadequate and that there was not enough of a buffer zone to back up the Prime Minister's claims that everyone would be a winner. I was beginning to wonder about the size of this magic pudding. Even when the government talks about the deal with the states, you begin to wonder at what point the deal will crack and at what point the reality will begin to be obvious.Treasury's admission that the compensation package could be eroded over time adds significant weight to this long-held fear. Once in, the GST will be there for the long haul. However, the compensation package is just a sweetener to get a foot in the door. Indeed, Coles Myer chair, Stan Wallis, is publicly urging the government to make the package a bit fairer in order to win community support and, dare I say, to make sure that some of his customers can continue to buy the basic necessities of life.In addition to the compensation being inadequate, under the ANTS package income will be redistributed less effectively in Australia because the income tax cuts clearly favour the rich more than the poor. Someone on $50,000 per annum gets an 18.3 per cent tax cut while someone on $20,000 gets a 12.7 per cent cut. At the same time about $6 billion per annum has been shifted from direct taxes to indirect taxes—the tax mix shift—which will hit the poor more than the rich. That has been explained by a number of speakers so far tonight.It is also important to remember that the surplus that is being eroded was built on the backs of those who can already least afford it. Past expenditure cuts have decimated the not-for-profit sector and had a huge impact on many worthwhile programs of assistance for those who need it most—the programs that, over time, this government has cut for those people who have been willing to speak out on policy issues. Those people may not be able to speak out currently or be able to say what the impacts are going to be on the sectors they do—or they used to—represent.There is no recognition of the need to increase government spending and reverse the impact of the $12.4 billion cuts in education, health, welfare, employment and training, ABC funding, child care and other public services. We are going to give the benefits of those cuts more to the rich than to the poor. What a great philosophy!The government's tax plan treats non-profit community groups as if they are businesses. Like other businesses, their sales will be taxed, except for smaller groups and some excluded activities. They will have to deal with complex systems of compliance and they will have some of their tax advantages stripped away at a time when the government are reducing their spending, services and help for the most disadvantaged in our society. Non-profit and charity organisations are even more important, yet their viability is being undermined again.In light of the stated position of the ALP to oppose any amendments to the GST, the dynamic as we enter the committee stage of the bills has completely changed. The focus is now firmly on the Australian Democrats and Senator Harradine, who have effectively indicated that they are prepared to consider voting for the GST package if certain conditions are met. Every person in this chamber can effectively hold the balance of power.The Greens (WA) listened carefully to the vast array of concerns that were raised during the committee process to see if there were certain conditions that would make the ANTS package acceptable. We concluded that the ANTS package was fundamentally moving in the wrong direction. It is decreasing the progressivity of the tax system—that is, the fairness of the tax system. It is undermining the most progressive element—the personal income tax system. It is widening the gap between the rich and the poor in a way that could not be fixed by a tinker here or there. It is attacking the environment in an intensely fundamental way. We could not amend without starting again, and that is where the government should be going as well.Given that the Greens (WA) position is to oppose the general thrust of the GST package because of its fundamental shortcomings, it is our intention to challenge the agendas of the negotiations taking place between those parties and the government. The Greens will be pushing to see that this package does not come down to a couple of so-called sticking points that can be itemised in a box for a newspaper story or can fit into a seven-second grab. There are many more issues at stake than should food be in or out or should the government increase the compensation package a little. Consequently, we will be moving amendments in some crucial areas that have been highlighted by community groups who have made submissions to the various Senate committees examining the GST package. We will be laying their concerns on the floor and forcing all in the Senate chamber to justify their support for the package.I will take the opportunity to discuss my second reading amendment in respect of the wine equalisation tax bill. That amendment notes `that cask wine is a category 1 cause of alcohol abuse'. It talks about alcohol abuse costing taxpayers annually, contributing to alcohol related deaths, contributing to hospital bed days and being the prime cause of human distress through health problems. The amendment states that a study has been done to look at the association between alcohol and fire injuries, falls and drownings, car accidents, assaults, child abuse, suicides and machine accidents, yet this government is actually suggesting that we make the alcohol volume irrelevant to the tax and look at the price of the wine. It is not commonsense. There are a number of groups who really want a change to be seen here.I have foreshadowed my second reading amendment in respect of the goods and services tax bill, but I would like to move my second reading amendment in respect of the wine equalisation tax bill, on page 1,316. I hope the Senate has heard the lobbying that has taken place on this and will support my second reading amendment on this very, very important issue. I move:At the end of the motion, add:"but that the Senate:(a) notes: (i) that cask wine is a category 1 cause of alcohol abuse, with alcohol abuse: (a) costing taxpayers $4.7 billion annually; (b) contributing to more than 3,700 alcohol-related deaths annually; (c) contributing to 730,000 hospital bed-days; and (d) being a prime cause of human distress, through health problems, serious accidents, family breakdowns, unemployment and alcohol related offences; (ii) that a study commissioned by the Department of Health and Family Services in 1995 estimated that alcohol is associated with: (a) 44% of fire injuries; (b) 34% of falls and drownings; (c) 30% of car accidents; (d) 50% of assaults; (e) 16% of child abuse; (f) 12% of suicides; and (g) 10% of machine accidents; (iii) that aboriginal people in Australia experience significantly higher rates of alcohol-related illness such as alcoholic cardiomyopathy, alcoholic gastritis and alcohol liver cirrhosis as well as traumatic injuries, road accidents, suicide and violent death than do non-aboriginal Australians;(b) expresses major concern: (i) that the current taxation arrangements in relation to wine have an adverse effect on public health, safety and order; (ii) the Government's proposal for a price-based wine equalisation tax (WET) will perpetuate the anomalies in the present system which result in cheap cask wine being taxed at one fifth of the level applied to low alcohol beers; (iii) the Government's WET proposal will not address this wide range of social concerns associated with alcohol abuse; and(c) considers that it is only by taxing alcohol content that incentives can be introduced to produce lower alcohol, less toxic beverages".Adjournment379710000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Crowley)—Order! It being just three minutes short of 9.50 p.m., I propose the question:That the Senate do now adjourn.379721:47:003797Cook, Sen PeterSenator COOKRF4WAALP00—Today is quite a significant day in the history of the Senate. Today the report of the Senate Select Committee on a New Tax System, the Senate committee examining the GST, was tabled. As well today, the speeches in the second reading debate were commenced on what promises to be a long and absorbing journey by the Senate in Mr Howard's new tax adventure on the GST. Today we kicked off the tax debate properly in the Senate.There is no doubt that Australians have been waiting for this occasion, and there is no doubt that it is met with great anticipation. There is no doubt there is an onerous and difficult responsibility on the Senate to discharge its obligations under the Constitution and to the Australian community to do the right thing. What constitutes the right thing in this debate is a matter of very deep division between the parties, and there are very strong views held about it in the Australian community. But this chamber of this parliament in this capital of this nation has the responsibility to determine as a house of review whether or not the bills presented to it by the government should pass. Today, as I said, we started that process.The tabling of the Senate select committee's report was, I thought, a significant occasion. In my remarks on the tabling of that report, as chairman of the Senate committee, I did what I believed was the right and appropriate thing and congratulated all of those who had played such a constructive role in the preparation of this 500-page report which constitutes the findings of a committee that sat for over four months on 23 different occasions and took evidence in every capital city and in regional Australia.During the debate on the tabling of the report, my deputy chairman, Senator Alan Ferguson, also spoke. One would have thought he would have directed his remarks in the main, if not exclusively, to the reasons he and his colleague government senators in the inquiry found as they did. I was surprised, I might say, to hear some of the detail of his remarks. It is with great reluctance and a great deal of concern that I now rise to simply correct the record for what I think has been on this day of great significance for the Senate an unfortunate marring of the record by the performance of my colleague. I trust that, on reflection and with greater opportunity to consider what was said, he might want to at some stage moderate or at least retract some of those remarks.On the occasion of the tabling of the report—and I have a copy of the Hansard now—Senator Ferguson criticised Labor staff and, in reference to me, my staff for intervening in the process of writing the committee report, and he chose to make most of his remarks about staff involvement in that process. Can I just say this for the record: my staff and the staff who have worked for me on secondment from other shadow ministers in servicing my needs as the Labor chairman of the select committee worked under guidance and direction from me, and I am responsible. If there are any criticisms of what staff said or did, then that criticism should not be directed at people who cannot come into this chamber and defend themselves; it should be directed at me. If there is something that is believed to have been inappropriate or something that is believed to have been misconduct, then I should be criticised for that. If it is right and just that the remarks that are being made are fair and proper, I will, let it be said, accept that criticism and, if I need to, I will apologise; if I do not need to, I will rebut it. On this occasion I feel no need to apologise.I now go to the substantive criticism. As one would imagine, with the preparation of our final report, after four months of sitting on a most comprehensive reference, we were rushing, under pressure, to conclude the document but wanting to do it in a way that, importantly, reflected not a party political slant on the evidence but, in a balanced way, a fair and honest review of the evidence put before the committee.This was an inquiry into government legislation and a government proposal. As I said more than once to my colleagues on this committee, on occasions such as this criticism engendered in the hearing process inevitably is of the government proposal and overwhelmingly reflects criticism of the government, and when we write a review of that evidence, and do so impartially, the balance of the report should reflect the body of the evidence, and the balance of the report will be critical of the government. That is a function of our democracy, a function of our society and it is inevitable.If the balance of this report properly reflects the evidence before it, it should set out the detail of where the government was supported, where it was criticised, where the opposition was supported, where it was criticised and where the Democrats were in a similar situation—and anyone else, for that matter. But the overwhelming cast would not necessarily be one where all those who the government thought ought to support it came forward and had their views recorded. So, in the first place, government senators would get restive if this report properly reflected the evidence which was overwhelmingly critical of the government. This report reflects the evidence, and that was our responsibility.However, the second part of it is the intervention in the final preparation process of the report. I would say this about those concerns expressed: yes, I did support changes in the final hours and past the original deadline that I, along with the rest of the committee, had set for conclusions. But why did I do that? I did it—in case anyone wants to know, even though no-one has actually asked—because I believed it to be very important that this report be a fair one.The key issue—in fact, I think the key issue of the entire inquiry—arose in the last few minutes of our hearing, 11 days ago, in this building. On that day, that Thursday, two professors of economics, Professor Ann Harding and Professor Warren, presented to the Senate committee modelling work that had been commissioned by this inquiry. They are celebrated, recognised and distinguished professors, the most eminent authorities in Australia to do this work.Professor Harding and Professor Warren presented a body of research in documentary form. They appeared before the committee for a day's examination, running from early in the morning until quite late in the afternoon. Their evidence taken as a whole was their written work and their oral testimony given before the committee. After the Department of the Treasury had given evidence, I invited Professor Harding and Professor Warren back to the witness stand in order to comment on and respond to the criticisms made of them and their report by officers of the Treasury, and they did. That was the process.But what was the issue? It is the issue that is important here. This is what the report now reflects—and, if I had not intervened, it would not now reflect this.EP5FERGUSONSenator Ferguson—You had five days to do it.RF4Cook, Sen PeterSenator COOK—I will take that interjection because all it says is that I was late in doing what I did. If I was late in doing it, it was because I was late in discovering the error. And what do I do in those circumstances: allow a flawed document to proceed, or exercise right and proper judgment to correct the balance and allow a properly balanced document to proceed? That issue is important here.In the last few minutes of this four-month hearing, and in the last few minutes of the testimony of Professor Harding and Professor Warren, it became clear—and it was corroborated by economic authority—that the so-called compensation awarded by the govern ment to pensioners in Australia would erode rapidly over time to zero; that these pensioners would have to pay a 10 per cent GST on costs, but what was awarded to them to compensate for doing so would vanish. This is a class of Australians who are the most unprotected Australians of all. (Time expired)379921:57:003799Allison, Sen LynSenator ALLISON1M6VICAD00—I rise to speak about recycling and local government. It is some time since I last addressed the chamber on the dire predicament of kerbside recycling. But it is turning into a perennial bad news story, and little has changed in the last 12 months or so. Earlier this year 12 councils across Queensland were forced to shut down their recycling schemes because of expense, and other councils are currently reviewing their schemes. The Queensland Local Government Association attributes the failure to high costs and the refusal of the packaging industry to share responsibility for some of that waste.At present, federal, state and local governments and industry are negotiating the national packaging covenant, and included in this is a $35 million rescue package. This sum, to be spent over three years, falls well short of the $25 million a year needed by local government. The Queensland Local Government Association says that upgrading landfills to comply with state legislation in Queensland alone will cost around $700 million. So where is this money to be found? The story of recycling in Australia unfortunately can be summarised in one word—and that is `buck-passing'.Local government is expected to perform magic disappearing acts on the waste that we generate. We are a country with one of the highest recycling participation rates in the world; Canberra, at 80 per cent of households, has the highest in the country. It would be a tragedy to now subvert this painstaking public education campaign by which we have achieved this level of awareness and participation so far. One of the consequences of councils being forced to cut recycling services is a loss of public faith in environmental action. Australia is a larger generator of waste than Canada, Europe and Japan and is exceeded only by the United States of America. Australians need to do a much better job in cleaning up our backyard. This entails cooperation. The net cost to local government of kerbside recycling is $75 million to $100 million a year. That is the gap between the cost of collecting and cost recovery, even taking into account the cost of avoided landfill. Such a cost is unsustainable. To lighten the burden on local government, federal and state governments, and particularly the packaging industry, need with some urgency to assume far greater responsibility for this problem. Local government is very wary of signing off on the $35 million rescue package because it is simply not adequate to meet the task of a genuine rescue effort. The industry contribution is a mere $17.5 million over three years, or one-ninth of the annual cost.Recently the CEO of the Packaging Council of Australia, Mr Gavin Williams, said it did local government no honour to be calling for a higher industry contribution. I would suggest that the industry has got off very lightly. The majority of the cost of recycling is borne by ratepayers rather than governments or even consumers. There is little incentive at the moment for industry or consumers to clean up their act. As noted by the industry, there has been no action to date on importers of packaged products. These importers are under no compulsion to contribute to recycling or reprocessing.The industry has said that it will not sanction its contribution to the rescue package being used to `prop up' kerbside recycling. What an extraordinary statement that is! What is often not taken into account is the real but often hidden cost to the community of landfill. All that is being asked of industry is to take more responsibility for the waste it produces. The use of the phrase `prop up' is not an entirely innocent use of language. Any expenditure for public or private good can be seen as propping up, depending on one's perspective. The general public props up private enterprise by paying taxes which are then used to construct roads which benefit private enterprise, particularly freight oper ations. Industry assistance, R&D funds and bailouts are some of the many projects that benefit from the public good, as does private enterprise that is propped up, usually by taxpayers.This is not to say that there have not been councils that have signed unsustainable recycling contracts. The ALGA has said that efficiencies of up to 15 per cent in kerbside recycling could be achieved. But that would result in even more material flooding onto what is already a depressed market for recycled materials. In general, the public, especially ratepayers, have had to prop up an unsustainable cost to the environment of waste from packaging practices. Let us not forget that the Australian Supermarket Institute, one of the signatories to the covenant, is resistant to supporting measures such as charging consumers for plastic bags. We need to ask why it is that supermarkets cannot do what a host of small businesses and cooperatives are doing. I applaud the efforts of outlets such as Friends of the Earth grocery shops in capital cities, food cooperatives and the like—originally the domain of universities but now spreading into inner suburbs.According to the Australian Local Government Association, the cost of kerbside recycling has more than trebled in three years, thanks to burgeoning supply and the closure of overseas markets as a result of Asia's currency crisis. The ALGA has said:Were it not for the fixed price of contracts for paper and cardboard, local government would be in a far worse position.The net cost of kerbside recycling to local government in Sydney and Melbourne combined is $44 million per annum, and that is $9 million more than the poultry rescue package. One proposed solution is to allow councils to raise revenues through an identifiable surcharge, and this would entrench the status quo. It would not encourage industry to devise better packaging practices. The ALGA resolved in March last year to promote national container deposit legislation along the lines of the South Australian model. This may be the only alternative if industry and state and Commonwealth governments fail to provide adequate support for comprehensive recycling programs.Back in 1984 a Victorian state government committee recommended the indefinite postponement of container deposit legislation. The industry then said it needed time to show that a voluntary effort would be preferable to a regulated outcome. As a result, the glass, aluminium and PET industries were instrumental in promoting kerbside recycling as an alternative to container deposit legislation, but it appears that the time for such industry optimism has now passed.The New South Wales Local Government Association has called for a national week of action on container deposit legislation from 30 November to 6 December. A kit has been prepared in anticipation of this and the Democrats wholeheartedly support this initiative. It is my hope, however, that the campaign will be enthusiastically adopted by other states. It is one thing to consider ourselves tardy in adopting trends overseas, but it is quite another to ignore the success of the container deposit legislation on our own doorstep in South Australia. This is an idea that definitely needs recycling. It is one that I commend to the Senate. I hope the minister for the environment will at last take up this now urgent issue.380022:06:003800Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise to add my thanks, as did Senator Cook, to a number of people who worked on the GST inquiry. In particular, I would like to thank Jody, Chris and Jan, who did an enormous amount of work on the committee in supporting Peter, Nick and me. I would also like to thank my staff, who had to put up with me right throughout the committee's inquiry.I rise on a matter of some importance. It is a matter I have raised in the committee and it is a matter that I have raised with the Clerk. It concerns the conduct of the Secretary of the Senate Select Committee on A New Tax System, Mr Diamond.A number of issues arose during the inquiry around the contract that Mr Murphy had with the committee. The committee had a number of heated debates about this matter. Mr Murphy did not complete his required work under the terms of the agreement that he signed. There were extensive discussions about why Mr Murphy did not. Mr Murphy claimed that he complied with the agreement and should be paid in full. I understand that the Clerk of the Senate and the President have now paid him in full. I believe that this payment is improper and that the conduct of the Senate has been reflected upon by the decision of the Clerk and the President, in particular, to pay this money.Mr Murphy has not completed his written contract to this day and has, in fact, requested more money to complete his contract. When Mr Murphy was asked why he had not completed the work, he informed the committee that he had been told by a member of the committee secretariat that one of the quotes that he supplied was the one that was approved. Unfortunately, the deliberations of the committee did not reflect that point, because the committee did not agree to hire Mr Murphy for the quote that he gave.The committee had an extensive discussion about it. What happened was that Senator Ferguson on behalf of the Liberal Party supported the existing quote—known as option 2—by Mr Murphy. I have no criticism of Senator Ferguson for that whatsoever. He supported that position, but the majority of the committee did not support that position. It is unfortunate that the secretary of the committee chose to reflect to the committee's staff that the position advocated by Senator Ferguson was in actual fact the majority position on the committee. It was not.EP5FERGUSONSenator Ferguson—Have you checked with Senator Murray?3L6Conroy, Sen StephenSenator CONROY—It was not, Senator Ferguson. Senator Murray has made the point in the committee processes which you have been engaged in with me.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Address the chair, please, Senator Conroy. Senator Ferguson, you will get your chance later.3L6Conroy, Sen StephenSenator CONROY—What has happened is that the Liberal Party's position was reflected by the secretary of the committee and, further, it was reflected in the verbal advice to the Clerk. This was not the case.We then had a second example where Professor Warren, in his presentation to the Senate committee just a week or so ago, stated clearly for the public record that, after he had been hired by the committee on a written contract to prepare certain work, he contacted the committee secretariat to advise them that he was not going to complete the work he had been contracted to do because, in his view, it was not able to be done. At no stage did the members of the committee consult with the chair of the committee about this matter; that is, about the fact that Professors Warren and Harding were not going to complete the work that they had been contracted to do.Professors Warren and Harding made it quite clear that, as far as they were concerned, they had completed their contract. On the points that, in their view, they were not able to complete, they had contacted the secretariat of the committee and they considered that they had been discharged. They said that they believed that they were discharged from the responsibility of meeting the parts of the contract they either did not like, did not agree with or believed were too technically difficult to do. I have not been able to get a satisfactory answer as to why the committee secretariat took it upon itself to vary the terms of the contract that the committee itself had agreed to. So far no-one has even attempted to offer a suggestion after nearly two weeks. I ask: why was the chairman of the committee, Senator Cook, not approached and informed of this change by the committee secretariat? These are important matters.The material that was contracted to be produced by this committee goes to the heart of the government's credibility. It goes to the heart of why Chris Murphy would not produce macro short-term effects as he was contracted to do—because they would have been critical of the government. It goes to the heart of why Professors Warren and Harding were able to phone the committee secretariat and say, `We don't want to produce first-year effects. It is too technically difficult.' This is not the case.Senator Ferguson interjecting—3L6Conroy, Sen StephenSenator CONROY—That is what they said. Go and read the Hansard , Senator Ferguson.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Address the chair please, Senator Conroy.3L6Conroy, Sen StephenSenator CONROY—So why did the secretariat, throughout the process of preparing the reports, continually not comply with the requests of the chair and the chair's representatives, the staff of the chair who were acting on his behalf and at his instruction? Given that the majority of the committee were requesting various changes at various points, why was Senator Ferguson continually able to thwart the production of the report—as he did?Why were sections inserted, deleted and inserted? That is what has gone on with this particular committee report. Sections that were put in were taken out and then put back in. On whose instructions were sections taken out? Why was typing required to be done twice to put back in sections that had been deleted? This is a gross abuse of the Senate committee process. The committee secretary has no right whatsoever, if a majority of the committee want something in the report, to defy the chair.It doesn't matter if Senator Ferguson phones you up and says, `I have discussed it with the Democrats; take this out, put that in.' With no reference to the chair whatsoever—no checking with the chair as to whether this was an accurate statement—changes were made to the report. This is an outrageous abuse by the Senate staff. It is unacceptable that the majority wishes of a committee can be thwarted by a minority position and a staff who do not want to comply. This is a very grave matter.I come back to this: what was going on? There have been no answers yet from the committee secretariat as to why some material was agreed to, without the wish of the committee, by Professor Warren. He has said on the public record that he advised the committee and they said it was okay not to do the work. We are still waiting, two weeks later, to hear from anybody what transpired between Professor Warren and the committee secretariat.380222:16:003802McGauran, Sen JulianSenator McGAURANWH4VICNP10—I rise this evening to speak on the matter of East Timor. As the Senate would be well aware, the situation in East Timor has deteriorated to a point where the so-called pro-Indonesian militia is undertaking a terror campaign towards the mass population of East Timorese. It is reported that at the very least 25 unarmed citizens were butchered last week in Liquica, a township just outside the main capital, Dili. The attack was on defenceless men and women inside a Catholic church—a horrific scene. Within days the mob had moved their terror on to the capital of Dili. Armed to the hilt, the militia crisscrossed the city in convoys of trucks, firing at and attacking the houses of known pro-independence activists and of those who did not fly the Indonesian flag. The death toll in Dili at the very least was 12. Sadly, it is unlikely to stop there, given the Indonesian military's support of the militia. No-one should doubt that the militia have been armed and waved on by the Indonesian military. That chain of command goes all the way to Jakarta. Given that the military is still entwined with the government, at the very least the government must be held responsible and accountable.The history of East Timor under Indonesian rule shows that such bloodbaths are never the product of rogue elements. If Jakarta does not orchestrate it, then it is unhindered by Jakarta. The turn of events in East Timor places the country in grave danger of sliding into civil war with, consequently, the abandonment of the independence process—which of course is the prime aim of the militia. There is no doubt that following the abandonment of the independence process there would be an even greater suppression and slaughter of the population.Therefore, there can now be no turning back from an East Timor policy. We need to make certain changes to and shifts in our policy and to change some of our current rhetoric. I believe that Australia should lock in behind this. Firstly, a new policy of frank engagement with Indonesia should replace the old policy of constructive engagement. Australia's policy of constructive engagement, first hatched after the East Timor invasion in 1975, has been a failure. It was a policy designed to get close to the Suharto regime, to win their confidence. We would therefore be in a position to influence the regime in areas of political, social and economic reform, to the advantage of the interests of Australia. Yet, for all this neighbourly bonding, we seem to have gained very little. The Suharto regime just ploughed on with its abuses, never making any meaningful reform. Today's announcement by the Prime Minister that he will meet with the Indonesian President, B.J. Habibie, next week for very urgent talks over the death toll in East Timor is such a shift in the policy. It introduces a direct engagement at the highest level. It is the needed shift in policy, and it—and far more—is wholly supported.Secondly, our stated preference for an autonomous East Timor in an Indonesian federation should be changed. How could we deny the East Timorese preference for total independence in the light of recent events? Thirdly, we should send the message to Jakarta that, no matter what it takes and regardless of the impact on our relationship, there will be a free vote regarding East Timor's future—free from intimidation and free from interference. This will send a clear message that there can be no backsliding on this matter. Fourthly, a frank engagement will require a whole new language to come out of Foreign Affairs. For example, the very soft language being used regarding the possible military backing of the militia or the suggestion that there is an inevitability in the path to freedom will bring about such atrocities as we saw in Liquica. Again today the Prime Minister has led the way and toughened up the language coming out of Foreign Affairs. He certainly conveyed a frank exchange between himself and the President of Indonesia when he said that there was `a strong and inescapable impression in Australia that the Indonesian military had not done enough to discourage the violence and discourage the killings'. Further, he said that ABRI had primary responsibility for maintaining security in Indonesia and that quite plainly that responsibility in East Timor had not been properly discharged.Fifthly, we should no longer cover up what is coming through from our intelligence services. By putting it out there on the international stage, by being frank, we are going to have a more penetrative effect than the old way of diplomacy behind closed doors. Sixthly, Australia must gain an absolute commitment from Jakarta that they will immediately restore order by disarming the militia. If not, we must switch to supporting the call for a UN force to do the job instead and we must suspend all levels of military cooperation between Australia and the Indonesian armed forces.Australia has a major role to play, indeed a proud role, in bringing a democratic vote to East Timor. But given the dark clouds now gathering over East Timor, a frank engagement is all we have time for before further atrocities occur. A new stance towards Jakarta will not be easy to enforce, with all its traps, but the alternative is worse; that is, a dishonest regime which is allowing East Timor to erupt into violence with all its terrible consequences, not just for East Timor but for the obvious flow-on effects for Australia.380322:22:003803Sherry, Sen NickSenator SHERRYZW4TASALP00—I want to make some comments about some remarks in the government senators' report that was tabled earlier today of the inquiry by the Senate Select Committee on A New Tax System and also make a few comments about some of the remarks that Senator Ferguson made. Before I go to those, I would like to point out to the Senate that we are having a lengthy second reading debate on this issue. I do not want to cloud the issue relating to a goods and services tax with the comments I am going to make about the operation of the committee. It is important to note that the structure of the committees that were established to examine the tax package and the goods and services tax resulted from the deal between the government and Senator Harradine. It was a deal that led to the creation of, effectively, four Senate committees examining this package and it was the government's deal that set a very strict time line to report on what is the most significant tax package that has been put before the Australian community since Federation.In those circumstances, it is grossly hypocritical of the Treasurer and members of the government to criticise the moneys expended on the process. They were the ones who set up the structure. They were the ones who did the deal. In light of the $20 million of public moneys spent in the lead-up to the calling of the election, it was monumentally hypocritical. The deadlines that the committee was faced with in the preparation of reports and the hearings, et cetera, put us under enormous pressure, a greater level of pressure than I have ever encountered on any committee in my 9½ years here. That also put significant pressure on the committee staff and on the support staff, not just Labor opposition staff but also, I am sure, on the government staff and other parties who attended the hearings. In regard to that, I want to thank the three staff who were involved on the Labor side: Mr Chris Fry, Mr Jody Fassina and Ms Jan Southgate. In the circumstances, I think they did an excellent job, an outstanding job.It is not unusual to have support staff carrying out the functions of examining documents for us, in some cases preparing questions and making suggestions about particular angles and issues that should be pursued and presented in the report. There is nothing unusual in that. It is common practice in most Senate committee hearings when reports are being conducted. It is particularly difficult for opposition parties. The government have vastly greater resources that they have used ruthlessly in pursuing their tax reform package—their public expenditures of money on their advertising campaign. They have the backing and support of Treasury and the Department of Finance and Administration, as well as the personal staff in the various government members of the committee and also ministers' staffs. And that was apparent.There were at least two staffers there to support the government. I do not complain about that. I just draw it to the attention of the Senate in terms of the imbalance of the allocation of resources. I think it was unfair. I do not get particularly upset or uptight about criticism of me or my colleagues on the Senate committee. I do get concerned though when I see unjustified criticism of staff who cannot defend themselves in this forum, particularly when they have been very dedicated in their pursuit of the issues that we had before us on the committee and provided us with invaluable assistance.There were times when I got a little concerned with the behaviour of some of the support staff of the government, but I did not believe it appropriate to whinge or whine or carp about some of their activities. They did their job just as our Labor support staff did their job. It is very unfortunate that Senator Ferguson and the government senators chose to comment in the way they have in the report. It is often the fact that staff are critical in helping prepare the final reports. They have a very significant input. That is certainly not unusual.There is also a reference here to Senator Conroy and me not attending a meeting to deliberate on the content of the report. That is not unusual in the Senate in committee reports. We often find ourselves in a position where we have other commitments. I note that of the 23 days of the sitting of the committee I attended all but two: for one, I had a pressing domestic matter in relation to the death of a relative and for the other, I had a longstanding commitment which I just could not break. We have other senators, very competent senators such as Senator Campbell who was, on this occasion, able to replace me. There was the same arrangement on the government side.I commend Senator Cook, the chair of the committee. He sat through every hearing. I do not just commend him for that; I also commend him for the way in which he chaired the committee. So there was nothing unusual in my not being at a meeting to direct the final writing of the report. There have been occasions when I have not been involved in the process on other committees. It is no particular dereliction of duty and it is not an unusual circumstance. I daresay most senators in this place would, on one occasion or another, not get to the final meeting of the committee. We have an input; we had an input in this case. I discussed, I think probably on many occasions, on a daily basis with Senator Cook, the chair—the very competent chair of the committee—my particular views, the particular issues, the angles that I wanted included in the final report. I had every confidence in Senator Cook to represent the concerns and the issues that I wanted included in the final report.There is a reference in the report to government senators also wishing to note the `unacceptable behaviour of some Labor senators who at various times harassed and sledged some witnesses'. Certainly on this committee there were occasions when it got a little heated; occasionally it got terse. I have to say that, when some of the witnesses appearing before the committee gave evidence, particularly when they gave us some gross generalisations—and I think the business community was outstanding for this—about the alleged benefits of the GST with no hard evidence, it got a bit trying at times. It got a bit trying for all of us. I do not think, on reflection, that on those 21 days I attended committee hearings—Opposition senators interjecting—ZW4Sherry, Sen NickSenator SHERRY—I am not going to mention the government senators. I do not want to pick on them.Opposition senators interjecting—ZW4Sherry, Sen NickSenator SHERRY—You say, `Why not?' but we take it on the chin. There were occasions when government senators were getting stuck into witnesses, getting angry, getting uptight. It happens. But Labor senators, as I said, take it on the chin. It was a hard, grinding job. I actually enjoyed it. You get a bit tired at times and you get the occasional repetitive arguments, but we took it on the chin. We do not make any complaints about the behaviour of government senators. Their behaviour was, I think, identical to ours in terms of their approach.It certainly was not the worst committee I have ever served on. I recall the Senate Select Committee on the Functions, Powers and Operations of the Australian Loans Council. It would take a lot to top that committee, I have got to say, and time does not allow. The committee was led by the former Leader of the Democrats, Senator Coulter. It would take a lot to top some of the shenanigans that occurred on that committee. So I reject the government's criticism. I think it is unnecessary and, I think, particularly regrettable. (Time expired)380522:33:003805O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I want to talk about an entirely different matter this evening because, in July last year, Sydney airport was forced to close its overnight freight operations from 11 p.m. on 6 July to 5.15 the following morning.Senator Conroy interjecting—8O6O'Brien, Sen KerrySenator O'BRIEN—And, no, Senator Conroy, it was not the TWU.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—And Senator Conroy should not be interjecting out of his seat. He has been doing it repeatedly for the last while.8O6O'Brien, Sen KerrySenator O'BRIEN—I was not going to say that, Madam Deputy President. The result was a delay in the distribution of tonnes of mail and express freight and some very angry freight forwarders. One company, Australian Air Express, was reportedly so incensed it considered taking legal action to seek compensation. The then Minister for Transport, Mr Vaile, reacted as one would expect him to react—he was very angry. After all, this was the first time Sydney airport had been closed since the pilots strike of 1989 and he was the minister responsible. The minister, Mr Vaile, demanded an urgent report which was duly delivered to him on 13 July. He also sought an assurance that such an event would not happen again.Airservices Australia was forced to apologise to Sydney airport's major customers and also launched a full investigation into the problems encountered in finding replacement staff and the other issues that led to the incident. A Mr Peter Beaver undertook that investigation on behalf of Airservices Australia. He is the Manager, Corporate Security, at Kingsford Smith Airport.The current minister has advised me, in answer to a question on notice, that Mr Beaver's inquiry covered contingency planning staff arrangements for that particular night and `findings in relation to individual staff members'. In fact, it is now clear that Mr Beaver, I assume on the instructions of the general manager, air traffic control, applied considerable effort in pursuing those controllers who called in sick that night. Mr Beaver, as part of his inquiry, was given access to a tape recording of the call from one of the sick controllers. He was also given access to all electronic and paper records relating to the circumstances surrounding the absence of the two staff members. He even gained access to their email accounts.In a question on notice, I asked the minister whether these actions, which were extreme by any measure, were in contravention of an Airservices Australia union agreement. Mr Anderson answered that, because the tapes are recorded for operational security reasons, they are not covered by any agreement with the union. While the tapes might have been recorded for security reasons, they were certainly not accessed by Mr Beaver for that purpose. I also asked the minister whether Mr Beaver's actions were in breach of the Telecommunications (Interception) Act. He said that, in the view of Airservices, the action did not breach the provisions of the act.I have sought advice on this question and it appears that Airservices Australia is correct. It appears that, when communication is converted from electromagnetic form to speech at a telephone receiver, that act ceases to apply. It is not technically an interception. However, the actions of Mr Beaver may well be caught by the New South Wales Listening Devices Act which makes the use of a listening device to record a private conversation to which a person is not a party illegal. It appears the only defence available to Airservices would be if the person—the air traffic controller—expressly or impliedly consented to the use of the listening device.The minister also told me that Mr Beaver was given the authority to act as he did by the General Manager, Air Traffic Services. The minister offered to allow me access to the report that followed Mr Beaver's inquiry, and I will take him up on that offer. It is clear that the minister, Mr Vaile, was highly embarrassed by this incident, and so he should have been. But the then minister who was responsible to the people of Australia for aviation attempted to transfer that embarrassment to Airservices. Airservices Australia, it appears, then attempted to transfer responsibility to the controllers, and in pursuit of its quarry ignored the legitimate rights of those staff members and, it appears, the provisions of the Listening Devices Act 1984.Under the enterprise bargaining agreement between air traffic controllers and Airservices Australia, controllers can access sick leave as required, and the employee is responsible for assessing his or her own fitness to attend for duty. I am sure that all senators would agree that if an air traffic controller is suffering from even a minor ailment that might impair his or her performance they should not present for work.It is the responsibility of the shift supervisor to decide whether a replacement is required and to make arrangements as appropriate. That can involve the extension of a shift or the calling out of off-duty staff. That same enterprise agreement, which came into effect on 29 June last year, contained provisions regarding rostering principles as well as sick leave. Those rostering principles allowed for up to 10 days straight to be worked, including emergency duty and overtime. These principles were also a feature of the previous agreement that came into force in September 1992.The Manager of Sydney airport, Mr Jim Ludlow, varied that rostering arrangement on 23 June last year. The number of consecutive days to be worked was reduced from 10 days to eight days. The reason given was that it was to address workload and fatigue concerns. According to the minister in an answer to a question on notice, the change was made `particularly in consequence of two safety incidents in which fatigue was a possible factor'. The minister advised me:It was considered that regularly working the maximum 10 consecutive shifts could have been detrimental to staff health and attendance. I asked the minister:Under the eight-day rule, on how many occasions were operations at Sydney airport suspended due to a shortage of air traffic controllers?He answered that the closure in July of last year was in part the result of this rule. The rostering arrangements introduced by Mr Ludlow were withdrawn on 9 July, just two days after the airport was forced to close. It is also important to note that, prior to the forced closure of Kingsford-Smith Airport, Airservices Australia's senior management had been alerted, over a period of time, that the airport was vulnerable to closure on night shifts due to the staffing arrangements. Let me again quote the minister on this important point. He said:Airservices Sydney management had been made aware of potential deficiencies in the contingency plans applying in the event that there were not sufficient rated air traffic controllers available to maintain normal operations.The main factors directly contributing to the closure of the airport in July were high sick leave levels, the contingency arrangements that were in force at the time and the late notice given by a night shift controller. However, the key issue here was not two sick air traffic controllers, as the minister and Airservices Australia would have us all believe. The real problem was, and still is, the management of change in Australian aviation generally and the operation of Kingsford-Smith Airport in particular.Like many other areas of public administration under the Howard government, the administration of aviation policy is, frankly, a shambles. The Bureau of Air Safety Investigations report B98/90, entitled Systemic investigation into factors underlying air safety occurrences in Sydney terminal airspace, released in August of last year stated:Notwithstanding the likelihood that there has been resistance to some elements of change at Sydney TCU, the sheer volume and scope of the change process appears to have been overwhelming for most air traffic controllers.There is a safety issue here, and there is also a human resources problem. There is also a minister trying to achieve certain objectives, and those objectives are: firstly, a political distribution of noise from the airport over Sydney, an objective which now appears to be satisfying no-one; secondly, a program of capacity enhancement at KSA, that program having become disjointed and problematic; and, thirdly, establishing an airport that can cope with the demands of the 2000 Olympics, and this now is becoming increasingly unlikely, especially if the weather is bad. And, of course, Mr Anderson now, like Mr Vaile before him, brings an obsession with both privatisation and cost reduction to the pursuit of these objectives. It should be becoming increasingly obvious that the manner in which Mr Anderson is administering his portfolio when it comes to aviation safety leaves a lot to be desired.380722:43:003807Ferguson, Sen AlanSenator FERGUSONEP5SALP10—Madam Deputy President, it has been years since I spoke on an evening adjournment, but I feel it necessary to respond to some of the things that have been said on the adjournment by Senator Cook, Senator Conroy and Senator Sherry.Senator Bolkus interjecting—EP5Ferguson, Sen AlanSenator FERGUSON—I will start with some of the things that were said by Senator Cook. He commenced his contribution by saying that I was critical of his staff, or of the staff that worked for him. Senator Cook—through you, Madam Deputy President—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Yes, please address the chair and ignore the interjections.EP5Ferguson, Sen AlanSenator FERGUSON—My criticism is not directed at the staff; it is directed at you.XE4BOLKUSSenator Bolkus—At the chair?EP5Ferguson, Sen AlanSenator FERGUSON—Because, as chairman of this committee you allowed the job of the chairman—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator Ferguson, you might get yourself into less trouble if you actually speak to me and refer to Senator Cook in the third person.EP5Ferguson, Sen AlanSenator FERGUSON—I did not notice you saying that to Senator Conroy, Madam Deputy President, but I will defer to your ruling. 3L6CONROYSenator Conroy—She did, actually. Check the Hansard . She did twice.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I did ask you to address the chair.EP5Ferguson, Sen AlanSenator FERGUSON—Can I say, Madam Deputy President, that if the chairman had fulfilled his duty correctly and had come to the complete finalisation of this report, then perhaps his staff would not have been involved in things that are the work of senators and not of staff. At no stage during my contributions at the second reading stage on the ANTS bills did I do anything other than report accurately what happened during the process. It was the process that I was critical of, and not the individuals that were involved. It was just that they should not have been doing the things that they were doing in the role in which they were doing them after a deadline had been passed and after a committee had determined that deadline. As I said, I could have brought down the faxes, because I brought them to Canberra. I have 64 pages of faxes that I received after the deadline, which had changes in them to the committee report which we had been discussing during the week.I think it was Senator Conroy who said that I had suggested to the secretariat that certain things be deleted. Senator Conroy, there is only one sentence in the whole of the report that was put to me that I asked to be deleted. To his credit, Senator Cook, along with Senator Murray, agreed that that should go out. Otherwise, all we wanted to do was to add to the report to put what we thought was balance back into what had been a biased interpretation of the evidence we had received as a committee—one that was heavily weighted in favour of the Labor Party's position and not a balanced report of the situation as it was presented to us.Senator Cook, as chairman, should have fulfilled that role. If, as Deputy Leader of the Labor Party in the Senate, which is a very demanding role, he chooses to take on the job of chairman of a select committee as well—another shadow minister and a former parliamentary secretary were also on the committee—then one role has to come first. If he takes on the role of chairman of what he says is an important committee then, in fact, that job should come first.I noticed that Senator Sherry praised Senator Cook because he attended all 23 hearings. Can I say that was because of the fact that, on the days that Senator Cook was not available, we did not sit. I think Senator Cook would concede that we changed—3L6CONROYSenator Conroy—That is outrageous.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order on my left! Senator Conroy.EP5Ferguson, Sen AlanSenator FERGUSON—You would concede, Senator Cook, there were a couple of occasions when I agreed we should not sit that day because you had to receive medical treatment. It is a fact that we did not sit. Senator Conroy, Senator Cook and Senator Sherry all thanked their staff—Jody, Chris and Jan. They have every right to thank them, because if it had not been for Jody, Chris and Jan, Senator Conroy would not have had a question to ask any witnesses. He would not have had any questions at all. He used to come along with a wad about so thick, which Mr Jody Fassina or Mr Chris Fry would supplement as they went through it. Senator Conroy just about wore out the carpet between his advisers and his seat on the inquiry because he could not think of any questions himself. The only questions he ever asked were questions that were supplied by staff. And he says it is an outrageous attack on the integrity of people who cannot defend themselves.3L6CONROYSenator Conroy—I did not.EP5Ferguson, Sen AlanSenator FERGUSON—Yes, you did; you said the staff could not defend themselves and you said—3L6CONROYSenator Conroy—Senator Cook said that, not me.EP5Ferguson, Sen AlanSenator FERGUSON—I am sorry, I have got it under Conroy; it must have been you. Can I say that that is nothing like your outrageous attack on another staff member who cannot defend himself. You named the secretary of a committee; someone who has been in this place, I understand, for in excess of 20 years. I would suggest, Senator Conroy, that if you want to check whether or not this person has done a correct and proper job over the history of his service in the Senate, you should consult with all of your former Labor colleagues who have worked with Mr Diamond over that long period of time and see whether they agree with your statement.3L6CONROYSenator Conroy—It is what he did on this committee that matters.EP5Ferguson, Sen AlanSenator FERGUSON—If you can find one, you let me know. Unfortunately, Madam Deputy President, Senator Conroy has the view that if someone is not totally supportive of everything that he says or does then they must be against him. We all know in the Senate that there are a variety of views and there always will be a variety of views. Poor old Senator Conroy just cannot take it when there is somebody who does not accede in every way to every request that he makes.He then criticises the decision of the Clerk and the President. Now whether you were accusing the Clerk of bias as well, Senator Conroy, remains to be seen; but I will look very closely at the Hansard tomorrow, because when the Clerk gives advice to the President they make a decision with all of the evidence before them. In fact, Senator Cook, as chairman, and I both met with the President and the Clerk. You were not present at that meeting, Senator Conroy, so it would be very difficult for you to know what took place at that meeting. You talk about a Liberal Party submission to the Clerk. I have never made a submission to the Clerk. I spoke at that meeting with Senator Cook. He is aware of what was said and we both had what was an amicable meeting with the Clerk and the President. The decision was left to the Department of the Senate, who should determine that. If, after your accusations, the documentation of everything that went on at those meetings is possibly made public in the future then, in fact, others will be the judge of whether or not you have a very biased opinion of what is happening.You then bring into question Professor Warren's and Professor Harding's contract. To the best of my knowledge, that has not been discussed by the committee. It was raised in evidence but has never been discussed by the committee. I can only assume by the remarks you made tonight that, in fact, you now do not want to pay Professor Harding, or Professor Warren either, for the work that they have done. It seems to be the case with Senator Conroy that if everything does not come out exactly the way he wants it, then he tries to discredit people.Senator Conroy, I thought your contribution tonight was very poor. I think that if you read through the Hansard you might reflect on some of the things that you have said. I know that you tried to be very careful. I could see that you were really trying—you usually are very trying. I think you should read it carefully, because I imagine the Clerk and others in the Senate will want to read very carefully what you have said. But I hark back to what I said: if you want to be critical of someone who works in the Department of the Senate, who has a long history of respect and a long history of work in this place, I suggest you go to some of your existing colleagues and some of your former colleagues and see whether or not they would agree with your criticism.I never suggested that anybody should not have support staff because, in the context of a complicated inquiry like this, it is absolutely essential that support staff are available. The Labor Party had their support staff and we had our support staff. Without them I am doubtful whether we could have dealt with all the matters that were canvassed.Let me tell you this: when it comes to writing the report, that is the responsibility of the senators and the senators themselves. It is not the responsibility of staff to go directly to secretariats to initiate changes, which in fact the chairman himself would have been unaware of at the time because they were only faxed to him as well. Senator Sherry says that it is much more difficult for opposition parties. We did not find it that way, Senator Sherry. Senators themselves, particularly backbench senators, always made sure that they did their work, they did their homework. When we were in opposition we never had to get staff to write reports.I know the other senators have had 40 minutes, double time, to get their point across tonight. I may have to have a bit more time tomorrow night. Senator Sherry also spoke about the structure of committees. He did not say that they were dominated by the Labor Party. Even in the select committee, when the Democrats senator chose not to vote on any issue it gave the Labor Party the majority because when the vote was three-all it meant that Senator Cook could put into the report exactly what he wanted. (Time expired)22:54:003810Senate adjourned at 10.54 p.m.Documents38103810The following documents were tabled by the Clerk:Aged Care Act— Allocation Amendment Principles 1999 (No. 1). Community Care Grant Amendment Principles 1999 (No. 1). Extra Service Amendment Principles 1999 (No. 1). Residential Care Grant Amendment Principles 1999 (No. 1).Airports Act—Regulations—Statutory Rules 1999 No. 52.Australian Horticultural Corporation Act—Regulations—Statutory Rules 1999 No. 54.Child Support Legislation Amendment Act—Regulations—Statutory Rules 1999 No. 57.Civil Aviation Act—Civil Aviation Regulations—Civil Aviation Orders— Directive—Part— 105, dated 17, 18 [2], 19, 23 and 25 February; and 1 [12], 4, 5, 8 [6], 10 [6], 11 [4] and 12 [13] March 1999. 106, dated 17 February and 8 March 1999. 107, dated 15 February and 10, 11 and 12 March 1999. Exemption No. CASA 13/1999. Instruments Nos CASA 74/99 and CASA 95/99.Corporations Act—Accounting Standard AASB 1001—Accounting Policies.Customs Act—Instruments of Approval Nos TMRO 1999/1-TMRO 1999/4.Defence Act— Determination under section 58B—Defence Determinations 1999/7-1999/9. Regulations—Statutory Rules 1999 No. 56.Fisheries Management Act—Regulations—Statutory Rules 1999 No. 55.Higher Education Funding Act—Determination under section 15—Determination No. T26 of 1998.Horticultural Levy Act, Horticultural Export Charge Act and Primary Industries Levies and Charges Collection Act—Regulations—Statutory Rules 1999 No. 53.Interstate Road Transport Act—Determination RTR 99/1—Determination of B-Double Routes.Migration Act—Certificates under section 502, dated 31 March, 1 April and 12 April 1999.National Health Act—Determination under Schedule 1—IHS 4/1999.Parliamentary Entitlements Act—Parliamentary Entitlements Regulations—Advice of decision under paragraph 18(a).Product Ruling PR 1999/12.Public Service Act—Public Service (Australian Agency for International Development) Determination 1999/2.Taxation Determination TD 98/22 (Addendum).Taxation Ruling— TR 94/14 (Addendum). TR 95/17 (Addendum No. 2). TR 1999/4.Telecommunications Act—Telecommunications Numbering Plan Amendment 1999 (No. 1).Torres Strait Fisheries Act—Regulations—Statutory Rules 1999 No. 51.Trade Practices Act—Statement under section 65C.Proclamations3810A proclamation by His Excellency the Governor-General was tabled, notifying that he proclaimed the following provisions of an act to come into operation on the date specified:Therapeutic Goods Legislation Amendment Act 1999 —Act (except Schedule 2)—1 April 1999 (Gazette No. S 143, 1 April 1999).