1999-05-123912SENATE480301999-05-12The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.Business48034803Motion (by Senator Kemp, at the request of Senator Ellison) proposed:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the following bills, allowing them to be considered during this period of sittings:Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999Criminal Code Amendment (Slavery and Sexual Servitude) Bill 1999Copyright Amendment (Computer Programs) Bill 199909:32:004803Brown, Sen BobSenator BROWNQD4TASAG00—I want to make some comment on this matter. The question here is whether these bills should be exempted from the cut-off before winter. As the Senate knows, we already have a very long list of legislation which cannot possibly be dealt with before the winter break, and I would have thought that we should have a better explanation from the minister as to why these pieces of legislation should be dealt with at this stage.It becomes clear here that, if these pieces of legislation are to be dealt with, having been introduced at this stage, other pieces of legislation which have been on the agenda for quite a long time will have to make way for them. I do not know that the government has adequately explained why these pieces of legislation have taken until now to be introduced, important as they are, and why they are supplanting the government's previous priority list at this stage.Question resolved in the affirmative.Bills4804r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Bills4804r761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7624804A NEW TAX SYSTEM (GOODS AND SERVICES TAX) BILL 1998Consideration resumed from 11 May.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—The committee is considering the A New Tax System (Goods and Services Tax) Bill 1998, amendment No. 1 on sheet FA210, moved by Senator Kemp. The question is that the amendment be agreed to.09:34:004804Murray, Sen AndrewSenator MURRAY3M6WAAD00—There was a series of questions that the minister was going to respond to when we resumed debate today. We are waiting to hear from him on that basis.09:34:004804Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Let me respond to some of the questions raised. This refers to what is an Australian government agency. It is defined in the 1997 Income Tax Act. The definition is actually very broad: it means the Commonwealth, state or territory or an authority of the Commonwealth, state or territory. Government business enterprises are not expected to be covered by this definition. For example, it is not expected that Telstra and other GBEs will be covered by the definition of an Australian government agency. As I mentioned yesterday, the ATO will be issuing a ruling which will give more detail on the application. I hope that provides a response to satisfy the senator.Question resolved in the affirmative.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—We now move to Greens' amendment No. 1 on sheet 1382.09:35:004804Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—As I mentioned earlier in my contribution relating to the government's amendment on sheet FA210, this relates to, but was not contingent upon, the government's amendment. We are still looking at some aspects of the wording, so I will not be moving it at this stage. I may seek to move it at a later stage of the debate.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—We move on then to Democrat amendments Nos 1, 7, 8 and 10 on sheet 1361.09:36:004804Murray, Sen AndrewSenator MURRAY3M6WAAD00—by leave—I move:(1) Clause 9-15, page 14 (after line 13), at the end of the clause, add: (4) For the avoidance of doubt, the provision of a *government grant or *sponsorship to a *cultural organisation is not the provision of consideration.[cultural organisation](7) Clause 195-1, page 256 (after line 2), after the definition of creditable purpose , insert: cultural organisation has the meaning given by section 30-300 of the *ITAA 1997.[cultural organisations](8) Clause 195-1, page 260 (after line 19), after the definition of goods , insert: government grant means a payment made by an *Australian government agency (whether of money or other property) to a *cultural organi sation for the purposes of supporting the operations or functions of that organisation.[cultural organisations](10) Clause 195-1, page 274 (after line 8), after the definition of special education course , insert: sponsorship means a gift of money or other property to a *cultural organisation for the purposes of supporting the operations or functions of that organisation but does not include a gift for which the supplier receives consideration or other benefits such as advertising which promotes the supplier or the supplier's goods or services.[cultural organisations]These amendments before us are designed to deal with the issues raised with us by charitable organisations. Before I embark upon an outline of the amendments, I wish to draw attention to an approach which I hope the government will adopt in examining our amendments.We have put before you, Minister, something like 120 amendments to date. We would expect each to be dealt with on its merits, because they are in response to concerns which have been expressed through the Senate committee process. It is important to our future relationship with this government how seriously you treat these amendments. My party and I would regard it as singularly unhelpful if the government were to take the approach that only your amendments matter and are worthy of support and that our amendments do not matter. That is a general shot across your bows, if you like, because after 30 June you will want to bring forward business tax proposals and other tax proposals. You will expect them to be considered on their merits.In this GST debate, by and large, the Labor Party have dealt themselves out by failing to put up amendments and by failing to deal with amendments which are necessary and appropriate, in our view. Therefore, if we have to carry the bulk of the load of those people who want changes to your package, we would hope that your attitude would be appropriately deliberative.WW4KEMPSenator Kemp—As always.3M6Murray, Sen AndrewSenator MURRAY—You certainly understand the underlying message I am giving you. Minister, the first of these amendments is to clause 9-15, page 14, which is to add:(4) For the avoidance of doubt, the provision of a *government grant or *sponsorship to a *cultural organisation is not the provision of consideration.Amendment No. 7 states:. . . after the definition of creditable purpose , insert: cultural organisation has the meaning given by section 30-300 of the *ITAA 1997.Amendment No. 8 states:. . . after the definition of goods , insert: government grant means a payment made by an *Australian government agency (whether of money or other property) to a *cultural organisation for the purposes of supporting the operations or functions of that organisation.Amendment No. 10 states: sponsorship means a gift of money or other property to a *cultural organisation for the purposes of supporting the operations or functions of that organisation but does not include a gift for which the supplier receives consideration or other benefits such as advertising which promotes the supplier or the supplier's goods or services.All of those amendments, as you would note, are designed to introduce additional certainty and, if you like, to straighten out some of the lines in definitional matters and understanding concerning this area. I will leave my general remarks at that and defer to Senator Allison, who will outline the detail of the amendments.09:41:004805Allison, Sen LynSenator ALLISON1M6VICAD00—These amendments are very important. They seek to clarify what the government says is the case but will not actually properly confirm—that is, that the GST will not apply to grants to cultural organisations `for the purposes of supporting the operations or functions of those organisations'. Furthermore, they seek to clarify what forms of sponsorship will be regarded as GST free as a donation.This was one of the Democrat recommendations which I made in the report on the GST by the Senate Environment, Communications, Information Technology and the Arts References Committee. It follows on from the very serious concerns of a large number of arts organisations which submitted to the inquiry that the grants which keep their companies alive will be in peril under the GST.The arts will be harder hit than most industries by the GST, a point which was confirmed by studies carried out by the Australian Major Performing Arts Group, AMPAG, and by Econtech for the Australia Council. Econtech calculated that the seven per cent increase in arts prices forecast by Treasury would result in falls in sales of 10 to 12 per cent for artistic entertainment, including nine per cent for music and theatre productions, eight per cent for performing arts venues and four per cent for creative arts.This modelling suggests that many arts organisations and companies which are already in a parlous economic state would see their viability very seriously affected. Indeed, research in the Australia Council's Major Organisations Fund report shows that the performing arts have lost a collective $12 million over the last four years. The GST will come into play when the reserves of these organisations are extremely low.The Entertainment Industry Employers Association told the committee that the entertainment industry is in the middle of a marked downturn in sales and production. Indeed, AMPAG told the inquiry that only 11 of the 22 companies they represented were in surplus and that a five per cent fall in sales would cost $7.1 million, forcing 14 companies into deficit, and a 10 per cent fall would push 18 companies into deficit.Between six and eight of the companies would be facing bankruptcy. This could include some of Australia's flagship cultural icons, such as the Sydney Symphony Orchestra, Opera Australia, the Australian Ballet and the Sydney Dance Company. All of this would be exacerbated if grants and sponsorships were taxable. Australian companies give about $65 million a year to the arts, mostly in corporate sponsorship. Imposing a GST on all forms of sponsorship would have a particularly adverse effect, especially on finance companies which were unable to claim input tax credits.Sponsorship makes up 20 per cent of the revenue of the major companies, with grants adding a further 20 per cent. These are very important parts of the financing of our cultural icons, I am sure my colleagues would agree. The Australia Council told the committee that it was not clear in the draft legislation that grants were GST free, in spite of the minister's assurances to the contrary. It called for clarification of the proposed legislation so that the status of grants was not open to interpretation, therefore avoiding unnecessary concerns and appeals.Many arts organisations were very critical of the government's failure to adequately consult with arts organisations in particular in drawing up its legislation to define what is a grant and GST free. This amendment seeks to put that issue beyond all doubt and allow companies to start planning on the basis of certainty, at least about government grants. Sponsorship too, as I have already said, is of great concern. This is particularly so given that around a third of corporate sponsorship comes from financial institutions which will not be able to claim input tax credits if a GST is imposed on sponsorship.What really galls the Democrats in looking at the government's treatment of sponsorship, particularly of not-for-profit organisations, is that it is incredibly stingy compared with the treatment in other GST regimes like Canada and the UK. In the UK sponsorships are exempt from the GST if the sponsor receives no benefit in kind other than acknowledgment of the sponsorship. Advertising in a charity brochure is also largely exempt, and membership fees providing only minimal services are exempt as well. In Canada the rules introduced by the Liberal government there in 1997 are even more generous. Sponsorships are generally exempt, depending on the service provided. Naming rights are certainly exempt. Donations are exempt, even including the donation component of attending events like charity balls. In Ireland the supply of cultural, theatrical and musical services is exempt if provided to a cultural body. So in comparison Australia looks pretty puny.Our amendment seeks to ensure that corporate sponsorship is treated in much the same way as it is in Canada and the UK—that is, sponsorship other than the actual payment of services such as free tickets or advertising will be GST free. In moving this amendment, it is our intention that it be interpreted widely to ensure that the widest possible category of sponsorship is picked up and that the only part that is excluded is the part which is clearly a payment in kind for services such as free tickets, hospitality or commercial advertising.This amendment will help ensure that companies maintain the full benefit of corporate sponsorship but that that sponsorship is not used to avoid paying tax on actual services. In short, that part of the sponsorship which is really a kind of donation, albeit one that carries with it the right to be acknowledged or to have a logo used or even to have the sponsor's name attached to an event, will be GST free. I commend these amendments to the Senate.09:48:004807Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I can see the concerns that are being expressed here. I was on the other end of the phone when a number of the organisations expressing concern to the committee were putting their case. You could see that to the people involved and to those employed in this sector, given the tough times they have had recently, the impost of a GST was of great concern, in particular the collection costs and the potential impact on sponsors. Therefore I can see the reasons behind this amendment.This amendment provides that government grants to or sponsorship of a cultural organisation are not the provision of consideration—that is, are not subject to the GST system. Cultural organisations are defined in section 30-300 of the Income Tax Assessment Act 1997. A government grant is defined as:. . . a payment made by an Australian government agency (whether of money or other property) to a cultural organisation for the purposes of supporting the operations or functions of that organisation.Sponsorship, as we have heard, is defined as money or other property provided:. . . to a cultural organisation for the purposes of supporting the operations or functions of that organisation but does not include a gift for which the supplier receives consideration or other benefits such as advertising which promotes the supplier or the supplier's goods and services. The question that springs to mind is whether the definition or the change of definition pulls out of sponsorship the very essence of sponsorship. If there is no publicity, advertising or acknowledgment, would not the so-called sponsorship be a donation? With regard to the bit about the supplier receiving consideration or other benefit such as advertising, the dictionary definition of sponsor or sponsorship is that which brings back some benefits. There is obviously a commercial benefit.The definition of sponsorship also creates problems of income tax deductibility. Currently, corporations or businesses can sponsor a charity or a group and claim tax deductibility in one of two ways. Firstly, if the entity is a gift deductible entity, then the amount of sponsorship will be tax deductible. Secondly, if the entity is not a gift deductible entity, then the sponsor can claim tax deductions under section 51 of the Income Tax Assessment Act if they can argue that the promotion of their business is an activity which contributes to earning assessable income. Under section 51, anything which contributes to earning assessable income is a tax deductible expense.For instance, a law firm may sponsor a function held by a new student organisation called Women and the Law, which is set up to lobby the law faculty in a university to be more sensitive to gender specific issues. The law firm could argue that their sponsorship is tax deductible, as they are gaining publicity and marketing themselves to bright young women lawyers. However, if their name was not displayed in the function or on the invitations or mentioned by the organisers, they would not be able to substantiate the case for tax deductibility.In section 51.1 of the Income Tax Assessment Act, part of it, 8.1(1)(b), says that you can deduct from your assessable income any loss or outgoing to the extent that it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income. As I said, I can understand why we have been stuck in this position by the government. However, I am concerned that the outcome is that the Democrat amend ments seem to create a double bind. Firstly, sponsorships are GST free and therefore the recipient organisations will not have to ask the sponsor for 10 per cent more or skim off 10 per cent of the sponsorship to remit to the ATO. However, sponsorships themselves are less attractive if they are not directed to a gift deductible entity and there is no income tax offset available. My feeling is that that may involve more money loss than the loss due to the payment of the GST. So gift deductible entities win but other not-for-profit organisations lose, and the Greens are concerned about this situation on the basis of equity between similar organisations. Much like our other amendment aimed at the not-for-profit sector, we are trying to ensure that we do not end up with a two-tiered system relating to not-for-profit organisations. I will be interested in hearing about this further in the debate, but at this stage for us these amendments are a little problematical.09:54:004808Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—A fundamental misunderstanding seems to have occurred here. First of all, the amendments relate to government grants; they are not to do with some of the issues raised by Senator Margetts which were dealing with the private sector arrangements. So the amendments that have been moved by the Democrats, as I understand it from Senator Allison, are only about grants and sponsorships by government and do not deal with private legal firms or what have you. I think the debate has strayed far away from what the amendments are.Just to make it clear: the problem, Senator Allison, with what you have raised is that I think what the Democrats have moved would actually be to the detriment of the bodies you are seeking to help. In effect, you are denying them a cash flow benefit. If these amendments were passed, I daresay within a short period of time the government would be approached by organisations seeking to revert to the original arrangement, because you would have denied them the cash flow benefits. Let me expand on that. It is important to bear in mind that where such payments are taxable, they will not result in any detriment to the cultural organisation. Where they are taxable, the government or sponsor will need to pay a GST inclusive amount but will receive an input tax credit for the GST paid. In practice, the credit to the government will offset the GST they have paid for the price of a grant or a sponsorship.This is the debate we had yesterday, and I went through an example. Say there is a grant which is $100,000. If that is a taxable type grant, the government will give $110,000, the organisation will remit $10,000, the net payment is $100,000 and the government is entitled to a $10,000 input tax credit. So what we are seeing here is that on the recipient side, the registered recipient will need to remit the GST to the ATO but they will have the cash flow benefit of holding on to the GST until they are required to remit it. We do not believe it would be appropriate to deny them this benefit. The government has been keen to meet with a range of arts bodies to explain its position, and my understanding is that in some recent meetings there has been a recognition and a better understanding of the bill, and the organisations are typically far happier as a result of this when this is explained to them.In summary, and this covers a bit of the debate we had yesterday, Senator Allison, if the Democrats amendments were passed, it is my belief it would be to the detriment of the organisations you are in fact trying to help, because they would not receive the cash flow benefit of holding on to the GST until they have to remit it to the tax office. The government will be opposing the amendments.09:58:004808Murray, Sen AndrewSenator MURRAY3M6WAAD00—I would like the minister to just flesh out his response a little more. Let us start with amendment No. 1. That amendment affects subdivision 9A which is to do with taxable supplies. Within that there is the explanation of what `consideration' is, with three clauses. We have added a fourth clause. The fourth clause we have added says:For the avoidance of doubt, the provision of a *government grant or *sponsorship to a *cultural organisation is not the provision of consideration.In other words, it is not a taxable supply. It does not affect their cash flow—they would have received the grant, they would have received the sponsorship. To start with amendment No. 1, in what respect would your answer in terms of a cash flow consideration at all invalidate the proposal? What we have sought to do is to make it clear what is not a taxable supply.09:59:004809Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—If it is not a taxable supply, you do not get the $10,000 which you keep until you have to remit it to the tax office. That is the position. We have been through this, and I have given another example this morning. What happens is that, if the grant was $100,000, if it is a taxable grant that grant is $110,000. The organisation keeps the $10,000 until it has to remit it to the tax office, so there is a tax flow benefit. The net effect is the same but there is a cash flow benefit by holding on to the cash until you have to remit it to the tax office.I understand exactly what you said, Senator, because you are conveying a view that a number of arts organisations originally put to the government and they have obviously put the same case to you. My understanding, particularly from some recent briefings with some of the larger arts bodies, is that they now understand the government position and the argument that I am putting.We think what you are doing here will give a detriment to the organisations, not a benefit, and that detriment is that they lose their cash flow benefit. Therefore we will not be supporting the amendment and, frankly, if it went through we would be under pressure to restore the original clause.10:01:004809Murray, Sen AndrewSenator MURRAY3M6WAAD00—Let us focus on a government grant. I understood you to have said yesterday that it is not the intention of government, which formerly gave this $100,000, to now give $110,000 and then the $10,000 is given back. I understood you to say yesterday that you are still going to be granting $100,000. How is there a benefit? You are not giving somebody $10,000 to take back $10,000—from what you said yesterday.10:01:004809Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We have given $110,000 and the government is entitled to claim the credit of $10,000. The organisation receives the additional $10,000 and we will claim the input tax credit. I gave an example yesterday and an example this morning. If we currently give $100,000 and it is taxable then the $100,000 will be $110,000. The organisation will remit $10,000, so the net payment is $100,000 and the government is entitled to a $10,000 input tax credit. So the government is no worse off and the organisation is no worse off, but the organisation has a cash flow benefit while it keeps the $10,000 before it is remitted to the Australian Taxation Office. The situation is that you are denying an organisation that cash flow benefit. Organisations which have understood this now appreciate that this is not a problem and their earlier concerns have been dealt with.10:03:004809Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, you said yesterday that an organisation which got $100,000 before the introduction of the GST will still be granted $100,000 after the introduction of the GST—it will not be granted $110,000. Are you telling us that the government is going to increase all these grants by 10 per cent? Let us have a yes or no answer on that and then we can understand where we go from there.10:03:004809Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Yes. In order to deal with the taxable issue, the GST has to be covered. I think that would be understood if you read the answer I gave yesterday. I will recheck the Hansard , but as I was reading from the same notes I would be very surprised if the Hansard did not say this. The net cost to the government is the same because the government gets a credit. Remember the ceteris paribus assumptions that we had—everything else remaining the same? In other words, the government has not changed its programs or priorities. The net cost to the government is the same. That is the point I am making. A $100,000 grant is still a $100,000 grant but the initial payment would have the $110,000 and then the government claims the $10,000 so the net effect to the government pocket is the same.10:04:004809Murray, Sen AndrewSenator MURRAY3M6WAAD00—Put aside the government and talk about the cultural organisation that we are referring to. If they get a government grant of $100,000 pre GST, and post GST they still get a government grant of $100,000, there is no change to their cash flow. The cash flow will be affected if they get that same grant of $100,000 and then 10 per cent is lopped off and they have to pay it back to the government. As I understand it, that is not what you were saying yesterday. Where is the cash benefit to the organisation if before this happens they receive $100,000 and after it happens they receive $100,000?10:05:004810Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—This is what I said yesterday; I have the Hansard here. I think my answer was to Senator Margetts. I said:You wanted an example. If the government gives a grant of $100,000 to a particular organisation and that is taxable, the government gives $110,000 and the organisation gets $110,000. It remits the GST, which is $10,000, and the net payment is $100,000.DX5MARGETTSSenator Margetts—It is $11,000.WW4Kemp, Sen RodSenator KEMP—No, it's not.DX5MARGETTSSenator Margetts—What is 10 per cent of $110,000?WW4Kemp, Sen RodSenator KEMP—This is exactly what I said, Senator:That is what we mean when we say `net out effects'. The government gets an input tax credit of $10,000 so the net cost to the government is $100,000.That is what I said yesterday; that is what I said today. There has been no change from what I said yesterday. The argument which we ran yesterday is essentially the same argument that I think Senator Allison is seeking clarification of this morning. Where it is taxable, the government grant has the GST applied. I have been quite consistent, let me assure you.10:07:004810Allison, Sen LynSenator ALLISON1M6VICAD00—Apart from the nonsense of the government giving with one hand and taking away with the other, there is the question that Senator Margetts raised of this being, in the case that you cited, not a GST of $10,000 but of $11,000. Leaving that aside, what sort of assurances are there that the government's grants program will be increased by 10 per cent in the arts budget, or are we talking about Treasury topping up the arts budget for the purposes of the GST? How is this juggling act going to go on within government?10:08:004810Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Let me make this clear. The 10 per cent applies to the GST exclusive value. In this case, the GST exclusive value is $100,000. This $100,000 with a 10 per cent GST equals $110,000. The GST represents one-eleventh of GST inclusive value. The GST inclusive value is $110,000. That is how the mathematics work. It is perfectly consistent with what everybody else has said. The net cost is the same. A taxable grant of $100,000 now, with the GST applied, becomes $110,000. Because the government gets an input tax credit, the net cost to the government is the same. That is the position.Does government give with one hand and take away with another? I guess an analogy would be our salary. The government gives us a salary—people will argue whether it is too high or too low, but it gives us a salary—income tax is applied and it takes money away. The government giveth and the government taketh away.10:09:004810Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The government may giveth and taketh away, but here we have a situation where, from my question yesterday, the government did not promise that they would giveth. I asked, `Will the government make the commitment that it will pay the extra 10 per cent on top of grants that are deemed subject to the GST?' We did not get a straight answer at the time, and I am sure that is what is behind a lot of the questions that the Australian Democrats are asking now. It is not actually in the legislation that that will happen. Of course, it does not cover—3M6MURRAYSenator Murray—Nor is it in the budget.DX5Margetts, Sen DeeSenator MARGETTS—Nor is it in the budget, as Senator Murray indicated. If that is the case and it is not indicated in the clear as mud, accrual budgeting process, perhaps the minister can let us know when and where that commitment is written. How does this relate to the private grants or sponsorships? Where would they get the extra money to cover them for this particular time, or will they have a cashflow problem themselves?10:10:004811Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The amendments deal with government grants. I think we should confine ourselves to the issue of government grants. We have to confine ourselves to the amendment which is before the chair or we will never finish. I have explained to you the net cost to the government. If there is a taxable grant of $100,000 and the government continues that program, continues that grant to the organisation, the government will pay $110,000. That will include the 10 per cent GST. But the net cost to the government will be $100,000 because it will be claiming back an input tax credit.Government will always set priorities. If the government currently gives a grant of $100,000 to Senator Margetts's arts foundation, or an appropriate agency entitled to receive such a grant, and it believes the organisation continues to be worthy of such a grant and it continues the same priorities, that organisation will receive $110,000. But the net cost to the government will be $100,000. That is the point I am making. This does not impose, in this particular example, an additional cost on the government, but it does provide a cashflow benefit to the organisation that you are seeking to assist.I think that point is understood now. I think this amendment reflects an earlier discussion, which of course I am aware of because I guess the same people in the Treasury have seen you. That is why I say that what you are seeking to do here, and I do not doubt with the best of intentions—I am not arguing that position, because I am sure it is with the best of intentions—in our view, would be to the detriment of the organisations that you are seeking to assist.10:13:004811Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—You had me almost convinced a little while ago. Senator Kemp, I think you are doing quite well this morning actually. Let me compliment you. You were going well, but then you threw me completely. You threw me completely by using the illustration of parliamentary salaries, because in fact the argument breaks down completely if you use that little illustration. What we are talking about is a grant to an organisation which includes $10,000 additional so they can pay the GST. That $10,000 then becomes cash in hand and enables them to have a cashflow. I thought it would be very good if the government were going to do that.The minister then used an illustration and said, `It is like a parliamentary salary.' The problem is that when we are paid our parliamentary salary, we never get the tax amount in hand. We simply get the salary less the tax, net. If the analogy to the grant is exactly analogous to what we receive when we receive our salary, there is no cash benefit. As parliamentarians, we do not receive salary plus tax and have a period where we have the tax in our pockets to enable our cashflow to be improved and then some time later pay it back. We never receive the tax. Can you see the problem that your illustration has caused me? I am now very anxious about the assurances you were giving, because I thought you had me convinced. Now you have lost me.10:14:004811Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—If you would remain convinced if I were to withdraw it, I withdraw it. The simple point I was making is about whether the government gives money and the government takes away money—it was not to push the metaphor in every sense. I think Senator Allison or Senator Margetts wondered about this concept of the government giving and the government taking, and I was just drawing an analogy. You rightly drew attention to the cashflow benefits. I assure you that the cashflow benefits are there. The analogy was simply, on the debate we had: the government giveth and the government taketh away.10:15:004811Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I was actually chided a little while ago—and, of course, I was shocked and upset about this—for mentioning private sponsorship. Actually, the Democrats amendment specifically relates to private sponsorship, so I would refer the minister back to that. We have talked about the churning in relation to government grants and departments. The tax office will say that it will churn it back to that area so that they have substantially the same situation. But if the grant recipients have a cashflow benefit, one of the things we have to look at is that government departments will have a cashflow problem. If they are having to churn through 10 per cent more each time, they are always going to have a cashflow loss of about 10 per cent, having paid out more than they normally would.Given that, we still have a situation where the Democrats' amendment which is before us—I know the minister is very keen to deal with amendments which are before us—deals with the issue of sponsorship. I am still asking the question: how do we deal with sponsors in that situation? What is the ability to compensate for the fact that the sponsors themselves are in a difficult situation or may be reticent to pay that extra 10 per cent because they are not going to be churned, or are they?10:16:004812Cook, Sen PeterSenator COOKRF4WAALP00—Mr Temporary Chairman, at this juncture it might be an appropriate time, without disrupting the flow of questions, to declare the Labor Party's attitude to this amendment of the Democrats. It is a simple statement to make. I have expressed the Labor Party's view of this legislation at many points prior to now. Let me simply restate that we are opposed to a GST; therefore we are opposed to this legislation; therefore we will be voting it down.This amendment, to some extent, accepts that a GST is inevitable and therefore seeks to amend the package. We do not want to put the handcuff of a GST on the Australian people. Therefore, we are not going to be party to a debate which decides whether the handcuffs should have fleecy lining or should simply be raw metal. It seems to us that that is to modify the principle in some way. The principle is wrong, so we will not be supporting this amendment by the Australian Democrats and we will be voting against this legislation at the conclusion of the committee stage.To the arguments: if we were, for example, supporting the principle of a GST—which we are not—the arguments advanced by the Democrats have considerable merit. The explanations given by the government are a load of old cobblers. The contact I have had with organisations in the arts area does not suggest to me at all that they are in any way chastened or quietened by the explanations given to them by the government on this point. Having said that, I signify to the chamber that we will not be supporting the amendment.10:18:004812Allison, Sen LynSenator ALLISON1M6VICAD00—I want to return to the question before getting onto sponsorship, and Senator Margetts is correct to say that these amendments do go to that question of private sponsorship as well as government grants. It seems to me that we cannot proceed with this question until the government gives the commitment that grants to arts organisations are going to be increased by 10 per cent. I do not see how we can be satisfied with the answer. I am not sure that the arts organisations which will have the benefit of cashflow described by the minister—by virtue of the amount of money they can hang onto for three months before paying back to the government—are going to be at all reassured if, at the beginning of the process, their grants are not increased by that amount.I understand there are going to be great difficulties, as I appreciate, because the quantum of grants changes from one year to the next. For instance, let us look at the current budget. Does it build in a 10 per cent increase in grants? How do grants organisations know that this has been built in? Will it not just be another opportunity for the government to cut costs and reduce the amount of the grants by at least that amount?10:20:004812Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, we are probably re-covering some ground. If the government has a commitment to make a grant to an eligible arts organisation of $100,000, the government will pay $110,000; the government will get an input tax credit of $10,000, and so the net effect to the government will be the same—$100,000. That is how it will work. If you are entitled to a grant of $100,000, that grant is a taxable type grant. The government will then pay you $110,000. The government will be entitled to an input tax credit of $10,000, so the relevant appro priation will show $100,000, but the arts organisation will have the $10,000 on hand until it is required to remit it, providing the organisation with a cashflow benefit.I think that answers your question, but I take your guidance. Our reading of your amendment was that it did not apply to private organisations. If you tell me your amendment does, obviously it is your amendment so we will have that debate. If it is a sponsorship, if it is a taxable supply, the business, if it is a relevant business, will get an input tax credit. If it is an input taxed body, it will not get that, but on the other hand it will be in exactly the same position as other alternative sponsorship arrangements. We do not see that this will be detrimental to private sponsorships. We think, overall, the amendments that you have moved are not to the advantage of the organisations you are seeking to help.10:22:004813Allison, Sen LynSenator ALLISON1M6VICAD00—Coming back to the question of government grants, perhaps the minister could point to the clause in the legislation which would guarantee that 10 per cent on top of the existing grant and a line item in the budget. Can you draw that to our attention so we can be reassured?10:23:004813Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The reassurance is: the government understands its legislation and, if it makes a grant which is a taxable grant, it will have to pay GST on that grant. But the government well knows that it will get an input tax credit so that the net cost to the government is the same.I do not want to keep repeating myself, but that is the principle. I have stated the principle. I have my advisers here and I have looked around to check whether I have put a word out of place and they all say that it is fine. I am sure that the explanation you have been given is the correct explanation, and I urge the chamber to oppose this amendment moved by the Democrats.10:24:004813Murray, Sen AndrewSenator MURRAY3M6WAAD00—Through the chair: Minister, we understand the principle and that principle has been spelt out. What we have not got from you is the commitment. The commitment would be, in the legislation or in the budget, that there would be an extra 10 per cent paid—which the government would then take away—to the organisation. Otherwise there is no cash benefit whatsoever. There can be no cash flow benefit. The only ways you receive a cash flow benefit are if you either receive additional money or if you are allowed to keep money, which you would otherwise lose, for a longer period than otherwise pertains. Nothing in your answer has indicated that there is additional money, or a longer time, in the hands of the organisation. On the other hand, if you were saying they are going to be granted $100,000 and 10 per cent is going to be taken away, but you will delay the taking away of that 10 per cent for a couple of months, that is a cash flow benefit for the period it is not taken away—but it is not a cash benefit.The principle is understood, but the fear that lies behind these amendments and our questioning of you is that cultural organisations are going to be short-changed. Nothing in your answers to date—including the somewhat amusing summary by Senator Cook of your answers—has satisfied that. That is why we want you to draw our attention to a specific clause or a specific commitment, either in the budget or in this legislation, which satisfies that principle.10:26:004813Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We understand the principle, so we have moved forward. The final point is: if the government has a commitment to a grant of $100,000 and there is a GST applicable to that grant, the government will pay $110,000. It will claim an input tax credit so the net effect to the government is $100,000. Where it is a taxable grant, the government will pay $110,000 when the GST is applied. That is the assurance that I am giving you.10:26:004813Murray, Sen AndrewSenator MURRAY3M6WAAD00—If the government has a commitment, it will appear as a financial outlay in its statements, regardless of the fact that it is going to get it later on. If the government commits itself to paying a parliamentarian's salary of $83,000 but is going to take back a significant percentage of that in tax, it has an outlay of $83,000 even though it is going to be taking back $30,000 or $40,000 in tax. That is how it works. If you have a commitment to raise an organisation's grant by 10 per cent, it has to appear in the budget as an outlay. It does not appear in the budget as an outlay, and that is the problem with your description to us.10:27:004814Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I think we are going around in circles, but I can give you some comfort on how the budget works. I am advised that, in an accrual framework, the input tax credit comes to account at the time the grant is made, and so the amount that you are seeking does not appear in the appropriation. This is how accrual budgeting works. The input tax credit comes to account when the grant is made. I can assure you that we follow proper accounting standards and rules. The assurances I have given you are plenty. I can repeat them again: if you are entitled to a $100,000 grant, the government will pay you $110,000 if it is a taxable grant and immediately claim an input tax credit. The net cost to the government is $100,000, but the organisation gets a $10,000 benefit.10:29:004814Allison, Sen LynSenator ALLISON1M6VICAD00—We are clearly not getting very far with this question and I am sure that arts groups are not going to be comforted by the minister's words. I do not think there is any sign that their budgets will be increased by 10 per cent in order for them to be decreased by 10 per cent.However, I will just move on to the question of assurances. The minister referred to some subsequent consultations he had had with arts organisations. As the chair of the committee that dealt with this question, it was quite clear from what those arts organisations said to us that they did understand that whatever amount it was would not have to be refunded for a period of three months. So I am surprised that they have suddenly seen the light and see this as a positive instead of a negative.Minister, can you give us a little more detail about which organisations said to you that they are now happy with this arrangement? Was it the Australia Council, for instance? Did they put anything in writing? As chair of that committee, we heard their concerns and we saw them on paper, and I have not heard anything from them since to say, `We don't want you to go ahead with those amendments because now we are happy with what the government says.' I think it is imperative that you provide us with whatever you have in terms of a new approach by arts organisations to this question.10:30:004814Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—What I said was a fair summary, as we have had discussions with some arts organisations. As a result of the explanations, I think we were able to address some of their concerns. These are consultations with the Treasury. If I wish to reveal those consultations, I would prefer that we dealt with the organisation directly and got their permission so that we do not have a blazing row over what someone said.I have been advised by the Treasury in good faith that these issues have been explained. I do not say that every organisation—of course, the arts is a huge community—is falling over saying that this is fantastic. I am not suggesting that at all. But I am suggesting that, where we have had the opportunity to explain the position, we think the concerns have been addressed. If it is appropriate for me to table a list I will do that, but I think I would need to check further.To finalise the earlier point, the accrual framework reflects the reality of the net cost to government. That is how the accrual framework operates. I do not know if I can go any further on that. I think we have dealt with the general principle which, I understand from what Senator Murray said, is now accepted. We have dealt with how the government would work this in practice, and I have dealt with the example of the $100,000 grant. We have now turned to the budgetary side—how this appears in the budget—and we have addressed that particular issue. I can see some shaking of heads, so I can see that I have not entirely persuaded at least three people in the chamber, but that is the government's position. Frankly, if this amendment were passed it would deny a cash flow benefit to organisations that you are trying to assist.10:32:004815Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Minister, first of all, I have listened carefully to the wording you used in relation to how happy the organisations were. I noticed that you carefully chose your words when you said that `some' of the organisations have had `some' of their issues addressed, and then earlier you said they were much happier. It occurred to me, having listened to the hearings, that the word `devastated' could be a description of the feeling a number of the groups were expressing. Much happier than devastated still leaves you pretty unhappy, I would think. It is interesting, Minister, that you never have any problem spraying it all over the chamber when you have something in writing, so I assume that you do not actually have anything in writing to indicate how very happy the organisations are.One of the reasons I can see behind the Democrats' amendment is to not require this ridiculous ping-pong game. The enormous compliance costs associated with the government paying someone's tax that they are going to ask for back is a ridiculous nonsense just so you can keep some kind of ideological purity to your scheme. The issue remains—and I think the issue behind the Democrats' amendment still remains—with the nonsense compliance costs which have not been addressed.Can the minister guarantee, with all of this and how very happy the organisations are, what specific resources—and do not come to us with the $500 million, because we know how little that is going to do—are going to be available to these arts organisations to deal with the time, effort and compliance costs associated with this ridiculous tax ping-pong?10:34:004815Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We have had a long discussion on compliance issues and the net cost per registrant. I do not plan to revisit that.Senator Margetts interjecting—WW4Kemp, Sen RodSenator KEMP—We mentioned the net cost per registrant. The RIS, which is attached to the bill, looks at the registration issues, and I cannot add anything further on that particular matter.10:36:004815Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, I am going to finish off my remarks on Democrats' amendment No. 1 simply by saying to you that I have been dealing with accrual accounting systems for 30 years. If there is a physical transfer of money from the government to an organisation, it would have to be at the gross level and not the net level to achieve the effect that you outline. You keep referring in your accrual remarks to the net consequence, not to the gross consequence.Anyway, I want to move on from there. You have taken a broad process of opposition which I think focuses on amendment No. 1, but I want to ask you why you would oppose amendment 7. Amendment 7 simply provides a definition for cultural organisations. It says:cultural organisation has the meaning given by section 30-300 of the *ITAA 1997.We know that there is certainty in the taxable community at present which arises from convention, custom, case law, definitions and rulings. What the cultural organisations are seeking is certainty within this legislation as to their definition—the way in which they are viewed by the tax commissioner.To summarise, we think this gives them that certainty and understanding within an existing framework, one which they are familiar with and are comfortable with. I would like to understand why the government would oppose the definition we have proposed in amendment 7.10:37:004815Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We do not need to extend it. The activities of cultural organisations are already an enterprise for the purposes of the GST. It is well known in governments what a cultural organisation is. It is defined in rulings and other things, so we do not see any need for this amendment. We do not think it adds to certainty, and so we would be opposing it, Senator.10:38:004815Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, are you saying it is inaccurate or that it is accurate and unnecessary?10:38:004815Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We think it is redundant. We have defined it broadly and we do not see that this is necessary. It is redundant and on those grounds, therefore, we would not be supporting it.10:38:004816Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, perhaps it has slipped my attention. Could you indicate to me where you have defined it broadly?10:38:004816Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—At 9-20 we define enterprises. Because a cultural organisation will fit under that particular clause, because it is a creditable enterprise, it is covered in that particular clause 9-20.10:39:004816Murray, Sen AndrewSenator MURRAY3M6WAAD00—On the same line of questioning, I read 9-20 but I cannot find `cultural organisation' spelt out there. Perhaps you would indicate where particularly in those clauses 1A-G or 2A-D their needs would be covered as comprehensively as they are covered in the ITAA at present.10:40:004816Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—They will either be covered in A as a form of a business or in E under charitable institution. So it is covered in either of those two clauses, depending of course on the type of organisation.10:40:004816Murray, Sen AndrewSenator MURRAY3M6WAAD00—Are you then saying, Minister, that a charitable organisation is the same as a cultural organisation, or can be the same, or is always the same, or is sometimes the same?10:40:004816Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It could also fit into D, I am subsequently advised, as well. We think that a charitable or cultural organisation would fit into any of those three. That is the advice that we have from the Australian Taxation Office.10:41:004816Murray, Sen AndrewSenator MURRAY3M6WAAD00—Perhaps through the chair or through you, Minister, your advisers could explain why the ITAA chooses to differentiate between cultural and charitable organisations in a very deliberate fashion.10:41:004816Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I am now referring—and perhaps this can give you some further comfort—to 30-100 of the tax act, where there is a table which sets out the general categories of cultural recipients and a list which covers the matters that you are concerned with.10:42:004816Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to go back to a previous element of my original concerns in relation to the Democrats' amendment. Can I ask whether a sponsoring organisation, if they received acknowledgment but not necessarily advertising in lieu of their sponsorship, would still be able to qualify for tax deductibility?10:42:004816Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There is no change in the legislation to income tax deductibility. If you are an income tax deductible organisation, you remain an income tax deductible organisation. This legislation does not change that.10:42:004816Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I am talking about private sponsors, not tax deductible entities. I want to check whether a private business sponsoring a cultural organisation would be able to access tax deductibility if it could not show that there was a specific service—and this relates back to what Senator Ellison was saying; it was the intention of the Democrats' amendment—and whether it would be able to prove sufficiently to the Australian Taxation Office that that sponsorship was a business expense if there was not some sort of service that came back. If they simply got acknowledgment for their donation, would that be sufficient to enable them to access tax deductibility, or would there have to be some other service, such as advertising or other specific service, provided?10:43:004816Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—That is an income tax act test. This does not alter it. If an activity is tax deductible now, it will be tax deductible whether this goes through or not. This does not change that aspect. We are talking about income tax law here.10:44:004816Allison, Sen LynSenator ALLISON1M6VICAD00—On that question of sponsorship, I wonder if the minister can respond to the criticisms that arts organisations had of the fact that $65 million comes to arts organisations—probably higher than that; that was in 1993-94—in the form of sponsorship. Almost 60 per cent of that was from corporate sponsorship and, of that, 32 per cent was provided by finance and insurance businesses. Those are the companies under this legislation which would not be able to claim input credits. Our amendment would change that. I wonder if the minister can advise what they see to be a way in which those companies, those finance organisations, would not reduce their sponsorship contributions by that amount and why they think that the arts organisations can simply absorb the loss of 10 per cent on what is many millions of dollars currently flowing through to the arts community. Why not adjust that so that there is no GST paid by finance organisations and you do not get any decline in the sponsorship support of those groups to the arts?10:45:004817Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—If organisations of the nature you have mentioned have to choose between sponsorship of a variety of organisations, we do not see that this biases that decision. The system is established. With some bodies—the financial ones you have mentioned—particular rules apply, but as far as their sponsorships are concerned, presumably if they make sponsorships now they will continue to want to make sponsorships in the future. This does not provide any bias against the arts or sport or any other organisation. They will obviously choose their priorities as to how they wish to sponsor organisations but we do not see that this will bias their decision.10:46:004817Allison, Sen LynSenator ALLISON1M6VICAD00—Perhaps the minister can explain why he thinks that is the case. We are talking here about somewhere between $15 million and $20 million. It is not a small amount. If those organisations are not able to claim any credit, why would they simply increase their sponsorship amounts by 10 per cent? What is the incentive for them to do that?10:47:004817Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I think it is probably worth just putting on the record that if you are an input tax body you do not get credits. I think that is well understood. The point I am making is that this does not bias their deci sion between sponsorship or other forms of advertising. These organisations will wish to advertise. No-one claims that they will stop advertising. They advertise because they clearly see they get a benefit out of advertising, out of sponsorships. Therefore, the point I am making is that what we have in this case does not bias their decision against one of the issues you are running—cultural organisations. If they wish to sponsor sporting organisations or environmental organisations, then they will not get an input tax credit for that.10:48:004817Allison, Sen LynSenator ALLISON1M6VICAD00—Our amendment on sponsorship recognises that to remove a GST altogether from sponsorship might open the way for abuse of such a situation. For this reason we made it clear that payment in kind for services such as free tickets, hospitality and commercial advertising would continue to attract a GST. I would argue that this is a very reasonable position, because I do not think the minister has been able to satisfy us about the overall problem for organisations that have sponsors that it is not going to be that a GST will be paid by those organisations on that contribution. A bit like what the government is telling us about its grants to arts organisations, there is no certainty that they will be increased by that 10 per cent in order to cover them, so that the arts organisations at the end of the day will get 10 per cent less. This is the problem we face here. As I said, our amendment is a very reasonable one in terms of what would still be caught up, so abuse of the system would be dealt with. Arts organisations are very concerned about this. Perhaps the minister can tell the Senate what his more recent discussions with arts bodies resulted in in terms of whether or not, once they had it explained to them, they saw this as a benefit just like the question of government grants.10:50:004817Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The earlier discussion related to government grants. I think the Howard government grants worked. Once we explained that—at least from the experience of my Treasury officials—organisations had less concern about that. I do not argue that there is not a vigorous debate on the sponsorship issue. We do not happen to agree with the position that is being put. I think the earlier debate related to how government grants worked. I think there was an agreement that we understood the principle. Then we looked through the security and the accounting. That was the issue I was raising in relation to arts organisations. I think there is still concern on the sponsorship issue—I do not deny that—but what I am saying is that we do not agree with the position that is being put. We think that where bodies wish to provide sponsorship, where they wish to seek to advertise their name, they will continue to wish to do that. In making that business decision, there is no bias against cultural bodies. After this legislation goes through, they will continue to have their own priorities and this will not bias their decision between sponsorship or advertising of particular bodies.10:52:004818Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, the Democrats, frankly, are confused by the government. Here is a government which, through the Prime Minister, has initiated a proposal that has received considerable business support. Of course, they are almost sycophantic with this government but in this case it is an initiative worthy of support—that is, the Prime Minister's initiative, coupled with proposed tax concessions, to encourage charitable donations and community involvement by companies. Sponsorships to arts organisations and cultural organisations are exactly in that broad field and yet the government seeks to introduce a much harsher regime than is typical of other civilised Western democracies such as Canada which treat their sponsorship regime better than you intend to. I think there is a conflict in the way in which you are approaching this matter.The Democrats proposal in item 10 draws on the evidence given to the committee. I am referring to the report of the Senate Environment, Communications, Information Technology and the Arts References Committee in March 1999. The Australia Council, for instance, told the committee that 11 per cent of Australian companies give $65 million to the arts. Other witnesses suggested that sponsorship volumes could fall by the propor tion of GST levies on them. The committee concluded by saying that there were real grounds for concern about the impact of the new tax system on corporate sponsorship. It is corporate donations to charitable institutions which the government is seeking to promote. Why on earth would you seek to limit it for cultural organisations?The effect of the Democrats' amendment, whilst it would have some revenue consequences for the government, is far more in line with the Prime Minister's initiative and his approach to the charitable side than your response to this amendment. It seems out of key to us. I predict that your government will be obliged to return to this because you will discover the unfortunate consequences of the policy that you are proposing. I am exceptionally disappointed that you can see no value whatsoever in any of those amendments.UNKNOWNThe TEMPORARY CHAIRMAN (Senator McKiernan)The TEMPORARY CHAIRMAN (Senator McKiernan)—The question is that amendments 1, 7, 8 and 10 on sheet 1361, moved by the Democrats, be agreed to.10:59:00The committee divided. (The Chairman—Senator S. M. West)9Allison, L. Bartlett, A. J. J.Bourne, V. *Brown, B.Lees, M. H. Margetts, D.Murray, A. Stott Despoja, N.Woodley, J.50Abetz, E. Bishop, T. M.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, G.Carr, K. Chapman, H. G. P.Collins, J. M. A. Conroy, S.Cook, P. F. S. Coonan, H.Cooney, B. Crane, W.Crossin, P. M. Crowley, R. A.Denman, K. J. Evans, C. V.Ferguson, A. B. Ferris, J.Forshaw, M. G. Gibbs, B.Gibson, B. F. Hogg, J.Hutchins, S. Kemp, R.Lightfoot, P. R. Lundy, K.Macdonald, S. MacGibbon, D. J.Mackay, S. McGauran, J. J. J.McKiernan, J. P. Murphy, S. M.O'Brien, K. W. K. *O'Chee, W. G.Parer, W. R. Patterson, K. C. L.Payne, M. A.Quirke, J. A.Ray, R. F. Reid, M. E.Schacht, C. C. Sherry, N.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Watson, J. O. W. West, S. M.Question so resolved in the negative.11:03:004819Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move government amendments Nos 4, 6, 56 and 74:(4) Clause 11-15, page 22 (after line 19), at the end of the clause, add: (3) To the extent that an acquisition relates to making *financial supplies through an *enterprise, or a part of an enterprise, that you *carry on outside Australia, the acquisition is not, for the purposes of paragraph (2)(a), treated as one that relates to making supplies that would be *input taxed.[creditable purpose](6) Clause 15-10, page 28 (after line 21), at the end of the clause, add:(3) To the extent that an importation relates to making *financial supplies through an *enterprise, or a part of an enterprise, that you *carry on outside Australia, the importation is not, for the purposes of paragraph (2)(a), treated as one that relates to making supplies that would be *input taxed.[creditable purpose](56) Clause 60-20, page 137 (after line 16), after subclause (2), insert: (2A) To the extent that an acquisition or importation relates to making *financial supplies through an *enterprise, or a part of an enterprise, that the company will *carry on outside Australia, the acquisition or importation is not, for the purposes of paragraph (2)(a), treated as one that relates to making supplies that would be *input taxed.[creditable purpose](74) Clause 129-50, page 201 (after line 3), at the end of the clause, add:(3) To the extent that an *application relates to making *financial supplies through an *enterprise, or a part of an enterprise, that you *carry on outside Australia, the applica tion is not, for the purposes of paragraph (2)(a), treated as one that relates to making supplies that would be *input taxed.[creditable purpose]These amendments concern the export of financial supplies to a branch. Exports are GST free and input tax credits relating to exports are available even if the export is a supply that would otherwise be input taxed. These amendments seek to ensure that certain transfers made to an offshore branch give rise to an entitlement to input tax credits.Under the provisions as they currently stand, a transfer of goods or services from a branch located in Australia to an offshore branch of that entity may not be entitled to GST-free export treatment because the transfer occurs within the same entity. There is no supply that is a GST-free export. In most cases this will not matter as no GST will be payable on the transfer and the entity will be entitled to claim its input tax credits.However, if such a transfer is related to the provision of input tax to services, the entity would be disadvantaged as it would not claim a credit that would be available for a competing input tax entity for an export in a similar circumstance. This disadvantage could be overcome by separately registering the local and overseas branches of the entity. It is not appropriate to have a different treatment depending on whether or not an entity registers its branches. This request would allow input tax credits for transfers made to an offshore branch.11:05:004819Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—It appears that these amendments make financial services that are exported to a branch of the same entity overseas GST free on the basis that the supply is an export—that is, a creditable acquisition—and therefore you could gain an input credit. This is supposed to fix up the anomaly that there would be different treatment of input tax supplies depending on whether the entity separately registers their branches.I would like to ask the minister—and I am sure other people have separate questions as well—whether or not this leaves open the potential for double dipping, remembering that entities receive an advantage already by registering as single entities. That is, all supplies between branches are outside the GST regime as they are transfers within an entity; consequently there can be significant compliance cost savings. It seems that large multinational financial firms are wanting to double-dip here. They want to be able to register and operate as single entities in order to cut down on compliance costs. But, if they win on compliance, as the situation currently stands they will lose the ability to claim input credits on the export of financial supplies to overseas branches.Would it also potentially create a windfall? It seems clear that financial institutions will receive a windfall if they are able to claim input credits on interbranch transfers where they otherwise would not be able to. And what is the impact on cash flow? Financial institutions may receive significant cash flow advantages from this amendment. The Australian branch would be able to claim input credits as soon as the supply was made. I would like to get some answers to some of these questions and hear some of the responses. Maybe they will link in with what I have been asking.11:07:004820Cook, Sen PeterSenator COOKRF4WAALP00—I have a couple of questions about the government's amendments. I preface my questions by saying these are amendments which the government is making to its own bill—there are 128 amendments to its own legislation—dealing with exports. I understand what the amendments propose to do, to the extent that they have been explained to the chamber.In looking at this general area of services exports, let us look at a service that is exported offshore. For example, legal advice formulated in Australia exported by transmission to the New York office of the same law company is an export and therefore is GST free under the government's proposal. But in this whole area where we are dealing with the export of that sort of advice, I think there are loopholes in this legislation through which you could drive the Spirit of Progress. There are loopholes in this legislation that sly lawyers and sharp accountants can take advantage of to escape the GST, while Australian battlers have to pay it.I think there are loopholes in this legislation which mean that those who are wealthy, who have got discretionary income and who can afford to retain sharp lawyers and smart accountants can escape their obligations while wage earners who have to pay every red cent in tax for what they get in their wages—and will now, if a GST comes in, have to pay it at the counter when they buy goods or services—cannot escape it. This is an area in which, once again, this legislation favours those who are well off and penalises those who are not. It is not this loophole, particularly, that I think best demonstrates that. When we come to particular areas of the bill, I will take some time to explain where I think the government has left the door open for the big end of town and shut it in the face of Australian battlers.3M6MURRAYSenator Murray—Try supporting some of our amendments.RF4Cook, Sen PeterSenator COOK—I take that interjection. I have explained the position of the Australian Labor Party. The position is simply, again, that we do not support a GST. A GST is not fair. It penalises people. We will not support a GST which is softened and therefore the degree of penalty is slightly less, but the penalty still remains. We want to throw this legislation out. At the end of the committee stage, we hope to obtain a majority vote in this chamber so to do.3M6MURRAYSenator Murray—Then oppose the government amendments, too.RF4Cook, Sen PeterSenator COOK—What will be sitting before this chamber at the end of the committee stage is the bill that the government wants. The bill which this chamber will have to decide on is what the government wants, in all of its unfairness, resplendent in all of its differential treatment. But that is a matter for the debate as it progresses.With regard to the matter that is before the chair at the moment, there is something that I do not understand. Maybe the minister can explain it; let me add it to the question asked by Senator Margetts, because she asked a question similar to something that concerns me as well. If you are, say, an Australian bank, and you have an office, say, in New York, and you want some particular advice for your Australian operations and you have your New York office request that, and your Australian office sends the advice to New York, it is GST free under this amendment. The advice still is in the system and could be used in Australia, but the service, which is being taxed for the first time, is GST free. How do you counter confected arrangements where overseas subsidiaries of Australian operations seek advice, which they actually do want in Australia, for some sham reason for their overseas operations, escape the GST by deeming it to be an export but use that advice in Australia? That is the question I have for the minister.11:12:004821Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There were a number of questions from Senator Margetts and Senator Cook. Senator Margetts, you cannot take advantage of both the grouping provisions and the branching provisions. The advice I have received is that the two forms of registration are mutually exclusive—that is, there is no double dipping or no possibility of a windfall in that sense. The amendment simply provides equity for financial suppliers who are not separately registered for overseas branches. I think you made that point, but your concerns related to double dipping and windfalls.Senator Cook raised an issue. Division 84 of the bill deals precisely with the issue which he raised. It taxes on reimportation. Senator Cook was worried that this might be a loophole. We believe that division 84 of the bill covers the precise concerns that Senator Cook raised.11:13:004821Murray, Sen AndrewSenator MURRAY3M6WAAD00—As I understand it, these four amendments expand the ability to deal with exports. Division 11 deals with an entitlement to input tax credits. An entitlement arises essentially where an entity makes a creditable acquisition. The basis of a creditable acquisition is the acquisition of anything solely or partly for a creditable purpose. Something is acquired for a creditable purpose if it is acquired in carrying on your enterprise, as in clause 11-15 on page 22 of the bill. The acquisition is not for a creditable purpose if it relates to making supplies that are input taxed or if the acquisition is of a private or domestic nature.Amendment No. 4 amends clause 11-15 to make it clear that acquisitions in relation to the making of financial supplies through an enterprise that a person carries on outside Australia are not treated as relating to the making of supplies that are input taxed. The explanatory memorandum provides that the reason for the amendment is that, if an entity that operates its branches acquires something through a branch in Australia and transfers it to a branch outside Australia, that transfer is akin to an export. Exports are GST free and these types of acquisitions should also be GST free, even if they would otherwise be input taxed.The bill does not currently treat such transfers to overseas branches as exports because it is a supply entirely within an entity. This amendment will mean that these acquisitions are for a creditable purpose so that, even if the transaction occurs entirely within one entity, the entity will be entitled to an input tax credit for the acquisition. Your amendment No. 6 makes the same amendment in relation to creditable importations and for the same reason. Your amendment No. 56 makes the same amendment in relation to creditable acquisitions that are pre-establishment acquisitions and creditable importations that are pre-establishment importations which occur before a company comes into existence. Amendment No. 74 makes the same amendment in relation to adjustments for acquisitions and importations.I am interested in a number of things here. It is always useful to know who has asked for these changes in legislation. We gather, from the reference to financial suppliers and branches, that it would be banks. That would be appropriate, but we wish to know whether it would benefit any other kinds of financial institutions at large or if there would be any limitations to only one kind of financial institution. My assumption is that it is global: in other words, anyone who falls within the definition of a financial services provider would benefit.The second question I have relates to a principle. It seems to me that in approaching this in this manner you are opening the door to our own later amendment to make inbound tourism GST free. What you are saying is that an effective export should be treated as such. That is what you have done here. You have said that, when you move funds from one branch to a branch outside Australia, it is an effective export and it should be treated as such. We would agree with that principle, but why would you make a distinction between the effective exports which are attached to inbound tourism packages?The third question I have to ask is: in what instances would pre-establishment acquisitions or importations occur for financial institutions rather than other industries as a whole? I can clearly see it might happen with, say, a mining venture or something of that sort. But I would find it difficult to envisage a financial supplies provider not being incorporated first, because you have licensing and capital adequacy provisions and all sorts of other rules and regulations to follow before you can get registered.11:19:004822Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—In relation to who raised the issue, the International Banking and Securities Association did through the consultation process for applying the GST to financial services. Your second question was: is it global? Yes—anyone who falls within that definition of supplies too. With regard to inbound tourism, I guess we are going to have that debate a bit later on. I appreciate your flagging it and will look forward to that debate. One is onshore and one is offshore, so I think we can have a good debate on that. I am not sure that it establishes the principle you are seeking here. In relation to the last question you raised, there is no special treatment here for pre-establishment costs. The bill generally allows credits for pre-establishment costs.11:20:004822Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I am sure Senator Murray has some follow-up questions, but I will ask for further clarification of the responses the minister gave to me in the meantime. In relation to my questions on double dipping, I am not sure that your response actually dealt with what we asked. We know that it is possible for organisations to register as one entity, but what we are suggesting is that organisations can reduce their compliance cost by registering as one entity but can also claim input credits at the same time. Is that not the case? We were not talking about the grouping provisions; we were talking about the ability to gain benefit in more than one way as a result of this amendment.11:20:004822Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—This gives genuine exports credit. We do not want to bias the entity structure. I discussed with you the grouping provisions and the branching provisions, and there are two sorts of registrations that are mutually exclusive. We do not see that this is a problem. You have put the question to us but it is not one that we feel will lead to what you are concerned about in the area of double dipping or whatever.11:21:004822Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I recall being on the inquiry to look at Australia's service exports. One of the things that came through clearest of anything was that we actually have very little idea about the range, extent and even revenue flow involved in Australia's service exports. It is one of those difficult things. We also know that within and between companies it is almost impossible. I know from the Greens (WA) point of view and from some of the responses from the Australian Democrats that the situation of transfer pricing—the slippery situation of transfer pricing—shows how easy it is for companies to be able to reduce their costs, their taxation requirements and so on in and between entities, especially when you have something that is not solid like a solid export. So you have not actually addressed our problem. We know you have not done much modelling on this, but have you any idea of the costing on what the potential is for loss of revenue as a result of this amendment?11:22:004822Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—This was the government's intention. Clearly the bill, on consultation, did not meet what was the government's intention. We have clarified the bill so that there is no cost to the forward estimates as a result of this. On transfer pricing, I think that is a different issue. It is an issue that the tax office is very much aware of. There has been a great deal of work done in recent years on this issue. There are a whole range of compliance requirements for countries. Transfer pricing is a serious issue but it is one that the tax office is particularly aware of and is addressing.11:23:004823Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, in relation to my question, I understood your short answers but I thought they were inadequate. I return to two of my questions. Firstly, in what respect does this principle of acknowledging an anomaly in the act and moving to allow the provision of services to be export classified, whereas formerly they were not, differ from inbound tourism? In both cases you have a good which is used in Australia but has an interaction with a foreign branch or a foreign sales office. The second area in which I thought your response was very short was on the pre-establishment importations and acquisitions area. Perhaps you could expand a little on that reply for me to satisfy me as to that.I want to move on to a further area. It is fashionable, and rightly so, for there to be a great deal of government, parliamentary, business and community interest in the area of electronic commerce. The banks and financial institutions have been up to their necks in electronic commerce for decades. They are the pre-eminent users of electronic commerce by virtue of the nature of the transactions they conduct. It really relates to the revenue question of Senator Margetts. Are these amendments in a sense motivated by an inevitable difficulty in seeking to tax in any way the electronic commerce transactions that arise at an instantaneous rate between financial institutions, both offshore and onshore? Are you merely accepting reality by introducing this, or is this in fact a motivational device which will have the effect of enhancing, improving and increasing Australia's ability to be a financial services centre? The heart of my question is: is this reactive, just accepting the facts of the world and the difficulties of dealing with electronic commerce, or is this proactive, designed to improve and increase the export potential of the industries affected?11:26:004823Cook, Sen PeterSenator COOKRF4WAALP00—While you are taking that question, Minister, I thought I would explore one step further the question I asked you earlier. You referred me to section 84 of the bill. I have looked at that section again and I have looked at the explanatory memorandum dealing with the section. On the basis of seeing your point of view on that, though, can I go back to my example. You have an American company in Australia that wishes to buy an Australian company and would normally go to an Australian lawyer to seek legal advice on how best to do that. To avoid the GST, it requests the advice of the subsidiary of the Australian law firm in New York from its New York office. So the Australian law firm in Australia provides the advice to its New York office and thus it does not pay a GST. The New York office provides to the American parent in New York that advice, the New York parent company supplies to its American subsidiary in Australia that advice, and they therefore act on it. Looking at this section, essentially you say that they will get caught. My question is: how?To take another example, an Australian bank is asked by its New York subsidiary for some advice. It provides that. That is a service and that is taxable, but it goes overseas and it is deemed an export, so it is not taxable. It provides the advice to the New York subsidiary of the Australian bank and that bank turns the advice around and sends it back to Australia to one of the Australian clients of that bank. Under this section, that ought to then attract GST, and that is what the section of the bill says. But the same question arises: how? How will the tax office know that this has occurred to be able to identify the transaction and tax it? How will the tax office have that degree of penetration of these types of arrangements which can, as Senator Murray indicated, go over the Internet in the flash of an eye and occur at a million miles an hour every day, every second of every day? What capacity does the Australian Taxation Office have to detect that and prevent it from being a way in which the big end of town can avoid paying tax once again?11:29:004824Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There are a number of questions there and I will deal with them. I am always happy to expand, but I am exceedingly conscious that we have been in this debate now for approaching 40 hours and we have a long road to travel. Whereas I do not seek to deny any information to the—HX5WOODLEYSenator Woodley—It is a very important tax package.WW4Kemp, Sen RodSenator KEMP—It is a very important tax package and we will certainly beat the world record as far as the Federation is concerned for the length of time it is debated, but it is on all of us to see how we can deal with this in as expeditious a manner as possible.On the tourism issue, I think we should deal with that when your tourism amendment comes up. We will have a long debate on tourism and we should deal with that issue when that occurs.3M6MURRAYSenator Murray—What is the principle?WW4Kemp, Sen RodSenator KEMP—One is onshore and one is offshore. To me there is a clear difference. All I am saying is: let us deal with that when we come to it. We can run this debate then. It makes sense to do it in that context.Your second question was on pre-establishment costs. Pre-establishment costs rules in division 60 allow a person to claim input tax credits for purchases they make in starting a business. This rule is needed because these purchases are often made before, for example, a company is incorporated. The amendments allow the same treatment for financial suppliers. They are making financial suppliers consistent with the rest of the bill. There is not a special deal for financial suppliers.You raised an interesting issue on the difficulties of dealing with electronic commerce. A great deal of work is being done—as you would be aware as you have an interest in this—in the OECD and in other areas looking at the whole issue of electronic commerce. The motivation for this was to actually give effect to the intention of the bill and to improve the drafting arrangements. Of course, exports are treated favourably under the bill and that is what we seek to achieve.In relation to Senator Cook's issue, and it is an interesting question, the advice I have is that 84-15(c) covers the situation that you raise. The advice to be given to Australia is a taxable transfer. You asked: how? Normal audit procedures. Companies are subject to normal audit procedures. I understand that it is not dissimilar—without pushing the analogy too far—to dealing with transfer pricing within the same companies. What is required there are the audit procedures and steps that the Australian Taxation Office takes. We believe we have covered the situation that you have raised.11:33:004824Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, your answers have not satisfied me. Perhaps I have not made myself clear enough. I really wish to know whether this is one of three possibilities: are you merely correcting an anomaly and according with the principle of making exports GST free; were you reacting to a situation where it may be impossible for you to deal with these kinds of transactions any other way simply because you cannot police electronic commerce transactions in the financial supplies area; or were you encouraging a proactive regime of the kind that was announced by the Treasurer last night where the government is seeking to promote the financial services sector, and this measure would contribute to that?My other question related to the pre-establishment acquisitions and pre-establishment importations. I do not know if it is appropriate for the finance industry. Both the previous government and this government have adopted—properly, I think—a regime of very tight and very close regulation of financial institutions because of the important part they play in the Australian economy. It is only when they are incorporated that they can be appropriately regulated by APRA and that they have the appropriate licences, appropriate capital adequacy provisions and all the other protections which are essential in the proper management of prudential regulation. That is why I asked whether the pre-establishment acquisitions and pre-establishment importations put the community at any risk if they apply to financial institutions. I cannot envisage a situation where a financial institution would get into that situation. I would imagine that they would have to be incorporated first. I just do not know whether this opens up any regulatory loopholes, if you like. It was not an idle question; it went to the probity of your regulatory system, which could be breached through this.11:35:004825Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We do not see that this leads to a loophole in the regulatory arrangements. It applies to anyone who makes a taxable supply and that may well apply to a corporate company rather than a bank. All we are trying to do here is provide amendments to allow for the same treatment of financial supplies. We are simply trying to make the bill consistent. We are bringing it into line with other treatment in the bill. We do not see that there is a regulatory issue involved here. We have a great deal of measures, as you say, to make sure financial institutions are appropriately prudentially supervised.I thought I answered your question. You gave me a number of options. The answer is that we are trying to correct an anomaly in the bill in relation to a service which is clearly an export service. I think that was the second of your three options.11:37:004825Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Senator Kemp, I do take your point that the inbound tourism issue is for a later debate. I did have a series of questions on that which I will defer to a later time. There is just one, and if you could perhaps address this that would reassure me and I need not go on with the questions I was going to ask.In terms of inbound tourism, I do hope that you can give us the assurance that you will examine the principle which is being established now. I must say that your answer that the difference is between onshore and offshore transactions does not really take me anywhere. The principle being established for the relief of financial institutions through this amendment seems to me to be a principle that, as Senator Murray has said, flows on exactly to inbound tourism. If you can give me an assurance that you will go back and examine that principle in relation to inbound tourism, we can have the debate later.The problem I have with your reference to onshore and offshore transactions is that, as Senator Cook said before, many of the transactions take place in cyberspace. I am not sure whether that is onshore or offshore. It is almost like saying, `Where is it?' That reminds me of another debate that I have been involved in for many years about where is heaven and where is hell, but that is a debate for another place. It is perhaps a theological rather than an economic debate.If these transactions are taking place in cyberspace, I am not sure whether they are onshore or offshore. Although I am prepared to leave the inbound tourism issue for the later debate, you can see why I would like an assurance that you will re-examine the principle being established. In my mind, it really does apply.11:39:004825Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I will give you the assurance that it is clear that we are going to have a debate on inbound tourism. I will be responding at that time. It was a nice way to tempt me, Senator. I am not tempted. I think we should deal with that at the appropriate time.11:40:004825Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—There are all sorts of reflections of hell, and sometimes this place seems to be one. I have some issues on which I would like clarification from the government. It has not clarified them with any satisfaction at all, so the Greens (WA) will not be supporting these amendments.Amendments agreed to.11:41:004825Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—by leave—I move:(9) Clause 21-1, page 40 (lines 3 to 10), omit the clause, substitute:21-1 What this Division is aboutIf debts are written off as bad or are outstanding after 12 months, adjustments (for the purpose of working out net amounts) are made. They can arise both for amounts written off or outstanding and for recovery of amounts previously written off or outstanding.Note: This Division does not apply to supplies and acquisitions that you account for on a cash basis (except in the limited circumstances referred to in Division 159).[bad debts](10) Clause 21-5, page 40 (line 16), at the end of paragraph (1)(c), add ", or the whole or a part of the debt has been due for 12 months or more".[bad debts](11) Clause 21-5, page 40 (line 18), at the end of subclause (1), add ", or 1/11 of the amount that has been due for 12 months or more, as the case requires".[bad debts](12) Clause 21-5, page 40 (lines 21 and 22), omit subclause (3).[bad debts](13) Clause 21-10, page 41 (lines 2 and 3), omit "written off as bad".[bad debts](14) Clause 21-10, page 41 (line 4), at the end of paragraph (b), add ", or the whole or a part of the amount that has been due for 12 months or more, as the case requires".[bad debts](15) Clause 21-15, page 41 (line 13), at the end of paragraph (1)(c), add ", or the whole or a part of the debt has been due for 12 months or more".[bad debts](16) Clause 21-15, page 41 (line 15), at the end of subclause (1), add ", or 1/11 of the amount that has been due for 12 months or more, as the case requires".[bad debts](17) Clause 21-20, page 41 (line 23), omit "written off as bad".[bad debts](18) Clause 21-20, page 41 (line 25), at the end of paragraph (b), add ", or the whole or a part of the amount that has been due for 12 months or more, as the case requires".[bad debts]These amendments deal with bad debts. Before an adjustment to reduce the GST payable can be claimed for a bad debt, the bill currently requires that businesses notify the purchaser that the debt has been written off. The government is persuaded that this will not be possible in many cases. These amendments therefore propose that there be an amendment to remove the requirement to notify the debtor and, further, to allow an automatic decreasing adjustment after 12 months or such earlier time as the debt is written off.It is important to note that the approach taken in these proposals reflects the need imposed by the constitution for symmetry of treatment between the decreasing adjustment for the vendor and the increasing adjustment for the purchaser. This will ensure that the measure does not have the effect of inadvertently imposing a tax.11:42:004826Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The Greens (WA) do not have any particular problems with this amendment, but it removes the requirement to notify a recipient of supply that you have written off their bad debt because it is undesirable from a commercial point of view. Rather, these amendments provide for a decreasing adjustment where the whole or part of the debt has been due for 12 months or more, if you have not already written off the debt. As I said, it seems to be a reasonable amendment with enough flexibility to account for the situation of bad debts. The issue of commercial reality seems to be a real practical concern.However, the question that springs to mind—and it was brought up in the whole process of the various committees—is why some groups have access on what they consider to be reasonable problems but others do not. We have just gone through this debate concerning cultural and other organisations, environment groups and so on. Why is it that real problems are recognised by the government if they happen to be specific financial institutions or elements of industry but those of other groups are not? Why do those groups get a guernsey but others do not?11:43:004826Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I have made it clear on a number of occasions that the legislation has been on the table for a considerable period of time. There has been widespread consultation. In the end, the government makes a judgment on the submissions which are made to it. Clearly, in some cases, we accept the views which are put to us; in other cases, we do not. It is not correct to say that we ignore other organisations. There are amendments that I have put down that assist charities with things like raffles and bingo, which were important issues that were raised. It is a judgment that, appropriately, the government makes. After all, it is the government's legislation. The government has listened to people and, as a result, has proposed a range of amendments.11:44:004827Murray, Sen AndrewSenator MURRAY3M6WAAD00—This set of amendments says that when bad debts are written off there is decreasing adjustment, that is, the GST is reduced by one-eleventh of the amount written off—clause 21-5. Correspondingly, if the amount written off is subsequently recovered, the GST owed is increased by one-eleventh of the amount recovered—clause 21-10. Items 9, 10, 11 and 13 to 18 amend the summary of the division—clause 21-5 to 21-20—to reflect that, in addition to these adjustments being made when amounts are written off, they are also to be made where the debt is outstanding for 12 months. Item 12 amends clause 21-5 to omit the requirement to notify the debtor when his or her debt is written off.Your amendments are clearly understood. The question I have relates to the issue of recovering amounts. As I understand it, how amounts are to be recovered is not spelt out in this legislation; it is spelt out in normal tax legislation. It is the Commissioner of Taxation who can authorise an officer—and `an officer' is defined in the tax act—to recover those amounts. Is that so, or is the tax commissioner able to subcontract the recovery of bad debts to debt recovery companies and that sort of thing?11:46:004827Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—This is essentially an adjustment to your net amount. I do not think we establish any new principle here. These principles are well established. Debt recovery arrangements are also well known. So I assure you, we are not striking out into dangerous new territory here, apart from the obvious thing—that we are dealing with a broad based consumption tax.11:47:004827Murray, Sen AndrewSenator MURRAY3M6WAAD00—The problem I have is that this issue was raised this morning at the Senate Standing Committee for the Scrutiny of Bills. I would be reluctant to let the opportunity pass because there is an issue of real concern here. What was raised at that committee this morning, which will come out in their report later, had been raised in previous reports. It relates to the issues under section 66 of this bill which concern the fact that the authorised officer, for purposes of debt collection and for other purposes, means `A person the commissioner has authorised to exercise powers or perform functions.'I would be very glad if Senator Coonan, who was present at this discussion, participates in this debate. `Person' is defined on page 268, section 195(1) where it says that `person' includes a company. This is why I am taking the opportunity raised by your amendments to this section to ask whether there is any danger of the tax commissioner, either now or in the future, subcontracting or contracting out the recovery of amounts previously written off, or bad debts, to a debt collecting company which in turn could use an agent to act on those issues? It would be of concern if the authorised officer was not a person appropriately trained and judged by the commissioner to have the qualifications and abilities to conduct this exercise. It may be, once the Scrutiny of Bills report is tabled later today, that your department or your ministry may choose to examine those issues and come back to them. I was afraid we may go past this section and then have difficulty coming back with an appropriate amendment.11:50:004827Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—This does not have anything to do with collection or contracting out. We are looking at how adjustments are made. I have not seen the matter that you have raised. The way it has been explained to me, it seems that it is not clear that this deals precisely with what this amendment is seeking to do. It seems to be a wider, contracting out issue—we would all have views on contracting out. Bad debts are recovered by business in the normal way. The tax office does not collect debts that are owed to businesses. The authorised officer issue you raise does not relate to this particular amendment.Senator, as you have raised the scrutiny of bills issue in this chamber, I will bring it to the attention of my officers, but it does not seem, at least in the way it has been explained to me, that this deals with the issue which is before us now.11:51:004828Murray, Sen AndrewSenator MURRAY3M6WAAD00—Minister, you are quite correct: I have opportunistically jumped in.WW4KEMPSenator Kemp—You weren't wasting time, were you?3M6Murray, Sen AndrewSenator MURRAY—No. I have opportunistically jumped on a section which does not deal with the precise issue I raised. You are quite correct: this is an adjustment mechanism that we are dealing with. My purpose in doing so, since we are right in the middle of the debate and the report will only come down later, was to find an opportunity to alert you and your advisers to a problem which we think is easily fixed. Senator Coonan—who is sitting behind you—certainly understands it very well. I would appreciate it if you took the concerns of the Senate Standing Committee for the Scrutiny of Bills to heart and perhaps responded as rapidly as possibly, preferably with amendments. That is all I have to say on that issue at present.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—The question is that amendments 9 to 18 be agreed to.Question resolved in the affirmative.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—We will now move to opposition amendment No. 1 on sheet 1327.11:52:004828Cook, Sen PeterSenator COOKRF4WAALP00—I move opposition amendment No. 1:(1) Page 50 (after line 21), after Part 2-5, insert:Part 2-5A—Consumer informationDivision 26—Obligation to provide consumer information26-1 Information to be provided on receipts When a *business provides a consumer with a receipt or docket in respect of a *taxable supply, the receipt or docket must separately identify: (a) the price of the goods or service, excluding the GST component; and (b) the amount of the GST component; and (c) the total price of the goods or service, including the GST component.[GST transparency]I have said in this debate that essentially we will allow the government to modify its bills in order that the community of Australia can clearly see exactly what the government wants this GST to do. We will in effect not be moving any amendments to the bills, and we will not support other amendments to the bills; therefore we expect this chamber to defeat the legislation at the end of the committee stage.We have moved this amendment not on the basis that if the chamber accepts it we would find the bill therefore acceptable and would vote for it at the end of the committee stage, but rather to point out the absolute hypocrisy of the government's position on the GST. The government has campaigned around this country, designating the wholesale sales tax as a hidden tax. The cat was let out of the bag by the Treasurer on Perth radio in June of last year, when he said that the GST will be embedded in the final price.All of us remember the propaganda sent to every home in this country by the Treasurer, Mr Costello, attacking the wholesale sales tax. What did that propaganda say? In his newsletter, Mr Costello—the Treasurer, the member for Higgins—said, `This newsletter reveals the unfair, hidden and complex tax you already pay every day of your lives' and `Who knows what taxes they are paying? Wherever you go there are hidden taxes.' That was part of the orchestrated campaign by this government, led by the Treasurer, supported by other members of the coalition, to pretend that the wholesale sales tax was somehow an evil tax.It is not possible to show, on a price tag or at the cash register, the level of the wholesale sales tax, but it is possible to show the level of the GST. This amendment proposes that the receipt given to the consumer at the cash register show how much the good or the service cost and how much tax the consumer is paying on that good or service. For the government to designate the wholesale sales tax as a hidden tax and then not move to expose the real level of the GST is, in my view and in the view of most Australians, absolute hypocrisy—and this amendment will demonstrate that.Let me turn to the fundamental questions of tax reform. We are not debating a package of tax reform measures in this chamber; we are debating a GST. That is something different. That is a regressive tax. Underlying tax reform are the principles of equity, efficiency and simplicity. They are the principles that most people agree should be the basis for constructing a taxation system. But, in modern-day debate, a fourth principle has been added: transparency. I need go no further than the submission of the Western Australian Chamber of Commerce and Industry to the inquiry of the Senate Select Committee on A New Tax System to demonstrate the point. I think it is an excellent submission, well researched and capably presented by the WACCI—one I do not agree with in its final purpose but nonetheless an excellent submission. In the second chapter they go to the question of tax reform principles, and they say this:A tax structure should have four key characteristics. (1) it should be transparent so that it is readily apparent to both taxpayers and those meeting the real costs of taxation that they are paying tax and how much they are paying.The other principles they enunciate are an equity principle, an efficiency principle and a principle that tax ought to adequately meet the needs of government expenditure.On transparency, which is dot point 2.1, they say:Because people don't like paying taxes, there is an incentive for governments to disguise from taxpayers how much they are actually paying.Later in the submission they say:It makes the tax system more transparent by shifting the tax burden from invisible taxes to visible taxes.Coming to a concluding part of this chapter, they say again:These processes can in turn only be properly informed if the first principle discussed in this section, that of transparency of the tax system so that taxpayers know how much they are actually paying, is achieved.In the hearing in Western Australia, the chamber appeared before the select committee and capably argued its brief. Ms Nicola Cusworth, the economist of the chamber—and, I think, an impressive person in her own right—was asked this question by Senator Conroy:You have argued very strongly about transparency and the need for transparency. Do you believe the GST rates should be displayed on retail dockets?Ms Cusworth replied, `Yes'. There is no qualification. She simply said, `yes'. The Western Australian Chamber of Commerce and Industry is part of the Business Coalition for Tax Reform, and they hold that view. I expect therefore that there will be a willingness by every coalition senator from Western Australia to support the views of their own state organisation in the commercial and business area on this matter. I think the question of transparency is properly answered on the principles, at least in that submission from the WACCI.But let me go to another matter. In a question to the Treasurer in the House of Representatives last year, Mr Crean asked Mr Costello:What is the GST component of a grocery bill of $138.70?A simple enough question. The Treasurer declined to answer. The Treasurer, on his feet in a situation like that, could not divide $138.70 by 11 to find out what the GST component was. It is not as simple as the government pretends. If the Treasurer cannot do it, how can mum at a checkout with three screaming kids try to work out how much tax she has to pay on her grocery bill? Why should she have to do it? When we get our income slip—our salary sheet—on there is how much the gross income is, how much tax we pay and what our net income is. We know how much tax we pay on wages and salaries. Why then will the government not allow us to know how much tax we will pay on our purchases of goods and services at the checkout if a GST goes through? This amendment would enable at least that to be transparent.If anyone says this will be organisationally difficult, I have a copy of a number of receipts from checkouts in Canada. They have a GST in Canada. On the first one of these receipts—the John Todd Trading Company of Alpine Road, Sunpeaks, British Colombia—it says that the purchase of the goods came to $79.90, there was a PST of $5.59 and the total price paid by the consumer was $91.08 and it showed that it was paid by a Visa card. That is at the checkout. When you line up and go through, it says on the receipt given to the consumer what the GST component is.If this amendment was adopted and if this law came into place, Australians would at least know at the checkout how much tax they are paying to the government on the goods and services that they purchase. It can be done. It is done in Canada. I will seek leave later to table this document to show that it does work, it is effective. Canada is not the only place where it happens; it happens elsewhere in the world as well. So let us not have any argument from the government in this debate that it cannot be done. It is done elsewhere in the world and it could be done if necessary in Australia.The other thing that would be important about this is that, by having to show it on the customer receipt at the checkout, it would deter unscrupulous businesses from inflating their prices and blaming the higher cost on the GST, therefore hiding the real impact of what this tax on consumers would be. I know what the reply from the government on this score will be: `But we've got the ACCC and we've got maximum penalties for anyone caught'—and I emphasise the word `caught'—`offending against this law. We don't have adequate resources to police it, but if perchance by happenstance or good luck we catch someone out, they will go for a row because we've got big penalties.' That is what is meant to deter unscrupulous practitioners from artificially inflating their prices and blaming it on the GST. If you show it on the docket they cannot do that, and that is another good reason this should be shown on the docket.In the evidence before the Senate select committee on this point, Mr Hank Spier of the ACCC said, `But there are 18 million people policing the impact of the GST.' But they are very ineffective police if they are like the Treasurer of this nation and cannot work out, by dividing their total cost by 11 on the spot at the checkout, how much they are being slugged by a tax. They are ineffective if the information is not in the hands of consumers in order for them to be able to work out and know exactly what the actual cost will be.The government opposed this in the House of Representatives. Transparency, as I said, is a problem for the WST; it is not a problem for the GST. In the Hansard we will see—because we intend to divide on this matter if it is not agreed by the government—the names of every senator in this place who wants to slug people with a GST but hide from public gaze the cost of what a GST will be to the Australian community.I now turn to the explanatory memorandum. I believe this issue is an important issue. This is an issue that ordinary Australians understand and want to see happen if they have to put up with a GST. In the explanatory memorandum—a memorandum of nearly 1,000 pages—there are only five words on this matter: `Displayed prices will include GST.' That is all it says. There is no debate, no justification of an indefensible position, just five cynical words. As well in the explanatory memorandum there is an example. The example is Big Ben's Clocks of 12 Grandfathers Road, Cuckooville. You just wonder who the cuckoo is who thought that up as an example and trotted it out as a way of disguising from Australian consumers the knowledge they need, if there is a GST, to work out what the value of that GST is.I do not know what the government is frightened of. This is a simple change, a reasonable change, an appropriate change and a change an enlightened tax system should enact. This is a change that the WACCI—an employer body—says should occur. Remember the Cusworth answer to the question? Simply, `yes'—an unqualified, `Yes, it should'. We know how much tax we pay on our salaries. Why can we not know how much tax we pay on our purchases if there is a GST?I conclude by saying that we do not want a GST. We will be voting against this bill at the end of the day. This is an exercise for us to just flush out the government hypocrisy on this matter, and I would be very interested, Minister, if maybe you would actually take a principled stand and support the amendment.12:07:004831Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Talk about hypocrisy! It is absolutely breathtaking to sit here and listen to Senator Cook carry on about this amendment. I am not aware that it is Labor Party policy to make sure that the wholesale sales tax is exposed on receipts. I do not think it is and, of course, it is not. Of course there are multiple rates. It would be of great interest, I suspect, if you were prepared to propose that and give some substance to the comments you have made. It is simply not your policy, and it is not your policy in relation to excises.To get up and demand this amendment when you yourself have no policy in relation to your own tax system on this—which you would not be prepared to do, Senator Cook—is breathtaking hypocrisy. From time to time we throw those words around the chamber, but this rates right up there, I can tell you, as an act of hypocrisy on your part. It is interesting that the Labor Party are moving an amendment. They are all over the place on whether they are going to move amendments or not move amendments or whether they are going support the government's position or reject other amendments.Let me make it clear that the government opposes this request. It is unnecessary, it would make the GST more complex, and it would add to compliance costs. There has been a lot of discussion on compliance costs in this debate to date, and there is no doubt, in my view and in the view of people in the industry, that this would add significantly to compliance costs.As to the level of transparency, I believe that people understand that there will be a 10 per cent GST. People understand that it will be applied on a broad base. Of course, unlike with the wholesale sales tax where there are multiple rates, Senator Cook is demanding a level of transparency that has never been present under the wholesale sales tax system and that has never been required under that system.Let me make it clear: requiring businesses to itemise the amount of GST paid would lead to greater compliance costs of businesses by forcing them to unnecessarily increase the information contained in displayed prices and also to adapt cash register equipment to print out three amounts for every item sold. Even if the proposed changes were to apply only to subtotals and not to each item, separate receipts would need to be issued for GST free or input taxed items. This is an attempt by the Labor Party to cause serious compliance problems in the industry. It is a principle they are not prepared to apply to their own tax system. They are simply not prepared to do it.This principle is so important to the Labor Party that you will not adopt it as your own policy because you recognise its compliance problems. You recognise that the small business sector would be appalled by the additional cost of what you are requiring, and that is why you are not proposing it for your own system. But you are proposing it for the government proposal before this chamber.I understand that there has been some recent discussion in, for example, the Australian Retailers Association about this issue. My understanding is that they have not come to a formal position. One of the views they may have put publicly initially was that they believed that the GST should be visible in pricing, and I am advised that the Australian Retailers Association are likely to change their view, and I have the permission of the relevant individual to make this clear. Among other things, they say:Some consumer research by one of our members has indicated that a large majority of customers would prefer to have the GST embedded in the price.3L6CONROYSenator Conroy—Oh, yes!WW4Kemp, Sen RodSenator KEMP—I am quoting what these people are saying. They say:Further checking of the various software by retailers indicates there would be additional compliance issues if they were required to show GST and price on dockets. In the case of smaller retailers, many have not got the necessary software and would have to perform the price-GST split by hand. Major retailers indicate that they would not have the systems in place to provide such information by the scheduled date without additional costs.The individual argues that the government's proposal has a degree of simplicity and minimises compliance costs. We believe that you are attempting to impose additional costs on business and we believe that consumers understand the system which is in place—they certainly will understand it better than they understand the Labor Party's system. The Labor Party has suddenly moved into this debate with an amendment and a principle which they are not prepared to apply to their own preferred tax system.12:12:004832Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I have listened carefully to this debate, and it is certainly an interesting one. The position that the Democrats will adopt towards this amendment will be put by Senator Murray in due course, but there are a couple of points that have been made that ought to be addressed. I really want to address the Labor Party first of all and I have some questions for Senator Cook about this amendment, because it is an important amendment.As Senator Kemp inferred, one wonders why there is an amendment at this stage, when the Labor Party is not supporting any other amendments. One needs to ask why this amendment is so critical, given the fact that the Labor Party is now voting against other amendments which I thought had far more substance and were far more critical for the people of Australia than whether people wanted to know if the price contained a GST and what that particular part of the price was.Senator Cook mentioned hypocrisy. I always thought that hypocrisy was saying one thing and doing the opposite. I do not think that I would want to accuse the government of hypocrisy and I do not want to accuse the Labor Party of hypocrisy at this stage. But if we are trying to apportion hypocrisy to one or the other or to the Democrats or to anybody, let us be sure that we take the definition and apply it accurately. Saying one thing and doing the opposite: in this debate, we have to ask who is doing that.Really this is a political amendment by the Labor Party. That is what it is about. It is a political decision on the part of the government not to show the GST because that will be to the advantage of the government if the package passes and a GST is imposed. I would not want to be a government either that allowed the GST to be shown on every docket at a checkout. I can imagine the kind of resistance that that would build up in the mind of purchasers over a period of time, and one can imagine that after a period of time it would become quite an irritant for people.On the other hand, it is obviously a political amendment that the Labor Party is keen to have passed, because the Labor Party would see this amendment as advantaging it in any subsequent election campaign. If the continual showing of the GST on a docket becomes for people a part of the election campaign, then I would imagine that it will be to the advantage of the Labor Party for that to be shown. But I really do not think this amendment is about hypocrisy on one side or the other; it is really about who is going to win the political campaign at the next election. What the Labor Party is trying to do is steal a march, if you like, on the government—3L6CONROYSenator Conroy—Win government. Shame on us!HX5Woodley, Sen JohnSenator WOODLEY—I see. That was not your motivation at all, Senator Conroy. I guess it is because I have become cynical after six years in this place that I look for political motives.ZW4SHERRYSenator Sherry—You're a politician. You are supposed to be political.HX5Woodley, Sen JohnSenator WOODLEY—I mean party political motives. There is a difference, Senator Sherry, between—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Calvert)—Order! Can I have less interjection from my left. And would you address your remarks through the chair, Senator Woodley. I know you are under severe provocation.HX5Woodley, Sen JohnSenator WOODLEY—I apologise, Chair. There is a difference between politics and party politics. In the church I got into this debate all the time. Politics is what we are about; it is about life. Party politics is something different. Perhaps I need not go any further along that line.It really is the beginning of the campaign. If this package is passed and a GST is applied to many of the items which would be bought, ticketed and docketed at the checkout, the political campaign will begin with that very act. The Labor Party, I am sure, would make darn sure that everybody knew that the docket they received at the checkout was in fact part of the campaign.I was interested in the reference to Canada by Senator Cook. I guess this is what really made me become a little cynical. He gave the example of Canadian checkout dockets. He would know, as I know, that in Canada the election following the introduction of a GST saw the party which introduced the GST reduced to two seats or a handful of seats, and they sure lost government. I can see that, given that illustration by Senator Cook, he is pointing to the purpose of this amendment, and that is that the Labor Party really believes that an election following the imposition of a GST would be one that they would be hopeful of winning. This amendment is not only about transparency—it is about that; you were very eloquent at that point, Senator Cook, and I do not discount that transparency is important—but it is also about politics and the political advantage that will accrue to the Labor Party if this amendment gets up and the package is passed.3L6CONROYSenator Conroy—And the Democrats.HX5Woodley, Sen JohnSenator WOODLEY—Senator Murray is going to give you some indication of the Democrats' position. The question I have for Senator Cook, however, is about the statement he made that the information that his amendment would supply is information that Australian consumers need. I think I am quoting you accurately, Senator Cook. My question is: how do you know? Did the Labor Party do a survey of consumers in order to ascertain whether they wanted this information? Most consumers, I think, only want to know what the final price is. I had experience of this in the 1980s when I visited the United States. In some of the States they do have a GST or a consumer— ZW4SHERRYSenator Sherry—It is a retail tax.HX5Woodley, Sen JohnSenator WOODLEY—A retail tax, okay. Thank you, Senator Sherry. I must say that Senator Sherry is always accurate in these things so I accept his interjection, because it is helpful. What is it again? A retail—ZW4SHERRYSenator Sherry—A retail tax—in some States.HX5Woodley, Sen JohnSenator WOODLEY—But what I found was that when we went around we would seek to buy an item, say, in a restaurant and we would ascertain the price from the menu et cetera, and then we would get the bill and find that the price was different because there was this retail tax added on. That nearly drove us crazy, because we never knew how much money we would need. We would try to estimate that when going into a restaurant perhaps. I was a bit short of money in those days—I was not a parliamentarian and was on significantly less salary than I am now—so as we travelled around on an extended visit we did need to know how much we were spending. The critical thing was not what the price was and then to be told there was an additional retail tax; what we really needed to know was the final price. It nearly drove us mad trying to deal with that issue.Senator Cook, have you done a survey of consumers? I wonder if you could tell us something about the results of that survey. You also said that the wholesale sales tax was embedded in the system and you really could not separate that out and have that on a docket. You made that assertion. I think you need to justify it to us. I think Senator Kemp was rightly a little indignant at that point, because he said, `It is okay to assert that you can't do it with your system but you want to do it with the government's system.' So I think you should justify your assertion that a wholesale sales tax could not be included on a docket. There probably are good reasons. We would like to hear them.Senator Kemp, just to finish, I do not think the Labor Party is trying to increase the compliance problems. Perhaps the result is that but I am sure that is not their motivation. I would like to defend Senator Cook at this point because I do not think it is about that. It is about politics, pure and simple. I wonder if Senator Cook might address those couple of questions.12:23:004834Cook, Sen PeterSenator COOKRF4WAALP00—Willingly. I will do it briefly because I know some of my colleagues wish to speak. Firstly, on the question of hypocrisy, I chose the word hypocrisy deliberately. I used it with reference to this government explicitly. I did so because, by my definition, hypocrisy is saying one thing and doing another. The example here is that the Treasurer of Australia authorised a leaflet to go to every Australian letterbox, attacking the wholesale sales tax as a `hidden tax'. One of the so-called shocking things in the Treasurer's view about the wholesale sales tax is that, to quote him, it is a `hidden tax'. One of the disgusting things in the Treasurer's view about the wholesale sales tax is that, to quote him, it is a `hidden tax'. One of the reprehensible things in the Treasurer's view about the wholesale sales tax is that, to quote him, it is a `hidden tax'. The government, at expense to the taxpayers, put this leaflet in every letterbox in Australia saying, `The tax system is crook and we need a GST.'Labor does not believe we need a GST. Labor believes we can have tax reform in this country without a GST and that things need to be done to improve the current tax system. But the government campaigned on the basis that one of the problems with the wholesale sales tax was that it was a hidden tax. They did not do it just once, or flippantly; they did it many times—with propaganda and deliberately. When the GST comes along, what do we find? It is a hidden tax in their legislation. That is my definition of `saying one thing and doing another'. They told us on Perth radio in June last year that hidden taxes are bad but that, in the case of a GST, they will embed it in the total price. On the question of hypocrisy, that is my point to the government.A short footnote to those remarks: I was attacked by the government on the basis of what Labor is doing. The whole point here is that the government said all this, and taxpayers expect that the government will be consistent, but it is not. Therefore, I argue it is hypocrisy. What Labor is doing is not intro ducing a GST. We had that debate back in 1986. We are not introducing a GST, because we think it is a crook tax. Therefore, we have no need to have a policy to impose a GST which is shown with the price. So that is the answer to the first question.Secondly, on the question of why I am moving this amendment and not supporting other amendments, one of the shameful things about this whole exercise is that what is called tax reform is really introducing a regressive taxation system for Australia that hurts the poor and advantages the wealthy. The shameful thing about it is that this is called tax reform and is being rushed through the parliament, and a mandate is being claimed. We now know, by courtesy of the Senate inquiry, that the things that the Australian people were told, prior to the election, in all of the glossy publications that were put out, are not true. We know that.We know that in the budget brought down last night there is no new compensation for the things that have been proved beyond reasonable doubt about the inequities of the system. We know that in the budget last night, or in any statement from government people since, there is no change on the government side in order to remove the high-roller advantage to casinos and gamblers so that they will escape the GST while the rest of us will get slugged by it. We know that. We think it is a crook package. Why am I opposing the package? I am opposing the package for those reasons and for the many other reasons I have stated in this chamber on many occasions. We think this amendment shows the hypocrisy of the government.This amendment also has intrinsic merit, for the reason that the principles of tax reform are equity, simplicity, efficiency and transparency. Australians should know how much tax they pay. If you are a wage or salary earner, on your wage slip you have your gross salary, the tax taken from it and your net salary shown. You know how much tax you pay. I have here a copy of the receipt that it is possible to get at the checkout in Canada—and not only in Canada but in many other countries around the world where they have a VAT or a GST—which shows people the cost of the goods and services they purchase and how much tax they pay.We had quite an extraordinary speech from Senator Woodley about deeper, hidden political agendas. I do not know where that springs from. With the greatest respect to the Democrats—I frequently pay them the tribute that they are entitled to, because they are entitled to recognition and respect—I offer the brickbat, having been someone frequently offering the bouquets, that the Democrats in this debate have not stepped back from playing politics either. The whole deal about exempting food and therefore making a GST fair is playing politics.ZW4SHERRYSenator Sherry—No, surely not!RF4Cook, Sen PeterSenator COOK—Oh, come, come! Is this such an innocent and naive chamber as to believe that there are no politics ever conducted here and that the only matters debated are matters of principle and substance? The whole assumption that this is a political matter and should therefore be dismissed is trite. What are we saying? Are we saying that when there is a GST Australians should not know at the point of purchase how much tax they are paying?You said, Senator Woodley, as I recall—I do not have the actual words—that people will become resistant to the tax because they will see and will get annoyed by how much tax they will have to pay. I am not a fan of the GST so I think that will be a good thing. I think it will act as a barrier, too. If people see how much tax they are paying it will make it a damned sight harder for governments to increase the GST when they want to. The record of a GST everywhere around the world is that it only ever goes up, it only ever rises. If there is a GST and Australians know how much tax they are paying, there will be a block of public sentiment there to stand up to governments to make sure that it does not increase. That is an added advantage.Your question, Senator Woodley, was: how do I know that consumers want this? I think consumers are entitled to this as a right. The obverse of saying that they are not entitled is to say that wage and salary earners should have only the net wages shown on their pay packet and not how much tax is taken out of their gross salary, because they do not really want to be messed around by the detail of how much tax they pay. One of the things that this side of the chamber—and I include in this every party sitting on this side of the chamber—has always argued for is the right of the consumer to have access to certain knowledge to make their consumption at least informed. On this side of the chamber—as opposed to that side of the chamber—we have always argued that the relationship between a big retail store and a single purchaser is an unequal relationship and that there has to be some advantage to the consumer via information so that they can make discriminating choices about what is fair and reasonable. In my list of things that consumers are entitled to I include healthy foods, regulations about swift service and about not being conned, proper pricing and a number of other things about quality as well. They are also entitled to know how much tax they pay on goods and services.The last question that you asked me, Senator Woodley, if I have them all listed, is: why can't a wholesale sales tax be shown on a docket? If you really want to put us to the test, I suppose in some cases it could be. But this is a different type of tax. It is not a retail tax; it is a tax on the wholesale value of the good as it is transformed in the various stages of production. It is a different tax. What we are talking about here is a goods and services tax which is a final tax—applied at 10 per cent under the government's bill to the last transaction—that is easy to display.In opposition to me the government has said that I have a secret agenda. I am very fond of hearing from the government about the ALP's secret agenda because it is usually a lurid depiction of unreality; it is never anything like what we think. But the government wants to push these arguments out to try to blacken our name in the community. It always says we are trying to make the compliance costs, the costs on small business, higher by insisting that the GST figure be shown on the docket. Just about everywhere else in the world it is shown. If the government wants this shown here, it seems to me—balancing the right of consumers to know and the small amount of cost, if there is any at all, given that most small businesses will have to purchase new plant and equipment to deal with a GST anyway—that an extra button on the dial will not be a huge cost. But I am told that that is the secret agenda of the ALP. I am told that it is an anti-small business agenda, which of course is nonsense. But that is the government's argument.I think there is some merit, though, in not pushing the compliance costs of displaying a wholesale sales tax because, to that degree, it is a much more complex thing to do. But if this were to become a matter of contention on which the whole debate turns, and if it were going to break the back of the debate one way or another, I would modify my position, quite frankly. When you balance the two principles—a slight increase in compliance costs against the right of the consumer to know how much tax they are paying—I think the second argument overwhelms the first argument. In this chamber—and in life and in politics—we are often trying to reconcile which of two principles is more important when both in their own right are equally important. But you have to make a choice about how you balance them. If I am put in the situation of asking, `How do I balance the principle here?' I will balance it in favour of the consumer, quite frankly.I think I have answered all of the questions put to me by Senator Woodley and, on the way through, Minister, maybe I have replied to some of the unfair licence you took in your reply to me when you attacked the Australian Labor Party. I will sit down now. I know a number of my colleagues want to speak on this matter because it is an important one for us.12:35:004836Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There is always one problem with Senator Cook: he finds it hard to run a consistent line. He almost came back to it at the end. Senator Cook rolled out a lot of very important phrases—`consumers are entitled to know as a right', which in our view they do, and `there is a need for transparency', which was highlighted a number of times. Then he said, `Consumers . . . are also entitled to know how much tax they pay on goods and services.' Under our system we believe it is very straightforward; under the Labor Party's system it is exceedingly complex. Nonetheless, the principle was boldly stated. The truth of the matter is, Senator Cook, that you had 13 years in government but none of these principles applied to the indirect tax system which the Labor Party ran in that period.You mentioned there will be complexity. I think there will be complexity; that is precisely the point I am making. With the system you have you wish to introduce complexity. In relation to excises on fuel, I think that is pretty straightforward. Despite your strong arguments about what you believe the Labor Party's position is, for 13 years nothing was ever done on this.Let us get this absolutely clear: what we are seeing is a pathetic attempt by the Labor Party to apply what they claim are principles to our system which they have no intention whatsoever of applying to the Labor Party preferred tax system. After 13 years, Labor did not go down this route, even in areas where it would have been straightforward. I agree that it would have been complex in the wholesale sales tax area; the retailer's margin would probably have to be revealed.3L6CONROYSenator Conroy—Get out of here!WW4Kemp, Sen RodSenator KEMP—Absolutely; it would be complex. But the truth of the matter is that, on things like excises, I suspect it would be quite straightforward. But these fine principles and the arm waving were never applied to your own system, Senator. There was no intention that it apply to your own system, even when it could have been done in a less complex way. I know that Senator Woodley will get up and censure me on this, but I shall risk it: this is gross hypocrisy by the Labor Party; make no mistake.12:38:004836Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—The issue of hypocrisy is an interesting one. I think I will leave that debate where it is. I will not be tempted to try to referee the fight as to who is hypocritical and who is not. I must say that Senator Cook certainly tried to answer my questions. I give him credit for that. I remember that when he was sitting on the other side of the chamber he always tried to answer. I am not saying I was always satisfied with the answers, but they were certainly very good attempts to answer my questions. I think that is important.However, I do need to defend the Democrats with regard to the point that has been made about politics. We know that it is all about politics; there is no doubt about that. I was not trying to be pure in any sense. I was trying to say that you built all of your initial contribution, Senator Cook, around whether or not the government was hypocritical. I felt that what we needed to point out was that, in this debate about hypocrisy, really it is about politics rather than hypocrisy. That was the issue, and that is where I would take issue with you, Senator Kemp, as well. It is about who is going to gain advantage and who is not. Of course, the Democrats are involved in politics, and of course we know that our amendments are about the political debate. I acknowledge that. If I gave the impression that somehow or other we were above that, Senator Cook, accept my apology; I did not mean to remove the Democrats from the political debate because we know that we are absolutely involved in that.I hear what you say about consumers, but it does smack a little of telling consumers what they need, Senator Cook. `Consumers need to know'—you can make that point by waving your arms around, but I would still be interested to know whether or not you did survey consumers. I think that would be a useful exercise, because that would really tell us whether or not consumers wanted it. We can all tell people what they need, but it is a different question to ask them whether they want what we believe they need. That was the point I was making. I will leave my remarks at that point. I did appreciate Senator Cook's very good attempt to answer my questions.12:41:004837Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I might help Senator Cook here. I have here a copy of the transcript of evidence from the Senate Community Affairs References Committee. I refer to questions from Senator Chris Evans to Ms Mara Bun—for whom most of us have a great deal of respect—from the Australian Consumers Association. I quote:Senator CHRIS EVANS —As I understand it, normally in terms of consumer protection you argue for transparency. Does that mean you argue for the GST to be displayed on the docket as part of the price—Ms Bun —Absolutely.Senator CHRIS EVANS —or are you happy with the government's proposal?Ms Bun —No, we think that is central. We think that to replace a hidden tax with another hidden tax is not a sensible approach. We have discussed this with a number of very, very big financial institutions who very definitely share our views. They have had the problem, in the past, of having their own fees and charges confused with government taxation. They do not want that in the future, and we think that is fair enough. For people to make choices, they need that kind of disclosure.I guess one of the issues that comes to the Greens (WA) is whether or not—and I would have to read the Australian Consumer Association's submission—the Australian Consumers Association were taking that further step and saying they needed that information before they made their choice about where they put their money. I would suspect that that is what they were saying—when you wait for the docket, you have already spent your money. Occasionally, you can ask for refunds, although you do not always get them. The reality is that it is after the horse has bolted, to a certain extent, if there is a requirement to get that on the docket.There are some alternatives which have slightly less compliance cost. That includes the potential to require that the Australian Competition and Consumer Commission can issue a notice that the breakdown should be on the price tag so that consumers can see it, not merely on a docket or receipt. I assume in that case the Australian Competition and Consumer Commission would take into consideration the compliance cost and maybe allow some kind of catch-up for those people who do not currently have that facility in their technology.I notice, as a consumer, when I go into grocery stores—I think this is the area where there might be the most concern about compliance—that if it is a large chain, I can almost never pick up an item which has the price on it. That almost does not exist in most large grocery stores. As we have heard in other debates, 70 or 80 per cent of the grocery chains in Australia are controlled by the same people, so presumably they have the same system. You have to remember what the price was on the shelf and keep that in your head to make sure you have been charged the right price at the checkout.Progress reported.Matters of Public Importance483810000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! It being 12.45 p.m., we will now proceed to debate matters of public interest.483812:45:004838Hutchins, Sen SteveSenator HUTCHINS84PNSWALP00—I seek the Senate's indulgence to make a statement for about five minutes in this matter of public interest debate. I would like to thank the Senate for granting me absence over the last few months and explain why I have been unable to attend here. In mid-February this year I went to see a doctor and was diagnosed as having bowel cancer. As a result of that I had to have major surgery on 16 March this year. That has necessitated me being unable to attend the Senate. I thank not only my own party leader Senator John Faulkner and party whip Senator Kerry O'Brien for their indulgence, support and encouragement but also President Margaret Reid and in particular Senator Sue Knowles, who sent me a nice letter.The duration of my illness will extend a few more months yet. I am currently undergoing chemotherapy and I will also be undertaking a combination of chemotherapy and radiation therapy shortly. This treatment that I am going to undertake is for prevention; it is not for something that has got out of hand. I will probably not be able to attend the last sitting of the Senate in June this year because of daily attendance at Nepean Hospital for the radiation therapy.I have thanked a number of people already, but I would also like to thank Nepean Hospital in the western suburbs of Sydney, where I was operated on and where I am still being attended to at the cancer care unit. In particular I would like to thank the doctors and nurses who have been of great assistance to me, offering support and encouragement. I was in ward 4A with a number of other blokes when I was operated on. A number of those fellows were in a far worse position than I was. We maintained our sense of humour and dignity while we were undergoing our treatment. I would like to thank the surgeon, Dr Cartmill; therapist Megan Laidlaw; the oncologists, Dr Veness and Dr Jenny Shannon; and the nurse who seems to have taken me under her wing, Di Dingle.I would like to briefly thank a number of other people for being around when I needed them: my old school mates Michael Lee and John Della Bosca; another old mate of mine who is actually a colorectal physician, Dr Anthony Donaghy; and of course Leo McLeay. A number of old mates, old truckies and old workmates have been supportive, as has an old friend of mine, John Allan, who is listening now. I would like to thank my family and in particular my sister who has offered great encouragement and support to me.I have a few more labyrinths to journey through over the next few months. I know now as a cancer sufferer how awkward it can be to discuss it. All I can say to anybody who does have cancer is that if you give up, you will go. Anybody who has had it will know what I am talking about. If you give up you will be going, quicker than you probably think. It is hard and it does change you; emotions and feelings go through you. You do try to make amends for past sins and past wrongs, and you do try to make up. With some people you can and with some people you cannot. I want to take this opportunity to say to the house that I do appreciate not only my own side's indulgence of my absences but also the government's indulgence, as well as the kind regards and notes that have been sent to me by a number of people.When I was first diagnosed with cancer I thought of a quote from Dante, which said:In the middle of the journey of our lives, I found myself in a dark wood, for the straight path was lost.I encourage people who have cancer or who have friends or family with cancer to read cancer literature, because it does give you that pathway out. It does show you where to go. One of the books was on a survivor of one of the concentration camps in Belsen. His name is Victor Frankel and he says to people who are in this predicament of facing a life threatening disease:No man can ever know what life still holds in store for him or what magnificent hour may still await him.That is for all of us cancer suffers. As I said, my treatment is preventative; I am not out of action and I intend to be here for a while.4839Miscellaneous483912:50:004839Payne, Sen MariseSenator PAYNEM56NSWLP10—Before I begin my remarks I would like to note the words of Senator Hutchins and welcome his return to the Senate this afternoon. I would like to convey my personal best wishes for a full recovery and a successful treatment. It is ironic indeed that this matter of public interest discussion should have begun with Senator Hutchins's words, because one of the issues I wish to pursue this afternoon is particularly apposite.Next week members of the New South Wales parliament and other invited delegates begin their deliberations in the New South Wales Drug Summit. Chaired by the Rt. Hon. Ian Sinclair and the Hon. Joan Kirner, the summit will examine in some detail several aspects of this compelling issue: the nature and extent of the drug problem, existing strategies, the situation at the front line, the interrelationship between drugs and communities and, finally, the way forward. I am honoured to have been invited to be a delegate to the summit. Its examination of these issues is important, even urgent. If the summit can achieve an open and honest assessment of the situation, moving towards a way of protecting young Australians and best assisting those already addicted, then it will be a very productive set of deliberations.But there are underlying issues that a summit such as that being held in New South Wales cannot possibly address. Any useful recommendations of such a drug summit will fall on barren ground unless the underlying problems are taken up by governments and communities sooner rather than later. In particular, I refer to the disturbing decline in the mental health of Australians, and specifically young Australians, as an issue of fundamental importance in this country. To our collective shame, it is a crisis the nature of which governments and political leaders around this nation are only now starting to comprehend and working to resolve. If it is not addressed seriously, it will create an enormous social, economic and personal drain on our community.Before the last Premiers Conference, Victorian Premier Jeff Kennett addressed the National Press Club. Premier Kennett gave voice to the concerns of many over the potential impact of mental illness on the future social and economic wellbeing of this country. He also outlined the direction his government has taken in addressing the issues surrounding mental health and called on other governments to do the same. He quite rightly made the point that there is no quick fix for the problems of mental health and that longer term strategies of prevention, recognition and treatment must be pursued.I share those concerns and I support the steps the Victorian government has taken and indeed the national initiatives that this government has supported. Last night's budget announcement of $39.2 million over four years for suicide prevention initiatives is a significant contribution towards addressing the problem. The measures announced include funding of specialist programs for community members who are at high risk of suicide. These activities will promote initiatives that aim to address risk and protective factors for suicide, including media activities, community development and education activities, and seek to build upon links and partnerships with government, non-government and community initiatives already in place.I join the Victorian Premier in his call for the establishment of a national centre for depression. However, governments cannot stop here; they can and must do more. I think it is only by addressing the issue of mental health in fora such as this Senate chamber that the problem will even begin to receive the attention it deserves. To illustrate the compelling need for further government action, we have to look at both the effect and prevalence of mental illness in the community. Mental illness is a term that is often used so inappropriately, but it is in fact a general term that refers to a group of specific illnesses, in much the same way as heart disease is used to describe varying cardiovascular conditions. Specific mental illnesses include psychotic illnesses like schizophrenia and bipolar disorder, as well as non-psychotic disorders such as depression and anxiety. But mental illness is not limited to these.It is in fact impossible to identify all causes of mental illness, but there is general agreement that it is primarily a physical dysfunction of the brain. What triggers that is open to debate, but it includes factors such as chemical imbalances in the brain, stress and exposure to distressing experiences. The prevalence of non-biological or communal factors in contributing to the disorder complicates efforts to prevent mental illness and effectively means that potentially each of us is at risk. Indeed, the New South Wales mental health authority states that currently one in five people will suffer some form of mental illness in their life, and that equates to more than three million Australians.The extent to which people suffer may vary from a transient, mild, non-psychotic illness to prolonged, severe, psychotic illness. However, while the illnesses themselves may vary in their severity, sufferers do seem to experience similar problems. The problems are not just the result of the illness itself but also the result of a sometimes uncoordinated and inadequate approach towards treatment. Sufferers experience feelings of loneliness and helplessness. They suffer discrimination, they suffer from the effects of still inadequate research and inappropriate treatment and they are often at high risk of suicide. These are all factors which can and must be addressed by governments.Historically, the treatment of mental illness sufferers is best described, I suspect, as shameful. Often they were committed to institutions with dubious regimes, or at best ignored and left to deal with the illness on their own, despite the fact that it often pre vented them from gaining and keeping employment or from finding accommodation and more often than not resulted in relationship breakdown and social withdrawal.So it was no surprise that in 1993 the Human Rights Commission's Burdekin report found that the health care system was failing the very people it was meant to protect. Unfortunately, however, it seems that, despite the modern reluctance of governments to institutionalise mental illness sufferers, not a great deal else has changed. Sufferers still experience loneliness, despair and discrimination and are often marginalised by the community in which they have to live. Often the illness will lead to relationship breakdowns with family and friends, to job loss and, in a tragic number of instances, particularly in this nation, to suicide. These are people who suffer from an illness that, if properly diagnosed and treated, would, as many sufferers of other treated conditions do, go more or less unremarked by the community at large.The debilitating effects of mental illness not only impact on the sufferer but also impact on the community as a whole. In fact, the World Health Organisation estimates that mental illness is responsible for more deaths in Western society than any other factor outside of cancer. WHO estimates that by 2020 it will be the single largest killer of humankind. But the adverse effects on the community do not stop there. Severe depression, schizophrenia, anxiety and bipolar disorder are often the root cause of drug dependency, homelessness, suicide and family breakdown. Outside the immediate and profound personal impact, the costs of such adverse side effects are enormous, both socially and financially. Indeed, there are estimates that untreated depression alone costs Australia $4 billion to $5 billion per annum.The effects of this illness are devastating in rural and regional Australia. Communities are often isolated and do not have access to the same level of mental health care services that is available in larger centres. Then there is the different culture that often exists in the bush that encourages sufferers to internalise problems such as depression rather than seek help. It is this culture and an absence of available services that are in no small way contributing factors to the high incidence of suicide in regional Australia.But the effects are harder still on young Australians. Most serious forms of mental illness strike the victim in adolescence or early adulthood, often at a time when they are trying to cope with normal biological changes or may be struggling with issues of sexuality or managing family relationships. They might be seeking to establish their independence in their studies, their career or their home life, or all three. The added complications of a mental illness can escalate feelings of worthlessness, hopelessness and depression that young people often experience to a point which I have had sufferers describe to me as one of feeling nothing, of numbness. This escalation all too often results in suicide or drug dependency.While the incidence and sometimes coincidence of drug dependency and suicide amongst our youth are well documented and prohibition of illicit drugs remains a high priority of governments around the country, what is not often spoken about is the root cause of the problem—mental health issues—and so the high incidence of illness and the importance of proper diagnosis and treatment for sufferers are all too readily overlooked by authorities.The lack of awareness and understanding of mental health issues by various government authorities means that we often punish the sufferer for the effects of illnesses rather than helping them. For young sufferers the result is often further discrimination. That will create only further withdrawal and dislocation of extremely vulnerable young people. For that reason, early in my time in the Senate I identified and supported the Reach Out program, designed particularly to provide information and assistance through the Internet to young sufferers of depression and their family and friends.The lack of positive diagnosis of mental illness is another problem that concerns me. It is estimated that two out of three people suffering from mental illness are never diagnosed and therefore are never treated.That can be for a range of reasons. They may feel that they are unable to approach their doctors or other health care workers, so they resort to hiding the illness and internalising their problems. There is also a social stigma still attached by many to mental health problems, derived largely from a lack of awareness and, therefore, understanding. Family members often find it most difficult to accept and to come to terms with mental illness of a child or a sibling, and the reluctance of the sufferer to come forward with their problems is no doubt the result of a combination of these and other factors. Additionally, it would seem that poor diagnosis rates also suggest that when patients do come forward doctors are not always willing to acknowledge the presence of a mental illness.The community's lack of understanding and its fear of sufferers are also of significant concern to me. It is clear that the adverse community perception of mental illness is an impediment to effective diagnoses and treatment of it.It is only exacerbated by the portrayal and description of sufferers through outlets of the electronic and print media. The Burdekin report in 1993 found that the Australian media reinforced and reflected the fear of mental illness prevalent in the community, often resulting from selective reporting on issues affecting and involving mental illness sufferers. Efforts have been made in recent years to address these issues—in particular, the Press Council has published a booklet entitled `Reporting Suicide'.The media treatment of suicide has an impact on sufferers and their willingness to seek treatment. The recent deaths of two very different people and the media treatment of those instances have particularly made me stop and think about the role of the media in this regard. Just for a moment, recall the treatment of the deaths of INXS star Michael Hutchence, and young Temora resident Gabrielle Woods. Both deaths are great personal tragedies, both profoundly and violently impacting on their families, both the results of depressive illness and both hugely sensationalised. I cannot for one moment imagine how the daily bombardment of sensational suicide stories affects the health and wellbeing of sufferers of mental illness, but it does not help to raise serious understanding and awareness in the community of the real issues of depression, anxiety, schizophrenia and other psychotic illnesses. In my view, there is enormous potential for the Australian media to play a more positive and constructive role in public education in this area, as they have in many others.So what should be the role of government in fighting this illness? The response in Australia to cancer—breast cancer—and HIV/AIDS has been quick, overt and very public, but they are much more visible killers, more obviously painful and more readily diagnosed and treated. For mental health, the answer is not so easy. Community and political leaders have a role to continually address this issue in a positive and constructive way. Hopefully, we can eventually talk about and deal with mental health issues as openly and frankly as we talk about other illnesses.Ensuring that the community regards mental illness as just an illness that can be treated is an important and basic step in creating a climate where early detection of warning signs and the preparedness of sufferers to seek treatment is the norm and where support and care for the ill replace denial, rejection and fear.Specific strategies aimed at countering individual illnesses, including the establishment of a national institute of depression, should be pursued. Governments have to look beyond short-term reactive policies and adopt long-term policies aimed at early detection of warning signs and effective treatment for mental illness.You can hold all the drug summits in the world, and you can develop and implement innumerable strategies, but the first step should be—must be—recognition that the root cause of many instances of a relationship breakdown, drug dependency, loneliness and suicide is mental health problems.Most people would feel that attending even one funeral or memorial service for a friend who has taken their own life is one too many. In recent times I have had this devastating experience on several occasions. The questions are usually the same: `Who would have thought?' `Why her?' or `If only we had known, we could have helped.' There are many of us who can help by raising awareness, by helping to reduce the stigma attached to mental illness and by ensuring that parents, teachers, friends and family members are equipped to recognise the warning signs and to encourage sufferers to seek diagnosis and treatment. We can show that we will tackle this problem seriously. I hope that members of this parliament can exercise some of the leadership that goes with elected office and become part of this process.484213:05:004842Gibbs, Sen BrendaSenator GIBBS6L6QLDALP00—I rise to speak this afternoon on a matter that has generated enormous public interest in the past couple of weeks. The opening of the tolerance room, or T-room, at the Wayside Chapel in Sydney's Kings Cross has reignited tensions surrounding the debate on drug law reform in Australia. On 3 May, Australia's first organised trial of a supervised drug injecting room began, initiated by a group of private individuals with a wealth of practical experience in dealing with heroin users.In considering the potential benefits of safe injecting rooms in Australia, I believe it is firstly essential to draw a distinction between the T-room initiative and various illegal shooting galleries that have been operating informally in Kings Cross for a number of years. These so-called shooting galleries have traditionally been unsterile and have not provided clean injecting equipment to users. They have also generally not provided safe means for the disposal of needles and syringes after use. Shooting galleries were unsupervised and did not offer any medical assistance to users. Advice and direction for those wanting to address their drug problems were also absent. While the objectives and potential benefits of the shooting galleries were obviously questionable, their activities should not be used as a means of dismissing the T-room trial, which is as different from these initiatives as chalk is from cheese.On the first day of the T-room trial, six drug users were provided with clean equipment and injected themselves in the presence of a trained nurse. The rules for using the room include that users must be over 18, they must use their own drugs, they must inject only into their arms or legs, they must be long-term users and they cannot be assisted in drug taking by staff. Medical assistance and advice on getting off drugs is also available. The conditions of the T-room are clean and hygienic. Users must wipe down their table with disinfectant before and after use. Clearly, the conditions of the T-room trial could almost be described as idyllic when compared with the shooting galleries that Kings Cross has already embraced as a means of getting drug use off the streets.There is certainly no question that drug use is already rife on the streets of Kings Cross. Suggestions that a safe injecting room might attract users to the area are laughable and naive, given the extent of the problem that already exists. In a recent interview, Reverend Ray Richmond from the Wayside Chapel described the situation in Kings Cross:We already pick up 120 needles a day in our front garden and 20 to 30 needles a day in each of the male and female toilets. We do not permit this activity and people are regularly asked to leave from anything from about 1 week to 6 months for not paying attention to our rules. There are about 200 injecting drug users here at the Wayside Chapel every week. In the last 10 weeks, 8 have died.Reverend Richmond and his group are now seeking to prevent some of these deaths, and their ideas have not emerged in a vacuum. There is a significant body of evidence from overseas to indicate that safe injecting rooms can prevent deaths. In Switzerland, where safe use rooms have been operating for over 10 years, not one death has occurred in supervised use situations.A recent position paper on injecting facilities, prepared by the Australian Drug Foundation, supports Reverend Richmond's belief that the T-room could save lives. The paper points out that fatal drug overdoses will be reduced because staff are on hand to administer first aid and to call an ambulance. European experience also indicates that ambulan ces tend to arrive sooner because the locations are known and easily accessible. Indeed, the rate of fatal overdoses in the city of Frankfurt went from 150 to 30 within four years of opening injecting rooms.The position of the Australian Drug Foundation on the provision of injecting facilities therefore lends considerable legitimacy to the aims and objectives of the T-room trial. The foundation believe there is a need to further explore the potential of such initiatives. Their position paper reveals a belief in the merit of safe injecting facilities, and their stance on the issue is summarised into these main points: that the health risks caused by injecting drug use pose a major public health problem, both to injecting drug users and to the wider community; that the use of injecting facilities presents significant potential to reduce the incidence of fatal overdose among injecting drug users and to improve their access to health services; that the use of injecting facilities presents significant potential to reduce public nuisance in areas of high injecting drug activity; and that the use of injecting facilities is specifically targeted at reducing the harm associated with injecting drug use, not at reducing levels of drug use within the community.This strategy must be seen as only one part of a comprehensive response to drug use within our community. The ADF therefore strongly supports a properly conducted and controlled trial being undertaken in Australia to provide evidence on which to make decisions about the use of injecting facilities. While the paper makes no direct reference to the T-room trial, it obviously lends significant weight to the credibility of the concept. I believe it is particularly relevant that the ADF highlights the fact that safe injecting rooms are not the answer to Australia's drug problem—that they are merely a means of saving lives in the short term so that these people will be alive long enough to be able to make a decision to address their drug dependency over the long term. It is very difficult to rehabilitate someone who is already dead.The position of the ADF also highlights the fact that the T-room cannot be relied upon as the only means of exploring the potential of safe injecting rooms. Governments at all levels need to get behind the idea and organise a large-scale trial if we are ever to determine the potential of such initiatives to save lives.The ADF position paper also provides information on the success of injecting facilities in Europe. Facilities in Switzerland, Germany and the Netherlands have been found to meet their two primary objectives. The first objective was to reduce the harm experienced by injecting drug users by reducing the risk of fatal overdose and to reduce the transmission of blood borne viruses. The second objective was to reduce the public nuisance of drug users injecting in public places. Clearly, overseas experience indicates that injecting rooms can have health benefits for both users and the broader community.In a recent interview on the 7:30 Report, Dr Franz Trautmann from the Netherlands Institute of Mental Health and Addiction, was highly critical of Mr Howard's refusal to acknowledge scientific evidence from overseas. With regard to the Prime Minister's zero tolerance approach to both heroin trials and safe injecting rooms, Dr Trautmann commented:There's a huge number of people using heroin in this country, a huge number of young people. I think it would be wise to at least try this before you make the statement that it has no real influence.Reverend Richmond concurred with this view, stating:We want to tell the Government to base health policies on evidence, not outdated moralistic opinion which has the appearance of being caring but rarely leads to effective action.When churches start talking about the outdated and moralistic opinions of governments, I think there is significant cause for concern that government policies are out of touch with community values and concerns. However, the Prime Minister seems not to be swayed by either scientific evidence or public opinion. Indeed, his dogmatic adherence to the notion of zero tolerance has even led the government to hold back funding for school drug education programs that do not comply with his own narrow perspective.A Senate committee hearing on 6 May revealed that a $7.5 million plan to warn schoolchildren of the dangers of drugs is still waiting for final approval, despite being given to Minister Kemp almost two months ago. An article in the Herald Sun on 7 May suggested that the reason for the delay could be the failure of the strategy to use the term `zero tolerance', with which Mr Howard has been so taken.An education department bureaucrat, Ms Lois Sparkes, admitted that only $500,000 of the $2.5 million allocated to the plan for this financial year had been spent. In addition, none of the $500,000 had gone to schools; it had only paid for research and meetings of the National Advisory Committee on School Drug Education. Clearly, the Prime Minister's inane preoccupation with the notion of zero tolerance has tainted his ability to think and act in an objective fashion.Susan Mitchell from the Australian was also highly critical of the Prime Minister's blind faith in so-called zero tolerance strategies in her article on 12 April. In the article, entitled, `One-liners are not policy—some ideas have nothing to recommend them', Ms Mitchell perceptively points out that Mr Howard `seems to have broadened the phrase to allow him to refuse to tolerate anything with which he does not agree'. Ms Mitchell goes on to say, `Simplistic approaches, inherent in catchphrases such as zero tolerance, are not only intellectually sloppy but dangerous.' I could not agree more with this conclusion, particularly now that it seems the Prime Minister is determined to ignore any evidence that contradicts his own personal opinions.The T-room trial has sparked a flurry of letters to editors all across the country over the past few weeks. I would like to conclude this afternoon by reading one of these letters which, I believe, is useful in providing some perspective to the current debate on safe injecting rooms. This letter was printed in the Sydney Morning Herald on 5 May and was written by a Canberra resident, Mr Bert Castellari. He said:Back in the 1960s I was privileged to be involved in what was then a bold new experiment that tested community attitudes . . . it was the first drop-in centre at the Wayside Chapel, run by the late Rev Ted Noffs.It provided a friendly and caring environment where young people with drug and social problems could come without fear of retribution. In those days the drugs were marijuana and LSD and the chapel guided many young people through the most traumatic times of their lives.Nowadays the drug is heroin and the Wayside Chapel is again testing community attitudes by providing a safe environment for users of a drug that is far more destructive than marijuana or LSD.The chapel proved to be an innovator in the `60s and it will, I hope, again prove that understanding and compassion are better cures than punishment.Mr Acting Deputy President, in the 1990s I hope that governments can learn this lesson, too. I would like to put on the public record my support for Reverend Richmond and his group, who have initiated this progressive step. I am sure all senators agree that we must look to a variety of solutions to address the drug problem and that the most important thing is keeping people alive.484513:20:004845Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—Before I begin my contribution, let me support Senator Gibbs in her contribution and as a supporter of the Wayside Chapel from the 1960s. They have always been at the forefront of innovation, treatment and the whole business of rescue, and I think they need our support at this time. It was a good speech and I thank her for it.However, I want to speak about something entirely different. In this matter of public interest debate today I want to speak about the crisis in the sugar industry in Queensland, particularly in North Queensland. It is a crisis that is facing not only many producers but of course many of the towns up and down the Queensland coast that depend on the sugar industry for their economic wellbeing.While some areas in southern Queensland have had good crops, the picture in the north is very different. The quality of cane has been affected by rain since last August, and that was followed by a particularly wet summer. The ability to harvest saleable cane has also been affected, and these conditions will have adverse implications for next seasons's plantings as well.There may or may not be such a thing as a level playing field, but in North Queensland, either way, it is a very boggy one. After a year of gradually deteriorating prices during 1998, sugar prices have virtually collapsed. Prices have been affected by the floating and devaluation of the Brazilian currency and by reduced demand in Russia, Asia and the former Soviet Union. There has also been a shift in world production. Brazil has emerged as a massive and now very competitive supplier. This relates to their advances in the production of both alcohol and ethanol and the trend towards production on large farms owned by conglomerates. In addition, there has been a decline in the ability of Australia to rely on preferential market access to areas like Canada, Indonesia and the Middle East.Growers who experienced below-average crops and quality in the 1998 season have barely covered production and living expenses—and some of them have not even done that. Many have already started to increase indebtedness in order to meet these costs. Highly geared enterprises will be early casualties of the slump in prices. This leads to a loss of family farms and flow-on effects in the towns that are supported by the sugar industry. As you would know, Mr Acting Deputy President, that means towns up and down the whole of the Queensland coast.Previously, there was a series of mechanisms to cushion the impacts of recurring low world prices. These mechanisms included controlled production, a two-pool pricing system, domestic pricing and international regulation of output. Cane farmers are dealing in what is essentially a corrupt world market. I describe it as a corrupt world market because the Australian sugar industry is now the only one operating in an environment without any of these cushioning mechanisms. Mr Acting Deputy President, you would know that both the Labor Party and the Democrats tried to keep in place some of those mechanisms when the government decided to remove them. We did our best during the debate to point out what it would mean and, of course, having sown the wind, the government is reaping the whirlwind.The Democrats have previously argued for the retention of the sugar tariff to protect the livelihoods of our sugar growers, but that argument was lost, the debate in this place was lost and we are now suffering as a result. I recognise and acknowledge the contribution made by the Member for Kennedy, Bob Katter, in the other place who, along with the Labor Party and the Democrats in this place, tried to get the government to turn around its headlong flight into deregulation. But, unfortunately, he was unable to do it and in this place we did not have the numbers.As these supports have fallen away from the sugar industry, it has been sustained to some extent in growth and economies of scale. However, these benefits have not been evident in the wet North of Queensland. The threats to Queensland sugar producers, however, come not only from overseas or from wet seasons but from within the industry itself. The proposed cane supply agreement given to growers recently did not allow sufficient time for growers' consideration, and if that agreement is signed off and does become the basis of further pricing, it will break the nexus between cane prices and sugar prices and cause further detriment to the industry.It is felt by some growers that such an agreement does not protect their interests; rather, it gives unfair leverage to the refining sector, just as removal of the tariff did. This comes on top of the price slump and production difficulties. I point out that, in terms of the refiners, it also gives an advantage to gigantic transnational corporations such as Coca-Cola. It is the main contributor to the Australian soft drink manufacturing peak body and was well and truly behind the push to remove the sugar tariff.The push for this agreement comes on top of the price slump and production difficulties. There would be any number of growers prepared to back the description of the proposed cane supply agreement which I am giving, although this may not be the view of the peak body nor of the associations of refiners and millers nor of the brokers. But the grassroots point of view, and the point of view of the family farmers, is certainly that, in this instance, they are at a significant disadvantage. They feel as though they are being pressured to sign off on that agreement.Every decade has included a period of very low international prices for sugar producers. Every period of low prices is a threat to small family production units in particular and the towns they support. But when low prices are compounded by a corrupt world market and a significant lack of leadership from the government, there is a crisis. Growers would like to put the government on notice that this crisis is developing and that, unless something is done, things will get much worse. This is certainly the message growers want me to bring to the government here in Canberra.Let me pay tribute to some of those who have contacted me, such as the Australian Canefarmers Association, Laurie Frebrellis, from North Queensland, and Mark Hoey, another sugar grower. They are very concerned about this issue and wanted me to make these points in the Senate today. They point out that the quota system in the United States is used to regulate imports. Some kind of quota system may be needed in Australia. At least, there should be a guaranteed minimum farm gate price. Unless we can get some system such as this in place, it is impossible to see a future for the sugar industry in this country.There is, of course, the problem of overproduction. Mr Acting Deputy President, even in your own state, now that sugar is being grown in the north, this is a big issue. Not only is there an overproduction in a global sense; it is something that Australian sugar growers themselves need to look at. There is the issue of export parity pricing, which was put in place once the sugar tariff was removed. This means that the price is set by the global market, and when that price drops to almost nothing, of course the result is disaster. Once the sugar tariff was lost, which was a component in the setting of the price in this country, the global market took over, with the result we are seeing now.The question that sugar growers in Queensland are asking is: why should the price in the domestic market be tied to the global price? There has been no reduction in the price of sugar to consumers, despite the fact that there has been an absolutely massive drop in the price to growers. So they say that if only the price could be maintained at a reasonable level in the domestic market, that would at least give them some relief. Of course, in Queensland most growers depend more on the export market than the domestic market, but it is a point they are making.Some of the growers have said to me that it is time for the ACCC to review the abuse of the monopoly power which is being used by sugar refiners to further depress the price which growers are receiving and also the amount of cane which is being crushed by the millers. They also raised with me the issue of representation by cane growers of their position, which they feel is not always put as clearly as it should be by the cane growers organisation. I have talked to them about this and I seek to keep a relationship going with the cane growers organisation, which is the statutory body. But, again, growers are saying to me that that representation needs to be looked at. I recognise, of course, that the voluntary organisation—the Cane Farmers Association—also has expressed these concerns.Let me say in conclusion that whether any of these suggestions from the growers which I have put to the chamber this afternoon are final solutions or even temporary solutions, I do not know. That is a matter for further debate. But much more, and beyond any mere debate, it is certainly a matter for immediate action by this government.484713:33:004847Carr, Sen KimSenator CARRAW5VICALP00—Last week some senators from this chamber, whilst sitting in an estimates committee hearing, were subject to a display of bureaucratic ineptitude and ministerial neglect of absolutely incredible proportions. If it were not so serious in its implications, I might be tempted to call it a comedy of errors. I refer to the sorry story of what is coming to be known as our newest university, Greenwich University—a `fully accredited Australian university', as it claims in its 1999 prospectus. I will be seeking leave later to have a photocopy of this prospectus tabled.Greenwich has said that it has a perfect right to call itself an Australian university: since duly established Australian universities are self-accrediting, then Greenwich University is as good as the rest. For reasons of its own, Greenwich University is wringing the maximum propaganda value out of the fortunate situation in which it now finds itself. If you remember, Greenwich University had its origins in the United States, where most recently it was located in Hawaii but was not recognised according to the local accreditation criteria. Now, however, thanks to the generosity of the Australian government, this institution of doubtful provenance and dodgy courses has truly landed on its feet.I will read from its current prospectus. It says:. . . in 1998 . . . the university moved to the jurisdiction of the Commonwealth of Australia and was established as a fully accredited university pursuant to statute. The Education (Greenwich University) Regulations 1998 were passed by the Norfolk Island government of the Commonwealth of Australia . . . Australia is a leader in international education and has a long tradition of distance education. These regulations were subsequently enacted as a full act of parliament by the Legislative Assembly of Norfolk Island, which legislation was then formally approved by the Commonwealth of Australia, education being a joint responsibility of both governments. On Wednesday 9th December that year the Greenwich University Act 1998 received the royal assent and became law.As you will note, the Greenwich administration has even dragged the Queen into this sorry affair. The prospectus goes on to explain that Greenwich is one of only three private and 36 public universities in Australia, all of which are established under acts of parliament. It has, it says, `acquired Australian citizenship and become part of the British Commonwealth system'.All of this is designed to enhance its commercial position as an Internet degree mill in the unsuspecting international market. All of this is at our expense—that is, yours and mine. However, a $3 billion education export industry is based on our excellence and our well-earned international reputation for excellence. It is directly under attack by this conniving invader known as Greenwich Uni versity. We have, might I say, a cuckoo in the nest.Who is responsible for this abomination of ornithology, this feathered freeloader? The stately emu on our coat of arms—that's who. The Commonwealth emu chose to close its eyes. Our Commonwealth guardian bird turned its back. It failed to protect us. It allowed the Greenwich cuckoo to sneak past its defences. Who was the Commonwealth emu on this occasion? Who was caught napping in their bird costume? There have actually been two culprits—two Commonwealth ministers assuming the guise of emus in my sad little scenario. The minister directly responsible for this fiasco was the minister for territories, Senator Macdonald. Minister Macdonald directed that the Greenwich University bill of Norfolk Island be assented to by that territory's Administrator in line with his power under the Norfolk Island Act 1979. In doing so, the minister for territories took advice from the Department of Education, Training and Youth Affairs. The second minister duped by the Greenwich cuckoo was the education minister, Dr Kemp. Rather than emus, perhaps we are looking at two people who were acting like galahs. Both of them failed to exercise due attention. They neglected their responsibility to uphold the integrity of the Australia education system.We have been told by Senator Ian Macdonald, who informed a Senate estimates committee on 4 May on this matter, that Greenwich University was purely a matter for Norfolk Island and was `not a major issue'. It was `not a major issue' was the claim he made to that Senate estimates committee. `It is not necessary to undertake a detailed examination of the bona fides of this entity, this outfit,' he said. We didn't need to know whether Greenwich was fit to stand alongside our real universities in the eyes of the world. As the vice-chancellors of Australia's 38 respectable universities and all the state education ministers have now made abundantly clear, the matter of Greenwich University is a very big issue indeed. It constitutes a direct threat to Australia's international reputation.I go back to what the Greenwich University 1999 prospectus actually says. It says that Greenwich claims to be `a global university' authorised under its Australian act of parliament to grant degrees. It claims that it `fulfils Australian accreditation requirements'. It says that Australian universities must meet no external accreditation requirements because their bona fides are clear and their reputations are protected by the application of rigorous standards and quality assurance measures. And that clearly is the case with all other universities that are currently recognised.But what Greenwich lacks is an application to these safeguards. This is due solely to its new status which is courtesy of this Commonwealth government. Under Norfolk Island law it is as accredited as the next institution—self-accredited, of course, in the case of this particular university—but, as I say, has no real accredited status of its own to actually justify the claims it has been making.MCEETYA, through its last meeting in Adelaide on 22-23 April, has forced Dr Kemp's hand. The state ministers right across the country have indicated they are not prepared to stand by and give this flock of galahs free rein. The federal government has been forced to institute a full-scale review of the academic and financial credentials of Greenwich University.Minister Kemp was able to extract at that meeting a promise from the Norfolk Island officials who were present that if the review finds against Greenwich then the territory will initiate steps to rescind the Greenwich University Act provided the territory's legislature sees fit to vote to do so. With the agreement of the good citizens of Norfolk Island, the cuckoo might be ejected from the Australian nest.The minister was pressured by those at the MCEETYA meeting to use the powers conferred upon the Norfolk Island Act to disallow the Greenwich University. The government refused to do so, refused to meet its responsibilities under that act. It could have done so and this collective error of judgment could have been corrected, but this government has refused to do that. It sought a face-saving device: this inquiry to be headed by Mr Gallagher, who is the officer directly respon sible within the Public Service for the administration of the Higher Education Division.One would ask how appropriate it is that the officer responsible should be making an inquiry into this very bungle which I would expect he would have had a good deal to do with in his own right and, one would expect, in exercising his responsibilities, would have taken all possible steps to have prevented. What we have seen, however, is that Dr Kemp and Minister Macdonald do not want to look like a pair of galahs. I cannot see, frankly, how they are going to avoid that responsibility.Australia does face a foreign invasion in its higher education sector. This foreign invasion has been intent on exploiting our international reputation for excellence and our particularly lax regulatory environment in higher education. They have used devices such as post office boxes, rented rooms, Australian registered companies and, of course, the Internet. Every bogus professor and their pet dog can now set up a virtual university degree mill that operates out of Australia, thanks to this government.The so-called University of Asia, for instance, claims that its registry—that is, its postal address—is in Adelaide. This is an outfit that offers bachelor degrees through the post and the Internet for a mere $US18,000 a pop. We have the St Clements University, which is registered in the British Caribbean Territory of Turks and Caicos Islands. It operates from Australia under the guise of a registered company, and if you ring its Adelaide office you are greeted by a voice saying `Australian tertiary education services and malt whisky wholesalers.' This is a company that purports to be yet another Australian university.The Australasian Institute is another one. It advertised, `Your MBA at the push of a button.' It claims affiliations with genuine Australian universities, which, of course, they have all denied, and has already hoodwinked at least 11 unsuspecting international students to pay thousands of up-front dollars for worthless qualifications. This outfit operates out of an office on the Gold Coast.We talk a great deal about defence in this country, and so we ought to. We ought to also be discussing the defence of this country's international reputation in regard to its higher education. Australia's defence against these unscrupulous freeloaders is in complete disarray. The federal government has finally agreed that we need a quick response and a combined regulatory approach involving states and territories, and it is about time that occurred.This Greenwich episode is a shameful display of this government's negligence. Let us get it right. Let us keep the invading cuckoo universities from fouling our nest in higher education. I seek leave to have this document tabled.Leave granted.484913:45:004849O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—At the beginning of last month, there was a story in the Australian Financial Review that carried the headline `New port rates give little joy'. The story reported on the official government waterfront productivity data. It amounted to a report card on the impact of Mr Reith's and Mr Corrigan's campaign against waterside workers on port efficiency.Senators would recall that it was a very extensive campaign, both in its development and its implementation, as well as in its cost. It cost taxpayers many millions of dollars directly, port users tens of millions of dollars, and the broader community probably hundreds of millions of dollars. It also created bitter social divisions. Who can forget the images of men wearing balaclavas and with dogs on chains on the waterfront?The government data, which related to the December quarter, showed productivity had remained flat overall, with falls recorded in three of the five major ports. Sydney saw a fall of 4.9 per cent in movements per hour in the quarter, Brisbane was down 7.7 per cent in the same period, and Fremantle dropped by 6.8 per cent. Adelaide remained unchanged, but at a high rate of over 23 lifts per hour. This high rate reflects the positive relationship between workers and management at Port Adelaide. The five-port average for the quarter declined by one per cent. Naturally, I suppose, the response to these numbers from Minister Anderson, the Minister for Transport and Regional Services, was to attack the MUA.The Minister for Employment, Workplace Relations and Small Business said at the beginning of April last year that both the major stevedores, P&O and Patrick's, had given a written commitment to reform in line with seven objectives. The commitment was allegedly given in return for access to a $250 million loan to pay redundancies. Those benchmarks, including an end to overmanning, high productivity, greater reliability, improved safety, lower costs through the logistics chain, greater use of technology and more training, were part of the process. The loan was to be paid back by way of a levy. It was to be administered through a wholly owned Commonwealth company, MIFCo.Mr Reith said all the costs would be met by the stevedores, not the government. He said this was a speedy process and port users would not be the ones to pay. He said he had commitments from both the major operators, who together account for about 90 per cent of the stevedoring in this country, that they would absorb the cost of the levy. He said it would not be passed on to users, and therefore ultimately the taxpayers, in the form of higher costs. He told parliament:Both major stevedores have agreed that the levy at this rate can be absorbed into their existing structure of charges so there is no overall cost increase in costs to shippers.He went further by suggesting that stevedoring rates would actually fall and he predicted that the waterfront would all be fixed by Christmas 1998. I will quote him again:I said that we would fix up the waterfront by Christmas, and I am still working to that timetable.But, in evidence to a Senate inquiry into the legislation required to set up the levy arrangements, the major stevedores had a different view. They said that their margins were thin and the added costs would be difficult to bear.Mr Mason, P&O's general counsel, said his company had signed a statement of support for the seven government objectives. I asked Mr Mason whether P&O had given a written commitment to absorb the cost of the levy. He said no. Mr Mason said that the government target of 25 movements per hour was just a target. He pointed to the reality that some vessels are very difficult to work and may limit the crane movement to 10 movements per hour.Mr Corrigan said Patrick's also supported, in general, the proposed reform. There was nothing in that commitment about absorbing costs. Mr Corrigan offered to give such a commitment to the committee. However, senators would be aware that Mr Corrigan is currently the subject of a Federal Police investigation into alleged false evidence he gave to the Industrial Relations Commission relating to the Dubai fiasco. Mr Corrigan also misled a number of media outlets in relation to his knowledge of the failed training exercise. So in that case his word was nothing, and that appears to be the case still.This whole exercise—initiated by the former minister for transport, Mr Sharp, and hijacked by Mr Reith—was never about reform of the waterfront. The real objective was to beat the union—and that is a trophy Mr Reith would love to have. It is now clear that the users of the ports and, ultimately, the Australian community are the ones paying for this political indulgence.Nor was the establishment of MIFCo to administer the levy system about assisting the reform process. It was not about increasing efficiency; it was a payback to Mr Corrigan for acting as the government's agent in campaigning against the union. It was part of an arrangement with Chris Corrigan to provide him with financial cover while he set about illegally sacking 2,000 workers. Importantly, it was also about masking Mr Corrigan's failures as a stevedore; helping to fund his corporate strategies, such as his failed and expensive attempt to grab market share from his opponent P&O; and also helping him overcome a complete lack of industrial relations skills.Mr Corrigan's management of Patrick's led him to a position where he had to crash or crash through. While he was not initially attracted to Mr Reith's and Mr Sharp's plan, in the end that was the only option left to him. Patrick's offered Mr Reith a vehicle to attack the MUA, and Mr Reith offered Patrick's an open chequebook.The minister for transport recently provided me with an answer to a question taken on notice about the operations of MIFCo. He said there had been 820 workers paid out. He said the companies involved were all companies associated with Chris Corrigan. Those numbers are as at 8 February. In an earlier answer I was told that, as at 14 December, five Patrick companies had received redundancy related payments since 8 April 1998. Those Patrick companies had been provided with $102 million. A second answer related to the issue of workers being given packages and then being re-employed. Funding is not available for workers who take a package on Friday and are then rehired on the Monday.The minister told me that on 3 September the secretary to the department of workplace relations wrote to MIFCo drawing its attention to reports that Patrick's was looking to re-employ supervisors who were taking packages. Patrick's responded on the same day, denying the allegations. The Chairman of MIFCo then wrote to Patrick's on 4 September and again on 8 September on the same matter. MIFCo found it necessary to write to Patrick's twice in four days, even though Patrick's had assured MIFCo on 3 September that it was not planning to rehire any redundant workers. MIFCo felt the need to conduct a company search of Red D Hire, the company allegedly associated with the Patrick group as well. Clearly, rumours in the industry about Patrick's misusing the redundancy payments persisted. And clearly, while Mr Reith was happy for Mr Corrigan to do his dirty work, he does not trust him with the taxpayers' money—and, I must say, nor should he.Mr Chris Corrigan, with the government cheering from the sidelines, sacked 1,400 permanent and 600 casual workers from 17 ports around the country. This was the climax of a government plan developed over a long period of time, at a cost to the taxpayer of several million dollars. The cost con tinues to grow as parties in this process continue to argue in the courts.It was also a secret process. The government went to enormous lengths and continues to do so to prevent details of its strategy being scrutinised by the parliament and by the public. A senior officer of the Department of Workplace Relations and Small Business, Mr Derren Gillespie, was even prepared, it seems, to give false evidence on a number of occasions to the Senate to protect the government.Mr Corrigan did need financial help from the government, because the plan that he was pursuing was an expensive exercise. In 1997-98 the Patrick parent company, Lang Corporation, had to pay out $58.6 million because of the dispute induced by Mr Reith. Lang also had to cover compensation claims from businesses that suffered financial loss as a result of the dispute. The shipowners' losses amounted to about $30 million, and the broader economy lost an estimated $250 million. But there was also a significant cost to the other major stevedore, P&O. That company's agreement with the MUA was put back some 12 months and the bills are still coming in.The evidence now shows that, despite all the economic and social disruption caused by the government's plan to smash organised labour on the Australian waterfront and despite the minister's claiming that the waterfront would be fixed by last Christmas, productivity is worse—certainly no better—than it was before Mr Reith and Mr Corrigan embarked on their folly.What about the government claim that stevedoring charges would go down and the assurance that the government gave that stevedores would absorb the cost of redundancies paid through the MIFCo levy? As I said earlier, there was no such commitment by the major stevedores, nor was there a commitment to the benchmarks contained in the seven objectives that the government attempted to link to the redundancy assistance. There was just in-principle support for the goals.Contracts with stevedores are generally for one or two years, and a number of major contracts were renegotiated around the end of last year and early this year. Senators might recall an article on the back page of the Australian Financial Review of 6 March, saying that shipping companies had been eagerly awaiting big cuts in stevedoring rates. After all, that was what the war on the docks was all about. That is why they copped all the costs associated with the government induced industrial chaos. But rather than cutting costs, Mr Corrigan pushed for price increases of up to 22 per cent and an average increase of around 15 per cent.I understand that, in the end, new contracts were struck at rates similar to those applying in 1998—notwithstanding the fact that there was an attempt by Mr Corrigan's companies to ratchet the rates up, certainly not down. This is sharply in contrast with promises by the government and also a view put by the National Farmers Federation, which was among the government's front-line troops in this campaign.At the Senate inquiry into the establishment of the levy system last year, the then Deputy Director of the National Farmers Federation, James Ferguson, said Patrick's would save $50 million a year from reduced labour costs. He said some of these savings would go to paying off the levy but some would be passed on to users—his constituency, the farming community. He was dead wrong. One year on, not one cent of savings has been seen by the farmers, and they are not likely to see any benefit in the future. Nor is anyone else, except Mr Corrigan and his companies. The share price of the Lang Corporation has gone from around $1.50 during the dispute to $4.80 at close of business yesterday.Mr Corrigan addressed an Australian Chamber of Shipping luncheon on 28 April. He told that gathering there would be no downward movement in rates until he had recovered around $70 million in costs he had incurred trying to smash the MUA. The costs of legal action currently being taken against Corrigan by Major Wells and others will also be paid by users. The fact that users and therefore consumers will have to meet all the costs incurred by Mr Corrigan through the MIFCo redundancy arrangements is a given. At current rates it will take the Lang Corporation about four or five years to get its money back.It is not unreasonable for port users to conclude that all that industrial and financial pain was for nothing. It is also not unreasonable to conclude that this expensive and disruptive exercise has changed little. There are fewer workers on the docks than before, but those reductions were already in the pipeline.Senator Abetz interjecting—8O6O'Brien, Sen KerrySenator O'BRIEN—They were, and the evidence shows it. The senator might update himself in regard to the evidence rather than interjecting so thoughtlessly.Work practices have also changed, but again those changes would have come about through negotiation, which was well advanced before this dispute. When I say `negotiation', I mean the approach adopted by P&O, not Chris Corrigan. Perhaps the only real change that has been achieved out of this process is that Mr Corrigan's wealth has grown.Questions Without Notice485248524852Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—My question is directed to Senator Newman, the Minister for Family and Community Services. Isn't it true that the government's offer of just $20 million for respite care assistance means that only 900 of the 13,400 families you have identified as currently in desperate need of respite care for their child with a disability will receive any assistance at all? How will the government decide which families are to receive this paltry assistance provided in the budget?4852Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I did notice that Senator Evans was putting that stuff about in his press release. It is a pity that he did not listen to the question that I was asked by, I think, Senator Allison two or three weeks ago. He then asked almost the same question himself about a week ago. He got the same answer about unmet need that I gave the Senate at the time. The respite care measure that Senator Evans is referring to is long overdue and badly needed. It does meet an area of unmet need, that is, carers of profoundly disabled children for whom there has been little or no opportunity for respite care. Senator Evans may think it is not much to support 900 families who have been almost torn asunder by the stress of caring for children with these disabilities. I would hope that Senator Evans would recognise that people with some disabilities have greater needs than others and this is a group of families who are in particular distress with the caring needs that they have taken on their shoulders.In addition the budget includes a measure for carers of people suffering from dementia—they may be older people with dementia but they may not be. So there are two measures in the budget that go to supporting carers. But most important of all, as I have told the Senate twice before, at the meeting of the Commonwealth, state and territory ministers on unmet need in disabilities I committed our government to providing support to meet the unmet need bill of $294 million. None of the states were prepared to make the commitment in terms of dollars at that time and we will be meeting again in the next couple of months. Work is going on urgently, Senator, if I can convince you at last—AX5EVANSSenator Chris Evans—Two years it's taken you.BE4Senator NEWMAN—Oh, no. For 13 years Labor was in power and could well have started preventing the unmet need let alone addressing what had already built up. It is a disgrace and it is a wonder that he can even open his mouth about the subject. We have inherited the unmet need of a couple of decades, but 13 years of that was the responsibility of the Hawke-Keating governments. We are ready to try to take our share of the responsibility. The states and territories have also said, in a joint communique, that they will share the role as well.AX5EVANSSenator Chris Evans—The Lib ministers said you were awful.BE4Senator NEWMAN—They did nothing of the sort. They played the usual games that states do when they are negotiating with the Commonwealth. The fact remains that we all recognise that there is a need, we agree on the quantum of the need and we have agreed to take a shared responsibility in meeting that need. The fewer political games that are played, either at the state and territory level or by the opposition, the better, because it is people with disabilities and their carers who are the losers in those games, Senator Evans.4853Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—Madam President, I ask a supplementary question. It is the carers and the people with the disabilities who are asking this question. They want to know where the money is. You have had two big budgets since the report identifying the need. You have no money in either budget to seriously address the problem. Instead the government gloats over $5.4 billion worth of surplus. What does the minister say to those 12,500 families who will not receive any assistance at all, many of whom have been contemplating giving up their children because they just cannot cope? What do you say to them?4853Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—It is not only just a lot of rot that we have heard, but it is a bit rich coming from the party that produced the Commonwealth debt which we are now trying to pay off with the surplus. By paying off the Commonwealth debt as soon as we can—and that is what the surplus enables us to do—we are increasing the possibility, over the next decade, of making sure that services to all people in need can be more generously met because we are not wasting it on interest payments that go to foreign banks or anywhere else.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Opposition senators will cease interjecting.BE4Senator NEWMAN—It is important that this country focuses on getting itself into a good economic position so it can be a more caring society. In the meantime we are prepared to meet our share of the responsibilities we inherited from Labor.48534853Ferguson, Sen AlanSenator FERGUSONEP5SALP10—My question without notice is to the Leader of the Government in the Senate, Senator Hill. Minister, last night's federal budget has delivered on all the promises made by the Howard government in last year's election, with major spending commitments on families, the aged, health, education and rural and regional Australia. Minister, can you inform the Senate of the importance of the budget surplus to Australia's economic future and in particular for low interest rates? What further reforms can be added to this responsible management of the nation's finances to promote further economic growth and job creation?4854Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—Rarely has a budget received such widespread acclaim as last night's Howard government budget—acclaim from the media, lobby groups, financial markets and the community. It is true that we have delivered on our election promises and we have done it without raiding the nation's Bankcard, without racking up debt the way Labor did year after year. There are a wide range of responsible spending initiatives in the areas mentioned by the honourable senator, but we have not spent money that we do not have. The budget remains in surplus. Madam President, I remind you that this year's budget is $5.4 billion in surplus—the third surplus in a row that this government has delivered. What a contrast to Labor. Remember the last five years of Labor—$80 billion of accumulated deficits.The budget surplus is important to Australia because it is being used wisely. It is being used to repay Labor's debt—the $80 billion of debt that the Australian people have to repay. This government, through prudent economic management, is putting the funds together to repay that debt. By doing so it is keeping the economy strong, helping to protect us from the economic turmoil that is being experienced on the part of our Asian neighbours. Most importantly, it is helping to keep interest rates down. That is good for Australian home buyers; it is also good for Australian business, particularly small business. I remind the Senate that home owners are saving about $300 a month on an average home loan because of the cuts in interest rates that have been achieved by the Howard government. Throw away the surplus, as Labor would, and you throw away the benefits of low interest rates. As the Australian Chamber of Commerce and Industry said last night, this surplus will ensure interest rates are kept low.The budget is also a wake-up call to the Senate. Clearing government debt and reforming the tax system are great national challenges and I would say it is time the Senate took up that challenge. We could completely wipe out Commonwealth debt by the year 2002-03 if the Senate would pass the government's legislation—both the tax reform package and the full sale of Telstra. It is as simple as that. We could clear Australian government debt for the first time in a century. At the same time we would be able to deliver $13 billion of cuts in personal income tax to Australian taxpayers.We remember what the hapless shadow Treasurer said last night when referring to the GST. He said, `We want to hold this government to its promises.' If they want to hold the government to the promises, they will support the sale of Telstra and they will support the government in implementing its new tax system. Both proposals were put in full to the Australian people at the last election. Employer groups also want the Senate to get on with the job. Last night the Australian Industry Group said:The Budget provides support for tax reform, a first order national reform issue. We call on the Senate to pass the legislation.The Business Council of Australia said:The budget paves the way for tax reform. Australia can now get on with the vital task of building a better, more competitive and fairer tax system.The Australian Chamber of Commerce and Industry stated:In the end, what this budget has done is prepare the way for the next one which should follow the introduction of a new tax system.The Australian government has shown the lead. It is now up to the Senate to take advantage of that opportunity. (Time expired)48544854Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—My question is directed to Senator Newman, the Minister for Family and Community Services. Can the minister explain why the government is prepared to pay her department $366.5 million over four years to implement the GST package but is only prepared to compensate youth allowance victims to the tune of $170 million—less than half that provided for GST related departmental expenses? Isn't this another example of the government's misguided priorities? Why is the government prepared to spend more to implement an unfair tax than it is prepared to spend compensating the families who will bear the brunt of that tax?4855Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Right at the end of the question came the problem for the Labor Party. They describe the money in question as being money used for implementing a tax. What they have not recognised is that it is the money required to support and provide services to Australia's families. There is not only a new tax system but also a new method of delivering tax and family benefits to Australia's families. One of the problems has been that an awful lot of Australia's families who need special help tend to live outside the metropolitan areas where so many Labor Party members come from. The need is to have a wide network of family assistance offices around Australia which provide easy access not only to people's entitlements but also to information and advice about their entitlements and information on services.There are something like 300 Centrelink offices around Australia; there are about 26 tax offices around Australia; and there are over 220 Health Insurance Commission offices around Australia. They will all have a family assistance office presence, which means they can widely cover this vast country of ours, taking services to families where they are and giving them the help they need. One of the things that was learnt from the family tax initiative was that, often, families do not make choices that are in their own best interests when determining whether to take a benefit—GB6COLLINSSenator Jacinta Collins—How patronising.BE4Senator NEWMAN—No, it is not; it is helpful. Families have to decide whether it is better for them to take a benefit through the tax system or through the welfare system. I don't want families not getting the maximum entitlement which the law allows them. The lack of advice and information for them is to be overcome by having family assistance offices around Australia. Families will be able to take their new benefits as a lump sum at the end of the year—for some families this will be an attractive option because there will be a sense of enforced saving, which they often want to do but find it difficult under the normal pressures of family life—or they will be able to take them as tax deductions in their pay packet, or they will be able to take them through a payment to the primary carer. It is sometimes complicated for people to assess what is the best measure for them.That is an indication of some of the help that people will get in a family assistance office. It requires a major IT system and it requires the provision of information at that point of contact with people—helpful people. To describe it as the implementation of a tax is to totally misread the purpose of the family assistance officers. Only a party that really does not give a damn about Australia's families, wherever they live, would try and portray it in that way.4855Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—Madam President, I ask a supplementary question. Can the minister explain why, aside from these huge GST implementation costs, the government is cutting $12.6 million from family assistance in the year 1999-2000, as indicated on page 86 of Budget Paper No. 2? Why has the minister allowed the Treasurer to put this $12.6 million towards his $5.4 billion surplus, instead of ensuring that they are passed on to those who need them most—that is, the families who will be dependent upon assistance?4855Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—That is hardly a supplementary question. It is a new question on a new topic, but I am happy to take it because it is important to make sure the Labor Party does not remain in the ignorance it constantly wallows in. The savings of $12 million to which you referred, Senator, are not family allowance matters; in fact, they are a change in the indexation date—GB6COLLINSSenator Jacinta Collins—It's here on page 86.BE4Senator NEWMAN—Madam President, does the Senator want to hear my answer or does she want to tell me across the chamber? I do not mind which, but she is in ignorance. Indexation of the child-care assistance will occur in July 2000, along with the introduction of the new child-care benefit, rather than in April 2000. It is an adjustment measure which produces a one-off saving in 1999-2000 of the $12 million referred to.48564856Crane, Sen WinstonSenator CRANEUW4WALP10—My question is to the Minister for Family and Community Services, Senator Newman. Last night's federal budget has been widely acclaimed as a family friendly budget with boosts in particular to low and middle income families and families with children. I ask: would the minister please outline the benefits to families announced in the budget?4856Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I thank Senator Crane for the question. While some people might like to live in cloud-cuckoo-land, Senator Crane recognises the reality is that this budget is recognised as being a very important, family friendly budget. I draw the attention of the Senate to one of the budget documents entitled Strengthening and Supporting Australian Families. If people do not want to rely on misinformation from the opposition, I suggest they go to their local member to get a copy of that publication and see for themselves the wide range of measures which have been introduced in this budget and will help Australia's families in one way or another.First and foremost has got to be the major restructuring of the family assistance package and family assistance offices. That is vitally important to the future of Australia's families. Also the lower interest rates have enabled Australia's families to afford a home or better maintain a mortgage without the same stress as was the case under Labor, which presided over 17 per cent interest rates which crippled families as well as sending small businesses into liquidation. Now that we have a budget surplus of $5.4 billion, Australians can square their shoulders and be proud of the fact that they are going forward with greater hope for the future than they have had for many years.Let me talk about child care because so much misinformation about child care has been put about. Let me make it absolutely clear: the number of child-care places have been increased every year that we have been in government. Money for child care has been increased for every year we have been in government. We are now spending $1.1 billion on child care, which is more than Labor spent when it was in government. There will be $598 million extra for the period 2000 to 2003 through the child-care benefit, and it is better targeted at places that are available for families in areas of highest need. The assistance for families with children in child care will increase by $7.50 per week for a low income family with one child in care paying average fees, by $11 for two children and by $32 for three or more children in care.Very importantly, and it is badly needed, there will be higher rates of assistance for families with several children in child care, regardless of what type of service they use, and families using part-time care—we know many of the primary carers are also in the work force part time—will be able to get increased assistance of 10 per cent more for up to 33 hours in long day care centres. That is very important practical help for families.One of the big worries of families is the scourge of drugs and drug addiction in the young. There are over $295 million already committed for the fight against drugs and there was an additional $221 million announced at the last Premiers Conference by the Prime Minister. There will be $60 million going towards preventing chronic youth homelessness, and any parent in Australia would think that would be money well spent. There are increased amounts of money going into building family relationships, better enhancing relationships, and supporting men who are having difficulty so that they can enjoy happier relationships.Another prevention measure that will help families is another $25 million, making $50 million for preventing domestic violence, preventing harm to our children who witness domestic violence, helping perpetrators stop their own violence, and getting the community to understand that it is a crime and that we must all take action. Madam President, I could go on and on, there are so many pages of assistance. (Time expired)48574857Hogg, Sen JohnSenator HOGG7L6QLDALP00—My question is to Senator Newman, the Minister for Family and Community Services. Will the minister confirm that Centrelink will have 5,000 fewer staff to assist customers as a result of this government's funding cuts? Will the minister confirm that last year there were 6.4 million unsuccessful call attempts to Centrelink, and only one in six callers made it through? Does the minister seriously contend that replacing people with answering machines is the answer to the needs of Centrelink clients?4857Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—When we came into government we inherited a call centre system which was utterly decrepit and could not answer the needs of the customers. Ever since, we have put more and more people into call centres. We have spread them around regional Australia so that there are more employment opportunities, and we have put in efficiency measures to try to establish best practice in call centre management. That is all behind us. Now, in this budget, we are introducing two new call centres—one in Maryborough and one in Port Augusta. This was a commitment which we gave in September during the election campaign. We wanted to establish a couple of call centres, each with about 50 people who come from rural areas, who understand rural issues and who would be appropriately helpful to people with problems that need addressing because of their personal circumstances in rural Australia.These are important measures which will be introduced this year. In addition, we are running a pilot project to test the introduction of electronic service delivery, because there is quite often great pressure on the call centre system—maybe after a quarterly letter has gone out or people have had a payday and they are not sure whether their money is in the bank. Those kinds of things cause the peak load to grow in Centrelink. People who can be answered quite quickly make up quite a part of the call centre demand on some days. People will be able to get those sorts of answers in an electronic manner over the call centre system, thus freeing up time for people who have more complex issues to be addressed and who need to speak to an officer. This has been done by a number of businesses, as you would know, Madam President. It is good, efficient management of resources. We are testing it as a pilot to see how Centrelink and the customers can work through it and find a good solution for everybody.4857Hogg, Sen JohnSenator HOGG7L6QLDALP00—Madam President, I ask a supplementary question. Minister, you failed to answer the first part of my question, where I asked about the 6.4 million unsuccessful call attempts to Centrelink last year and the fact that only one in six callers made it through. I ask you to address that. I also ask: is it a fact that, while the tax office is getting an additional 2,100 GST tax police, Centrelink is losing 1,050 staff who are meant to be assisting low income Australians? What does this say about the government's priorities?4857Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I cannot answer as to detail of the callers that actually got through, but that sounds like a grossly exaggerated figure which was being used by the shadow minister. The reason for that is that I get frequent graphs demonstrating the call—Opposition senators interjecting—BE4Senator NEWMAN—Madam President, the opposition have got nothing to scoff at. They gave us a call centre system which was hopelessly understaffed, hopelessly inadequate, and we have spent three years trying to get the system we inherited into shape.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many interjections.BE4Senator NEWMAN—Do you know, Madam President, I do not think they really care about the answer. We have put on something like 400 extra staff in May. As at 10 May, 159 of them are operational; the remainder will be operational by the end of May. There are a number of measures that have been taken, Senator. I would love to tell you. (Time expired)48574857Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—My question is to the Minister for the Environment and Heri tage, Senator Hill. Last night's budget indicated that government grants that are made to voluntary environment and heritage organisations will be `dependent on whether their activities contribute to government environmental and heritage priorities'. Can the minister give examples of what types of activities by a conservation organisation may be seen as not contributing to the government's environmental priorities?4858Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—It is incredible, Madam President. Senator Bolkus put out a press release raising the same point and criticising the guidelines. Senator Brown—surprise, surprise—put out the same press release criticising them. The Australian Democrats, never to be left out, come in here today and ask a question on the same issue. It must be the biggest issue around in the environment. I will read the guidelines by which I was guided. They state:The current environmental priorities of the Commonwealth government are to be taken into account in determining the funding or level of funding of particular organisations whose activities are directed to those priorities.I think they are excellent guidelines and that is why I adopted them. They were, of course, the guidelines of Senator Faulkner when he was minister.4858Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—Madam President, I ask a supplementary question. Can I take it from the minister's answer that making public information which is contrary to government environmental policy decisions is seen as not contributing to your environmental priorities? Isn't this criteria for funding just part of an ongoing campaign to intimidate and silence groups which are the most effective in exposing some of the nastiest decisions your government is responsible for? What is the point of funding community organisations if they are so totally restricted in what they are able to say and do and are forced to become simply underpaid propaganda merchants for the government?4858Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—Community groups seem to be willing to take the approximately $1.7 million that we appropriated for the purpose last year and about the same sum of money that is being appropriated this year.48584858Cook, Sen PeterSenator COOKRF4WAALP00—My question is to the Minister for Family and Community Services, Senator Newman. Is it not a fact that, using the forecast of average wages growth provided in the budget papers, pensioner compensation for the GST will erode within just four years?4858Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—This is a question which has been asked in one form or another for several months, and the fact remains that the impact of the GST will be on prices. Therefore, the compensation is related to the cost of living index, the CPI. We have also introduced another benchmark to protect pensioners from the potential of falling living standards, which is over and above and in addition to the CPI benchmark which has been used for generations. Whatever the cost of living index rises to in the future, pensions will be at 1½ per cent above that index—in other words, above what they would be with today's—Opposition senators interjecting—BE4Senator NEWMAN—Somehow the Labor Party thinks that because you have a second benchmark—10000PRESIDENTThe PRESIDENT—Order!BE4Senator NEWMAN—There are two benchmarks and whichever is the highest is the one which will determine what pensioners receive.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are too many senators on my left interjecting.BE4Senator NEWMAN—The income of pensioners will continue to rise by whichever of the benchmarks at any given time is the higher, but their income can never drop below 1½ per cent of CPI. They have full compensation.4858Cook, Sen PeterSenator COOKRF4WAALP00—Madam President, I ask a supplementary question. Don't these budget paper forecasts indicate that, in the year 2003-04, pensioners would have been getting $426 a fortnight without the GST and in the same year they will be getting a pension worth $426 with the GST? How does the minister justify a compensation package that evaporates so quickly? If the Treasury can admit that the GST compensation erodes to zero, why can't the Minister for Family and Community Services admit it?4859Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—No, they do not.48594859Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—My question is to the Minister for the Environment and Heritage, Senator Hill. I refer to the recent signing of the WA Regional Forest Agreement, and I ask: did the minister support the allocation for logging and woodchipping of those old growth forests such as Dawson, Giblett, Jane, Peak, Rocky and Sharpe which were placed on the interim list of the Register of the National Estate on the recommendation of his own department? If he did support that decision to allow logging in these important areas, on whose advice did he make that decision? If he did not, when did he become aware of this decision?4859Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—The Regional Forest Agreement for Western Australia has been signed, and it is a very significant achievement both for the environment and for industry in Western Australia. As honourable senators know, the Regional Forest Agreement scheme is based on a Commonwealth-state agreement—negotiated by our predecessors, I concede—which was designed to provide for a comprehensive, adequate and representative conservation reserve system whilst at the same time giving resource security for the timber industry. This government has been pleased that it has been able to achieve a number of agreements pursuant to those guidelines—first in Tasmania, two in Victoria, now in Western Australia and we are very close to the first in New South Wales—and by the end of the year we hope to conclude the process.As I said, the Western Australian agreement achieves some very good outcomes for the environment—in particular, the achievement of all reserve criteria targets for all ecosystems where possible on public lands, and the creation of an additional 12 national parks and 25 additions to existing national parks. In total, over 150,000 hectares of new reserves will be added to an already extensive reserve system, representing a net increase of 114,000 hectares over the existing reservation. Two-thirds, or 67 per cent, of all old growth forests in Western Australia will be protected within the reserve system.FX5MURPHYSenator Murphy—How many?BH4Senator HILL—It is 67 per cent of all old growth. The agreement provides for an extensive capture of places on the National Estate interim list—the ones that were not mentioned by the honourable senator—with 82 per cent of those places in the reserve system. Eighty-two per cent are able to be retained, Senator. The agreement delivers a total reserve system of 1,047,000 hectares, over one-third of the native vegetation of the region.XE4BOLKUSSenator Bolkus—What about her question?BH4Senator HILL—I can give you some more examples if you like.DX5MARGETTSSenator Margetts—Madam President, I raise a point of order. My point of order is on answering the question. The minister sounds like he is about to wind up, but he has not actually answered the specific question: on whose advice did he make the change of decision or, if he did not make the decision, when did he become aware of that change? I hope he is going to answer it at some stage.10000PRESIDENTThe PRESIDENT—I am sure the minister is aware of your question, Senator.BH4Senator HILL—Madam President, I was just going to remind the honourable senator that, in addition, we are adding high biodiversity areas to the reserve system, such as Wandoo, the Scott River plain and the Darling escarpment adjoining the Blackwood Plateau and the section to the east of Perth. As I have said, in this agreement—which is a balance between the environmental goals and providing resource security for a timber industry that we hope will continue to flourish and provide jobs for Western Australians—we have been able to retain 82 per cent of those places that were on the Register of the National Estate.QD4BROWNSenator Brown—On a point of order, Madam President, the question was not about why the senator has been involved in the protection of areas. It was quite clearly about why the senator has been involved in the destruction of areas, including National Estate areas which have been protected under his own hand. He has not addressed that question, and I ask you to direct him to do so.10000PRESIDENTThe PRESIDENT—I cannot direct him how to answer a question. There is no point of order. The minister is being relevant to the matter raised.BH4Senator HILL—I was explaining to the honourable senator, who I assumed was interested in the environmental outcome, what a good environmental outcome had been achieved. In fact, 82 per cent of the places on the interim list were able to be retained within the reserve system. I would have thought that that was a pretty good outcome. I took advice under the EP(IP) Act and the Prime Minister took advice under the Australian Heritage Commission Act, and those advices were obviously taken into account in the outcome.4860Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I have a supplementary question. I thank the minister in as much as he gave an answer. I know the relevance was that trees were involved in the answer, but it did not actually involve answering the question. Right near the end of the minister's answer, he said, `I took advice,' and by way of a supplementary question I would like him to say advice from whom and when. Can the minister confirm that, whilst the publicity material associated with the signing of the RFA proclaims—and you mentioned this in your answer—that 12 new national parks have been created, 16 already approved national parks, nature reserves and conservation reserves have either been revoked or gutted under the RFA and that 54,000 hectares of forest that were approved by government to become conservation reserves have had their conservation status revoked? On whose advice and when, Minister, did you make that decision?4860Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I actually do not sign the agreement but I give advice in the process of reaching the agreement. We did, as I said, take into account all matters to determine a good environmental outcome and a good job security outcome. It is interesting to note that most of the Western Australian press that I have seen on the RFA outcome has been particularly positive. If you look at just one side of the ledger, you will always find something to carp about but, if you look at both sides and you want a good jobs outcome and a good environment outcome, when you look at the WA RFA you will think a pretty fair job has been done.48604860Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—My question is directed to Senator Newman, the Minister for Family and Community Services. Has the minister received her late night report on how significant budget details were made public on her departmental web site hours before the Treasurer's speech? Can she confirm that this embarrassing revelation came about because the operation of the departmental web site has recently been outsourced to a private IT firm who had no knowledge of the need to protect the security of sensitive budget details? Can the minister also confirm that this outsourcing resulted in the departmental web site being inaccessible for at least the last 12 days, only coming online to drop the budget announcements? Just who has the minister decided to blame this time for the latest embarrassment within her own portfolio and ministerial responsibilities?4860Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—It was actually Labor that outsourced ITs. It was the Department of Veterans' Affairs. Do you remember, Senator? I acknowledge that budget media releases were put on my web site yesterday afternoon. The secretary to the department has acknowledged that it was a departmental error. He has undertaken to ensure a thorough formal investigation of the circumstances which led to the serious breach of budget confidentiality. I expect a full explanation, an analysis of any deficiencies in departmental procedures and controls, and consideration of appropriate corrective and disciplinary measures. The preliminary report of the department's investigation last night has come across and it indicates that the release occurred as the result of a series of technical and human errors associated with preparation to meet the requirement for budget information on government web sites immediately following the budget speech.4861Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam President, I have a supplementary question. Given that the minister does not even understand who was responsible for outsourcing IT in the Department of Social Security and, therefore, the Department of Family and Community Services—LD4ALSTONSenator Alston—Madam President, I rise on a point of order. We have had about 15 or 20 seconds of abusive introduction. There is not a skerrick of a question contained in that proposition, and I suggest that you rule Senator Faulkner out of order.5K4Senator FAULKNER—On the point of order, Madam President: apart from the dishonesty and the inaccuracy in the statement that Senator Alston made, I would draw your attention to the sort of preamble that government senators—for example, Senator Crane—used in their questions in question time today and I would ask you to rule Senator Alston's non-point of order out of order.10000PRESIDENTThe PRESIDENT—It has become a custom for preambles to questions—which probably should be a great deal shorter than they are—that they should not be abusive. The level of sledging that has been going on in the chamber in recent times is unacceptable. I ask Senator Faulkner to ask his question.5K4Senator FAULKNER—Is the minister aware that all participants in the budget lock-up had to sign secrecy agreements before entering the room and that a breach of those requirements would have been a breach of the Commonwealth Crimes Act? I ask whether she is also aware that the Deutsche Bank summary of the budget led with the line:The greatest excitement generated by the 1999-2000 Commonwealth budget was the accidental release of a number of press statements relating to budget initiatives by the Family and Community Services ministry.Given how serious this issue is, why don't you for once take full responsibility yourself for this serious lapse of security within your own portfolio—as opposed to pointing the finger, as you always do, at someone else?4861Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Of course when I am responsible for something I take responsibility for it. As I said in my answer, I am still waiting for a report of how it happened and the details of it happening. I do not have anything else to add today, Senator. I am sorry to disappoint you.48614861Lightfoot, Sen PhillipSenator LIGHTFOOTWP6WALP10—My question is directed to the Minister representing the Minister for Health and Aged Care, Senator Herron. The government is committed to fostering stability and fairness in the health system.RF4COOKSenator Cook—I raise a point of order, Madam President. I was waiting for Senator Alston to take a point of order because this is exactly the point he took a moment ago about introductions and preambles that are out of order—and yet the government has made a practice of it. This is a hypocritical government.LD4ALSTONSenator Alston—Madam President—10000PRESIDENTThe PRESIDENT—Order! I do not need any help on this. There was a totally different point of order. Preambles ought not to be included in questions or supplementary questions.LD4ALSTONSenator Alston—On that matter, Madam President, I think you have previously ruled that introductory remarks or preambles are acceptable if they are in context and are certainly not too long. But my point of order was an entirely different one—that Senator Faulkner was taking the opportunity to simply abuse Senator Newman. It was not an introductory remark; it was nothing more than a classic example of sledging. I am sorry Senator Cook does not understand the difference.10000PRESIDENTThe PRESIDENT—Senator Alston, I have already pointed that out.UI4RAYSenator Robert Ray—On the point of order, Madam President, some preambles that put a question in a proper context you should rule in order, but those that are either sledging or self-congratulatory should be ruled out. I think that rather than rule on it now you might be able to come back, because we have a pattern that every government question starts with some obsequious comment that is irrelevant to the question.H15CAMPBELLSenator Ian Campbell—I raise a point of order, Madam President. Under what standing order can a senator, regardless of how long they have been here, stand up and make suggestions to you?10000PRESIDENTThe PRESIDENT—Thank you. Senator Lightfoot.WP6Senator LIGHTFOOT—Thank you, Madam President. I will not be put off by the opposition from spreading to the Australian people—10000PRESIDENTThe PRESIDENT—Senator Lightfoot, I have called you to ask a question and you may ask a question and that is all.3L6CONROYSenator Conroy—Your only friends are over here!5K4FAULKNER Senator Faulkner—You've been put off, Ross.10000PRESIDENTThe PRESIDENT—Order! Labor senators will stop interjecting.WP6Senator LIGHTFOOT—I ask the minister: can he inform the Senate of the benefits of the health system for Australians following the government's decision to introduce lifetime health care cover?4862Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—My answer will be neither sledging nor self-congratulatory—Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many interventions in the chamber at the present time.VW4Senator HERRON—Lifetime community rating may even have affected Senator Ray or Senator Woodley, Senator Lightfoot himself and certainly me if it had been in when we took out private health insurance—if we did, that is.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order!UI4RAYSenator Robert Ray—Eighteen years ago, you dill.10000PRESIDENTThe PRESIDENT—Senator Ray, I have called the chamber to order. Senator Herron, please proceed.VW4Senator HERRON—The introduction of lifetime community rating health cover is an important structural reform to ensure the continuing stability of both the public and private sector health systems. It is a policy with long-term rewards for the Australian health system and benefits all Australians. We are determined to ease the Labor induced pressure on Medicare as well as ensure that Australians have a level of choice as well as universal access to excellent health care. The lifetime health cover scheme is part of a comprehensive strategy. We are committed to long-term solutions, not just to quick fixes. The first step was the introduction of the 30 per cent rebate which addressed the issue of affordability of private health insurance.Lifetime health cover is a fair and equitable scheme which does not change the basic principle of community rating, which is that health funds cannot charge members a higher premium based on their age, their health status or their claims history. Without lifetime health cover, people who are long-term members of health funds are subsidising people who join only when they anticipate heavy hospital and medical expenses. That is not fair and it pushes up the price of health insurance for all members. Lifetime health cover will reward people who join a health fund and take out hospital cover early in life and maintain this cover throughout their life.Everyone who currently has hospital cover with a registered health fund will automatically lock in lower premiums for the rest of their lives when the lifetime health cover system begins on 1 July next year. There will be a 12-month period of grace starting on 1 July 1999 to allow people currently without private health insurance the opportunity to take out hospital cover and lock in lower premiums. In recognition that people may need to discontinue their private health insurance membership for a period of time for reason of hardship, lifetime health cover allows people up to a total of 24 months absence during their lifetime without a loading being applied to their premium when they return to private health insurance.In addition to lifetime health cover and private health insurance, the Howard govern ment last night unveiled initiatives to improve rural health. The budget provides around $171 million over the next four years for a range of specific measures to improve access to services and strengthen the rural health work force. It builds on the many successful rural health initiatives already in place. We will introduce retention payments for long serving GPs in rural and remote areas at a cost of $43.1 million over four years. A sum of $40.8 million will be provided over the next four years for the establishment of 30 regional health service centres in rural communities throughout Australia. A further $2 million has been provided for residential aged care places. The government will provide $19.2 million over four years to expand Medicare access in rural and remote Australia. In line with the government's strategy of providing greater choice and recognising that some women prefer to receive services from a female doctor, this budget will provide $8.2 million over four years for a fly-in, fly-out female GP service. The service will increase access to primary health care interventions such as cervical cancer screening, breast and skin examinations and other preventative health care.A further measure recognises the dramatic impact breast cancer has on women and fulfils the government's 1998 election promise to provide funding of $4.1 million over four years to support services for women who have been diagnosed with breast cancer. This measure will focus on women in rural and remote areas in particular. (Time expired)48634863Quirke, Sen JohnSenator QUIRKEZS6SAALP00—My question is to Senator Newman, the Minister for Family and Community Services. Can the minister confirm that one of the two new Centrelink call centres announced in yesterday's budget will be located in Maryborough, in the Wide Bay electorate of Mr Warren Truss, Minister for Community Services? Can the minister also confirm that the last new call centre was established in the minister's home town of Launceston?4863Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I do not know where Senator Quirke was earlier in question time because I told him that a call centre was to be established in Maryborough and another one in Port Augusta. At the time that that was promised, on 22 September last year, Minister Truss was not the minister in this portfolio. Centrelink chose two locations—the same thing applies to Port Augusta—with large rural areas surrounding them so that they could provide a good service to people in those rural areas. The other centres around Australia are in places such as Toowoomba, Townsville, Launceston and Hobart, and I am sure Senator Sherry and Senator Murphy are not going to complain about the ones in Tasmania. We need the jobs. Those were all decisions, once again, which were made at arms-length from government.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many interventions in the chamber. The behaviour is disorderly.BE4Senator NEWMAN—Those call centre decisions in Tasmania, either the expansion or establishment of them, were made at arms-length from government.4863Quirke, Sen JohnSenator QUIRKEZS6SAALP00—Madam President, I ask a supplementary question. As the minister has told us that Port Augusta will be one of the next places to get one of these centres, can she confirm that Mr Wakelin is going to follow in Mr Truss's footsteps and soon become a parliamentary officer as well?Government senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my right will cease interjecting. Senator Newman has the call.4863Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I am sure all of my colleagues would agree that Mr Wakelin is a very good local member. I have campaigned for him and he is an able contributor to the coalition effort in government. As you would know, Madam President, such positions are the prerogative of the Prime Minister.48634863Lees, Sen MegSenator LEES8U4SAAD00—My question is to the Minister representing the Prime Minister. Is the minister aware that Australia's public sector net debt is the fourth lowest in the OECD and, as a percentage of GDP, is about a third of that of Canada, the United Kingdom and the United States? Does the minister agree that, on international comparisons, Australia does not have a public sector debt problem, although by international standards we do have significant underfunding of education, research, social welfare and other key parts of the social safety net? Why is the government giving more priority to fixing what is not a problem and paying essentially no attention to fixing the very real social deficit problem that has been made worse by your government's $1.8 billion of broken promises, those non-core promises you chose not to fulfil in your first term in office?4864Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—One thing I will give the Democrats is that they are consistent. They come in here time and time again and argue that government should put up taxes, borrow more and spend it. The consequences of that we experienced under Labor. The consequences were record high interest rates and record high unemployment. That is not the path that this government is going to accept.RF4COOKSenator Cook—Piffle!BH4Senator HILL—Senator Cook, one million unemployed is the record of your government.8U4LEESSenator Lees—Madam President, I raise a point of order on relevance. I did not ask about any Labor Party policy. I asked about this government's policy of clearing debt.10000PRESIDENTThe PRESIDENT—The minister is entitled to put the answer in context but I shall listen carefully to the answer.BH4Senator HILL—Madam President, I was just making the point that the recipe of Labor, which was supported throughout its 13 years of government by the Australian Democrats, was high taxes, high expenditure and, consequently, high interest rates. Small business will never forget the interest rates of 20 per cent that they got from Mr Keating and Mr Hawke. That was Labor's way of doing business.Senator Alston interjecting—BH4Senator HILL—It is true, as Senator Alston says, that in the last two years of a Labor government Mr Beazley was the finance minister, and what did he give us in his last year? He gave us $10 billion of deficit. In his previous year, it was $14 billion of deficit.HX5WOODLEYSenator Woodley—Madam President, I raise a point of order. Under `Rules for questions', paragraph 73 (4) says:In answering a question, a Senator shall not debate it.That is exactly what Senator Hill is doing. He is not answering the question.10000PRESIDENTThe PRESIDENT—The minister is able to answer as he sees appropriate for the question asked. I am not able to direct him as to how to answer it. He may well see the question differently from the person who asks it. But it is important that what he says is relevant to the question.BH4Senator HILL—As I understood the question, I was being asked why won't the government adopt the Democrats policies, which are to spend more on a whole range of what are referred to as social issues, social causes. Apart from the fact that we are spending record amounts on education, health and the other social issues to which the honourable senator referred, this government has a strong policy to leave this country with a sound economic record that can provide prosperity not only for this generation but for future generations as well. One way of doing that is to get down the deficit.From its last five years in government, Labor left us with $80 billion of debt. Future generations of Australians will have to pay for that debt. This government, having put the books back into surplus, has started the process of repaying that debt and the outcome will be a stronger economy that will enable future generations to have the best chance of prosperity that we believe they deserve. So we make no apology for the direction that we have taken in government. Most Australians actually appreciate lower interest rates. Most Australians appreciate that the unemployment level is now down to the lowest it has been since Mr Keating's recession. Most Australians appreciate the fact that they have a better chance of a job in the future than they would have had under Labor's policies which were reinforced by the Australian Democrats. We make no apologies for that—DT6BARTLETTSenator Bartlett—Madam President, I rise on a point of order. I let it go the first time, but this is the second time the minister, in not answering the question, has completely misled the Senate by suggesting that the Democrats supported Labor's economic policies when they were in government. I know the minister was in this chamber and I was not, but I can quite easily point him to any number of decisions over the term of the Labor government where it was the coalition that supported Labor's economic policy.10000PRESIDENTThe PRESIDENT—There is no point of order.BH4Senator HILL—What I do remember is 1993 when Labor came in and broke all its promises. Which party supported them then? The Australian Democrats. When they put up fuel taxes, particularly taxes on the fuel of the battlers, who supported them? The Australian Democrats. Who put up the wine taxes? The Australian Democrats. We have a different direction for Australia and we are proud of it. We think it will provide security for this country in whatever difficult times might lie ahead. The fact that we have been able to repay so much of Labor's debt so quickly is something we are actually proud of, and we are confident that the results will be to the benefit, as I said, of this and future generations of Australians.4865Lees, Sen MegSenator LEES8U4SAAD00—As the minister had great difficulty answering the question, I am very tempted to ask the original one again. But I will just make a couple of points and then ask a supplementary question. To put it in context, the minister is suggesting that we simply ignore the fact that we do not have a debt problem. The minister is suggesting that continuing to sell—Government senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Government senators are interjecting too loudly. I need to hear the supplementary question.8U4Senator LEES—The minister is suggesting that by continuing to sell off assets such as Telstra we will benefit future generations. Can I ask the minister: isn't it the case now with your new accrual accounting system that we actually see the true value of these assets that we have still managed to hang on to? Therefore, Minister, isn't the whole argument about selling off assets largely irrelevant because they appear on the positive side of the ledger and balance off our debt? In other words, if we sell them off, yes, we will lower our debt, but we will also lower our asset base so we will end up with no change whatsoever. (Time expired)4865Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—We may have less of a debt problem than other countries and that may well be the reason why we have one of the strongest economies in the world. By taking the hard decisions of reducing expenditure and repaying debt rather than always taxing more and borrowing more, running up the deficit and forcing up interest rates, we have delivered one of the strongest economies in the world which must be for the benefit of all Australians. Now, if we can go on and reform the taxation system and repay the balance of our national debt, we will be in an even stronger position and be able to deliver more to ordinary Australians. Madam President, I ask that further questions be placed on the Notice Paper .Miscellaneous4865486515:06:004865Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I move:That the Senate take note of the answers given by the Minister for Family and Community Services (Senator Newman) to questions without notice asked today.The Minister for Family and Community Services joined with the Treasurer today in gloating about the $5.4 billion surplus achieved in the budget but had no answers to the questions posed to her about the needs of the constituency she represents. She had no answers to the desperate needs demands of people for services within her portfolio area that are not addressed by this budget. She wants to trumpet the budget surplus but she does not want to address the very real needs of people in the Australian community. Those people are crying out for assistance. They are crying out for programs to assist them, be it in disability services, child care, aged care or housing. What the government has failed to do in this budget is address those social policy concerns. There was some money for private health. There was some money for private schools. But there was no money for the people in our community who are hurting.It is important that we put this in context, because a range of these people in our community are hurting because of what the government did in its first couple of budgets. I refer to the $850 million ripped out of child care, the $500 million ripped out of aged care, the $450 million ripped out of housing and the $120 million ripped out of disability services. All of that did damage and hurt Australians. They were looking to the budget to provide some assistance to those families who are doing it tough, and there is nothing in it for them. The minister failed to get any assistance for those people in the budget.She brought together a new super-department, the Department of Family and Community Services. This was supposed to achieve something for the constituents of that department. Nothing has been achieved. The damage wreaked by the first couple of Howard budgets has not been repaired. Those families, those people in need, continue to suffer. And what happened? The government threw a few crumbs to a couple of groups, mainly in rural areas, to address their political concerns about the rise of One Nation, but whole groups in our society, thousands of Australians who are suffering, got no support and no relief.What did the minister say today? She used a dorothy dixer to try to talk about restructuring of the department. I am sure that really warms the hearts of those people doing it tough in our community! What was really interesting was that the best she could offer was to say, `But next year it'll all be okay.' The government is saying that there are some crumbs, there are some programs that will address some of the concerns, that will be introduced on 1 July 2000. What happens until then to those people doing it tough? They have got to wait. If they have got child-care needs, if they have got a disabled child who needs assistance, they have got to wait. That is not good enough. They do not take any joy in a budget surplus when the basic human needs that they have are not being met in this society. And they do not want a minister who can offer them nothing—who cannot win a vote in cabinet, who cannot win any support in the budget for the programs that they need. They are told that they have to wait until July 2000 and, if they get anything at all, it will depend on their acceptance of the fact that they are going to have a new goods and services tax imposed on them, which all the evidence proves will make them worse off again, and that they have got to sell the one major public asset—the best public asset—that we have got in order to get some sort of minor relief.These people are hurting now. They are looking for the government to provide some solutions to the social problems confronting them, and there is nothing in this budget for them. The disability sector is a good example—people with disabilities, people supporting children with disabilities. The government says they need $300 million now. The government's own report which it has had for two years has identified $300 million of unmet need. We have had two budgets in which the minister could have got assistance to address those problems. She has had two goes at it; there is nothing. There is $20 million for respite care—$20 million to meet a $300 million need. The people who care for people with disabilities say it is paltry and pathetic. They are outraged because the government has done nothing.FQ6SYNONSenator Synon—What did you do for 13 years? Nothing.AX5Evans, Sen ChrisSenator CHRIS EVANS—I hear Senator Synon give the same answer which Senator Newman uses: `It's all the Labor government's fault. We've only been in for four years; we've only had four budgets. It's all somebody else's fault. We're not responsible.' What I want to know is: when do you become responsible? When does it become your fault? When do you start to take responsibility for the decisions taken by government? You want to claim the credit. You want to say, `The budget surplus is all the result of our good work,' but you do not want to own up to the fact that social policy in this country is in tatters. (Time expired)15:11:004867Lightfoot, Sen PhillipSenator LIGHTFOOTWP6WALP10—I rise to rebut what Senator Evans said in taking note, that we do want to take the credit and the responsibility for four very responsible budgets that have been brought down under the tenure of this government. Why wouldn't we want to do it? We have a 3.5 per cent growth rate for 1999-2000. We have a growth rate that is the highest in the OECD countries. We have a growth rate that is the highest in the G7 countries, except for the US this year; next year it will be the highest in the G7 countries. And that is going to go on. In spite of all the downturn that the opposition spoke about when the Asian meltdown happened, this economy is clearly one of the most exciting economies in the world. And just watch it get better. I refer not only to the $5.4 billion surplus which is the harbinger of things to come, not only to the lowering of the debt, but also to low housing loans—under six per cent—a growth rate of 3.5 per cent and a lower inflation rate. These sorts of formulae have never been brought together by any government before.There is an extra $1 billion for the states. Senator Evans did not speak about that, did he? This sets the formula for Australia to be debt free—if the spoilers on the other side allow the GST and the sale of a large tranche of Telstra to go through. This is indeed a most exciting period to be alive and to call yourself an Australian. I think those on the other side know that.What did Senator Evans say? `Nothing for certain people.' This budget covers everyone in Australia. This is a comprehensive budget that touches in a very positive sense every person in Australia. We have reduced the debt of the previous government. There was supposed to be a surplus but it ended up being a $10 billion black hole as a result of Mr Beazley's policies. And don't forget that Mr Beazley, now the Leader of the Opposition, left us with a $23 billion debt that he accrued in two years—and over $60 billion during that period of his government. This government has reduced it. Perhaps that means nothing to you people on the other side, with your fiscal irresponsibility, because you are like a pack of dingoes going into a paddock. You don't go in there to feed—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! Senator, please do not reflect on members of this place, either individually or collectively, in such language. And would you please address the chair.WP6Lightfoot, Sen PhillipSenator LIGHTFOOT—I will, Madam Deputy President. It was more of a reflection on the dingoes, and I apologise for that.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Unreservedly?WP6Lightfoot, Sen PhillipSenator LIGHTFOOT—I apologise unreservedly, yes. What it means is this: there is $17.3 million over four years for lifetime health cover—something that will encourage Australians to go into the private health system and will take the pressure off the public health system. There is $614 million over six years for health and medical research, plus $20 million over two years to improve medical research facilities. Senator Evans said there was nothing there. There is $42.8 million over four years to establish 30 regional health service centres—something that the opposition, when they were in government, drained from the bush, from rural areas. We are going to put them back.There is $43 million over four years to reward GPs who stay in rural areas for more than two years. One of the great problems with keeping health alive, well and up to date in the bush has been the atrophying of GPs who were neglected by the opposition when they were in government. People are not going to forget this. There is $110.5 million over four years in Medicare benefits to reward doctors for coordinating and planning care for the chronically ill. It goes on and on.This is a most magnificent budget and it ought to be recognised. Most responsible fiscal commentators and economic commentators in Australia have given this, unequivocally, the thumbs up. Never before have we had such a combination of things brought together: growth of 3.5 per cent, an inflation rate that is lower than that, record job vacancies and a reduction, albeit small, in unem ployment. This has been a great budget. It is a great day for Australia. We have a great combination in Mr Peter Costello and Prime Minister John Howard. We are going to be here for a long time as a result of this budget.15:16:004868Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Yesterday I heard the Deputy Prime Minister, Mr Fischer, say that this budget was one of solid sparkle. It is a solid slap in the face for Australian families. Behind all of Mr Costello's bombast, smuggery and gloating, and behind all the indefensible non-answers from Senator Newman today, what we know is that all that Australian families get out of this budget is crumbs and hard grind for yet another year. There is nothing sparkling in Mr Costello's fourth budget, and that is probably why Deutsche Bank said this in their budget flash from last night:The greatest excitement generated by the 1999-2000 Commonwealth budget was the accidental release of a number of press statements relating to budget initiatives by the family and community services ministry.In fact, there have been five investigations into leaks since 1996 by the Secretary to the Department of the Prime Minister and Cabinet, Mr Max Moore-Wilton. He was only able to identify the culprit of one of those leaks. That was concerning budget cuts to the Human Rights and Equal Opportunity Commission.Mr Moore-Wilton could not do anything about charges against that person because the leaker was a Howard government ministerial staffer. Senator Newman, the Minister for Family and Community Services, knows exactly who that person was. I think Senator Newman would acknowledge that that person was a member of her own staff.What is Senator Newman's response to this latest security debacle? As you have seen today from question time in the Senate, it is totally inadequate. She does not know who is responsible. She has demanded that a report be on her desk as soon as possible. All she knows is that it is not her responsibility. As usual, it is somebody else's fault. As usual, she has rounded up some other suspects and will blame anybody except herself and her office.The Department of Family and Community Services has outsourced its media web site. For 12 days the web site has been completely inaccessible. When it came online again, 15 press releases detailing government initiatives from the Department of Family and Community Services were exposed for everybody to see and for enough time for the media, the opposition and anybody else to download them. We said before that the finance minister's headlong rush to outsource IT was bound to be fraught with problems. Through the outsourcing of the IT function of Senator Newman's department, we have a really major budget leak. This is a really major gaff—probably the most significant and serious budget leak since John Howard's whole budget was leaked in 1980.The security precautions surrounding a budget are tight. People who breach them fall foul of the Crimes Act. Senator Newman's call for a report was totally inadequate in these circumstances. The whole matter should have been referred to the Federal Police as soon as these materials were in the public domain at 4 p.m. yesterday. But her pattern, as always, is to take no responsibility. She will never own up to her own shortcomings, failures and inadequacies; she will blame someone else. She will scapegoat anybody else as long as it is not her. The buck stops with Senator Newman on this serious budget leak. It is her responsibility and just for once in her ministerial career she ought to own up to that and take responsibility for this serious budget leak. (Time expired)15:21:004868Crane, Sen WinstonSenator CRANEUW4WALP10—I am delighted to speak here today following what is one of the great Australian budgets, brought down by Peter Costello last night. One cannot help but comment on the contribution from the Leader of the Opposition in this place. I find it absolutely remarkable that, after all the goodness, all the greatness, all the benefits and all the things that have been delivered in this particular budget, we have somebody here denigrating someone who made, almost certainly inadvertently, a mistake. To try and denigrate them and put them down is an incredible reaction. Why not debate the economy? Why not debate the difference in the Australian scene today from when those opposite were last in government? I am proud to stand here and recognise the four years of contribution that we have made.Senator Faulkner is leaving. He quoted from somebody criticising the Australian economy and the budget. Let me say that just last night, following the budget, Standard and Poor's said that we were now in a position where they could upgrade the credit rating of Australia. Just think of the impact of that. That means further downward pressure on interest rates, and that is a benefit that flows through to everyone in this community. It is something that improves the affordability of the things we buy.Let us look at some of the real issues. Senator Evans in his contribution said that there was nothing here for the needy. I have a particular interest in rural, regional and remote Australia. There will be 30 new regional health centres. What a contribution to the health and wellbeing of those people who live out of the capital cities in this country. Of course, there are very few on the other side of the chamber who understand the importance of that particular measure. We will spend $43 million over four years to help retain rural doctors. Surely they recognise—I am sure you do, Madam Deputy President—the problem it has been, through longstanding bad policy, attracting doctors to rural, regional and remote areas of Australia. We as a government are doing something about that and we are going to have an enormous impact on those particular health measures.There will be 500 rural transaction centres for banking, postal and Medicare services for communities with less than 3,000 people. We all know that for many years there has been a slow movement of people out of the country and into the major cities. In this process many of the services have gone with them. There is very little that you can do about that movement, but there are structural things that governments can support, such as these transaction centres, to help deal with that particular problem. There will be $1,000 for apprentices to encourage employers to provide increased training. Once again we are targeting those individuals who need that training. There will be $195 million on improved roads and bridges and road black spot funding. This is a measure which is going to assist millions of Australians, and the benefit flows right back through our community. So when I listen to the arguments put on the other side, I find them quite hypocritical.It is about time they started telling us, after their 13 years of failure in government, just how they are going to address these particular issues into the future, how they are going to change the situation and how they would not lead this country back into high interest rates and high inflation, with the damage that did to our resource industries and the individuals in it and the damage that did to the employees who work in these particular industries. That is what we want here in terms of this debate, not some attack on somebody who inadvertently released something. It should not have happened but it did happen. We want to get down to the nitty-gritty. We want to get down to the issues. We want to be able to hear from those opposite what their position is. It is amazing. Virtually every newspaper, certainly every one that I have seen, has applauded this budget for its responsibility, its direction, its soundness and for the fact that we are delivering what we said we would do in 1996 when we said we would get on top of debt in this country. Debt is the biggest single thing that drove up those interest rates. The finance minister at that particular time was a man who is now the Leader of the Opposition, Mr Beazley. He alone, in just two years as finance minister, put $24 billion onto that debt. That is hardly a record to be proud of. (Time expired)15:26:004869Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—In taking note of Senator Newman's responses to questions in question time today, perhaps I could commence by reminding Senator Crane that that is in fact the matter we are dealing with at this time, not the opposition's response to the budget as a whole. I might commend him for a more adequate response to some of the issues that were raised with Senator Newman than that exhibited today by Senator Newman herself. If she were in the position to run some of the arguments that Senator Crane has just run, she may well be able to answer some of our questions. However, one point of Senator Crane's comments is that many of the areas that he comments on as significant events in this budget are in fact attempts by this government to go back over ground and cover up the problems it has created through what it has withdrawn in the past, particularly in the area of apprenticeships.Let me go back to how unfortunately Senator Newman was inept in explaining the question that I raised with her today. That question was: why is it that the budget includes $366.5 million over four years to implement the GST package in her department and half of that is all that is made available in relation to compensation with respect to the youth allowance? To shift some of the blame from Senator Newman, she can share it with respect to the area of employment. Again we have an example there of very distorted priorities, because more funds will be devoted to computer systems to support the introduction of the GST than will be devoted to new employment initiatives. This is why we have got headlines, in relation to budget responses, that are contrary to what Senator Hill seemed to think—that they were good responses—and that are highlighting the fact that, whilst we have a $5.4 billion surplus and 3.5 per cent economic growth, joblessness is still going to be stuck at 7.5 per cent and this government has been so mean as not to do anything about what has been demonstrated as inadequate compensation to families, in particular, but more so to low income people and pensioners.Before I go on further on those points, let me again emphasise how this budget highlights the problems with the GST. Not only in the area of employment but also in the area of health and community services do we have examples of how this tax is not simple but is administratively cumbersome and costly. Of course, it is also job destroying, and that is why the government is getting the figures that are in today's headlines.Let me go back to those areas of direct responsibility that relate to Senator Newman: the lack of adequate compensation and the Youth Allowance debacle. Senator Harradine said in response to the budget, particularly with respect to the Youth Allowance, that it was `too little, too late and improper'. Let us start with the `too little'. We have a maximum amount of $18.75 per week for the families that were not compensated as they should have been according to the commitments to Senator Harradine. Let us compare that with what was taken away and confirm the point I just made to Senator Crane. What was taken away was a maximum of $88 per week for children at home and $133.70 per week for children away from home. I think that demonstrates the point quite clearly.Let us look at `too late'. The question I asked today followed the example that was highlighted during the GST inquiries when Senator Newman's personal representative from her department on the Treasury task force framing the GST legislation, Mr Tune, did not even know about the Youth Allowance commitment. He did not even know. It is no wonder Senator Harradine is saying that it is too late now.Let us look at `improper'. The government's heavy-handed response to both Youth Allowance and compensation has been correctly highlighted today as `improper'. I am surprised that the government senators' report to the bill to limit violence and sex on the Internet has not also been linked to the processing of the GST—this is how clumsy this government is being. Australian families may as well be in Wagga Wagga for all the attention they have got in this budget.Let me conclude on the minister's continual denial that the budget forward estimates confirm that the small amount of compensation is being eroded. Your own budget confirms it but your own minister cannot understand it. She cannot understand it to the extent that, in her answer to me, she could not even understand that the heading of the area that I was referring to on page 86 of Budget Paper No. 2 is Tax Reform Family Assistance Package. (Time expired)15:32:004870Synon, Sen KarenSenator SYNONFQ6VICLP10—Thank you, Madam Deputy President, for the opportunity to speak today on this issue. I do find the smugness of the opposition today somewhat disappointing. We are standing here after an astonishingly well-received by all commentators budget—a responsible, sound budget. A budget for our times was delivered last night. Could the opposition today ask us to account for any substantive point in the budget? No. What they chose to hark on was an administrative error in one minister's department. If that is the best you can do in budget analysis you had better get used to those benches because you are going to be there for a long time.We are extremely proud to take responsibility and credit for the budget that was delivered last night—a well-crafted budget, a responsible budget. We now have a growth rate in this country of about four per cent. The Wall Street Journal recently lauded Australia's economic management, calling it the second most successful economy in the world. We have low inflation, averaging about 1¼ per cent. We have lower unemployment than we had under the ALP—that's for sure—when unemployment peaked at over one million. We have created 185,000 jobs in the past year alone and the unemployment rate has come down from around 12 per cent to 7.4 per cent. As the Treasurer said last night, it is still too high but it is coming down.When the current Leader of the Opposition, Kim Beazley, was finance minister—for just two short years he was finance minister—he managed to accrue over $24 billion of deficit and 25 per cent of the government's debt. In fact, in the last five years of Labor's misrule in this country we acquired as a nation $80 billion of debt in just five years. This budget will return Australia a surplus of over $5 billion so that we can repay the debt that Labor accrued.Within that context of a most responsible budget, let us look at some of the important and caring initiatives that the Howard government has been able to deliver to the Australian people—initiatives that the ALP did not see fit to raise today because they are not accustomed to raising good news in this chamber. In the area of health alone, the allocation to medical research will be in creased by $614 million over the next six years. This is surely an initiative that will serve this country well into the future. We have allocated $228 million to improve the health care of older Australians and those with chronic illnesses. The ALP are always getting up and asking about older Australians, but they did not have the heart to get up and congratulate us on our initiatives last night. There is $210 million for hearing services which will benefit 60,000 extra people, primarily older Australians. We heard today about the lifetime health cover initiative to make private health insurance more economical in the future.In my own interest area of education and employment, it is interesting to note that, despite the hyperbole this morning, in 1999 the federal government will spend almost $298 million more on government schools than Labor did in their last year of office. I bet that is a surprise to you. Government schools will receive almost $1 billion more over the period 2001 to 2004 compared with the period 1997 to 2000. That is record federal direct funding. Non-government schools will now have a fairer funding system, with struggling schools better off but no schools worse off. This will cost some $56 million over the next four years or so.There is $130 million extra for literacy and numeracy, $90 million extra for Asian languages and $78 million extra for teacher training. In 1999 there is a record number of undergraduate student places in Australia—more than 402,000. In the area of employment we have $228 million over four years to expand the existing Work for the Dole program. We have doubled the number of places and we have increased the age range so that more people can take advantage of this excellent program.We heard about apprenticeships earlier. We are talking about $1,000 extra to rural and remote employers. (Time expired)10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! The time for the debate has expired.Question resolved in the affirmative.487210001CLERK ASSISTANTThe Clerk—A petition has been lodged for presentation as follows:4872101HX5Woodley Sen JohnTo the Honourable the President and Members of the Senate in Parliament assembledWe, the undersigned petitioners believe that(a) a valid mandate does not exist for the introduction of a Goods and Services Tax (GST)(b) the Australian electorate was not adequately informed, prior to the 1998 Federal election, to be able to deliver a valid mandate(c) the overwhelming response to the Senate inquiry into the tax system confirms these beliefs(d) the findings of the Senate Inquiry have shown, over recent weeks, that the proposed GST will be a regressive tax instead of the intended tax reform. It is abundantly clear that the enactment of the GST will result in the rich of this country benefiting at the expense of the more than five (5) million citizens living near or below the poverty lineYour petitioners request that the Senate should:(a) reject legislation presented to the Senate for the enactment of a Goods and Services Tax(b) initiate a process, based on the findings of the Senate Inquiry, which should inform and enable the Australian electorate to deliver a valid mandate for a just tax system. This process to culminate in a referendum.Senator WoodleyHX5Senator Woodley(from 101 citizens)Petition received.Notices48724872Senator Bartlett to move, on the next day of sitting:That the Senate—(a) welcomes the decision by the Federal Government to provide assistance to people displaced by the current conflict in Kosovo;(b) notes the strong public support for Australia to receive refugees from Kosovo; and(c) calls on the Government to increase the overall size of Australia's permanent refugee and humanitarian intake.4872Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I give notice that, on the next day of sitting, I shall move:That—(1) The Senate meet on Friday, 14 May 1999, and that: (a) the hours of meeting shall be 9.30 am to 4.25 pm; (b) the routine of business shall be government business only; (c) the sitting of the Senate shall be suspended for 45 minutes from approximately 12.30 pm; and (d) the question for the adjournment of the Senate shall be proposed at 3.45 pm.(2) On Tuesday, 25 May 1999: (a) the hours of meeting shall be 9.30 am to 6.30 pm and 7.30 pm to 11.10 pm; (b) the routine of business from 9.30 am to 2 pm and from 7.30 pm to 10.30 pm shall be government business only; and (c) the question for the adjournment of the Senate shall be proposed at 10.30 pm.I seek leave to make a short statement in relation to the notice.Leave granted.H15Campbell, Sen IanSenator IAN CAMPBELL—I thank my colleagues in the chamber for granting leave. The first part of the motion relates to sitting hours proposed for this Friday, which is a matter that was substantially agreed to—although I put it on the record that it was not agreed to by everybody in the chamber—by most at a leaders and whips meeting held at about 1 o'clock today. The government's proposal to sit on Tuesday, 25 May, which is a Senate only sitting week, in the morning and for extended hours in the evening to facilitate the completion of the new tax system debate has not found agreement around the chamber at this stage. We left the meeting at 1 o'clock with a proposal to further discuss that. I put it on the record that I am giving notice of it here so that, if we do find agreement between now and tomorrow morning, we will be able to proceed on that basis and we will have a notice. If a majority or consensus is not found this evening—5K4FAULKNER Senator Faulkner—There is a fair bit of difference between a majority and a consensus, as you know.H15Campbell, Sen IanSenator IAN CAMPBELL—There are a few votes in it, Senator Faulkner. If we cannot get an agreement, the government may well amend this motion to delete that part, either in writing to the clerk this evening or by my amending it tomorrow morning. At least it will be available for the Senate to deal with tomorrow.15:41:004873Brown, Sen BobSenator BROWNQD4TASAG00—by leave—I am one of those who are not in favour of this proposal, but I am not going to debate that now. I simply reiterate that it will facilitate our coming to an agreement if we do not have a piecemeal approach to the change in sitting hours between now and the end of June but do have an agreed position, when this matter comes up for debate tomorrow, which encompasses all changes to sitting hours between now and 30 June inclusive. It is going to lead to a debate about such issues as the government's approach and the failure to get consensus on this matter which, of course, would be the desirable objective. A bit of homework is required by the government during the rest of today if we are to have a smooth facility of this motion tomorrow.15:42:004873Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—by leave—The statement by the Manager of Government Business in the Senate is accurate, as I understand it, in as far as it goes. But I make the point to the manager that I think the spirit of the discussion that was held earlier today was to ensure that all senators had an opportunity to plan their programs between now and the proposed end of this sitting period. In order to do that, I think it is incumbent on Senator Campbell, as the Manager of Government Business in the Senate, to provide senators with more detail about other elements of the government's proposed amendments to the current sitting pattern and sitting timetable. It involves a couple of Friday sittings; it involves a couple of Tuesday morning sittings; it includes later sittings on one or two Tuesday and Thursday nights.As senators give consideration to this particular issue, it is important that they have those details in their minds. Frankly, as I pointed out at the meeting held earlier today, there is an issue of plain, simple, old-fashioned courtesy here, to give senators, their staff, officers of the parliament and others an opportunity to plan for these proposed extra sitting times and days. I do not have an argument with what Senator Campbell has told the chamber in terms of accurately reporting what occurred at a meeting today. I do accept the point that Senator Brown makes—or the point that I think Senator Brown is making—that it is not the full story. I see that he nods. The Manager of Government Business ought to provide that level of detail for senators. It is important that senators understand the sorts of constraints that the government is considering.As senators make decisions on the motion of which Senator Campbell has given notice today, it is important that, when they come before the chamber, they do so in full possession of the facts. I ask Senator Campbell whether, given his role as Manager of Government Business, he will address that fundamental issue and provide, as soon as possible, for the benefit of all senators, details of what the government proposes in terms of amendment to the current timetable and pattern of sittings.What senators need in this circumstance, at a minimum, is a great deal more certainty than they have at the moment. No-one likes sitting extra hours or extra days. I think everyone accepts that. Sometimes you just have to do it, Mr Deputy President, as you know. But if the government has other plans I think now would be as good an opportunity as any to outline them so that we are all clear.I am not going to find fault with the statements made by the Manager of Government Business in the Senate in his earlier contribution. They were accurate in as far as they went, but it is urgent that the full picture be placed before the chamber so that all of us, not only senators but their staff and parliamentary officers and so many others for whom these matters are crucial in forward planning, have an understanding of what the government has in mind.15:46:004873Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—by leave—The points that Senator Faulkner makes are wise ones. However, in my defence I would claim in relation to future proposals that at the meeting at lunchtime which was attended by all the whips and all the leaders, we did circulate, as Senator Faulkner would acknowledge, a full proposal for additional hours to meet the government's program.8O6O'BRIENSenator O'Brien—Is it confidential?H15Campbell, Sen IanSenator IAN CAMPBELL—I did not mark it `confidential' and I do not think it should be. In fact, I will now make it totally unconfidential and seek leave to incorporate it.Leave granted.The timetable read as follows—TIME TABLE FOR CONSIDERATION OF LEGISLATION PRIOR TO 30 JUNE 1999 (5/12/99 12:12)(b)BillApprox hours for debateTime for vote on amendmentsA new Tax System (Goods & Services Tax) bill 1999 (Package of 27 bills)25Tues 25/5A New Tax System (Family Assistance) Bill 1999 A New Tax System ( Family Assistance) (Repeal and Consequential Amendments) Bill 1999 (C'mttee 25/5)56pm Wed 26/5Telecommunications Laws Amendment (Universal Service Cap) Bill 19992Thurs 27/5Broadcasting Services Amendment (Online Services) Bill 1999 (C'mttee 11/50)5Frid 28/5Export Market Development Grants Legislation Amendment Bill 19991FriD 28/5Telstra (Transition to Full Private Ownership) Bill 1998 & associated bills5Mon 21/6Higher Education Legislation Amendment Bill 1999 (C'mttee 25/5)5Tue 22/6Wool International Privatisation Bill 1999 (C'mttee 24/5)5Wed 23/6Superannuation Legislation Amendment Bill (No. 3) 1999 C'mttee 22/61Thur 24/6Environment Protection and Biodiversity Conservation Bill 1998 Environmental Reform (Consequential Provisions) Bill 1998 (C'mttee 27/04)6Frid 25/6Regional Forest Agreements Bill 19986Mon 28/6Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 19984Tues 29/6Workplace Relations and Other Legislation Amendment (Superannuation) Bill 19982Tues 29/6Appropriations Bill (No. 1) and (No. 2) Appropriation (Parliamentary Departments) Bill 1999/2000 (C'mttee 22/6)4Wed pm 30/676* Messages from HOR may need to be incorporated into this programHours of debate available under current arrangements as at 12 May 1999—46 hours. The above table assumes that additional hours for debate can be agreed as followsSit on Fridays for Government Business only (5.5 hours per day).-14 May-28 May-25 June11 hoursAdditional hours on sitting Tuesdays and Thursdays (3 hours from 7.30pm—10.30pm)-25 & 27 May-22 & 24 June-29 June-Tuesday 25 May (Senate Only) commence at 9.30am (4.5 hours) 19.5 hoursH15Campbell, Sen IanSenator IAN CAMPBELL—For the sake of senators and anyone else who is interested, I point out that the above timetable sets out what we regard as a generous estimation of time that could be required to debate a range of very important high priority bills between now and the completion of this term of the Senate on 30 June. For example, it sets out a further 25 hours of debate for a new tax system. If we are able to extend sitting hours as proposed by the notice, that would ensure an extraordinarily long debate on any historical terms. It sets out a range of hours estimated for completion of the bills.Senator Brown made the point that he would be happy if we could agree on this program and have certainty about the extra sitting days. The government would be very happy to provide that to all senators and we would also be very happy to have a very clear understanding of the time that the debates on all of these bills will be completed. I think it would be very helpful to all senators to know that particular bills will be completed on a particular day, that they would then start consideration of another bill and that time management in the Senate could be greatly improved by having a much clearer idea not only of when we were able to sit but also of the days we would do particular bills and when we would reach conclusions on bills. With that in mind, I lay on the table the government's proposals.Senator Brown to move, on the next day of sitting:That the Senate—(a) notes: (i) the condition on page 49 of the Environment and Heritage Portfolio Budget Statement 1999-2000, under the heading Grants to Voluntary Environment and Heritage Organisations, that `Funding is dependent on whether their activities contribute to Government environmental and heritage priorities', and (ii) that environment groups that complied with this dictum would need to support such policies as mining uranium at Jabiluka, logging koala habitat in New South Wales, woodchipping the tallest trees in the southern hemisphere in Tasmania allowing an 8 per cent increase in greenhouse gas emissions in Australia by the year 2010; and(b) condemns this condition as a deliberate means of compromising environment groups by stifling criticisms of the Government's actions, which is injurious to the environment.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—I draw the attention of senators to the new orders that were moved yesterday for trial on notices of motion.QD4BROWNSenator Brown—I have another notice of motion.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—My message is that I draw senators' attention to the new procedures which started yesterday for notices of motion. Please proceed.QD4BROWNSenator Brown—On a point of order, Madam Deputy President: I think if you look carefully at those new procedures you will find that they provide for motions to be presented to the chamber in this fashion. There is an alternative to presenting them in written form, but I will stand corrected if I am wrong about that. There is provision for the motions also to be brought to the notice of the chamber at this time by being read out.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—You are correct, Senator, but I am drawing attention to the options that are available. You have the call.4876Brown, Sen BobSenator BROWNQD4TASAG00—Thank you for this option. I give notice that, on the next day of sitting, I shall move:That the Senate congratulates the Australian Labor Party on its new policy commitment to end logging in old-growth forests in Western Australia.Committees4876487648764876Calvert, Sen PaulSenator CALVERT5F4TASLP10—I present the eighth report of 1999 of the Selection of Bills Committee.Ordered that the report be adopted.5F4Calvert, Sen PaulSenator CALVERT—I also seek leave to have the report incorporated in Hansard .Leave granted.The report read as follows—SELECTION OF BILLS COMMITTEEREPORT NO. 8 OF 19991. The Committee met on 11 May 1999.2. The Committee resolved to recommend—That the provisions of the following bill be referred to a committee:Bill titleStage at which referredLegislation committeeReporting dateSuperannuation Legislation Amendment Bill (No. 3) 1999 (see appendix 1 for a statement of reasons for referral)immediatelyEconomics22 June 1999The Committee recommends accordingly.3. The Committee deferred consideration of the following bills to the next meeting:(deferred from meeting of 23 March 1999). Taxation Laws Amendment Bill (No. 4) 1999. Taxation Laws Amendment Bill (No. 5) 1999. Taxation Laws Amendment (Demutualisation of Non-insurance Mutual Entities) Bill 1999(deferred from meeting of 30 March 1999). Customs Amendment Bill (No. 2) 1999. Import Processing Charges Amendment Bill 1999(deferred from meeting of 20 April 1999). Commonwealth Grants Commission Amendment Bill 1999. Customs Amendment Bill (No. 1) 1999. Customs Amendment (Temporary Importation) Bill 1999. Employment, Education and Training Amendment Bill 1999. Taxation Laws Amendment Bill (No. 6) 1999 (deferred from meeting of 27 April 1999). Copyright Amendment (Computer Programs) Bill 1999.(Paul Calvert)Chair12 May 1999Appendix 1Proposal to refer a bill to a committeeName of bill:Superannuation Legislation Amendment Bill (No. 3) 1999Reasons for referral/principal issues for considerationDetailed examination of issues surrounding changes to regulation of self managed superannuation funds.Possible submission or evidence from:Australian Society of Certified Practising Accountants, Effie Vasilopoulos (Blake Dawson Waldron), George Raitt (BDW), Institute of Chartered Accountants, Barbara Smith, Australian Taxpayers Association, ASFA, IFSACommittee to which bill is to be referred:Economics Legislation CommitteePossible hearing date(s) :Week beginning 31 May 1999 Possible reporting date : 31 June 1999signedKerry O'BrienWhip/Selection of Bills Committee memberNotices48774877Motion (by Senator Ian Campbell) agreed to:That government business notice of motion no. 2 standing in the name of the Special Minister of State (Senator Ellison) for today, relating to consideration of legislation, be postponed till the next day of sitting.Items of business were postponed as follows—General business notice of motion no. 213 standing in the name of Senator Margetts for today, relating to the Western Australia Regional Forest Agreement, postponed till 13 May 1999.General business notice of motion no. 206 standing in the name of Senator Allison for today, relating to indigenous education, postponed till 13 May 1999.Committees487748774877Motion (by Senator Calvert, at the request of Senator Ferguson)—by leave—agreed to:That the time for the presentation of the report of the Economics Legislation Committee on provisions of the Textile, Clothing and Footwear Strategic Investment Program Bill 1999 be extended to 21 June 1999.48774877Motion (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 by extended to 27 May 1999.48774877Motion (by Senator O'Brien, at the request of Senator Cooney) agreed to:That the time for the presentation of the report of the Standing Committee for the Scrutiny of Bills on the fairness, purpose, effectiveness and consistency of right of entry provisions in Commonwealth legislation be extended to 30 September 1999. 48774877Motion (by Senator Calvert, at the request of Senator Boswell) agreed to:That the time for the presentation of the report of the Joint Select Committee on the Retailing Sector on the degree of industry concentration within the retailing sector in Australia be extended to 30 August 1999.Notices4877487715:54:004877Brown, Sen BobSenator BROWNQD4TASAG00—Madam Deputy President, I ask for your advice. Will we be circulated with a list indicating the dates on which notices of motion will be considered, whether there will be some delay or whether they will not be dealt with?10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—The Clerk has just read out a list of which ones were being postponed. They are Nos 206 and 213.QD4Brown, Sen BobSenator BROWN—I thank you for that reply. I wonder whether you could let me know whether our offices were formally informed that those motions were to be postponed. The point I am making is that, if we are not informed, senators will need to come to the chamber to hear the clerk read out the list of postponements before they can know that the motions are not going to be dealt with—and then go back to their rooms.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—When the Clerk reads out the list, that is the first definite notification of which ones are being postponed. Senators have up until that time to postpone.QD4Brown, Sen BobSenator BROWN—I will not delay the Senate, but I will make another point. I would like you, Madam Deputy President, to take a note of my concern that this means the only way senators can reasonably know that there has been a postponement is to be here when the postponement list is read out.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator, that was the case under the old procedure. That is not new.QD4Brown, Sen BobSenator BROWN—The point I am making is that no gain seems to have been made here as far as senators' attendance is concerned. I would ask you to look at that matter to see if some improvement can be made.15:56:004878Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—by leave—The point you made, Madam Deputy President, is correct: senators would normally have had to come down to the chamber to see what was going to be postponed. But, as I understand it—I am not a whip and do not go to the whips meetings—senators will indicate to the whips that they are intending to declare motions formal. When as an opposition senator I sought to declare motions formal, it was courteous to indicate that intention to all the other parties so that they would know what was coming up. A benefit is gained by all senators in getting rid of the drudgery of going through endless announcements of postponements. By doing this in writing, you save that time, which hopefully can spent in actually debating some motions or other items.Committees4878487815:57:004878O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—On behalf of Senator Cooney, the chairman of the Scrutiny of Bills Committee, I present the eighth report of 1999 of the Senate Standing Committee for the Scrutiny of Bills.Ordered that the report be printed.Miscellaneous48784878487815:57:004878Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Payne, I present additional information received by the Legal and Constitutional Legislation Committee in response to the 1998-99 budget and additional estimates hearings.Committees487848784878Motion (by Senator Calvert, at the request of Senator Ferguson)—by leave—agreed to:That the time for the presentation of the report of the Economics Legislation Committee on the provisions of the Taxation Laws Amendment Bill No. 2 (1999), formerly the Taxation Laws Amendment Bill No. 4 (1998), be extended to 27 May 1999.487810000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—The President has received letters from party leaders seeking variations to the membership of committees.Motion (by Senator Ian Campbell)—by leave—agreed to:That senators be discharged from and appointed to committees as follows:Community Affairs Legislation CommitteeAppointed: Participating member: Senator Stott Despoja.Foreign Affairs, Defence and Trade References CommitteeDischarged: Senator Woodley, and Senator Bourne as a substitute member.Appointed: Senator Bourne.Legal and Constitutional Legislation CommitteeDischarged: Senator O'Chee.Appointed: Senator McGauran.Bills4878Message received from the House of Representatives returning the following bill without amendment: Migration Legislation Amendment (Temporary Safe Haven Visas) Bill 1999 Message received from the House of Representatives agreeing to the amendments made by the Senate to the following bill: Taxation Laws Amendment (Software Depreciation) Bill 1999 Bills4878r7394878Bill received from the House of Representatives.Motion (by Senator Ian Campbell) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.487916:00:004879Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I move:That this bill be now read a second time.I seek leave to have the second reading speech incorporated in Hansard .Leave granted.The speech read as follows—This is a bill that extends student choice.It creates two new choices for students at Australia's publicly funded universities.First, it gives students the right to choose whether or not they belong to an association.Second, it gives students greater choice over what goods and services they purchase.Freedom of association is a basic right that should be available to all Australians. The Government has already extended protection of this right to workers through the Workplace Relations Act 1996. It is important now to extend this right to the higher education sector. Students should not have to fund organisations they do not support. These organisations should not be able to claim that they represent people who do not in fact support them. Students should enjoy on campus the same rights they enjoy off campus, and this legislation will give them those rights.Choice about which goods and services they purchase is something expected by Australians. The compulsory general service fee charged on most Australian campuses requires students, as a condition of enrolment, to pay for services they may not want to use. On most campuses, in order to get a university degree you have to contribute to sporting facilities, whether or not you play sport. On most campuses, in order to get a university education you have to contribute to student entertainment, whether or not you have the time or the inclination to attend. Students should enjoy the same consumer right to purchase only the services they want on and off campus, and this legislation will give them that right.This legislation will for the majority of Australian university students remove the last compulsory upfront charge imposed on university entry. Despite claims on the other side of the House to have introduced `free' education that was never so. There was always the compulsory student union fee. Indeed, Labor's misleading of the public on this matter continues. The 1998 ALP Election Platform stated that `Labor believes that upfront undergraduate fees are undesirable in Labor's Australia',But in the same document said that`Labor also strongly opposes the Government's plan to impose federal Voluntary Student Unionism legislation.'The only compulsory up-front fee for most students is that supported by the Labor Party. There is no such confusion in the Government's position, and this legislation will remove an anomaly in the current system which creates an financial obstacle to higher education for students on low incomes.This is not a minor problem for some students. The upfront charge on a number of major metropolitan campuses exceeds $300 a year. Costs to students in the larger cities are also higher than those faced by students in smaller cities and regional centres. So these students face a considerable financial burden.A much better system would be to allow students to manage their own financial affairs. Students themselves are best placed to know their own financial priorities. They are certainly better placed than the officials of student organisations.This legislation represents a better system. It will let students choose how they spend their money. It will let them spread their expenditure over the year, better reflecting the fact that their income is also spread over the year.Those who in this debate have focused on the legislation's impact on student organisations are missing the point. This legislation will affect student organisations—that is an intention of the government. It wants student organisations to have to become more responsive to students. This inevitably means that they will have to alter their mix of services and change the way they deliver services.In Western Australia, which has had voluntary student unionism since 1995, we have already seen change in the services provided. At Curtin University, for example, the guild no longer offers aerobics, but it does now offer a casual employment register, assistance with resume writing and interview skills, and discounts at a range of on and off campus retailers. Two new cafes have opened at the University of Western Australia. All these examples show a focus by the Guilds on the services most likely to be of value to students.Giving students choice will also improve the quality of services provided on campus. When campus organisations cannot take their customers for granted they will have to be provide a better service, or they will lose those customers. The introduction of competition to other parts of the economy has seen service levels improve significantly. We can expect the same on university campuses. Student organisations can play a worthwhile role on campus. However we should not take at face value student organisations claims that the services they provide to students are the ones students want and need. We should put this claim to the test. The best way to see if student organisations really are supplying the services students need and want is to make payment voluntary. Student organisations will prosper when they provide goods and services which students want.To focus on this legislation's impact on student organisations is to miss the point. The legislation is about student choice, not student organisations. If student organisations change to meet student needs that is good. If students decide they would rather spend their money on other activities, that is their legitimate choice.Regional universities are likely to do well under this legislation. Many of the student organisations at regional universities already have a reputation for serving their student bodies well, and this is likely to be rewarded with high membership levels under voluntary student unionism.Regional universities have a further strength in sharing some facilities with their local communities. This gives regional campuses the opportunity to spread costs in a way not available to many metropolitan campuses where the infrastructure of the surrounding community is already well developed. Local communities and student organisations can each make financial contributions to the provision of facilities, such as sports centres, which each can use, to the mutual benefit of both.The Government does not, however, accept the argument that compulsory student service fees are justified because this enables provision of services to the local community. There is no reason why university students, people with below average incomes, should subsidise the rest of their community via their student organisation fees. It is legislation that defends the interests of students wherever they choose to study.This bill also repeals provisions of the previous Government, which enshrined the practice of compulsory student unionism. The bill repeals sections 25A and 25B of the Higher Education Funding Act, to remove the legislative base of the former Student Organisation Support (SOS) Program. Under this program taxpayers money was used by the previous Government to provide funding to certain student organisations in Western Australia and Victoria, which students themselves had decided not to fund organisations at that level with voluntary fees.Further, the bill makes consequential amendments to the States Grants (General Purposes) Act 1994 to repeal subsection 15(1), established by the former Government, which provided that funds paid under the SOS program could be recovered by the Treasurer from State Grants. This provision would have diverted funds away from hospitals, schools and roads, to pay for student services that students themselves were unwilling to fund. The former Government wanted taxpayers to bear the cost of their policy of compulsory student unionism.The bill also includes a number of matters of an administrative nature. The bill builds on the streamlined arrangements for applications for remission of debt under the Higher Education Contribution Scheme (HECS) and the Open Learning Deferred Payment Scheme (OLDPS). This amendment further streamlines the administration of the remission arrangements by deeming applicants to have received notification of a decision on their application within a reasonable period. The amendment also places the onus on the applicant to advise the Secretary of the Department of Education, Training and Youth Affairs of a change of address. The amendment will streamline the remission process for students and simplify the administration process.The bill also amends HEFA to reflect the name change of James Cook University of North Queensland to James Cook University. Following the passage by the Queensland Government in September 1997 of the James Cook University Bill 1997, the institution is now known as James Cook University.Another provision in this bill relates to the University of the Sunshine Coast. In November 1998 the Queensland Parliament passed legislation establishing the University of the Sunshine Coast as an independent institution from 1 January 1999. Previously, the institution had operated as a separate entity under the sponsorship of the Queensland University of Technology.Until now, the Commonwealth provided operating and other funding to the institution via the Queensland University of Technology. As the granting of independent status ends the sponsorship arrangement, the bill provides for the new university to be listed separately in Table A of the Higher Education Funding Act, to receive Commonwealth funding directly.This bill reflects the Government's commitment to keep striving to continually improve the already world class higher education system in Australia.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.Bills4881r670488116:01:004881Chapman, Sen GrantSenator CHAPMANFF4SALP10—I present the report of the Parliamentary Committee on Corporations and Securities on the provisions of the Corporate Law Economic Reform Program Bill 1998 , together with submissions, Hansard record and minutes of proceedings.Ordered that the report be printed.FF4Chapman, Sen GrantSenator CHAPMAN—I seek leave to move a motion in relation to the report.Leave granted.FF4Chapman, Sen GrantSenator CHAPMAN—I move:That the Senate take note of the report.In March 1997, the Treasurer, Peter Costello, established the Corporate Law Economic Reform Program. The aim of the program is to create an environment in which businesses can get on with the job of creating wealth and jobs for all Australians. In April 1998 the Treasurer released the draft Corporate Law Economic Reform Program Bill 1998 for public comment. The bill is in four parts, dealing with reforms to directors' duties and corporate governance, fundraising, takeovers and accounting standards. This bill represents an important step in the government's drive to modernise the legal structures under which Australian businesses operate.I want to place on record my appreciation for two of my colleagues in this place—firstly, Senator Gibson and, secondly, Senator Ian Campbell—for their work as parliamentary secretaries that brought forward this legislation. They both did very important and sterling work on behalf of the government in ensuring that this very important area of law is reformed in a worthwhile manner. I see that Senator Ian Campbell is in the chamber listening to these remarks at the moment.H15CAMPBELLSenator Ian Campbell—I wouldn't miss it.FF4Chapman, Sen GrantSenator CHAPMAN—I am glad, Senator Campbell, that you would not miss it. As you well know from your own work, this is a very important area of law reform.The bill has undergone an extensive process of public consultation and discussion involving the release of discussion papers and public consultations initiated by Treasury and the Business Regulation Advisory Group. The bill incorporates many of the comments and suggested amendments from business groups, professional bodies, practitioners and users of the law.The committee's inquiry began in April 1998 following a request by the Treasurer. It was interrupted by last year's federal election. The committee's deliberations were also delayed by the need to consider some new issues which were raised very late in its proceedings. In general, there was strong support for both the consultation process and the general thrust of the bill. The submission of the Australian Chamber of Commerce and Industry, for example, said:The CLERP process is considered to be a model of best practice consultation with the affected parties in policy development. It forms an integral part of a competitive industry policy and recognises the international move to outcome based regulation. It also achieves a careful balance between the need to foster vibrant capital development and the maintenance of prudential investor safeguards and confidence. This should ensure the best outcomes for Australia in terms of future investment, innovation, exports and employment generation.There is insufficient time to outline all of the matters considered by the committee so I will confine my comments to a few of the main issues.One of the main areas of concern raised with the committee was the extension of the compulsory acquisition provisions to allow a 90 per cent majority shareholder to compulsorily acquire the remaining shares at any time. Several individual shareholders and the Australian Shareholders' Association opposed this change on the basis that it would allow their shares to be acquired from them against their will and without sufficient regard to general considerations of fairness.The committee members were not unsympathetic to their views. However, the committee also has to consider the effects of these small minority holdings on the efficiency of Australian businesses and on the interest of all of the shareholders of the companies involved. The committee ultimately concluded that this extension of the compulsory acquisition provisions is justified and that it is generally fair to minority shareholders. The committee has, however, recommended some minor amendments aimed at protecting the interests of those minority shareholders.Another significant issue which arose during the inquiry concerned the effects of capital gains tax on shareholders whose shares are acquired during a compulsory acquisition, or who received a scrip-for-scrip takeover offer. As one witness noted, not only will shares be taken from minority shareholders in a compulsory acquisition but also a tax liability will arise under the current capital gains tax provisions. Self-funded retirees will be particularly affected because their capital base will be diminished if they are subject to capital gains tax during a compulsory acquisition or a scrip-for-scrip takeover offer. The reduction in their capital base will reduce their future income stream and may limit their ability to continue to support themselves.The committee concluded that the capital gains tax implications of accepting a takeover offer will deter many investors from accepting an offer. This will frustrate, to a significant extent, the economic objectives of the reforms contained in this bill. The committee has therefore recommended that, irrespective of progress on other much needed capital gains tax reform, roll-over relief from capital gains tax be provided where shares are compulsorily acquired and whenever a takeover offer for a publicly listed company is accepted on a scrip-for-scrip basis. An amending tax bill should be introduced urgently to accompany debate on this legislation to give effect to this recommendation. Failing this, the legislation should be amended so that a potential unwanted capital gains tax liability provides an absolute defence against compulsory acquisition.In a late submission to the committee the Australian Stock Exchange raised several new issues relating to the listing of new floats and to private placements of securities. As the suggested amendments proposed by the ASX involved significant, though somewhat technical, changes to the bill the committee wrote to a range of affected parties seeking their responses. After considering the responses it received, the committee was not persuaded that significant changes to the bill were warranted. However, the report does contain some recommendations aimed at addressing some of the concerns which were raised.In correspondence to the committee, the Minister for Financial Services and Regulation, the Hon. Joe Hockey, outlined some issues relating to takeovers which were highlighted by a recent takeover bid by Evans Deakin, and the Federal Court decision in the Aberfoyle case. The minister provided the committee with a report by the Companies and Securities Advisory Committee dealing with these issues.The CASAC report recommended that sections 623(2) and (3), which prohibit the giving of collateral benefits, be removed from the bill. It also recommended that section 621(4), which requires that a cash offer equal to or exceeding the maximum paid for the securities by the bidder over the last four months, be extended to all bids. Unfortunately, the committee did not have time to examine these issues at a public hearing or seek further comment from other interested parties.Based on the evidence available to it, the committee accepts the CASAC recommendations. However, in light of its limited consultation on this issue, the committee has not made any definite recommendation. It has left it to the government to accept the CASAC recommendations or to proceed with the bill as drafted and refer these matters to the committee for further consideration.Mr Acting Deputy President, my tabling statement deals with other issues in relation to the Takeovers Panel, and I also have some comments on supplementary reports that have been tabled by Labor Party senators and also by Senator Cooney and Senator Murray. Given the shortness of time for government business this afternoon, I seek leave to incorporate the rest of my remarks in Hansard.Leave granted.The speech read as follows—The report also examines the new provisions which deal with the Takeovers Panel. During its inquiry the committee was able to conduct a hearing by video conference with Mr Peter Lee from the UK Takeovers Panel. This was a very valuable exercise for the committee because the UK has successfully operated a Panel for over thirty years. The hearing emphasised to the committee that for the Australian Panel to be fully effective it must enjoy the support of the whole business community. It also focused the committee's attention on the importance of ensuring that the best possible people are appointed to the Australian Panel, and that they are appropriately paid.The committee concluded that the bill will establish an effective Takeovers Panel.Before concluding, may I thank all members of the Committee for their contributions to its deliberations on this important legislation. Given the involvement of Senators Gibson, Conroy and Senator Murray, and I on the Senate Select Committee on a New Tax System it has taken special cooperation for this Committee to conduct its deliberations concurrently but that has been achieved.I welcome the general support of all Committee members for the Report and note the absence of dissenting Reports.However, I do wish to comment on the Supplementary Reports lodged by several members. In response to Labor members may I say that the legislation does not relax regulation but simplifies it to make it more user friendly.Those members express scepticism regarding the benefits of takeovers because some are not successful.That may be the case. However, it is a matter for the market to sort out. It is not a reason to unduly restrict takeover activity or open avenues for costly and obstructionist litigation.Restricting to ASIC the initiation of court action regarding decisions of the Takeover Panel is questioned by Labor members. However, this is also designed to prevent undue litigation.ASIC has adequate capacity to protect small investors in these circumstances.Labor members' comments on Directors' Duties and Corporate Governance and also on Accounting Standards add little to the Main Report.I reject the criticism and the need for amendment.Senator Murray suggests that the Committee has been equivocal in its reaction to CASAC's proposals that Section 621 (4) should apply to all forms of takeover bids and that as a consequence Sections 623 (2) & (3) should be removed from the Bill.In fact the committee supports CASAC on this. We simply made the point that we have not had the opportunity to take external evidence on this and that it may be appropriate to do so.As regards the voting rights of a director who is on the boards of both the bidder and the target, it is appropriate to leave the solution to this, should a problem arise, in the hands of ASIC.Despite Senator Murray's comments, his proposal to extend the source of enforcement applications regarding Takeover Panel decisions is contrary to the Bill's purpose of minimising litigation.This is also the case with his proposals regarding compulsory acquisitions. Senator Murray's admirable points of principle regarding appointments to accounting standards bodies should apply to all appointments to government bodies.They are principles which this Government and its Ministers do apply.It would not be good administration to write them into one piece of legislation in this piecemeal fashion.The legislation strikes the appropriate balance between black letter law and delegation to ASIC, contrary to Senator Murray's comments.It does not preclude future legislative initiatives if proven necessary.Senator Cooney's references to the balance between reliance on business ethics and regulation are noted but the legislation does strike the appropriate balance.As a non-lawyer, I do not share Senator Cooney's enthusiasm for the courts and believe in the intent of the legislation to reduce litigation.Before I conclude my comments on the Bill I would like to thank all of the individuals and organisations which made submissions to the Committee, appeared before during public hearings, or responded to requests from the Committee for comments on specific issues.May I also thank Committee Secretary Frank Nugent and his staff for their tireless work on this Inquiry.16:09:004883Conroy, Sen StephenSenator CONROY3L6VICALP00—I would also like to place on record a number of thankyous, firstly to the chair of the committee, Senator Chapman, who has had to carry this one for quite some time through many different phases, and secondly to the secretariat, who worked tirelessly on the report on the provisions of the Corporate Law Reform Economic Program Bill 1998. I would also like to record my appreciation for the work of Senator Gibson and Senator Campbell on this as well, which I think is appropriate. At the outset I would like to indicate that the Labor Party supports the reform of the corporate regulatory environment. Labor has, though, a number of concerns with the bill, and we are likely to move a number of amendments to it. We have not yet finalised our position, but I would like to indicate some of the areas of our concern. Taking the proposed changes to the takeover laws as an example, Labor believes that the potential threat of takeover is necessary to maximise performance by management. However, there is growing overseas evidence that the most crucial aspect of international competitiveness is strong domestic competition.The government has asserted that existing laws have discouraged takeover activity, yet evidence presented to the committee was not compelling. The recent Ernst and Young report on mergers and acquisitions, showing that Australia experienced a record level of mergers and acquisitions in 1998 and that this is expected to continue into 1999, shows that in the real world, in the real market, the reality is somewhat different from the evidence that was given to the committee. The proposal may, in my view, breach some important principles of transparency, information in the marketplace and equality of access to this information.The government has also indicated that it wishes to change the rules on compulsory acquisition of minority shareholdings. Labor believes that this change will unfairly disadvantage minority shareholders. Even the government members believe this provision is unduly harsh, and they indicated so in their report. I would like briefly to quote from Mr Alfred Rofe, Chairman of the Australian Shareholders Association Ltd, who highlighted this concern on behalf of minority shareholders in this way:Compulsory acquisition involves the expropriation of the property of the shareholders whose shares are to be acquired. Minority shareholders in a partly-owned group of companies are in a particularly vulnerable position. It is therefore essential that any compulsory acquisition of their shares can be seen to be fair to both the majority and minority shareholders. As the courts have pointed out on a number of occasions, fairness in this context involves both fair dealing and a fair price. The proposed new compulsory acquisition power in its present form tips the scales too much in favour of the majority shareholder.This is something that should be of concern to everybody in the chamber. Over recent years we have seen many new entrants into the share market. Many mum and dad shareholders have now come into owning shares as part of a whole range of floats of former public companies and demutualisations. This is an area where we should be particularly conscious of making changes.Labor supports the revamp of the Corporations and Securities Panel, believing that it may more effectively address takeover disputes, but we will be keen to examine this over the next couple of years to make sure that it lives up to the hopes that we have for it. We are concerned about the restriction on individuals approaching courts, as is set out in this legislation. At the moment, only ASIC has the power and, unfortunately, ASIC—and Senator Campbell and I have debated this many times across the chamber—is not always driven by the capacity to deal with every issue that is brought before it. It is a question of the resources available and priorities for those resources. In some cases it may be that ASIC does not feel it necessary to follow some of these matters up.Another area of concern to us is the proposal which sees that the notice of acquisition be accompanied by an expert valuation and that the expert valuation be provided by somebody paid for, and selected by, a majority of shareholders of the company. We believe that in those circumstances the possibility of a not necessarily impartial report by the valuer, if they have been hired and chosen by the directors, is sufficient that the Corporations and Securities Panel should be the organisation that chooses the valuer. We believe that the majority shareholders and the directors should pay for this, though. That part is consistent.Another suggestion revolves around sophisticated investors and the proposal in here for a sophisticated investor to be deemed to be a sophisticated investor by the licensed security dealer. They have the power to make this choice. Due to both this government's and the last government's policies many people will have large superannuation lump sums towards the end of their lives. That has been a consistent policy that we have pursued and that this government has been pursuing. If we find that people have maybe half a million dollars at the end of their 20-year or 30-year working life, they will not necessarily be what you would traditionally describe as a sophisticated investor. But, on the surface, if a licensed dealer chooses to say, `You have a large amount of money, you have obviously had experience around here,' in his own mind he can make the decision himself to waive the information that would be going to somebody in those circumstances. So we do not believe that you should allow the licensed security dealer to make this choice under the proposals that exist at the moment.Another area is directors' duties and corporate governance and the question of a safe harbour for directors. This has been debated for many years. This is not a new proposal. It has been around for at least 10 years.H15CAMPBELLSenator Ian Campbell—Senator Cooney thought it was pretty good.3L6Conroy, Sen StephenSenator CONROY—Senator Cooney has probably dealt with it before, I am sure. The government say they want to clarify the duties for directors. My concern, from a reading of the legislation at the moment, is that in actual fact there is a watering down of the responsibilities, not a clarification. In those circumstances, fellow members and I are uncomfortable with supporting the bill in its current form. There is also a range of existing court decisions which have clarified the responsibilities for directors. And they have been quite clear about what those responsibilities are. If anything, they are perhaps too clear. What we are concerned about on our side of the chamber is that this bill waters down that position.Finally, so that other colleagues get a chance to have a few words, on the accounting standards question—whether or not we should be adopting the European model or the US model—we are concerned that this government is seeking to mandate one or the other of these proposals when it is too early at this stage. We are working towards harmonisation. This is a thing we should be working towards. But for the government to be potentially mandating either of these options is, I believe, to be jumping the gun, and what we should be doing is having a little more time before we jump one way or the other.16:17:004885Cooney, Sen BarneySenator COONEYSF4VICALP00—As Senator Conroy has said, we do need time to see which way we are going with corporate law. Corporate law is absolutely essential to the sort of society we have, because it is through the corporate structure that most of our economic activity is now conducted. Not only is our economic activity conducted through the corporate sector but the corporate sector is becoming more and more important, as Senator Conroy has said, to the population generally.That has been largely brought about by encouragement from governments of both kinds. When we were in power, shares in the Commonwealth Bank were put out to the public and the public were encouraged to invest in them. A third of Telstra has been sold and many people in the community own shares in Telstra. So government has encouraged people in the street to invest in companies. In addition, government has encouraged people to go into superannuation schemes, because it is through superannuation that people are going to be able to provide for their later years and it is anticipated that the social security system, as it is presently run, will not be able to meet the demand that will be put on it further down the line by those who are becoming older. As a way out of that problem it is suggested that people take out superannuation. Of course, superannuation funds make their money largely through investments in companies, so the company structure in Australia and the laws that guide companies in their operations are of essential importance to Australian people. It is for that reason that I have some reservations about the direction in which company law is going.A significant thing is that company law is now the responsibility of Treasury, whereas it used to be the responsibility of the Attorney-General's Department. There is a significance in that, because there is danger that an overemphasis will be placed on monetary returns that people get from companies—on, as it were, the issue of gain rather than the issue of service that companies may give and of responsibilities that companies have not only to their shareholders but to the community generally. But particularly with public companies it must always be remembered that the ownership of those companies is largely divorced from the control of them. It is a matter of great importance that those owners of the companies be protected from the actions of controllers. I am not saying that the controllers are going to act dishonestly or in an oppressive way, but they are going to act in a way that does not always suit the shareholders, particularly the minority shareholders; and Senator Conroy has made some remarks about that.In respect of the report I want to join the speakers that have already given their speeches and acknowledge some people who have had a lot to do with this report. As Senator Conroy said, Senator Chapman has led the committee well. I think that his predecessor, Senator Ian Campbell, needs acknowledgment. I am to be followed by Senator Andrew Murray, who on behalf of the Democrats has done a lot of work in this area and has done it well. Senator Brian Gibson has been mentioned. I think he has done seminal work in this area. It is a pity, I must say, that he is not amongst the ministers that we have in this government.As far as the secretariat goes, I have a great deal of praise for Frank Nugent who, it seems to me, is required to do a lot of work without all that many resources. I know that in the additional contribution I made he picked out some errors that needed correcting, and I thank him for that, particularly since it must have been almost an oppressive task that he had to get this report into shape.I note that some recommendations were made in the majority report, and that some recommendations were made by the Labor Party and some by Senator Murray. I think those recommendations deserve consideration. I know the government is intent on getting ahead with its program on corporate law reform but it is important to remember that this is an important area of the law. It is an area of the law that will never be finally dealt with. There will always be reasons to change the law but, whenever those changes occur, they should be made as significant as possible.16:24:004886Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will commence by acknowledging the chair. Mr Acting Deputy President, you would be aware that I sit on a large number of committees; they number 13 at this time. I have experience of a wide variety of chairs—both members, in joint house committees, and senators—and Senator Chapman joins the ranks of coalition chairs who exercise their role judiciously and with courtesy, even when there are differing views. Labor Party chairs that I have served under have behaved in the same way. In fact, there is only one chair out of the 13—regrettably a coalition male senator—who is a rude person as a chair. Generally speaking, the standard of chairing is high. Senator Chapman has indeed carried on that tradition.The other point I make about the committee is the quality of the secretary and, secondly, the continuity of membership between one parliament and another, which is very helpful in terms of a corporate memory and of experience and abilities. Of course, there is a range of abilities in the committee which includes people with very good legal qualifications, business qualifications and other practical areas of experience.This committee is also notable for its coalition members avoiding the temptation to automatically support whatever the government puts up. They are prepared to be critical and to make recommendations which differ from the legislation before them. That is healthy and I hope that they have some influence on the Treasury, who do not have a reputation, in my party at least, for having very big ears. Hopefully, those members can generate a number of amendments.The report on the provisions of the Corporate Law Economic Reform Program Bill 1998 and the bill itself cover a number of areas. The process that has been undertaken here is that a draft bill has been put out to be commented on at large and then put to a committee. That is a very practical, useful and proper way in which to develop good legisla tion. There are four main areas of attention that this bill deals with in terms of the Corporations Law. The first relates to some adjustments to directors' duties and corporate governance, the second to takeovers, the third to fund-raising and the fourth to accounting standards. The middle two might be regarded as having a focus on economic outcomes. The first and the last have very much to do with standards of corporate behaviour and corporate reporting, which should be in the interests of the community as a whole. As Senator Cooney said, they must not just be based on economic precepts and economic views but on social needs and the ethics which we require at this level of operation in our society.The Australian Democrats will attend to issues of corporate governance when the debate comes to the floor of the Senate and we will be moving a number of amendments. We regard it as our role to push hard at the accountability area. We have previously been supported in this effort, in the last round of legal change in this area, by the Labor Party, and I look forward to them assisting us again to improve the levels of corporate governance without putting directors and senior management into a straitjacket and without making it difficult for them to run their companies appropriately.The Democrats have addressed the issue of takeovers. The areas concerned are the consideration offered during a bid, collateral benefits and bidders statement formalities, as well as the scope and powers of the panel and compulsory acquisitions. Against each of those headings, we will be making amendments, largely derived from evidence to the committee. In those areas, we have differed with some of the members of the committee as to the direction we should go in. It is very healthy to see in a joint house report that there are three supplementary reports to the main reports. They are not minority reports; they are not dissenting reports; they are supplementary reports and indicate the way in which a diversity of views can be properly expressed in an area of great legal, commercial, economic and social significance to the country. The other area the Democrats will be attending to is that of appointments to accounting standards bodies. We have a particular desire to push an agenda that ensures appointments are made on appropriate grounds of merit, probity and the right balance of skills and backgrounds. One of the issues we draw attention to is the excessive power which is being delegated to other authorities—in this case, ASIC—and we will be making some remarks on that matter. We will also be addressing issues which have arisen from witnesses but which are not spelt out in our main supplementary report. Accordingly, I thank the committee and the Senate. I seek leave to continue my remarks later.Leave granted; debate adjourned.Bills4888r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Bills4888r701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7624888A NEW TAX SYSTEM (GOODS AND SERVICES TAX) BILL 1998Consideration resumed.10000CHAIRMANThe CHAIRMAN—The committee is considering the A New Tax System (Goods and Services Tax) Bill 1998 and amendment No. 1 on sheet 1327, moved by Senator Cook. The question is that the amendment be agreed to.16:31:004888Murray, Sen AndrewSenator MURRAY3M6WAAD00—The amendment we are dealing with is the only one offered by the opposition to the A New Tax System (Goods and Services Tax) Bill 1998, which has attracted the bulk of the over 250 amendments being put to the tax package. There has been great concern throughout the Senate committee tax inquiry about whether the benefits of the reductions in indirect taxes will be passed on to consumers. This is a key issue and one which has needed very careful thought.The research from overseas suggests that it will take six months or so for prices to settle down after the introduction of a GST. This was evident from the research in Canada and in New Zealand. Treasury, for example, provided the committee with a report by Mr A.E. Bollard of the New Zealand Institute of Economic Research which showed that about 70 per cent of the impact of the GST passed through in the first quarter and was most evident in the quarter after. But these effects do need to be accentuated as much as possible and as quickly as possible. There is a real concern that retailers and wholesalers in less than perfect markets will try to profiteer by increasing their margin by absorbing the benefits of the wholesale sales tax being abolished. That has worried the Democrats, and I know it has worried other members of the Senate.The ACCC are to be given sweeping powers to prevent that, including the imposition of fines of up to $10 million for corporations and the power to issue injunctions. But, realistically, the ACCC are being given only a small number of extra officers for the difficult job of prices surveillance and legal compliance—from memory, that small number is 40. But, of course, there is also the added difficulty being claimed in some quarters that giving the ACCC this authority will actually rub up against constitutional difficulties, and it is not too clear whether they will be able or allowed to do the complete job that the government is suggesting they do. Nevertheless, the real benefit of the ACCC's actions must be in the educational process and in working with businesses to develop appropriate means to identify the real benefits of reductions in indirect taxes and incorporating these into their pricing structures.The Labor Party amendment is focused on how price is expressed. The week before last, the ACCC issued its draft guidelines on how it will enforce its rules—guidelines described by the Financial Review as being `stiff' and `tough'. The ACCC has recommended that businesses display GST-inclusive prices, arguing that this is what is required by the law and the Trade Practices Act, sections 52, 53 and 53C. However, the ACCC is also suggesting that businesses display pre- and post-GST prices where appropriate. The guidelines as they stand are in deliberately vague terms because they are intended to apply across all industries, with the ACCC promising more specific guidelines if needed for particular industries.Minister, you may like to comment on this point later but, as far as I am aware, there is nothing in the government legislation which prohibits a business from showing its prices as it sees fit, provided it complies with the government's law. If the business wanted to show the GST separately, there is no rule, as far as I understand, which prevents it from doing so. In other words, for those retailers and those businesses supportive of showing a GST separately, my understanding is that they can do so. I would be interested in your response if you fleshed that out. So the idea that they cannot, I think, is wrong. It is apparent from the approach of both the government and the ACCC that they do intend that pricing should be GST inclusive. In other words, if there is to be any doubt or any ruling required, it should be GST inclusive. That contrasts with Senator Cook's Labor Party amendment.I think the guidelines as they stand are in deliberately vague terms because they intend them to apply across all industry, with the ACCC promising more specific guidelines if needed for particular industries. Whilst that flexibility might be practical, it may lead to some difficulties in the implementation. The ACCC seems to have made a fair start with those draft guidelines, but clearly they do not go far enough. The requirement to display pre- and post-GST prices during the transition period might be regarded as quite essential, particularly to help consumers in their own informal prices surveillance—which will help the ACCC in its work—but we should not understate the immense amount of work and the cost that that will entail.Just picture your average supermarket needing to put up two sets of prices and needing to do all the posters that are necessary—the art work, the price bursters, et cetera—and I presume also in newspaper advertising. That area of ACCC compliance will carry a cost, and I am not at all sure, having gone right the way through the committee hearings, that I have ever heard that area of cost spelt out. I think the compliance cost of software, hardware and price changing was spelt out, but not that of having to put up two sets of prices and run that throughout your shop for a period of maybe six months. Minister, you might choose to comment on that potential cost as well in your response.It is during the transitional period—that key six months after the introduction of the GST identified by the Treasury—that some additional consumer measures will be needed, especially in the retail sector. The Democrats will be developing proposals to bring forward to the Senate when we debate the changes to the Trade Practices Act later in this package of bills. That is an appropriate place to deal with the issue of GST transparency, because we must maximise the early pass through of indirect tax changes by making it mandatory to give consumers all the information they need to know if they are being ripped off. But I am with the Labor Party—I do not expect early pass through; I think the pass through will take at least two years for most indirect taxes. That would seem to me the most practical way at present to deal with the GST's price effects.This is Labor's only amendment to this particular bill. For that reason, Senator Cook, it is a bit difficult to take you seriously on the policy ground. I take you very seriously on the political ground, but when this is your only amendment it is a bit difficult to take you seriously on the policy ground. Senator Kemp has rightly made the point that over your 13 years in government you did not propose to include the wholesale sales tax on prices, even when it was raised again in 1993. I think we are dealing with different matters here—it is more difficult to deal with a wholesale sales tax than a retail sales tax or a final consumption tax—nevertheless, I think the point has legitimacy. You did not put petrol and alcohol excises on price tags. Again, there are difficulties attached to that because of the particular level of production, but the point deserved to be made.In 1994, when the Democrats asked that embedded indirect taxes be noted on business inputs so that exports could be fully rebated, the Labor Party at that stage refused point-blank to consider the issue. When you introduced the fringe benefits tax in 1986, it was put on employers rather than employees, so in that sense it was hidden and not exposed to the employee. So there is a long tradition of the Labor Party in government not exposing taxes up-front. This coalition government is continuing that tradition. From memory—and Labor Party senators could correct me—your election policy on the wholesale sales tax did not propose that the rate of WST should be shown on invoices either. So, again, that differs from the policy you appear to be promoting here.What concerns me most is that, of all the hundreds of technical issues presented to the committee over four months, this is the only Labor amendment to the GST bill. I am one of those who believe that individual Labor senators have a genuine and great concern about social justice and such issues as taxing the essentials of life and taxing food, but the concerns of those individual senators who I know have those strong feelings have not been translated by the Labor Party into amendments that attend to issues in the health and community services area or child care or aged care or any other area of charitable organisations or cultural organisations affected by the GST.If Labor's committee members have genuinely written long lists of problems and concerns into the committee reports and have supported recommended changes and a different policy approach in many instances to that adopted by the government, why hasn't that been translated into amendments? If Labor's opinion is that they are not going to do anything to lessen the pain of this bill, that is an abrogation of your responsibility, because you do not have the numbers. If the bill were to be passed by any of the other groupings in the Senate capable of providing the numbers, the fact that you did not seek to make the bill better is a cross you are going to have to bear.I think the Labor Party is a much harder beast than many of its members and has turned its back on amendments which would address the issues of social justice and equity, which individual senators feel very strongly about. The Labor Party, as that much harder beast—if I can put it that way, rather than the individual senators—has deliberately chosen political divisiveness. I understand why. I can understand the approach and I think, incidentally, it will be a very effective weapon in your hands. It will be a singularly effective device because what we have here in pure political terms is the Labor Party wanting every consumer, every day, to have the GST stuck in their face until election day. Then the ALP will be able to use those invoices, which would have a GST on them, to really push the message as to the effect of the tax on individual consumers.That is predicated on the belief that you would have a Canadian result—that the community as a whole would react and throw out the government. That may have been the case in Canada; it has not been the case in 105, or whatever it is, other countries that have introduced a GST or a VAT. It was not the case in New Zealand, the UK or Denmark—let us go through the long list.I would have preferred the very real and genuine concerns that Labor senators have individually to have been translated into support for amendments being put to the bill by the Democrats, the Greens (WA) and the Australian Greens. The only amendments you have supported are government amendments, which so far we have supported because they do improve the bill. Why improve it for the government and not also improve it by supporting the cross-party amendments where you agree with them?HX5WOODLEYSenator Woodley—Why not approve it for the Australian people?3M6Murray, Sen AndrewSenator MURRAY—Exactly. Why not improve it for the Australian people? (Time expired)16:47:004891Harradine, Sen BrianSenator HARRADINE6H4TASIND00—Will the minister advise the chamber of what is the practice in other countries? Is it or is it not a fact that labelling which shows clearly the GST component of the total price is done in all countries where there is an equivalent tax, except for New Zealand? Secondly, though honourable senators will know that I do not stand in this place often quoting the World Bank or the IMF, is it or is it not a fact that both organisations have indicated in articles that such a practice—that is, to show specifically and separately the GST component of the total cost—is the correct way to proceed?Senator SHERRY (Tasmania) (4.48 p.m.) I would like to make a contribution, which will be largely in response to Senator Woodley and Senator Murray. Senator Kemp might want the time to check up on the material that Senator Harradine has just asked about, which I think is a very important question. I am pleased that Senator Woodley has remained in the chamber since the contribution he made.HX5WOODLEYSenator Woodley—I knew you were going to speak, Senator Sherry.ZW4Harradine, Sen BrianSenator SHERRY—Thank you very much. I was pleased in respect of your second contribution that you acknowledged you are a politician and that we are involved in a political process. I really did think you were stretching the principal argument of the Democrats just a tad too far to maintain the position that you were maintaining in your first contribution.We are politicians. We have legitimate differences from time to time. Unfortunately in this country we tend to focus on the differences rather than the things we agree on. I suspect, if you look at legislation, that there is a majority of legislation we actually do agree on in terms of a significant number of things. But, Senator Woodley, to suggest that we are not involved in some political process, as I believe you were doing, was really stretching it quite a bit.I would like to touch on Canada, because you both touched on Canada and I have some knowledge of what occurred in Canada. I do not believe, and I do not believe the Labor Party believes, that you would have a political result after the introduction of a goods and services tax like the one that occurred in Canada. The Canadian Progressive Conservatives—that is a bit of a contradiction in terms, Progressive Conservatives—were defeated after a long period in office. Certainly the goods and services tax was an issue. Compounding that in Canada, almost every province except Alberta had its own state tax, and the GST was added on top of it. That just added to people's angst. There were commitments given that there would be a uniform national rate and that this other state provincial tax would be done away with. That did not happen.Also in Canada there were five parties that had substantial electoral support. The electoral system was first past the post. You had the Quebecois; the Reform Party, which was a right of centre party; the Liberal Party; the Social Democrats, equivalent to the Labor Party; and the PC. Those five parties, all competing, drew their relative strengths from regional bases. Unfortunately for the Progressive Conservatives, their vote was scattered throughout the country. It was not an insubstantial vote. From memory, they received about a quarter of the vote and ended up with two seats.3M6MURRAYSenator Murray—We know the problem well.ZW4Harradine, Sen BrianSenator SHERRY—I know the problem well, and I have done some analysis of it. I do not believe for one moment—and I am sure the Labor Party does not either—that you would get a political result emerging that was comparable with Canada's if we ended up with a GST in Australia.Senator Murray, one of your remarks was that you believed that the parliamentary Labor Party was a much harder beast than many of its members and supporters. I have spoken extensively about my role and work on the GST committee to Labor Party members and indeed to many members of the community in Tasmania in the last few months. I am yet to find one Labor Party member who has seriously questioned the Labor Party's approach on the GST.WW4KEMPSenator Kemp—Bob Hogg.ZW4Harradine, Sen BrianSenator SHERRY—I am talking about my Tasmanian colleagues in the Labor Party. We went to the election with a fundamental commitment to vote the GST down. I have made it very clear that the Australian Labor Party intend to vote down the goods and services tax. The Labor Party are not going to produce a so-called warm, soft and cuddly GST. That is not our function. We believe a GST is fundamentally unfair, and we do not believe that any amount of window-dressing of a GST will produce fairness and equity for Australians, nor do we believe that the so-called protections that this government is arguing are there will be maintained anyway. We have had this argument time and time again. As I say, I am yet to find a Labor Party member who questions our particular approach. They want us to vote this down. They do not want us to be producing a warm, soft and cuddly GST because they do not believe that can emerge.What I have encountered from time to time—including at a barbecue I was having over Easter with some farmers in the Forth Valley, close to where I live—is some fairly significant ignorance about the impact of a GST. I am not criticising the particular people I was having the barbecue with, but at least two of them thought that payroll tax was being replaced as a result of this package. So there is still, unfortunately, a considerable level of misunderstanding, despite the government's publicly funded $20 million propaganda campaign in the lead-up to the last election.Senator Woodley said to my colleague Senator Cook and to other Labor senators who were here, `Why haven't you done a survey of consumers to see whether they want to know this particular information—whether they want to know what the GST price is and want it included on their receipt?' Senator Woodley, we have not done a consumer survey. That is our judgment, and it is not just our judgment. For example, we heard from Mara Bun from the Australian Consumers Association. I do not believe the Consumers Association had done a survey of consumers to determine their view on this matter, but it was their expert judgment, and very firmly their expert judgment, that the 10 per cent should be shown on receipts. I would submit that that is the case in other policy approaches. For example, in relation to choice of superannuation, this government is developing what are called `key feature statements'. I do not agree with the government's policy, but these key feature statements are designed to give information to consumers; whether they understand it or not is another issue. That is not as a result of any survey this government has done or the Consumers Association have done; it is a result of the expert opinion of groups like the Consumers Association believing that this is what should occur.There are a couple of comments that Senator Kemp made. He did allege that many businesses, particularly small businesses, would not have the software in place in time to ensure that this particular pricing is carried out. That must be one of the largest furphies I have heard for some time in this debate. It almost matches the assertion that the high-roller changes were minor technical amendments, but that is another issue.3M6MURRAYSenator Murray—Not quite the same excitement.ZW4Harradine, Sen BrianSenator SHERRY—No. But surely recording on receipts the actual price of the tax, the 10 per cent, is a very minor aspect and will be a very minor contribution to any costs for the purchase of software. Labor does not believe that it would be a significant cost. In fact, I suspect that the cost of doing this would be zero or very minor in the context of the general compliance costs that are being forced on not just small business but also large businesses. For those who already have the software, it would be a very minor change to their existing software. For those who do not have the software and have to purchase it and/or the hardware as a consequence of a GST, I do not think there would be any additional cost. I think the arguments about compliance costs as advanced by Senator Kemp are simply not correct.In the lead-up to the last election there was a particular constant mantra and misleading argument from the government. There was a range of those, but one of the allegations they made was that the wholesale sales tax was a secret tax, a hidden tax. They said, `Why don't we get it out in the open? With a GST it is going to be out in the open. We want the consumers to see the effect and the impact of a GST.' This is the government's proud boast, and what Labor is attempting to do with its amendments is to hold the government to their word on this issue. We want this tax out in the open. We want consumers to see it, and we are picking up the government's own rhetoric on this point. It is not our commitment. Senator Murray is right: we did not give a commitment about the wholesale sales tax. We did not give a commitment about the GST in the lead-up to the last election except a commitment to defeat it, hopefully to see it never return to the political landscape in Australia.There are some very important practical reasons why our amendments should be supported. The first is the issue of the transition stage for a GST and its implementation in that first year or two. It is very important that consumers are able to determine the effect, and part of determining the final price is knowing that goods did or did not have a wholesale sales tax. I would concede that the number of consumers who are going to work out what the approximate price should be as a result of the abolition of the wholesale sales tax will be relatively small, but some will want that information to determine whether the wholesale sales tax reductions are being passed on in full. We do not believe that they are going to be passed on in full in many areas. But it is important that consumers have the information about the 10 per cent tax on most goods and services.This brings me to the second point: the GST is not going to apply to all goods and services, so it is important to know which goods and services it is going to apply to.3L6CONROYSenator Conroy—Not high rollers.ZW4Harradine, Sen BrianSenator SHERRY—We know it is not going to apply to high rollers according to the government. In some shape or form the government is going to make sure high rollers are exempt or it is going to get the states to exempt them. That is another issue, Senator Conroy, but a very important issue.In the context of the GST not applying to all goods and services, it is important to know those that are going to be taxed and those that are not going to be taxed. That is why the level of the tax should be shown on the receipt. My colleague Senator Cook rightly referred to the submission from the Western Australian Chamber of Commerce and Industry and its representative Miss Nicky Cusworth. There are many things that I did not agree with in their submission, but in terms of a witness presenting a case with some facts and some backup support, she was one of the most impressive representatives of the business community that presented submissions to our committee hearings in Perth in Western Australia. She very strongly maintained that, in terms of transparency, the tax should be shown in full.As I said, the issue of transparency is very important. This is the government that is introducing a very major new tax by any measure. We can agree on that, at least: a very major new tax into the Australian economy and community with very substantial effects and impacts on the community. We have lived with the wholesale sales tax for a long time; I hope we live with it for a lot longer. But there are practical difficulties, as Senator Cook touched on—it could be done; I would certainly concede that, but we are not promising it should be done—of showing the impact of the WST through to the consumer. We did not make a promise at the last election to show the impact of the WST.WW4KEMPSenator Kemp—You missed the point of the argument.ZW4Harradine, Sen BrianSenator SHERRY—No, I did not miss the point of the argument, Senator Kemp. We did not make that commitment. I am submitting that the practical difficulties of showing a WST are very substantial indeed. Do we show the impact of tariffs, which are effectively a tax, on goods and services in the community when they are sold at the retail end? Of course we do not. You take a practical view about the impact of tariffs.I think there is an element of peevishness in the Democrats' approach. They are effectively saying, `You're not supporting any of our amendments so we are not supporting yours.'8U4LEESSenator Lees—Fair enough.ZW4Harradine, Sen BrianSenator SHERRY—Senator Lees, for the principled Democrats I submit that that is not a particularly principled position, particularly after Senator Woodley's homily to us before lunch about playing politics and not playing politics. I would submit to the Democrats that there are very good policy reasons indeed why we should show the tax on receipts. There are good political reasons, as well. (Time expired)17:04:004894Conroy, Sen StephenSenator CONROY3L6VICALP00—I rise to support the Labor Party amendment and I want to respond to a number of issues that have come up so far in the debate, starting with the government and Senator Kemp. Here you are: you have $20 million worth of advertising, you are proud as Punch of the GST, proud as Punch this morning and all during the election, as was the Treasurer last night, but what happens when it comes to the crunch of actually putting it up-front for people to see?ZW4SHERRYSenator Sherry—They don't want to boast about it.3L6Conroy, Sen StephenSenator CONROY—That is exactly right: they don't want to boast about it. It is the tax package that does not really have a GST in it. Don't mention the GST. I debated a Liberal party member during the election campaign and each of us had 15 minutes. After 15 minutes of speaking from the member for Indi it was discovered that he had not mentioned the GST once. Fifteen minutes from a federal member and not once did he mention the GST. And that is how this continues to be. They will talk about tax cuts, they will talk about this and they will talk about that, but as soon as it comes to the hard ball on the GST, don't mention it.Senator Kemp has indicated the compliance cost issue. I am surprised, Senator Kemp, because I am sure you are familiar with the evidence presented to the committee. Accounting group after accounting group, representatives from New Zealand and business groups came before us to tell us how simple this GST was going to be for the small business community in particular—all that you needed to do was put an extra column on your ledger; and for those poor small businesses that did not already have a computerised system, the answer was, `This is going to help them modernise and it will cost them only $150 to buy a new package.'I had a degree of scepticism about $150, but let us take the government and the evidence on face value. We are talking about systems that are being designed at the moment, systems that will be designed after the final vote is taken and all the amendments are in place—if there are any. Those companies that design these packages have the broad outline ready but they know it could be an amended package and they will not complete their product until after they see the black and white of the legislation. In those computer codes they write and put into a package, all that will be needed is one extra line. Out of thousands and thousands of lines of computer code to design these new software packages, one extra line is going to be needed to accommodate this particular amendment.One line out of tens of thousands of computer codes into $150 cannot come to much more in compliance costs, Senator Kemp. It is not as though there are previously existing packages that you can just pick up from New Zealand, bring across and put in place. You have to have a new computer software package designed for the Australian system that is coming on. To say that there are significant compliance costs to meet this particular amendment is a furphy, an absolute furphy.We had witness after witness, from the National Farmers Federation to the Western Australian Chamber of Commerce and Industry—I think Senator Sherry has already referred to Ms Cusworth—all saying that they believe in transparency. They believe that it is necessary to have the docket with the GST on it. One of the organisations that appeared before us, one august organisation of which one of our senators is a former official, and has direct experience in the retail industry is the shop assistants union. The shop assistants union was asked about hiding the amount of the GST and what the concerns were. Mr Blandthorn gave a very comprehensive submission—ZW4SHERRYSenator Sherry—An excellent submission.3L6Conroy, Sen StephenSenator CONROY—It was an excellent submission. Mr Blandthorn made the following point:We make the point in our submission that the introduction of a new tax which leads to increased costs of goods and services will hit consumers. In many cases, the first time consumers are hit with those costs they are going to be surprised. The people at the front, that is, the shop assistant serving the customer is the person we are concerned for.We believe that once the GST is introduced, people will take out their anger on the people serving them. That is why we ask in our submission whether anyone has considered the impact of the GST on those people at the front line, those people actually serving the customers, when they are suddenly open to abuse and criticism because of something that is beyond their control. They are the only people that consumers can take out their ire on. That is, except at the next election, when people will have seen the real impact, as opposed to the froth and bubble that they were told about, and when they will get a chance to take their ire out on the government—if they are successful in passing this legislation. We have the legitimate concern of an organisation representing 250,000 shop assistants around Australia, all at the forefront of dealing with the impact of the GST. They are not involved in an esoteric philosophical debate in this chamber; they are at the forefront, the front line, of having to deal with this.Senator Mark Bishop interjecting—3L6Conroy, Sen StephenSenator CONROY—I wouldn't go that far, Senator. The hypocrisy of the government's position on this has already been pointed out. Equally, the hypocrisy of the Business Coalition for Tax Reform has also been pointed out. Their advertising campaign can only be described as deceitful. There they were, with $4 million, talking about the `hidden taxes'. Remember the ripping ads? `Ripped off' and `hidden taxes' was their implication. There was never a word in their $4 million advertisements about the fact that they were supporting a hidden GST. The hypocrisy of the Business Coalition for Tax Reform on this issue is only matched by that of the government. The National Farmers Federation, the Western Australian Chamber of Commerce and Industry, the shop assistants union and St Vincent de Paul came before us and said, `We want to see it exposed.'WW4KEMPSenator Kemp—That was a poorer version of Senator Cook's speech.3L6Conroy, Sen StephenSenator CONROY—Senator Cook was particularly eloquent today.Senator Kemp interjecting—3L6Conroy, Sen StephenSenator CONROY—I agree with you. I will come to Senator Woodley and Senator Lees in a minute. The hypocrisy of the government is in saying one thing and doing another. Recently in this chamber we had a debate on the Charter of Budget Honesty Bill. The government championed the need for transparency, accountability and improved disclosure. Senator Kemp and Senator Campbell are on the parliamentary record. They outlined why they wanted a charter of budget honesty. I quote:What we are doing in this charter of budget honesty is bringing in a new improved accountability, ensuring that the public is properly informed . . . That was Senator Kemp, on 1 October 1997, talking about ensuring that the public was properly informed. Senator Campbell said:The improvement of the fiscal position will only be achieved through greater discipline, transparency and accountability in government fiscal policy . . . Transparency and the accountability of government will be substantially increased through improved disclosure . . . The government on one hand are saying that, when it suits them, they are about transparency and disclosure but, when it might not suit their political agenda, it is off the table. Senator Kemp has made a number of points about the WST and disclosure. I will give you a news flash, Senator Kemp. It is easy to disclose the WST on food; it is zero. The WST on utilities and housing is also zero, as is the case with a range of other goods. It is very easy. There is not much need for a discussion on it. It is zero on the necessities of life. There is no need for disclosure because it is already there.I now turn to the Democrats—Senator Murray, Senator Woodley and Senator Lees. They have expressed disappointment at our unwillingness to support some of their amendments. They have accused us of playing politics, playing hardball. Recently the following amendment was moved in this chamber:At the end of the motion, add "but that the Senate condemns the Government for:(a) unfair tax cuts, with more than 50% of the benefits going to the top 20% of income earners—that is a fact which is not denied by the government—(b) tax cuts for higher income earners which far outweigh the increases in social security payments for lower income earners—that is another fact—(c) creating a situation where a couple with no children earning $100,000 gets 5 times the benefit of a low single income family with three children".I can understand why the government did not want this to be on the public record and for this amendment to get up. I understand their position. They are ashamed of some of the things that they have done in this package. What surprised me was that the Democrats took a walk, filled those chairs at the back of the chamber and abstained. We lost.How could you possibly come into the Senate today and accuse us of playing politics and say that we will not support good wholesome amendments like the ones you are moving, when you walked? You walked and that is what matters. How can you possibly oppose a statement that says, `Unfair tax cuts with more than 50 per cent of the benefits going to the top 20 per cent of income earners'? You stated the unfairness of this package day in and day out. I understand the government did not want them on the public record but where were you? I think Senator Margetts voted with us, but where were the Democrats? That was not the only one. We had an emotion—8U4LEESSenator Lees—An emotion?3L6Conroy, Sen StephenSenator CONROY—We certainly had plenty of emotion, but we also had an amendment that read:. . . the Senate condemns the Government for:(a) misleading the Australian people about the real price effects of the GST—a fact uncovered in the Senate inquiry—(b) inadequately resourcing the Australian Competition and Consumer Commission, thereby not protecting consumers from GST related profiteering—something acknowledged by the ACCC itself—(c) threatening the viability of small business with unprecedented powers over small business pricing policies.Again, I understand why the government wanted to vote this amendment down, but I do not understand how you can have the front to come in here and say to us that we were playing politics when again you took a walk back to the chairs against the wall. And it went on. It was not just those two. We had the another amendment which said:. . . that the Senate condemns the Government:(a) for the most complex, administratively expensive and job destroying tax this country has ever seen; and (b) for a GST that forces charities and other non-profit bodies to reallocate scarce resources to filling in forms for the Prime Minister (Mr Howard) and the Treasurer (Mr Costello), when these resources could be used to alleviate the misery and suffering of the poorest and most vulnerable members of the community.You would have thought that we would have got that up, that there was a majority in this chamber to support an amendment like that. I understand why Senator Kemp was too ashamed and wanted to hide that. Again, what did the Democrats do? They took a walk. They abstained and the amendment was defeated. There is one final one—they weren't done yet—which said:. . . that the Senate condemns the Government for:(a) imposing a huge new paperwork burden on Australian small business through the GST, which does not exist under the wholesale sales tax;(b) increasing the number of businesses paying indirect tax to the Government from 70,000 to 1.6 million; and(c) imposing tax on the necessities of life for the first time.Again, I understand the government—absolutely consistent with the government's position—but why did you abstain? Who was playing politics? Why did those amendments go down in this chamber? Do not come into this chamber and say to us that we are playing hard ball, that we are playing politics, when you had the chance to vote for these amendments and you took the walk, you pleaded the fifth, against the back wall. We lost. These were fair and reasonable amendments, but to our surprise the Democrats decided that they were going to help defeat them. They took the option of abstaining on all of them.So, Senator Woodley, no-one has the high moral ground when it comes to this particular debate about amendments. We said up front to the Australian community that we would defeat the GST. We said we would not move amendments and we are sticking to the commitment that we gave.8U4LEESSenator Lees—So what's this if it's not an amendment?3L6Conroy, Sen StephenSenator CONROY—We indicated that we had a couple of amendments—I take your point. Up front during the election campaign we indicated that was our position and we are sticking to it. The mistake in your logic is that you think you can make this fair. You cannot make this fair. This bill is an atrocity and you cannot make it fair. (Time expired)17:19:004897Murray, Sen AndrewSenator MURRAY3M6WAAD00—I have been a little provoked by Senator Conroy, but I must indicate that I have corrected on the record previous statements by members of the Labor Party concerning your amendments in the second reading stage which, as you know, are an expression of opinion but have no effect on the bill. At the time I indicated that there were amendments which we supported, there were a couple we opposed and there were a number we abstained on. For the number we abstained on, in fact we had far stronger real-life amendments which change the GST bill materially. Your amendments simply did not go far enough. That was our purpose in asking.The latest second reading amendment you outlined was on the essentials of life. We are sitting here ready to go on the amendment which deals with the exemption of food, which I think runs to three pages—not a second reading amendment, not a hands up and we just think there is a problem here but we are not going to do much about it kind of amendment; these are real amendments. This is where you put your money down.We were making sure we could see exactly where you sat on your second reading amendment so that we are going to counterpose that with where you sit on our amendment. Then we will have the battle of the amendments in the public relations war. I think you are going to lose because you are going to be out there saying, `We had the second reading amendment which indicated our policy and our approach, but we actually opposed the amendment which would have made food GST free. Oh and we opposed the amendment which would affect the charitable problem. Oh and sorry about your cultural organisation. Education, this is a real problem, but we couldn't quite get beyond the second reading amendment.'That policy position I understand. I think this is a very sound statement of a policy position. I have no problem with your views on that, but you do not have the numbers and we do not have the numbers. If this GST goes through without the amendments which would help cultural organisations, educational organisations, health organisations, charitable organisations, churches, the poor and the disadvantaged, then you will be culpable. We do not have the numbers and nor do you.17:22:004898Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I do not wish to intrude into the debate between the Democrats and the Labor Party but I think that we now need to move on. I think I may have the support of the Leader of the Democrats, Senator Lees. There are a couple of general comments I could make.Senator Lees interjecting—WW4Kemp, Sen RodSenator KEMP—I thought you were providing support. I will make a couple of comments. The first is that it is very clear, Senator Woodley, that you have sorely provoked the Labor Party. I think that is very true. I do not know whether that was your intention or not but, if it was, you have scored 100 per cent—and congratulations. My second comment is that Senator Conroy repeated, by and large, the speech that Senator Sherry gave, which by and large repeated the speech that Senator Cook gave.I thought it was a pretty good debate today. We did not agree on a lot of things, but it was a considered debate: a lot of questions were asked and a lot of questions were answered. I thought it was a good debate, and it is unfortunate that we are now seeing some further time-wasting. I think that is a great pity. The Labor Party official spokesmen assured me that they were very keen to move on to the amendment that Senator Lees wishes to move, and the Labor Party were going to pull their speakers off. I think it is a pity that did not happen; we may have saved ourselves an hour or so.I will turn to specific questions that a number of colleagues have raised. Senator Murray, nothing prohibits a business separating out a GST. The only time they would not be able show a GST amount is when there is no GST. For example, where an unregistered business sells an item, showing a GST would be misleading. I think that answers the question you put to us. You spoke at some length about the ACCC, and I think those issues are better dealt with when they come before the Senate in the relevant bill. My view is that we should deal with them at the relevant time rather than dealing with them out of sequence. So please bear with me on that.Senator Harradine raised a number of questions—he is not in the Senate at the moment, but I will bring my answers to his attention—in relation to what the practices are around the world. There are varied practices around the world. My advice is that many of them make it difficult to know what the full price is, and I think this is the most important fact for consumers. Further, many countries have multiple rates, which may make separate reporting more relevant.In relation to some papers that Senator Harradine referred to us, the advice I have on the IMF Occasional Paper No. 88, Guidelines for Administering a VAT: Value Added Administrative and Policy Issues 1991 says that for invoices provided to final consumers in the unregistered sector, the price may be shown as including VAT. My advice is that the IMF prefers a simplified invoice for final consumers, and I understand this is entirely consistent with the approach the government is taking.DX5MARGETTSSenator Margetts—What is the unregistered sector? What does it mean?WW4Kemp, Sen RodSenator KEMP—We stress that we have developed an Australian model and we think it is world best practice. We have obviously looked at what other countries do.DX5MARGETTSSenator Margetts—There is no point quoting something if you don't explain what it means.WW4Kemp, Sen RodSenator KEMP—Could I just finish my remarks, if you don't mind, so I can go through the questions that people have raised? Senator Sherry was not listening to the comments I made. I was reading out, in relation to issues such as software, a facsimile I have received from the Australian Retailers Association. I was putting the view that they had put to the government.ZW4SHERRYSenator Sherry—They are wrong.WW4Kemp, Sen RodSenator KEMP—I am just correcting the record. It was a vital bit of information that was missed from your comments. I was providing information supplied by the Australian Retailers Association.I think that probably covers the broad issues which were raised. I think we have canvassed this at some length. It has been quite a long debate on this particular item. The views have been put on the table, and it is the government's preference that we put the motion so we can decide this and move on to the next one.17:27:004899Conroy, Sen StephenSenator CONROY3L6VICALP00—I intend to be brief. I just wanted to respond to Senator Kemp's continual allegation, any time anybody stands up to speak, that they are filibustering. The only problem we have is that his adviser is getting writer's cramp. In terms of the Democrats and the suggestions that Senator Lees made about food—and Senator Murray is saying, `Food! These are fair amendments!'—the problem for us on the Labor side, and for the voters out there in Voterland, is the definition of food. Throughout the election campaign and for a fair bit of the inquiry, the Democrats had one view of food. Today they have a string of amendments.ZW4SHERRYSenator Sherry—They changed from breakfast, lunch and dinner.3L6Conroy, Sen StephenSenator CONROY—That is exactly right. They had a broad definition of food. Then we got to the business end of the season, as they say, and food had narrowed a bit—and a couple of things that were in were now out. We went from the Norwegian to the French, to the Swedish, and we finished with the Irish model.Over the next few weeks when the Democrats say, `Trust us, back our amendments on food,' what concerns me is that, by the time we get to 30 June, food will be a lettuce and a tomato bought at Coles in Manuka. And by midnight it could be just the lettuce. So when they say to us, `We want you to back our amendments on food, we want you to help make this fair,' and the government is saying, `No, we are not going to cop that' and they put the pressure on, we are concerned that food will get narrower and narrower. There is only one way to make this legislation fair, and that is to reject it outright.The revenue base was proven yesterday in the budget not to be broken—furphy gone. Now we are being asked by the Democrats to take it on trust, and I do not believe we are in a position to agree to that. I happen to think that food is more than a lettuce and a tomato, and that there is only one way to make sure that this bill is made fair, that is, by defeating it.17:30:004899Lees, Sen MegSenator LEES8U4SAAD00—Obviously I cannot let those nonsense comments go. For the poor unfortunate people—of which there are probably three—still listening to this broadcast today after some of the utterances from the Labor Party, I do have to explain the difference between pious amendments that the Labor Party moved to the second reading and the amendments, if we ever get to them today, we wish to move that will actually make a difference.For those who may be listening—the three or four left—pious amendments can be attached to the second reading, but they do nothing, they achieve nothing, they do not actually make a difference. Nothing happens to actually change the law and government policy. Our problem with a lot of those amendments was that the issues they identified—the difficulties within this package—are the very ones we are trying to sort through and to sort out. So we were not about to vote for a series of worthless amendments which would just attach themselves to the bill and go nowhere, that did in fact imply that that is what we could be left with at the end of the third reading—to still have those amendments in the bill.If Senator Conroy, who has unfortunately left the chamber, bothered to read our food amendment, he would see that not only is it detailed, not only does it show that it is the one used by 17 of the 23 OECD countries that treat food as a special case, but he would also see very clearly that we actually make sure that there are no extra compliance costs. We overcompensate for the difficulties of compliance. So we were not about to vote for second reading amendments that are largely useless when what we wanted to do was to get to the third reading stage and actually make a difference.To answer a number of Labor senators who have spoken on this and who attributed to the Democrats all sorts of motives for moving their amendments: we genuinely want to look at tax system that is better than the one we have now. That is why we have bothered and gone to the trouble of putting together the amendments and of arguing them in the community and are now going through the process hour after hour in this chamber hoping that we can get them up, because if we do not get a broad cross section of our amendments up, we will simply be voting the bills down.But I can see where the Labor Party is going. They moved their second reading amendments so they had on the record some concerns without actually having to do anything; so that if this does get through—and it will not be on our vote—with food in it, without fixing the problems for charities, with the poor definitions of health and education and with the diesel fuel problems, the Labor Party will go to the next election and say, `We identified those concerns, we moved these amendments, now we will go to the election and we'll campaign to take food out, we'll campaign for charities, we'll campaign for the rest of the health sector and education and all the rest of it.' So what you are really doing is having a bit both ways. You have moved some amendments which, for those out there who do not understand the political process, will sound like you have done the right thing, but in fact you have voted against the key amendments at the time that they could have really made a difference.We will see what happens as we now progress, but my final comment is just to the nonsense that Senator Conroy suggested when he implied that we had in some way reduced our commitment to no tax on food. We did not. We actually listened carefully to the evidence from the fast food industry to make sure that we taxed like products the same. We listened to the arguments from dietitians, health groups and rural producers. There are a lot of jobs in this for rural Australia— thousands of jobs; 6,000 to 8,000 jobs—if we can keep the tax off fresh food. We listened carefully to the tax commissioner's concern and indeed to Mr Costello and his thermometer on hot and cold chooks and hot and cold pies so that we could get it right on the compliance grounds. That is why we threw out the English model and why—as we look at what the government wants, which is the New Zealand model—we cannot accept the New Zealand model, which is tax everything, either.We have spent some time listening to all the evidence—and I know Senator Cook listened to the evidence as well—before the committee before deciding on our model of which food amendments we would move. They are all there. Had Senator Conroy been here, I could have sat with him and taken him through them.17:34:004900Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I want to make a range of comments with respect to this particular issue and the amendment moved by the Australian Labor Party. I will try to confine my comments in the interests of getting through this process, but I think there are a couple that need to at least be put on the record.I have to say that I actually agree with what Senator Woodley said this morning in response to some of the issues raised by Senator Cook: this is a political issue. There is no doubt it is a political issue, and there is no doubt in anybody's mind that the government has made a political decision about how it will deal with the presentation of the GST. It is done specifically to protect its very exposed rear end in this issue.It is well known, as Senator Woodley referred to this morning, what happened to the Canadian government that introduced a GST. It is also well known what happened to the Labour Party in New Zealand after it introduced a GST. The political results for governments that have gone down this path have not been terribly good. Their experiences have not been terribly positive in terms of the political outcomes for them as a result of introducing it. WW4KEMPSenator Kemp—Stop weeping then, George. You sound very sad, George.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—It is interesting, Minister, because an article appeared in the Canberra Times on 18 March which referred to what had occurred in New Zealand and referred to the fact that the Prime Minister had actually learnt some lessons from the New Zealand experience. The article went on to say:Having won the October 3 election, the Prime Minister has been quick to claim a mandate, but there seems little doubt that coalition hardheads have not overlooked the closeness of the result or that their parliamentary leader went within an ace of making them a one-term regime. It is in these circumstances that the coalition must now be careful to ensure that the GST does not remain an election issue, that the Howard government is not made to pay the same price as the former New Zealand Labour government. To ensure this is not the case, the coalition must ensure that the GST is introduced as seamlessly and unobtrusively as possible. Just like New Zealanders, Australians will have to be able to walk into a shop and buy an item without realising they are paying a GST. If Mr Howard doubts how important this will be, he need only visit some of the nations where a GST or a value added tax is in place and where it is quite deliberately added on to the marked retail price consumers are expected to pay.There are a range of examples I could go through. I want to quote a couple to reinforce that position. A report, in relation to the application of a GST in Singapore, in the Straits Times of 1 April 1996 states:A Consumers Association of Singapore check last month showed that nine out of 15 GST and non-GST registered furniture shops, electrical and electronic shops and restaurants excluded GST from the prices of advertised goods.Under the Goods and Services Act, GST-registered shops must include GST in the prices they quote to customers, advertise in the media or display in the shops . . . Mr Gerry Harvey from Harvey Norman made some comments which were reported in December last year:Mr Harvey said that, if a GST was introduced, the new tax should be clearly displayed as a separate add-on to the retail price, similar to the `plus tax' method used in the US.`Everything should be sold as plus tax,' he said. `Customers should be well aware of how much of they're paying in tax. It should be like that now. `If you buy something now, it should be at, say, $10, plus whatever tax is added on.'Mr Harvey said that, when people were aware of the amount of tax they were paying, they tended to make governments more accountable.`If governments are more accountable, there is even the possibility we might get better government,' he said.There are a range of examples like that which I think justify the Labor Party moving this amendment. At the end of the day, this is the one opportunity that may present itself to protect consumers' rights in this whole process—rights which have been totally ignored. I want to quote from one of the submissions to reinforce that point. It was a submission made on behalf of the Australian Consumers Association. Under the heading `Disclosure of the GST', they said:Unfortunately, the proposal for a new tax system fails to address the issue of `hidden' taxes. While the publicity surrounding a GST will keep this tax in people's minds, it is not easy to calculate the individual's tax burden—as is possible in the current income based tax system. We urge the government to improve the level of disclosure by legislating that prices must be given with the GST `on top'. This will improve the transparency of the tax and make price monitoring simpler.In Canada prices are given as the amount `plus GST' with the total transaction broken into these components, given on the receipt. This allows consumers to understand the effect of the GST on the price they pay, and to calculate the tax burden they are incurring. The UK system is more arbitrary, with some large chains giving a price breakdown receipt for travellers.ACA encourages the government to become world leaders in GST disclosure to improve consumers' understanding of the tax and minimise over-inflationary price increases.That in summary, Minister, is what the Australian Labor Party amendment to this bill is all about. It is about ensuring transparency of the taxes that people are being asked to pay on goods and services as a result of the introduction—if it is voted for by the Senate—of your ANTS package. It is about ensuring that, every time the public go in to buy a loaf of bread or clothes for the kids or to pay for their education, they will know at the end of the day what tax burden is being imposed upon them.That is what the amendment is all about. That is what you are politically frightened of in terms of your position on this tax. What you want to try and bury as quickly as possible is the real impact over time that your package will have on the average Australian. And that is what this amendment, if it is carried by the Senate, will expose.17:42:004902Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Mr Temporary Chairman, I was actually in continuation at the time we were last dealing with this bill, and I was dealing with the fact that the Greens (WA) support the issue of transparency in relation to the GST. I was talking about the fact that these days you rarely in the main supermarket chains pick up a good with the price marked on it. I was indicating that we have an amendment which will be moved later because it relates to the Trade Practices Act and I would like to think we could get support from the ALP on it. It actually enables the ACCC, when they believe it is necessary, to also require—especially when there might be complaints and so on—that a business put the GST information on the price ticket.Prices, in my understanding, are generally about what you see before you buy. If it is on the receipt, it is the cost of what you have already paid. I know also that the Australian Consumers Association want it to be as open as possible. If we are wanting to be world leaders, I would think that the Labor Party would not only support this motion in relation to the dockets but would also want to enable people before they buy—before they have actually committed their hard-earned money—to find out what the price component is and what is tax and what is not.I must admit that at one stage we thought it might be a case of one or the other on these amendments, but I think they can live together. As I say, I will be moving mine at a later time because it does relate to the Trade Practices Act. I indicate that the Greens (WA) will support this amendment. I hope that the Democrats were not saying that second reading amendments are always worthless amendments; sometimes they do have an important role to play. We are getting robust debate on some of these issues.I believe that it is interesting that this is one of the few substantive areas—apart from the government's amendments, which are often problematical—which the Labor Party have chosen to support. The Greens (WA) will support the ALP's amendment and we would like to think that they will allow the ACCC discretion when they believe it is necessary for people to clearly know before they buy, when there might be some evidence that consumers may be being misled.17:44:004902Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I can answer the question. I think Senator Margetts flagged, while I was speaking, that she had a bit of concern about a lack of clarity in one of the comments I made. Senator Margetts, I spoke about the unregistered sector, and I think that caused you some concern. The unregistered sector is the sector that is not part of the GST system—in other words, it includes the final consumer. It includes business below the registration threshold that choose not to register. Those are two areas. The registered sector is entitled to a tax invoice.I can now quote from a paper that was referred to by Senator Harradine. Issued by the International Monetary Fund, it is entitled Value-Added Tax: Administrative and Policy Issues and is edited by Mr Alan Tait. I will read the relevant paragraph, `Final Consumer Invoices', into the Hansard:This is a simplified type of invoice for registering sales to unregistered persons, who should be considered final consumers under the VAT. On this invoice, the price may be shown as including the VAT and the name and address of the buyer may be omitted.So that provides the answer that Senator Harradine was seeking. We have largely dealt with the sorts of issues Senator George Campbell raised. We will differ on a lot of those, but if there was a logic to Senator Campbell's comments that governments that brought in this sort of tax reform lost elections I would have thought, Senator Campbell, that you would be the first person over here supporting what the government is doing.17:46:004902Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I have been listening to this debate very closely. I was not going to contribute but I was listening to Senator George Campbell speaking in relation to this amendment, and it is one that arose at the committee that I was a member of, the Senate Community Affairs References Committee. He made specific reference to the support of the Australian Consumers Association for this amendment. I do have a great deal of time for the Australian Consumers Association. I think they are one of the more effective advocates in this country for the interests of consumers and of the general public. Some of the other contributions my colleagues have made indicate why the Democrats are inclined not to agree with them on this specific amendment.There are a range of other aspects such as Senator Kemp's reference previously to the curiousness of wanting to label a GST but not label a wholesale sales tax—and other points like that. But it is also worth pointing out that if the ALP are wanting to use the Australian Consumers Association as support for the validity of backing a particular amendment, I would certainly be interested in knowing why they are ignoring the Australian Consumers Association when they are talking about the need to exempt food from the GST, for example, or when they are talking about the need to modify the tax package to make it fairer in a range of other ways.It is all very well to pull out the ACA in relation to one particular amendment which will not actually fundamentally change the fairness of the package. Surely the major aspect of what we are supposed to be about in this parliament in considering proposals that the government put forward is to make sure there is a net benefit to the Australian community, particularly to those who are less well off. I think that is what our priority has to be. The Australian Consumers Association gave lots of very informative and very helpful evidence to the Senate committee, not just on the issue of food but on other areas such as treatment of health, for example, which we will be getting to a little later on in this legislation.I suggest to the opposition that, if they are wanting to point to the position of the Australian Consumers Association on any particular issue, they look at the position of the Australian Consumers Association on far more fundamental issues, such as ensuring that this legislation, which this parliament quite responsibly has to consider, generates a fair outcome. They should look at the position of the Australian Consumers Association on a whole range of other issues, including particularly the exemption of food, the treatment of health and the treatment of community non-profit organisations. All those issues will fundamentally affect people's standard of living and the fairness of our entire tax system—something that will not be affected by whether or not there is a label on something in a supermarket. It is pretty obvious that the intention of this amendment is to maximise the potential electoral backlash from consumers having to be hit with a visual reminder of a tax every time they buy something. The amendment has not addressed in any way making the package fairer. To the Democrats, that is the fundamental and crucial aspect of what this legislation and our considerations are about, and that is what we should be focusing our attention on.17:50:004903Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—There is one issue that I would like the Labor Party to give us some clarity on, because I think it does affect how we feel about these amendments. I do not want to make it hard for the Labor Party, particularly as Senator George Campbell was so kind in his remarks about me before. One of the issues that might not seem to affect this amendment but certainly does affect it and is why I am sceptical about it at the moment is that every Labor senator who has spoken so far has said that the GST is fundamentally unfair. I think that in a way, particularly if you are talking about the GST as currently presented in the legislation, I would agree with you about that. I noticed also that in constantly saying that—I am not sure which Labor senator said this; perhaps it was Senator Cook—they warned us about was that if the GST was passed then it would stay in place even if there was a future Labor government because, they said, it cannot be unscrambled.I would like the Labor Party to spell out in more detail why the GST cannot be unscram bled. You have told us that the current tax model is much fairer and that it is good. Why couldn't you simply announce a return to this model, obviously with the modifications which you believe would improve it—I presume that would include tax credits, as announced by Labor during the last election campaign—and then give voters a clear choice at the next election? It would be a choice between the government that introduced a GST and the opposition that will abolish the GST, if it is elected to government. This was the choice at the 1998 election, so would it not be appropriate to make it the choice at the next election? You may be able to give us some detail about why the GST could not be unscrambled.If you cannot answer that question, we would be very sceptical about your amendment. Why would you want to have a computer print-out at the point of sale to show the GST? That is a terrible imposition. Why would you then say to consumers at an election, after 12 or 18 months of putting the GST up the noses of consumers by that device, `Sorry, we're going to leave it in place'? You can see the anomaly that I am pointing out. I am not going to use the word hypocrisy, because I eschewed that this morning, but George Megalogenis, writing an article in the Australian some weeks ago, put it very well when he said that there was basic hypocrisy in the Labor position—that is, for Labor to argue how bad the GST is and then refuse to abolish it if they win government after the next election. You can see the problem. I think George Megalogenis was right when he said that there is a basic hypocrisy in that position.The problem with your second reading amendments, which really did not address the issue, is that they were pious waffle—fairy floss, if you like, that disappears as soon as the sun shines on it—whereas the Democrats were moving and are moving real amendments. Senator Conroy is the one who said that we were running away. Well, I do not know who is running away from real amendments. In any case, could you tell us whether, if a GST is passed, you would abolish it at the next election? If not, why not?10000CHAIRMANThe CHAIRMAN—The question is that opposition amendment No. 1 on sheet 1327 be agreed to.17:59:00The committee divided. (The Chairman—Senator S. M. West)27Bishop, T. M. Bolkus, N.Brown, B. Campbell, G.Carr, K. Collins, J. M. A.Conroy, S. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Forshaw, M. G.Gibbs, B. Harradine, B.Hogg, J. Hutchins, S.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. O'Brien, K. W. K. *Quirke, J. A. Ray, R. F.Schacht, C. C. Sherry, N.West, S. M.40Abetz, E. Allison, L.Alston, R. K. R. Bartlett, A. J. J.Boswell, R. L. D. Bourne, V.Brownhill, D. G. C. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Colston, M. A. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Kemp, R.Lees, M. H. Lightfoot, P. R.Macdonald, I. Macdonald, S.MacGibbon, D. J. McGauran, J. J. J.Murray, A. Newman, J. M.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Reid, M. E.Stott Despoja, N. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W. Woodley, J.Denman, K. J. Payne, M. A.Evans, C. V. Knowles, S. C.Reynolds, M. Coonan, H.* denotes tellerQuestion so resolved in the negative.18:04:004904Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I realise that on the running sheet we have a Democrat amendment to be moved next. I want to use this brief hiatus before the next amendment is moved to follow up something with the minister. He will recall, I am sure, with his razor sharp memory, the questions I raised with him on 27 April about the process followed in relation to the development of these tax proposals and the government's legal requirements under the Environment Protection (Impact of Proposals) Act. At that time, in his usual cooperative manner, he indicated that he would forward my questions and concerns to the Minister for the Environment and Heritage.I am keen to know, firstly, whether he has been able to do that in amongst everything else on his schedule and, secondly, whether there is any information in relation to that matter that he could provide to the Senate to give an indication as to what processes were followed. Do the government have any further advice to indicate that their requirements and obligations under the Environment Protection (Impact of Proposals) Act were adequately followed or, for some reason, do they not apply in this case?18:06:004905Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I have obtained a brief on that; I apologise, I thought that we had dealt with that. I will call for the brief again. The short answer is that the act does not apply to bills of this type.DX5MARGETTSSenator Margetts—What!WW4Kemp, Sen RodSenator KEMP—No, it does not. But I will provide you with a formal response.18:07:004905Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I thank the minister. I certainly would appreciate the reason. You may have verbalised it during a part of the debate that I did not manage to hear, although I have been following it very closely. In relation to your short answer that the act does not apply, I can understand that aspect of the argument—certainly we are at the stage of proceedings where the legislation has already been put forward, formalised, investigated, et cetera, by Senate committees—but I would be interested in the environment minister's views or the details of the briefing in relation to the legal requirements when the proposals are being developed and the appropriateness of not triggering the act in relation to the develop ment of those proposals. I am not sure if your briefing deals with that.WW4KEMPSenator Kemp—I will check, Senator.18:08:004905Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—The Labor Party did not help us in that last division. I was trying to get an answer from them which may have helped me to decide how to vote in the last division. I wonder if they are prepared to give an answer now to my question about the next election and whether or not they would be prepared to abolish a GST if they were in government. It related to the amendment, in the sense that I could not see much point in supporting it.You will remember my speech this morning, and I must have made an assumption—incorrectly—that you wanted the GST to be clearly labelled. It would have helped me to decide how to vote. But it is still relevant to a lot of the other amendments which we are putting forward. If we wanted a GST as part of the labelling process, it would confront people every time they went to a cash register, and you have said that if you were subsequently in government it could not be unscrambled. I wonder whether you have any detail of why it could not be unscrambled. It would help me in future as we work through other amendments.18:10:004905Quirke, Sen JohnSenator QUIRKEZS6SAALP00—I am tempted to my feet because the good Senator Woodley has made a couple of points. I am getting involved in the last part of the debate, and I somewhat regret that now, but I did want to see this progress today. Senator Woodley, the one thing about this tax package that I think everyone in here will agree with is that if it gets up either in its pure form or via Dublin or Belfast, or whatever you people are going to do to it by the time it gets through here, it is going to be one of the most significant tax changes—if not the most significant tax change—in living memory. What is going to happen is that a series of taxes will disappear. Some might take longer than others, but a number will disappear. The whole basis of indirect taxation as it is currently collected will disappear in favour of a retail turnover tax which, courtesy of your party, will be hidden—it will not be transparent to the public out there. This tax will take either $25 billion or $30 billion annually out of the community and put it into the Treasury. I say $25 billion because, if you get your Irish model up, according to the government figures it will be a $5 billion change in the whole procedure.I see Senator Lees is shaking her head. I could not care less if it were 5s 6d. The fact of the matter is that if you take something out of it, then it will be less. At the end of the day, it does not matter to us because we oppose it up hill and down dale. We do not care that much for the Irish option, the Norwegian option or, for that matter, any other option. We will not be voting for it.The proposition that Senator Woodley has just put to us is whether we would get rid of it at the next election. Senator, I think you know the answer to that. We would have to promise immediately to put back all those taxes that had been taken off, many of which would be outside the jurisdiction of this place and, for that matter, the House of Representatives. One of the reasons I oppose this tax is that we do not know where the money is going to go and in whose hands the control of these massive amounts of funds will be.The reality is that we are seeing not only a significant tax change—arguably one of the most significant tax changes—but also a devolution of considerable power in health, education and a number of other areas to state administrations. I have even seen floated in front of me various amendments which talk about the hypothecation further still to the third tier of government in this country—into local government. I will comment on that at the appropriate time. In answer to the question that you have asked—will we promise at the next election to somehow or other manufacture all of these tax moneys, to reverse this particular policy in every state and maybe even reverse it in every council district in the country—I think it is sufficient to say that, unfortunately, it would be impossible.I am sure every member of the Labor Party would like to say, `Yes, it will be reversed if we get back to power,' but this will be change at such a significant level that it would take years, if not decades, to wind back. Coming from a low-grade state, I am very concerned about what this will mean. If all of the health and education services that my constituents in South Australia are going to get will be as a result of the South Australian administration—and we are not going to have national standards on those services, we are not going to have national benchmarks and the Commonwealth government is walking away from it and saying, `This is a new kind of federalism'—then I think we are all going to be in for a bit of a hard time. But, at the end of the day, I suspect these changes that go through this place will be here for many a year, and that is irrespective of the way I vote, should they get up.18:15:004906Murray, Sen AndrewSenator MURRAY3M6WAAD00—On the running sheet it has, at the bottom of page 2, Democrats amendments 1 to 16 on sheet 1353 revised to be moved by leave together. I do not intend to do that. I move:(1) Clause 35-5, page 73 (after line 21), at the end of the clause, add: (3) If you supply food products affected by the definition of food for human consumption in section 38-2, and the total turnover of your business is less than $10 million, then you are entitled to a further refund of GST that is equivalent to 4% of the input credits payable in respect of GST-free food for a tax period.I have separated that out deliberately because the major debate about whether food should be taxed or not taxed has rested on the simplicity issue. If you listen to the government and business, they have not focused on the equity argument, they have focused on the simplicity argument. That is about compliance costs. The food issue, as we all know, can be easily funded. The $3.5 billion that the Irish option propounds as opposed to the New Zealand option, which is what the government has, can be easily funded by reducing the income tax cuts at the top end of the proposed income tax scales. But the principal argument of business organisations and of the government has rested on simplicity and compliance. That is why I wish to settle this issue, if I can, by leading this amendment first.This amendment seeks to ensure that small businesses affected by making food GST free receive a small collection fee to cover the additional compliance costs. Research by the United States General Accounting Office suggests that zero rating increases compliance costs by between 30 and 50 per cent. So if your compliance cost was a dollar it would—WW4KEMPSenator Kemp—Procedurally this seems a strange way to proceed because we are providing compensation assuming that a future amendment is passed. When they were taken together I could see some logic. Of course I will not be supporting it.UNKNOWNThe TEMPORARY CHAIRMAN The TEMPORARY CHAIRMAN (Senator Murphy)—Minister, it is not necessary for you to debate. Senator Murray is moving his amendment. If you want to take a point of order you can, otherwise I call Senator Murray.WW4KEMPSenator Kemp—It did seem a strange way. I am just trying to be of assistance, but I think Senator Murray understands my point.3M6Murray, Sen AndrewSenator MURRAY—I do indeed understand the minister's point, but we did not want to get this issue lost within the food definition issue. The food definition as to what should be in or out, how chickens are to be dealt with, what happens with yoghurt and all of that kind of stuff is bound to be raised and aired and will need to be dealt with.Minister, I would understand your point most of all if I thought there was the remotest chance of this getting up. As we know, the Labor Party have indicated that they will not vote for our amendments and you have obviously indicated the same. So I know the numbers are against me. What I am trying to do is to focus on what I have found to be the core opposition to our proposal from the government and from business organisations. By focusing on that, I think that the next 17 amendments, which we will move by leave together tomorrow, will go quicker. For us, compliance is the issue.Returning to what I was saying, the United States General Accounting Office does suggest that zero rating increases compliance costs by between 30 and 50 per cent. So if a compliance cost was a dollar, it would go up to between $1.30 and $1.50. Based on an estimate of 40,000 retailers being affected by making food GST free, in Australia this would amount to a cost of between $13 million and $40 million.Here is the first area of contention. The ABS figure we use to arrive at the number of retailers that would be affected is 40,000. The ATO used a figure of 300,000. I asked them on notice to confirm that that figure was accurate, and I have not had a response. Maybe it has not reached me; maybe it went through the secretariat. I personally have not received a response.The collection fee would cost, on the basis of our amendment, around $40 million. That is four per cent of the input credits payable in respect of GST free food or about 0.2 per cent of food turnover. That is the next important issue: how much in terms of extra compliance costs would result from food being made GST free? Unfortunately we have only two figures available to us: one figure was provided by the Australian Society of Certified Practising Accountants and the other by the Democrats from their own calculations. Neither the government nor any other source has provided us with a compliance cost figure.The ASCPA provided a compliance cost for making food GST free of $100 million. In the scale of things, if the entire argument against making food GST free rests on the compliance cost, then the cost of that compliance is relevant. If it is somewhere between $40 million at our top estimates and $100 million at the top estimates of the ASCPA, then it is a minuscule amount given the range of this proposal because the government's own figure for the compliance cost of introducing the GST across all business is $1.9 billion. In other words, our proposal, at the maximum, will cost five per cent extra in terms of compliance. We think it could be as low as two per cent extra. That is the cost.On that very shaky foundation business organisations and government have built this edifice of the introduction of food being GST free as being unacceptable. We have had Mark Paterson, a very experienced, very capable head of the largest business organisation in this country, describing the introduction of GST-free food as a nightmare. It is not a nightmare in cost terms. As we all know, the superannuation funds have estimated that the cost of complying with the government's superannuation tax is $100 million, and the government dismisses that and says it is just a consequence of a necessary law. So why would $100 million maximum for the compliance cost of making food GST free be a big issue? Why, in the words of Mark Paterson, experienced, capable leader of a business organisation, would it be a nightmare?We step away from those judgments into the arena of international experience. Why is it not a nightmare for the majority of the 105 countries that have a GST-VAT to have food either differentially rated or zero rated? They do not find the compliance costs unbearable and they do not find the practice of making food GST free unbearable. In fact, it is very manageable. The committee heard all sorts of claims that a food definition would be impossible to police and would add hugely to compliance costs. It is not impossible to police in the 23 out of 27 OECD countries that have a GST-VAT. It is not impossible to police amongst the 700 million people affected within the OECD by food being GST free or being differentially rated. It is against that very unsound judgment that we should put into context the government's obduracy about refusing to contemplate this as a policy option. We think it is a superior option from an equity point of view. Their principal argument against it is on compliance costs, and we think the evidence that is before us is that the compliance cost issue is vastly overstated, both in cost and effect terms.For all of the assertions and the photocopied VAT circulars from other countries, no empirical evidence of the size of the problem was produced to the committee. Senator Cook, who was the chair of the principal committee, will verify that very few submissions among the 1,500-plus that came to the committee actually dealt on an empirical basis with the compliance issue as regards food. The rough estimates of the likely compliance costs, as I said, came from the Australian Society of Certified Practising Accountants, who used the ATO figure of about 300,000 food outlets. Yet I do not know where they get that from, because the ABS figure is 40,000. The Democrats election policy also overstated the cost. We had called for $120 million of compensation for small businesses affected by the zero rating. In other words, small businesses would have been overcompensated for the problems created by zero rating food. But the ASCPA estimate of compliance costs, if it was only 40,000 retail outlets, would mean that a figure of between $13 million and $40 million might be more appropriate. That cost is an awful lot less than the cost of $1.9 billion of putting the GST in generally, and it is an awful lot less than the cost of compensating the millions of Australians who will be detrimentally affected if food is taxed.If this issue is the core claim by which the government try to counter our approach, they need to substantiate and validate the actual consequences of not taxing food. The first reason we have heard is that it will cost too much. I think that the Democrats have conclusively shown that it will not cost too much. The second thing they have said is that it will gut their package. In 1993 the coalition went to an election supporting food not being taxed under a GST proposal, so they have changed their tune since then. They say it will gut their package. They know it is easy to cover the $3.5 billion which it would cost under the Irish option by cutting the income tax cuts at the top end.The third ground they have used is psychic costs. That might sound a bit fanciful, but I guess for someone running a butchery or a bakery somewhere the stress and the psychic costs of changing systems or of introducing new systems do indeed exist. But, if you are going to make such a claim, you have to go and look empirically at what were the consequences overseas where a GST or VAT was introduced and where food was zero rated or differentially taxed. I can assure you that the insane asylums, the psychiatric hospitals and the places which look after people who have been excessively stressed were not filled with people who found they had to make food GST free.The other ground we have heard put up was the issue of time, that it would add unbearab ly to the time that retailers in particular would need to devote to separating out items that were to be taxed from those which were not to be taxed. I can see some validity in that argument. But when I look at the fact that the government is proposing to exempt or make GST free over 80,000 businesses, including pharmacies and businesses in health, financial services, education and so on, which will themselves have to separate out those items which are GST free or not, I think they have shot themselves in the foot. If it is all right for those 80,000 businesses, why is it not all right for the 40,000 businesses which would be affected by making food GST free?Let us return to the overseas evidence on compliance costs. I want to quote Professor Cedric Sandford, who is still running hard in this professional field. This remark is dated a bit: it was made in 1982. When he did a survey in the United Kingdom he said the following:The average compliance costs for all repayment traders (i.e. zero-rated) was 35 per cent lower than that of payment traders . . . Where outputs are zero-rated or exempt, book-keeping is simplified and this may well account for the low ratios in most sectors . . . The particular combination (of a zero rate and a standard rate) appears from the figures to cause relatively few (compliance cost) problems.I know everybody can produce their own pet expert, but there is an expert saying that doing things on this basis does not cause that much of a problem.Then we have Professor Neil Warren, who is a very eminent economist who happens to believe that you should tax food, so he is not on my side. This is what he said:It would therefore appear from the United Kingdom evidence that the burden on compliance of a GST, in aggregate, is not unduly serious.Mr Simon Holdsworth, President of the New Zealand Employers Federation, reporting to the ACCI in Australia, said:As far as our export invoicing is concerned, these are all zero-rated and done automatically by computer, and as we are able to claim any input tax there is no added cost associated with our (zero-rated) exports.When you are dealing with exports you have to differentially rate. You may be running a business where you have domestic sales and export sales. You are going to have to do the very same thing that you are going to have to do in a supermarket where some goods are taxed and some goods are not taxed. What does Mr Simon Holdsworth, President of the New Zealand Employers Federation, say? He says that it is a piece of cake.Then we have the UK National Audit Office report on VAT compliance costs in 1994, which said:The incidence of compliance costs in relation to trader turnover is broadly consistent between the United Kingdom (zero-rated), Germany and the Netherlands (which concessionally tax food), Canada (which zero-rates food) and New Zealand (which taxes food).In other words, the compliance costs do not differ that much whatever you do.In conclusion, the compliance cost issue in the sense it has been described to us by the government is dead. The argument should be about equity and not about compliance costs.18:34:004909Cook, Sen PeterSenator COOKRF4WAALP00—I sought the call earlier only to indicate that, from the opposition's point of view, we have no objection to the Democrats proceeding in the manner which Senator Murray has indicated, that is, by taking his first amendment first and dealing with that. The Democrats, after all, have originated these amendments and it is appropriate that, if they want to refine their approach to presenting them to the chamber, they should do so.I do not think it is appropriate for me to engage in a long intervention in the debate now. What I want to do, though, since I have taken to my feet and been given the call, is to indicate to the minister that I will have at the appropriate time a number of questions for him on food.I make the observation in passing that the government has argued that this is the broadest possible base for the tax. Many of those who made submissions to the Senate select committee and who, if I may say it this way, are in the government corner, argued for the widest possible base. But the truth is that this is not a tax that the government is proposing to apply to the widest possible base. It has made exceptions in health and education. No doubt at the appropriate time and in the right place it will be argued that they are exceptions on merit because of equity reasons or because of political sensitivity or because those sectors need to be regarded differently.However, having established the principle that this is not a tax to apply to the widest possible base, to dismiss the Democrat argument that therefore an area of exemption should be further included, as if there were a principle here, sets a lie to the government position. They have not applied the principle and they recognise that by not doing so there are, at the margin, compliance difficulties for the sectors—certainly for health and education. But they have drawn the line here on food. I do not think the government argument holds water as an argument as to why they should simply turn their back on this area. I make those remarks because it is to the threshold point of this amendment that is now before us.As I am in an observational mode, I should also observe that I do not necessarily agree with Senator Murray when he says that this is, if you like, a foundational question that may decide the fate of other food amendments. I do not necessarily see it in that light, but I do think there is a degree of misrepresentation of this position by the government. Those rusted-on government supporters were constant in their argument about the transitional costs of food. But if food were out, the companies would not be applying a GST and would be free of the cost of having to comply in that sense. So a whole population of companies would have a lesser compliance difficulty than would be the case if food were in.All of my remarks are observations. I have couched them that way deliberately. We think it would be a good idea not to have a GST on food. We think it would be damned good idea not to have a GST at all and our preferred option is the latter, not just the former. As a consequence, we will be exercising our view at the appropriate time.18:37:004910Lees, Sen MegSenator LEES8U4SAAD00—I pick up where Senator Cook left off and refer to some of those rostered-on government supporters in reading both their submissions to the committee and the evidence before it, and indeed some of the comments they have made when they have lobbied us. They actually want the government to put the tax on health and education on the grounds of simplicity: we should forget about equity, economics and everything else when going down this road. We have selected this amendment, and I will refer to Senator Kemp's point in a moment, to highlight how hopeless the government's case is when it has already exempted two areas, will not exempt a third, and its key argument is, `Sorry, we have to worry about simplicity and costs, et cetera, before we look at either economics or equity.'I direct a few comments to Senator Kemp, who did raise an interesting issue—that is, if this amendment goes down, where do we go with the rest of them? I flag to the government that, if this amendment goes down, we will still proceed with the other amendments on food. If they both go down, we will continue to work as constructively as we can with this bill and attempt to get up as many amendments as we can. If, at the end of the day, we are in a similar situation to the one we are in now—that is, there is no negotiation with government and no real effort to reach any compromise; not even the opportunity to debate the case at any real level of food in and food out—and the government will not recommit the amendments before we take the final reading on this bill, we will vote the bill down.We are not going to be pushed into a situation—if our food amendments go down—where we walk away from the rest of our amendments and the work we have done. We will pursue, issue by issue, one at a time, all of the things that we are committed to in the package of amendments that we have put before the chamber. The fact that we have isolated this particular food amendment to highlight the inadequacy of the government's argument against our food option does not mean that there is a problem, if this one goes down, in dealing with the rest of our amendments tomorrow.Senator Murray has gone through some of the other excuses the government has given for refusing to look at excluding food. I find it most interesting that somehow in Fightback it was okay to have food excluded, but now Mr Costello says things like, `It would be unravelling the package if we take food out.' That is simply not true. There are 23 OECD countries that treat food as a special case. It has not unravelled their VATs or GSTs. In fact, it has made them fairer. It has reduced inflation. It has enabled them to have a package that works for their entire community, not as we see in this package before us—basically advantaging those who are already quite well off. We move this amendment with some interest in the result, but it is not going to mean that our other amendments become irrelevant or that we are not going to keep pursuing them.I now turn to the amendment itself. Effectively, what the amendment will do is put in a collection fee for small retailers. We are acknowledging the small compliance cost. No-one has ever said one did not exist. The fact is that it is simply not a problem. It certainly will not be a problem if this amendment is successful because it overcompensates those small retailers. Senator Murray has already gone through the particular amounts. In our original package we had overcompensated even further. We have now looked through and taken on board all the evidence that was put before the Senate committee. Based on that evidence, these amendments deal with the issue of compliance costs for small business.18:42:004911Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—As time is running out, I will deal with just a couple of matters which have been raised. If the Senate has no objection, I would like to deal with a number of questions on notice, including one which Senator Bartlett raised. I said that I would get back to him before the close of business tonight if I could, and I can get back to Senator Bartlett now.There was a suggestion by Senator Bartlett that the government has disregarded Commonwealth environmental laws in relation to the tax package. That is wrong. The advice I have been given is that the tax package is to be given effect by an act of parliament. The assessment procedures under the Environment Protection (Impact of Proposals) Act do not apply to the passage of legislation by parliament. The EPIP Act has been in existence since 1974. My advice is that, in that entire time, no government has sought to designate under it a bill before the parliament, nor indeed a change to the taxation regime. That is the advice I have received.Senator Crowley asked that I follow up some issues. Apparently, some offers had been made before the Senate committee to brief community groups. Senator Crowley asked me about the status and whether there had been a follow-up with the Treasury. I have some advice from the Treasury. To save time I seek leave to incorporate that advice in Hansard.Leave granted.The answer read as follows—Senator Crowley asked whether follow-up had occurred with 11 community groups that were offered briefings during committee hearings.The following is the summary of organisations that the Treasury has met with or had contact with so far following the invitation of Government Senators during the Senate Community Affairs References Committee public hearings. The original list consisted of 11 organisations.Treasury has met with 4 of the organisations. Community Housing Federation of Australia (and associated groups). National Youth Coalition. YWCA of Australia; and. the Government of Independent Retirees.Treasury has made contact by telephone with 5 groupsAustralian Confederation of Child care;. Consumers' Health Forum of Australia;. National Association of Community Based Children's Services;. Older Women's' Network; and. the Seniors Economic Forum.Treasury will also be sending further information to the Older Women's' Network and Seniors Economic Forum following on from the phone conversations. Treasury has attempted to contact the remaining two organisations, but have not been able to do so due to possible inaccuracies in the contact details (Mr Gerard Thomas of the Australian Pensioners' and Superannuants Federation and Mr Geoff Opray of the Qld RSL).WW4Kemp, Sen RodSenator KEMP—I thank the chamber. Senator George Campbell asked me a question concerning the time period over which positive impacts on growth of a GST would occur. I have a response. The question was raised during the debate. I seek leave to incorporate that answer in Hansard.Leave granted.The answer read as follows—TREASURYSENATE QUESTIONSenator Kemp—on 28 April 1999 (Hansard page P3779) Senator George Campbell asked me a question without notice concerning the time period over which positive impacts on growth of a GST would occur.Generally, computable general equilibrium models used to model indirect tax reform provide estimates over the medium to long term. The actual time frame will depend upon the scale and type of change being modelled and how long it takes for investment to change and the capital stock to fully adjust.There are some models, however, configured to track short-term and year by year adjustments, eg the Monash Model, and Mr Chris Murphy's MM2.WW4Kemp, Sen RodSenator KEMP—I thank the chamber. When people talk about rusted-on positions and people who appeared before the committee, they have to be very careful. They suggest that somehow their evidence can be discredited because they happen to be in the government's so-called tax cart or they seem to be pushing a particular vested interest. I think a fair assessment of the evidence that was given to the various Senate committees—in my view, the overwhelming weight of evidence—on the food issue was that it was opposed to the position which the Democrats have adopted.The Democrats have adopted this position, I think I am correct in saying, almost from day one of the tax package. I think the government's position has been given very strong support in the evidence that was given to the Senate committees. It is wrong to suggest that anyone who gives support to the government's position is—I do not know whether there is an inference that I could draw—somehow tainted, and anyone who gives evidence that supports the Democrats' position is therefore quite virtuous.HX5WOODLEYSenator Woodley—That's true, isn't it?WW4Kemp, Sen RodSenator KEMP—No, it is not true at all. I am trying, with difficulty, to elevate the debate. I know this is an exceedingly difficult task. Let me go through the evidence that came before the committees in statements by organisations. Mr Rob Bastian, the Chief Executive of the Council of Small Business Organisations of Australia, representing some 150,000 small businesses, said:It is our very strong belief that to exempt food would be a disaster. Without question, small business wants food included.Quite rightly, most of us in this Senate recognise the important role that small business plays. We see that a lot of future jobs will come out of small businesses as they grow into larger businesses. We should not dismiss this sort of comment in a cavalier fashion. The Australian Chamber of Commerce and Industry, representing some 350,000 businesses, indicated that:The potential exemption of food would be a critical blow to the fundamental attraction of a single rate, broad based GST. All the key advantages in terms of lower compliance burden, high level of voluntary compliance, ease of administration and improved competitiveness would be seriously eroded if food were to be exempt. It would be difficult to exaggerate the compliance nightmare which an exclusion or partial exclusion of food would cause for small business in the retail and distribution centres.Democrat senators interjecting—WW4Kemp, Sen RodSenator KEMP—If I could just be heard in silence; we listened very carefully to what you said, Senator Lees. I know you had your say and in principle you would want me to have my say. My position is that the Democrats should have listened closely to the evidence that was given. They adopted a fixed position almost from day one and have not varied from it.DX5MARGETTSSenator Margetts—And you haven't?RF4COOKSenator Cook—The government had a flexible position throughout.WW4Kemp, Sen RodSenator KEMP—I am sorry that reading out evidence which gives comfort to the government position causes such angst in the chamber. Let me quote the National Farmers Federation. The NFF feel so strongly that food must be taxed that they said they will withdraw support for the tax package if food is exempt. Rob Douglas, Director of Rural Policy for the National Farmers Federation, said:Once you start zero rating things and having things so that every invoice has to be dissected, the compliance costs go up exponentially.The Executive Director of the Australian Food and Grocery Council, Mr Mitch Hook, said:Excluding food from the GST base will only serve to render the system more complex, more administratively difficult and more costly to comply with. It is just not an efficient way of ensuring that the social objectives of tax reforms are met—equity, progressiveness and responsibility for the poor and disadvantaged.There are a host of other quotes that I could put before the chamber. Let me quote the Australian Society of Certified Practising Accountants. This is pretty weighty evidence when you look at these organisations which are coming out—organisations which have some expertise in this area. The society's tax director, Angela Ryan, said:Approximately 300,000 business operators will face a massive increase in compliance costs as a result of making food GST free. This is a dead weight on the economy and one that will inevitable be recouped through increased prices.So it goes on. I will not delay the Senate, but frankly I think that the Democrats have refused to listen and to take into account the evidence.Progress reported.Documents4913491318:50:004913Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—I move:That the Senate take note of the document.The 1998 annual report of the Australian National University starkly sets out the degree of crisis which this government and its policies on higher education have inflicted upon the Australian higher education sector. In fact, this document is quite damning in relation to the government's continued attacks on the sector and the slashing of funding which has taken place since the government came to power in 1996.I was quite surprised when I opened this document this afternoon. I was struck by the forcible language used. I hope that other members who look at this document—certainly government members—are conscious of that when they read the document or at least its opening sections where it describes the impact that the funding crisis has had on this particular institution. It is undoubtedly written with the intention of sending a very strong message to the government and to government members which I think they would do well to heed. The review of 1998 in the report commences with a quote which says:In the last three years, Australian universities have confronted their harshest financial and administrative environment ever.It goes on to note the deep concern of the university at the unprecedented level of scrutiny to which it has been subjected. It continues:The impact of these pressures on higher education, including cuts to courses, diminished capacity for basic research, the loss of staff, and poor morale, challenges the validity of the policies that have generated this environment. These policies have harmed Australia's ability to sustain high-quality universities with research excellence and outstanding staff that enable the nation to claim a world-class higher education system . . . At a time when Europe, North America and many countries in Asia are maintaining, or increasing, higher education funding, especially for basic research, Australian research and higher education risk collapsing to the second or third world rank.Those are quite strong, damning words from this institution in an annual report. This is from a university ranked very highly; in fact, it is ranked next to Oxford, Cambridge, Harvard, MIT, Stanford and the Sorbonne by The Times Higher Education Supplement .Of course, this message is not a new one; it has been levelled at this government since its first harsh higher education measures were announced. But it is clear from this report that the sector is nearing crunch time and that the margins which the sector has continually narrowed to survive have now almost disappeared. In short, there is nothing left to cut.I do acknowledge that some of the initiatives announced in last night's federal budget are directed specifically at industry research linkages, but universities are still in such strife as a result of the deep funding cuts over the past three years that this government has a long way to go in positive initiatives before the damage is contained, let alone repaired. Universities around the country have had to cut staff and courses, reduce book and facility budgets and increase fees. The road back from this severe downgrading of standards and facilities is a very long one, and current government attitudes towards this sector do not give much cause for optimism.Job losses at the ANU over the past year have been severe, amounting to 430 full-time jobs lost, and have affected nearly every area of this world-class university's operation—not to mention the impact on higher education generally and on unemployment in the Australian Capital Territory. Sadly, the government has a very poor record on heeding the concerns of this sector and its representative organisations. Unfortunately, the response seems to have been to ignore these concerns or, worse, to attack the messenger.This attitude has been abundantly displayed, not just in recent months but in recent days, with the hearing last Friday of the Senate employment committee that is looking at the government's intention to introduce voluntary student union legislation—rejected, of course, by nearly all organisations and lobby groups within the sector. I hope that government members—particularly Senator Tierney, who is a member of the council of the ANU—read this report and take heed of the strong messages contained within it. I seek leave to continue my remarks later.Leave granted; debate adjourned.4914Human Rights and Equal Opportunity Commission - Aboriginal and Torres Strait Islander Social Justice Commissioner - Social Justice - Report for 1997-98. Motion to take note of document moved by Senator Bartlett. Debate adjourned till Thursday at general business, Senator Bartlett in continuation. Adjournment491410000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—The consideration of government documents having concluded, I now propose the question:That the Senate do now adjourn.491418:57:004914Tierney, Sen JohnSenator TIERNEYO15NSWLP10—I rise tonight to speak on a matter that has been before this parliament and was debated yesterday: the Broadcasting Services Amendment (Online Services) Bill 1999 . I did try to get on the speakers' list for that bill, but it was only one a side so I did not get the opportunity.Having sat through the entire inquiry—up to midnight on quite a number of nights and a full day's hearing last week—I would like to make a few comments on the evidence that was given to the committee. I have had a longstanding interest in this matter. Before the information technology committee was established, I was chair of its predecessor for about two years. This committee, which has operated since 1991 in various forms, has taken a great interest in the whole issue of online services. We saw that we had a changing technology in front of us which raised many issues and which was going to become a major driver for the new phase of industrial development as we move into the next century. We saw that information industries and their main tool, the Internet, opened up enormous possibilities for our economy and our society. We are now seeing these come to fruition through e-commerce, the increasing amount of business that is done across the country online and the increasing amount of home usage of Internet services.Australia is a great adaptor of new technologies, and the Internet is no exception. People are shopping, banking and working from home with this technology, so it does have a very beneficial effect on our economy. It is driving a new information revolution and it is one of the factors that is keeping up the level of growth in our economy.But there is a dark side to the Net. As well as adults using the services on the Net that are in e-commerce, entertainment and a range of other areas, children have access to the Net as well. This is currently unregulated, and parents have expressed considerable concern about that. The challenge to government is what to do about this new situation. We have had before the committee a range of views on what we should do—for example, `Do absolutely nothing; treat it like the Wild West and just let it all go and governments have no role.' People in the industry have put that proposition to us many times in the earlier hearings and in the hearings in the last week.But the question that has always been raised in the minds of members of the committee is that, if illegal activity is occurring on the Internet, why does the medium make that situation different? If it is illegal in print, in books, on TV, on videotape and on film, the same material is also illegal if it is in a different medium—being the Internet. Some people argue that you can use the current laws of the land to fix this problem. You can use the current laws of the land up to a point. If there are sites that are illegal and police become aware of them, they can arrest people for illegal activity. This does not only involve hardcore pornography; it can involve things like paedophilia rings and homemade recipes on the Net for making bombs. These sorts of illegal activities, which I am sure any reasonable sort of person would want stopped, should be stopped, but the current laws do not really take account of what this information revolution has produced. For example, if material came into the country illegally 20 years ago, it would have come in by plane or by ship and we had Customs officers who could then seize it at that point. Of course, the Internet travels at the speed of light and comes in instantly from other countries, so you need a whole range of new responses to that situation.We did have some varying views on how we should approach this matter, and there are basically four or five levels of response that can be made. People who appeared before the committee tended to support some, if not all, of these measures. At the base level, you have the whole idea of community education, the theory being that, if you educate the parents, the children and the teachers, this will prevent a lot of access to this material and we should do as much as possible in that area. But it is really a problem of scale. Any community education program—no matter whether it is against smoking, reckless driving or whatever it is—has only a limited impact and reaches only a limited audience, and certainly this area would be another area where you would have that sort of a problem. That does not mean that we should not do anything in the area, but we must never see that as the panacea to the problems created here.The next level relates to the people who are providing the material—the Internet service providers. Those people have developed—and it should be in place by Christmas—an industry code of practice. We welcome that and we feel that that will create a generated standard from the people who are involved in this industry. But it will not be compulsory for people to join, so having a code of practice does not totally solve the problem.At the next level, governments can intervene. I mentioned a range of laws that exist, but with this new technology you need to do something new at the service provider level—the ISP—and that is what this bill actually focuses on. It focuses on ways of blocking or filtering material as it comes through the Internet service provider. A lot of people have argued to us that you cannot do that, that it is not technically feasible. But increasingly we have found—and we did start our inquiries on this as far back as 1993 when we were told we could not do any of this sort of thing—that the technology has developed to screen and filter out material, and it is becoming quite sophisticated.That is why the bill has as a major provision that the Internet service provider must take down illegal material if it is technically feasible and commercially viable. That clause creates a flexibility in the bill so that, as this industry develops, we can actually change what is happening in responding to the problems. I cannot really see why anyone could object to that sort of provision if they take that flexibility into account, because if it is not technically feasible they will not be required to take it down and they will not be charged with anything.Some of the industry have kicked and screamed about this particular provision, but I think it is a most reasonable provision, and Australia is a world leader in trying it. People say that it will not work 100 per cent. Well, what laws do work 100 per cent? There is a law against stealing, but it does not mean that there is no stealing going on. But we try to enforce to the capacity of the law what we can to prevent that, and it is the same with this particular area of endeavour.At the next level above what we can do in this government, there is international cooperation. There have been great strides in this area in recent years. If there is illegal material happening in different countries, there is cooperation through organisations like Interpol to take this material down or to arrest the people if the material is illegal in that country. Increasingly, there are conferences and meetings of groups of people who are trying to fix this problem at the international level.The Broadcasting Services Amendment (Online Services) Bill is not a sudden last minute thing, as some people have been making out. We have been working on this since 1993. It is a new industry, it is a difficult technology, but the hearings that we had were very useful in bringing out all the issues and looking at possible solutions. We have managed to put together a bill that will make quite an effective step forward in control in this type of technology.491619:07:004916Coonan, Sen HelenSenator COONAN2M6NSWLP10—I appreciate the opportunity to speak in the adjournment debate tonight because I want to raise a matter of critical importance for New South Wales, the state I represent. I am glad that my friend Senator Forshaw is in the chamber tonight because, as a Labor senator from New South Wales, he might be able to convey a message.There can be no doubt—by way of background—that the very welcome budget surplus of $5.4 billion announced by the Treasur er last night is the product of sound fiscal management and hard decisions taken in the Howard government's first term. A central plank underpinning Australia's sound economic position has been the reform of Australia's antiquated industrial relations system. How extraordinary then that, the day before the budget was announced, it was reported that the New South Wales Labor government has embraced a discussion paper as a blueprint for amending New South Wales's industrial relations laws—not, as you might expect, to modernise the legislation and to enhance the opportunities for small business and job creation but to go back to the dark ages of a totally regulated work force run for the benefit of the unions at the expense of business and of the unemployed.Put starkly, the proposals seek to increase union power in unprecedented ways. Some of the provisions are extraordinarily intrusive and may in fact prove to be unlawful; for example, a right of officials to impose a service fee on non-union members working under a union negotiated workplace agreement. This fee will be imposed by requiring employers to pay the service fee to the relevant union.Given that 70 per cent of employees choose not to join unions, this is a breathtaking imposition on an ordinary worker's rights to choose whether to join a union. A non-union member can be slugged with the service fee despite not even being a member of the union, not having a contract or agreement with the union, not having asked the union to provide services, and having even voted against the union being involved.Another equally iniquitous interference in both freedom of association and freedom of contract is the proposed right of union officials to intervene in every non-union workplace agreement in the state of New South Wales irrespective of whether the union has any members working under the agreement and irrespective of the employees' wishes.Yet another intrusion into property owners' rights is the attempt to give union officials the right to enter parts of residential properties, such as nursing homes, to inspect employees' wage and time records. To mention just another one, the proposals seek to increase the power of the Industrial Relations Commission to interfere with and override commercial agreements—not between union members but between small business independent contractors who are not members of a union and whatever third parties they have contracted with.At present, of course, employers have a choice to negotiate with unions or directly with their employees. Significantly, a report last year to the Labor Ministers Council has indicated the success of this system by showing that workers on individual contracts have outstripped the salaries of union members. So why, you might ask, is the New South Wales Labor government so intent on dismantling the clear and proven benefits of freedom of association and freedom of contract without union interference? And especially why now, when the Premier, Mr Carr, so recently talked about reaching out to encourage small and medium-sized entrepreneurs and the need for the Labor Party to encourage non-union membership? It is quite an intriguing approach. I quote Mr Carr:I want to rejuvenate the Labor Party . . . We've got to do what British Labour's done under Tony Blair's leadership and that is to recruit new people, change the ethos of the party and make our programs relevant to people who have never belonged to a trade union.Mr Carr also said that the ALP should reach out to small business and encourage `wealth creators'. I think a lot of us would agree with him. But as some commentators have observed, allowing union officials to stomp all over a business and to interfere with the contractual relations it has with its employees is hardly calculated to encourage any entrepreneur—whether small, medium or large—to create new businesses or to expand and create new jobs.This proposal and some others are genuine job killers. This proposal is likely to drive investment away from New South Wales and force small business to seek a more conducive industrial relations environment. It makes a mockery of Mr Carr's claimed wish to reform the ALP, to invigorate its ranks with non-union members, to make the party more representative, and to support wealth creators. Despite the proven benefits of non-union workplaces, and despite all Mr Carr's protestations about wanting to change Labor's ethos, the bitter reality is that the New South Wales Labor government is dominated by the unions and that the government is therefore simply unable to resist their demands.The unions control in the vicinity of 60 per cent of the vote at Labor Party conferences. They control who gets preselection and in what position, and they control what policies go forward and what gets held back. The unions in New South Wales are, in effect, the invisible hand that controls the government. Mr Carr has been forced to acknowledge that his desire and that of his Treasurer, Mr Egan, to privatise electricity in New South Wales was opposed by the unions and he had to give in. Now it appears that Mr Carr and his Minister for Industrial Relations, Mr Shaw—whose preselection in a winnable upper house spot required decisive intervention—have been called on to pay back the unions for support and funds for the March election. And pay back, big time, they have—by entertaining these proposals.These measures represent some of the most regressive industrial relations proposals, either state or federal, this country has seen in a decade. But the New South Wales government's preparedness to do the unions' bidding has both sinister and frightening implications for the people of New South Wales. First, it means Labor is governing for its union mates—a small, elite special interest group—and not in the best interests of the people of New South Wales. Secondly, these proposals are opportunistic. Labor has no mandate to do this, having failed to tell the people of New South Wales just weeks ago during the election campaign that this was in store for them as soon as the government was safely returned.The proposals will weaken the rights of small business, especially in the building industry and other industries where union coercion of contractors and non-union employees has been a feature. In my view, state and federal ALP members in New South Wales whose parliamentary careers rely on the votes and support of union officials and who will benefit from these proposals have a clear obligation to all of their constituents, not just to their supporters, to tell them about the real effects of these proposals.Increasing union power to intrude into established employer-employee relationships is bad for jobs and economic growth. It intrudes on the rights of ordinary workers. This is when Australia is only now starting to do better in workplace relations because of the deregulatory IR changes focusing on the workplace started by the New South Wales Greiner and Fahey coalition governments and adopted since then, I must say, by state and federal governments of both political persuasions throughout the country.The New South Wales proposals contrast dramatically with the approach of the federal coalition, which also issued an implementation paper on its second term industrial relations proposals in early May. Those proposals were line by line in accordance with our election policy, and the proposals were spelt out side by side. The federal coalition policy is to promote cooperative workplace relations respecting the rights of all employees, union and non-union alike.The New South Wales Employers Federation Chief Executive, Garry Brack, has described these proposals as `a kind of insanity' and as an `anti-business package'. Although there has been a suggestion that the government will listen to the concerns of business and unions about the proposals, I certainly hope it is not a done deal. I hope I am wrong about this and I also hope that the public outrage that will accompany any attempt to ram these proposals through will give the Carr government the intestinal fortitude to do the right thing for the majority of the people in New South Wales. (Time expired)491819:17:004918Lundy, Sen KateSenator LUNDY7G6ACTALP00—It is interesting on this day following budget day that one of the focuses of many of the minds in Parliament House has not been on analysing what is going on with respect to the budget. Why? Because we have not been able to get access to many of those documents. Today in Parliament House we witnessed an absolute disaster in terms of using information technology. I watch with interest, as these difficulties become more apparent in the wider community, whom the government will seek to blame. We saw today in the chamber a very rapid sideways shift of responsibility from Minister Newman with respect to an IT blunder within her own department. Many people in Parliament House had great difficulty today in accessing their exchange server services as well as the actual budget documents, and I am looking to see where the blame will be shifted to.By way of general comment, I point out that it is an issue that is budget related. The services in Parliament House need to be fully funded to the level necessary to deliver what we require and, in analogous terms, to the level of information technology that any general business, commercial, government, or community-based operation would deserve and expect. If you want to have a quality system you must be prepared to fund it to the degree necessary.Over the last three years we have seen the exemplary services provided by the Parliamentary Information Systems Office being put under great pressure by this government in its willingness to cut back, not to mention the attacks on morale with the continual rumours of outsourcing circulating within that office. Indeed, many senators opposite will know my intense interest in the government's IT outsourcing process and how that process attacks generally the whole notion of control and strategic management of what I believe to be a core issue for any business, community organisation or government. We are dealing with information technology in an age when it is not something you can hang off the side of an operation. Here in Parliament House we have seen that really come to fruition.Information is the business of all of us. As politicians, information is the fuel upon which we sustain ourselves each working day. To find that our information systems do not work does undermine our ability to actually do our work. What we experienced today was that the budget papers were not fully loaded onto the internal parliamentary information system and a great load was imposed upon that system as just about everyone in the building tried to access the documents for the first time electronically. What should have been quite a glorious day celebrating the wonders of information technology in this place actually degenerated to a point where hardly anybody could use their information access systems, their computers. Rather, documents were damaged as Parliament House staff tried to open them, and delays of many minutes in just doing simple tasks like opening emails occurred. In fact it is the first time since I have been elected that I have actually experienced such a horrendous delay and breakdown in those services.I can only suggest that it is because of inadequate investment in the systems in the first instance. There is evidence of this in the delay by the Department of Finance and Administration in funding Internet access in the first instance. For quite a long time in the early period of the coalition government, all members of parliament awaited eagerly the ability to access the Internet, only to find that the funding could not be found. This was eventually changed at some latter point and Internet access was rolled out within Parliament House and efforts were made to roll it out to electorate offices.It is worthy of note that when the Internet roll-out program was first initiated it included the electorate offices of parliamentarians. However, when it came to the crunch, the part of the information technology that was the responsibility of the then Department of Administrative Services was outsourced to CSC, and that vendor did not carry on the program of rolling out Internet access to electorate offices. Indeed, we are now at the point where this program has not been completed, despite many members of parliament thinking that that would be the case over time. This is something that needs to be followed up.Let me go back to parliament today coming to a virtual standstill in electronic terms. For someone who relies quite heavily on email this caused a great disruption. In analysing the situation, it seems that DOFA contributed significantly to the problem when it several times mailed a bulk email relating to agreements being negotiated in this place—hence, exacerbating the problem. I would expect anyone who claims to have some understanding and financial control over an information system to have some sensitivity as to the capability of it, but that is not the case. It will be interesting to see where exactly the government seeks to place the blame for this matter.I want to finish my comments tonight by saying a few general things about information technology and Internet access. The fact that we have a sophisticated—indeed, cutting edge—information technology system here in Parliament House means that we are privileged and distinct from the majority Australians. The fact that we have Internet access puts us in that small category of the 20 per cent of Australians who have Internet access. In our case, it is afforded to us by virtue of taxpayers' money. We think it is imperative to be connected in this way and to have these services—I know it facilitates my ability to do my job properly—so it is not unreasonable to expect that anyone in the community or in business should have that same advantage.The question of equity of access to information technologies and the Internet becomes, I suppose, the focus of my comments this evening. We experienced today what happens when the system goes down and you lose that access. More than anything else, the message in this is that information technology, no matter where you are, is core business. It is fundamental to the way we operate and the way in which we communicate and interact with others. The 80 per cent of the population who currently do not have Internet access are isolated in the same way that we were isolated today when the system did not work.For governments, the message behind this is very plain: look at how you work and look at how you use the information technology and the Internet. Look at what happens when it goes down; imagine if you did not have it. It is a different way of living. I firmly believe that all Australians should be able to enjoy the opportunity to participate fully in the information society. I believe all Australians should have the capability and the skills to choose whether they want to participate in the information society, and they should be able to do so with confidence.This requires a far broader policy agenda from this government than just a narrowband information economy approach that looks at the dollar figures and the economic outcomes and forgets about the profound social implications that arise out of these new technologies—more than implications: real opportunities for people, whether they be in isolated areas for remote rural access or in schools, with all the educational opportunities that are there for young Australians.It was a telling day for many parliamentarians as to how much we take for granted. I hope within that experience today there lies a powerful policy message—that all Australians should be afforded the opportunity to participate in the information society.19:27:004920Senate adjourned at 7.27 p.m.Documents49204920The following government documents were tabled:Advance to the Minister for Finance and Administration—Statement and supporting applications of issues—February 1999.Australian Maritime College—Report for 1998.Australian National University—Report for 1998.Human Rights and Equal Opportunity Commission—Aboriginal and Torres Strait Islander Social Justice Commissioner—Reports for 1997-98— Native title. Social justice.Industry Commission—Report—No. 61—Telecommunications equipment, systems and services, 9 April 1998.The following documents were tabled by the Clerk:Aged Care Act—Determination under section 52—ACA Ch. 3 No. 1/1999.Australian Communication Authority Act— Radiocommunications (Charges) Determination No. 1 of 1999. Telecommunications (Charges) Determination No. 1 of 1999. Telecommunications (Nominated Carrier Declaration Application Charge) Determination 1999.Defence Act—Determination under section 58B—Defence Determination 1999/11.Life Insurance Act— Prudential Rules Nos 33 (Variation of Prudential Rules No. 26) and 35. Variation of Prudential Rules No. 35.National Health Act— Declaration Nos PB 4 and PB 5 of 1999. Determination No. PB 6 of 1999.Radiocommunications (Receiver Licence Tax) Act—Radiocommunications (Receiver Licence Tax) Determination No. 1 of 1996 Amendment 1999 (No. 1).Radiocommunications (Transmitter Licence Tax) Act—Radiocommunications (Transmitter Licence Tax) Determination No. 1 of 1996 Amendment 1999 (No. 1).Answers to Questions on Notice4921The following answers to questions were circulated:4921(Question No. 286)2864921Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Prime Minister, upon notice, on 25 November 1998:(1) What is the Government's position regarding Office of Government Information and Advertising (OGIA) officials acting as formal referees for firms tendering for Commonwealth research work.(2) Was Mr Borko Vlatkovic, Director Research and Ministerial (OGIA), involved in: (a) the compilation of the short list of companies invited to tender for the market research associated with the community education and information program; and (b) any aspect of OGIA's work in support of the market research work associated with the community education and information campaign.(3) Did any other OGIA personnel act as referees for firms invited to tender for work associated with the program.4921Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Prime Minister has provided the following answer to the honourable senator's question:I am advised that OGIA officials did not—and Government Communications Unit (GCU) officials do not—encourage firms tendering for government work to nominate them as referees. Although the practice is discouraged, it is not unknown for firms to nominate OGIA/GCU officials as referees when drawing attention to past government work as part of their proposals for future government work.In the course of providing briefing to the Ministerial Committee on Government Communications on the suitability of firms to undertake work for the Commonwealth, GCU officers are careful to avoid any suggestion of bias in their commentary to the committee and they are equally careful in their advice to departments and agencies.(2) (a) Yes, as Mr Vlatkovic was head of the work area responsible for the compilation of such shortlists.(b) No.(3) No. 4921(Question No. 305)3054921Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Finance and Administration, upon notice, on 30 November 1998:(1) How many car parking places are provided for the officers of senators, members and office holders at Charterbridge House, 70 Phillip Street, Sydney.(2) What is the actual or estimated rental or commercial value of each car parking space.4921Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Finance and Administration has provided the following answer to the honourable senator's question:(1) and (2) Issues relating to car parking spaces at 70 Phillip Street, Sydney were dealt with in questions on notice stemming from the Senate Finance and Public Administration Legislation Review Committee on 9 February 1999.Responses to relevant questions on pages 194 and 195 of the Hansard of 9 February 1999 address these questions.4921(Question No. 312)3124921Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 1 December 1998:(1) Which ministers have been allocated a second media adviser.(2) In each instance, what are the home states of these ministers.(3) Has the practice of allocating an additional media adviser in each state been retained.(4) What are the names and nominated home bases of each media adviser employed by a minister allocated an additional media adviser.(5) Do the second media advisers take part in a telephone link-up with the Prime Minster's office at around 12.30 pm on Mondays.(6) In each instance, have these ministers been allocated an additional personal secretary; if so, what are the names and nominated home bases of any additional personal secretaries.4922Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) The Minister for Employment, Workplace Relations and Small Business, the Minister for Family and Community Services, the Minister for Foreign Affairs, the Minister for Defence, the Attorney-General and the Minister for Immigration and Multicultural Affairs.(2) Victoria, Tasmania, South Australia, Queensland, Western Australia and New South Wales respectively.(3) There is an additional media adviser provided in each State.(4) Carmel Christensen—Melbourne; Mark Polonsky—Launceston; Amanda Lynch—Adelaide; Peter Kaye—Brisbane; Robert Haynes—Perth; Vacant—Sydney.(5) The Prime Minister's Office has regular telephone contact with a wide range of ministerial staff on a wide range of matters throughout the course of any given week.(6) Yes.Roberta Musolino—Melbourne; Damian Mantach—Launceston; Sarah Dunstan—Adelaide; Beverly Morrisby—Brisbane; Deanne Ford—Perth; Sarah Baxter—Sydney.Details provided above are as at 1 December 1998.4922(Question No. 449)4494922Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Finance and Administration, upon notice, on 9 March 1999:(1) Which ministers have chosen to establish joint electorate/ministerial offices.(2) In each instance (a) what is the address of that office; (b) what is the annual rent payable; and (c) what fitout and/or refurbishment costs have been incurred for the period 1 January 1998 to 28 February 1999.4922Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Finance and Administration has provided the following answer to the honourable senator's question:(1) The following Ministers have chosen to establish joint electorate/ministerial offices:* Senator the Hon Richard Alston;* Senator the Hon Chris Ellison;* Senator the Hon Robert Hill;* The Hon Joe Hockey MP;* Senator the Hon Ian Macdonald;* Senator the Hon Jocelyn Newman;* The Hon Warren Truss MP;* The Hon Wilson Tuckey MP;* The Hon Daryl Williams MP; and* Senator the Hon Amanda Vanstone.(2) (a), (b), & (c). See following table.(a)(b)(c)MinsterAddressAnnual RentFitout/Refurbishment costs inuccred between 1/1/98 & 28/2/99 **Senator the Hon Richard Alston2nd Floor CPO 4 Treasury Place MelbourneNil—CPO Office*NilSenator the Hon Chris Ellison89 Aberdeen Street Northbridge$27,000.00$50,729.63Senator the Hon Robert HillSuite 2 CPO 100 King William Street AdelaideNil—CPO Office*NilThe Hon Joe Hockey MPLevel 2 32 Walker Street Nth Sydney$83,850.00$119,260.00Senator the Hon Ian Macdonald***131 Denham Street Townsville$37,000.00NilSenator the Hon Jocelyn Newman11 Elphin Road Launceston$27,000.00NilThe Hon Warren Truss MP319-323 Kent Street Maryborough$38,800.00$82,919.00The Hon Wilson Tuckey MPLevel 38 Exchange Plaza 2 The Esplanade PerthNil—CPO Office*$8,441.00The Hon Daryl Williams MPGateway Building Andrea Lane Booragoon$55,000.00NilSenator the Hon Amanda Vanstone100 Pirie Steet Adelaide$53,625.00Nil* No annual rent is apportioned to those Ministers who have offices in the Commonwealth Parliamentary Offices (CPO) as the department pays rent on these premises regardless of occupancy. ** Note, these figures do not include any expenditure incurred by a Minister's home department. These figures cover all costs incurred during the period of time in question even though the bill for the Services may not have been received during the specified dates.*** Since becoming a Minster, Senator Macdonald has continued to occupy the same office as he occupied as Parliamentary Secretary.4923(Question No. 450)4504923Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Finance and Administration, upon notice, on 9 March 1999:(1) In the case of joint electorate/ministerial offices how are the running and other costs apportioned between the department and the relevant home department.(2) Where costs are shared in accordance with any agreement or guideline, what steps does the department take to verify its component of the costs.4923Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Finance and Administration has provided the following answer to the honourable senator's question:(1) In the case of joint electorate/ministerial offices, running and other costs are apportioned in accordance with the guidelines outlined in the Ministers of State Entitlements Handbook 1998.(2) The Department verifies all costs against invoices prior to payment and in the use of entitlements such as the excess stationery entitlement, those ministers with combined electorate/ministerial offices are asked to certify that the additional stationery is for electorate business only.4923(Question No. 453)4534923Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Finance and Administration, upon notice, on 9 March 1999:(1) When was the decision taken to appoint Computer Sciences Corporation Australia to provide information technology and support services to electorate offices?(a) What were the estimated savings of the decision; and what have been the actual savings.4923Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Finance and Administration has provided the follow ing answer to the honourable senator's question:(1) The decision to outsource information technology and support services to Computer Sciences Corporation Australia Pty Ltd (CSC) was announced by the Government on 5 March 1998. CSC took responsibility for information technology and support services in electorate offices on 1 July 1998.(a) The estimated savings for the Department of Finance and Administration's component of the Cluster 3 contract with CSC are approximately 35% over 5 years. These estimates include all former DAS components and electorate offices.Actual savings cannot be provided at this stage, as the first full period of operation of the contract has not been completed. As the contract is usage based, variances in usage from the baseline projections will be reflected in the level of savings.Service levels are and will continue to be refined, as will the technical standards of the service being purchased. Changes in technology, service levels and operating standards over the life of the contract are likely to impact on performance against the original estimate of expected savings.4923(Question No. 457)4574923Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Under the provision of the Remuneration Tribunal Determination that allows for Senators and Members to make a claim for travelling allowance with respect to a visit to Norfolk Island only upon written application to the Special Minister of State, how many such requests have been sought and how many have been approved for the 1997-98 financial year4923Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:Determination 8 of 1998 provides that a statement be provided by a Senator or Member to the Special Minister of State in respect of payment of travelling allowance for Norfolk Island in certain circumstances, but does not require that the Minister approve or not approve the travel or payment of travelling allowance. Travelling allowance was paid to two Senators and three Members by the Department of Finance and Administration in respect of travel to Norfolk Island in 1997-98. The Senator and Members in question travelled en bloc to Norfolk Island on 15-16 June 1998 for formal business of the Joint Standing Committee on the National Capital and External Territories in respect of its inquiry into Communications and the External Territories. Individual statements by each Committee Member as to the purpose, period and itinerary of the journey were not provided. The Acting Committee Secretary provided the Department of Finance and Administration with a list of Committee members attending the hearings on Norfolk Island and the dates and times of hearings.4924(Question No. 458)4584924Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Under the provision of the Remuneration Tribunal Determination that allows for Senators and Members to make a claim for travelling allowance with respect to a visit to Cocos and Keeling Islands only upon written application to the Special Minister of State, how many such requests have been sought and how many have been approved for the 1997-98 financial year.4924Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:Determination 8 of 1998 provides that a statement be provided by a Senator or Member to the Special Minister of State in respect of payment of travelling allowance for Cocos (Keeling) Island in certain circumstances, but does not require that the Minister approve or not approve the travel or payment of travelling allowance.In respect of travel to Cocos (Keeling) Island, one Minister sought and received payment of travelling allowance in 1997-98.4924(Question No. 459)4594924Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Under the provision of the Remuneration Tribunal Determination that allows for Senators and Members to make a claim for travelling allowance with respect to a visit to Christmas Island only upon written application to the Special Minister of State, how many such requests have been sought and how many have been approved for the 1997-98 financial year.4924Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:Determination 8 of 1998 provides that a statement be provided by a Senator or Member to the Special Minister of State in respect of payment of travelling allowance for Christmas Island in certain circumstances, but does not require that the Minister approve or not approve the travel or payment of travelling allowance.Travelling allowance was paid to one Senator by the Department of Finance and Administration (and four Members by the Department of the House of Representatives) in respect of travel to Christmas Island in 1997-98. The Senator and Members in question travelled en bloc to Christmas Island on 8-9 October 1997 for formal business of the Joint Standing Committee on Treaties to conduct advertised public meetings on the Australia-Indonesia Maritime Delimitation Treaty. Travelling allowance was also paid to one Minister in respect of travel to Christmas Island in this period.4924(Question No. 460)4604924Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Finance and Administration, upon notice, on 9 March 1999:(1) How many senators and members entitled to a four-wheel drive vehicle have received approval from the Special Minister of State for the installation of a satellite telephone.(2) (a) Which senators and members have sought such a service; and (b) what has been the total cost to the Commonwealth of purchasing, leasing, installing and maintaining satellite telephones for senators and members.4924Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Finance and Administration has provided the following answer to the honourable senator's question:(1) 6 Senators and Members who are entitled to a four-wheel drive vehicle have been given access to a satellite phone.(2) (a) (b) please refer to the table below.(a)(b)Senator/Members who has sought the satellite phone serviceCost to Commonwealth of provision, (including leasing, installation, maintenance)The Hon Warren EntschPurchase price: $4699* Monthly access fee: $50Mr Barry HaasePurchase price: $4914* Activation fee: $100The Hon Bob KatterPurchase price $4699* Monthly access fee: $50Mr Tony LawlerNone as yet—phone has not been installedThe Hon Warren SnowdonPurchase price: $0 took over phone of former member, the Hon Nick Dondas Monthly access fee: $50Mr Barry WakelinPurchase Price: $4200* Deinstall/reinstall (new vehicle): $1320 Deinstall/reinstall (accident): $1128 Repairs: $2155 Monthly access fee: $45 Ongoing costs: $1.80 per minute for calls* Note: Initial installation is included in the purchase price of the phone4925(Question No. 467)4674925Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999What was the total cost to the Commonwealth of advertising vacant electorate officer position in the 1997-98 financial year.4925Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:$104,810.084925(Question No. 471)4714925Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 9 March 1999:What is the estimated administrative cost of collecting monthly rental reimbursements for members' and senators' home telephones.4925Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:The collection of monthly rental reimbursements for Senators' and Members' home telephones represents a portion of staff duties in each of the regions and in central office. The exact administrative cost of this portion of staff duties is difficult to calculate but an estimate would be in the vicinity of $68,000 per annum. 4925(Question No. 619)6194925Bolkus, Sen NickSenator BolkusXE4SAALP00 asked the Minister representing the Minister for Foreign Affairs, upon notice, on 24 March 1999:Can information be provided on the (a) number; (b) dates; (c) chairmanship; (d) names of Department of Foreign Affairs and Trade participants; (e) names of other participants; and (f) purpose of interdepartmental meetings on Kakadu since the Kyoto meeting in December 1998 and to the date of the answer to this question.4925Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Minister for Foreign Affairs has provided the following response to the honourable senator's question:It has been agreed through consultation with Environment Australia that they will coordinate a response to the question on notice from Senator Bolkus concerning Interdepartmental Meetings on Kakadu (Senate questions 617—621).4925(Question No. 627)6274925Allison, Sen LynSenator Allison1M6VICAD00 asked the Minister for Education, Training and Youth Affairs, upon notice, on 30 March 1999:(1) What guidelines or restrictions will there be governing how winning schools are able to spend prize money.(2) Will schools be permitted to spend prize monies on a purpose unrelated to literacy and numeracy as long as the project has educational merit.(3) Can a list, by name, be provided of members of the assessment panel; if this has not been finalised, what is its likely composition and what organisations will be represented.(4) What criteria will be used in judging schools eligible for cash prizes.(5) Were there any other ways explored to encourage literacy achievement with the $160,000 that will now be used for cash prizes; if so, can details be provided.(6) Did the Government consult any literacy assessors, researchers or specialists in formulating the idea of a cash prize.(7) Was there any assessment made regarding whether the prize would have any beneficial effect on literacy and numeracy outcomes.(8) Is the prize expected to translate directly into an improvement in outcomes; if so how.(9) Can the Minister explain how these cash prizes will assist children with learning difficulties, learning disabilities and behavioural problems impeding literacy acquisition.(10) How will these cash prizes assist teachers in detecting literacy difficulties in students.4926Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Education, Training and Youth Affairs has provided the following answer to the honourable senator's question:(1) Award-winning schools are required to use their prize money for a range of school-based strategies and activities that will support further improvements in literacy and numeracy. A copy of the guidelines is at Attachment A.(2) No, schools will not be permitted to spend prize monies on purchases unrelated to literacy and numeracy.(3) State selection committees with representation from the non-government sector and the Commonwealth will be established to nominate primary schools that fulfil the award criteria (see Attachment B). Lists of names of selection committee members have not yet been provided to DETYA. The Department expects to receive this information when it receives State and Territory submissions for National Literacy Week funding. These are due on 23 April 1999.(4) The award criteria for judging schools eligible for the National Literacy Week Awards for Literacy and Numeracy Achievement are at Attachment B.(5) In 1998, the Government set aside $1 million to support a range of public awareness activities during National Literacy Week which is to be established for the first time in 1999. In order to give it a high profile, the Government decided that National Literacy Week needed an innovative focus that would distinguish it from existing events such as Book Week. Subsequently, the Minister approved the allocation of up to $200,000 to fund the awards and associated promotion activities so that the event would have a strong national focus and involve primary schools, parents and local community groups.(6) The National Literacy Week initiative is being developed by a Commonwealth/ State Working Group, which met for the first time on 1 February 1999. It includes one representative from each State and Territory and is chaired by Dr Evan Arthur, Assistant Secretary, Literacy and Special Programs Branch. All Working Group members support the idea for the awards. A list of members is at Attachment C.(7) National Literacy Week awards will go to schools that have added significantly to students' literacy and numeracy performance, not just to those scoring highest in literacy and numeracy. They will recognise that schools will have different starting points in terms of student outcomes. As noted in the answer to Question 1, award-winning schools will be able to use their prize money for a range of school-based strategies and activities that will support further improvements in literacy and numeracy.(8) The awards are expected to raise public awareness of the importance of all Australian students developing effective literacy and numeracy skills, and to recognise and reward schools that are contributing to significant improvements in literacy and numeracy outcomes.(9) The awards will have an equity focus. They will go to schools that have improved the performance of their students, recognising that schools will have different starting points in terms of literacy and numeracy outcomes. For schools with educationally disadvantaged students, improvements in outright performance will be more difficult to achieve. This approach to awarding the cash prizes will help these schools gain the recognition and sense of achievement they need, and to support improvements against their previous best.(10) The awards are aimed at rewarding and publicly recognising schools that are progressing the implementation of the National Literacy and Numeracy Plan and supporting attainment of the national literacy and numeracy goals. The Plan is directed at early identification of students who are having literacy learning difficulties, and intervention to address their needs.Attachment AUSE OF FUNDSFunds awarded to schools may be used for a range of school-based strategies and activities that will support further improvements in students' literacy and numeracy outcomes, and may include: * salaries for teachers, specialists and support staff;* development of programs that directly assist students, including:. preparing, publishing or purchasing and implementing program/curriculum/professional development/assessment materials that can be used to support improved student literacy and numeracy outcomes;. computer assisted and other specialised learning techniques; or. items of equipment such as computers or teaching aids.* support and training for volunteer literacy and numeracy program tutors;* employment of literacy or numeracy co-ordinators, advisory staff, interpreters, translators, welfare officers including bilingual officers, teachers' aides and school-community liaison workers;* trialling, evaluating, disseminating and delivering professional development material; and* teacher and support inservice opportunities.Attachment BNATIONAL LITERACY WEEK AWARDS FOR LITERACY AND NUMERACY ACHIEVEMENT—AWARDS CRITERIAThe emphasis of the National Literacy Week Awards will be on recognising and rewarding innovative practice leading to value-added improvements in student literacy or numeracy performance. States/Territories are invited to nominate government and non-government primary schools that have shown improvement in literacy and/or numeracy through best practice.The Awards will have a strong equity focus, and will recognise that schools will have different starting points in terms of students' literacy and numeracy outcomes.To be eligible for a National Literacy Week Award for Literacy and Numeracy Achievement, government and non-government primary schools must fulfil the following criteria.* Nominated schools must demonstrate that they are progressing the implementation of the National Literacy and Numeracy Plan and supporting attainment of the national literacy and numeracy goals. In particular, nominated schools must demonstrate that they are implementing effective literacy/numeracy instructional programs that have value-added to students' performance. By "value-added", it is meant that a school's teaching programs have significantly improved students' literacy/numeracy performance, given those students' starting point. Nominations should be accompanied by evidence that focuses on improvement against baseline data on educational outcomes in literacy and numeracy. State and Territory selection committees may provide either school level, or system-based, outcomes data to support their identification of schools that are achieving improvements through intervention.It is acknowledged that many non-government school education authorities are in the initial stages of implementing the National Literacy and Numeracy Plan (which commenced in 1998). In future years, validated data such as that becoming available from the national benchmarking process should be used to demonstrate evidence of improved performance by schools and improved literacy levels of students.Attachment CCOMMONWEALTH/STATE NATIONAL LITERACY WEEK WORKING GROUPDr Evan Arthur (Chair), Assistant Secretary, Literacy and Special Programs Branch, Schools Division, DETYAMr Lindsay Wasson, Director of Curriculum Support, NSW Department of Education & TrainingMr Ross Kimber, Assistant General Manager, Curriculum Development & Learning, Technologies Branch, Education VictoriaMr Tony Cook, Manager, Literacy and Numeracy Unit, Education QueenslandMs Diana Rees, Project Leader, Literacy, Education Department of WAMs Gerry Mulhearn, Curriculum Superintendent, SA Department of Education, Training & EmploymentMs Alison Jacob, Director of Planning, Executive Support Branch, Department of Education, Training, Community & Cultural DevelopmentMs Connie Emslie, Acting Manager, NT Literacy Plan, NT Department of EducationMr Allan Hird, Director, School Programs Branch, ACT Department of Education and Community Services4927(Question No. 635)6354927Faulkner, Sen JohnSenator Faulkner5K4NSWALP00 asked the Minister representing the Prime Minister, upon notice, on 30 March 1999:(1) Does the Prime Minister have access to any pay television services at the Lodge; if so: (a) which services; (b) which provider; and (c) by what means, for example, cable, satellite, microwave and/or other. (2) (a) Who requested the connection of the service; and (b) on which date was it requested.(3) On which date was the connection carried out.(4) (a) What was the cost of the connection; and (b) who paid for it.(5) (a) What is the annual subscription cost; and (b) who pays for it.(6) Can a list be provided of the individual channels which can be accessed at the Lodge as part of these pay television services.4928Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Prime Minister has provided the following answer to the honourable senator's question:(1) No, however connection of a pay television service is being considered. As a satellite dish is required to connect the service at The Lodge, the Australian Heritage Commission is being consulted.(2) I requested that the connection of the service be investigated on 6 December 1998.(3)-(6) Not applicable.4928(Question No. 636)6364928Faulkner, Sen JohnSenator Faulkner5K4NSWALP00 asked the Minister representing the Prime Minister, upon notice, on 30 March 1999:(1) Does the Prime Minister have access to any pay television services at Kirribilli House; if so: (a) which services; (b) which provider; and (c) by what means, for example, cable, satellite, microwave and/or other.(2) (a) Who requested the connection of the service; and (b) on which date was it requested.(3) On which date was the connection carried out.(4) (a) What was the cost of the connection; and (b) who paid for it.(5) (a) What is the annual subscription cost; and (b) who pays for it.(6) Can a list be provided of the individual channels which can be accessed at Kirribilli House as part of these pay television services.4928Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Prime Minister has provided the following answer to the honourable senator's question:(1) Yes, I have access to Foxtel pay television via cable.(2) I requested the connection of the service on 6 December 1998.(3) 23 December 1998.(4) (a) $1,575. (b) The Official Establishments Program within my department, which meets all running costs of the residences.(5) (a) 1,077, including additional viewing locations, additional monthly programs and statement fees. (b) The Official Establishments Program within my department pays $694.80 per annum. I pay the balance of $382.20 per annum which includes the cost of one additional location and monthly magazine and the subscription fees for Entertainment Plus and World Movies.(6) The standard suite of channels is available, together with some additional channels for which I meet the costs.4928(Question No. 654)6544928Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister for the Environment and Heritage, upon notice, on 1 April 1999:(1) Has the Minister reviewed, or will the Minister review, his decision to give an export licence to a Tasmanian abattoir for sending wild brush-tail possum carcasses overseas; if so: (a) when; and (b) what studies have been, or will be done, for that review; if no review is planned, why not.(2) How many carcasses have been exported.(3) Have any measures been undertaken to ensure that no inhumane treatment of the possums occurs: (a) in the field; (b) in transport; or (c) in the abattoir; if so, what are those measures.(4) Are Tasmanian possums being sold in Taiwan, Hong Kong or elsewhere, as `Australian Tree Foxes' or any other fake appellation.4928Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:(1) The export of brush-tail possum carcasses from Tasmania is subject to three separate decisions under the Wildlife Protection (Regulation of Exports and Imports) Act 1982 (the Act). Firstly, approval of a Management Program under subsection 10(1) of the Act; secondly, the approval of an annual quota; and thirdly, the issuing of an export permit on each occasion that carcasses are to be exported.On 12 December 1996 I approved the Management Program entitled `Management Program for the brush-tail possum Trichosurus vulpecula (Kerr) in Tasmania 1997-1999' submitted by the Tasmanian Parks and Wildlife Service. My approval of this Management Program expires on 31 December 1999. It will be open to the Tasmanian Parks and Wildlife Service to submit a new plan of management for the species when the current plan expires. Any new plan will be reviewed to ensure it meets the requirements of sections 9B and 10 of the Act and Regulation 5 of the Wildlife Protection (Regulation of Exports and Imports) Regulations prior to my consideration of the plan.Under the current Management Program an annual quota of possums that may be shot or trapped for damage mitigation purposes, is established. The quota is established on the basis of the population status of brush-tail possums in Tasmania, trends in the abundance of brush-tail possums, seasonal conditions, and the need for crop protection. The approved quota for the period 1 July 1998 to 30 June 1999 is 250,000.In view of the information provided above, I do not consider any further review of these decisions is necessary at this time.(2) My Department does not keep records of the number of carcasses exported unless that is the unit of export. The following information has been extracted from the annual report on the harvest, provided to my Department by the Tasmanian Parks and Wildlife Service, and on the volume of exports, as recorded by my Department:19941995199619971998harvest14324827113256762export5350kg meat 64 bodies1904kg meat 841 bodies9051kg meat 16 bodies11134kg meat12749kg meat(3) The capture, transport and slaughter of the brush-tail possums to be exported as carcasses is subject to the Code of Practice for Capture, Handling, Transport and Slaughter of Brush Possums (Tichosurus vulpecula), revised December 1997. This code was endorsed by the Tasmanian Animal Welfare Advisory Committee on 12 December 1997.(4) My Department does not have information on the trade names used for brush-tail possums in other countries.4929(Question No. 658)6584929O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister for Transport and Regional Services, upon notice, on 13 April 1999:(1) When did the former Minister for Transport and Regional Development (Mr Sharp) direct Airservices Australia to undertake the necessary steps to introduce the Sydney Airport Long Term Operating Plan.(2) When was the plan provided to the then Minister.(3) What was the planned date for the full implementation of the plan when it was completed and provided to the then Minister.(4) When did stage one of the plan commence.4929Macdonald, Sen IanSenator Ian MacdonaldYW4QLDLPRegional Services, Territories and Local Government10—The Minister for Transport and Regional Services has provided the following answer to the honourable senator's question:(1) 20 March 1996.(2) Airservices Australia provided the draft Plan to the then Minister on 16 December 1996.(3) On 30 July 1997 the then Minister directed Airservices Australia to implement progressively the Sydney Airport Long Term Operating Plan. No completion date was specified by the Minister.(4) 3 August 1997.4929(Question No. 712)7124929Allison, Sen LynSenator Allison1M6VICAD00 asked the Minister representing the Minister for Education, Training and Youth Affairs, upon notice, on 29 April 1999:With reference to part (b) of an answer (reference E502) to a question asked in relation to the consideration of additional estimates hearings on 15 February 1999 (Employment, Workplace Relations, Small Business and Education Legislation Committee; Examination of Additional Estimates 1998-99; 10-11 February 1999; Additional Information Received; Volume 1; April 1999, p.171) which stated that, `Major releases of materials have occurred for the school and higher education sector':(1) Can a copy be provided of the material that has been released to schools, with those parts that were produced by Impetus Consultants identified; if not, why not.(2) With reference to the statement in that answer, that, Impetus Consultants provide ongoing specialist advice on materials produced under the Discovering Democracy program: (a) what is the cost of that consulting advice to date; and (b) what is the projected expenditure for the same ongoing specialist advice for the remainder of the Impetus Consultants contract.(3) Who are the principals of Impetus Consultants.4930Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Education, Training and Youth Affairs has provided the following answer to the honourable senator's question:(1) A copy of material released to schools under the Discovering Democracy program is attached. The materials were produced by the Curriculum Corporation. Impetus Consultants provide independent expert advice on the accuracy and coverage of the materials. They are not responsible for developing or producing specific materials.(2) (a) The total cost of consultancy services provided by Impetus Consultants on Discovering Democracy materials to the end of March 1999 was $44,036.25 ($29,690.10 in 1997- 1998 and $14,346.15 in 1998-1999).(b) The contract between the Department of Education, Training and Youth Affairs and Impetus Consultants provides for up to a further $15,653.85 until the end of the 1998-1999 financial year.(3) The principals of Impetus Consultants are Dr Kevin Donnelly and Mrs Julia Donnelly.