1999-05-133912SENATE493101999-05-13The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.493110001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:493185VJ4Watson Sen JohnTo the Honourable the President and Members of the Senate in Parliament assembled:The petition of the undersigned shows that citizens of Tasmania think that the government's taxation package, including the goods and services tax, does not provide sufficient information nor detail and hence is open to inequitable application during its implementation.Your petitioners ask/request that the Senate should not pass the legislation until the following questions are resolved fairly and equitable for the citizens of Tasmania:1. How will the government ensure Tasmania is treated fairly in comparison to the more affluent and larger States? Tasmania, on a per capita basis, has the highest unemployment, lowest average weekly wage, the oldest population, the greatest number of people dependent on government income support and the most decentralised population of any state of Australia. The government's model for estimating the cost of the GST does not allow for the different economic and social patterns between states.2. How will the government ensure families can afford good food which will be relatively more expensive in respect to `junk' foods whose price will decrease after the removal of sales tax? Tasmanians pay the highest costs for food in Australia and are among the worst health status population in Australia.3. How will the government ensure that organisations and charities can continue to provide the necessary community services and support to disadvantaged citizens? Community organisations and charities in Tasmania will face a double jeopardy from the implementation of the Tax Package. It is predicted that poverty in Tasmania will increase and more people will be seeking extra assistance. At the same time organisations will have a reduced capacity to meet those needs because of increased administrative costs associated with compliance and in many instances reduced revenue because of the application of the tax to such things as membership fees and fund raising. 4. How will government ensure that service quality and scope of education, child care and health services can be maintained without increasing the costs of these services? The government proposes that essential services such as education, child care and health will be GST free. However, community based organisations offering these services will have increased costs arising from the extra administration and accounting requirements of the tax package.Senator WatsonVJ4Senator Watson(from 85 citizens)4931871SF4Cooney Sen BarneyTo the Honourable President and Members of the Senate in the Parliament assembled:We the undersigned citizens and residents of Australia call on the Senators to support the following:Racial abuse and discrimination is prevalent throughout Victoria and Australia. Such discrimination strikes at the very fabric of our society. As instance we cite the on-going campaign of racial vilification, death threats and attempts on life directed against Captain Frank and Elisabeth Staberhofer and their business of Captain's Lodge International Motel & VIP-Restaurant.Your petitioners therefore pray that the Senate immediately launch an investigation in relation to occurrences of racial abuse and vilification generally and in respect of Captain Frank and Elisabeth Staberhofer particularly. This inquiry must focus on the effectiveness of such avenues of recourse as are open to victims of racial discrimination. It must also focus to halt the abuse immediately, to exonerate the parties concerned and to compensate them for their hideous suffering.Senator CooneySF4Senator Cooney(from 871 citizens)Petitions received.Notices49314931Senator Allison to move, on the next day of sitting:That the Senate—(a) notes that: (i) on Wednesday, 12 May 1999, the people of Norfolk Island voted in a referendum on the following question: Do you agree with the Australian Federal Government's proposal to alter the Norfolk Island Act so that: (a) people who have been ordinarily resident in the Island for 6 (six) months will in future be entitled to enrol on the electoral role for Legislative Assembly elections; and (b) Australian citizenship will in future be required as a qualification to be elected to the Assembly, and as a qualification for people who in the future apply for enrolment on the electoral roll for Assembly elections. (ii) the result of that referendum was that 74 per cent of Norfolk Islanders voted no, with more than 90 per cent of the eligible community voting in that referendum; and(b) calls on the Government to now withdraw the Norfolk Island Amendment Bill 1999 and to enter into formal negotiations with the Government of Norfolk Island in view of the referendum result.Senator Payne to move, on the next day of sitting:That the Senate—(a) notes that the week beginning 10 May 1999 is National Volunteer Week;(b) congratulates all Australians who offer their time and effort to their communities through volunteering, providing significant assistance to those less able to help themselves;(c) acknowledges the spirit of service that is inherent in volunteering and the benefit that the broader Australian community derives from the work of generous individuals;(d) calls for a continuation of Australia's spirit of volunteerism and for recognition of those who participate in their communities; and(e) recognises the work of the many Australians who volunteer their time in response to crisis situations across the country and, in particular, notes the efforts of those involved in the continuing clean-up and repair after the recent hailstorm that caused serious damage to Sydney suburbs.Senator Stott Despoja to move, on the next day of sitting:That the Senate—(a) commends the establishment of an Australian Embassy in Zagreb, Croatia;(b) applauds attempts to strengthen our diplomatic representation in the region; and(c) acknowledges that groups such as the Australian Democrats have long supported the establishment of such an embassy, as indicated by their notice of motion of 14 October 1996. Business49324932Motion (by Senator Ian Campbell) agreed to:That the following government business orders of the day be considered from 12.45 p.m. till not later than 2.00 p.m. today:No. 2— Migration (Visa Application) Charge Amendment Bill 1998No. 3— Superannuation Legislation Amendment Bill 1998No. 4— Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 .4932Motion (by Senator Ian Campbell) agreed to:That the order of general business for consideration today be as follows:(1) general business notice of motion no. 162 standing in the name of Senator Collins, relating to the introduction of the Employment Security Bill 1999 ; and(2) consideration of government documents.Notices49324932Items of business were postponed as follows—General business notice of motion no. 136 standing in the name of Senator Allison for today, relating to the appointment of a select committee on superannuation and financial services, postponed till 24 May 1999.General business notice of motion no. 206 standing in the name of Senator Allison for today, relating to indigenous education, postponed till 24 May 1999.General business notice of motion no. 215 standing in the name of Senator Bartlett for today, relating to Kosovo refugees, postponed till 24 May 1999.Miscellaneous4932Motion (by Senator Margetts) put:That the Senate—(a) notes that: (i) the Western Australia Regional Forest Agreement (RFA) was signed in the week beginning 2 May 1999, (ii) despite claims by the Commonwealth and State Governments that 12 new national parks have been created, 16 already approved national parks, nature reserves and conservation parks have been either revoked or gutted under the RFA, (iii) two-thirds of Western Australia's unprotected old-growth forest have been targeted for destruction under the RFA, (iv) most of the 151 000 hectares of `new reserves' announced under the RFA are either regrowth forests or remote and non-commercial forest or woodland that the industry does not want to log, (v) many heritage-listed old-growth forests, such as Giblett, Jane, Sharpe and Peak, will be destroyed as a result of the RFA, and (vi) the RFA will have a negative impact on employment opportunities and on the regional economies in the south west of Western Australia, (vii) despite making abundant provision to compensate shareholders or proprietors where necessary, the RFA makes no legally binding provision to compensate for the impact of structural adjustment on forest industry workers;(b) expresses its outrage that the terms of the Western Australia RFA are contrary to the wishes of the vast majority of Western Australians, including 80 per cent of the submissions from the public to the RFA process; and(c) notes that the Senate is yet to consider the Government's Regional Forest Agreements Bill 1998 and observes that it would have been preferable to have finalised Parliament's view in advance of the RFA being signed.09:38:00The Senate divided. (The President—Senator the Hon. Margaret Reid)33Allison, L. Bartlett, A. J. J.Bishop, T. M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Conroy, S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. Forshaw, M. G.Gibbs, B. Hogg, J.Hutchins, S. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. Murray, A.O'Brien, K. W. K. *Quirke, J. A.Schacht, C. C. Sherry, N.Stott Despoja, N. West, S. M.Woodley, J.34Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. * Campbell, I. G.Chapman, H. G. P. Colston, M. A.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Cook, P. F. S. Newman, J. M.Faulkner, J. P. Tambling, G. E. J.Ray, R. F. Hill, R. M.Reynolds, M. Kemp, R.* denotes tellerQuestion so resolved in the negative.Business49334933Motion (by Senator Ian Campbell) put: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 10.30 am to 6.30 pm and 7.30 pm to 11.10 pm; (b) the routine of business from 10.30 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.09:45:00The Senate divided. (The President—Senator the Hon. Margaret Reid)53Abetz, E. Alston, R. K. R.Bishop, T. M. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H. *Campbell, G. Campbell, I. G.Carr, K. Chapman, H. G. P.Collins, J. M. A. Conroy, S.Coonan, H. Cooney, B.Crane, W. Crossin, P. M.Crowley, R. A. Denman, K. J.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Forshaw, M. G. Gibbs, B.Gibson, B. F. Heffernan, W.Herron, J. Hogg, J.Hutchins, S. Knowles, S. C.Lightfoot, P. R. Lundy, K.Macdonald, I. Macdonald, S.MacGibbon, D. J. Mackay, S.McGauran, J. J. J. McKiernan, J. P.Minchin, N. H. Murphy, S. M.O'Brien, K. W. K. O'Chee, W. G.Parer, W. R. Payne, M. A.Reid, M. E. Schacht, C. C.Sherry, N. Synon, K. M.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.West, S. M.9Allison, L. Bartlett, A. J. J.Bourne, V. *Brown, B.Lees, M. H. Margetts, D.Murray, A. Stott Despoja, N.Woodley, J.Question so resolved in the affirmative.Miscellaneous493409:49:004934Brown, Sen BobSenator BROWNQD4TASAG00—Madam President, I ask that general business notice of motion No. 217 standing in my name for today supporting the ALP's policy to end logging in old-growth forests in Western Australia be taken as formal.Leave not granted.QD4Brown, Sen BobSenator BROWN—Madam President, I note the denial of formality by somebody on the government side.Miscellaneous4934Motion (by Senator Brown) put: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.09:54:00The Senate divided. (The President—Senator the Hon. Margaret Reid)32Allison, L. Bartlett, A. J. J.Bishop, T. M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Conroy, S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. Forshaw, M. G.Gibbs, B. Hogg, J.Hutchins, S. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. McKiernan, J. P.Murphy, S. M. Murray, A.O'Brien, K. W. K. *Schacht, C. C.Sherry, N. Stott Despoja, N.West, S. M. Woodley, J.32Abetz, E. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Heffernan, W.Herron, J. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. MacGibbon, D. J.McGauran, J. J. J. Minchin, N. H.O'Chee, W. G. Parer, W. R.Patterson, K. C. L. Payne, M. A.Reid, M. E. Synon, K. M.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Cook, P. F. S. Newman, J. M.Faulkner, J. P. Tambling, G. E. J.Quirke, J. A. Alston, R. K. R.Ray, R. F. Hill, R. M.Reynolds, M. Kemp, R.* denotes tellerQuestion so resolved in the negative.Committees493549354935Motion (by Senator Bartlett) agreed to:That the following matter be referred to the Legal and Constitutional References Committee for inquiry and report by 18 October 1999:The operation of Australia's refugee and humanitarian program, with particular reference to:(a) the adequacy of legal assistance provided to asylum seekers under the Federal Government's Immigration Advice and Application Assistance Scheme;(b) the adequacy of a non-compellable, non-reviewable ministerial discretion to ensure that no person is forcibly returned to a country where they face torture or death;(c) whether Australia's treaty commitments to, and obligations under, the 1951 Convention relating to the Status of Refugees, the 1984 United Nations (UN) Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, and the 1966 International Covenant on Civil and Political Rights are capable of being met given that the fundamental principle of non-return to face torture or death is not present in domestic law nor subject to the rule of law;(d) the adequacy of current refugee determination procedures having regard to the role and function of the Refugee Review Tribunal in investigating asylum claims;(e) the importance of maintaining full judicial oversight of any administrative process that directly affects Australia's compliance with its international legal obligations;(f) the potential implications for the future operation of Australia's refugee policy and program following the enactment of the principle of providing temporary haven;(g) the recent case of the Chinese woman allegedly deported to China, despite pleas for protection, to face a forced abortion when 8½ months pregnant;(h) the responsibility of Australia under international law for the very serious human rights violation of forced abortion which is claimed in this case;(i) the circumstances in which the Australian Government decided to proceed with the deportation of Mr SE, despite being on notice that an application had been sent to the UN Committee Against Torture, and the circumstances in which the Australian Government decided to suspend the deportation proceedings in the case of Mr SE;(j) why cases such as the Chinese woman and that of Mr SE are not being picked up early enough by the Department of Immigration and Multicultural Affairs and the Refugee Review Tribunal;(k) the accessibility of judicial review for impecunious asylum seekers, particularly since 1 July 1998 when the Commonwealth Legal Aid guidelines were amended to remove grants of aid for asylum seekers except in extremely limited circumstances;(l) the role and involvement of private contractors in removal processes; and(m) the processes which are in place for monitoring deportation cases once they have been returned to their country of origin.Miscellaneous493509:57:004935Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—Madam President, I seek leave to make a short statement in relation to the refusal to grant leave for formality on general business notice of motion No. 217.Leave not granted.H15Campbell, Sen IanSenator IAN CAMPBELL—Madam President, can I make a brief statement under standing order 191?10000PRESIDENTThe PRESIDENT—Leave is needed to make a statement. There will be another occasion when you can do it.Committees493649364936Motion (by Senator Calvert)—by leave—agreed to:That on 14 May 1999—(a) the Joint Standing Committee on Electoral Matters be authorised to hold a public meeting during the sitting of the Senate, from 9.30 am till 12.30 pm, to take evidence for the committee's inquiry into the 1998 Federal Election; and(b) the Parliamentary Standing Committee on Public Works be authorised to hold a public meeting during the sitting of the Senate, from 9.30 am till 1 pm, to take evidence for the committee's inquiry into a replacement research reactor at Lucas Heights, New South Wales.4936493609:59:004936Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Sandy Macdonald, I present the fifth report of the Standing Committee on Publications.Ordered that the report be adopted.Bills4936r742Billsr741Billsr745493609:59:004936Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Ferguson, I present the report of the Economics Legislation Committee on the Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 1) 1999 and two related bills, together with submissions and Hansard record of proceedings.Ordered that the report be printed.Committees49364936493610000PRESIDENTThe PRESIDENT—A message has been received from the House of Representatives acquainting the Senate of a resolution granting the Joint Select Committee on the Retailing Sector an extension of time to present its report on the degree of industry concentration with the retailing sector in Australia to 30 August 1999.Bills4936r6534936Message received from the House of Representatives acquainting the Senate that the House has agreed to certain amendments made by the Senate to the Electoral and Referendum Amendment Bill (No. 2) 1998, disagreed to certain other amendments, made amendments in place thereof, and also made an additional amendment in which it desires the concurrence of the Senate.Ordered that consideration of the message in committee of the whole be made an order of the day for the next day of sitting.Bills4936r8014936Bill 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.493710:01:004937Campbell, 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—Madam President, it is with pleasure that I introduce this bill to the Senate.The privatisation of Wool International concludes the Government's involvement in the management of the wool stockpile as it passes responsibility to a private sector board who will manage the stockpile in the interest of its shareholders.Now is the right time to privatise Wool International. Equity in the stockpile is now significantly higher than the wool debt, so there is little justification for the ongoing involvement of the Government in its management.Madam President, the new commercial structure provided for in the bill is simple, and meets the Government's objective to protect, and indeed enhance, the rights of Wool International entitlement holders while providing commercial flexibility for the sale of the stockpile.The most important issue is that ownership of the stockpile is to be formally transferred to the unit holders, and its management to a commercial Board answerable directly and only to its shareholders.Wool International will be converted by this legislation into a company operating under Corporations Law. It will be a new company, with a new name—WoolStock Australia Limited—a new Board, new management structures and a new commercial way of doing business.Shares in the new company will be issued to all Wool International entitlement holders—one share will be "stapled" to each unit of entitlement.Madam President, the units of entitlement remain in place, and remain valid. Cash distributions will be able to be made to the entitlement holders. The amount and frequency of distributions will be a matter for the Board of the new company. If the commercial price obtained by WoolStock Australia for the stockpile is higher than the book value of the stockpile at conversion—which will hopefully prove to be the case, the extra equity will be available for distribution as dividends to be paid to shareholders.Protecting and enhancing the rights of entitlement holdersMadam President, the benefits of privatisation include. value of equity could be enhanced by the commercial management of the stockpile;. no legislated selling schedules; and. equity holders' rights have been enhanced in that they now have the right to vote on the management of their asset.Madam President, there will be considerable interest in the arrangements for appointment of the commercial Board to run the new company. An initial Board will be established to ensure essential preliminary work on a business plan and the transition of staff and resources to the new commercial arrangements happens smoothly. To that end the Government will appoint three members of the Board at the outset, with further directors to be appointed later. The actual size of the Board will be determined after further consultation, including with the Interim Advisory Board.It is intended that two of the additional directors, who would be appointed by the new Board, would need to be endorsed by shareholders at the first meeting of the company. The inaugural shareholder meeting will be called as soon as practicable, possibly within two months from the start up date of 1 July 1999. This meeting would also have the opportunity of endorsing the future direction of the new company.After that, composition of the Board will be chosen in the normal manner under Corporations Law.Madam President, a trust company is to be established to hold units and shares of unit holders whose legal status has not been established and cannot, for a number of reasons, have their units and shares transferred to them immediately. The trust will be charged with actively working to transfer units and shares to the unit holders, beneficiaries or creditors, as soon as their legal status has been established.Tax issuesIn relation to tax treatment of unit holders, the Government worked on the simple principle of seeking to maintain arrangements for the commercial company which would be similar to those relating to the statutory authority.I am happy to say that in the main, this has been achieved. . Most importantly, the Government is prepared to exempt WoolStock Australia from income tax on its stockpile activities.. Distributions in the hand of equity holders will be taxable, but will be able to be considered as Primary Producer Income for eligible unit holders.. Proceeds from the sale of units by eligible unit holders will still qualify for small business Capital Gains Tax roll-over relief.. Madam President, dividends paid to shareholders will be taxable in the normal way in the hands of shareholders. There will, however, be the normal access to Primary Producer Income arrangements for those who qualify. Shareholders should seek their own financial advice on this.Continuation of government guaranteeMadam President, one of the primary objectives of privatisation is to bring the way the stockpile is managed into line with normal commercial practice. This includes financing its debt.While the intent is that the new Board moves promptly to normal private borrowing arrangements, the Government is prepared to consider some flexibility in timing of the withdrawal of the government guarantee to allow the new Board time to negotiate the appropriate arrangements after 1 July 1999.Lending institutionsThe interests of lending institutions have been recognised, by including a provision that any charges or liens attached to current entitlements will remain in place after privatisation, and will apply to both the entitlement and the share stapled to it.Trading of units and sharesMadam President, the ability to trade units and shares, or to borrow against them, will provide an important opportunity and benefit to many unit holders. Macquarie Bank has been operating a market in Wool International units and, while there has been relatively limited trading to date, there will clearly be scope for a substantial increase in this market over time.WoolStock Australia will not start life as a listed company—but the shares and units will be tradeable. There is the prospect that interest in development of exempt markets for this security will grow rapidly.Madam President, further work will need to be done by the Board of the new company to improve liquidity of the market for units and shares—this will benefit both the unit holders and those who want to be involved in these markets. New business directionsMadam President, the Government appointed an Interim Advisory Board, headed by Mr Donald McGauchie, to develop a draft business plan for the new business.This work is not yet complete, but good progress has been made on developing a business plan and Mr McGauchie and this Board have been consulting widely with all sectors of the wool industry in the development of this plan.The opportunity for investment in new wool business activities is clearly desired by some Wool International equity holders. Both the Government and the Interim Advisory Board understand that while some wool growers simply want to get their share of the money from the sale of the stockpile, others would like to see an opportunity to invest their equity in developing a broader wool business.While the principal activities of WoolStock Australia will be selling down the stockpile and distributing available proceeds to the unit holders, it will also be able to spend up to $3 million to investigate and possibly support new business activities.Shareholders who might wish to invest in these new business activities will be able to do so, after proper "due diligence" processes and in response to a prospectus.Employees of Wool InternationalThe rights of the existing employees of Wool International have been maintained. There will be no loss of entitlements by staff, as Wool International will itself be transformed into a Corporations Law company, and existing staff contracts will continue.Role of OASITOThe Office of Asset Sales and IT Outsourcing, and its professional commercial advisers, and officers of my Department, have done a commendable job in working through the complexities of this privatisation.I believe the package of proposals is simple and workable, and one that provides a balance between the various competing interests.The cost of the process—a total of $4.5 million—will prove to have been a very prudent investmentConclusionMadam President, this bill fulfils the Government's commitment to the wool industry, to return the stockpile to its owners under fully commercial management.This action will be welcomed by the wool industry.This is a good outcome to a very difficult and long standing issue which had become the Achilles heel of the industry. The industry can now look forward to dealing with the challenges it faces in the world textile market and focus on the issues which it will need to address to rebuild its future.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.Bills4939r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7624939Consideration resumed from 12 May.A NEW TAX SYSTEM (GOODS AND SERVICES TAX) BILL 199810:02:004940Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—I table supplementary explanatory memoranda relating to the government amendments and requests for amendments to be moved to the A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999 and A New Tax System (Commonwealth-State Financial Arrangements—Consequential Provisions) Bill 1999 . These memoranda were circulated in the chamber on 11 May 1999.10000CHAIRMANThe CHAIRMAN—The question is that amendment No. 1 on sheet 1353 moved by the Australian Democrats be agreed to.10:03:004940Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The amendment that has been separated from the rest of the Democrats' food exemption amendments is obviously an important issue to many people. It was a major source of debate within the committee inquiries, and a number of people gave very considered evidence in relation to its impact. I know it is an issue of concern to many retailers because of the whole issue of a goods and services tax. Of course, this is not something that has been put on them by the crossbenchers of the Senate; the goods and services tax is something that is being shoved through by the government.The issue of compliance is not something that in general is being put on them by the minor parties. The reality is that the Greens (WA) have always believed that consumption taxes of any kind should have the ability to be varied, depending on whether they are necessities of life you are talking about, depending on whether they are environmentally harmful goods and services or areas of activity, and depending on whether they are areas of activity that one should be encouraging in the 1990s leading on to the 21st century. In that sense, there might be some problems initially in the implementation of any differentiated tax, but the reality is that the problem has not been created by the Senate, by the crossbenchers, or by the Democrats; the problem has been created by an unfair tax which the Senate is trying to mitigate. I indicate that the Greens (WA) will support the principle of exempting food should—and we hope it will not—a GST be forced upon Australia. On that basis I will accept and vote for the amendment.10:05:004940Murray, Sen AndrewSenator MURRAY3M6WAAD00—The minister in his response yesterday quoted evidence given to the committee by a number of reputable individuals and reputable organisations. But the minister knows, as I know, of course, that the quality of evidence varies according to the witness. Regrettably, many of those witnesses who he used, despite some of them being eminent people of considerable reputation, had not conducted empirical studies and were making assertions not based on facts. The quotes I used yesterday were in fact from people and organisations who had studied these matters and studied them closely.Amongst the quotes that the minister gave appeared these words: that making food GST free would be a `disaster', that it would `exponentially' increase compliance costs, and that it would make the administration of the GST by businesses `a nightmare'. Really, when the very top estimate is for $100 million extra compliance costs if food is GST free, as compared to $1.9 billion for imposing the GST, you have to be concerned about the balanced argument. The minister quoted the ASCPA, the Australian Society of Certified Practising Accountants, from their press release issued on 10 February by Angela Ryan, who is the ASCPA tax director. The release 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 inevitably be recouped through increased prices.Well, the $1.9 billion worth of cost to business from the government's imposition of the GST will also be recouped from an increase in prices as compared to the $100 million that she estimates making food GST free would cost. She makes no remark about that.Also within this press release she accepts the ATO's figure of 300,000 business operators who would be affected. Yet, as I have indicated, we have checked the ABS figures and they come to 40,000—7,835 supermarkets and 37,246 retail businesses specialising in food retailing. It is nowhere near 300,000. What is this `massive increase' in compliance costs when the increase at maximum is five per cent of the overall cost of imposing the GST on business and is possibly as low as two per cent?Why would it be a `dead weight on the economy' when you have so many countries worldwide who do this very thing, who differentiate the price of food in their GST regimes? Is she saying that other major countries are experiencing a deadweight effect and are finding out that these problems are so massive that they cannot cope with them? This does not make any sense. Here are some of the countries which, if you follow the logic of Angela Ryan's press release, are so affected: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland, Sweden, Great Britain, Canada, Iceland, Mexico, Switzerland, Turkey, Poland, the Czech Republic, Hungary, Korea. There are another 90 countries that I can read out, if you want, but you are getting the point, aren't you?If 700 million people in those countries can cope with food being differentially rated or zero rated, why do people like Angela Ryan and Mark Paterson think that our 18 million Australians are too stupid, too incompetent, too incapable, to do what retailers and businesses do very easily in those other countries? It is just assertion; it is not evidence. I will quote to you again from the UK National Audit Office report on VAT compliance costs in 1994. I do so because they are the equivalent body to our own very esteemed Auditor-General's department. This is what they say: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).The issue of compliance costs is not a material issue when we are considering whether food should be made GST free. The issues that concern, and should concern, the government are those issues of equity versus the issues of efficiency—which are the economic issues—and those issues which attend to revenue. And those are the issues which we will deal with at length in the next set of amendments.This whole compliance costs area indicates to me that business have not done their homework. I fully understand the argument of Mitch Hook—the head of the Food and Grocery Council, and a very reputable person—because it obviously makes sense from their point of view for there to be a common rate across their whole industry. They are arguing to their book, and quite rightly so. That is a sound argument. I happen not to agree with it but I think it is a sound argument. But do not come and say to us, as you did in your response, Minister, that these people—who, as far as I know, have never run a business in a country which has a GST or VAT which zero rates or concessionally taxes food—talk about it being a disaster and a nightmare, when it is not a disaster and a nightmare for all those countries which have chosen to go this route.Far, far more countries have chosen to zero rate or concessionally tax food than have done otherwise, and they have done so for equity reasons, for social justice reasons, and because they know that it does not affect efficiency and does not affect the economic outcomes. However, this amendment does recognise that there is some increase in compliance costs and it would seek to compensate for that increase in compliance costs which would emerge. That really is the purpose of our moving this amendment.10:13:004941Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—To briefly reply, I think that you, having accused everyone else of making a lot of assertions, did precisely that. In your comments you referred to countries which either zero rate or differentiate food. I think you might have mentioned Austria. Well, the standard rate of the VAT in Austria is 20 per cent, but the food rate is 10 per cent. In Finland the standard rate is 22 per cent, but the rate for food is 12 per cent. We are having a 10 per cent GST. There is no point in quoting countries in which the rate that you quote for food is in fact higher than the 10 per cent rate which we are imposing. That adds some perspective to some of the comments that you have made.In relation to what is a desirable tax system, a desirable tax system is one which emphasises efficiency, equity and simplicity. I stress the word `equity'. We are going to be into that debate in relation to the next amendment. Frankly, in all of the material that was presented to the committee, no-one believes that it would in any way increase the efficiency of the system or its simplicity. We would argue that the equity is severely compromised. I leave my comments there because we are going to be joining the major debate on this after we deal with this amendment.Let me just make one quick point to the Senate. As a result of the length of the debate we have had, we have cemented ourselves into the 10 longest debates in Senate history. In fact, this is the seventh longest debate ever and, of course, we are still going. We have spent some 39 hours and 53 minutes debating the ANTS bill, including over 24 hours in committee to consider just 36 amendments. I remind the Senate of the progress, or the lack of progress, that we have been making.Yesterday there were a number of examples where an inordinate amount of time was taken up repeating the same points. I try to keep my remarks to the minimum. I have tried to respond to questions which have been raised, and to deal with them in a sensible fashion, but there were a number of cases yesterday where speaker after speaker rose on this debate and repeated essentially the same argument as the previous speaker. The Labor Party was particularly guilty of that. We will not be supporting your amendment and the sooner we move on to the major amendment that you seek to move, the better.10:17:004942Sherry, Sen NickSenator SHERRYZW4TASALP00—An unfortunate start, Senator Kemp. You are being so provocative this morning, accusing us of tedious repetition, when we only have to look at the substance of the answers that we have obtained from you. The amendment that we are dealing with and the following amendments from the Democrats are significant. They relate to food in all its aspects—everything from the amendment that we are dealing with at the present time through to issues relating to tuckshops and other matters. It is not my intention to waste the time of the Senate, and I know it is not Labor's intention to waste the time of the Senate. We have been quite properly drawing attention to the inadequacies, the fundamental flaws and the fundamental unfairness of a goods and services tax.Labor will not be supporting this amendment because we do not support a GST. The most effective way to ensure that the horrors of a GST are not imposed on the Australian public is to ensure there is no GST. That is Labor's consistent position, a very principled position. We do not believe you can make a soft and cuddly GST. That is the commitment we gave to the Australian electorate and that is the commitment we intend to honour absolutely.Senator Murray has touched on some of the issues. He read out a list of countries and the way in which they treat food with respect to GST, or value added tax, or whatever the particular variant is called in those countries. It went further than being used by Senator Murray as an attempt to enhance his argument on food; it showed that there are a significant number of countries that have a GST. But, if you reflect on those countries, what has a GST done for those countries?We have numerous examples in Europe and throughout North America, with the important exception of the United States, which does not have a GST. If we look at advanced economies, most now have GSTs or VATs, and the government has made that point on many occasions. However, there are two economies that do not have a GST: one is the United States and the other is Australia. The assertion is continually made that the Australian economy will do better under a GST. History will tell us whether that is right or wrong. If the GST is defeated—as Labor certainly hopes it will be; we will be fighting for that to the end—and if we then have a look at the economic progress of Australia over the following years, it will be interesting to see whether the economy does better than its current performance. I suspect that it will not.The government's argument is that we need a GST to improve and continue to improve economic performance. On the other hand, of course, the Treasurer argues that the economy is doing very well, to paraphrase the Treasurer; I am sure he would use slightly more extravagant language than that. We do not see that, for a whole range of reasons that Labor senators have touched on this debate.I am not going to waste the time of the Senate. We are anxious for this legislation to progress, and to get to the final vote by the end of June because we want to vote this whole, horrible GST package down. We are not in the business of making a GST, with all of its horrible needles and spikes. We are not in the game of pulling out a couple of those needles and spikes. The most effective way to deal with this issue is to simply say no to a GST on the final vote, when we get to it. My hope, Senator Kemp, is that we will get to it reasonably soon.10:22:004943Murray, Sen AndrewSenator MURRAY3M6WAAD00—I am glad Senator Sherry got up because, frankly, the remarks of the Assistant Treasurer exasperated me. Minister, I do not know what your experience in life is or what your background is. I do not know whether you have experience in business or accounting systems or anything of that sort. The compliance cost issue—and there are, I think, six people here in the chamber who were on the committee—relates to the suggestion by us that food is differently rated from the standard rate. It does not matter whether it is nought or 10 per cent or whether it is six per cent or 21 per cent, when you are introducing accounting systems, the compliance cost arises because you have to vary the price, you have to vary the system, you have to change the computer codes and you have to change the pricing. The compliance costs come from the administration and the management of a differential rate. For you to stand up and say that all those countries have a different rate, and therefore my argument does not count, misses the entire point.I do not think it is typical of the whole government, but it shows that the Assistant Treasurer has not followed the evidence that was put before the committee. I cannot understand why you have not done that. This is the most important bill that you are ever going to carry as Assistant Treasurer, and you have not mastered the basic argument that the compliance cost in the differential rating of food arises because it is a different rate—not because it is zero versus 10 per cent. The same problem arises when it is six per cent versus 21 per cent. I hope that you have grasped that basic point. If you cannot understand that, I almost do not understand why we are having the debate. It just floors me.The second point you made, which again illustrates that you have not followed the evidence, was that no-one has argued that making food zero rated is good for the economy. The very people who agree with you that food should be taxed argue that if food were not taxed employment would go up and the economic benefits would be positive. Have a look at the Murphy evidence. Have a look at Professor Dixon's evidence. These are people who support your position that food should be taxed, but they recognise that, if it were not taxed, there would be positive economic benefits to the agriculture and food industries. Two out of the three advisers who attended that evidence are here, and they can tell you that fact. So please do not misrepresent to those of us who were there the professional evidence that was given—it really is exasperating. Hold to your policy position, but please do not do that, because it invalidates everything else you say.10:25:004943Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I would like to indicate my concern about some of the comments Senator Sherry made in relation to the position of the ALP. Over the last day or so, the ALP have been suggesting that if a GST is shoved in place—and it will not be the Greens who support it—it could not be changed or fixed. I can understand their saying that this package cannot be made warm and cuddly, but my concern is that the ALP are saying that if the GST were forced on the Australian community against its wishes, and if food were not exempted, they would never move to change that situation—that there is nothing about a flat rate GST that they could ever change.We have heard evidence that smart economies around the world recognise that environmental costs of pollution should be built into the costs of buying goods and services. We know that countries that want to encourage certain sorts of progressive employment creating industries are saying that that should be encouraged by ways of differential tax. I am concerned about the message that is coming through from the opposition about the inequalities or inequities that exist within this package. Does it mean that if it ever gets shoved through against the wishes of the Greens and the ALP, food would remain at the same rate as the rest of the package? Does it mean that whatever problems they and others have identified during the committee process of inquiry—whatever bad process, whatever bad drafting, whatever is wrong with this bill now, including the high-roller taxes—will stay in concrete? That is a really interesting issue.Is it that they want it to be bad and to leave it that way? Or is it that, if a GST gets put through with all its problems, there would be some sort of commitment from the ALP to leave it in exactly the form it lands in? I do not personally think that they would do that. However, I do need to clarify this. Would it stay the same? They are saying it would be impossible to stop having a GST. We all know that once you have given money to the states you will never get it back, so is the reality that it will be set in concrete in all of its elements? Or is there potential to do with it what you could do with a consumption tax? The progressive smart countries of the world are using consumption taxes to move ahead on ecological issues, on sustainability issues and on equity issues. Could that be done? Or is the Labor Party saying that, however bad it is, if it ever falls to the ground, that is where it will stay?10:29:004944Sherry, Sen NickSenator SHERRYZW4TASALP00—I think there would not be any disagreement with the position that food is one of the essentials of life. I certainly recall during the committee hearings when Senator Harradine was sitting next to me on a number of occasions and we were involved in questioning of witnesses that he rightly drew out the point that it was not just food. We were looking at issues relating to transport, public transport, power and clothing—they are other essentials of life.The reason I make that comment is that this approach to taxing the essentials of life, including food, is but one of the major flaws in a goods and services tax. It is just one, but it is a very major one. Labor has consistently highlighted the other issues relating to the adverse impact of a GST—the poorly designed compensation package, particularly in respect of pensioners, self-funded retirees and a significant number of people who have not yet reached pension age and who are not receiving some form of social security, for example low income farmers and persons who either have retired voluntarily or have effectively been forced into retirement prior to pension age. We have highlighted issues relating to inflation, pass through, the impact on small business—and the list goes on. That is why Labor believes that the GST should be voted down. And I look forward to the day that we do vote it down.WW4KEMPSenator Kemp—But will you repeal it?ZW4Sherry, Sen NickSenator SHERRY—That, Senator Kemp, brings me to my next point, which is directly related to the issue that Senator Margetts raised. The Labor Party's tax policy will be presented to a national conference which is now scheduled for July-August next year. I am happy to say that it will be in my home state of Tasmania yet again. That is when our tax policy will be presented to the Australian electorate for consideration. We are not developing our tax policy on the run. I am certainly not developing it here in the Senate; I would not be here for long if I attempted to.WW4KEMPSenator Kemp—You have no policy position.ZW4Sherry, Sen NickSenator SHERRY—The election was held last October and Labor is developing a comprehensive tax policy for the next election. We will do that in our own time for presentation to our national conference next year. I am certainly not privy to advance copies of any tax policy; it does not exist at the present time.WW4KEMPSenator Kemp—Will you repeal it if it goes through?ZW4Sherry, Sen NickSenator SHERRY—Our tax policy will be unveiled at the national conference next year.NB5CAMPBELLSenator George Campbell—And you will be one of many who vote for it.ZW4Sherry, Sen NickSenator SHERRY—I hope I will be one of many to vote for it. It is not for others to suggest what our approach will be at this point in time.Senator Margetts interjecting—ZW4Sherry, Sen NickSenator SHERRY—I will be very happy for you, Senator Margetts, to come down as an observer to our national conference next year; I would be happy for you to come and observe our tax debate. We are the alternative government. I look forward to seeing you there, and Senator Stott Despoja, Senator Lees and Senator Murray.WW4KEMPSenator Kemp—I do not think it is a genuine alternative.ZW4Sherry, Sen NickSenator SHERRY—As far as Labor is concerned, there are only two alternatives: there is your GST with all its inequities and unfairness, and there is Labor's clear position—no GST. You could not have a clearer principle.EU4O'CHEESenator O'Chee—No tax position.ZW4Sherry, Sen NickSenator SHERRY—I will take that interjection. That is not correct and you know it, Senator O'Chee. Our tax policy will be unveiled at the national conference next year.NB5CAMPBELLSenator George Campbell—Senator O'Chee will not be here to vote for it.ZW4Sherry, Sen NickSenator SHERRY—We definitely know that Senator O'Chee will not be here to vote on our tax policy when it is presented as legislation when we are re-elected to government. So we do not have to worry about you, Senator O'Chee, in respect of that.Senator O'Chee interjecting—ZW4Sherry, Sen NickSenator SHERRY—Senator O'Chee, I did not want to get this debate off to a bad start. We are making progress, as Senator Kemp made very clear in a press release, although he did make some unkind comment.NB5CAMPBELLSenator George Campbell—When is morning tea?ZW4Sherry, Sen NickSenator SHERRY—I hope you are not thinking of food; this is a critical amendment. I have consistently stated in the Senate that we are anxious to get to a final vote on this issue; it will occur by the end of June. We are thoroughly examining the issues relating to a GST and I believe we are exposing the fundamental flaws of a GST. We will continue to do that in the Senate; that is part of the political process. We have only to look at what happened last week with the exposure of this outrageous concession given to high rollers. I do not want to put gloom on Senator Kemp's day, but Labor is consistent in its approach to a GST.ZS6QUIRKESenator Quirke—He is looking much happier today, though.ZW4Sherry, Sen NickSenator SHERRY—He is looking a touch happier as more time elapses between last week and this week. Once again, I make it very clear that Labor does not support a GST. We are not in the game of trying to remove the horrible spikes and pins in the GST, of trying to produce some sort of teddy bear version of a GST. If you hug the GST you are still going to get a horrible shock. The Democrats are in the game of hugging the GST. That is their business. I respect your arguments, but we do not agree with your approach. We are not in the business of hugging a GST. Our tax reform proposals will be developed in adequate time, presented to the national conference next year and then presented to the Australian people.10:37:004945Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I will be very brief. The response to Senator Margetts's question was a classic example of a bit of ducking and weaving, but people who read the Hansard can judge whether I am correct or not. A couple of remarks made by Senator Murray cannot go unchallenged. As Senator Murray knows, I am slow to be provoked, but I do not think they can go unchallenged. Senator Murray relied rather heavily on evidence given by Professor Dixon. Professor Dixon told the Senate inquiry:In the long run, exempting food has a negligible but negative impact on economic welfare under either labour market assumption.So the very best evidence that could be quoted may have been taken out of context. I think Senator Murray may have accused me of taking something out of context, so I put that back on the record. We do not accept Senator Murray's estimate that 400,000 businesses will be affected.3M6MURRAYSenator Murray—40,000.WW4Kemp, Sen RodSenator KEMP—Sorry, 40,000. The tax office estimate is 370,000. I think Senator Murray has excluded a large range of businesses in the food chain which properly should be counted in this particular proposal. Senator Murray, I just make those comments to add a little bit of perspective. When I was quoting the differential rates, I was referring to that part of your speech where you were talking about zero rating food. I wanted to get on the record that there were various ways one could read what other countries are doing, so I think my remarks should be viewed in that context.10:38:004946Murray, Sen AndrewSenator MURRAY3M6WAAD00—I will not pursue this issue anymore so that we can move on to the next thing. Just on notice to you, Minister: could you ask your advisers to provide the ATO list of all businesses affected by food? I asked for it way back when—whenever they appeared before the committee—and I have not yet seen that list. I would like to compare it with the ABS list.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Hogg)—The question is that Democrats amendment No. 1 on sheet 1353 be agreed to.Question resolved in the negative.10:39:004946Lees, Sen MegSenator LEES8U4SAAD00—by leave—I move Democrats amendments Nos 2 to 16 on sheet 1353:(2) Division 38, page 77 (after line 5), after the heading of the table of Subdivisions, insert: 38-AA Food for human consumption(3) Page 78 (after line 4), after clause 38-1, insert:Subdivision 38-AA—Food for human consumption38-2 Food for human consumption (1) A supply of *food marketed for human consumption is GST-free . (2) However, a supply of *food marketed for human consumption is not GST-free under subsection (1) if it is a supply: (a) made in the *course of catering; or (b) of *confectionery; or (c) of a *savoury snack; or (d) of a *bakery product; or (e) of *ice-cream goods; or (f) of *biscuit goods; or (g) of a *taxable beverage.(4) Clause 38-90, page 85 (line 6), omit "not GST-free", substitute "subject to GST in accordance with this Division".(5) Division 40, page 100 (after line 7), at the end of the table of Subdivisions, add; 40-E School tuckshops and canteens(6) Page 104 (after line 22), at the end of Division 40, add:Subdivision 40-E—School tuckshops and canteens40-105 School tuckshops and canteensA supply of goods and services by a *school tuckshop or canteen is input taxed .(7) Clause 195-1, page 253 (after line 4), after the definition of Australian law , insert: bakery products means a supply of: (a) cakes, being a mixture of flour, eggs and other ingredients baked in an oven or otherwise cooked and including pancakes and muffins, but not including a mix for a cake requiring processing or cooking by the consumer; or (b) pastry including pizzas, croissants, fruit tarts, vegetable or meat pies, pasties, cheesecakes, donuts or similar goods; but does not include bread, meaning food for human consumption manufactured by baking dough composed exclusively of a mixture of cereal or other flour and any one or more of the ingredients mentioned in the following paragraphs in quantities not exceeding the limitation (if any) specified for each ingredient: (c) yeast or other leavening or aerating agent, salt, emulsifiers, vitamins, malt extract, milk, water, vinegar or gluten; (d) fat, sugar and bread improver, subject to the limitation that the weight of any ingredient specified in this paragraph must not exceed 2% of the weight of flour included in the dough; (e) dried fruit or other vegetable matter, subject to the limitation that the weight of any ingredient specified in this paragraph must not exceed 10% of the weight of flour included in the dough; other than bread packaged for sale with other foods in the * course of catering.(8) Clause 195-1, page 253 (after line 5), after the definition of batch repair process , insert: biscuit goods means goods that are, or consist principally of, biscuits, cookies, crackers, pretzels, cones or wafers, but does not include: (a) breakfast food consisting principally of compressed, rolled or flattened cereal; or (b) rusks for infants or invalids, or goods consisting principally of those rusks; or (c) crispbread or goods consisting principally of crispbread.(9) Clause 195-1, page 254 (after line 28), after the definition of company , insert: confectionery includes: (a) goods marketed as confectionery or consisting principally of confectionery; or (b) popcorn; or (c) confectionery novelties; or (d) goods known as muesli bars or health food bars, and similar foodstuffs; or (e) crystallised fruit, glace fruit and drained fruit; or (f) crystallised ginger and preserved ginger; or (g) edible cake decorations; but does not include candied peel.(10) Clause 195-1, page 255 (after line 11), after the definition of corrected input tax credit amount , insert: course of catering, in relation to a supply of *food marketed for human consumption, includes: (a) any supply of food for human consumption on the *premises from which it is supplied; or (b) any supply of hot food for consumption away from those *premises; or (c) any supply of food marketed as a prepared meal whether or not it is supplied hot or cold, or requires cooking, heating, thawing, chilling or other processing or treatment prior to consumption; but does not include whole roasted chickens supplied hot or cold for consumption away from the *premises. For the purpose of paragraph (b), hot food means food which, or any part of which: (d) has been heated for the purpose of enabling it to be consumed at a temperature above the ambient air temperature (whether or not it is to be consumed); and (e) is at the time of supply above that temperature. For the purpose of paragraph (c) a prepared meal includes: (f) quiches (whether fresh or frozen); or (g) sandwiches (on any type of bread or roll); or (h) pizzas (whether fresh or frozen); or (i) salads which have been mixed or prepared (including rice, potato and pasta based salads and other salad variations); or (j) frozen meals; or (k) pastizzi; or (l) platters etc. of cheese, cold cuts, fruit or vegetables and other arrangements of prepared foods; or (m) fresh or frozen hamburgers and similar products; or (n) hot dogs; or (o) pasta based meals (whether fresh or frozen), but not uncooked and sold without a sauce or other additive; or (p) products of similar nature to those described in paragraphs (f) to (p); but does not include: (q) products which require the mixing of other ingredients to bring them into a state where they are fit for consumption.(11) Clause 195-1, page 260 (after line 2), after the definition of floating home , insert: food marketed for human consumption means: (a) goods marketed as food for human consumption (whether or not requiring processing or treatment); or (b) goods marketed as ingredients for food for human consumption; or (c) goods to be mixed with or added to food for human consumption (including condiments, spices, flavourings etc.); or (d) goods marketed as beverages; or (e) goods marketed as ingredients for beverages; or (f) fats and oils marketed for culinary purposes.(12) Clause 195-1, page 263 (after line 2), after the definition hospital treatment , insert: ice-cream goods means the following goods, or any similar goods: (a) ice-cream, ice cream cakes, ice creams and ice-cream substitutes; or (b) frozen confectionery (other than frozen yoghurt); or (c) flavoured iceblocks (whether or not marketed in a frozen state).(13) Clause 195-1, page 269 (after line 6), after the definition of pre-establishment importation , insert: premises includes: (a) the place where the supply of *food marketed for human consumption takes place; or (b) the rest of any single occupancy office or factory in which the outlet is situated; or (c) the grounds surrounding an office, factory, cafe or public house or other outlet, where the grounds are not a public thoroughfare; or (d) the whole of any enclosed space such as a football ground, a garden, a showground or amusement park or similar areas where there is a clear boundary or limit.(14) Clause 195-1, page 273 (after line 6), after the definition of satisfies the participation requirements , insert: savoury snacks means: (a) the following goods, if they are marketed principally as food for human consumption: (i) potato crisps, sticks or straws, corn crisps or chips, bacon or pork crackling or prawn chips; (ii) seeds or nuts that have been shelled or that have been processed or treated by salting, spicing, smoking or roasting, or in any other way; (iii) caviar; (iv) goods similar to those covered by subparagraphs (i) or (ii), whether or not they consist wholly or partly of any vegetable, herb, fruit, meat, seafood or dairy product or extract and whether or not they are artificially flavoured; or (b) goods consisting principally of goods covered by paragraph (a); or (c) goods of a savoury nature which have been prepared ready for an individual to heat or cook prior to consumption; or (d) seeds or nuts that: (i) have been processed or treated by salting, spicing, smoking or roasting, or in any other similar way; and (ii) are not of a kind ordinarily used as ingredients of food for human consumption or as goods to be mixed with or added to food for human consumption.(15) Clause 195-1, page 273 (after line 10), after the definition of school , insert: school tuckshop or canteen means a shop that is operated by a non-profit body, selling food on the grounds of an *education institution.(16) Clause 195-1, page 274 (after line 26), after the definition of supply of a going concern , insert: taxable beverage means: (a) beverages of an alcoholic strength by volume of 0.5% or greater, where the alcoholic strength by volume is determined at a temperature of 20 degrees celsius and on the basis that, at that temperature and in a vacuum, the specific gravity of ethyl alcohol is 0.79067; or (b) cordials for making non-alcoholic beverages, and preparations for use in flavouring foods, if the cordials or preparations consist of: (i) less than 25% by volume of juices of fruits or vegetables; or (ii) a mixture of water and concentrates of juices of fruits or vegetables, being a mixture whose strength is equal to or less than 75% of the natural strength of the juices; or (iii) a combination of juices covered by subparagraph (i) and a mixture covered by subparagraph (ii); or (c) concentrates for making beverages if the concentrates consist of less than 25% by volume of juices of fruits or vegetables; or (d) non-carbonated or carbonated soft drinks or like beverages, if they consist of less than 25% by volume of juices of fruits or vegetables; or (e) flavoured beverages, if 90% or less of the beverage is: (i) milk (including skim milk), soy milk or rice milk; or (ii) milk powder (including skim milk powder); or (iii) whey, whey powder or whey paste; or (iv) a combination of the above.These are amongst the most important amendments that the Democrats are presenting to the Senate on this package of legislation, and they are the amendments that seek to make food GST free. If these amendments are not acceptable at this point in time—and I suspect that is where we are going today; we will have to see—then we will be trying still to make a number of other changes to the package. But if, at the end of the day, we do not recommit and pass these amendments, we will not be voting for the GST. I will outline the arguments for the amendments initially and when some time permits I will then go back and look specifically at how it will all operate.The GST on food is the most regressive and most unfair part of the GST as proposed by the government. This is because food makes up 24 per cent of the spending of low income households but only 12 per cent of spending of the top 20 per cent of households. The GST makes its impact on low income households even worse because the price effect of the GST on food is three to four times that of other goods, and this is because food—other than confectionery—is now not taxed.Treasury itself has conceded this point. We only need to look at what Treasury has actually agreed to in terms of how much various items will go up to see that. Let us just go through a few. Fresh meat rises by 6.6 per cent; fruit, 5.7 per cent; vegetables, 5.7 per cent; and flour and a whole range of cereal products are up by 6.2 per cent. So Treasury itself has conceded that there is a significant increase in the cost of all those items that are at the moment not taxed. Then we look at other items: confectionery is going to go up by about 1.7 per cent only; soft drinks are going to come down—because we have them at a higher rate, they will come back down—to 10 per cent; electronic equipment will fall by 5.5 per cent; new cars will fall by 8.3 per cent; and financial services will fall by 10.6 per cent. It is significant that all of these latter items are consumed in greater proportions by high income earners.We have heard, particularly in the last 24 hours, a great deal about the need to rein in inflation. Indeed, Senator Hill neatly avoided the real question that I asked him yesterday and went off on some sidetracks, including inflation. We agree: of course we have to keep inflation down. So let us actually do it in this package. Treasury estimates that the impost of the GST on food makes up three-quarters of the inflation impact of this package—in other words, three-quarters of the 1.9 per cent inflation rate caused by the GST in the second year. A GST without food would have an inflation rate by 2001 of just 0.5 per cent. So where is the logic? Where is the consistency? Do we want to keep inflation down? If we do, let us do it by taking food out.Chris Murphy, in his longer term modelling, found that taking food out of the GST would see the inflation rate fall in the longer term from 0.9 per cent to a negative—to minus 0.5 per cent. In other words, if we take food out of the package, the price impact of the GST in the longer term is actually negative. That means that, in the longer term, there will be virtually no need, in an average sense, for any compensation for the GST with food out. Obviously, in the short term there is a significant need for compensation and an ongoing need for compensation for the losers because, as we know, averages hide losers. Pensioners, for example, will still need significant compensation, but it will be a lot less than if we keep food in the package.The extraordinary thing about these price effects is that food makes up just $4 billion to $5 billion of the $32 billion raised by the GST—that is, 13 per cent of the revenue base—but 75 per cent to 100 per cent of the adverse price effect of the GST and much more so for low income earners. This is why food is so important and why we will not walk away from it. That is why virtually every major church and welfare group has entered into the tax debate and has become involved in the issue of taking food out—zero rating food. I will just go through some on the list: ACOSS, Anglicare, the Anglican Church, the Catholic Church, the Uniting Church, the Salvation Army, St Vincent de Paul, the Brotherhood of St Laurence, the Consumers Association, the Australian Association of Social Workers, the Carers Association, the Australian Pensioners and Superannuants Association, the Public Health Association, ATSIC and the National Rural Health Alliance.These are the people who know what is going to happen. Most of them work at the coalface. They know the impact the GST will have on low income families and on low income earning individuals. They work every day with those people who are already having trouble making ends meet, and they see very clearly what is going to happen and how low income earners will be hit very hard.The conclusion that the Democrats have come to that the GST has to be taken off food is not just shared by church and welfare bodies; it is the view held by the governments in 23 of the 27 OECD countries that have a VAT or GST system. All but two European countries, for example, provide concessional treatment for some or all food. Why? Because the case for taxing food is regressive, which is undisputed in those countries. The compelling argument is no longer even debated. If 23 out of 27 OECD countries can do it, why should we be an exception and why should it cause so many problems in Australia? Only four countries tax food at the full rate. They are the ones that have listened to the simplicity arguments and have gone down that road. Let us look at who they are, what their tax rates are and what the circumstances are in those countries.Let us start with Japan. Their GST rate has been only three per cent on everything from day one. So it is not such a problem if food is included in Japan. New Zealand is a separate case with major problems. I will put that to one side and just look at Norway and Denmark, the other two countries. It is worth noting what the social safety net is in these two countries that tax food fully, and indeed in Sweden, which taxes almost all food. They have the most generous social security systems in the world. Income support, as one retires, is typically linked to a person's former income. Retirement benefits are between 70 and 80 per cent of the person's former income—not 25 per cent of male average weekly earnings. They do not have the levels of poverty that we have in Australia.Internationally, with New Zealand put out as the odd example and one that I certainly do not want this country following, we see that we are on very solid ground and in very good company when we call for GST-free food. We are also on very solid ground economically. I note the government has not attempted to refute our economic arguments. There has been a lot of bluster and a lot of the going back to the mandate mantra, but they have not taken apart the argument economically because they cannot.The Senate tax committee commissioned Australia's two most prominent private sector modellers, Peter Dixon and Chris Murphy, to model the GST with food in it and the GST with food taken out. Their models came up the same results on all of the major variables: GDP growth, exports, business investment, consumer welfare and consumption. The results were virtually the same whether food was in or food was out.Let us put it another way to make it as simple as possible for the government, because it has escaped them so far. You do not need to tax food to deliver all the economic benefits of the GST. You still get a 1.8 per cent boost in GDP but you get that without the downside—a massive redistribution of the indirect tax burden from the rich to the poor.We ran over most of the arguments yesterday, and I will skip over those quickly. They are that it is all too complex and that compliance costs will soar. I think we have very clearly put those arguments to bed. I realise the government is never going to accept it, but those arguments are a nonsense. Then we move on to the other argument run by the Treasurer—the one he used again yesterday at the Press Club—that it is going to somehow unravel the package and blow out the deficit. It is not going to unravel anything. It has not unravelled anything in 23 other OECD countries. It is not going to touch the deficit because we have completely funded taking food out within the package. We do not want the budget surplus tapped into at all. We look at this as an entity in itself within the package. You pay for taking food out by adjusting income tax rates.We have always argued that this is the way we have to go: treat the tax package as an entity unto itself. If the minister wants to look at the detail on or the amendments to those bills before this chamber—when we get to them—regarding tax cuts, they outline our specific proposals. These amendments will save $3.6 billion, fully funding the exemption of food in the first year, and still leave full tax cuts in place—indeed even better tax cuts in place for 69 per cent of taxpayers.The government also throws up the tired old furphy that exempting food will benefit high income earners more than low income earners. In percentage terms—and that is what is important—the argument is blatantly untrue. In dollar terms it is true: high income earners will get some benefits back. But under our adjusted tax scales, they are losing money to pay for making food GST free. In other words, they are losing maybe $40 a week in their tax cuts but they will pick up $8 to $10 a week because their groceries will not cost so much. It will balance itself out. We do not have a problem with that. The problem lies at the bottom end of the income scale.To give you an example, a taxpayer on $80,000 a year would gain, on average, $8.93 a week from the exemption of food but would have their tax cut reduced by $49 a week. This is a clawback under our amendments, and we are perfectly happy to live with that. As many of the church groups have said, it does not matter that removing the tax on food is also going to mean that the basket of groceries is cheaper for those on high incomes. It is their tax cuts that are going to change in order to pay for that. I would argue that our proposed tax scales are much fairer than what you are proposing in ANTS because, for example, a taxpayer on $20,000 a year would see their tax bill reduced by $13.35 a week. That is $3 more than you are currently proposing, Minister, within your ANTS package.The Democrats scale ensures that low income earners are better off by reducing the huge and unfair tax cuts for high income earners. Regardless of Mr Costello's continued chanting, it is all fully funded, with no impact on the budget bottom line. He commented yesterday that, if we could come up with a package that did not cost millions, he would be interested. Here is a package that effectively costs nothing, and he is still not interested in any negotiations. Our proposals are a lot fairer. They are a lot more affordable than what the government is presenting. They preserve the economic benefits of tax reform but actually deliver a fairer sharing of the tax burden.10:52:004951Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I was waiting to see whether there were any others who wished to make a contribution to this debate.ZW4SHERRYSenator Sherry—We are anxious to move it on.WW4Kemp, Sen RodSenator KEMP—Excellent. That is the best news I have heard all day. Let me make some responses to the points made. First of all, the Australian Democrats argument for making food GST free is essentially that it would make the government's reforms more equitable. I think that is the key element. Senator Murray nods, and I take it that we are addressing that particular concern. Making food GST free would be a very inefficient way of delivering assistance to the needy. This is because the benefits of a GST-free treatment of food go to everyone who purchases GST-free goods. A better approach clearly is to target compensation to those who need it. The evidence that was given to the committee is quite interesting on this. I think we naturally look at the evidence which backs up our case, but in my view the overwhelming weight of evidence strongly supports the government position on this. The fact of the matter is that the higher income groups spend more money on food. I am looking anxiously at Senator Murray to see whether he agrees with my assertion on that.3I6STOTT DESPOJASenator Stott Despoja—No, we don't.ZW4SHERRYSenator Sherry—Not as a percentage.WW4Kemp, Sen RodSenator KEMP—But the total amount of money spent on food tends to rise as the income goes up. There was evidence to the Senate committee by Access which I have here. We can all argue about the Access data, but let me quote what they said:Expenditure on food expressed in dollars per household varies markedly between equivalent disposable income quintiles, but rises from about $4,850 for the bottom household income quintile to about $7,100 for the top household income quintile, an increase of about 46.3 per cent.That is the case. We can all argue about these figures and we may have our own comments on the Access figures, but I think the basic principle is unarguable: expenditure on food by household groups rises as the income itself rises. Therefore, what will happen here is not an equitable treatment. It will mean giving more benefit to higher income people than would be given to lower income people. That is one of the arguments, and I think it is an important one. When you want to run the equity argument, I think you have got to take into account those issues, and they should be effectively addressed in your remarks.In relation to what other countries do, I know there is the old saying, Senator Lees, that there are lies, damn lies and statistics—8U4LEESSenator Lees—There are facts too.WW4Kemp, Sen RodSenator KEMP—You have quoted from a table on what happens in Europe. I guess it was a similar table to the one I have here. This is the table of VAT treatment of food in OECD countries. Eighteen of the 25 tax food.8U4LEESSenator Lees—How many do it at the full rate?WW4Kemp, Sen RodSenator KEMP—My understanding and information is that two actually input tax food and five zero rate food. As I said, you could look at this table and say, `Hey, most countries tax food.' That is a fair assumption from this table.8U4LEESSenator Lees—So are you offering us two per cent?WW4Kemp, Sen RodSenator KEMP—No. That is the point I am making: most countries do that. Then you look at the comparative food prices in other countries. Some evidence was given which shows that in fact food prices in Australia are substantially lower than food prices in other countries. So I put the point to you that, on the equity argument, you have got to address the fact that higher income groups spend more on food than lower income groups, so presumably the vast amounts of your benefits will flow to people on higher incomes.8U4LEESSenator Lees—Use the tax cuts to pay for it.WW4Kemp, Sen RodSenator KEMP—I know you shake your head and say you do not agree with me, but I think that is an important issue. When you look at what other countries do in taxing food, I think that is an important issue, and I have quoted some figures there for the edification of the Senate. So I think your case is not one which is sustained by the evidence before the committee. Very few people, including the modellers which I think were preferred by your party, supported the exclusion of food from the package, including on welfare grounds. So the government will not be supporting the amendments that you have moved.You referred to Mr Costello's comments yesterday. The only point I would make is that it is hard to negotiate when you say, `Well, we are not going to do this. This is our bottom line. This is non-negotiable.' Then you say, `But people should negotiate with us.' You are saying that on all these issues these things are not negotiable. Then you say that we should negotiate. We were elected to government. The government puts together its tax package based on the election promises that we gave at the last election. Then you come to us and say, `We won't talk to you. These are our non-negotiable demands.' Senator, I would have to put to you that I think that puts the comments by the Treasurer in a slightly different perspective than the one you had in your comments in the Hansard.In summary, I make the point that we are opposed to this measure. We are opposed on a variety of grounds. Seeing that the equity ground was one that was strongly run, I think that Senator Lees' comments have not addressed that. There are other great complexity arguments that certainly can be raised. We have had the bakery people coming out and raising particular complexities in how this would apply to bread, and I think there are a whole host of other arguments that can be very easily run.11:00:004953Lees, Sen MegSenator LEES8U4SAAD00—I was not going to speak again at this stage but I cannot let the comments of Senator Kemp's on negotiations go. Minister, I have now been in this place 10 years—not nearly as long as many, I realise—and I have never struck what I guess has become known as a `negotiating process'—I would not call it that—like this before. With other ministers we have been able to say, `Okay, let's agree to disagree on that and let's get down to areas where we think there is some room to move'—and, as we heard yesterday, there is some room where you are happy to move—`Let's talk about that.' But, no, unless we are prepared to put our principles aside and agree with the government on key issues, there will be no negotiations on things like diesel, health, education and charities—nothing.With health legislation, for example, we have said very clearly, `Okay, you're never going to get me to agree that giving away $1.8 billion unchecked to private health insurance is a good idea.' But there are still other issues we can work on, other ways we can approach the problem and other matters that we can still talk to ministers about. It was the same thing under the Labor government—we were not going to have a bar of several issues that they brought up in respect of health but we could work on others.As we know in this debate, we may see these bills go through at the end of the day and, as with Wik—yes, we saw them go through at the end of the day—we may have some of our amendments in the bills. So we want to stay at the table, negotiate and talk to government, agree to disagree on food if we have to. But we want to at least talk to the government on a range of other issues that we are going to be voting on as this process proceeds. But to say, `You do it our way or we don't talk to you' is not negotiation11:01:004953Sherry, Sen NickSenator SHERRYZW4TASALP00—I was not going to be provoked into making a response but I could not help but wonder, when Senator Kemp started talking about pastrycooks, whether I was looking at the gingerbread man. Senator Kemp referred to the issue of high income earners spending more on food. In monetary terms that would be true, but you have to look at percentages. If Senator Kemp argues that high income earners spend more on food, I suspect that is true of everything, every conceivable item. High income earners do spend more on clothing. I suspect they spend more on housing.Honourable senators interjecting—ZW4Sherry, Sen NickSenator SHERRY—On health; that is right, so you have to look at the percentages. There may be a couple of areas, but I certainly cannot think of any of the essentials of life where a high income earner would spend less in money terms. The reason they spend more money on essentials of life is they have more money to spend and this government—in its income tax cuts—is giving them more money to spend, much more money to spend than low and middle income earners. That is just one of the essentially unfair features of the government's tax package.As I said earlier, we are anxious to get to the final vote on this; we are anxious to vote the GST down. Food is one of many of the essentials of life—essentials including public transport, power, rent and housing. We do not believe there should be a tax on those essentials of life, full stop, because we do not believe there should be a GST, full stop. That is the commitment Labor gave in the lead-up to the last election. Labor intends to keep faith with its supporters and the people that voted for it on that basis—and I might note in passing that the majority of Australians hold that view: no GST. Labor, having given that pledge, that commitment and that promise, intends to honour in the Senate that commitment and promise to the Australian electorate.We are not against tax reform and it is not correct to say, as Senator Kemp has touched on occasionally, we are against tax reform. There were certainly in our 13 years in office some very important changes to Australia's tax system. As they were needed and as they were necessary we introduced them. Labor will be developing its tax package for the next election and, as I said earlier, that will be discussed in detail and unveiled at our national conference. I am not privy to the developing details but I do know one thing and I can say this with confidence: the Labor Party does not support a GST—defeat this GST in the Senate in the next month; defeat the GST—and the GST will not be in the tax package that we are going to take to the next election.WW4KEMPSenator Kemp—But will you repeal it?ZW4Sherry, Sen NickSenator SHERRY—It is not a matter of a repeal, Senator Kemp, because we are insistent that we vote down the GST. We know we are never going to convince you. I would certainly hope we can convince the Australian Democrats, the Greens and Senator Harradine that they should join with Labor to vote down the GST.They should do so not just because it taxes the essentials of life, such as food, clothing, power, rent and housing costs, but also because of the inequitable income tax cuts. For people who earn $70,000 or $80,000 a year there are tax cuts of the order of nine, 10 or 11 per cent—depending on your family circumstances—but for low and middle income earners the tax cuts being offered by the government are much lower in monetary and percentage terms.They should do so for the sorts of reasons that have been explored comprehensively over the last few months relating to pensioner compensation and self-funded retiree compensation. We had another example yesterday with Senator Cook's question to Senator Newman. The budget papers themselves show that within three or four years the so-called compensation for pensioners will be eroded and will disappear.But it is not just pensioners and self-funded retirees who will be affected. A significant group in the community who have not reached retirement age and do not receive social security in some form will also be disadvantaged. The impacts on inflation and jobs are the sorts of very substantial issues as to why a GST should be voted down. I do not intend to make further comments. We are anxious for this debate to move along, to deal with these amendments and to get to the final vote by the end of June when hopefully we will see the end of this GST within the Australian political and economic system forever.11:07:004954Brown, Sen BobSenator BROWNQD4TASAG00—I would like to ask the Democrats, whose amendment this is, where I as a citizen would stand with the GST in the following situation. Yesterday I went down to the food store—to Aussies here in Parliament House, but it could be any food store in the country—and bought a carton of soya milk and a banana roll for my lunch. Today I have decided to buy a carton of ordinary milk and a roll plus a banana separately and to go away and put the two together and have my lunch. Will I be treated any differently, as far as the GST is concerned under the Democrat amendments, today as compared with yesterday?11:08:004954Bourne, Sen VickiSenator BOURNETW4NSWAD00—First of all, let me tell Senator Brown that I believe he would save three or four cents today—so congratulations, well done. The Assistant Treasurer has said that he has statistics on the OECD. He seemed to say that, if you look at all the OECD countries, then you will see that naturally the government is right. I do not think that is right; I do not think that is correct at all. In fact, if you look at all the OECD countries and the way they tax food you will see that world's best practice would be to either zero rate or give a concessionary rate to food. I have a few statistics here that I am sure you would be interested in.As Senator Lees said and as the Assistant Treasurer said, of the 29 OECD countries, 27 have a GST or a VAT and of those 27, 23 either zero rate food or they have a concessionary tax on it. Let us go through them: Ireland, Poland, Korea, Canada, Mexico and the UK all zero rate food; Spain, Italy, Luxembourg, Switzerland and Turkey tax food at four per cent or less—one-fifth of the standard rate; France, the Netherlands, Germany, Belgium, Greece, Portugal and the Czech Republic tax food at between four and eight per cent—about one-third of the standard VAT rate in those countries. So of the 23 OECD countries that have a concessionary tax on food, six zero rate food, five tax it at a very low nominal rate, seven tax it at around one-third of the standard rate and five tax it at rates over 10 per cent but still less than the variable rate of GST or VAT. So only New Zealand, Japan, Denmark and Norway fully tax food at the standard rate, which Australia now wants to do. Sweden taxes most food at the standard rate.When we are talking about having an internationally comparable tax system, our proposal is a mainstream proposition; your proposal is the one that is out there. Twenty-three out of 27 OECD countries accept that food is a special case, that taxing food hurts the poor more than the rich and that good tax policy and good political policy deems that food should be treated at either a zero rate or a low concessional rate.Another thing that comes from that international evidence is that most countries have opted for a food exemption which focuses on basic foods, as our amendment does. It is not just the Irish option, it is also the German, the Belgian, the Spanish, the French, the Italian, the Austrian, the Portuguese, the Mexican, the Canadian, the Turkish, the Polish, the Czech and the Hungarian option. It is the option of lots of countries. In fact, of the 23 countries that concessionally or zero rate food, 17 distinguish between basic foods and either junk food or takeaway food.Our amendment reflects the practice adopted in most OECD countries in one way or another. It is the Democrats, not the government, who are benchmarking tax policy against world practice. It is the Democrats who are looking carefully at how other countries have dealt with tax issues and who have sought to learn from that experience, which tells us that you have to take food out.What about the countries that fully tax food? As Senator Lees has told us, Japan has a GST of about five per cent. That is hardly an impost, although it was enough to cost a government office and also to cause an economic recession because consumers did object to that five per cent. New Zealand started with a GST of 10 per cent with some compensation. Two years later the rate went up and the compensation went down—surprise, surprise! So New Zealand does not present a great case for taxing food. The other countries that fully tax food are in Scandinavia—Norway, Denmark and, by and large, Sweden. In each of those countries, as Senator Lees has told us, the social security system is far more generous than it is in Australia—much, much more generous. Social security is also tied to income in those countries, so as wages go up so does compensation go up. That is not the case in Australia. The compensation offer from the government is nowhere near as generous as the treatment in those Scandinavian countries. So we presume that the government, in offering inadequate compensation, is benchmarking itself against the famous New Zealand.A recent paper by Robert Stephens to a tax reform conference at the University of Melbourne looked at the New Zealand experience. He concluded that the comprehensive GST combined with a flatter tax scale has reduced the progressiveness of their own tax system. In 1982, those on three times average earnings paid 15 per cent more in tax than the those on average earnings, but by 1998 that difference had fallen to only 6.3 per cent. Further, he found that the taxing of food had a lot to do with this. Exempting food in a revenue neutral way would increase the disposable income of the bottom quintile by 0.5 per cent but reduce it for the top quintile, where we all are, by 0.2 per cent. And he found that compensation was inadequate—it did not last. Most importantly, he found that the failure to compensate adequately explains why poverty increases substantially with family size.Similar studies by the OECD comparing Sweden and Denmark with the Netherlands and the UK also found the same thing—taxing food is regressive. Interestingly, the last time that Denmark increased its VAT by three per cent—that was in 1992—no extra compensation was paid at all. So the international experience tells us that compensation tends not to last and it tends not to reach all of those who need it.How does the concessional treatment of food compare with compensation? It is a lot better. In Denmark, which taxes food, the VAT rate rose from 10 per cent in 1967 to 25 per cent in 1992—all without extra compensation. In the UK in the same period the VAT rose from 10 to 17.5 per cent, but the tax on food stayed at zero. In Ireland, the VAT standard rate rose four per cent but food stayed at zero. In the Netherlands, from 1969 to 1984 the standard rate rose six per cent but food rates stayed frozen. In France the standard rate has risen four per cent and the food rate has been reduced. In fact, in Belgium, Ireland, Italy, Luxembourg, France, Spain and the UK the standard rate has risen by an average of 5.4 per cent but the food rate is either the same or lower than it was when the VAT started. In only two of those 23 OECD countries with concessional treatment of food has the food rate risen in recent years by more than the standard rate, and that was as part of budget austerity budgets.So, in 21 out of 23 countries, once food won concessional treatment it stayed that way. Government has a distinct reluctance worldwide—not just here—to increase taxes, particularly taxes on food. If we win this argument now there is a good chance that food will stay GST free. By contrast, social security compensation is under threat in most Western countries. In Australia, the government boasts of how many people it has thrown off social security benefits and about the fact that $1.8 billion of social safety net promises were broken in the 1996 budget.So international evidence tells the Democrats that the fight about food is worth having, and it is worth having right now. If we win it now, that is it—it is won. If we lose it now, that is it—we will never get that back. I urge senators to reject any GST on food. It is unfair, and it fails to meet international best practice for a fair and efficient tax system as a real and permanent impost on the poorest in our community.11:16:004956Brown, Sen BobSenator BROWNQD4TASAG00—Senator Bourne, in responding to my question about the specifics of the bread roll and milk, said tritely, `Well, you might save 3c or 4c.' This is a serious matter. We are dealing here with the purchasing power of people right across this nation. Let me say to Senator Bourne and the Democrats that, if we are dealing with $3 or $4 lunches, 10 per cent of the GST makes not 3c or 4c difference but 30c or 40c difference. If you translate across to 10 million lunches, you are dealing with a $3 million or $4 million a day difference in the taxed as against the non-taxed food. If you add on top of that the cost of trying to determine where the GST line falls a la this Democrat amendment on the small shopkeepers, the small business keepers in this country, the cost becomes much greater again.The problem here is that the good intentions of the Democrats to shield people through having the GST taken off food leads to the much wider difficulty of a failure to shield people in general from the GST. The points that the Democrats are making about the GST hitting poor people unfairly when it applies to food apply to the whole range of other things that people in the wider populace buy and consume. This is why the Greens from the outset have said that we are opposed to the GST because it is increasing the gap between rich and poor in our country. To say, `We'll save it on food but we basically endorse the GST in its wider impact on the community', is a very false means of defending the poorer people in this country.The Democrats shepherded the potential for the GST through the last national election. As senators will be aware, I have said that in this place before. The Democrats said to the nation, `We will make this a nice GST', and people dropped their guard. Had they not done that I believe this government would not have been returned because of the justifiable fears that many voters—not least swinging voters—have about the impact of the GST on their future. But they did it. They cushioned the concern about the GST, and now we are here debating a GST in this place because the Democrats took that point of view at the last election. We are now seeing Democrat amendments which are aimed at making it a nice GST. The problem for us is that we would not—and I believe should not—be entertaining a GST at all if it were not for that particular role taken by the Democrats.I am not going to be satisfied with a response which says, `You'll save 3c or 4c', to a particular question I put to the Democrats on this matter of food when we were in committee. It is a very complicated amendment they are putting up. It may seem simple to them but to people out there on the street in Australia it is complicated, and for small business it is expensive, difficult and frustrating.As Senator Margetts said, a GST minus anything is a better GST. But we should not have a GST with any component of the necessities of life cut out from it—food being an obvious one. We should not have this GST at all. If we get it, it will be because of the Democrats' role in enabling the government to get away with the presentation of the GST at the last election.I want Senator Bourne, Senator Lees or any of the other Democrat senators to come back to that specific question about the 30c or 40c difference it makes to your lunch, your breakfast and your dinner if you are an average Australian. Where do you draw the line on this in a way which will not confuse people? How do you justify these amendments as a means of allowing the government's wider GST program to be brought in so that the average Australian taxpayer is saddled with it?11:22:004957Lees, Sen MegSenator LEES8U4SAAD00—I was hoping that we could get on with this, but I cannot ignore Senator Brown's comments. Wow—responsible for the election of the Howard government! I think there would be a few ministers who would disagree with that. Be that as it may, I am not going to walk away from our interest in staying at the table and talking about tax reform—it is a genuine interest. We believe that Australia's tax system does need an overhaul, but it has to be done fairly.Unfortunately, Senator Brown has not listened to what I said when I opened this debate, so I will have to go through it again. Very quickly on his issue of breakfast, lunch and dinner: there should be no difference whatsoever for breakfast for the average Australian. If your average Australian has cereal for breakfast, there would be no tax; with some milk, no tax.QD4BROWNSenator Brown—With soy milk?8U4Lees, Sen MegSenator LEES—With soy milk, no tax. Senator, I recommend that you actually read our amendments. If the average Australian had toast with vegemite, there would be no tax on the bread, the butter and the vegemite. If we make ourselves some scrambled eggs and sausages, there would be no tax on any of that. So for breakfast, there would be nothing.As for the bread roll, the milk and the butter, et cetera, for lunch, if you make your own lunch there would be no tax on anything. However, the tax line comes in when it is prepared. In other words, when the bread roll, the butter and the cheese are put together as a prepared product, tax would be payable.Dinner would depend on whether you go out to a restaurant or whether you prepare it in your own home for yourself. Largely—and I refer you back to the amendments again—it would depend on the level of preparedness of that meal. Some of the reasons for drawing the line at prepared or unprepared food relate to jobs. As I said earlier, we do not believe that we should see Woolworths competing against the corner store where you may pick up a pizza on the way home and you would pay tax, yet you would not pay tax when you pick it up from the supermarket. If it is a prepared meal, it should be taxed; like should be taxed as like.Senator Brown raised two other points. The first related to compensation for those small food retailers who are going to have some small compliance costs. We dealt with that amendment yesterday. We would have actually overcompensated food retailers. Amendment No. 1, which was voted down in this place, would have put in place a collection fee for small retailers equal to four per cent of the input credits on food products—in other words, they would keep some of the money—and that would cost around $120 million. The evidence before the committee is that it would cost them only about $40 million. If that amendment had been passed, they would have been well overcompensated for any additional costs or any additional computer programming they would have done with some foods GST free and some foods not.The final point is—this is one of the great furphies in this debate, and I am amazed that the government has not done a little bit more work on it; I understand they cannot because they are still sticking to their guns on food—if we take food out, the modelling brought before the committee by Chris Murphy found that the inflation rate would fall in the longer term from 0.9 per cent—this is the inflation impact of this package—to minus 0.5 per cent. In other words, by taking food out, you actually compensate for the extra money people are going to have to pay for a range of services. This still does not mean we need no compensation; far from it. Pensioners and low income earners still need that base level of compensation tied to average weekly earnings—properly, not to 25 per cent; more like 26½ per cent. But we have never been able to have discussions about this with government because they have not been interested in talking to us.I say to Senator Brown: taking food out negates most of the need for any compensation. For those people who need compensation, the smaller package of compensation will be a smaller target for future governments to have a go at removing.11:26:004958Brown, Sen BobSenator BROWNQD4TASAG00—I respond to that by asking Senator Lees whether she could give a clear exposition on the difference between the tax applying to prepared food as against not applying to unprepared food. She said it is not going to make any difference to breakfast, to cooked sausages or scrambled eggs. Is that the case for the working person who gets breakfast at a cafe or a takeaway place on the way to work? Can the senator please let the committee know about the trend which is universal but applies as much in Australia as anywhere else towards buying prepared foods rather than preparing meals at home? Has this been taken into account? Can Senator Lees tell the committee what the changes are projected to be in Australia over the next 10 or 20 years as far as consumption of prepared meals for breakfast, dinner or tea by Australians, including low income earners, are concerned?11:27:004958Lees, Sen MegSenator LEES8U4SAAD00—I am happy to respond to that. There were some projections in the evidence before the committee, and I think it is safe to say that there may be some change in behavioural patterns if we see this GST go through. That was evidence from the dietitians and nutritionists, those people who are concerned about some of the trends for Australians to move to the very highly processed and prepared foods and away from basic fruit and vegetables. I am not going to say that it would be a problem if we were to see some switch back to what we would consider to be fresh food, but by no means is that the only area that will be untaxed. All tinned food would be untaxed. Indeed, virtually everything that is now tax free in the wholesale sales tax system is in here, except for the line as far as prepared foods are concerned. That is where the change is.The other issue is jobs. In Canada there was a significant impact on the fast food industry because of the way it was introduced. We do not want to see a lot of young people's jobs under threat because of the unfair advantage supermarkets would get if their prepared food was untaxed compared with prepared food purchased elsewhere. It is fair to put a tax across-the-board. Looking at the basket of goods picked up by low income families at a supermarket, it is around 88 per cent of the items they purchase and around 83 per cent of their total expenditure on food. It has been done in a way which is certainly a lot fairer than the New Zealand model, which the government is proposing. At the end of the week, the basket of groceries taken home by low income families will be marginally cheaper in price because of the other items besides food that will come down in price—shampoos, soaps and all the other things that will come down to 10 per cent. The government cannot argue its case on the basis that some items are coming down because, with a GST on food, the basket of groceries at the end of the week is going to cost significantly more.11:29:004959Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—I would like to return to some comments the Assistant Treasurer made. I do not want to misquote you, Senator Kemp, but you were suggesting that the idea of not exempting food from the GST had overwhelming support from people or submissions before the inquiries. I suggest that you should say that you had support in the form of opinion but certainly not in the form of evidence. I would like the Assistant Treasurer to comment on those submissions to which my colleague Senator Murray has drawn the Senate's attention, specifically those submissions that looked at the positive impact, not only in equity terms but in employment terms, of removing food from the GST. When the Democrats are talking about that exemption, we are not just addressing the direct cost implications, which we have heard some reference to from the last speaker; we are also concerned with the indirect effects on matters such as employment. I have not heard a lot of debate on this matter today from the government.My colleagues have already discussed the important point that the exclusion of food from a GST would not affect the benefits of taxation reform, but I would like to look at some of the employment aspects of the amendments before us. Indeed, the exclusion of food would have a positive effect on employment. We have seen this in evidence to the various committees. In particular, evidence provided to the Senate select committee by Econtech and Monash University demonstrated that exempting food from the GST would promote the creation of something like 8,000 to 12,000 extra jobs, primarily due to the change in the tax mix between direct and indirect taxes. Senator Lees, Leader of the Democrats, has just referred to the impact the exemption would have on reducing the inflationary effects of a GST. We found through the Senate select committee process that the inclusion of food in the GST would be very likely to have a dramatic and deleterious impact on employment prospects, specifically in rural Australia. Again, we have not heard a lot of discussion about some of the concerns raised not only at the Senate select committee but at the other committees about the impact of a GST on those areas. I heard much evidence to the employment and education committee from rural and remote regions about their fears and concerns regarding the impact of a GST on their areas, in particular in relation to employment.Increases in the price of food due to the imposition of a GST would be likely to lead to dramatic changes in the pattern of consumption of fresh fruit, vegetables, meat and cereals. In particular, this could lead to a reduction in domestic sales. In the short term this could lead to the loss of around 10,600 jobs in the food and agriculture industries, the reduction of incomes of rural producers in many sectors, the loss of 2,500 jobs from outer rural regions to the cities, and an increase in the compliance cost for farmers. A food-free GST would have a dramatically different effect, particularly with the model proposed by the Australian Democrats. Modelling has estimated that there would be a doubling of the long-term economic benefits to agriculture and an increase in the consumption of fresh foods—obviously due to lower prices—and extra jobs in food and agriculture industries would be generated.While I am addressing the issue of employment and the exclusion of food, I briefly remind the Senate of the impact of a GST on those who are currently unemployed. Clearly, this is one of the big questions in the debate before us and it is no doubt one that is going to be explored a lot later as the debate progresses. But I note that while there are some positive effects, particularly associated with the exemption of food from a GST, the overall employment impact of this package is not positive. We only have to look at the impact on the tourism sector to see some of the deleterious impacts of this package on employment. But it is quite clear that the government's main interest in introducing a goods and services tax has not been employment opportunities or decreasing our levels of unemployment.Indeed, there are some very simple measures that could have been pursued but have been ignored by the government in their so-called taxation reforms. Perhaps the single most important taxation reform which could have brought a significant positive impact to the employment situation is the reduction or abolition of payroll tax. And yet payroll tax reform has been largely ignored in this package. I hear this government, and particularly the Assistant Treasurer, referring to submissions from various chambers of commerce and industry in evidence to the committees which theoretically support the government's case. Certainly, in evidence before the employment committee the government's neglect of changes to payroll tax was roundly condemned.Excluding food from the GST is jobs friendly. And it does not have an impact, as already explained by my colleagues, on the economic benefits which could be obtained from taxation reforms. I would like Senator Kemp to address some of those issues. Does he acknowledge that there is a difference between opinion and evidence in the committees? Does he acknowledge the positive and beneficial effects that could come as a result of the exemption of food from the GST—specifically in the employment area and in particular in rural areas? The Democrats are not hugging a GST—as Senator Sherry may have suggested in the chamber. It is not a case, as Senator Margetts suggested, of us hugging our GST `when all else fails'. Far from it. I reiterate what my colleagues have said. The proposed taxation of food is the most regressive and unfair part of the package.The current form of this package is not sustainable. I think it is an incredibly unfair package, especially in relation to areas like education which, contrary to government claims, is not entirely exempt from the GST. Again, that explains why the Democrats, in the set of amendments, are moving for an exemption for school tuckshops. We believe this will actually minimise the compliance costs for school P&Cs. There will be no need to collect or refund GST in tuckshops. Also, tuckshop revenues will not be counted in deciding whether P&C associations exceed the $100,000 GST threshold. So we think we have adopted quite a sensible approach to food and education, in particular to the treatment of tuckshops. We have grave concerns about this package, not only in relation to food. I would like to specifically hear from the Assistant Treasurer in relation to the impact of a GST on food in relation to employment.11:36:004960Brown, Sen BobSenator BROWNQD4TASAG00—I want to come back to Senator Lees's response to my very important question about the impact of the Democrat amendment on people buying food in Australia. We have established that it will make a difference to lunch as to whether you buy a prepared roll or whether you buy the ingredients to make your own roll. I think the impact is bigger than has been indicated by the Democrats. A really important trend in Australia is that towards people going out and buying prepared meals—including breakfast on their way to work—and taking the kids with them, very often.We can say whether we like that or not, but it will not make any difference to that trend, as you will know, Mr Temporary Chairman. I want to hear from the Democrats, who have proposed this motion which effectively says, `You pay the GST if the food is prepared but you do not if you prepare it yourself,' whether they have done the homework to show what the projected rate of increase of buying prepared breakfast, lunch and dinner is going to be on average families over the next decade or two.This is quite crucial because it is not a simple choice of whether it is taxed or not that is going to determine whether people buy their meals outside of the home. It is going to be a whole range of circumstances that are in many cases going to force that option on people. What I want to hear from the Democrats is the homework they have done to see how much this increasing impact of the GST on the food consumed by average Australians will be under their amendments.11:38:004961Murray, Sen AndrewSenator MURRAY3M6WAAD00—I probably need to be advised by Senator Brown as to where he is coming from, so that I can understand how to respond. As I recall, Senator Brown was a participating member of the Select Committee on A New Tax System. Unfortunately, I had to miss a couple of the hearings, but I attended nearly all of them. I do know that Senator Margetts participated in them, but I cannot recall whether you attended any, Senator Brown, and whether you did your homework as well on this very important question.I put that to you because at present we have a taxation system which has a series of indirect taxes, including taxes on goods and services and on food consumed by the poor, the disadvantaged and those in the lower income levels—which is what we are trying to attend to. If your philosophical proposition is that you do not believe that there should be any taxes at the indirect level at all, that I could understand. If your suggestion is, however, that some taxes are all right and some are not, I would like to know that. If you are suggesting that all food should not be taxed or that you should move through the range of definitions that we have examined and that are in the reports, then I would like to know where your definition would fall; and you haven't proposed an amendment.You see, the problem for us all, Senator Brown, is that you do not have the numbers, we do not have the numbers and the Labor Party do not have the numbers. This tax bill could go through opposed by the Democrats, the Australian Greens, the Greens (WA) and the Labor Party. Our purpose in putting through a change is indeed to make this bill better. Really, if you agree with us that food should not be taxed and you are arguing about the limits at which taxation occur, I can understand that. But what we did was to go away and do the research on the various kinds of options and work out the definition, which we drew from international precedent.If your question is, `Will there end up being definitional problems?' yes, there will. There are always definitional problems with any kind of tax. We know that; it is just a fact of life. Not everything that emerges in this six-page amendment will clear up every issue.To return to the nub of your question, we have made a judgment that we can reach somewhere between 83 and 88 per cent of all food purchased by poorer Australians at present. Your question is, `If their patterns of consumption change, what will happen?' The trend is for a change, but we have not seen any evidence—Senator Cook was the chair, and perhaps his memory may stretch a little further than mine—which extrapolates forward what the Australian expectation is of the prepared food question you have asked. I cannot recall that evidence having been presented.What was presented to us was what it is at present and what it is in other countries, but I do not know that you can automatically assume that that is what it will become in Australia. My difficulty in answering your question—and I have been very general in answering it—is that I have not got that evidence and I am not therefore able to deal with your question in the important sense that you have phrased it. And you might be right: it might well increase exponentially. `I do not know,' is the answer. I can only deal with the facts I have before me right now.Our understanding and estimation of the effect of our amendment is that it will reach between 83 and 88 per cent of the food take at present and make that food GST free. It is true that we have arrived at a narrower definition, but we had to design a definition which might have, in our view, achieved acceptability in any package that the government might have wished to change. We know this is academic. They are going to vote against it, and Labor are going to vote against it because they are voting everything down. It is just not going to get up. It was our best attempt to make the package far fairer and far more progressive and make it meet the needs of poorer, disadvantaged and lower income Australians. If you wish to put up an amendment to widen the definition, obviously that could be considered on its merits.11:45:004962Brown, Sen BobSenator BROWNQD4TASAG00—My amendment, and I believe that of Senator Margetts, is sitting here. We oppose the GST, right across the board. We do not have to move any refinements to it. The Democrats have got into this business of divining which bits of food should be taxed and which bits should not. The point I have established here is that that is without a proper analysis of the impact of the tax they want on food on average Australians coming down the line. What we can say, and the Democrats will not be able to countermand this, is that there is an established trend, which will continue into the future, for Australians to buy processed food, prepared food, outside of the home. That will increase. As that increases, the people who buy that food—that is right across the board, poor people included—will be taxed the GST under this Democrat amendment. It is not going the other way. It is going to weigh against them into the future.Here we have an amendment which is going to be regressive in that it will increasingly be an impost on poorer Australians. I do not think it will affect people on high incomes; they are spending more of their money on other things, and we would all agree on that. The Democrats' arguments against the government's GST, across the board, apply—maybe to a lesser degree—to the Democrats' amendment here. This will increasingly be an impost into the future on average income and low income Australians disproportionate to the rest of the community. It does not matter which committee we sat on or did not sit on; that is an established trend in Australia which is going to harm low income earners under this Democrat amendment.That is why I think it is perilous for the Democrats to get into the business of, firstly, saying that they will oppose the GST on food and then, recognising that is not such a good thing, trying to divine a line somewhere down the middle, with all of its contradictions and traps, that would fit the status quo. It will increasingly be an impost on poorer Australians as we move into the future. This committee is establishing that fact here and now in this debate. It is a very important point that the Democrats' amendment will increasingly incur a cost on the very people they say they are defending; that is, poorer Australians. And they do not have any information about what degree that cost is going to be.3M6MURRAYSenator Murray—And nor do you.QD4Brown, Sen BobSenator BROWN—It is not my amendment. You are moving this amendment. I am opposed to a GST on everything, including food. You are putting up this amendment, and you are responsible for the impact it has on Australians coming down the line. We have established here that that will be an increasing impact on Australians.3M6MURRAYSenator Murray—No, you have not established that. Spell out your argument. Where is the evidence?QD4Brown, Sen BobSenator BROWN—We have established that you have no evidence. The trend established in Australia towards people buying prepared food will increase into the future and it is illogical to argue—Senator Murray interjecting—QD4Brown, Sen BobSenator BROWN—Senator, if you want to argue that that trend ceases with this Democrat amendment and that, in some way or another, it is going to instantly plateau or go back, do so. But I do not think anybody out there will believe you. That is the problem you have.Senator Stott Despoja said that the Democrats had evidence that exempting food would create 8,000 to 12,000 jobs. Is that the advantage of this amendment? Is that the established fact as far as food, as now redefined by the Democrats, is concerned? Is it going to create 8,000 to 12,000 jobs to have the tax apply only to processed food but to exempt only non-processed food? If it is not, what are the facts? It is not good enough to say, `We are here creating jobs,' if you cannot specifically say what your amendment is doing. I ask the movers of this amendment: what is the job impact of your amendment as it stands, not of the exemption of food across the board?The third question I put to Democrats is the business of tuckshops. As I read it—and I would be happy to be corrected on any of this because it is not my amendment—food will be input taxed in tuckshops and food selling facilities run by tuckshop committees, school committees, parents and friends and so on, but will be exempt from the GST. Why is the food going to be input taxed? What will be the effect of that as against exempting food sold in tuckshops from input GST costs?11:50:004963Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I think the chair would admit, and probably most members of this chamber would admit, that I very rarely attack people in this chamber, because I think we should deal with issues. But, Senator Brown, you are an issue in this Senate because you are irrelevant. When you keep saying, `I have a very important question,' that very important question is important to you but not to anyone else. You are quite irrelevant in this chamber, Bob, and you are going to become more irrelevant. That is the problem, and we are spending time answering your questions.I never attack people, but you have made yourself an issue. Although I am not attacking you, I do want to deal with the issue of your questions, as an issue in itself. You make reference to the last election; the Democrats at the last election put on the table a tax package, as did the ALP and as did the government. Where was the Australian Greens' tax package? Nowhere to be seen. The only contribution that Bob made to the last election was to try to become an ornament on the bonnet of the Prime Minister's car. That was his contribution to the last election.The tragedy of the last election was that the wrong Green got voted out. Senator Margetts has made a tremendous contribution to this Senate, and I will certainly be saying that when she leaves. It is a tragedy that she lost her seat, and I am sad that she lost it to a Democrat—although we are certainly not going to reverse it. But the Green voters made a mistake: they voted out the wrong Green. The problem is that the Greens did not win one seat at the last election—they lost one—and, after 1 July, they will have one seat in this Senate.Senator Brown, you said that at the last election the Democrats helped the government to get elected. The Democrats won two extra seats, so the people of Australia made their choice about tax packages very clearly. They are not interested in the questions that you put to this chamber because they know that you are irrelevant, and they know that there is nothing to be said for the propositions that you are putting forward. Not only have we done the modelling but we have done the work, as we always do. Senator Margetts also does the work for any debate in which she takes part in this parliament, but, unfortunately, you make the same speech every time you come in here. You do not do any work. You listen for a word from somebody, you fasten onto that and make the same speech you made last time, changing only a couple of words.I do not think we need to answer any of your questions, even though there are answers to them, because you have made yourself an issue. I think it is about time that this Senate and the people of Australia realise that the contribution you have made and the contribution you are making is of no interest to this Senate or to the people of Australia.11:54:004963Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I am rather disappointed with that very personal response from Senator Woodley. I would like to point out that both in Tasmania and Western Australia, the Greens were one of the few parties in the Senate whose vote did not drop.There are outcomes of elections, but I think it is very personal and churlish to suggest that one person ought to be in the chamber and another person ought not. I want to put on the record that everybody in this place has a contribution to make, and I do not think it is for anybody to suggest that somebody ought not have their views taken into consideration, or that somehow or other someone who was voted in—correctly—is irrelevant simply because that person belongs to a party that is not theirs. Everybody in this chamber has the ability to vote according to their conscience. It does not happen in this chamber because of a lumpy, outdated and, I believe, undemocratic party structure—mostly in the major parties but also sometimes on the crossbenches.The party structure makes the votes of most people—especially in the major parties—irrelevant. The way the parties are represented in the Senate means that their vote becomes irrelevant, simply because they vote as one. If the Democrats, the Labor Party and the coalition vote in the same way all the time, then all but one of their votes become irrelevant. That is how the party system has contorted the democratic system in the Senate of Australia, and that ought to be changed. Individual senators should not be attacked for voting according to their conscience. All of us should take the individual responsibility to represent our conscience, our principles and our states, which is the way the system has been set up.11:57:004964Cook, Sen PeterSenator COOKRF4WAALP00—I think it is appropriate that the Labor Party join the debate at this stage. I do not want to interfere in the argument going on at the other end of the chamber, and I am happy to yield if that argument is not completed, but seemingly—to me at least—it has developed a circular motion and appears to be going around and around without arriving at a conclusion. I am sure honourable senators will seize the opportunity to defend their honour, but perhaps I can move on to some questions I have of the minister, acknowledging, as always, that honourable senators will do what they deem necessary and that is beyond my control.Before the chamber now is a set of amendments moved by the Australian Democrats to exempt food from the GST. It is worth recapping that in this chamber there are, essentially, four positions on the GST. The position of the government is that a GST should be as broadly based as possible—but notably not completely broadly based because it makes some exemptions, and the government no doubt will argue that those exemptions are appropriate. The government's view of what is appropriate does not extend as far as the elimination of food from the package. A broadly based GST is a regressive tax which hurts those at the middle and lower income level more harshly than those at the upper income levels in our country. Therefore, there is a compensation package to offset that. There is an elaborate but fraudulent mechanism to pretend that the GST will never rise, and there is a bribe of tax cuts—which will vanish—to encourage people to think there is some advantage in going for the cash and ignoring the principle. That is the government's position.There is the position of the Australian Democrats, which as I understand it, is to accept the principle of a GST but to turn their attention to the necessities of life by eliminating food from the package, by addressing the diesel fuel rebate in such a way as to diminish the greenhouse gas effects of increased consumption of diesel fuel, by changing the package so that the GST is not a tax on learning by taxing books and literature, and by removing some quite important elements of the package as they relate to the medical and pharmaceutical areas.There is the Senator Harradine position, in which he has nominated a range of areas he describes as including the necessities of life. His definition is much wider than food—it goes to clothing, shelter, transport and, in his own state of Tasmania, to heating costs in winter for pensioners and a range of other matters. If one wants to take an economists' view of the Democrat or the Harradine positions, the Democrat position is to structurally modify the package and the Harradine position is to seek greater compensation for the injury the package will give to those at the lower end of the income scale.Then there is the Labor Party position, which is, I acknowledge, shared by the Australian Greens. They would claim originality for it, and I am quite happy to concede their independent commitment to it from us. But we both share the same view, which is that this GST is intrinsically unfair, that it is unable to be remedied, that the package should not pass and that we are opposed to it.So, to put it in a constructive way: I agree with the Australian Democrats that food should be out of the GST—but I do not think that there should be a GST at all. As a consequence, we have formed our view. But when we turn to the debate about food as an issue, which is the debate in chief now going on in this chamber, I believe that a number of quite important elements dredged up through the Senate select committee inquiry and by public participation in the debate on the GST—the debate that we are now allowed to have but could not have before the election—ought to be raised and the government should be made accountable for its position.There has been a great deal of cant and, dare I say it of the coalition government, hypocrisy in this debate on the subject of food, which leads me to my first question to you, Minister. It is a direct question to you and I would be delighted if you would answer it. That question is: would the government now, please, set out for the benefit of this chamber what food, under its own package, is exempt from a GST?12:03:004965Brown, Sen BobSenator BROWNQD4TASAG00—I thank Senator Margetts for that very dignified response a moment ago. I do agree with Senator Woodley in one respect—that is, on his comments about Senator Margetts; we have unanimity there. Otherwise, I am not going to respond to what he had to say because it is not germane to the issue, which is one about the impact of imposing a tax on food or otherwise on the Australian people. I think, however, that Senator Woodley said that the Democrats would not respond to my questions. I do not know that his colleagues will agree with that.I want to put a couple of those questions again because they are quite important to this debate. We are here to determine whether or not to support the Democrats' amendment, and that means that we have, presumably, the correct expectation to know about some of the outcomes of that amendment. The question I put was about the impact on jobs. Can the Democrats inform the committee what impact their amendment will have on jobs? Senator Stott Despoja earlier talked about the impact on jobs of exempting food but not about the impact on jobs of the amendment. I did ask specifically about why tuckshop foods were going to be input taxed and why the Democrats had decided to allow that input tax to be put on foods in tuckshops, which is obviously going to increase the price of food in tuckshops and food amenities around the country.12:05:004965Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I think the issues that Senator Brown raises, particularly in relation to employment, are an important part of why this series of amendments is so crucial. There was a lot modelling done as a part of the Senate Select Committee on a New Tax System on the employment impacts of various models, including exemptions of food. The figures that my colleague Senator Stott Despoja gave previously, about the job benefits of this particular food definition contained in these amendments, of between 8,000 and 12,000 are generated from those modellings.The whole issue of a GST on food has obviously dominated a lot of the public debate although, in saying that, I do not in any way suggest that there are not many other issues that are important in relation to the overall tax package. Of course, there are many other Democrats amendments dealing with many of those other issues. The core issue of equity, which we have already gone into in detail, is a crucial one. The impact on employment is also a crucial reason why this amendment is so important.We would like to reiterate the request from Senator Stott Despoja earlier to the minister concerning the government's response to the Democrats' amendments as they affect employment, and particularly employment in rural and regional areas and in food production, et cetera. I would be interested in the minister's response to that. We have gone down a few other paths since that question was asked, so he may have either forgotten it or thought he had been relieved of the requirement to respond. I would like him to respond to that because employment is of course a key issue.There are broader issues as well in relation to the GST and food. Let us again look at what some other organisations have said. In a media release of April this year, the Public Health Association of Australia indicated their support for the Democrats' stance on food and our fight to leave food GST free. They said:Price is one of the most important factors contributing to food choice. A GST will establish a price disincentive for Australians to purchase the nutritious foods that form the foundation of a healthy eating program.. . . . . . . . .The PHA believes a GST on food is inequitable and will impede efforts to improve nutritional health.The health aspect of these amendments should not be ignored. I take on board comments made by previous speakers about the impact that tax signals can have on public behaviour, and obviously that impact cannot be predicted down to the last person. But the Democrats support the principle that I think Senator Margetts has outlined of using a tax system to assist in encouraging positive behaviour and discouraging negative behaviour. It is not the only thing that you use a tax system for, but the Democrats certainly believe that is a legitimate role and purpose for a taxation system, and that is one aspect of what these Democrat amendments are aimed at.The Australian Consumers Association, in response specifically to the Democrats' proposals in relation to food, said:The Democrats' revamped proposal to exempt fresh food from the GST is a positive way of encouraging healthy eating.. . . . . . . . .All the Government's strategies to get people to eat healthy food would get steamrolled by a marketplace which is counter healthy eating, if there was no change [to the GST legislation].ACOSS has, of course, spoken often about food being the largest essential item—about a quarter of the weekly budget of low income Australians. Again, let us remember that these amendments are specifically aimed at ensuring that there is not an extra excessive burden on low income Australians.The modelling that has been done indicates that, for the people in the lowest 20 per cent of the socioeconomic bracket, these amendments will exempt about 83 per cent of foods, and that proportion decreases for high income earners, which again relates to the issues of progressiveness and equity. ACOSS has repeatedly talked about how unfair it is to make the poor pay more for their food so that the better off can have a larger tax cut, and that is something that needs to be remembered in the context of the amendments that we are putting forward.I will quote what was said by one other group. The Australian Council for Health, Physical Education and Recreation, in a media release that they put out in April, said:The . . . Democrats' stance on GST exemption for healthy, basic foods should be applauded. Their stance encourages and provides incentive for Australians to make healthy food choices.. . . . . . . . .. . .. the compliance burden [of exempting basic food] would appear to be minimal on the basis of international research and the current undue focus on the compliance issues tends to detract from the more significant health and social aspects of the Democrat's policy.So there is a range of different reasons from a number of community organisations that focus on issues such as fairness, equity for lower income earners, public health and employment—all of which are crucial and all of which are addressed by these amendments.The Democrat component of the Senate select committee's report goes into a lot of detail in respect of the basis for the figures in the employment suggestions that we have put forward. As well as looking at the overall figures, we also look at the employment impacts in different parts of the community—areas such as rural and regional Australia. I seek the minister's response to some of the issues that were originally flagged by Senator Stott Despoja an hour or so ago and revisited by me.12:12:004966Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—Senator, thank you for the invitation. I always try to respond. I think I may have some faults, but a lack of willingness to get up in the chamber is not often one which is pointed to by senators around the chamber.RF4COOKSenator Cook—That was a very introspective comment.WW4Kemp, Sen RodSenator KEMP—It was a bit of a reflective at this time of the debate—why not? I was actually going to respond immediately to Senator Stott Despoja's question but as I was about to rise to my feet she walked out of the chamber. It was not clear just how urgent the response was, so I naturally decided to let the debate flow. Some interesting points were made. Senator Brown would be in blazing agreement with me when I say that he and I do not often agree on many issues—and before he gets too excited, let me say that there were quite a few things that he said which I did not agree with. But I think he did draw together some useful points. I will come back to the modelling, but he did ask a very significant question. With modelling, as all of us know—particularly after this process—you feed your assumptions in and that can obviously alter the nature of what is produced. It is the old GIGO rule. I think Senator Murray would know what that means; it is often applied to some cases—garbage in; garbage out. Senator Stott Despoja, it is very nice to see you back in the chamber.3I6STOTT DESPOJASenator Stott Despoja—I was listening intently from my office.WW4Kemp, Sen RodSenator KEMP—I am very glad to see that you were pinned to your TV set rather than being on the TV set in one of the shows that are displayed.3I6STOTT DESPOJASenator Stott Despoja—Your loss, Senator Kemp.WW4Kemp, Sen RodSenator KEMP—Nonetheless, I make that point, and we are all exceedingly envious of that.3I6STOTT DESPOJASenator Stott Despoja—Don't I know it!WW4Kemp, Sen RodSenator KEMP—Senator, the first point that Senator Brown made was a very good point. I do not think the model that you quoted was the model which relates to the amendment, but I will have some of my very talented advisers check this out for me. Of course, models were mixed on this. I am aware that the Dixon model showed a small gain and, from memory, the Murphy model showed no gain. I will check on that but, as I said, that is from memory. That is the first good point that Senator Brown made.The second good point Senator Brown made was in drawing the attention of the chamber to the great complexity which can occur. He quoted his famous example of the bread and the banana sandwich. I do not think it was directly and clearly answered; others will judge that. I have a whole list here of anomalies that tend to support the position that Senator Brown raised on the complexity issue. I will quote a couple of examples, and these tie in with some of the equity issues. Fresh crayfish would be GST free but frozen fish fingers would be taxable. Fillet steak would be GST free but frozen hamburgers would be taxable. We can go through a whole host of those issues, but I think that Senator Brown, in his inimitable way, did highlight the great complexity that this issue deals with.I am a listener to this part of the debate. After all, this is not an amendment I have moved—it is an amendment someone else has moved. I am intrigued that I am suddenly being asked questions in relation to somebody else's amendment. Nonetheless, as a good-natured person I come back into the ranks. From my perspective, I do not think the Democrats dealt with the equity issue at all. It is one thing to keep on saying that this has more equity but, as Senator Brown usefully pointed out, this has not been modelled. With regard to the proposal that you have put, the redistributive effects simply have not been modelled. As I said, there is an overwhelming weight of evidence that more of the benefits of this will flow to higher income groups than to lower income groups.Senator Brown drew a different conclusion to what I would have drawn in the end about the whole package but, if I understand Senator Brown's point correctly, I just do not think that the Democrats can avoid that issue. You cannot avoid the complexity issue; it is one which is relentlessly raised all the time. I will not take up the time of the chamber, but I am happy to give to the Democrats a list of some of the anomalies that the government sees in this and the complexities which would inevitably occur as a result of this particular amendment.On the modelling issue, the government takes great comfort from a range of models which have been done, looking at the effects of economic reform. There has been a whole host of people who have done some work on this. For example Access, in their December 1998 AEM forecast, said that the good news was that the tax cuts sweetening the GST were expected to stimulate renewed job growth, perhaps sending employment down to seven per cent in 2001. They further said that, in the long run, the impact of the package would raise national output by 2.5 per cent and that there would be an additional 190,000 jobs.It is true that we will have a frank exchange of models. If you feed certain assumptions in, you get certain results. The question is: are those assumptions fair and reasonable? We have had this debate in this chamber at length and we have discussed this at question time. I do not accept the position that Senator Stott Despoja has put forward. As I said, we can provide a list of other models that have been done. I do not think the figures she quoted relate to the amendment before the chamber. Indeed, as I understand the Murphy model, it did not actually endorse the position that Senator Stott Despoja stated to us.There was an issue raised by Senator Cook. He asked if there were any examples of where food was provided GST free in the government's package. If Senator Cook is a student of the ANTS package—his advisers clearly are—he will know that food is only GST free where it is provided as part of a GST-free service. For example, food that is provided as part of a medical service or a residential care service is eligible for GST-free treatment. Clearly the government has done this because food is provided to patients when they are in hospitals. They do not typically seek out medical treatment in hospitals to get their meals GST free. That is a sensible and practical approach, and I think that would be endorsed by this chamber. That is a very different matter to the sort of amendment that we are considering here.I have listened carefully to the debates and I have listened, as have all senators who have an interest in this matter, to the evidence that was provided to the committees on this issue. My feeling is that the Democrats have adopted a very early position on this particular matter. It is a somewhat inflexible position—a non-negotiable position, as I think has been emphasised again and again. For those who want negotiations, this is a non-negotiable position. A fair reading of the evidence given to the committee by groups that were not unsympathetic to some of the things that you were saying, Senator, would be that there was very little comfort in that evidence. Senator Bartlett quoted groups of some people that he felt supported the position. That is fine; my judgment—and I think it is a fair judgment—is that the overwhelming weight of evidence does not support that.Let me quote, for example, the Wesley Mission, who gave some evidence. They provide services to over a quarter of a million people in the community each year. They said:The Wesley Mission supports the GST because we believe it provides a greater resource to fund the ever increasing cost of administering government within Australia, particularly in the welfare sector.We can argue that point, but they went on to say:Wesley Mission would be sympathetic towards a no exemptions GST, partly because there are too many `me too' illustrations being brought forward which provide a whole range of complexities to legislation that is designed to replace an already complex and difficult to administer set of legislation. So we would be sympathetic in some respects to that.We can all quote examples, but in the end a balance has got to be made. Governments have got to make decisions and, as I said, this food issue has been extremely well canvassed. I do not think the Democrats have dealt effectively with the equity issue. I think the international comparisons can easily be used to counter the Democrats argument. I know that Senator Bourne made some points, but I am unpersuaded by them because I think you could equally argue, from what seems to be almost the same table, a quite contrary position: that most countries in fact impose a GST on food. Then you people bring in refinements, and we can have a debate on that. But to suggest that that is an overwhelming weight of evidence is not sustained in terms of the tables which have been produced.The complexity argument has not been dealt with by the Democrats, and I think it is very difficult to do it. Once you move down this route, you introduce a whole range of complexities and you get a whole host of anomalies. Senator Brown's contribution this morning has been quite interesting to show very briefly the anomalies which occur. I do not think you dealt with that issue. I therefore indicate—this will not surprise you, Senator Stott Despoja and Senator Murray, but stay tuned—that the government will not be supporting this amendment.12:24:004969Murray, Sen AndrewSenator MURRAY3M6WAAD00—I must respond to a few of the questions put to us, since it was our amendment. Thank you for your questions, Senator Brown. I actually think they are quite helpful in fleshing out a couple of issues. Let me try to respond to you.One of the questions you asked related to item 6, which is that a supply of goods and services by a school tuckshop or canteen is input taxed. At the moment what happens with a school tuckshop or canteen is that they cop whatever taxes are there, for example, wholesale sales tax on cool drinks that they sell. The government proposes that they be taxed if they exceed the $100,000 level, as I understand it. We did not want them to be taxed on food and we discussed the matter. It was put in evidence, as you are probably aware, to the committees. We looked for a measure which would be most likely to keep them below the $100,000 level and would be most likely to reduce compliance costs, and the best way we could work out to do that was in fact to make them input taxed so that they did not charge a GST and did not make any GST claims. It simply kept them pretty well clear of all the admin and everything else that has to go with this. We saw that as the easiest way to deal with it. You may have a different view, but that was our best method of keeping their prices down and keeping them free of having to charge GST to their students.The jobs issue is a key one. The Australian Democrats are not a well funded political party. It might be of interest to note that we get one seat for every 375,000 votes that are recorded for us, so we tend to be very under-represented in relation to our public support.RF4COOKSenator Cook—Oh!3M6Murray, Sen AndrewSenator MURRAY—It is true. The number of seats for the Labor Party, by comparison, is about one for 80,000 or 90,000 votes, so that gives you an idea. Despite that great support, we do not have great funds. That is simply a longwinded way of saying that we have not got the funds to do the modelling. So we did not develop this definition prior to the select committee's considerations, we developed it after the select committee's considerations. It was the select committee that did the modelling. Plainly, our definition could not be exactly modelled. What was modelled was the following. Again I will use the presence of the chair of that committee, Senator Cook, as a reference point in case I slip up with my memory. Professor Dixon, using the Monash model, modelled a very basic definition of food which he costed at around $2.5 billion. Mr Murphy, using his model, modelled a slightly wider definition than we are using, which I recall was costed at around $4.5 billion. Anyone knows that the consequence of modelling is that you cannot be exact, and Mr Murphy's figures were that there would be an 8,000- to 12,000-job improvement in the short term from making food GST free.WW4KEMPSenator Kemp—What about the long-term effects?3M6Murray, Sen AndrewSenator MURRAY—He said that the long-term effect was that it evened out, and he said that for the entire GST package. That is why I qualified it with `short-term'. The point to make is one which all economists would make, and those with economic training in the chamber would know that. If prices go up, jobs fall. That is why people argue against major increases in wages, in prices of goods, in prices of services and so on.It is accepted by all the modellers and commentators that, for instance, raising the prices of the tourism sector, which will happen, will result in a fall in jobs. It is accepted that a fall in prices in the manufacturing sector will actually increase jobs. So the six to seven per cent increase in food prices will result in a loss of jobs and, if you take that increase away, which is our intention, obviously the potential loss of jobs falls away and there is a possible job increase. You want a specific, modelled answer to this definition. There is not one. This definition was not modelled. A narrow definition was—by Professor Dixon—and a slightly wider definition was modelled by Mr Murphy, and the best I can do is refer you to the evidence accordingly.Senator Kemp, you made a number of remarks about the OECD and the fact that most of its members do in fact tax food. You are accurate in that assessment, but on equity grounds they differentiate, in the taxation of food, from the standard rate. Belgium: basic food is six per cent; the standard rate is 21 per cent. The difference is 15 per cent, which is greater than the 10 per cent you seek to impose, Minister. Germany: the basic food rate is seven per cent and the standard rate is 15 per cent; the difference is eight per cent. So you can see in each of these cases that a major differential is offered. It is offered on equity grounds; that is why it is there.The Greeks tax basic food at eight per cent; the standard rate is 18 per cent—a 10 per cent difference, so that would be just the same in our society as giving your rate of 10 per cent and giving food nought, the same difference. Spain: the basic food rate is four per cent; the standard rate is 16 per cent—a 12 per cent difference, greater than your 10 per cent rate. France: the basic food rate is 5½ per cent; the standard rate is 20.6 per cent—only the French would rather have 0.6 when everybody else's is a straightforward number—and the difference there is 15 per cent, which is 50 per cent greater than your 10 per cent.Ireland: the basic food rate is nought and the standard rate is 21 per cent—a 21 per cent gift on equity grounds. Italy: the basic food rate is four per cent, the standard rate is 19 per cent; the difference is 15 per cent, again 50 per cent greater than your 10 per cent. Luxembourg: the basic food rate is three per cent; the standard rate is 15 per cent—a 12 per cent difference. The Netherlands: the basic food rate is six per cent, the standard rate is 17½ per cent; the difference is 11½ per cent—greater than your 10 per cent. Austria: the basic food rate is 10 per cent and the standard rate is 20 per cent, a difference of 10 per cent. That is exactly what we are suggesting in Australia: a difference of 10 per cent between a standard rate and zero rated food.Portugal: the basic food rate is five per cent; the standard rate is 17 per cent—a difference of 12 per cent. That is a greater gift to equity than your rate. Finland: the basic food rate is 17 per cent; the standard rate is 22 per cent—a difference of five per cent. It is less than yours. Sweden: a basic food rate of 12 per cent and a standard rate of 25 per cent; 13 per cent is the difference. Great Britain: a basic food rate of nought per cent and a standard rate of 17½ per cent; the difference is 17½ per cent. Canada: a basic food rate of nought per cent; the standard rate is seven per cent, so the difference is the full seven. Iceland: a basic food rate of 14 per cent and a standard rate of 24½ per cent, a difference of 10½ per cent—again greater than your 10 per cent.Mexico: a basic food rate of zero and a standard rate of 15 per cent, a difference of 15 per cent. Switzerland: a basic food rate of two per cent and a standard rate of 6½ per cent, a difference of 4½ per cent. Turkey: a basic food rate of one per cent and a standard rate of eight per cent, a difference of seven per cent. Poland: food is zero rated and the standard rate is 22 per cent, a difference of 22 per cent. The Czech Republic: a basic food rate of five per cent and a standard rate of 22 per cent, a difference of 17 per cent. Hungary: a basic food rate of 12 per cent and a standard rate of 25 per cent, a difference of 13 per cent. Korea: food is zero rated and the standard rate is 10 per cent, a difference of 10 per cent.I have taken you somewhat painfully through all of that to indicate that, whilst it is true that out of the countries I have listed only six zero rate food, all the others apply a differential which in nearly every case is greater than the differential between the 10 per cent you are proposing for the GST and the zero rating we are proposing. The reasons they do that are that it does not harm the economy, it is not overcomplex and it produces greater equity. So that is my answer to that remark of yours.The second thing that I have found intriguing throughout this debate, Minister, and perhaps you would like to answer this question a little later, is this: I would like to know if in 1993 Mr John Howard, Mr Peter Costello and you were parliamentarians, if you fought the election in 1993 and if you went to that election arguing that food should not have a GST on it. If you did, I want to know if you publicly supported that position or if you publicly opposed that position and why you and the other two individuals would think it perfectly acceptable to fight an election in 1993 on food not being taxed when suddenly in 1999 this is an unbearable evil. That is an important issue.RF4COOKSenator Cook—The unbearable likeness of being.3M6Murray, Sen AndrewSenator MURRAY—Yes.WW4KEMPSenator Kemp—We lost that election with food out.3M6Murray, Sen AndrewSenator MURRAY—Yes, but it is an interesting idea, isn't it? Here is something which you find so appalling in 1999—you say we will gut the package, we will ruin the economy and send us all into doom and disaster—but which the rest of the world coped with quite well and for which in 1993 you went to the people and said, `Yes, let's not have food taxed.' That is a very strange approach. I will leave it there. I think there was a major question on equity and I will deal with that at length further on. I think, Senator Cook, you might have wanted to follow on with additional questions.12:37:004971Cook, Sen PeterSenator COOKRF4WAALP00—There are a few minutes remaining before we adjourn for lunch so I will return to my question to the minister. My question was based on the key argument of the government that the Democrat amendments are unreasonable in part because they introduce a higher degree of complexity than is necessary. My question was: would the minister point out where food is exempt from the GST in the government's own package? In answering that question, Minister, you used the example of patients in a hospital because the medical field is exempt from a GST, in part but not in whole. Hospital patients who are fed while undergoing attention in a hospital get their food GST free, but those who visit them and take a meal in the hospital canteen do not. Those who serve their needs, the nurses and medical staff, do not. They pay a GST for their food. I have a series of questions which you may care to answer. If a patient is an outpatient but has been prescribed a particular diet by the doctor, is their food GST free or do they have to pay the GST? Your example was in the medical field only and I do not want to be unfair to you so I will describe the way I heard it and you can correct me if I am wrong. You made it appear that this was the only or predominant area.WW4KEMPSenator Kemp—No, it was an example.RF4Cook, Sen PeterSenator COOK—Okay. Would you agree with me that passengers on inbound international flights get their food GST free? Would you agree with me that, for owners of greyhounds or horses whose business is racing greyhounds or horses, the food for the greyhounds or horses—or for that matter any farm animal—is GST free, but the food for the human owners is not? Would you agree with me that, in the case of some of those animals, particular diets are necessary and those diets consist of food which a human could consume, but if the humans in the family consume any of the animals' food they would have to rush down to the shop and pay a GST on it because it is GSTable? If anyone buys more food for their animals than is necessary and the family consumes part of that then they have to pay a GST. Isn't that a complexity and how do you detect it in those circumstances?They are examples of complexity that you have not gone to in your own package. More importantly, if you turn to page 91 of the ANTS package, this lavish document printed at taxpayers' expense as government propaganda and sent to all of us before the election to explain your GST package, you will see on the outside column the heading `Import tax credits'. Since we are coming up to time, you may give some thought to this in the break and reply to this in greater detail when we resume. In the `Input tax credits' column there appear these words at the end of the second paragraph:Input tax credits will not be allowed for the GST paid on certain inputs that are essentially private in nature (for example, meals and entertainment expenses).Let me emphasise some of those words: `will not be allowed for the GST paid on certain inputs that are essentially private in nature'. It then gives an example.Isn't it true, Minister, that a business person attending a business convention on, say, the Gold Coast and claiming the business convention as an input to their production will have their airfares to get there, the accommodation to stay there and the food they eat while they are there GST free? As I read your tax package, those expenses are regarded as an input to production. If you were a lawyer attending a legal conference on the Gold Coast you would not pay GST on your airfares or your hotel and you damn sure would not pay GST on the food. Isn't that a degree of complexity? In fact, if the average Australian wanted to see people consuming GST-free food they should just rock on down to the nearest five-star hotel on the Gold Coast and watch business travellers consume a GST-free high-class piece of tucker while they have to go down to McDonald's and pay a GST on their hamburgers.Isn't this a degree of complexity that is hidden, much like your high-roller tax was hidden, in this package? Isn't this a degree of complexity to which publicly you have not referred? Isn't this a degree of complexity which is embarrassing to the government when it maintains that there is no complexity on the food issue? They are the questions I have for you, Minister. Perhaps you may care to answer them.12:44:004972Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We are running out of time, but I would be delighted to answer the questions. I want to briefly comment on the intervention that Senator Murray made. Senator Murray read out at very great length a table; it may have been easier if the table had been incorporated into Hansard and we could have saved some time. It does not deal with the central argument that was put by the Democrats—that it supported the argument for GST-free food. The fact of the matter is that most of the cases Senator Murray showed in that table, from memory, showed that in most countries there is a GST on food. I am unpersuaded by that point that Senator Murray made.Progress reported.Bills4972r6764972Debate resumed from 18 February, on motion by Senator Ian Campbell:That this bill be now read a second time.12:45:004972Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—The Migration (Visa Application) Charge Amendment Bill 1998 is listed as non-controversial. The opposition supports the legislation. In the Senate Legal and Constitutional Legislation Committee report of April this year on this piece of legislation, which was called The Provisions of the Migration (Visa Application) Charge Bill 1998 , the committee recommended the legislation be carried and that the bill stand as printed. There is no other comment. It is one of the few pieces of immigration legislation that has received the unanimous support of a committee; there is no dissenting report. It is a technical bill which the opposition supports and recommends that the Senate carry forthwith.12:46:004972Patterson, Sen KaySenator PATTERSONLI4VICLP10—I thank honourable senators for their support of the Migration (Visa Application) Charge Amendment Bill 1998 , and I thank Senator Schacht for being so succinct.Question resolved in the affirmative.Bill read a second time, and passed through its remaining stages without amendment or debate.Bills4972r6944972Debate resumed from 17 February, on motion by Senator Abetz:That this bill be now read a second time.12:48:004973Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—The opposition supports the Superannuation Legislation Amendment Bill 1998 .12:48:004973Patterson, Sen KaySenator PATTERSONLI4VICLP10—I wish to thank honourable senators for their contributions to and support for the Superannuation Legislation Amendment Bill 1998 . I know people are supporting the bill, so I commend the bill to the Senate.Question resolved in the affirmative.Bill read a second time, and passed through its remaining stages without amendment or debate.Bills4973s2014973Debate resumed from 10 March, on motion by Senator Ian Macdonald:That this bill be now read a second time.12:50:004973Cooney, Sen BarneySenator COONEYSF4VICALP00—The Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 in effect amends the crimes legislation of Australia. It arises out of an OECD convention on combating bribery and the implementing of legislation. It makes it an offence for an Australian citizen or an Australian resident to bribe or attempt to bribe an official in an overseas government.I will say a couple of words about the convention. The convention went through the Joint Standing Committee on Treaties, as Senator Schacht knows. Since becoming a member of the Joint Standing Committee on Treaties, he has become a very vocal member of that committee. The inquiry carried out by the Joint Standing Committee on Treaties was chaired by Senator Coonan, who is very knowledgeable in the field of law. I think tribute ought to be paid to her for the work she did in this respect, as well as to the secretary of that committee.This is a first step. The countries who are members of the convention are OECD mem bers. Perhaps a lot of the corruption that goes on does go on outside that particular organisation, although I am not saying that there is none within that organisation. Certainly a lot of it goes on outside the OECD.What is being sought here is to begin a cultural change so that business can be conducted around the world as it ought. We hear about performance enhancing drugs in sport. People are down on those sorts of drugs because they allow people to compete above and beyond their merit. In other words, merit does not become the test of who wins, but untoward conduct does. In the same way, this particular legislation is aimed at ensuring that the recipient of any contract around the world is the best person to have contended for it. In other words, it is an attempt to have business around the world conducted on the basis of merit, not on the basis of nepotism whereby people might get a contract because they are related to the person who has the ability to give it; not on the basis of the payment of money; not on the basis of the giving of services, but very much on the basis of merit: who is the best person to get this contract in terms of his or her ability?That is a very important move because, if business or trade or the transfer of money, services or otherwise is corrupted, then it is to the disadvantage of everybody, not only in terms of the moral outrage that that presents—that is one of the foremost issues—but also in the practical effects that that has. The corruption of trade or business leads to a situation where business is less able to be as successful as it might otherwise be.Perhaps if I read some of the headings to the bill, the flavour of it will be seen. Division 70, `Bribery of foreign public officials', is followed by definitions of particular terms such as `benefit', `benefit advantage', `control' and so on. There are other headings: `Bribing a foreign public official', `Defence—conduct lawful in foreign public official's country', `Defence—facilitation payments' and so on. It defines the areas that are to be covered.It deals only with people who are in government. Trying to bribe somebody in a country outside Australia in private enterprise does not fall within this bill. That becomes an issue as governments tend to outsource things, but it is not dealt with here. It is a start of a regime that happily will extend so that corruption, not only in terms of the corruption of government officials but the corruption of anybody around the world, will become a criminal offence in this country.It also shows the need for countries to undertake responsibility for their own citizens and for those who reside within the country. You can have world courts but the only problem there is that world courts cannot enforce their decisions; whereas, if you had domestic courts enforcing laws which cover the international scene, what is done in other countries, then I think much more effect can be obtained, and that is what is done here. It is a good piece of legislation. I commend the treaty which gave rise to it. As a matter of prejudice, being a member of the Joint Standing Committee on Treaties, I commend it and I commend Senator Coonan for her effort in this regard.12:57:004974Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—The Democrats will be supporting the Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 . We are glad to see that the government has reached an agreement with the Labor Party in relation to their amendments. I concur with Senator Cooney's comments in relation to the work of the Joint Standing Committee on Treaties and the ministerial response that was tabled in this place a short time ago.The Democrats have previously put on record our concern about the ongoing use of bribery in business internationally; and specifically in our region, with the political and economic developments of the last year, we are very conscious of these issues needing to be resolved. We are very concerned and hope that Australia will provide a leading example of the long-term strengths of honest international business. As a country, we enjoy an excellent reputation internationally and our legislative response should not allow for any other possibilities.We have put on record before our concerns in relation to the use of facilitation payments. Anecdotally, the use of facilitation payments by some businesses have been responsible for some of the distortions in business processes within the economic systems of some of our nearest neighbours. It seems that on occasions all that is required for a bribe to become legal is that an official assures you that the business deal would go ahead. Any money offered after that moment is a facilitation payment after a bribe, rather than a bribe. I have made these comments in the chamber before, so I am glad to see that amendments in relation to that section have been proposed and accepted. The Democrats will be supporting the bill.12:59:004974Mackay, Sen SueSenator MACKAY9L6TASALP00—On behalf of the opposition, I indicate that the Labor Party strongly supports the Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 . Corruption is a scourge on many countries throughout the world. Research carried out by the IMF shows that corruption gives bureaucrats an incentive to increase needless red tape, and it further saps the confidence of investors. Countries in which corruption flourishes are the countries which invest least in education.Over the past decade, the issue of bribery has come under the microscope as never before. Corruption has played a part in the dismissal of governments from Zaire to Brazil and from Indonesia to the UK. The OECD convention on bribery, and hence this bill, emanated from these and other experiences.The opposition will be moving four amendments to the bill. We have discussed them with the government, and we understand that the government intends to support all four amendments. On behalf of the opposition, I would particularly like to thank Senator Vanstone and her staff, who have played a very constructive role in relation to this process. As Senator Stott Despoja said, I think both sides recognise the importance of the bill and of getting it right the first time. The differences in our discussions were not ideological. We were all working towards the common goal of making this legislation as good as it could possibly be at this point. On behalf of the opposition, I would also like to thank Transparency International—and, in particular, Peter Willis and Peter Rooke for their helpful comments in relation to this legislation.The first amendment to be moved by the opposition is to insert in clause 70.2, after paragraph (3)(a), the following words:(aa) the value of the business advantage;Clause 70.2(1) sets out the primary offence. Clauses 70.2(2) and 70.2(3) then go on to state that, when determining what is a `benefit that is not legitimately due' and what is `business advantage that is not legitimately due', certain things should be ignored. One would expect that the same matters would be ignored in both cases but, as currently drafted, the matters to be ignored are not the same. Clause 70.2(2) includes `the value of the benefit', but clause 70.2(3) does not include `the value of the business advantage'.The risk is that a court interpreting the legislation might take this to mean that, by omission, the value of the business advantage was a relevant factor in deciding whether the business advantage was legitimately due. This is obviously not the intention of the explanatory memorandum and this amendment is simply designed to clarify that.The second amendment we are moving is to clause 70.4, inserting before paragraph (1)(a) the following:(aa) the value of the benefit was of a minor nature; andClause 70.4 is the facilitation payment defence. It sets out conditions under which a person will not be guilty of bribing a foreign official. As the OECD convention envisaged, one of the conditions of that defence is that the amount of the bribe be small. As paragraph 44 of the explanatory memorandum puts it:Use of the term `minor nature' ensures that the legislation achieves the intention of the OECD Convention that the quantum be small . . . Use of the term `minor nature' will enable the court to take all appropriate circumstances into account and to decide whether the nature of the payment in a particular case is minor.The opposition's view is that this is not achieved by the present legislation. As it reads now, the first part of clause 70.4(1) says:(1) a person is not guilty of an offence under section 70.2 if:(a) the person's conduct was engaged in for the sole or dominant purpose of expediting or securing the performance of a routine government action of a minor nature; and . . . As presently drafted, this clause does not achieve the intention of the explanatory memorandum, and the term `minor nature' goes not to the quantum of the payment but only to the nature of the government action. This amendment will remedy that and ensure that the legislation reflects the aims of the explanatory memorandum.I will not read the text of amendments 3 and 4—probably much to the relief of the chamber. Their effect is to extend the legislation from Australian citizens to Australian residents. This is not groundbreaking. The legislation making overseas paedophilia illegal also applied to Australian residents.The amendment also contains a restriction: proceedings against an Australian resident cannot be commenced without the Attorney-General's written consent. This is appropriate given the somewhat looser ties that bind residents to Australia as compared with those that bind citizens to Australia. I commend all four amendments to the chamber.13:04:004975Murray, Sen AndrewSenator MURRAY3M6WAAD00—Senator Stott Despoja has already indicated that the Australian Democrats welcome the government's Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 and the Labor Party's amendments to that bill. This bill has appeared relatively quickly. The convention which initiated it was concluded in December 1996. In the ways of legislatures, to get it into play three years later is relatively quick. However, we should recognise that there has been business resistance to it and that has somewhat delayed the government's introduction of it. I am very grateful that the government has seen fit to resist business pressure not to introduce this.A marvellous organisation called Transparency International Australia, which circulates its newsletters to all parliamentarians, keeps a watching brief on this matter. In October 1998, it provided to the Economist magazine a corruption index for 41 countries. Transparency International is an anti-corruption organisation based in Berlin but, of course, it has an Australian chapter. Scores from the organisation range from 10, which they describe as `squeaky-clean', to nil, which they describe as `corrupt'. In their list of 41 countries, the most squeaky-clean was Denmark and the least squeaky-clean, or the most corrupt—whichever way you want to look at it—was Cameroon. I do not think it is very good for a country to be right at the bottom.Where did Australia fit? Australia fitted at No. 7. Speaking for myself, and probably for the other senators here, I would rather that we were at No. 1. In other words, there is room to improve our own performance in this regard. The top seven were: Denmark, Sweden, Canada, Singapore, the Netherlands, Switzerland and then Australia. I am pleased that we were in the top 25 per cent of those 41 countries spelt out.I should indicate that we trade with a number of countries which feature very much in the bottom sector of that list. Among those in our own region are South Korea and then, getting more corrupt, the Philippines, then getting more corrupt after that, Thailand, and, more corrupt after that again is Indonesia, which is only third from the bottom of the list. I draw this to your attention because much of our trade and international business activity is with countries whose standards are not high. I think it is absolutely vital that we promote a culture of morality through our businesses operating in foreign countries.I am very grateful to the government for reinforcing that message, because I want to draw attention to a mind-set which still exists in business. This is an extract from the ACCI Review of April 1998. The ACCI represents many hundreds of thousands of businesses. This is what it said in its leading paragraph:The OECD convention and related legislation on bribery are likely to compromise the capacity of businesses to compete in a number of markets. The better approach to deal with these problems is to develop a multilateral agreement on corruption under the WTO. The treaties committee of the parliament should recommend against accession to the convention for the time being.Thank goodness the treaties committee did not listen to them either! What does that say to you about the morality of these people? It says that economics, markets and competition come first for them. These are the same people who say: it is in the interests of Australia to do away with unfair dismissal applications; it is in the interests of Australia to apply youth rates right across the market; it is in the interests of Australia to have the lowest wages possible; it is in the interests of Australia to tax food. They are also saying, `By the way, it is in the interests of Australia not to have a law that prohibits the bribery of foreign public officials.' I am really grateful that the government has rejected that attitude; it is a credit to it. The message to us is that we need to be alert to and to resist the attitude that bribery is sometimes acceptable if practised by others, both domestically and internationally.I draw your attention to another article, which was in the Business Review Weekly of 15 February 1999. It led in as follows:British crime authorities claim that accountants are turning a blind eye to the establishing of complex structures by money laundering clients. Accountants gave authorities only 44 tip-offs in 1997 compared with 7,000 from banks and 14,000 from all sources. Peter Jolly, chairman of the Australian Institute of Chartered Accountants task force on fraud, says conferences here have made accountants realise that their forensic skills are valuable to the authorities.I draw your attention to this because the previous government introduced the Austrac method of picking up money laundering activities through financial institutions. The banks have been very cooperative and have greatly assisted in that matter.However, it is only recently that professionals such as lawyers, accountants and valuers—people who know things are going on—have started to blow the whistle a little more. I encourage the government to examine corporate law and other forms of law to ensure that people who have a position of trust in our society act in favour of Australia by exposing money launderers, tax avoiders, people who bribe and people who are corrupt.The government has made an important step along a chain of activity which would increase and improve Australian accountability. One of the reasons I am speaking here is because I have the Democrats' business and corporate affairs portfolio. I will be looking for ways to encourage corporate law to encourage accountants, valuers and lawyers to expose issues which they otherwise might regard as professionally privileged when, in fact, they are matters of corruption. I look forward to getting the support of other members of the chamber in that regard. The Parliamentary Secretary to the Minister for Immigration and Multicultural Affairs and the government have had a lot of compliments from me in this speech. I think they deserve them. I thank the government for introducing the bill.13:12:004977Patterson, Sen KaySenator PATTERSONLI4VICLP10—I thank all senators for their cooperation on and interest in the Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 . The passage of this legislation will enable Australia to fulfil an important obligation that it undertook when it signed the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions on 7 December 1998. The government is appreciative of the exhaustive examination of the draft legislation by the Joint Standing Committee on Treaties and of the work of Senator Coonan, who chaired the subcommittee of that committee, and of all the members who participated. The government is very grateful to those people.The bill agreed to by the Senate includes three amendments which were raised by the opposition following introduction of the bill in the Senate. The government is happy to accept the opposition amendments. Also, I appreciate Senator Mackay's comments. It is not often that you hear a comment of gratitude towards a minister. I remember doing that when Senator Tate and Senator Richardson were very cooperative when I was in Senator Mackay's position of taking legislation through. It is the sort of thing that the public does not often see. When they see us champing at the bit across the chamber, they do not see the cooperative effort that goes on behind the scenes to get amendments that will make legislation better. Governments should always be grateful to oppositions for identifying problems. I know I was most pleased when Senator Richardson acknowledged my contribution to a social security bill. I think it is appropriate that it be acknowledged, and I thank Senator Mackay for her comments.The government looks forward to reporting to the OECD that Australia has passed the implementing legislation with the support of all the groupings in our parliament. The message that is sent to the international community about our attitude to corruption is very important in a world where trade between different countries is increasingly influencing domestic policy. I thank honourable senators for their comments. I thank Senator Murray and Senator Stott Despoja for their complimentary comments, and I thank all senators for their respective contributions to the passage of this important piece of legislation through the Senate.Bill read a second time.4977The bill.Amendments (by Senator Mackay)—by leave—agreed to:(1) Schedule 1, item 2, page 8 (after line 14), after paragraph (3)(a), insert: (aa) the value of the business advantage;(2) Schedule 1, item 2, page 11 (after line 11), before paragraph (1) (a), insert: (aa) the value of the benefit was of a minor nature; and(3) Schedule 1, item 2, page 13 (after line 14), after subparagraph (b) (i), insert: (ia) at the time of the alleged offence, the person is a resident of Australia; or(4) Schedule 1, item 2, page 13 (after line 19), after subsection (1), insert: (1A) Proceedings for an offence against section 70.2 must not be commenced without the Attorney-General's written consent if: (a) the conduct constituting the alleged offence occurs wholly outside Australia; and (b) at the time of the alleged offence, the person alleged to have committed the offence is: (i) a resident of Australia; and (ii) not an Australian citizen. (1B) However, a person may be arrested for, charged with, or remanded in custody or released on bail in connection with an offence against section 70.2 before the necessary consent has been given.(5) Schedule 1, page 14 (after line 14), at the end of the Schedule, add:4 The Dictionary of the Criminal Code Insert: resident of Australia means an individual who is a resident of Australia.Bill, as amended, agreed to.Bill reported with amendments; report adopted.4978Bill (on motion by Senator Patterson) read a third time.Sitting suspended from 1.17 p.m. to 2.00 p.m.Questions Without Notice497849784978Conroy, Sen StephenSenator CONROY3L6VICALP00—My question is to Senator Ellison, the Minister representing the Minister for Finance and Administration. Does the minister concede that the issue of the full sale of Telstra, as set out in the budget papers, contains significant elements of inherent fiscal risk? Isn't the full sale of Telstra completely dependent on assumptions on which the government has no guaranteed basis for proceeding, such as support from the National Party and a tick from the still undefined independent review? Doesn't the government's own charter of budget honesty require a comprehensive detailing of these fiscal risks in the budget papers? Where are they, Minister?4978Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—Contrary to opposition claims, the possible blocking of the Telstra sale bill has been included in the budget statement of risks. The budget clearly states in Budget Paper No. 1 at page 4-28 that revenue from the sale could be placed at risk if the Telstra (Transition to Full Private Ownership) Bill 1998 does not pass parliament. The government is continuing to negotiate with the Senate to address their concerns with the draft sale legislation and we fully expect the bill to be passed. The full sale of Telstra was an explicit election commitment which was unequivocally affirmed by the people of Australia when they elected this government in October last year. Accordingly, its inclusion in the budget papers is entirely appropriate, and I call on the other side of the chamber to abandon its petty opposition to the full sale of Telstra.The sale of Telstra will give this country a chance to be debt free by the year 2002-03. No longer will the people of Australia be wearing the yoke of an outstanding debt which the opposition brought about. As those who are listening would know, a mortgage for an average man or woman can be a great disability, and that is how this debt is to this country. If we could clear that debt, we could do a lot more for the people of Australia but, unfortunately, the opposition does not see that.4978Conroy, Sen StephenSenator CONROY3L6VICALP00—Madam President, I ask a supplementary question. Isn't Tuesday night's budget debt reduction strategy completely dependent on the full sale of Telstra, despite last year's budget papers stating unequivocally that halving the ratio of Commonwealth general government debt to GDP by the turn of the century would be met in the absence of the further sale of Telstra? Doesn't this add further weight to the need for the government to be completely up-front about the risks facing this asset sales strategy? So where is the budget's comprehensive risk statement relating to the full sale of Telstra?4978Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I have already referred to the statement of risks contained in the budget and I would refer Senator Conroy to that section of the budget paper to which I referred. The fiscal risk to revenues and expenses associated with the Telstra sale, in the statement of risks, is recorded in a single description of the risks located under risks to expenses. The government cannot be clearer than that. This is after all the benefit of the accrual accounting system which we have brought into place for the first time in the history of this country. This was something that the opposition said was a good thing but they never got around to doing it.49794979Macdonald, Sen SandySenator SANDY MACDONALDCX5NSWNP10—I ask my question of Senator Ian Macdonald, the Minister for Regional Services, Territories and Local Government. Minister, regional and rural areas have had some big wins from Tuesday's budget. Will you outline some of the benefits that will flow to country Australia from the budget, in line with the government's determination to maintain the balance between country and city?4979Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—The budget is definitely one for the bush. This is part of the goal of this government, because we wanted to make sure that the results from the Howard government's careful management of our economy and our nation flow to all Australians, including those in the bush. My colleague Senator Sandy Macdonald rightly identifies this goal in a very important question dealing with the budget's benefits for the bush. Senator Sandy Macdonald well knows of this: he is from the country himself. He understands what rural and regional Australians need and why they should share in the good times that have come with the Howard government.The thing that country Australians like most about this budget is its honesty. I might say that even the media have been surprised that this budget is one where the government actually delivers on its election promises. It is a truthful and honest budget, and it is financially responsible. People in rural and regional Australia, as Senator Sandy Macdonald well knows, get benefits from the fact that interest rates are kept low, that inflation stays low and that bush families are able to pay off their mortgages. It is a very responsible budget.Bush people also enjoy the fact that the budget concentrates on providing basic services in education and health. More specifically, this budget for the bush makes services available to rural Australians and this means big things for rural families. We have provid ed some $42.8 million for 30 new regional health service centres. We have provided some $43.1 million for the rural GP retention scheme. We are providing some $8 million to enable a female GP to fly in and fly out to the bush. I would expect great rounds of congratulation from the female members of the opposition, but all of them are too interested in reading their papers to acknowledge this great thing for rural women.That is why the National Farmers Federation, the Council of Remote Area Nurses and the National Rural Health Alliance have all been very complimentary of this budget. In addition to those benefits for the family, we are providing new Centrelink call centres in Maryborough and Port Augusta. We have provided, for regional Australians living in Tasmania, an additional $15 million for the Tasmanian Freight Equalisation Scheme, complying with and honouring the election commitment that we made. All I get from that senator from Tasmania is laughter. Labor have no interest in Tasmania or in the bush.Yesterday, I was honoured to go to Tamworth to launch the government's $20 million scheme to help regional centres and cities with flood mitigation. We have provided some $7 million to extend the Rockhampton airport. We have actually honoured our election commitment, something that, after 13 years of Labor, rural people find a little surprising, because Labor never did that. We have introduced big, new schemes for local government, and that is why Queensland local governments have said that they compliment us on this budget. The Queensland Local Government Association says that we have got this right. That shows that the coalition are committed to rural and regional Australia, and there is more to come. (Time expired)Distinguished Visitors497910000PRESIDENTThe PRESIDENT—Order! I draw the attention of honourable senators to the presence in the President's gallery of former South Australian Senator Baden Teague. I welcome him to the national capital and to the Senate chamber.UNKNOWNHonourable senatorsHonourable senators—Hear, hear!Questions Without Notice498049804980Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—My question is to Senator Ellison, the Minister representing the Minister for Finance and Administration. Can the minister confirm that forward year expenditure projections were traditionally provided in the budget papers for all government functions and subfunctions? Can the minister also confirm that, on 26 April, the shadow minister for finance was provided with mock-ups of Budget Paper No. 1 which explicitly set out the same information on an accrual basis and that the shadow minister was explicitly advised by the minister's office that this forward year information would be provided in this year's budget papers? Can the minister therefore explain why none of this specific program information was included anywhere in the budget papers?4980Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—This arises, of course, from a claim by the member for Melbourne that key information contained in the mock-up of the new budget format was excluded from budget papers. This really highlights how desperate the opposition is in relation to attacking this budget. This budget provides the Australian people with the most transparent set of accounts ever produced by a federal government. The comments of the member for Melbourne are out of step with media commentators who have praised the government's move to an accrual budget, something which, as I said earlier, the opposition spoke about but never introduced. The budget papers, both Budget Paper No. 2 and all portfolio budget statements, provide details for the budget year and the forward estimates for every budget measure, both increases and decreases. There is no issue in this at all.4980Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—Madam President, I ask a supplementary question. There is a serious issue here, Minister: the non-disclosure of program information. So I ask you: does the absence of this specific program information from the budget papers explain why the Treasurer overruled Minister Fahey's decision to allow department of finance officials to brief the opposition during the budget lock-up on the accrual accounting consequences of the budget?5K4FAULKNER Senator Faulkner—Remember that you are representing finance here.4980Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I would remind Senator Faulkner that this is a finance matter and I am representing the minister for finance. In case he did not know, we have moved to an accrual based budget; we are looking at outcomes and we have moved to an outcomes presentation. Forward years down to output level were not included in portfolio budget statements but could be included in future years. There was a straightforward approach to the way this was handled. The shadow minister for finance, as with others, was in the lock-up. This form of accounting is a much better form than we had previously. The opposition wanted it but never got around to introducing it. Now that we have done it, they are trying to attack it.49804980McGauran, Sen JulianSenator McGAURANWH4VICNP10—My question is to the Minister representing the Minister for Education, Training and Youth Affairs, Senator Ellison. Will the minister inform the Senate how the coalition intends to honour the promises it made at the federal election in the area of education?4980Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—As we outlined in the run-up to the election last October, there were great things we had planned for the Australian people in relation to education. We have delivered in this budget not only by providing a surplus of $5.4 billion but also by way of a great social bonus in relation to education. Firstly, we have provided an additional $19.8 million for drug education, and that is something which all in this Senate chamber would agree is an important issue to address. Not only that, we have also provided $131 million in additional funding for numeracy and literacy. These are very important issues which have been recognised by all education ministers across this country. We have also continued funding of $90 million for Asian studies and languages, and that is a very important thing for the future of this country. We just cannot bring in these new initiatives and reforms and fund these programs without skilling our teachers to deal with them. What we have to do is provide professional assistance for our teachers, and we have put in $77.7 million for the professional development of teachers.AW5CARRSenator Carr—What about the money for TAFE? Where is it?10000PRESIDENTThe PRESIDENT—Senator Carr, if you want to ask a question, I suggest you put your name down on the list.9X5Senator ELLISON—I remind Senator Carr, who might not be interested in this, that this is a great step forward and it has been welcomed by the teaching profession in this country. But we have also provided increased funding of $93 million for the higher education research infrastructure. We have provided $25 million for university science lectureships. We have also brought about a fairer method of funding for the non-government schools sector. What we have provided is a choice for those low income parents in relation to which school they want to send their children to. So we have provided a fairer system of funding, based on the needs of parents rather than on the resources of schools. That is only good news for the non-government schools sector.Of course, the opposition has been party to much of this campaign, saying that we have neglected the government sector. Let me remind the Senate that, in relation to the government sector, we have committed an extra $1 billion for government schools for the period 1997-2001. By the year 2000 we will have spent 25 per cent more on government schools than Labor ever did—in fact, an increase of $382 million, more than Labor spent in its last term of office. These expenditures indicate that this government is totally committed to a strong government schools sector and a strong non-government schools sector. We are about parity and fairness in funding.Also, we have before this parliament legislation which will provide increased revenue by way of the GST legislation, which will allow the states more money to fund those government schools. Senator Carr forgets that the majority of funding for government schools comes from the states. What we are doing is giving this country an opportunity whereby those states will have more revenue available to them, by way of the GST, to spend on things like education and government schools. These initiatives and programs are what we promised the people of Australia. We have delivered in full. This budget is an education budget which begins to tell the story for the next decade of promise for education in this country.49814981Sherry, Sen NickSenator SHERRYZW4TASALP00—My question is to Senator Kemp, the Assistant Treasurer. Can the Assistant Treasurer confirm that the impact of the GST has been taken into account in projections throughout Budget Paper No. 1, with the exception of the price effect? Is the Assistant Treasurer aware that table 3 on page 1-11 of Budget Paper No. 1 indicates that employment growth projections for the years 2000-03 are static at two per cent, even taking account of what the government calls the `job creating' GST? Don't the government's own budget papers prove that the GST will not stimulate employment and add weight to European Union experience that consumption taxes stifle employment?4981Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I thank Senator Sherry particularly for that question. Senator Sherry was part of a government in which unemployment rose to more than 11 per cent—one million Australians were unemployed as a result of the recession that Mr Keating said we had to have, which was induced by the Labor Party. It always surprises me that Labor senators are prepared to rise to their feet and be reminded of the performance of their own government. In contrast to Labor, we have been able to bring unemployment right down. In our view it is still too high, and it is one of the big tasks which is before this government.Senator, I do not think you are reading your budget papers carefully enough. I draw your attention to a statement on page 3-21 of the budget paper, which I would like to share with the Senate because I think it is very significant:In short, there is scope for the unemployment rate to fall significantly below its present level of around 7½ per cent (and hence for employment growth to outstrip labour force growth) over the medium term without igniting inflationary pressures.This is the important thing.Senator George Campbell interjecting—WW4Senator KEMP—Senator George Campbell was the leader of the metal trades union, which—according to most estimates, and particularly Mr Keating's estimate—lost 100,000 jobs in his own industry as a result of his policy. He says, `Rhubarb, rhubarb, rhubarb.' That is what you were responsible for, Senator Campbell.Madam President, let me continue. Unfortunately, I am being provoked by Senator George Campbell. The budget paper says:The extent of these further falls in unemployment depend, in part, on the extent of further labour market reform, taxation reform, social security reform and micro-economic reform more generally.We say to the Labor Party: if you are concerned about the levels of employment, and if you are concerned about the proportion of people who are on the unemployment rolls, get out of the way of the reform process so we can achieve exactly what we set out in the budget paper and look towards the medium term and the longer term with confidence.4982Sherry, Sen NickSenator SHERRYZW4TASALP00—Madam President, I ask a supplementary question. I think if Senator Kemp looked at the budget table on page 1-11, he would see that the government does assume that the GST will pass, and yet it assumes there will be no growth in employment even if a GST is passed. Does the government still maintain that no modelling has been undertaken by the government on the employment effects of the GST? If this is the case, how is it possible to provide these projections at page 1-11 with any degree of accuracy? Will the government now own up to the employment modelling it has undertaken on the effects of the GST?4982Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—There have been numerous models done on the effect of the GST.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many opposition senators interjecting, and I regard the behaviour of a number of you as disorderly.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! When I am addressing the Senate on a matter of order, I do not expect senators to continue shouting.WW4Senator KEMP—Let me quote one. The Melbourne Institute, using the ORANI model, indicated that indirect tax reform could lift GDP by around 3.8 per cent. Access said that the tax package could lift the GDP by some 2.5 per cent and create close to 200,000 jobs. There is overwhelming weight from the modelling that has been done on tax reform that it is good for jobs and good for the economy. Let us deliver our promises that we went to the Australian people with, and pass this tax reform package.49824982Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—My question is addressed to the Minister representing the Minister for Employment, Workplace Relations and Small Business. Why has the government failed to make job creation a priority of its budget, instead accepting that there will be no reduction in unemployment from 7.5 per cent over the coming year—a figure that we have already reached, according to today's figures? Why has the government committed $111 million to the expansion of the Work for the Dole scheme, which its own figures reveal is far less successful in finding work for people than the labour market programs that the government scrapped upon coming to power, such as Job Clubs and Jobstart?4982Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Unfortunately, Senator Stott Despoja is very much onside with the Labor Party in this regard because she clearly accepts at face value Mr Beazley's tired and discredited proposition that many of those training programs and make-work programs, which were simply designed to entertain people while they were sitting on the sidelines, somehow have some current validity. Well, of course, they have not.We are very much concerned to reduce the level of unemployment, and I was pleased to see that employment actually rose again this month, with a higher participation rate and a marginal change in the unemployment level. But the fact is that the overwhelming impediment to job creation lies in those who oppose our ongoing tax reforms and our workplace relations reforms. I know you have no interest in the subject, Senator Stott Despoja. You think that being a celebrity, performing for the youth of Australia by getting your photo on the front page of magazines, is somehow the solution. It is not. If you are here wanting to play serious policy games, then for a moment try to dissociate yourself from Labor's rhetoric on these issues and concentrate on what it is that causes unemployment to be higher than it should be.We have proposed a whole raft of reforms. You have consistently opposed the unfair dismissals legislation. Why? Because somehow you think there are a few brownie points there in appealing to the trade union movement. Just because the Labor Party are wholly owned subsidiaries, does not mean that you have to be. Why can you not face up to the fact that there are a lot of ways in which you can improve the labour market in Australia by giving it more flexibility?10000PRESIDENTThe PRESIDENT—Senator Alston, you should direct your remarks to the chair.LD4Senator ALSTON—I apologise.Senator Faulkner interjecting—LD4Senator ALSTON—That breathtaking hypocrisy from Senator Faulkner almost takes my breath away but not quite. Youth unemployment is simply another classic example. Being opposed to youth wages, opposing Work for the Dole, opposing the Green Corps, wanting to reintroduce a $5 billion Working Nation program and wanting to bring back the CES—these are all Labor Party policies. Is Senator Stott Despoja wanting to distance herself and dissociate herself from those? I hope she is. If she is, then she is on the same tram as us.We want to reduce unemployment, and the way to do it is to embrace the government's reforms. Do not expect anything from the Labor Party. You will have the opportunity to support some of these reforms in the not too distant future, and that will be the acid test. If you are serious about reducing unemployment, you will not have long to wait.4983Stott Despoja, Sen NatashaSenator STOTT DESPOJA3I6SAAD00—Madam President, I ask a supplementary question. Does the minister seriously believe that providing a `one size fits all' scheme for 18- to 35-year-olds—a scheme that does nothing for older workers and older job seekers—actually fulfils the government's promise to reduce unemployment levels? Does the minister actually support the idea of the government washing its hands of mature-age job seekers, providing no employment measures for them in the budget? Does the minister dispute the independent figures that show that the Work for the Dole program, with its success rate of 32 per cent, is nowhere near the 50 per cent success rate of Jobstart or even the 36 per cent success rate of something like Job Clubs, which cost only $1,700-odd per placement as opposed to $3,906 per placement? Does the minister dispute recent OECD Economic Outlook reports which suggest that—(Time expired)4983Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Of course there is no `one size fits all' approach here. The tragedy is that Senator Stott Despoja, who seems to be wanting to establish herself with the youth of Australia, is not prepared to acknowledge that they actually do want Work for the Dole opportunities. This has been an overwhelming success. We are proposing to expand the number of Work for the Dole places—double them—by the year 2000—3I6STOTT DESPOJASenator Stott Despoja—Is that the best you can do, Minister? Work for the dole eligibility stops at 35 years of age.LD4Senator ALSTON—You are just not interested—that is what you are saying. You are not interested in expanding programs that will actually give people on-the-job experience. That is what this is all about. This is a very successful program that is now being expanded in recognition of the fact that it is giving people opportunities. All you can do is carp at the margin and say, `Why is it neglecting the older generation?' In fact, we are extending it to 25- to 34-year-olds. So it is actually an improvement on the current situation. If you are asking, `Why don't we go even further?' then you are implicitly endorsing it. But you are not at all; you are simply utterly negative on the proposition. (Time expired)49844984Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—My question is directed to Senator Kemp, the Assistant Treasurer. Further to the question that was not answered by the Treasury yesterday and the questions from Senator Sherry that were not answered by the Assistant Treasurer today, I ask the Assistant Treasurer whether he can inform the Senate of the reason for the budget bottom line showing the supposed upside of the GST, such as increased revenue flows, but not including the likely downside, such as the extra inflation effect of at least 3.1 per cent. It may assist you, Minister, to actually look at page 1-11 of Budget Paper No. 1 to refresh your memory.4984Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—How curious it is to get a question on the GST from the Labor Party, given that they have now taken 40 hours to debate a very small proportion of the amendments which are going through the Senate but have indicated that, if the GST goes through, it will not be repealed by them. We had an absurd example this morning. The Leader of the Labor Party, Mr Kim Beazley, was asked in relation to the GST: if by chance there were an election and the GST were not proclaimed—and if by sheer luck they managed to fluke it back into office—would he proclaim the GST legislation? Do you know what he said?TH4KNOWLESSenator Knowles—No.WW4Senator KEMP—No, he did not say no, actually. The amazing thing is that he did not say no. He said, `It is hypothetical.' The point I am making is that the Labor Party is absolutely all over the place on the GST.In relation to the question that was asked by Senator Forshaw, let me make the point that we have adopted, as my colleague Senator Ellison said, world's best practice in delivering proper accounting in our budget statements. Very few governments around the world can claim to have such comprehensive, straightforward and honest budget papers as this government has, Senator Forshaw. Let me assure you that, in compiling the budget papers, we have followed world's best practice. We can hold our heads high. We have done brilliantly.The Labor Party should recognise that when we came back into government, some four budgets ago, we were left with a disastrous mess—a mess of awesome proportions. Mr Beazley was, of course, the finance minister. In four budgets we have got Australia back on track. We are now one of the powerhouses of this region. Our growth is higher than most other comparative countries and we have extremely low inflation. Let me assure Senator Forshaw that these budget papers are prepared according to world's best practice. We are very proud of them. I suggest it might assist you if you read them closely.4984Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—Madam President, I ask a supplementary question. The Treasurer might think it is amazing; we think it would be amazing if he ever answered a question. You might regard it as hypothetical; it is hypothetical as to whether you will ever answer a question. I will give you another chance. You did not address at all the issues raised in the question, which related to the impact of the GST in terms of inflation and why that was not included within the budget papers. Isn't this deliberate distortion of the effect of the GST on the budget more misleading and deceptive conduct from the Howard government and a likely breach of the charter of budget honesty?4984Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—The charter of budget honesty was an initiative of the Howard government that was opposed by the Labor Party. I am very glad that you asked me that question, Senator Forshaw, because it reminds me of a very famous quote by Senator Cook. In fact, I would say it was his second most famous quote. Senator Cook indicated to this chamber, before the 1996 election, that the budget was in surplus when there was a major deficit in that budget. If you are speaking about shonky figures and if you are speaking about people who twist the figures, look no closer than the neighbours that you have over there.49844984Brown, Sen BobSenator BROWNQD4TASAG00—My question without notice is to Senator Vanstone, the Minister representing the Attorney-General. I refer to the potential for a Senate reference to the High Court being required to determine whether Senator-elect Heather Hill has been validly elected. Has the government sought advice on this matter? If so, what are the details? Also, what action is being taken to resolve the issue before 9 August, when the newly elected Senate is due to sit? Will the government support my bill for a referendum to amend section 44 of the Constitution, which bans up to five million Australians from standing for parliament? If so, will it do so in time to have a referendum on that matter on 6 November?4985Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I thank the senator for his question. Section 44 of the Constitution has caused consternation in the community over a number of years. We can think of Phil Cleary and the Wood cases in recent years. I am aware that Senator Brown has a private member's bill before the Senate. I also recall that Senator Colston introduced a bill on the same subject in 1978, which lapsed in 1981. So it has a very long and difficult history.Subsections 44(i) and (iv) of the Constitution have been subject to criticism on the basis that they create confusion and unfairness in relation to the election of members of parliament. The Senate legal and constitutional affairs committee considered the matter in 1981 and it recommended change. The Constitutional Commission reported on it in 1988 and recommended changes. In 1997 a report on this matter of the House of Representatives Standing Committee on Legal and Constitutional Affairs accepted the force of a good degree of the criticism that had been levelled at section 44.The House committee, in its 1997 report, made 10 recommendations, including amendment of the Constitution to clarify and update the subsections and proposals to make intending candidates much more aware of the significance of the subsections. The committee was unanimous in finding that constitutional legislative change would be the only realistic way of overcoming the shortcomings that are perceived to be in subsections 44(i) and (iv). That reflects the bipartisan support for the change arising from earlier inquiries into section 44.The government is generally supportive of the committee's recommendations, although further work will be necessary to get to the point of specific proposals for both constitutional and legislative amendment. It would be important to ensure that any proposal continued to attract bipartisan support. The government would be inclined to put a proposal to a referendum only if it had bipartisan support.In relation to the Heather Hill matter, that is before the Court of Disputed Returns. I do not think it is appropriate to comment on that. A considered response to what is a difficult issue must await the decision of the courts, which are properly independent. You asked about advice. I will ask the Attorney-General if he has sought any advice on that matter and if he wants to comment on it. You asked what action we are taking to resolve the matter. It is before the courts; it is not for the government to intervene. You asked if the government would support your bill. We all have to wait every now and then to find out who will support what. You asked if it will be in time for 6 November. The government would ask you, Senator Brown, whether you will participate in debate to allow the passage of government bills in good and proper time.UI4RAYSenator Robert Ray—That was a bit snaky.4985Brown, Sen BobSenator BROWNQD4TASAG00—Madam President, I ask a supplementary question. The minister has outlined the long history and strong history of multipartisan support for a change to section 44. I ask the minister what it is that further has to be studied before we ensure that the rights of five million Australians are restored, in that they have a right to stand for parliament. Can the government give a commitment that it will move to allow the Australian public to vote on this matter to get over what is an incredibly outdated and unfair section of the Constitution which repeatedly brings trouble to the community?4985Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—Let me commence by indicating that if you thought I was snaky in answering your question, I certainly did not mean to be snaky with you.QD4BROWNSenator Brown—Madam President, I raise a point of order. Senator Vanstone is copping the fault I had this morning. She has heard it from the wrong source. I made no such comment and would not make such a comment.10000PRESIDENTThe PRESIDENT—I think it was from a Labor senator.7E4Senator VANSTONE—All I was going to do was assure you that I would not be snaky with you. I was simply indicating that we all would like our bills to be passed in appropriate time. All you do in your supplementary question is highlight that this is a longstanding problem. Governments of both persuasions have not been able to come to the point. If you were a member of a party that was ever likely to be in government, you would understand that there is a very long distance between a good idea in concept and putting it into legislative format. Of course, all good ideas have to compete with other good ideas in the legislative program. I have given you an answer. The government is generally supportive of those recommendations, but the government would want to have bipartisan support before it put it to a referendum.49864986Hutchins, Sen SteveSenator HUTCHINS84PNSWALP00—My question is directed to Senator Kemp as the Assistant Treasurer. Will the government follow the Victorian Premier's lead in demanding that banks explain their `unconscionable' $10 billion, 22 per cent hike in fees and charges? Will the government take any action to address the Australian community's concern that banks are ripping them off, by, for example, instructing the Australian Consumer and Competition Commission to officially monitor bank fees and charges?4986Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—We, of course, are very pleased with the developments this government has made in financial markets. We have effectively made very dramatic changes to improve the competitive aspects of financial markets and at the same time provide wider choice to consumers. One of the things we are really proud of is the fact that we have been able to preside over a period where interest rates have dropped sharply. We can all recall home loan mortgage rates under the previous government. When we came to government they were over 10 per cent. Now mortgage rates have fallen to around six per cent and of course there are special deals which are available to people.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are far too many interjections on my left. Senators know that they are behaving in a disorderly fashion.WW4Senator KEMP—One of the things we have been able to do is to preside over this period. If you look at an individual family who, for example, may have a mortgage of some $100,000, this would save that family in the order of about $320 per month. It is a huge saving, which this government has been very proud to deliver.One of the reasons for encouraging greater transparency in financial markets is that banks and others have got to be more explicit with fees and to properly account for the actual cost of providing a service, so we have seen some changes in the way that banks and other financial institutions have set their fees. One of the ways we are seeking to continue this major reform process is to further increase the competitive aspects of financial markets. It is the consumer that is able to reap the rewards of these more competitive financial markets. We certainly believe overall, and from the example I have quoted, that the government's policies have delivered very substantial benefits to consumers of financial services. We, like anyone else, would oppose any attempt by any institution to attempt to exploit some market position by charging excessive fees. This government would always oppose that.UI4RAYSenator Robert Ray—Poor old Jeffrey has got it wrong again, eh?WW4Senator KEMP—I do not know whether Senator Ray was being sincere in his comments when he referred to `poor old Jeffrey'. I suspect he was not. Bank fees are informally monitored, which I might say your government did when you were in office.3L6CONROYSenator Conroy—What are you going to do?WW4Senator KEMP—Let me make it very clear what we are doing. We have carried out major financial reforms which are delivering more efficient services to consumers of financial services. (Time expired)4987Hutchins, Sen SteveSenator HUTCHINS84PNSWALP00—Madam President, I ask a supplementary question. Minister, I did ask you about what the government was going to do in relation to monitoring the bank fees and charges increase. I would like you to come back to that in the supplementary answer. I would also like to ask you: are you aware that Mr John Buttle, who is the Chairman of KPMG's Financial Services Industry Group, has revealed that the banks—that is, the five big banks—are involved in a strategy:. . . to drive out the less profitable customer by giving signals through fees and charges if their behaviour appears unprofitable for the bank.Do you agree, Minister, that this sort of behaviour could be classed as unconscionable?4987Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I have not seen the matter to which you refer. In view of the fact that you have drawn it to my attention, I will certainly have a look at that. If I can make any further comment, I will certainly come back to the chamber and provide that.49874987Chapman, Sen GrantSenator CHAPMANFF4SALP10—My question is directed to the Minister representing the Minister for Employment, Workplace Relations and Small Business, Senator Alston. Does the minister agree that economic growth is vital for tackling the legacy of Labor's unacceptably high unemployment levels but that more needs to be done? Will the minister inform the Senate of what further measures the government is proposing to generate real jobs? How will Australia's job seekers benefit from the initiatives announced in Tuesday's budget? Is the minister aware of any threats to the government's plan for improving the living standards of all Australians into the next century?4987Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Senator Chapman does raise very important issues because, clearly, ongoing taxation reform and workplace relations reform are critical to ensuring that we are able to expand job opportunities for all Australians. Today's employment figures are further evidence of a consolidation of the gains we have made to date in reducing the unemployment rate and maintaining a positive employment trend. Certainly the rise in employment in April was entirely due to a rise in part-time employment, partly offset by a fall in full-time employment, but employment has risen by over 400,000 since we came to office. So there is a lot that has already been achieved but there is a lot more that we would like to do.If there is one single thing that we would like to do, it is to get the tax package through the Senate as quickly as possible. Tax cuts worth $13 billion are clearly enormously beneficial to ordinary Australians, and certainly the $10 billion removal of imposts on businesses will put them in a fantastic position for job creation. So it is not just the expansion of the Work for the Dole initiatives that were canvassed earlier but also the commitment to 500,000 new apprenticeships and traineeships—given that they were run down by Labor to a 40-year low—by allocating $1.6 billion over four years, and school funding continuing to increase: all these are very important and necessary measures.That is why it is a great tragedy to find that on the other side of the house there is simply no interest in genuine policy reform. In fact, I was astounded to hear Senator Sherry get up during the course of the morning—he made the AAP wire service with a headline `Opposition admits no formal tax policy'. The report said:The Opposition admitted today it had no formal tax policy . . . Senator Sherry said, "I am certainly not privy to advance copies of any tax policies that don't exist at the present time. But it will exist—our tax policy will be unveiled at the national conference next year."Mr Beazley has told us, time and again, that there are not going to be too many changes made to the national platform, so we hold our breath while you play politics for the next nine months. That is basically what it is all about.As Senator Kemp rightly pointed out, on AM this morning the Leader of the Opposition had a classic opportunity to explain what he would do if he were given the opportunity to prevent a GST being implemented. I think you could have heard the squelch throughout Parliament House; I certainly nearly choked on my mango yoghurt. We find the Leader of the Opposition simply saying that tax reform is not relevant, but what he has said previously is, `We'll oppose as effectively as we can, as people who know a bit about politics.' In other words, `We're world champions when it comes to politics. Forget that we've been done like a dinner at the last two elections, of course'—when he has been right up front driving the ship. Nonetheless here it is: so imbued in the Labor culture is he that he gets out there and boasts that they are good at politics, because that is what the game is about. So what does he say on AM this morning? He says:. . . because we have one objective in the next few weeks and that is to defeat this tax and all our parliamentary manoeuvring is to that end.So there you are, it is out in the open. There is no pretence that, `We are seriously examining the tax package,' and no suggestion that somehow, `We are interested in tax reform.' No, `Our only agenda is to manoeuvre to defeat the tax package'. In other words, it is politics, politics, politics: `We are not interested in reform of the system and are not really wanting to debate it, we are just patting ourselves on the back as great politicians.' More than half of their frontbench comes from the trade union movement—that probably says it all. (Time expired)4988Chapman, Sen GrantSenator CHAPMANFF4SALP10—I have a supplementary question, Madam President. Could the minister please enlarge on these threats to the improvement of Australia's living standards as we move into the next century?4988Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The unfair dismissals legislation is a classic example.Opposition senators interjecting—LD4Senator ALSTON—See, they know not the error of their ways! You simply do not want to know. If the bosses at John Curtin House and elsewhere tell you what to do, that is it, isn't it? You are not interested in whether it might create new jobs. Youth wages? No. Once again the unions feel a bit threatened by youth wages so, no, they cannot have a bar of that. Work for the Dole? Of course they hate it; they would rather squander billions of dollars on failed labour market programs, even though the outcomes cost up to some $143,000. These are tragic outcomes under your administration. Thirteen years to tackle the problems and who was the one that left us with these huge deficits and record levels of unemployment? Mr Beazley. Unemployment up to 11.3 per cent—great effort! What was it again? Twenty-five billion dollars in budget deficits from your then finance minister. It is a pretty good record. I just hope he stays there long enough for the next election. (Time expired)49884988Denman, Sen KaySenator DENMANFY5TASALP00—My question is to Senator Newman, the Minister for Family and Community Services. Can the minister confirm that the new measure in the budget to reduce from $10,000 to $5,000 the amount retirees can gift to their children and grandchildren will cost some retirees up to $15 a fortnight in reduced pension payments? Isn't this precisely the same amount as the average pension increase in the first year of a possible GST?4988Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—It all depends on their own performance and conduct. Nobody requires them to give regular payments of $10,000 a year to their needy children, but they are giving away more than the amount of the age pension each year under the current arrangements, and that is a nonsense. They should be using their assets to the maximum extent possible to support themselves in their retirement. The government is simply reducing the amount of money which people can gift to their children in any one year to $5,000 over five years. I do not think that is unreasonable by anybody's standards, and I would say that the taxpayers who are funding the pensions would say so too.49884988Murray, Sen AndrewSenator MURRAY3M6WAAD00—My question is to the Minister representing the Prime Minister, Senator Hill. Minister, is the government aware that if it was a business it would be described in financial terms as having a very low gearing, in other words, a low level of public debt? The problem is private debt, not public debt, isn't it? Is the minister aware that the United States, the United Kingdom and France hold the highest international credit ratings by Moody's and Standard and Poor's and yet Australia's public debt level is only one-third of those countries? Is the minister aware that a major reason for Australia's much lower credit rating is an appallingly low creation of private savings and a high level of current account deficit? Where are the measures in the latest budget to address these issues—to address the current account deficit, to encourage a reduction in private sector debt, to encourage private savings, to encourage Australian venture capital formation and to encourage value added exports?4J4SCHACHTSenator Schacht—That's a reasonable question.4989Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—Yes, it is a reasonable question. We got half of it yesterday from the Leader of the Australian Democrats. In relation to public debt, I would have thought that the honourable senator would acknowledge that it is important to reduce public debt. We inherited $80 billion of debt from the last five budgets alone of the Labor Party and Australians have to pay for that. It does affect our capacity for sound economic management. It has the consequence of pushing interest rates up—that was the Labor Party direction—and it put a lot of people out of work in this country.We have concentrated on addressing that problem. We are in a position where we are repaying public debt and we have run government surpluses for the last three years, and we are proud of it. Mr Beazley, as the finance minister, gave us $24 billion of debt in the last two years of Labor.Senator Cook interjecting—BH4Senator HILL—Senator Cook, who is interjecting, was the one who said that the books were in the black when they were $10 billion in deficit. We do take that issue seriously.Senator Murray raises another important question which is relevant to the current account, and that is our capacity to finance our external account. And that is important. But a fundamental is that you have to have a profitable private sector with the capacity to save and invest in its own imports. We have concentrated on putting our private sector, and particularly our export industries, in a position where they can afford to pay the cost of the capital that is necessary, including imports. We have tackled those fundamentals. The way in which the Australian Democrats could help us most to achieve that goal would be to pass the GST. Why? Because there is no GST on exports. It means the export sector of our economy will be stronger, and it will then have greater capacity and flexibility to pay for the cost of its imports. Yes, domestic savings, private savings and government savings are important, and it is still a major challenge that is before us. But you cannot do everything in one day, and what we have achieved in reducing the deficit, putting it back into surplus and providing a fundamentally sound financial base for this country deserves great credit.4989Murray, Sen AndrewSenator MURRAY3M6WAAD00—Madam President, I ask a supplementary question. I thank the minister for his answer. The Democrats and I do acknowledge that public debt reduction has been useful, but the need is now to mount an attack on the current account deficit. Minister, could you outline in this supplementary answer what further measures you believe the budget has which would encourage a reduction in private sector debt and encourage private savings and Australian venture capital formation?4989Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—I have said to the honourable senator that we have concentrated on the fundamentals. One of the problems under our predecessor government, the Labor Party, was that even when the export markets were booming we were running a huge current account deficit. Why were we doing that? It was because our own industry could not compete. They could not take the opportunities that were out there in the external market. Why couldn't they? Because they were suffering under exorbitant interest rates because of the incompetent domestic economic management of Senator Cook and his then colleagues. Senator Cook was a leading economic minister in the Labor Party, as much responsible for a million Australians being out of work and impossible interest rates for small business as any other member on the front bench of the Labor Party.Senator Murray, if we concentrate on building the capacity of our industry to compete internationally we will start to address the problem that you have identified.49904990Mackay, Sen SueSenator MACKAY9L6TASALP00—My question without notice is addressed to Senator Newman, the Minister for Family and Community Services. Can the minister explain why the Australian Institute of Family Studies has been without a director for more than a year? Did the minister recommend to cabinet the appointment of Professor Jan Carter? Why did the minister recommend Professor Jan Carter? Did the Prime Minister refuse to endorse the minister's recommendation? Is the refusal to appoint the eminently qualified Professor Carter a reflection of the Prime Minister's intention to impose his own 1950s view of family on the Australian Institute of Family Studies?4990Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—Most of the question goes to advice going to government and cabinet matters which no government ever answers questions on in this place, and I do not intend to create a precedent. As to the length of time: yes, unfortunately the previous director died in the job and the institute has been looking for a new director. That is all I can give you at this stage. It will be announced in due course.4990Mackay, Sen SueSenator MACKAY9L6TASALP00—Madam President, I ask a supplementary question. Thank you for that non-answer, Minister. When will a director be appointed to the Australian Institute of Family Studies? And why was Professor Carter, your preferred candidate, refused the job?4990Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I gave no indication of preferred candidates or names going anywhere. Senator Mackay is drawing a long bow to try and make that assumption. The name of a new director will be announced when such a director's position is endorsed.BH4HILLSenator Hill—Madam President, I ask that further questions be placed on the Notice Paper .Miscellaneous4990499015:01:004990Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—On Tuesday, Senator McKiernan—in a most charming fashion—asked me a question. I seek leave to incorporate the answer in Hansard —in just two days.Leave granted.The answer read as follows—Senator VANSTONE: on Tuesday 11 May 1999 Senator McKiernan asked me a question, in my capacity as Minister representing the Attorney-General, about jury service. The question was as follows:Does the Government consider the obligation for a citizen to serve on a jury as a community service obligation? Has the Attorney-General's Department provided any advice to the Government, or ever been consulted, as to the probable impact of the removal of jury service as an allowable matter from industrial awards? What impact is the removal of leave from awards likely to have on people's willingness to undertake jury service?Does the Government consider the obligation for a citizen to serve on a jury as a community service obligation? Has the Attorney-General's Department provided any advice to the Government, or ever been consulted, as to the probable impact of the removal of jury service as an allowable matter from industrial awards? What impact is the removal of leave from awards likely to have on people's willingness to undertake jury service?In my reply at the time I indicated to Senator McKiernan that I would refer his question to both the Attorney-General and also the Minister for Employment, Workplace Relations and Small Business for their views.I am advised by my colleague the Minister for Employment, Workplace Relations and Small Business that the removal of jury service from the list of allowable matters is part of an evolutionary process which was foreshadowed in the document More Jobs Better Pay, and which reflects the underpinning principles of the Workplace Relations Act.Minister Reith advises that the award simplification process should continue so that awards are simple, flexible instruments that do not impede agreement making, workplace efficiency, organisational effec tiveness, or act as barriers to employment growth. Instead, awards should be focused on providing a genuine safety net of minimum wages and conditions for low paid and disadvantaged workers. Accordingly, it is not necessary to include in awards matters that are dealt with elsewhere in Legislation or are more appropriately dealt with at the workplace through agreements. Such matters do not form part of a minimum safety net.Minister Reith also advises that jury service is not widespread in awards. Only about one quarter of all federal awards contain jury service provisions. In addition, all States and Territories provide some form of payment or compensation for jury service. Therefore, jury service is not part of a genuine minimum safety net of common conditions for low paid and disadvantaged workers.My colleague the Attorney-General advises that the Attorney-General's Department was consulted as a matter of routine on a set of proposals which included the proposal to remove jury service as an allowable matter in industrial awards, but was not asked to provide advice on the probable impact of that proposal and did not do so. The maintenance of an adequate pool of jurors within each of the respective Australian jurisdictions and any related arrangements for remuneration or compensation of jurors are matters for the States and Territories.499115:02:004991Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—On 27 April, Senator Brown asked me a question, although not in charming terms. I seek leave to incorporate in Hansard an answer to his question.Leave granted.The answer read as follows—On Tuesday, 27 April 1999 (Hansard page 3693) Senator Brown asked me, as Minister representing the Prime Minister and Leader of the Government in the Senate:Will the issue of West Papua be raised in talks between the Prime Minister and President Habibie today? In particular, will the Prime Minister be raising the issue of recent massacres of people aspiring to independence for West Papua, otherwise called Irian Jaya? Will the government raise with Indonesia the bill now being rushed through the Indonesian parliament to separate West Papua into three provinces in the run-up to the June elections as a means of thwarting the independence movement? Finally, will Mr Howard be expressing his distress that mob intimidation can have an impact on the aspirations for independence in West Papua above and beyond the impact it quite obviously has on him in regard to cricket? Does the minister have any further information on my earlier question of him of some months ago regarding threatening and harassment of West Papuan leaders following a visit to meet President Habibie on 26 February in Jakarta? Can he tell the Senate whether or not it is true that the Commissioner for Police has now banned even discussions of those meetings with President Habibie? Are there West Papuan leaders still in gaol as a result of earlier demonstrations for independence, and does the government have any information as to the wellbeing of those previously gaoled independence leaders?The Prime Minister has provided the following answer to the honourable senator's question which I seek leave to have incorporated in Hansard .I did not raise the issue of Irian Jaya with President Habibie during my meeting with him in Bali on 27 April 1999. The meeting focused on developments in East Timor and Australia's concern that peace and security are restored there as quickly as possible.The government has in the past, however, clearly and consistently conveyed to the Indonesian government its concerns over human rights violations in Indonesia, including in Irian Jaya.The Foreign Minister, Mr Downer, raised his concerns about human rights in Irian Jaya with President Habibie, General Wiranto and Foreign Minister Alatas during his visit to Jakarta in July 1998. Mr Downer again raised the issue with Mr Alatas when they met at the APEC meeting in Kuala Lumpur in November 1998.I am advised that the Australian embassy in Jakarta closely monitors human rights issues in East Timor, Aceh, Irian Jaya and other parts of Indonesia. The embassy makes every effort to follow up reports of human rights abuses. Embassy officers visit these regions regularly to monitor Australian projects and speak with local officials, NGOs and the armed forces.The government has also been active in providing substantial assistance to Indonesian NGOs that are active in monitoring human rights and providing legal aid. The government announced in late 1998 the provision of an aid package worth $2 million to Indonesia's independent National Commission on Human Rights. The Commission has been a vital element in the creation of a more robust human rights machinery in Indonesia. Its reports on a variety of cases have been instrumental in raising awareness of the issues and putting pressure on the Indonesian government.I am advised that the Australian embassy understands that the Irian Jaya police chief has issued an announcement which prohibited the activities of a group calling itself "Team 100" from publicising the results of the National Dialogue meeting between President Habibie and delegates from Irian Jaya. The embassy has been told that as a result of the announcement a number of command posts affiliated with the separatist movement have been closed. I am further advised that the embassy has no information on arrests made since the police chief's announcement.The embassy understands that a number of Irianese are in detention in relation to their alleged involvement in separatist activities. Information from human rights organisations in Irian Jaya suggest that at least 48 persons are in detention arising from such activities in 1998.499215:02:004992Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—On Tuesday, Senator Woodley—almost charmingly—asked me a question in relation to the Cubillo and Gunner cases. I have provided him with a copy and I seek leave to incorporate the answer in Hansard .Leave granted.The answer read as follows—Madam President— on Tuesday, 11 May 1998 (Hansard page 4716) Senator Woodley asked me a question without notice about the costs of running the Commonwealth's case in relation to the current separated children litigation.I now have a response for Senator Woodley and seek leave to have it incorporated in Hansard . Expenditure by the Commonwealth (both ATSIC and the Department of Prime Minister and Cabinet) to date on the Cubillo and Gunner cases is in the vicinity of $6 million.As I said on Tuesday, it is not unusual for governments to defend litigation against them, as the New South Wales Government is doing in a separated children case currently before the New South Wales courts.The need for the Commonwealth Government to defend litigation on Aboriginal issues was one reason the Keating Government set up the predecessor to the Office of Indigenous Policy in 1993. In a statement in March 1993, when the office was established, Prime Minister Keating said:"The office will also be able to provide advice and services to the minister when it would be inappropriate for the only source of advice to be ATSIC. For example where Aboriginal groups engage in litigation against the Commonwealth there may be a need for instructions to the Commonwealth's legal advisers of a kind which ATSIC would regard as inconsistent with its role."From its inception, that Office has had a role of providing instructions on behalf of the government especially in cases where ATSIC has a conflict of interest. The Office acted on behalf of the previous Labor Government (and later this government) defending the Kruger and Bray separated children challenge to the validity of the relevant Northern Territory ordinance.499215:02:004992Quirke, Sen JohnSenator QUIRKEZS6SAALP00—I move:That the Senate take note of the answer given by the Assistant Treasurer (Senator Kemp), to a question without notice asked by Senator Hutchins today, relating to bank fees.The very important issue of bank charges and fees has been somewhat topical for the last week or so. We on this side of politics were hoping that we would have got a definitive answer from the Assistant Treasurer about what the government intends to do regarding burgeoning bank fees and, in fact, the way in which ordinary people out there are being stung every time they either go near a teller machine or a bank or have their salaries or pensions or whatever paid into bank accounts.What we got was the following. We were told that he and the government were pleased with the present state of the financial markets. He went on to tell us there is a wider choice now than there has ever been before. He then told us that the percentages on mortgages have dropped. He then told us that the percentages on mortgages before were all our fault. He then told us that, if we are lucky, there is a special deal available with banks. He then told us that some families with an average mortgage are $300 a month better off, so presumably—although he did not mention it—they can afford to pay fees. He then told us there is more competition: he went around in circles. He then told us that they, the government, would do everything to make sure there is no rampant exploitation. Then somebody, by way of interjection, said, `Is Jeffrey wrong again?' The good senator avoided that—in fact, he avoided the rest of it by sitting down.The supplementary question asked, `Has your attention been drawn to this particular document?' Senator Kemp said, `No, it has not been.' He said that now that it had been, he would actually go away and read it. No where in his answer was there anything about bank fees.Everyone out there in the community knows and understands that the banks right now are more profitable than they have ever been. Banks now, in Australia, are bringing in record profits. In fact, each year the banks are outdoing each other to bring in multi billions of dollars in profit. What we find now is that the fee structure of these banks is again in the multi billion dollar league. What used to be the banking system of 20 years ago when a small incremental amount was made on the percentage of loan funds and when there was a very low reliance on fees has turned around now to a situation where the banks are making it through both avenues.We would have thought that the government would have an opinion on this, that they would have taken the question from Senator Hutchins and in fact said, `Senator, we are looking at this.' But what we found was that the Assistant Treasurer had not even looked at his mail on the topic, that they had been doing nothing about it, that they were silent about it. One can only presume that the government does not see this as an issue.I must say to the Senate that it used to be the case, when one went into a bank, that one knew which side of the counter the thief was on. He used to have a gun and wear a mask. Today it is just as likely that it is the pretty teller on the other side who takes you for more than what the bloke with the gun and the mask used to years ago.7Y6CROSSINSenator Crossin—Or the man teller.ZS6Quirke, Sen JohnSenator QUIRKE—Or the man teller that is there. I am corrected by Senator Crossin—quite correctly—on that point. At the end of the day, this question of bank fees is something that will not go away. The ACCC really ought to be called in to have a serious look at this whole problem. It may well be that some senators opposite agree with Senator Kemp. Certainly, Jeffrey Kennett does not. (Time expired)15:07:004993Campbell, Sen IanSenator IAN CAMPBELLH15WALP10—It is somewhat amusing and a little bit sad to hear a senator from the other side of the chamber making accusations about the charges that banks levy on customers and seeking to get the ACCC to have a look at them. It is sad because they did virtually nothing to improve competition. In fact, competition between banks declined during the sad, sorry, 13-year period of government that the Labor Party occupied the treasury bench. During that time, we saw a diminution of competition and a reduction in the competitive position of credit unions and building societies. Basically, the customer lost out.This government has said that the answer to getting better quality of customer service from banks and other deposit taking institutions is to see a massive increase in competition. In the short time that we have been in power, simple reforms such as the cheques bill have, for the first time in the history of Australia, allowed credit unions and other non-bank deposit taking institutions to issue cheques. For 13 years, Labor was lobbied by the credit unions which said, `For Pete's sake, let us have the power to issue cheques. Why do we have to go to banks to issue cheques?' I do not know why Labor did not do it, whether it was just inertia or maybe they were lazy.We said to the credit unions, `Yes, we'll do that. We will let you compete head to head against the banks and issue cheques.' That was a very sound reform which basically put credit unions and building societies on the same footing as banks so that they could compete. It was put in place within the first 24 months of this government's legislative program.Yesterday in this parliament, Senator Chapman introduced a report from the Joint Committee on Corporations and Securities. This government has led the reform agenda in the Corporations Law area. We are ensuring through the CLERP process that there is significant new competition for banks from a range of other institutions, including insurance companies and other financial institutions. Organisations such as AMP and other large insurance companies will be able to compete head to head for consumer banking. As the Treasurer has said on a number of occasions, when people talk about high charges or mortgage rates from banks, change banks. If you do not like what a bank is offering you as a customer, the great thing about Australia at the moment is that you can go to a whole range of different institutions.Credit unions and building societies are offering more services in more towns and suburbs than ever before in the history of Australia. There is more choice for consumers in Australia than ever before. I have to tell all senators and citizens of Australia that, if you do not like what one of the big four banks is doing to you, go to one of the smaller ones. Tell the bank manager his fees are too high. They have so much flexibility now that they will offer you a different account. If you do not like what they offer you, go to another organisation; go to a credit union. They provide fantastic services these days. So do building societies. So do a whole range of other organisations such as Aussie Home Loans and RAMS. The competition is tremendous.The sad thing about hearing senators from the other side complain about what the banks charge is that they seem to have forgotten, after less than a few years, what people received in their envelopes when they went out to their mailboxes during the time when Mr Beazley and Mr Keating ran the treasury bench. Australians have not forgotten the walk out to the letterbox when they got the envelope from their bank or building society, opened up their monthly mortgage account and saw the charges. The people opposite ran interest rates up to 17 per cent for home buyers and up to over 30 per cent for businesses. That is what people had to pay.Let Australians never forget what Labor does to the cost of money from banks. They are the party of high interest rates. Through the history of Australia, real interest rates have always been higher under Labor governments and have always been lower under Liberal governments. Under the Liberal government when Mr Fraser was Prime Minister and Mr Howard was Treasurer, interest rates in real terms were much lower than they ever were under the Keating and Beazley administrations. When you talk about bank charges, do not forget about Labor—(Time expired)15:12:004994Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—I rise to take note of Senator Kemp's answer today on bank fees and charges—his non-answer really because he spent the time available to him talking about interest rates, as Senator Ian Campbell has just done. The question to Senator Kemp was about bank fees and charges. Let us have a look at the situation of bank fees and charges in this country. Senator Kemp probably did not know the answer and does not want to know.In the last year, Australians have paid a record $10 billion in fees and charges to Australia's top five banks. We hear Senator Ian Campbell saying that if you do not like it, tell your bank manager that the fees are too high and go somewhere else. There are not a lot of other places to go if we are talking about the top five banks. The KPMG report released this week highlighted that the $10 billion was 22 per cent more than in the previous year. The five major banks—the Commonwealth Bank, the National Bank, ANZ, Westpac and St. George—have all increased their fees and charges in the last 12 months. The biggest rises have been through transaction account fees, lending fees, credit cards, the use of ATM and EFTPOS charges. More and more Australians these days are using the facilities of ATM and EFTPOS.The worst hit are the customers who can least afford it—pensioners and small account holders. Fees and charges are used by banks because they want customers out of their branches. They are using cheaper electronic banking. My colleague Senator Hutchins referred to Victorian Premier Jeff Kennett in his question—perhaps this is one of the very few things that Kennett gets right. He said that he thought it was outrageous that banks have raised their fees so much—the Premier of Victoria making a very valid comment about increasing bank charges. He went on to say that he thought computer technology would have made banking much cheaper, not dearer.What are some of the increases in fees that he might have been referring to? Let us look at them. The National Bank increased its minimum balance applicable to fee-free accounts from $500 to $1,000. That bank also introduced a charge for customers failing to pay the minimum monthly balance on credit cards within 30 days of the due date. The ANZ Bank has increased its monthly account keeping fees from $4 to $6. It introduced a $15 charge on lost cards and raised the current cost of stopping cheques from $7.50 to $15—so there is a 50 per cent hike in fees there. It has also introduced a $6 monthly fee on pensioner deeming accounts for balances below $500. Westpac raised its annual fee on selected credit cards from $18 to $24 and introduced a fee for overseas foreign currency purchases or cash advances by credit card. The Commonwealth Bank has also increased its over the counter withdrawals from $1.50 to $2 and increased its fee for cash withdrawal from ATMs from 45c to 60c.The banks are using these fees in an attempt to force out the less profitable customers, but the highly profitable, of course, are provided with a waiver or reduced fees. Fees and charges now provide for almost 20 per cent of income to the major banks—and this is up 17.4 per cent from four years ago.What is the federal government doing about this? In today's answer by Senator Kemp he could not talk to us about bank fees and charges; he could only talk to us about interest rates. He said that consumers were reaping the rewards. Of what? Of increased fees and bank charges? He said there were very substantial benefits to consumers. How? How can he prove that when he did not answer the question and in view of the facts that I have just read out about the evidence of an increase in bank fees and charges?The federal government leap to the defence of banks. They are defending banks rather than the average Australian. As the Consumer Credit Legal Centre has said, `The government must take responsibility for the treatment of disadvantaged consumers in a deregulated banking market.' The House of Representatives Standing Committee on Economics, Finance and Public Administration has called for the Reserve Bank to look into fees and charges. Good idea. But it is not surprising that people have become increasingly disillusioned with the banking services of this country. (Time expired)15:17:004995Tierney, Sen JohnSenator TIERNEYO15NSWLP10—I was wondering why the Labor Party was bringing up this issue today and I had a look at the lights up there and saw it is a non-broadcast day. That is totally understandable, because they would not want the hypocrisy of what has just been said widely broadcast. If the public really want to have a look at this, they will have to delve into Hansard , won't they? I am sure Senator Hill was a little bemused by this, particularly when he remembers that under the Bannon government the South Australian bank lost $18 billion. That is the way in which the Labor Party looks after the depositors' money in that state. Senator Patterson would have been absolutely amazed when she realised that the Victorians, under Joan Kirner and John Cain, lost $12 billion of depositors' money. Here we have the Labor Party coming in as the advocates of great financial reform. Let us look at your record, Senators. The federal record of the ALP over 13 years is before us. And don't we remember it well. Anyone who was in business during the 1980s remembers exactly what happened to bank charges under your regime.7Y6CROSSINSenator Crossin—What about increases in fees and charges last year?O15Tierney, Sen JohnSenator TIERNEY—Senator, you have probably never been involved in a business in your life. I have. I was in business in the 1980s. Do you know what I used to calculate each year? I could write off 25 per cent of the money to the banks in interest and in charges. It was always a neat 25 per cent of the money. Under your regime, under bank charges, under interest rates forced up by your leader, Paul Keating—7Y6CROSSINSenator Crossin—What about increases in fees and charges last year?O15Tierney, Sen JohnSenator TIERNEY—The last year of the Labor government? Is that what you are talking about?7Y6CROSSINSenator Crossin—Last year.O15Tierney, Sen JohnSenator TIERNEY—The last year of the Labor government? Perhaps they did start to come down, but after 12 years of pain from what people had to suffer under your Labor regime. Let us contrast that with what is happening currently under this government. We have extremely low interest rates. You give me a choice between being a father and a businessman in the 1980s and being a father and businessman in the 1990s under this government, and I will tell you which decade I would rather be in, because I have seen an enormously low level of interest rates dropping all the time over the last three years because of the excellent economic conditions created by this government.7Y6CROSSINSenator Crossin—What about increases in fees and charges? You don't care.O15Tierney, Sen JohnSenator TIERNEY—We have created those conditions, Senator. We have created not only a climate of low interest rates driven by low inflation but a climate of low interest rates driven by competition. The establishment of the ACCC and the entry into the markets of a number of competitive mortgage providers have now created a climate where, on interest rates, between savings payment and loan payment, banks have very small margins indeed. You are asking why charges do not come down. Charges will not come down substantially if margins are squeezed. You have to look at the ways in which the banks charge for particular services. Let us take Bankcard. You might say those rates are a bit high, but what a lot of people do with their Bankcard is put money on it during the month and pay it out at the end of the month. That is very smart, because they do not pay any interest, but the bank has to cover all the administration. That is why those charges do not come down. You have got to look at the scale of the banking system. You raised the report that came in from KPMG and talked about the $10 million profit.7Y6CROSSINSenator Crossin—Billion.O15Tierney, Sen JohnSenator TIERNEY—Ten billion dollars. It sounds a lot of money, I agree. But, Senator, do you understand that that is only three per cent in turnover—a very small proportion? Do you understand, Senator, that one-quarter of that $10 billion is actually earned in fees and charges offshore? In other words, we are making money offshore and it is coming in to help counter our balance of payments. I did not hear you mention that one, Senator. Do you realise that, because these are companies that pay tax, money comes back into the tax revenue that is used for the rest of Australia? All of that is a section of that $10 billion. So it is not quite as you say. This government has created a highly competitive banking system. Boy, when I look back at what we had in the 1980s under you and at what people now have in the 1990s under us, I know which regime I would prefer to be under and I know which regime the public would prefer to be under. (Time expired)15:22:004996Hutchins, Sen SteveSenator HUTCHINS84PNSWALP00—I am a bit astounded by the response from the government today in relation to my question to Senator Kemp. I have just heard a great old apology for the banks by Senator Tierney. It would appear, on this anniversary of the dismissal of Jack Lang, that we still have their puppets and their spokesmen on the conservative side of politics. In fact, when Lang tried to do something about the banking system in this country, they intervened and dismissed him. It would appear that the apologists are still here and are still saying to us on this side of the house that we can trust the banks to operate in a community conscious way. I do not believe that they do.We now have five big banks—and I think back to when John Howard was the Treasurer and we had five big banks or four big banks—and we still have the same number of people controlling the economy. My question to Senator Kemp was simply this: what is the government going to do about monitoring these excessive increases in fees and charges? As Senators Quirke and Crossin have outlined, the situation is—as the KPMG report has identified—that in fact the banks are trying now to drive customers out of their branches and force them over to electronic banking.For a lot of people who probably were not brought up in the computer age, this is going to be some sort of major and traumatic change for them, when and if they have to go into electronic banking. A lot of older people, pensioners, people on fixed incomes and a lot of people who are members of the work force would have no idea what they will have to do to get onto electronic banking. A lot of these people oppose the idea of having to go onto cashless pay in the first place, but of course that was the idea of the time. That is what the banking community wanted, and that is what we have ended up with. I know that a lot of people do not like going through bloody banks—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! Watch your language, please, Senator.84PHutchins, Sen SteveSenator HUTCHINS—Sorry; having to go through banks to get their money. But we had to, because it has been worked out that way. And we do not like using any other forms of electronic banking or transfer. However, that is the system, and we are left with it.All my question sought from the government was whether the government will go and ask the Australian Consumer and Competition Commission to monitor these fees and charges and the rises in them. All I got back today was Senator Kemp saying that he would look into it and Senator Ian Campbell telling us what a wonderful system the banks have got operating now. What is going on is clearly unfair and untrue, and a lot of people who can ill afford to be affected by these excessive increases are going to be the ones who suffer.I want the government to say what they are going to do about it. All we have heard is that the great idea of competition among the banks is going to resolve this issue. Well, I have not seen any evidence of that since, and I do not think there is going to be any in future.15:26:004997Patterson, Sen KaySenator PATTERSONLI4VICLP10—I am sorry that the honourable senator, who thought this issue was so important, could not even actually stretch out his time. Had he actually had a look at the question that was asked in the House of Representatives on Tuesday by Ms Gerick, he would have seen the answer that Mr Hockey gave to exactly the same question. They must have had a dearth of questions on the other side in their questions committee today in the Senate, because they actually had to ask the same old questions that had been asked yesterday in the House of Representatives. That just shows you the depths that the opposition has come to: they cannot even dredge up new questions but have to go over old ground that has been hashed over the day before.To give a direct answer to the senator: Mr Costello answered a question on notice from Mr Kelvin Thomson and, if you had actually gone through and looked at those issues as well and had done some homework on the other side, you would have found that your question had been asked by Mr Kelvin Thomson. So it has been asked twice, and it gets asked again today. It has been answered twice, but I will go over it again—just in case you cannot get to look at the Hansard and go through questions on notice and answers to questions on notice. Mr Costello's answer in part read:. . . the government introduced into Parliament, on 10 December 1998, A New Tax System (Trade Practices Amendment) Bill 1998 that amends the Trade Practices Act 1974 to provide the ACCC with powers to monitor prices, in order to prevent the possibility of consumer exploitation and excessive profit taking in the transition to the new tax system.In that process, it catches up the issue of bank charges as well, because the question on notice that Mr Kelvin Thomson put was in part this:(3) Has the Government introduced formal monitoring of bank fees and charges; if not how will the Government prevent profiteering by banks.The answer to that question was:The Government will maintain its policy of informal monitoring of bank fees and charges. The major banks would voluntarily inform the ACCC of their movements in fees and charges. These arrangements would not preclude the ACCC from formally monitoring bank fees and charges, along with other prices in the economy, as provided for in the A New Tax System (Trade Practices Amendment) Bill 1998.So the measures are there. That is one of the answers. The other thing is—and Senator Tierney spoke on it quite clearly—that the KPMG report figure is made up of a number of factors for the $10 billion, and 25 per cent of the $10 billion in fees and charges comes from offshore from Australian exports—which is really good news for Australia. So we need to look at that figure more clearly, and Senator Tierney has been over that point.Senator Hutchins raised the issue of older people who have not been brought up in the electronic age. What did the Labor Party do about that? Not a single thing. But, as we undertook consultations right around Australia for the International Year of Older Persons, the issue that came up in those consultations—and I was present at almost all of them—was banking, banking, banking. So what did the coalition government do? Through the Business Partnership Program that the Prime Minister announced, it went to the Bankers Association and said, `We need a partnership to do something about that.' So, with the five peak bodies associated with older people, with the Australian Bankers Association and the federal government supplying finances through the Business Partnership Program, we set up a business partnership with banks to assist older people to use banking facilities, to train people in how to use ATM cards and to ensure that ATM machines are being located in places that are safe. They wanted to practise and teach them about that.Labor complains, whinges, moans but did nothing for 13 years. We have in place, in partnership with the banks, a system that encourages and enables older people to learn how to use the banking system. It is no good complaining about it unless you are prepared to do something about it. Go back and look at Labor's record. I have here Mr Hockey's answer to a question on 24 November 1998. If you had read the Hansard, if you had listened to what was going on, if you had taken notice of what was going on in the other place you would know about that.On 31 May 1995, Senator Cook was asked the following question without notice:. . . what measures will the government take to ensure that the banks fulfil their community service obligations by reforming practices your government has been carping about for five years, inquiring into for five years and also doing nothing about for five years? On 11 July 1995, the then Treasurer Ralph Willis put out the following press release:The government agrees . . . on the need to supply better information to consumers so they can make the right choices about banking products . . .Nothing was done. Nothing happened in August, September, October, November, December or January. When we got to 26 February, four days before the federal election, Ralph Willis put out another press release saying that Labor will monitor fees. (Time expired)Question resolved in the affirmative.Committees499849984998Motion (by Senator Calvert)—by leave—agreed to:That the Joint Committee of Public Accounts and Audit be authorised to hold a public meeting during the sitting of the Senate on 14 May 1999, from 10 a.m., to take evidence for the committee's inquiries into the Auditor-General's reports.Ministerial Statements4998499815:31:004998Hill, Sen RobertSenator HILLBH4SALPEnvironment and Heritage10—by leave—I table the statement and the report by the Director of Meteorology on the Bureau of Meteorology's forecasting and warning performance for the Sydney hailstorm of 14 April 1999. I seek leave to incorporate the statement in Hansard .Leave granted.The statement read as follows—Between 7.15 pm and 9.25 pm on 14 April a hailstorm of unprecedented magnitude for that time of year moved across the eastern suburbs of Sydney. The storm caused untold damage across a wide area. Measured in economic terms, it was one of our most damaging weather events ever Fortunately, the loss of life and injury counts were not as high as in other severe storms. Nevertheless the Government does appreciate that the storm has caused significant cost, distress and severe dislocation to many people which is very much regretted.This was an unusual storm in many respects. Not in the 204 years of recorded meteorological history of Sydney has there been a hailstorm of such ferocity in April, and only a handful in the summer months have produced such large hail. Furthermore the storm approached Sydney from the south, moving in from the sea off Wollongong through the Royal National Park and over Bundeena, rather than taking the more usual eastwards path from the Blue Mountains to the coast.The Bureau of Meteorology did not predict the intensity of the storm, nor did it issue a severe thunderstorm warning to the public.The expert advice of the Director of the Bureau of Meteorology, Dr John Zillman, is that the professional judgments of the Forecasters that the storm would move off shore and abate were not unreasonable on the evidence before them. The climatological record and synoptic meteorological conditions did not suggest the combination of circumstances that would support a storm of such severity.Dr Zillman believes that the technology available to the Bureau's officers was appropriate and functioned effectively. Similarly, the Director advises in his report that the staffing of shifts involved was adequate.He has, however, noted in his report that the advanced radar systems becoming operational in Sydney is not available in other capitals. To this extent at least our systems are not as comprehensively technologically advanced as those available in the United States—a country which faces more severe weather events than face Australia's major population centres. The Bureau will engage an eminent US severe weather expert to examine our systems and make any recommendations for upgrading those systems appropriate to the risks faced by our major population centres.While I accept the Director's advice that the staffing of the Sydney Regional Forecast Centre was appropriate, I have asked that the Auditor General extend the scope of the performance audit of the Bureau that he is currently carrying out to examine the allocation of resources against the management of known and likely severe weather risks in the Sydney region and more widely In particular, I have asked him to examine the policies in relation to the number and deployment of severe weather experts, as well as the practices in relation to the training of staff on new high technology equipment as it comes into service.In addition, the Director of Meteorology will:. accelerate an ongoing program of training its forecasters in new techniques for using radar to monitor severe thunderstorms.. implement additional "silent" telephone lines between key operational centres to overcome difficulties caused by callers overloading the telephone system of their forecast offices.. upgrade the radar data display capability of the Bureau's core regional systems and re-configure the communications between the operational radars in the Sydney basin and the Bureau's forecast offices in Sydney and at Mascot to ensure small delays in data reception at Mascot are overcome.The Director of Meteorology will also commission a review by an expert in human factors management to evaluate the operational procedures and associated training adopted in its Sydney office, and more broadly. It is not sufficient that our forecasters have the best appropriate technology and professional training it is also necessary that the operational procedures and protocols that they are expected to follow are those that will ensure the best protection for the Australian public.The intention of conducting these external evaluations is to ensure that in the future all Australian cities can benefit from the best scientifically sustainable standard of forecasting for severe thunderstorms appropriate to the risks faced.Experience with the Sydney storm has also heightened appreciation of the critical interface between the Bureau and the media when intense and relatively short duration storms threaten life and property. Even if the storm had been forecast, it might not have been broadcast. I will ask the Bureau and the media, including the television media, to discuss arrangements through which real time advice of Bureau severe weather warnings can be given to viewers and listeners.Madam President, this Government has increased the funding for the Bureau of Meteorology by $4.6m per annum over the past three years. This is a reversal of a trend of declining appropriations. We are proud of our weather service, which is recognised internationally as being of a high standard. Dr Zillman, the Director of Meteorology's, international eminence as a meteorologist has been recognised by his appointment as the President of the World Meteorological Organization. The steps that the Bureau is taking in response to this event should reassure the Australian public that those standards, hard won, will not be lowered, and will be improved under this Government.That said, Madam President, the Director wisely cautions that severe storms are by their very nature difficult to predict, particularly when they occur, as they will from time to time, in apparently benign climatological and synoptic meteorological conditions. Regrettably, there is much still to be done in understanding the science of extreme weather events such as that which struck Sydney with such devastating force on 14 April.I commend the report to the Senate.BH4Hill, Sen RobertSenator HILL—I move:That the Senate take note of the documents. Question resolved in the affirmative.Bills5000500015:32:005000Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator MacGibbon, I present an advisory report of the Parliamentary Joint Committee on the Australian Security Intelligence Organization on the Australian Security Intelligence Organization Legislation Amendment Bill 1999. I seek leave to move a motion in relation to the report and to incorporate Senator MacGibbon's tabling statement in Hansard .Leave granted.The statement read as follows—I am delighted to be tabling a report from the Parliamentary Joint Committee on ASIO entitled, An Advisory Report on the ASIO Legislation Amendment Bill 1999. This report contains the results of our consideration of the ASIO Legislation Amendment Bill, which was referred to us by the Attorney-General on 13 April 1999.While the short timeframe available to us limited the scope of our review, it is important to acknowledge the significance of the fact that the review occurred at all It is a rare event that the legislation giving effect to our national security and intelligence agency is exposed to public scrutiny.In the report we express broad support for the purpose and form of the Bill.We believe that the Bill generally achieves an appropriate balance between public and private interests:. the public interest being to ensure that ASIO has access to the surveillance tools and techniques needed to safeguard Australia against security threats in the modern world; and. the private interest being to ensure that ASIO's activities do not impinge unduly on individual rights and liberties—principally, the right to privacy.Nevertheless, we do believe the Bill can be improved upon. Accordingly, we have made a number of recommendations aimed at clarifying the intent of the Bill and further enhancing the accountability and reporting regimes surrounding ASIO. One of the main issues raised in submissions was a concern that the Bill proposed to relax the test to be applied by the Attorney-General in considering whether to issue a search warrant to ASIO. We have recommended that a supplementary explanatory memorandum should be issued to make it clear that while the Bill rewords the test, it does not lessen the test.A number of submissions also expressed concern about the provision, which allows ASIO to `add delete or alter' data stored on a computer. We have recommended that the Bill, and/or the explanatory memorandum, should be amended to make it clear that ASIO is not empowered to add, delete or alter data stored in a target computer, except for the purposes of gaining access to the computer.In relation to accountability and reporting we have made three recommendations:. first, that the Inspector-General of Intelligence and Security report annually on the frequency with which ASIO recovers listening and tracking devices outside normal warrant periods;. second, that the memoranda of understanding regulating ASIO's access to tax and financial transaction reports (and any future modifications to these memoranda) be considered and cleared by the ASIO Committee before coming into effect; and. third, that the frequency of ASIO's access to financial transaction reports information be disclosed in the annual reports from the Australian Transaction Reports and Analysis Centre (known as AUSTRAC).We also recognise the strength of the argument, put to us in submissions, that community confidence in ASIO and its operations would be enhanced if it were more open in its reporting of activities. While there are clearly competing tensions to be addressed, we have suggested to the Attorney that the nature and scope of ASIO's public reporting should be considered further, perhaps by way of reference to the ASIO Committee.I believe that our review has been a valuable exercise and I look forward to the resumption of debate on the Bill and the Government's response to our recommendations.On behalf of the Presiding Member of the Committee, Mr Jull, I would like to thank all the members of the Committee for their efforts in producing this unanimous report.I commend the report to the Senate.5F4Calvert, Sen PaulSenator CALVERT—I move:That the Senate take note of the report.15:33:005000Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—I take this opportunity to make some brief comments on this, and Senator Sandy Macdonald is going to follow. The Attorney-General referred the legislation to the ASIO committee for comment. Probably the only weakness in this process was the timing which the committee was given to bring in its report. One would have to say that, not by any deliberate intent on the part of the Attorney, the timing was very tight. It did enable the committee to fully cross-examine the various agencies concerned but did not give the various interested groups in the community sufficient time both to put in their refined submissions and to appear before the committees. Again, this was unfortunate, but it was in no way intentional. However, I think it would be appropriate if this legislation, when it comes before the Senate, were referred to the legislation committee to give those groups their one day on which to raise further comments on this bill and to give them an opportunity, through this process with more timing involved, to put their views.What is involved in this ASIO legislation is the classic example of trying to properly balance the security needs of this country with people's civil rights. In this case that is a formula that is extremely difficult to assess because, let us face it, ASIO's operation are basically covert. It is not easy for civil liberties groups or even this parliament to assess whether ASIO is getting the balance right. Nevertheless, all you can bring to bear on this is your own experiences. I am probably uniquely advantaged because I have been a member of the security committee for six years. I have been in charge of two of the five security apparatuses in this country—DIO and DSD—and on various occasions I have had dealings with ONA, with ASIO and with ASIS. The security committee always took its duties extremely seriously—I am sure it is exactly the same with this government—and made sure its scrutiny of the activities of those agencies was at the highest possible level. What you need when you are dealing with security agencies is the right checks and balances.There have been examples in Australia, but more often overseas, where these agencies have gone beyond their brief and have in fact been caught up in the internal dynamics of their own being, to the detriment of the country. I think ASIS and the Sheraton raid was one example of that. I stress that these are the aberrations; they are not the norm with regard to Australian security organisations. They are rare. Certainly, after the Hope royal commission and the Samuels report many of the problems of the past that may have been institutionalised have been eliminated.I think these organisations have also become more balanced in their outlook. We are no longer dominated by the Cold War and the polarities that that developed in our society and what some people would see as entrenched biases in our security apparatus. I do not detect that they exist at all.Over and above all that, we do have a major protective device on all the powers of these agencies in the Office of the Inspector-General of Intelligence and Security. This office is given the power to oversight the five agencies to make sure they are working within their legislative charter. I would have to say that governments, when appointing inspectors-general, have always done it on the basis of appointing someone of independence. This government has had the opportunity of appointing only one Inspector-General, and that is Mr Bill Blick, whom most of us involved in the Senate estimates committee process would recognise as a very capable public servant, a fairly fearless public servant and someone who will carry out his duties in this particular job without fear or favour. As such, that is the most reassuring thing we can tell the Australian public when we are looking at the checks and balances that exist.There are basically three key issues in this legislation that will be of concern to people. Firstly, the access by ASIO to tax records and AUSTRAC records. This is something they have not had in the past, but I would certainly deem it something they need to use, albeit sparingly, in the course of their duties. With regard to tax, they do not have direct access to records under this legislation proposed. They will have to approach the Commissioner of Taxation, explain the purpose of their request and it will be up to the tax commissioner, under the powers in the tax act, as to whether he allows access to those records. The evidence given by Mr Richardson, the head of ASIO, was that he did not think he would need to do that on a regular basis. The access to AUSTRAC is also limited because they do not have direct, online access. They have to go Sydney, use a PIN number and access those records to assist themselves. So, in both cases, ASIO is not proposed to have unlimited access.But I do notice this criticism around: why give ASIO this increased power? I look at it from the point of view of who already has this power. If the critics are right, they should be a lot more worried about other agencies having this power than ASIO, who have a fairly good track record when it comes to probity. You already have a couple of the more unsavoury, at times, state institutions like ICAC and the CJC that have direct access into AUSTRAC, and you have several other agencies with no better proven track records—federal agencies—with access to tax records. So if indeed people want to argue that ASIO should not have this sort of access, they really should go back and look at all the other statutory abilities for other agencies to have access to these records which have a far less commendable track record than ASIO itself has.The second major area of reform here is to do with the timing of warrants. It is not possible for ASIO to meet the same timing as to the issuing and ceasing of warrants as law enforcement agencies. Why? Because it is covert, and it is not always possible to get the timing right if you want to keep the covert aspect to it. But again the act, as proposed by Attorney-General Williams, does detail various restrictions on ASIO's ability to issue warrants. I think they have the balance right.The third area that will cause some concern is the right of ASIO to go into computers to access information. Again, they have to do it in a covert way. I think the clause that has people most worried is the one that gives ASIO the right to alter information in order to continue the activity as a covert action. It does not have the right to just go in willy-nilly and change information. It only has the right to change a computer set-up to the extent to which they need covert entrance into it. Again, this is a modernising of the act. When the ASIO acts were first written, people did not think information to that extent would be kept on computers. We all know what has happened, even in the last 10 years, since the ASIO Act was last changed.So, on the whole, I do not regard the legislation as getting out of balance the rights of the Australian community to expect a security apparatus to operate with full and sufficient powers as opposed to the balance required for civil liberties. One thing we should always remember: whatever value ASIO is to us now, it has to keep its residual capacity, its techniques and its abilities there for time of crisis. We hope that time of crisis never comes, but it must be in a position to respond to it.I should say, finally, that the views I have expressed today are ones I have come to by listening to the witnesses and assessing the act myself. It does not bind my party; everyone should know that. This act will go through the normal Labor Party processes and, in turn, the Labor Party will either support or oppose it and, being a collectivist, I will abide by whichever decision they make. But I must say that, having examined the act with the other committee members, I think it has the balance right. I think the Attorney-General has drawn up an act that meets the modern requirements without being excessive, and I think that in terms of the civil liberties implications of it, the very defence of all this is the existence of a competent Inspector-General who will enforce the provisions with fairness and rigorousness.15:43:005002Macdonald, Sen SandySenator SANDY MACDONALDCX5NSWNP10—Following Senator Ray's very balanced comments, I want to make some comments on this tabling of the advisory report on the Australian Security Intelligence Organisation Legislation Amendment Bill 1999. This legislation revolves around the necessity for ASIO's powers to be extended and varied to meet not only the technological change but also the times in which we live and, in one particular sense, the security requirements of the Olympics next year. As Senator Ray has said, we have had a short time frame for our review and some people who wished to have the opportunity to come before the committee and make submissions may have been excluded because of the time constraints. But, in general terms, the committee supports the purpose and form of the bill. The bill proposes to allow ASIO such access to tax and financial transaction report information as is relevant to the performance of security intelligence functions. We support this access, provided appropriate safeguards are in place. These safeguards are to be described in the memoranda of understanding being negotiated between the Director-General of ASIO, the Commissioner of Taxation and the Director of AUSTRAC. We think it is important that these memoranda not come into effect until after they have been considered and endorsed by the ASIO committee.This is an important accountability measure. The bill proposes to extend the duration of search warrants from seven to 28 days and to allow the Attorney-General to delay the commencement of warrants. These provisions will allow a degree of flexibility in the execution of warrants that is appropriate for an agency that needs to execute warrants covertly. ASIO is not like a law enforcement agency that can execute search warrants in public.The bill also proposes to allow ASIO to remotely access computers. This is an appropriate extension of ASIO's surveillance powers and enables ASIO to make use of available technologies. We have, however, made a recommendation to make plain that ASIO cannot `add, delete or alter' data stored in a computer except for the purposes of gaining access to that computer. This means that ASIO can unlock the door to information, so to speak, but it cannot tamper with that information.We also support the extension of the time frames within which ASIO can recover listening and tracking devices. While we think it is far preferable that such devices are recovered within the period that they are active, we accept that it can be difficult to retrieve such devices covertly and within warrant periods. As an additional safeguard in this area, as Senator Ray has mentioned, we have recommended that ASIO's accountability watchdog, the Inspector-General of Intelligence and Security, report annually on the frequency with which listening and tracking devices are recovered outside normal warrant periods.Finally, it is worth saying that it is no easy task to achieve a balance between protecting national security interests and individual rights and liberties. We consider that this bill, as completed by our recommendation, strikes an appropriate balance.Question resolved in the affirmative.Bills5003s2045003Motion (by Senator Jacinta Collins) agreed to:That the following bill be introduced:A bill for an Act to amend the Workplace Relations Act 1996 and the Corporations Law, in order to help protect the entitlements of employees.Motion (by Senator Jacinta Collins) agreed to:That this bill may proceed without formalities and be now read a first time.Bill read a first time.500315:47:005003Collins, Sen JacintaSenator JACINTA COLLINSGB6VICALP00—I move:That this bill be now read a second time.The Employment Security Bill 1999 that I present to the Senate today is identical to the Employment Security Bill 1998 that was introduced by Senator Mackay in May 1998 and debated during general business on 25 June 1998. An identical bill was also introduced into the House of Representatives in the last parliament and in the current parliament by Mr Bevis.This bill was first introduced after Minister Reith advised the public that the government would put the issue of protection of employee entitlements on the agenda for the forthcoming meeting of the Labour Ministers Council in May of last year, but there has been no progress. Prime Minister Howard was reported as saying on 18 December last year that the government may review laws protecting workers and their entitlements when the employing company becomes insolvent, but this has not been done.The Employment Security Bill 1999 will help protect the entitlements of employees by amending the Corporations Law and the Workplace Relations Act. It will protect the most important asset of all Australian workers—their job—and provide increased job security. The bill is aimed specifically at corporate entities which seek to restructure and avoid their financial responsibilities to employees. More specifically, the bill addresses the circumstances of the corporate restructuring undertaken by Patrick last year when sacking its entire work force. The employees of the Patrick labour hire companies were left without their two most important rights. Those workers were left without any claim to accrued entitlements of annual and sick leave, redundancy payments and long service leave. These accrued entitlements could be made only against their direct employer, who was now a Patrick company in receivership.Secondly, the workers had lost their right to be protected against unlawful termination. This right has effectively been rendered meaningless. Employees could be reinstated only to their direct employer, the Patrick employing companies. However, as those companies were in receivership, any reinstatement order would be of no practical effect.Any employee of a corporation is potentially at risk of this type of corporate restructuring. Whilst workers have a legal right to accrued entitlements, there may not be any assets to provide for those entitlements on termination. Those employees have a right not to be sacked illegally, but a reinstatement order would effectively be unenforceable.During the waterfront dispute last year, employer representatives did not condone the use of such artificial contrivances as a legitimate method of disposing of a work force. Speaking on SBS in April last year, Mark Paterson, Chief Executive Officer of the Australian Chamber of Commerce and Industry, stated:. . . if there are other sectors of the Australian economy unwilling to embrace reform, then this is a lesson for them.Labor does not accept that employers have the right to artificially manipulate their corporate entity to avoid their legal obligations to their employees and, accordingly, is introducing this bill.This bill will seek to remedy the insecurity employees face as a result of such corporate practices, which unfortunately at the current time seem to be extending from the small business sector—within, as many of us would be aware, the textile, clothing and footwear sector—into much larger corporations. This type of artificial arrangement entered into expressly to avoid obligations to employees has no place in the decent and proper management of industrial relations in Australia. This is why it is even more concerning that it is growing into what we might regard as our more responsible corporate citizens. Regrettably, the current law allows it to occur. This bill will ensure that in circumstances where an associated company is able to meet the financial obligations of its bankrupt affiliate, it does so and the workers' entitlements to wages are met.Obviously not every company placed in liquidation participates in the type of Patrick corporate restructuring. However, there have been many recent examples of employer insolvency which have resulted in substantial losses to employees. One example is the Austral Pacific company, where approximately 600 employees are owed $9.8 million in entitlements. The corporate structure of that group is such that the ability to trace ownership of corporate assets for the purpose of distribution to workers is complicated.The government has tried to say that the circumstances of the Patrick corporate scam were unique, but this is plain wrong. Aside from government support—or, as some have claimed, conspiracy—any corporate group could organise their structure so that their employees are employed by an internal labour hire company with a tenuous agreement to supply labour to the rest of the group. Indeed, many corporate groups, for quite legitimate reasons, already have separate companies within the group that employ the labour. Just as the separate companies own the assets, own the land, hold the debt or hold the tax losses, a corporate group could easily alter this structure so that they could do what Patrick's did.The government has also tried to argue that other remedies apply under Corporations Law, but the amount of money lost by Australian workers through corporate insolvency today is staggering, and current remedies are obviously not accessible. Some other recent examples of employer insolvency and substantial loss of workers' entitlements are as follows. We are all aware of Cobar mine—270 workers lost $6 million; Woodlawn mine, 160 workers lost $6 million; Grafton Abattoirs, 250 meatworkers lost $3 million; Rockhampton and Yeppoon, 157 hospital workers lost $1.4 million; Sizzler restaurants, 2,000 workers lost $2 million; and Roadmark, where $175,000 in severance payments is owed. This bill can protect those legal entitlements for Australian workers.As I have said, the bill amends both the Workplace Relations Act and the Corporations Law. There will be two amendments to the Workplace Relations Act. Firstly, the bill introduces a new section 170JI. The effect of this section is to allow the court or commission, where it has made an order for reinstatement by an employer of an employee under section 170CH or 170CR and where satisfied that it is just to do so, to make an order with retrospective effect that a related body corporate shall be instead deemed to be the employer. At present, reinstatement can only be ordered against the direct employer.Subsection 170JI(2) sets out the criteria to which the court or commission shall have regard in deciding whether the making of an order is just. These are: firstly, the extent to which reinstatement of the employee by the direct employer is impractical because the employer is in receivership or is in the course of being wound up; secondly, the extent to which the related company took part in the management of the direct employer; thirdly, the extent to which the circumstances that gave rise to the receivership or to the winding up of the direct employer are attributable to the actions of a related company; and, finally, any other relevant matters.The proposed subsection 170JI(3) gives the court or commission the power to make orders regulating the contract of employment between the employee and the related body corporate and dealing with accrued entitlements and other matters necessary to give practical effect to the order. In the Patrick situation, this provision would have permitted the court to make an order reinstating the sacked employees to other companies in the Patrick group.The various requirements would have been easily satisfied because, firstly, reinstatement to the Patrick labour hire companies would be impractical because those companies were in receivership. Clearly the Patrick group played a substantial part in the management of the Patrick employing companies and the circumstances which gave rise to the receivership of the Patrick employing companies were clearly attributable to the actions of the Patrick group. It was they who orchestrated the corporate scam which led to the companies being in receivership. The proposed subsection 170JI(4) provides a definition for `related body corporate'. These amendments will therefore ensure that companies cannot use the Patrick corporate scam to leave their workers without any effective remedy against unfair and unlawful termination.Secondly, the bill introduces a new section 178A. The effect of this section is that a `related body corporate' can be held to be liable for the payment of legal entitlements to employees. The related company will be liable for the payment of any legal entitlements of unpaid employees in the following circumstances: firstly, a company—the related body corporate—has entered into a contract for the carrying on of work for or on its behalf by a related company, the employer, including a contract or arrangement to hire labour from the employer; secondly, the employer has contracted to undertake work for or on behalf of the related body corporate, including the provision of labour services to the related body corporate; thirdly, employees of the employer are engaged in carrying out the work; fourthly, the work is carried out in connection with a business undertaking of the related body corporate; and, finally, the employees are, or at the time of the non-payment were, subject to an award, an order of the commission, a certified agreement or an Australian workplace agreement.In the Patrick situation, this provision would make the Patrick group of companies liable for the accrued legal entitlements of the employees of the Patrick employing companies. These requirements would have been easily satisfied: the Patrick group and the Patrick employing companies entered into contracts for the hire of labour from those companies to the group; the work under the contracts was carried out in connection with the stevedoring undertaking of the group; and the employees were, at the time of non-payment, subject to an award and a certified agreement.The proposed subsection 178A(2) provides that liability does not apply where the related body corporate has a written statement given by the employer. A statement for these purposes is a statement that all legal entitlements payable to relevant employees for work during the period specified in the statement have been paid. The proposed subsection (3) provides that the regulations may set out details with respect to the form of the written statement. Subsection (4) provides that written statements under the section must be kept by the related body corporate and the employer for at least six years. Penalties are provided in subsection (7). Subsection (6) provides for false statements.Proposed subsection (5) provides that the related body corporate may withhold any payment due to the employer under a contract until the employer gives a written statement for any period up to the date of the statement. Any penalty for late payment under the contract does not apply to a payment withheld under this provision. Proposed subsection (8) provides that the provisions of the act relating to the recovery of amounts due under legislation, an award, an order, a certified agreement or an Australian workplace agreement apply to the recovery of legal entitlements payable under proposed new section 178A by a related body corporate.To avoid any doubt, the proposed subsection (9) states that the proposed new section 178A extends to a contract if the employer is in receivership or in the process of being wound up, unless payments made under the contract are made to the receiver or liquidator specifically in respect to the legal entitlements of employees. Subsection (10) is a definition section.The bill will also amend the Corporations Law in two particulars. Firstly, the bill inserts a new division 6A to deal with the liability of a related body corporate for debts of a company being wound up in insolvency. Proposed subsection (1) would enable the liquidator, a creditor or the ASC to apply to the court for an order that the related body corporate pay to the liquidator the whole or part of a debt of an insolvent company. The court may make such an order if it is just to do so.The matters which the court will take into account in determining whether to make an order are the extent to which the related company took part in the management of an employer; the conduct of the related company towards the creditors of the company generally and to the creditor to which the debt or liability relates—that is, the employees; the extent to which the circumstances that gave rise to the winding up of the employer are attributable to the actions of the related company; and any other relevant matter.Proposed subsection (4) provides that an order may not be made under these provisions if the only ground for making the order is that creditors of the company have relied on the fact that another company is or has been a related body corporate of the company. Again, this provision will give greater security to employees in relation to their accrued legal entitlements.Secondly, the bill will amend section 1317HD, dealing with the recovery of profits and compensation for loss resulting from contravention of civil penalty provisions. Where a person contravenes such a provision in relation to a corporation, the corporation or creditor or the ASC may recover, as a debt due to the corporation, an amount equal to any profit made by that person or another person because of the contravention and an amount equal to any loss or damage suffered by the corporation as a result of the contravention.These actions may be taken whether or not the person has been convicted of an offence in relation to the contravention and whether or not a civil penalty order has been made against the person in relation to the contravention—proposed paragraphs (c) and (d). Proceedings under this section may only be commenced within six years after the contravention—proposed subsection (2). In the Patrick case, these provisions would have meant that the employees of the Patrick companies—not just the receivers—would have had the right to sue Chris Corrigan and the other Patrick directors for debts arising from breaches by them of the Corporations Law.This bill provides the opportunity for parliament to ensure that workers' entitlements are honoured and that artificial corporate contrivances do not deprive Australian workers of those rights. When this bill was first introduced, it was not supported by the coalition. Some coalition members felt that the bill raised issues of constitutional validity, amongst other matters. Constitutionality has been addressed within various pieces of recent legislation without disabling the government in addressing their concerns.We would seek that the government senators act on concerns as expressed by the Prime Minister and by Minister Reith, and join constructively in supporting the passage of this legislation. We remain open to any proposals to resolve issues of concern with respect to the viability of any measures to protect the rights of workers affected by corporations using artificial contrivances to avoid their obligations. I know there have been many coalition members who have been concerned about such contrivances occurring in their seats.At the moment, employment security is an issue that is of growing concern to Australian workers. Within the current context of the budget forecasting that unemployment will remain steady at 7.5 per cent well into the future, with reports such as today's from Ian Henderson that underemployment is disturb ingly high despite periods of steady jobs growth, with the department of employment forecasting a looming slowdown in jobs and given that the budget again did not offer a great deal in relation to assistance for the unemployed, we call on the government to honour the concerns that have been raised by the Prime Minister and by Minister Reith and to work constructively in this area.Minister Reith has announced his next wave of labour market reform. Mr Costello reiterated yesterday the importance of this labour market reform. But this component is missing, despite the fact that the Prime Minister and Mr Reith have committed themselves to taking action. By supporting this private member's bill, the government has a means of being seen to be taking action in this area. I call on honourable senators to do so. I commend the bill to the Senate.16:06:005007Tierney, Sen JohnSenator TIERNEYO15NSWLP10—The Senate is debating the Employment Security Bill 1999 yet again. This matter did come before the chamber last year and it did go before the House of Representatives last year before it came into the Senate. What we have here is an orphan bill that keeps wandering around the parliament, starting in the House of Representatives, coming back to the chamber here and then coming back yet again. I do not think there is a great deal of dispute from the government side on the basic idea behind it, because we do see, in cases where companies suddenly collapse and disappear, that workers can lose entitlements.GB6COLLINSSenator Jacinta Collins—Well, do something.O15Tierney, Sen JohnSenator TIERNEY—Yes, you have got to do something, Senator Collins, but you have got to do it within the bounds of constitutionality, and you did point to that towards the end. As I will point out a little further on in my contribution today, what you are proposing to do in your two amendments to two different acts of the parliament is, on our advice, actually not constitutional. This is basically the reason that the government does not support the bill as it is being put forward today. First, we do not think it is workable. Secondly, we do not think it is constitutional. The sentiment is right but we need to work further, and the ministerial council is indeed doing that. I think we might have to await the outcome of its deliberations.Before I get into the detail of the bill and the reason that the government is responding in a particular way, I want to put this whole debate in a broader context. It is part of ongoing labour market reform which was started about 20 years ago. The unfortunate thing about that reform process is that the last ALP government got their priorities all mixed up. If they were really interested in making Australia a highly competitive, world-class economy, they should have really moved into reforming labour markets first. That was the first priority. What the last government actually did was to start by reforming the financial markets. Then they moved on to the trading markets, particularly tariff reform. Then they moved on to what they called their micro-economic reform, including what they called labour market reform. Of course, that labour market reform was very much driven by the trade union movement, and that was their problem.Because the Labor Party is a total captive of the trade unions, they had to respond to what the trade union agenda was right at the start. The proper sequence was to reform the labour market first to get the costs in this country down and make it a competitive economy; then reform the other markets and slowly reduce tariff protection when we have got industries that can compete and are not shackled by a whole range of uncompetitive labour market practices; and then reform the tax and financial structure. That is what they should have done through the 1980s and early 1990s. But, as I have indicated before, they did it the other way around—they left labour market reform to last. They had the much heralded accord during that time which in theory was labour market reform, but it delivered to Australia a lose-lose outcome. What we had was the rigidities of the labour market retained but we also had reducing real wages during that time. What we have under this government is an opening up of the labour market and we are having greater flexibility in the labour market, particularly with Australian workplace agreements. Guess what is happening in this more flexible system? Real wages, when your income is adjusted for inflation, are actually going up. So we are moving into a successful policy.In that sort of broad framework we have got to consider where we go next, and what Mrs Crosio first proposed and is now being proposed in this chamber today by Senator Collins is probably not the way to go. What we have got to remember is that what Senator Collins is driving here is very much the union agenda. The thing that amazes us all on this side of the parliament as we look at the other side is that we see people who were the head of their own particular national union or were party secretaries of their state division of the party. If you add up all the MPs on the other side who are in that position, it would be a huge proportion. Senator Collins is shaking her head there. I think she is indicating that it is not 100 per cent but maybe only 95 per cent. You are an exception, Senator Collins. That is terrific. You should encourage more people in like you, and then we will have a greater diversity of views and a greater contribution to the parliament. If you are not in that position, Senator Collins, I am really surprised that you are the one leading the debate.The Labor Party has for many years been answering the call of the union movement on a whole range of issues, particularly this one. As we really try and reform the labour market, I must pay some tribute here—I do not often do this—to the Australian Democrats. They did actually sit down with Minister Reith and try to hammer out some sensible reforms in the first term of this government. Those reforms have been in place now for some time and they are actually moving the Australian economy along with a much more flexible labour market. The Democrats are to be commended for their cooperation on that particular reform. It is a great pity they are not quite as cooperative on tax reform at this stage. But we do not expect cooperation from the Labor Party on this because we know they are just the servants of the union movement.What they are trying to do, of course, is wind back the industrial relations clock to bring in things like secondary boycotts and strike pay. They do not lose their old agenda. They want to abolish youth wages. There is a sunset clause on that particular labour market reform and, if that comes into effect, next year we are going to have a huge increase in youth unemployment because that reform will disappear under a sunset provision. So, even though they say they stand up for the workers, they are always arguing very strongly in this place for those who are in the employed work force, trying to do things for their conditions and resisting the types of reform that are very much needed.We have some allies in the views I am expressing here about the role of the trade union movement in this sort of reform. People like Mark Latham from the ALP, for example, lament that the union movement already exercises tremendous power in the ALP, mainly through its support for the ruling faction in each state branch.Simon Crean really wants to turn the clock back on labour market reform. This is a man who, when Mr Beazley falls over, as he inevitably will soon, will probably be the next Labor leader. He is a former ACTU president. The Labor Party would be totally back in the grip of the union movement if we go to Simon Crean. His policy is back to the future, back to the eighties: revive the accord and once again give the union movement a seat at the cabinet table—if Labor were fortunate enough to be re-elected to government—and of course then bring back secondary boycotts and reintroduce strike pay. That is the agenda of the Labor Party and what they are trying to do here today, in a very unrealistic way, is move their agenda further on.Why are they so interested in this particular aspect of labour market reform? You have to look back to the waterfront strikes of last year to find the real answer to that and to the groundbreaking work by Minister Reith. I think he will go down in history as a hero of labour market reform because he is the first minister who has really achieved any meaningful gains in a very frustrating area of reform in this country. It has been an issue which I have followed every since I have been in the parliament, and I watched with great interest what Minister Reith did last year.Some substantial reforms have come out of that, a far cry from what was happening when I first came into this parliament. We then had Minister Collins—not Senator Jacinta Collins but Minister Bob Collins—who was the minister for the waterfront. When I came into this parliament in 1991, he had said the previous year, `If I don't reform the waterfront with labour market reforms in one year, I will resign.' When I came in, it was 71 days to resignation day and we continued the countdown.Senators who were here at the time, like Senator O'Chee, will remember that countdown. We would say, `Well, 70 days to go.' He instituted a number of very minor reforms and the main outcome of them was that the Commonwealth government spent another $450 million in paying out redundant workers, a lot of whom actually came back later as casual employees. They took their redundancy pay, pocketed that, then rejoined the work force casually and came back and made a lot more money. So that was Labor's approach under the WIRA agreements, which was not particularly useful.We had to wait for Peter Reith to come in and make a number of very courageous decisions in conjunction with Patricks, who really put their head on the chopping block in the way in which they expressed the reforms and went ahead with those reforms. I can understand why they did it. They had come and seen our committee—not just them, but a group of stevedores—and they were totally frustrated with being ripped off by unfair work practices on the waterfront. We got to that point last year and they put forward a range of reforms that are making this country a lot more competitive.From that situation we come to this particular bill today because what was proposed and what came out of the Patricks case was a need to protect people who had lost their jobs suddenly. There is considerable concern across the community on that issue and the government does acknowledge that and would like to move to improve the situation. But broadly we would like to point out that there is a whole range of provisions in law at the moment, under the two acts that I will mention in a moment, that put those protections in at this time, and this bill is miscast in a number of ways because of that. It is also miscast, as I indicated earlier, because it is a bill which has doubtful constitutional validity in the way in which it approaches a certain number of matters, and I will mention those in a moment.The remedies in the Employment Security Bill that we are debating today deal with the Corporations Law and the Workplace Relations Act. In terms of the Workplace Relations Act, it proposes to empower the Australian Industrial Relations Commission or the Federal Court to order that a body corporate relating to the employer be deemed to be the employer for the purpose of a reinstatement order. It also makes a related body corporate liable for the payment of the legal entitlements of employees of an insolvent company.The second thing it proposes to do, through the Corporations Law, is enable a liquidator or a creditor or the ASIC to apply to the Federal Court for an order that the related body corporate pay the liquidator for the whole, or part of the, debt of an insolvent company. It also proposes allowing a creditor or the ASIC to seek a recovery when loss or damages have been suffered as a result of a breach by a director or another officer.The problem with what they are proposing is that it substantially duplicates recommendations already made in the 1988 report by the general insolvency inquiry, known as the Harmer report. Those recommendations were not adopted into law by the then Labor government so the first thing Senator Collins should do is go back, have a look at the Harmer report and actually realise, in terms of the constitutional validity of the law, why that actually was not done.The amendments that are put forward in this bill are based on outdated provisions of the Corporations Law. The Treasury has advised that the Corporations Law changes proposed are either redundant or unworkable so, if that is the case, why on earth would the government support this bill that is before the parliament? We do not want provisions that are redundant; we certainly want provisions that are workable and that is not the case in this. So we have a bill that does not add anything but it does duplicate and it does create considerable confusion.If we take, for example, the area relating to directors who do not owe a duty to the creditors, it is a fundamental nature of collective insolvency proceedings that such actions are only available to the liquidator or with the liquidator's provisions. The liquidator is charged with managing the prospective actions of the company on behalf of all creditors. His role could be seriously compromised if individual creditors were permitted to bring action at will, and that is what is proposed by the Labor Party's changes.The amendments that Senator Collins is proposing under this bill do nothing to address the situation where several creditors bring action over a single alleged wrong. The law already contains extensive provision for the recovery and return of moneys to insolvent companies for the benefit of all creditors. Liquidators and unsecured creditors can sue a director directly for compensation for loss or damage suffered as a result of a company trading when insolvent. There are also provisions which allow a reversal by a liquidator of transactions which lead to insolvency.If the intention behind the proposal is to expose the acts of directors to actions of creditors, even in a financially healthy company this would amount to a fundamental change to corporate law and policy which would have a very serious ramification on the way companies conduct their business. Creditors have no interest in the conduct of directors except to the extent they impact on the ability of companies to pay their debts. Even shareholders do not have the same rights as proposed here. The Australian Government Solicitor has advised that the bill as drafted would probably be invalid; however, the broad intentions could probably be implemented by Commonwealth legislation that would be within constitutional restraints.Finally, I suggest to Senator Collins and Mrs Crosio, who originally proposed this bill, that the government is opposing it not because we do not agree with the underlying sentiment, but because the bill is basically miscast, it will not achieve the objectives that are set out and it will probably be found in a court of law to not have constitutional validity. On that basis the government opposes this legislation.16:24:005011Murray, Sen AndrewSenator MURRAY3M6WAAD00—I do not intend to speak at length on this bill, but I do want to recap a little bit of history. This issue is not a new one. Hearing some of the contributions to date, it may be thought that it really dates from the circumstances surrounding the Patricks, Cobar and Woodlawn issues.NB5CAMPBELLSenator George Campbell—It goes back further than that.3M6Murray, Sen AndrewSenator MURRAY—That is right. Senator George Campbell, who has great experience in these matters, says that it goes back a lot further than that. That is the point I want to make. In 1988 the Labor government referred this matter to the Law Reform Commission, which brought down some recommendations as to how the matter could be addressed and fixed. The Labor government in its next seven years of government failed to fix the problem. That is a great shame, because the consequence of failing to address the recommendations of the Law Reform Commission meant that the workers affected in Cobar, Woodlawn, Patricks and many other instances lost their entitlements.The next stage was when events did come to a head about the Patricks time. At that time, on behalf of the Australian Democrats I went back to the Law Reform Commission's recommendations, had an amendment designed to address most of this problem and put that amendment to the Corporations Law bill, which was before the Senate at the time. Labor supported the amendment, as did the two Greens and the two Independents. The consequence of that was that it went down to the House of Representatives for approval. The government, with its numbers down there, rejected it and when it came back up here Labor failed to insist on that amendment. The result is that, a year later, we are still left without the protection that you are now addressing.There is a failure of will there, frankly, which dates back to 1988. I am very pleased to see that the honourable member Crosio from the House of Representatives and Senator Jacinta Collins from the Senate have decided to address this matter now.In this contribution I do not wish to deal with any of the possible defects that may be within the bill. Defects can always be amended and improved. I recognise that the bill has echoes of the various amendments and recommendations of the Law Reform Commission of so long ago, but I would not like to see this languishing in the bill limbo land which private members' bills do have in the Senate. I say to the Labor Party: from 1 July when we combine we will have the numbers in the Senate and, if you want us to support you in having this bill debated cognately with any workplace relations bill or Corporations Law bill that is before the Senate, I would be prepared to support that and go to my party room to argue that we support it. This is a serious issue that needs to be raised as such.Having said that, I say this to the government: if you do have problems with the way the bill is expressed at present and if you do have genuine concerns, you heard the offer from Senator Collins and you had better come up with your own solution to a problem which you yourselves have recognised and get the Labor Party to agree to it and get it done. Otherwise you are going to be faced with the situation where the combination of the Labor Party and the Democrats will address this problem because it must be addressed. It is not fair or right that ordinary workers, ordinary employees, should be put at risk and lose their entitlements in the manner they have.The fact is, the government, the ministers, the Prime Minister and the coalition members and senators recognise there is a problem. Our party, for one, would be delighted if the official opposition and the government got together and fixed it—and fixed it soon.Having said that, I should also indicate that this problem of restructuring companies to avoid obligations to employees does not affect just employees. It is quite possible for corporations to restructure themselves to avoid their obligations to other creditors—suppliers, landlords and anyone with whom they have a contractual relationship.That is what it is about. At the heart of this bill is a discussion on contract, on the way in which devious corporations can manipulate the law to avoid their obligations under contract. In this case the emphasis of Senator Collins is on contracts with employees, but it also can be, as I said, on contracts with any other form of supplier, be it landlords or normal suppliers, normal creditors and those sorts of people.In concluding my short remarks, I am sure that this bill—as any other bill—could be improved. We certainly will work with the Labor Party to get an improved bill into law, and we will have the numbers with them to make sure that this matter is put on the agenda and does not languish as private members' bills normally do. If the government has that knowledge in their heads, hopefully they will take the bill seriously and do something to address this problem.16:31:005012Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I take note of the offer made by Senator Murray on behalf of the Australian Democrats. We may well call on them in the not too distant future.I commence my remarks by making a brief reference to a point raised by Senator Murray and the recommendations of the Law Commission in 1988. While I acknowledge that those recommendations were not given effect to by the Labor government over the period from 1988 to 1996, I doubt very much if those recommendations in themselves would have addressed the sorts of issues that we were confronted with in the Patricks dispute, or Woodlawn mines, or Ashanti. No-one contemplated the company restructuring that occurred to create the hollow logs in order to avoid the obligations that companies have in respect of their employees. It has given a whole new meaning to the issues that we are trying to address. I think it is a bit hypocritical of Senator Tierney, the first government speaker, to berate us for endeavouring to try to address an issue that essentially arose from an agenda that this government was very much at the heart of.Senator Tierney said that the government would like to move to improve the situation, but then went on to say, `But—but, but, but—there are all these reasons why we cannot do it.' There is no reason why they cannot do it. If there is a constitutional problem, then let them come and work with the opposition in resolving that. We can accommodate a meeting to overcome the constitutional problems if they are the concerns the government have. If there are other issues in relation to the bill that they see are problems, then they can come along and work with us and we will work it through, provided that at the end of the day we put something in law that genuinely is about protecting the earnings of ordinary battlers, because that is what is at stake here. In many respects, it is the deferred earnings of workers that are being ripped off as a result of these malpractices that have been occurring with company insolvencies.I say that because I think the role of the Howard government has to be assessed in the context not of their rhetoric but of their actions. Before the 1996 election they said they were about a fair go for all Australians. They continued to say that they had the interests of the battlers at heart, that they were the true representatives of the battlers in this country. If they were really interested in defending the rights of battlers, they would have done something fairly quickly to address this issue when it became apparent.Let us have a look at where the issue actually emerged. Where did the hollow log strategy actually emerge? It emerged from the Patricks dispute. It emerged from the dispute on the Australian waterfront and the reform agenda that this government was pursuing in terms of the waterfront in conjunction and in collusion with Patricks Stevedores. And no-one can suggest to me—given all that we know about that dispute; given the amount of money this government poured into consultancies, advisers and providing assistance to the companies in that dispute—that they were not aware at any time through that process that what Patricks was doing was creating hollow log companies in order to shift the employment of their employees to avoid any liabilities in the result that the dispute went their way.The government had to know. The minister for workplace relations had to know that Patricks was contemplating this action. They seemed to know pretty much everything else that was going on around the waterfront at the time. It is interesting, isn't it, that within three hours of Patricks making an announcement at 8 o'clock in the evening that they were going to sack all their employees, this government responded with an announcement that they were going to introduce legislation the next morning in the parliament to set up a $250 million fund in order to pay out the redundancy money on the waterfront.Now you would not argue that there was not collusion in that environment. Was it just accidental that the draftsman happened to have that sort of bill sitting ready in the eventuality that something might happen on the waterfront? When there is that degree of relationship between the events on the waterfront, then you have to draw the conclusion that the government knew what Patricks was intending to do with the hollow log strategy. And obviously, that was the case on the waterfront. What did that do? That sent a very clear message to every other employer in the country that they ought to be doing the same thing—`If you have a problem with your work force, if you want to get rid of your work force, if you want to make people redundant, here is the strategy in order to avoid any financial obligations to that work force. Here is the way to do it.'You could hardly blame employers, most of whom are greedy anyway, of taking advantage of a set of circumstances that is being presented to them. A number of them did. What was the cost of that to ordinary workers?I want to run through some of the companies. Woodlawn mine: 160 workers lost $6 million in deferred income. Cobar mine: workers lost $5.4 million in retrenchment pay that remains outstanding, despite the fact that the parent company, Ashanti, after Cobar mine closed down, managed to pay its shareholders a dividend of 20c a share totalling over $US21 million. It could not pay $5.4 million to its employees. It had ripped off its employees' deferred earnings, but was able to pay a dividend of 20 per cent to its shareholders shortly after that occasion. Austral Pacific Bus Company: 700 workers lost almost $10 million of income that disappeared into a hollow log. Grafton Abattoir: 250 workers lost $3 million of their deferred income, again, into a hollow log.In most if not all of these cases the employees believed that the employer they signed up with for employment when they first joined the company was the employer that was actually employing them. In most of those cases, there had been a shift in the corporate structure of the company which had changed that employer-employee relationship and for no reason other than simply avoiding any liability in respect of the income of those employees. It was interesting and enlightening to hear the comments of one of the miners at Cobar mine on the Lateline program on 24 March 1998, Mr Tony Chaplain, who had this to say about his predicament:I don't want my sons down the track to be in the same position I'm in here, of losing everything they've worked for, of nine years of their life, or in the case of my father, 25 years of his life. If the laws aren't changed, the mine can start up in Cobar in six months' time and we could be in the same position we are six months after that. This whole issue has to be dealt with now. And if the Prime Minister thinks it's not a major decision, well, he's damn wrong.We need a strong mechanism outside of companies in order to protect employees' entitlements. If there has been any experience over the past couple of years, that is fundamentally clear to everyone. The current provisions of the law do not act to adequately protect employees' entitlements. The nature and the way in which companies are now functioning in treating this matter of itself has created the imperative for legislation to be introduced in order to ensure that there is a measure of protection for workers and to avoid the sorts of examples which I have just outlined from occurring again.The Employment Security Bill 1999 , which has been proposed by Senator Collins, is an attempt to create an insurance scheme that will protect workers' wages. At the end of the day, everyone knows that the moneys that have been ripped off those workers is their deferred earnings which have been held in trust for them by the employer. They are entitlements which they have already earned. Although they have been held in trust by the employer, what has occurred in these circumstances is nothing more than outright thievery of the deferred wages which those employees worked hard to achieve.I support the bill because it is an attempt to address some of these issues in trying to ensure, at a minimum, that there is some degree of protection for workers in circumstances where companies are either about to go insolvent or where there are deliberate strategies put in place in order to create the circumstances where workers' entitlements are excluded in an insolvency situation.I take this opportunity to inform the chamber that when Senator Kemp referred to me being secretary of the metal trades union, again he misled the chamber because no such organisation exists and never has existed in the history of unionism in this country. It is not unusual for Senator Kemp to come into this chamber and consistently get it wrong in answering questions about any issue that is put before him.My own organisation, the Australian Manufacturing Workers Union, of which I was proud to be the national secretary for some years, has already embarked upon a scheme that is in line with the proposal in this bill but goes much further. It is much more radical in the approach they want to take. Their proposal is to establish an industry trust fund that provides protection and portability of provisions, as well as security. They propose to have a fund that will have employees' entitlements set aside into it as they accrue. As workers earn those entitlements, those entitlements will be put somewhere where they cannot be ripped of by employers. They will be put in a secure fund which will provide those entitlements for them. It is proposed to be an industry-wide fund in the manufacturing sector and it will involve a number of unions in its process.It is proposed to work, for example, with annual leave in awards which accrue on a weekly basis of 2.53 hours per week. The employer would be required to pay that amount into the trust fund on a weekly or monthly basis—much the same as superannuation is currently administered. The employee would hold an account with the fund that contains all of the entitlements that that employee accrues, whether they are short or long term, such as long service leave, annual leave, retrenchment pay and so forth. If a company is placed in liquidation for any reason, then the employees' entitlements would be drawn from the fund and not be dependent on the employer.Part of the current problem is that businesses believe that they are entitled to a long-term interest free loan and can use this money for business. They cannot; it is the workers' money that workers have already earned. When a company or business collapses they have not set these earnings aside and the workers lose if the company is liquidated. It is simply unfair to make the worker bear the risk of company failure—each business in Australia must bear the risk of company failure. Each business in Australia must bear that risk and must contribute to avoiding making it the workers' problem.The AMWU fund goes a step further than the bill, where it will provide for a number of different scenarios, many of which are of great benefit to employers, including the fact that upon transmission of business the employee entitlements will remain with the fund so that new employers are not lumped with the burden of immediately paying out annual leave, long service leave or accrued entitlements.As workers become more transient—we have already seen casualisation of our work force in this country grow from 13 per cent in the manufacturing sector in 1983 to 26 or 27 per cent at this time—those entitlements that workers have will be secure and the people who are put on as part-time or casual employees will not be disadvantaged in terms of their overall entitlements compared to those who are lucky enough to be in secure and permanent employment.This type of scheme, in fact, is not new; it has been working in some other forms within the building and construction industry for a considerable time. My colleague Senator Forshaw would be familiar with some of the schemes that have been operating in that area, such as CERT and MERT, where the benefits of the interest that has accrued on those moneys are ploughed back into the industry in training and other benefits for the work force in those industries. So additional benefits are gained out of the establishment of the fund and the holding of those workers' moneys in trust on their behalf.The provisions of this bill are already in place in many jurisdictions abroad. Every country in the European Union, for example, has a wage guarantee institution in place. So it is not difficult or impossible to put together a package, which we say this bill at a minimum addresses, that can provide every worker in this country with security over the entitlements they have accrued while they have been in the work force. It can be done with a single company, an individual company, or it can be done by employment in an industry collectively or through a range of employers. That position can be achieved and can be achieved without any significant difficulty. I do not think it is adequate or appropriate for Senator Tierney to come in here on behalf of the government and say, `It is all too difficult. It is unconstitutional. It is not workable. So therefore we should not worry too much about it.' If this government had the remotest concern about the interests of battlers, they would be joining with the Australian Labor Party in ensuring that the bill does have all of the constituent parts to enable it to get through both houses of parliament and be speedily passed into law.But I suggest that people on the other side of the chamber are not serious about doing anything in this area to protect the entitlements of workers. They never have been interested in protecting workers' rights. The Minister for Employment, Workplace Relations and Small Business has made that clear publicly. He has publicly said that he is there to work on behalf of the people who control capital in this country. He has made public statements to that effect. He has not hidden his bias in terms of what drives his agenda on behalf of this government. I think it is important for us to try to provide a mechanism to ensure that workers' hard-earned entitlements are not able to be ripped off by shonky company arrangements and setting up hollow logs within companies.I finish on one point that was made by Senator Tierney with respect to the waterfront. He talked about the savings and the achievements that occurred on the waterfront through the reform package put in place by this government and Patrick Stevedores. I suggest that Senator Tierney should go and talk to some of the end users on the waterfront and ask them what they have achieved under waterfront reform, because they will tell him that none of the savings have been passed on. (Time expired)16:51:005015Ferris, Sen JeannieSenator FERRIS5L6SALP10—The bill that we are debating this afternoon is for an act to amend the Workplace Relations Act and the Corporations Law. This bill, the Employment Security Bill, seeks to protect the entitlements of employees affected by company insolvencies. This is the second time that the opposition has introduced this legislation into the parliament. I recall that the bill was first introduced into the Senate by Senator Mackay at about this time last year, and it is similar to a bill that was introduced last year and again this year by the member for Prospect, Janice Crosio. On that occasion, the bill was wearing the title of the Employee Protection (Wage Guarantee) Bill.This time the bill does, however, insert a new section 170JI to allow the Industrial Relations Commission or the Federal Court to order reinstatement upon an employer deemed a related body corporate. There is also a new section 178A which has the effect of ensuring that a related body corporate can be held liable for the payment of legal entitlements of employees. Amendments to the Corporations Law deal with the liability of a related body corporate for debts of a company being wound up in insolvency.What the speakers this afternoon have told us is that the bill will give employees a measure of job security. Senator Mackay, in fact, in her second reading speech a year ago, said that job security is a `vital and fundamental issue for all Australians' and that job security is `fundamental to all aspects of family life' and `a matter of concern to the entire community'. Of course, we on this side of the chamber would agree wholeheartedly.Protection for employee entitlements is, however, already being considered by the Labour Ministers Council, which is also considering amendments to the Corporations Law. In fact, the Ministerial Council on Corporations just last month agreed in principle to two of our proposals: firstly, a penalty against misuse of company structures to avoid payment of employee entitlements; and, secondly, strengthening related party and insolvent trading provisions to cover uncommercial transactions. These proposals will be discussed again at the council's next meeting but, of course, details of these in-principle agreements have already been released publicly by Senator Campbell's colleague the New South Wales Attorney-General, Mr Jeff Shaw.Our Treasury has asked whether the Corporations Law changes that have been proposed in this bill are workable. That issue has not been covered in the speeches so far. But under certain sections of the Corporations Law, the Industrial Relations Commission is already empowered to have corporations who are suspected of breaching the civil penalty provisions to pay compensation. Surely this means that sections of this bill are duplicated and will add confusion to this existing area of law. The Corporations Law already extensively covers provisions for the recovery and the return of money to insolvent companies for the benefit of all creditors and not just employees.EU4O'CHEESenator O'Chee—Directors can be liable.5L6Ferris, Sen JeannieSenator FERRIS—Indeed, Senator O'Chee; directors can be liable. When the bill was last debated in this chamber, the opposition was warned that the bill had a number of difficulties. One of these concerns was with the constitutional validity of the bill, which appeared very doubtful in regard to its proposed amendments to the Workplace Relations Act. Again, where is the evidence that this time the homework has been done to make sure that the bill is constitutional this time around? Of particular interest would be whether both the purported acquisition of property and the impermissible conferral of non-judicial power on a federal court would survive a constitutional challenge in the High Court.I was fascinated by some of Senator George Campbell's contribution today, particularly in relation to his comments on the agenda regarding Patrick's. Just have a look at the performance on the waterfront now. I would direct some of those opposite to go down to the waterfront in Melbourne, where they will find on many days of the week that the Melbourne docks are achieving world's best practice. And are those waterfront workers proud of it! There are no more rorts on the Melbourne waterfront, and the Melbourne waterfront workers are very proud of it.Of Sydney, I would ask the question: how many waterfront workers in Sydney no longer belong to the MUA? How many of them are making more money than they made before? And how many of them are going home to their families very proud of their work efforts and pay packet that they take home to share with their families? Surprise, surprise! When all this happened, the sky did not fall in. It did not fall in over the Melbourne waterfront when they achieved world's best practice, and it is not falling in over the Sydney waterfront when there are non-MUA workers working alongside MUA colleagues on the waterfront.I will never forget the visit that I had from a delegation of waterfront workers during the heady days of the dispute. They were what I call a `Henny-Penny' delegation: they come in wringing their hands, looking at the floor and shuffling their feet, and they have a wad of papers. They are there to tell you that the sky is going to fall in if a particular piece of legislation is passed.On this occasion it was an MUA delegation, and it was just after the wonderful 60 Minutes piece on the MUA boss John Coombs, strolling among his Chardonnay grapes down there on the Southern Highlands, riding on his tractor and on his horse, galloping around like a farmer. I posed a question to them that they could not answer at the time, and I never heard John Coombs answer it either. The question was: if a wharfie can be a farmer, why can't a farmer be a wharfie? And the answer was, `Because he is not a member of the MUA.'It was an interesting delegation, and they spent a good hour with me. They did invite me down to the Melbourne waterfront. Unfortunately, I have not been able to accept that opportunity, but it would be a very proud moment to be down there when the Melbourne waterfront achieves world's best practice. As far as I understand, you can go on any day because you are pretty likely to find, on three or four days of the week, that that record has been achieved. I have no doubt that those waterfront workers who formed that delegation would feel as proud as the rest of Australia does to see that happening.I got out a public relations kit that they left behind that day. I kept it because I thought at the time that whoever the agency was that had put it together would probably not be somebody that ought to be chosen again to put together a public relations kit, because on the front of this kit marked `The Docks' was half a truck, half a ship and a bunch of twisted old wharf piles. I could not help thinking that, if these people were coming to my office to tell me that our legislation and our actions were going to decimate the docks, they would have wanted to put a slightly more positive twist on the cover of their public relations document that they left behind—but there you are. It is in my files, gathering a bit of dust—one of the more unfortunate faces of the waterfront that I think the MUA thought they were selling at the time.Senator George Campbell also referred to workers at the Grafton abattoir who, he said, were owed more than $3 million. This was part of the argument for the opposition's bill. There are some additional pieces of informat ion that I think the chamber should know about in relation to this matter. Last year, the local member, Ian Causley, and Senator Bill O'Chee succeeded in forcing a related company to contribute $3.25 million to pay unsecured creditors, using existing provisions of the insolvency regime contained in the Corporations Law.I am sorry that Senator George Campbell is not here to hear this piece of information because I think it is a very important piece of information. It is very important to note that more money was owed to ordinary unsecured creditors, and Senator O'Chee and the local member, Mr Ian Causley, ensured that all creditors were better off overall. This was agreed to by creditors in October 1998. Senator George Campbell completely and curiously overlooked what two coalition members were able to achieve at that time. It did get a significant amount of publicity at the time. I am surprised that his research for his speech today did not enable him to comment on that. In fact, Senator George Campbell talked about job losses and it triggered in my mind an interesting fragment of history which—Senator O'Chee interjecting—Senator Forshaw interjecting—UNKNOWNThe ACTING DEPUTY PRESIDENT (Senator Hogg)The ACTING DEPUTY PRESIDENT (Senator Hogg)—Order, Senator O'Chee and Senator Forshaw! You two will have your chance to participate in the debate later. Senator Ferris is entitled to be heard.5L6Ferris, Sen JeannieSenator FERRIS—I appreciate your support, Mr Acting Deputy President. As I was explaining to the chamber, in the dark corners of my mind I recalled a comment made by former Prime Minister Keating about Senator George Campbell and job losses. I went searching for it and I found that it was former Prime Minister Keating who said that Senator George Campbell, in his previous life, carried around his neck the jobs of 100,000 workers. I am glad to hear that Senator George Campbell is now agreeing in this place that job security is very important and that, like us, he is working towards a set of circumstances that will achieve that.Let us never forget that it was the current Leader of the Opposition who, as minister for employment in the previous Keating government, was responsible for the highest rate of unemployment since the Depression—the highest rate of unemployment in 60 years. What a badge of honour that is for the Leader of the Opposition! In fact, unemployment under the Labor government reached 11.3 per cent and resulted in more than one million unemployed in early 1993—not a lot of job security there for workers and their families. Many of them lost their jobs and were without jobs for many years. Unemployment was a chronic problem at the start of the decade and Labor did very little to protect the security of employees then. Labor had an opportunity over 13 years to fix this piece of legislation to give this security to employees. They also had the opportunity to fix the taxation system, which would do as much or more to help job security as this bill that Senator Collins has brought in today.The Labor Party is big on rhetoric but it often never delivers when it comes to employment security. When Labor came to government in 1983, there were surveys that showed that job security rates were at 79 per cent. By 1992, that figure had declined to just above 60 per cent and by last year the figure was back to 77 per cent. It is fascinating to note that in Labor's last year of office it was actually union members themselves who were most likely to feel insecure about their job prospects. How could it be that people in the union work force felt so insecure about their jobs? To me, it is a terrible reflection on the members and leaders of the trade unions who sit in this place.Over the past year, 180,000 new jobs have been created in Australia. That totals 400,000 jobs since the election of the Howard government in 1996. Unemployment is at its lowest level for a decade. In fact, the number of unemployed young people—I know that Senator George Campbell and all members of the Labor Party will also regard this as a very high priority—has now declined by over 20 per cent since the 1996 election. It is now at the lowest level since records began being kept on this part of the employment market in 1978. What greater gift is there to a young person than a job and job security? There is no higher priority in Australia than to get our young people off the couch, out of the house and actually working and making a contribution to this country.Home loan interest rates are also at their lowest level since 1970. This represents a saving on a typical loan for a family of $4,000 a year on interest rate payments compared with March of 1996. Small business borrowing rates and inflation are at their lowest levels since the 1960s. All of these things contribute to job security. It is not just about legislation; it is about a growing economy. Economic growth this year has been at a rate of 4.25 per cent, far higher than any of the other leading economies of the world or in fact the OECD averages. This week's budget predicts economic growth of three per cent. That is where the jobs will come. That is where there is employment security. The best insurance for job security is a healthy growing, expanding economy.Senator Collins wants to protect employees and their wages. So does this government. The best way to do that is to have a healthy and growing economy. The right economic fundamentals—that is, economic growth and tax reform—are the best way to ensure employment security. That is why this government wants to reform the taxation system. In evidence from Professor Dixon to the Employment, Workplace Relations, Small Business and Education Committee, it was demonstrated that under the government's proposed tax reforms employment will be stimulated in the short run by about 30,000 jobs. How is that for job security? How is that for long-term job security? That is another 30,000 jobs. When we come in here to debate today a bill which will legislate for job security, why do we not consider passing the tax reform bills, because independent arms-length advice shows that 30,000 jobs will be stimulated and created in the short run by the passing of our tax legislation?Access Economics, in their December 1998 model forecast, report that in the long run the impact of the tax package raises an additional 190,000 jobs. What we have here is evidence that at the minimum we are talking about 30,000 jobs and at the maximum we could be talking about 190,000 jobs. They are jobs for our young people, the unemployed, families, women and indigenous communities. There will be job security and, at the end of the day, a sense that these groups will have contributed to this country. They will have a sense of satisfaction that comes from making a contribution.Taxation reform will return to Australian employees the incentive to work by placing 81 per cent of Australian taxpayers on a maximum tax rate of 30 per cent or less. Again, what better job security is there? There will be more jobs, and small business will prosper. Why will the opposition not pass that legislation?The new tax system will remove impediments on businesses so that Australian industries can compete efficiently on international markets. By making exports GST free, we will have enterprises that will be outward focused and concentrated on stimulating the domestic economy, where the jobs are and where the job security is. That will have an impact not just in this bill but out in the workplace, including in our small businesses, and out in our economy.More workplace relations reform will also deliver jobs. However, we know what sort of shiver goes down the spine of those opposite when that subject is raised. Their telephones ring hot from the Henny Penny delegations, who cry, `We can't have that! We can't have any more of those!' They are the sacred cows of the Labor Party's economy, and they are the people who do not deliver the job security.Further simplifying the award system will encourage further agreement making and organisational effectiveness, which will further encourage employment growth. Secret ballots will be put in place. They are the incentives we need to place in this economy to get it growing and working. That is where the job security is and where the new jobs will come from for our young people and women. The jobs will be for those people who want to work part-time and full-time, for those who want to strike their own agree ments with their employers and for those who will provide the job security for the rest of the Australian economy.Senator Campbell said that job security is a vital and fundamental issue for all Australians and so is the security of workers' earnings. There is absolutely no doubt that we agree. Economic growth is the best way to ensure employment stability. That is why we want to reform the taxation system and the industrial relations system. That is why the budget delivered this week builds on Australia's impressive job record. (Time expired)17:11:005019Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—I will start my remarks by picking up on those of Senator Ferris. In her conclusion just a moment ago, she talked about economic growth. This country has enjoyed unprecedented economic growth for a number of years now. There were certainly significant levels of economic growth in the latter years of the Keating government. We have seen economic growth running at between three and four per cent or more in the last few years. Much of that is due to the fundamental changes that were brought to the Australian economy throughout the Hawke and Keating years. For the first time, this country and the government realised that we lived in an international economy and that we had to reshape the economy of this country if we were going to cut it with the rest of the world. Whilst I, as a proud trade union official, throughout those years did not necessarily like some of the necessary decisions that the Labor government made, I now recognise that much of the prosperity and economic growth we enjoy today is due to the foundations laid down in those years.Senator Ferris says that we need economic growth in this country to create job security. We have had economic growth for quite a number of years now, but there is very little economic security for a lot of workers in this country. We even saw today in question time Senator Alston acknowledge that, with the latest employment figures, we have seen a drop in full-time employment and an increase in part-time employment. That is one of the problems with the policies that the govern ment is promoting; that is, there is less and less emphasis on secure full-time employment.The government only has to look at the proposal it keeps putting up that we need to weaken the unfair dismissal laws. We have this strange argument that says that if you can make it easier to sack workers you will end up employing more workers. That statement only has to be put forward to be refuted. It is a nonsense. If you look at the statistics, you will find that throughout the years of the Labor government when the unfair dismissal laws were passed and strengthened at the federal level, particularly because of some of the actions of state premiers such as Jeff Kennett, there was actually growth in employment in small business. Yet this government continues to argue that all will be solved because all you have to do is make it easier to sack workers.I am not going to get too distracted by replying to the many erroneous arguments that Senator Ferris put forward, because I do want to return to what this debate is really about. This debate is about the need for job security—for protecting the legal entitlements of workers in this country. That is the issue that we are debating here this afternoon.Senator Ferris interjecting—656Forshaw, Sen MichaelSenator FORSHAW—It is indicative that Senator Ferris and her colleagues have very little to say about this issue other than that they support it in principle but it is all too hard. It is indicative of the paucity of their arguments when they have to spend the last five or 10 minutes of their allotted 20 minutes talking about the GST and economic growth when we are dealing with a specific proposal to bring in legislation at the federal level to ensure that workers' legal entitlements are protected.I am not surprised that you were not able to speak on that issue for the entire period. Like Senator Tierney and some of your colleagues, you have said that you support it in principle. How could you say anything else? But you have not got any constructive proposals to put forward. All you can do is stand up and say, `Well, there's been a meeting of labour ministers, and they are working on some proposals. Down the track, maybe, we might get around to some sort of an agreement sometime about doing this nationally.' What we are talking about is specific federal legislation to address these issues. You have also said—and this argument has been put forward by others from the government—that this proposal could well be unconstitutional. I do not think it is, but even—5L6FERRISSenator Ferris—You're a High Court judge as well!656Forshaw, Sen MichaelSenator FORSHAW—No, I am not a High Court judge but, without blowing my own trumpet, I do have some degree of experience in industrial law, having spent 18 years appearing before the Industrial Relations Commission. The fact of the matter is that, if there is a constitutional issue but you agree with this proposal in principle, why don't you work with us? Why don't you come forward with some legislative proposals to address it? Why don't you do that?5L6FERRISSenator Ferris—You won't work with us on the tax bills.656Forshaw, Sen MichaelSenator FORSHAW—We do not agree with your tax bills—that is why we will not work with you on them. We oppose them; we know they will hurt workers. You say you agree with us in principle that workers' rights and workers' entitlements should be protected. Put your money where your mouth is and come up with some concrete proposals, rather than standing there attacking the opposition and claiming, `Oh, well. It may be unconstitutional. It may offend the Corporations Law, and there are all these problems, such as how do you extract debts from related companies when other companies go bankrupt, and so on?'I want to get onto the specific issue that is before us, because it does clearly demonstrate the difference between us and the government. We stand for protection of workers and their legal entitlements. When I say that, I want to stress that it is not just about workers and their entitlements, it is about workers' families and their entitlements. When employees are dismissed with very little notice—as has happened in many cases, such as the Grafton meatworks, and I will come back to that—their families suffer as well.At the Grafton meatworks in December 1998, just a couple of weeks before Christmas, workers were suddenly told that the meatworks were closing down, that they were out of a job and that there was not any money to pay them their accrued annual leave and other entitlements. They had to go home to their families—two weeks before Christmas—and say, `I'm sorry. I've just lost my job.' I will come back to that issue in a moment and deal with some of the facts, as distinct from the claims of Senator Ferris that it was Mr Causley and Senator O'Chee who rescued the workers on that occasion. That is not true.Since 1996, when this government came to power, we have seen a government that does not put job security and security of workers' entitlements to the fore—rather, it relegates them to the dustbin. Let us look at the record of this government, in terms of its industrial relations legislation, since it came to office. One of the first things it did was set out to emasculate the Industrial Relations Act, and it did so. It legislated to remove a whole range of provisions from industrial awards by a set date if the parties had not agreed to negotiate the removal of those provisions. It legislated to make it more difficult for workers and legal, free, democratic, registered trade unions to represent their members before the Industrial Relations Commission. It sought to legislate to make it easier to dismiss people. We have seen Mr Reith in recent times say that there is more to come. He has a few more ideas about how he can reduce the powers of the Industrial Relations Commission and, more and more, drive workers—particularly low paid workers—into a system where they do not have equal bargaining power with employers.If you are not prepared, because of your ideology, to accept that workers and corporations or other employers do not have equal bargaining power in most situations, then you only have to look at the issue that we are discussing here. Who is it who suffers when businesses such as Cobar mine, Woodlawn mine—and these are not small businesses—and Grafton meatworks close? Who is it who suffers? It is the workers. The directors do not suffer, as in the case of Grafton meatworks. The Gilbertsons did not suffer. They have a whole range of other corporate interests in industry and land development to keep them fed, housed, clothed, in employment and picking up directors' fees. But the workers did not have that.When you can work for a company for years and years and then be sacked with hardly any notice, and you cannot even get the money you are owed for your annual leave, your other entitlements and your superannuation, how can that possibly be equal bargaining? It is a nonsense for Mr Reith and others to suggest that, in this new world of workplace reform, workers in those situations can ever be equal when it comes to bargaining.This, of course, is the government that believes that you should use the Corporations Law more and more rather than section 51(xxxv) to regulate industrial relations and conciliation and arbitration in this country. This is the government, when it was in opposition, that opposed just about every national wage increase for the lowest paid workers and opposed superannuation being extended to workers. This is the government that supported the wholesale sacking of an entire work force on the waterfront, aided and abetted by their colleagues in the National Farmers Federation.Senator Quirke interjecting—656Forshaw, Sen MichaelSenator FORSHAW—Exactly. This is the government that stood by and allowed subterfuge and corporate trickery to lead to the mass sacking of workers and to their entitlements being placed in jeopardy. Of course, that is what happened at Grafton meatworks. The workers there were employed by one company but all the plant and the stock were owned by another. When the bank foreclosed, the company that employed the workers had no money, just as happened on the waterfront. And what happened in Grafton?UW4CRANESenator Crane—Why didn't you fix it?656Forshaw, Sen MichaelSenator FORSHAW—We have fixed that as far as possible. Through the efforts of Harry Woods, the state member for Clarence and the Minister for Regional Development in New South Wales, those meatworks were reopened—and Senator Crane knows this—and many of those workers have been rehired.UW4CRANESenator Crane—Give yourself some credibility—what about O'Chee and Causley?656Forshaw, Sen MichaelSenator FORSHAW—Senator O'Chee and Mr Causley have claimed a lot of credit because they wrote a few letters to the appropriate authorities with respect to seeking some money to be paid to the creditors. I am advised that all of the workers who were employed there are still owed substantial amounts of money. They have not been fully paid.UW4CRANESenator Crane—Nobody said that.656Forshaw, Sen MichaelSenator FORSHAW—Senator Crane, the fact of the matter is that it was the New South Wales Labor government and Harry Woods that entered into negotiations with the new owner to make it easier for him, because of the problems that were associated with some of the back charges, et cetera, that were owed, to get those meatworks reopened and get those jobs back. That was the priority and that has been achieved.We are now seeking to get some legislation through this parliament to fix the second problem. It is no use saying, `The Labor government had 13 years to fix this.' I concede that more may have been able to have been done in the past, but let us remember a couple of things. Firstly, the previous government did address the issues of priority in terms of employees having access to funds that might be available in liquidated companies in preference to other creditors. Secondly, what we have seen since this government came to power is a rash of these closures—Cobar mines, Woodlawn mine, Grafton meatworks and others. A whole range of them have collapsed. There has been a plethora of them. That is the immediacy of the issue, and that is why it has to be addressed now. It is no excuse to sit on your hands and say, `For 99 years we've had a legal system in this country.' The time has arrived where it has to be changed now, and we are asking you to get on board. If you believe in the principle of protecting workers' entitlements, then you will move with us to fix it.Senator Ferris referred to the fact that this legislation was brought forward some time ago by the member for Prospect, Mrs Crosio, in the other place, and it was brought into this chamber earlier by Senator Mackay. That is right, but what have the government done since then? They have done nothing. They are just walking away from the problem rather than addressing it. But I am not surprised by that because, day in and day out in this chamber, the real picture, the real message and the real views of this government are expressed by, in particular, Senator Alston. They mention trade unions, and they think that trade unions are evil incarnate and that they are terrible organisations. They say that the Labor Party is linked with the trade union movement and therefore we are all bad.I am very proud of having been a trade union official. I am proud of the fact that in 1988 I went to the United States and I had an opportunity to talk to the US farm workers. I went there to meet one of the greatest trade union leaders and one of the greatest citizens of America this century, Caesar Chavez—a man who led the fight to protect the rights of poor workers in the fruit industry and in other farming industries in California. Caesar Chavez was shot at and jailed for his beliefs.I am proud of the fact that, when I went to Poland a couple of years ago, I met officials of Solidarity, a trade union led by Lech Walesa which took on the communist regime in Poland. Through their efforts, they started the wave that led to liberation for eastern Europe. Trade unions, whether you like them or not, are an integral part of a democratic society.UW4CRANESenator Crane—Don't look at me, I'm not arguing with you.656Forshaw, Sen MichaelSenator FORSHAW—I have said this before and I will say it again: whenever dictators get into power, the two groups that they will always challenge and seek to remove the influence of are the churches and the trade unions, because they protect the rights and entitlements of workers and of ordinary people.Senator Crane, I know you better than a lot of other members because we have dealt with some of these issues in the past. I know that you actually think trade unions are decent organisations. Why don't you encourage some of your colleagues to stop this stereotyping and attacking of trade unions and to deal with some of the real issues that trade unions are proud to go out there and protect—the entitlements of workers and their families?I challenge you to get on board with us and fix a problem that needs fixing, so that ordinary working men and women in this country can know that, when they go to work and they earn their entitlements, they will be protected and that, eventually, when they happen to retire or if they unfortunately happen to lose their job, they will be paid their just and due entitlements. That is what should occur in a free and just society such as ours. It is about time the government took up that challenge and fixed this problem.17:31:005023Coonan, Sen HelenSenator COONAN2M6NSWLP10—I am pleased to have an opportunity to speak this afternoon on this general business motion. This bill reminds me of that marvellous film Groundhog Day , in which the main character kept waking up morning after morning to relive what had happened the day before. This went on ad nauseam.GB6COLLINSSenator Jacinta Collins—It's a new parliament now.2M6Coonan, Sen HelenSenator COONAN—The reason I am reminded of this is that we debated this bill approximately a year ago in this chamber. It had been introduced by different ALP sponsors in the previous parliament.GB6COLLINSSenator Jacinta Collins—Don't you know how legislation works?2M6Coonan, Sen HelenSenator COONAN—Now it crops up again, in almost identical terms, sponsored by Mr Arch Bevis, the shadow minister for industrial relations in the other place, and by Senator Collins in this chamber.GB6COLLINSSenator Jacinta Collins—I thought you were a barrister.2M6Coonan, Sen HelenSenator COONAN—It had a previous incarnation when it was introduced—with a few differences—by Mrs Crosio as a private member's bill, seeking a slightly different scheme. She was seeking a compulsory wage protection scheme.Another Groundhog Day feature of the bill, for me at least, is that Labor appears to have learnt nothing, despite having looked at this bill so many times. That is the really extraordinary thing about this. That is why, Senator Collins, I am talking about the fact that you have had so many chances to get it right and you have still got it wrong. You have got it wrong technically. Leaving aside the policy position for a minute, you simply do not understand how insolvency law works; nor do you understand how the constitutional arrangements of this country work. You certainly have not learnt anything from the previous outings this bill has had.In my speech during the second reading debate on the 1998 bill on 25 June last year, I pointed out—I thought it was in some painstaking detail—that the provisions in the bill, as they stood, were likely to be held to be constitutionally invalid. I did this free of charge and I did it in a bipartisan way. I will refer back to what I said, because Senator Forshaw went to some pains to invite us to be bipartisan about this. What I said on that occasion last year is being totally ignored; maybe it will not be this time. I said:The issue of ensuring entitlements of employees in a case where an employer has engaged in corporate restructuring is, in fact, a very complex one. I can say, as an entirely personal matter, that those who have tried to wrestle with this bill have my personal sympathy because it is a very complex issue to address, and any solution must not be based on a knee-jerk response to a particular factual situation. I think that is really what we have here.I went on to say that it had been a predictable response to some recent events by those who sit opposite. I will come to that a little later. I also said:. . . the Corporations Law already contains provisions that allow a liquidator to undo preferential transactions involving related parties in the period leading to the winding-up of a company. Therefore, if a company is proven to be engaged in sham transactions in order to wrongfully terminate the employment of its work force, appropriate remedies already exist.I might say, in a gesture of a true bipartisan approach to this, that it is worth looking at whether or not you have already got the remedies. I certainly do restate, on behalf of the government, a commitment to finding a solution—which the government is doing—to the issue of protecting the entitlement of employees on employer insolvency, but I do caution against any haste or overreaching in respect of this matter.I thought that that was a perfectly appropriate way to approach this debate. It is very disappointing, for two reasons, that you do not seem to be able to grasp it.656FORSHAWSenator Forshaw—We understand. You are talking about remedies after legal action.2M6Coonan, Sen HelenSenator COONAN—I will try it again, Senator Forshaw. Let us see if you can do a bit better this time. Firstly, an attempt to make a related body corporate liable for the payment of legal entitlements of employees of an insolvent company is perilously close to a compulsory acquisition of property. You know as well as everyone else in this chamber that, if it is that, it is constitutionally invalid.The second point about it is that the attempt to give the Australian Industrial Relations Commission or the Federal Court power to deem a related company to be the relevant employer for an order for reinstatement is also an impermissible conferral of non-judicial power on a federal court. I would have thought those two propositions were not too difficult to grasp and that, if you were really serious about what you are proposing to do in this bill, you would have made a much more serious attempt to deal with those issues than simply trotting out the old rhetoric and an identical bill. I am very surprised that there appears to have been very little attempt to actually grasp the problem you have got. It is your problem, if you want this bill, to actually make it workable. It is just astounding that you should trot out a defective bill. Anyway, that is obviously your problem. The way you have approached the attempt to amend section 1317HD of the Corporations Law in respect of insolvent trading and payment of liabilities is also a puzzle. This is because you have copied it blindly from the 1998 bill. I can understand that you might have missed the point, but apparently this is in total ignorance of the amendments made to the section by the passage of the Managed Investments Bill last year. This is pretty easy to grasp. Labor's position on this is really very curious. Firstly, the proposal substantially duplicates a recommendation of the 1988 report of the general insolvency inquiry, which was the Harmer report. Surprisingly, despite the passion on the other side, that was not adopted into law by the Labor government when it had a chance. When Senator Collins's party was in power, they had open slather. You had a chance to do what you are seeking to do now, and you simply did not do it. That is why this effort totally lacks credibility. You copied the amendments from last year's Employment Security Bill, and they failed to take into account the amendments to the Managed Investments Act which came into effect on 1 July last year. So we have got the same outdated and obsolete clause coming back again.I can only conclude from this chain of events that you cannot be serious about working towards a workable national scheme to protect entitlements, which is sometimes necessary when an employer becomes bankrupt. If you did, you would be doing something in a more constructive manner. This feeble attempt by the Labor Party is not a genuine attempt to address this at all. It is pretty easy to see that Labor has got its marching orders from Trades Hall, as usual, and this is the result. For the Labor Party to actually come in here after its appalling performance on jobs and employment security and then advocate a defective bill, a bill that it knows must be defective, means that it could only come from the trade union movement. It is all because of the Patrick case. Senator Cook said that in the case of Patrick's it was designed to give to employees of the Patrick companies, not just to receivers, the right to sue Chris Corrigan and other Patrick directors for debts arising from breaches of the Corporations Law. So we know what this is all about. We know the minority group that it is trying to assist.It did not help when the employees of the Brown and Hatton piggery had similar problems. Labor was in government then, and the solution that you now advocate was available to you then, but nothing was done about it. This is not only breathtaking; it is also nonsensical. If you are interested in this reform, if you are seriously interested in trying to address this problem, you do something constructive about it, and this bill certainly is not a genuine attempt.Labor have shown that they are not interested in the costs on business and the adverse impact on employment, particularly in relation to small to medium business, of any scheme that is put up to assist with security of employment. They are not interested in job security of ordinary Australian workers; they are only interested in those workers who are members of a union. It is very interesting that the membership application form to join the Victorian branch of the Labor Party, which I have with me—I am not going to fill it out; let us not get worried about that—requires those who fill out the form and wish to join the ALP to pledge that if they employ labour—NB5CAMPBELLSenator George Campbell—What has this got to do with the bill?2M6Coonan, Sen HelenSenator COONAN—I know they are upset, Mr Acting Deputy President, but this is why it is relevant. It says: `If I employ labour, I will only employ trade union members.' Isn't that the most extraordinary indictment of a political party that professes to have some interest in job security? It is only interested in employing people who are members of a union. That is extraordinary. It is only interested in those workers who are members of a union. What really hurts is that they are shrinking in number. The only place that union membership is increasing is in the Senate. Union membership is a shrinking number. Recent figures indicate a decline in union membership to 28 per cent. The percentage of workers that you want to protect who are in a union has declined to a mere 28 per cent, which includes both the public and private sectors.So Labor are interested, according to this application form, in giving priority to giving jobs to and protecting 28 per cent of the working population, an elite minority group. They ignore and prejudice the job security of the other 72 per cent of workers in this country. There cannot be any doubt that Australia's sound economic position has been underpinned by the industrial relations reforms that this country has seen since the coalition came to government. But, still dancing to the tune of their union mates, the ALP has systematically opposed workplace relations reforms that will really give workers job security and that will give all Australians better job prospects and better job security.Mr Bevis—who has carriage of this bill, or this attempt at a bill, in the other place—has certainly had some interesting things to say about further necessary industrial relations reforms proposed by the minister, Mr Reith. In an address to the Australian Industry Group on 5 March this year, as spokesman for industrial relations, he indicated that a future Labor government would in fact wind back the clock on industrial relations, that Labor would continue to oppose the coalition on any industrial relations reforms and that a future Labor government would swing the pendulum further back to the left than ever before. Mr Bevis also committed the ALP to the union movement. He said he was opposed to any moves to have the trade unions sidelined and argued that there would always be a case for regulation, for laws that confer rights on unions. He even favoured a return to a fully unionised work force.Given that in that speech he commits Labor to reversing all the freedom of association provisions achieved under the coalition and that he appears to favour legislative rights for unions, it is an interesting question whether a Labor government would attempt once more to make unionism compulsory. If it does, you can say goodbye to any jobs growth in this country and to the protection of any workers in this country.Mr Bevis seems to believe, according to his speech, that higher wages `increase employment levels'. I do not really understand how he puts that. But when he outlines the foundations for an effective coordinated policy, he wishes to include a progressive tax and well targeted industry support schemes. He does not say how they would work, but that is a very interesting point because it appears, in relation to Mrs Crosio's version of the bill that we are currently examining, that Mr Beazley was given a warning about the downside of imposing levies on the cost of jobs.This is extremely interesting because the proposal was to introduce legislation enacted to levy employers for employee guarantee funds. The private briefing note to Mr Beazley that I am reading from says:This basically is what Janice's bill proposes—Janice is Mrs Crosio—It is also in line with what the ACTU wants.Isn't that an interesting coincidence? Here we have a proposal from a Labor member and a private member's bill and a briefing to Mr Beazley, the leader of the Labor Party, who is told whether or not it is actually in line with what the ACTU wants. That is because it is necessary for Labor always to look at what the unions want. The Labor Party is completely run by them. Unions are the ghost of the Labor Party.An adviser to Mr Beazley, Mr John Angley, said that there was a reservation about the approach of this particular legislation or bill. He said:The downside of a levy is that it is another cost on jobs. If it is a statewide fund, like workers compensation, the cost per worker in the form of premiums inevitably grows. It also reduces the responsibility of employers and their owners to fix their own affairs rather than fall back on the fund.So there we have an admission on behalf of those opposite that a levy is in fact a cost on jobs and that the provisions within this bill will cost jobs if it is ever enacted.Mr Bevis has said that the alternative direction which Labor is pursuing is in their 10-point plan to undo all of the Reith reforms that have taken place since the coalition came to government. It is very interesting that, although Senator George Campbell seems to find some support for that proposition, others in the Labor Party seem to think very differently. I will quote from Mr Mark Latham's Civilising Global Capital at page 85, where he says:Whereas in its origins unionism was a force for economic change and progress, it has now fallen into the habit of opposing change in its contribution to most issues. In Australia there is little evidence to suggest that the leadership of the union movement has adapted successfully to the demands of the new economy.I can add that sadly the Labor Party are also in that boat. You have simply failed to adapt to the demands of the new economy. All you can do is oppose propositions. You can never support a constructive proposal. Mr Latham goes on to say, and this is a fitting point for me to conclude on:The danger for the relevance of political Labor lies in the way in which this narrow base of unionism might foster a concentration of employment strategies on capital intensive manufacturing industries at the expense of the growth potential of the services sector.(Time expired)17:51:005026Cooney, Sen BarneySenator COONEYSF4VICALP00—This is not a bill about trade unionism; it is rather a bill about the corporate sector. Mr Acting Deputy President, you have had much to do with the corporate sector and most people in the corporate sector act honourably and try to go about doing their work as they should. The corporate sector gives a lot of life to the economy that we all hope to enjoy.This bill is about those in the corporate sector who do not play the game. No doubt there are people in the work force who do not play the game. But because some people do not play the game does not mean that the group they belong to is thereby damned. This is not a bill that tries to condemn those people who carry on in corporate life as they should. But the people, the firms and the companies that have been quoted here today are not the sorts of people that ought be allowed to carry on as the proprietors of businesses.I can give an example of what happens: you have a corporation which gathers under its auspices both the assets and the employees of that corporation so that the assets and the employees are in the same loop, if I can use that expression. Quite deliberately, these people separate those two things out—they separate the employees from the assets by creating two separate companies. One company owns the assets, the other employs the employees.NB5CAMPBELLSenator George Campbell—They are hollow logs.SF4Cooney, Sen BarneySenator COONEY—As has been said, they are hollow logs. Senator Campbell is quite right about that. Everybody knows the concept. What has that to do with unionism, excepting this: if the unions do not do something about it then they are not doing the right thing? How can a union collect fees from its members and not try to do something about the outrageous situation that happens in places like Wodonga Meats, Patricks or the Mount Schank meatworks near Mount Gambier in South Australia? In that last situation they separated the assets and the employees by separating the employees into a company without the employees even knowing about it. A company was created and unbeknownst to the employees they were transferred to that company, which had no assets. In that situation the employees were left without proper wages—without wages at all. That was done without any consent on their part. There are now provisions in the Workplace Relations Act which help a bit. Section 298K is of considerable help in that situation. But clearly it does not go far enough.Much criticism has been made of Senator Collins's bill. Of course you can criticise a bill; we criticise many bills in here. But when we criticise a bill we do not say, `Because it is not tidy in all respects we will throw it out.' The point of arguing about a bill in this chamber is to get a bill that accommodates the situation. I would have thought that, given the things that have happened in places like Cobar, Wodonga, Grafton and Mount Schank we would all, as a parliament, try to do something about it.Simply because somebody wants to do something about an employee who is thrown out of work and left without the money that is due to him, and that person raises the proposition that something ought to be done about the situation, such a person should not be—in fact cannot be—dismissed simply because it is said that she has some relationship with a union. Senator Collins had a very proud relationship with a union. Likewise, Senator Campbell had many years in the union movement—27 years. Not only would they expect the union movement to do something about the situation, they would expect the Labor Party, the coalition and the Australian community to do something about the situation because this is unfair on people who live in our society.Mr Acting Deputy President, if a neighbour of yours or mine or Senator Herron or Senator Coonan was unjustly ripped apart and had their money taken from them by a very shallow trick when they had worked and a debt had accumulated to them, wouldn't you hope that something would be done to cure the situation? When the government talks about this bill as being some sort of union or Labor Party plot, they do a great disservice to our fellow citizens. If the government members thought about this they would move to create a situation where the sorts of instances we have talked about do not happen again and where our fellow citizens are treated properly and are able to get the wages they are entitled to.Debate interrupted.Sitting suspended from 6.00 p.m. to 7.30 p.m.Miscellaneous50275027Debate resumed from 11 May, on motion by Senator Kemp:That the Senate take note of the Budget statement and documents.19:30:005027Cook, Sen PeterSenator COOKRF4WAALP00—Madam President, during the election campaign, we said this government did not have a plan for our nation; it had a plan for a tax. This budget shows we were right. Instead of investing in our future, it invests in its own obsession. And the price of its folly will be borne by the generations to come, because without the investments needed to make our nation and our future work force smarter and more productive, we will not have the high wage, high skill future the people of this nation deserve.The good growth recorded in this budget stems from the industry and resilience of the Australian people, and hard decisions taken by this government's predecessor over a decade ago. We enjoy prosperity today because, more than a decade ago, government saw the priority of restructuring the Australian economy to secure our nation's future.Back then, a strong national government with an eye to the future saw the need to diversify our economy because global economic trends were promising a brighter and more prosperous future in new industries. We saw the need to broaden our industrial base from our reliance on cyclical industries, such as resources and agriculture, and get into areas like elaborately transformed manufactures to boost trade, growth and jobs.But the game has moved on yet again. Today, global economic trends are rewarding those nations supplying high knowledge content products. The new competitive landscape is about software, pharmaceuticals, communications and information technology, biotechnology, education exports and the like. We have no choice but to engage. Our capacity to do so means the life or death of jobs in this country.What we achieved in the past was not done with words or by an accounting result. It was achieved by government investing for the future: in education and training; in research and development; in export incentives; and in industry plans. So, too, as we look forward, our success in today's global economy demands investment in the future. Nothing short of a quantum leap in the education levels, skills and training of the Australian work force, and the national resources devoted to new industries, will see Australia join the emerging global prosperity. This, surely, should be the test we set this budget.What we needed from the budget was a strategy for a nation making its way in the world and an understanding of the challenge before us and how together we can rise to it. This is what the times demand of national government. These are the commitments a budget must show. Firstly, there must be a commitment to fairness for future generations, which demands strong fiscal discipline. It is centred on a golden rule that governments do not borrow to finance current spending and save in the good times so that over the cycle the budget balances. It must show a commitment to making every Australian family feel more secure in terms of the income they enjoy, in terms of their jobs, in terms of educating themselves through life and in terms of their ability, if unemployed, to get back into the work force.But it must also show a commitment to fairness as the centrepiece of our economic progress. It must show an iron determination that none of our fellow citizens is left behind as part of the bargain of our economic progress in a new century. Both of these ideas—fairness and progress—demand the same thing. They demand a commitment to a high wage, high skill future and an opportunity for all Australians to share in that future by developing their talents to the full. Only by pulling together, by pooling our talents, will we progress with fairness to all our fellow citizens.A good budget for these times must also demonstrate a commitment to the goal that good home-grown ideas fall on fertile soil here rather than go overseas and be lost to Australian business and Australian jobs in the future. These are the tests that Australians, in 50 or 100 years looking back, will apply to this generation.On Tuesday night, these were the tests before this Treasurer. He was asked to answer them on television just minutes after his speech. He was asked on budget night what the vision was beyond the GST. He was asked for the vision, and what he gave us was, `Ummm'. He gave us `Ummm'. He then gave us the mouth opening and shutting—for once soundlessly. He gave us the mouth opening and shutting, and then he gave us multiple circular hand movements. And then he just started in again on the GST.No performance, Madam President, could have been more eloquent. No performance could have illustrated more completely the real failure of this budget. It is not about investing for the future; it is just about a GST. How, indeed, could it be about anything else? We have now seen the cost of this GST. It is a cost which means this government can't afford anything else. It can't afford what the nation really needs.The Treasurer announced on Tuesday surpluses of $5.4 billion, $7.2 billion, $5.2 billion and $11.4 billion over the next four years. What he didn't announce was that the attempt to sell the GST has cost the surplus $5 billion next year, $5 billion the year after that and $7 billion the year after that. That is $17 billion, and that is the real price tag of this GST.Now leave aside for one moment whether you're a supporter or not of the GST. Leave aside the merits for and against. Ask yourself this: is it wise, is it prudent, is it strategic to spend over $17 billion to secure one public policy objective, when the nation faces so many challenges, requiring many different responses, across a range of fronts? Because that $17 billion is not just black ink.That could be the foundation of a new nation, and still see a decent surplus maintained—still see all the surpluses announced on Tuesday night maintained. But it is to become just so much spun sugar around a failing tax. What should a mature nation do with such a strong budgetary position—squander it on measures that feed into consumption and do nothing for investment—economic fairy floss? Spend more on new computers for the tax office's GST enforcement than on labour market programs for the unemployed? No, a mature nation would invest a portion of that in building the knowledge-based economy, and still leave larger surpluses than this government.The GST is a waste of a strong budgetary position. It is a waste of a surplus built with a tax system claimed to be broken.5K4FAULKNER Senator Faulkner—Come on Cookie—get him wagger wagger.RF4Cook, Sen PeterSenator COOK—Don't worry; wagger wagger's here.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are too many interjections.RF4Cook, Sen PeterSenator COOK—A surplus built on cuts in past years to our national investment in innovation; to our household savings which are now less than one per cent of household income, compared to six per cent when this government came to power; and to decent industry policy—all of which lie at the heart of a strong future for this country. It is a surplus wasted on a tax the rest of the industrialised world is trying to escape.The European Commission today—recognising that they have been locked in by their past agreements—is desperately trying to work out ways to break out of their GST and restore job growth in the services sector. Analysts of Japan as serious as the Reserve Bank of Australia say that the principal problem of the international economy today is the inability of the Japanese to get consumer spending going and growth back in their economy; a problem stemming in part from the raising of Japan's GST, which in any case is only half of the one proposed for Australia. And even with all the money the government is spending on trying to sweeten its GST, it still can't deal fairly with low income Australians. These budget papers show its pensioner compensation has an in-built self-destruct mechanism. If you care to do the maths, they show that pensioner compensation will now be completely eroded within 4 years. By 2003-04, the pension will be worth around $426 a fortnight under the GST—exactly the same amount pensioners would have got without the GST.But let me return, Madam President, to the dimensions of this budget's failure in providing a strategy for our nation to make its way in the world. The Prime Minister wishes this to be seen as an education budget. It makes you shudder to think what a bean counter's budget would have looked like.Let's understand where we start from in this. Thirty-seven per cent of our labour force did not finish high school. This compares to 19 per cent in the United Kingdom, 14 per cent in Germany, and just 11 per cent in the United States. Fifteen per cent of Australians have at least a university level education, compared to 26 per cent of Americans. We start from behind in the education race, and we have a lot of catching up to do.The place to start is with our children. Modern governments should understand that lifting the educational attainment of children is an investment, both in our society and in the future productivity of our economy. You cannot achieve this simply by spending a little extra on a minority of children, and you certainly don't achieve it by giving to some children at the expense of others. But this is the current government's approach. The government's view on education is that its responsibility ceases when it has changed the funding equation of the private school system supporting 30 per cent of our kids.Let me make this clear: we do not have a problem with more funding for non-government schools. But when you are a national government, your responsibility is to all schools, not just to some. Prime Minister, do you mean to tell me that when next Kim Beazley goes to Safety Bay Primary School in his electorate—as he did a few weeks ago for their Anzac Day ceremony—that the kids he sees there are not deserving of decent attention from their national government?Let me tell this parliament something: ever since Kim Beazley's father lanced the boil of the sectarian divide which had crippled Australia's education system since Federation, the national government has accepted that all kids are our kids—the responsibility to meet their needs is shared by us all. He offered the opportunity for all kids from all backgrounds to exercise freedom of choice and freedom of conscience. Ever since then, we haven't seen blazers or sweatshirts, we have seen the kids themselves. How can this government now say that a child at Safety Bay Primary is worth one-twentieth the amount of extra funding of a child at a non-government school?We have never divided Australian children into federal government ones and state government ones. Have those on the other side never heard of Jeff Kennett, or John Olsen, or Richard Court? Perhaps they endorse their special brand of care and attention to government schools? We know this: just in case a Liberal Premier had a fleeting inclina tion to do the right thing by kids in government schools, in the 1996 budget this government's new formula meant that, regardless of increasing numbers in government schools, their Commonwealth contributions would be cut.Prime Minister, you are responsible for every schoolchild in this country. You are responsible for their education now, and their opportunities later in life. You cannot wash your hands of any of them, let alone two-thirds of them. But the attitude on schools is of a piece with everything else this government has done on education.This budget celebrates an outcome which delivers $800 million a year less in direct Commonwealth higher education funding than in Labor's last year in office. The minister and his Prime Minister had one fig leaf between them to say that they ever cared at all for the smart kid from the bush or for a poor family who deserved a place at university. That was the merit scholarship scheme. It was paltry, it was parsimonious, and now it is past tense.And what is the government's argument? It doesn't have $6.8 million for scholarships for smart poor kids: `We have a $5.4 billion surplus, but gee, $6.8 million, we haven't got that kind of money!' This government thinks it has done its job for the education of this country, when it restores just $150 million of the $2 billion it cut from the higher education system in 1996. It declares itself relaxed with the idea of students doing science and engineering—the degrees which perhaps more than any others will build a knowledge-based society in this country—paying more than those doing arts. The government thinks its job is done when it leaves TAFE funding where it is. This government's job is not done.Similarly, the government paints itself as the saviour of Australia's research effort. But know this: taken together, all the Commonwealth support for education and training and for both public and private research and development activity has fallen from three per cent of GDP—not enough—when we were in office, to 2.5 per cent in this budget; and, in all probability, to 2.3 per cent at the end of this four-year period. And those figures include the government's one lifebelt in this budget—its spending on medical research.Let me make a few points about that. Firstly, the very Wills review which has prompted this spending says that restoration of the 150 per cent R&D tax concession is more important. Secondly, $600 million for medical research over six years compares to $6,000 million over four years you are spending on an ineffective failing private health insurance initiative. Finally, this small increase in medical research grants will scarcely compensate (if at all) for the cash-strapped public hospitals which used to invest in this area dragging their research dollars out, and for the universities, who used to do this research from their operating grants, hauling back their medical research grants as their funding has been cut.Which brings me, Madam President, to health. We all remember the John Howard of the 1970s: a new health plan every year. Now we have the ultimate in political nostalgia: a new health plan every year from the John Howard of the 1990s. This government claimed to have solved the problems with private health care when it spent the initial $700 million on private health insurance in 1996. Remember how that was going to lift membership from 30 per cent to 40 per cent? But it didn't. Then it was $1.5 billion a year for a 30 per cent rebate. They thought they had solved the problem then but, when questioned in parliament by us and forced to confess, said it was really about lifting it from 30 per cent to 33 per cent.Now we are told—this time for sure—that the problem will be solved, except the $1.5 billion is now just to tread water. Just treading water, when half of that $1.5 billion—half of it—would fully meet every single state demand: reopen all the wards closed in public hospitals; reopen the regional hospitals that have closed wards or closed altogether; put on the nurses; put on the doctors; and perform the procedures. Half of the $1.5 billion would have been enough to fix the system everyone uses.And that is the point. We have in this budget the end of community rating in reality and the introduction of so-called lifetime community rating. I have already indicated we will look at this fairly, but looking at it fairly also means protecting universal health care—not letting it become the next sacrifice to this government's public policy failures.One thing we will seek in scrutinising lifetime community rating is a commitment from the government to guarantee universal access to public hospitals. We will not let the next step—the fifth health plan—be means testing for public hospital access.In the meantime what about some mutual obligation here from the health insurance funds? Has this government got them all to close the gaps? Has it got them to control the premiums? Has it got them to hold their premiums in the middle of this year at least? Has it got them to do any of that? No, nothing at all. It has demanded nothing of the health insurance funds—nothing whatsoever—except to be the cheerful recipients of a Commonwealth blank cheque.But we know what kind of mutual obligation the Prime Minister has in mind for Australians. Yesterday on television he said that families simply had to re-order their spending priorities to afford private health insurance, and I quote:You might say to yourself `Gee, it's more important to stop that and go into private health insurance now than to add another country to my next overseas trip.'Gee, indeed! So, workers of Australia, if you are having trouble affording private health insurance, what with all the cuts to government services and a GST around the corner, I have the solution for you: just knock off the stopover in Tahiti on the way back from your skiing holiday in Austria. Just knock that off and you too can afford private health insurance, don't you know?So we say to the Prime Minister and to this government, `You have not done your job. You've not done your job, above all, for the families of Australia. You have forced them to be responsible for their young unemployed adults and you have cynically failed—despite your promises and undertakings to the Senate and Senator Harradine—to give them the relief they need.' And why on earth not? To build back in the money that Senator Harradine demanded would require an extra $50 million a year from your budget surplus of $5.4 billion. Here is your challenge: the youth allowance legislation is before this parliament now. Amend it now. We will support you.And, finally, as with every budget this government has produced, its greatest failing is on jobs. The budget forecasts unemployment stuck at 7.5 per cent through to the year 2000. But, of course, 7.5 per cent is not really 7.5 per cent. It has only been achieved off the back of thousands of Australians giving up the search for work, and continuing to do so in future. If this government had not pushed so many people out of the work force entirely, the unemployment rate today would be over eight per cent.Unemployment in this country should be well on the way down to five per cent. Even the Treasurer himself briefly flirted with decency on a five per cent target, but has come over all agnostic again. We are nowhere near five per cent and with no hope in sight, because employment growth is forecast to fall in this budget. That is the fault of a government which cares not a jot for employment, and so is this: long-term unemployment is higher today than when the coalition began to cut jobs programs, despite three years of economic growth in between.It is higher because this government has actively determined against sharing the benefits of economic growth with all Australians. The so-called `new' spending on labour market programs in this budget is a calculated insult to unemployed Australians. Firstly, it is a tiny, tiny fraction of the $1.8 billion cut from labour market programs since 1996. Secondly, it is not new money at all but an undignified recycling of money cut from the government's failed Job Network and hastily re-badged. Thirdly, the so-called `new' spending on jobs programs is less than the amount spent on new computers for the tax office for GST enforcement. And, finally, the government chose employment to break another election promise in this budget. It promised $90 million for Dr Kemp's New Apprenticeships, but has lost $40 million of that along the way.But know this, Madam President. I know that people look to the opposition for an alternative strategy. Well, we are offering one. I return to what I said at the beginning about what this budget could have achieved. If the GST were not implemented, contemplate the investments among which you could choose for a better future. With no GST, you could provide balanced funding for government and non-government schools—not $210 per student in non-government schools and $10 for government students, but fair and balanced treatment for all Australian kids, and a bit of relief for those schools suffering under coalition state governments. That would cost just a fraction of the GST compensation and the benefit would be not miserly compensation for an unfair tax but better educated children.With no GST, you could provide planned pension increases that would last, rather than compensation which disappears within four years. With no GST, you could double what the government has merely recycled from its failed Job Network into Work for the Dole. You could make it real new funding, and a real labour market program while you were at it—with training and in-work benefits and the hope of a job at the end of it: some hope, perhaps, for the 200,000 long-term unemployed in this country, including those in regional Australia and the citizens of Wagga Wagga.With no GST, you could have kept the university scholarship scheme for disadvantaged kids which this government axed in the budget. Indeed, you could even make it a little more generous. You could start to redress this government's failure on private saving. The average 35-year-old worker has lost $100,000 from his or her eventual super payout through government cuts alone. A new superannuation co-contribution would lift national savings and improve retirement incomes.You could contemplate tax reform without a GST. Remember, we are supporting propos als by this government to ensure people pay their fair share of tax not involving a GST. You could deliver fairer tax cuts and implement the tax credits that this country so badly needs. You could reform business taxation so that it rewarded innovation and investment in new industries. The R&D tax concessions could be restored.You could do most of these things, and still have a surplus greater than this government announced on Tuesday night—greater than the surpluses it expects in the coming years. You could spend far less than this government, and achieve far more for our nation.I say all of this to highlight the road not taken: the real cost of a GST, even before it arrives—the real cost in terms of the national ambition we are about to lose. This—as much as the unfairness of the GST—is what Labor, and Australia, have at stake in this tax debate. This is why we are keeping our election promise to oppose the GST.But we are keeping something else, too. And that is the idea that a budget is about all Australians—about a national ambition which we used to have and which still burns brightly among our fellow citizens. We are about keeping that ambition alive. It will not die these three years, and it will return again to those government benches. Thank you.20:01:005033Lees, Sen MegSenator LEES8U4SAAD00—Madam President, on behalf of the Australian Democrats, I rise tonight to reply to the Treasurer's 1999 budget speech. Compared with many countries in our immediate region, and indeed many well beyond our borders, Australia is a lucky country. Our problem is that more and more Australians are not able to share in the luck and fully enjoy the benefits. These Australians are falling further and further behind, despite the Treasurer's `magic set of numbers' and despite the delight of the international financial markets with Australia's economic performance.The budget was delivered by the Treasurer on Tuesday night with great gusto, great pizazz and great style. But, really, it was more of the same, admittedly with a few elements that are to be welcomed. Style is one thing; content is another. Frankly, I do not quite understand why the Treasurer is so excited about his budget.It is a budget where the gaping social deficit caused by underfunded education, health and social programs is allowed to grow and keep growing. This is despite huge revenue driven surpluses. It is a budget of narrow vision from an uncaring government, from mean-spirited leaders in pursuit of `a beautiful set of numbers' at the expense of decent levels of community service. It is a budget of style without much content. As I said on budget night, this is a nouvelle cuisine budget—a few dainty, well-presented morsels that fail to satisfy. Having said that, I do welcome the very modest loosening of the purse strings that has allowed a few positive spending measures to be implemented.This evening I propose to do three things: firstly, I shall briefly address overall fiscal policy; I shall then address specific budget measures; and, finally, I shall look beyond the budget to the wider tax debate.This budget proudly proclaims a surplus of $5.4 billion. This, we are told, is the great turnaround from the so-called $10 billion black hole. But, as I have pointed out before, the black hole was largely a figment of the Treasury's imagination in doing the bidding of its political masters—a Treasury which is always keen to find an excuse to slash support for ordinary Australians, for students, for the disabled, for the aged and for the unemployed. But looking back over the budget papers, we can see just how wrong Treasury was. Indeed, half of the budget cuts were not necessary once the conservative bias of Treasury estimates was taken into account.Then we get to the 1999-2000 surplus, which will be $3.8 billion higher than at the mid-year review. Why? Well, the ever compliant Treasury model upped the revenue estimates by $4.4 billion. So Peter Costello's surplus is essentially revenue driven. Revenue flows because the economy is strong. Revenue has risen by $19 billion since Peter Costello became Treasurer. Even if there really was a black hole, the economy could have and would have filled most of it without any action on the part of the Treasurer.The Treasurer has made much of his claim that this budget keeps $1.2 billion of election promises. But what about the $1.8 billion of non-core promises that were broken in his earlier budgets? What about those massive and unnecessary cuts to education, health, employment, industry and social welfare programs? He might have conveniently forgotten them but we have not, and neither have the millions of ordinary Australians who were hurt by the savage cuts.The Melbourne Institute did a major study on the distributional effects of those cuts and they found that the cuts cost the average Australian household $7 a week. Worse, for families living on less than $400 a week, the cuts set them back $14 per week. The government argues that these families will get their bonus next year with the tax cuts. But they won't! A two-income couple on $400 a week with two children will get only $9.85 a week from the tax package. So they are still worse off because of this government's failure to keep their promises in 1996.The Treasurer persists with the furphy that all this pain was necessary to retire debt. What a nonsense. Anyone with even a limited knowledge of economics must know that Australia does not have a public sector debt problem. We have the fourth lowest level of government net debt as a percentage of GDP in the OECD. Our debt level, as a percentage of GDP, is 40 per cent of that of the UK, 38 per cent of that of the US, 26 per cent of that of Canada, half the debt of Japan and 28 per cent of that of European Union countries.Since 1996 the government has reduced debt by around $24 billion. I liken it to paying off a very manageable home mortgage ahead of time but not feeding or clothing the kids properly. Yet, despite all this much vaunted debt retirement, the current account deficit has almost doubled. This is because of the continuing build-up of private debt. There is simply no causal relationship between the current account deficit and public sector debt. No competent, realistic economist would own up to believing that there is.The government has moved to accrual accounting; and I welcome the move, particularly as it adds weight to my argument that we do not have a debt problem. With the accrual accounting regime and with realistic valuations it is clear that Australia's public sector is very close to being debt free. We can see this because of the government's balance sheet. For the first time, we have included estimates of assets and liabilities. At page 4-8 of the budget papers, the Treasury estimates the Australian government's net assets/net liabilities position as minus $63.8 billion, or about 11 per cent of GDP. This is the shock-horror debt we are trying to get rid of—as little as that.But this figure is misleading. It includes Telstra as an asset, but marks it at book value only. The book value of Telstra is $11 billion, whereas the market value of Telstra is about $100 billion. So the true value of the government's share of Telstra is understated in the balance sheet by about $60 billion. There goes the net liability—it vanishes, evaporates, it is gone. It was that easy.But wait, there is more! The balance sheet includes an unfunded superannuation liability of $70 billion, a figure calculated by the Australian Government Actuary. This is the gross cost to government of future superannuation liabilities. But the Actuary noted in his report that this is overstating the government's real costs. This is because the payment of superannuation reduces future social security pension payments. He calculated the actuarial value of this at about $30 billion. So the real cost to government of its employees' superannuation is not $70 billion but closer to $30 billion. If we take the real value of Telstra and the real value of superannuation liabilities into account, the net liability of the government is not minus $63.8 billion but plus $26.2 billion. In short, we have no public sector debt problem.By all means, the government should aim for fiscal balance in times of plenty and not add to debt, but I stress again: we do not have a debt problem. I believe that a surplus of $5.4 billion this year, rising to $12 billion in three years, is frankly obscene when social services are not being adequately funded, when pensioners have to wait two years for basic dental treatment and when, over the past six months, 65 per cent of welfare agencies reported significant increases in demand for their services.This hard-right economic rationalism flows through to other economic parameters. Unemployment is forecast to stay at 7.5 per cent for the next 18 months. There is not a single measure in this budget to do anything about it, to actually try to accelerate jobs growth. We are told labour market reform will fix it. But it will not. The most recent OECD Economic Outlook summarises the most recent research on this issue and demonstrates quite clearly that cutting minimum wages and lowering employee protection does not provide more jobs.Modern economic theory and prominent economists like Paul Romer, Paul Krugman, Lester Thurow and Robert Reich map out the policies that governments should follow to maximise economic opportunities in a global economy. They are education, training, research and development and spending on infrastructure. These are the keys to jobs growth. Making the tax system more jobs friendly is something that we are trying to do at the moment. All these things have to be done, but this budget, in all its stylish splendour, does absolutely nothing. I believe this is the greatest failing of this budget—the failure to address unemployment. The unemployed have paid the price of the government's fiscal restraint policies, and indeed in many ways they have bought the surplus. By any measure, they should have been the first beneficiaries of the any surplus, and they were not.I now turn my attention to the actual content of the budget. I was very pleased to see at last a substantial injection of funds for medical research, the additional funding for indigenous health, and the government keeping its promises for more funding for rural health and the hepatitis C program. I will not dwell on the new private health insurance initiatives. I guess we can now say with certainly that the $1.5 billion to $1.6 billion injection did not work—so here we go again with yet another attempt.On education, the Democrats welcome the increased funding for literacy and numeracy programs, languages and teachers' profess ional development. But we do question why additional funding is provided to the 30 per cent of students in private schools—some $561 million over four years—but nothing for the seriously underfunded public school system.On the environment, the Democrats reject the continuing link between the sale of Telstra and funding for the Natural Heritage Trust Fund. The case for such a link was always flimsy and, with a $5.4 billion surplus, there is absolutely no case for treating environment spending any differently from other core government activity. Tying funding for the environment to the sale of Telstra is, quite simply, blackmail. It is unconscionable for government to abrogate responsibility for our significant environmental debt in this fashion.I note that the government has allocated $5 million for monitoring toxic air, and that will certainly be needed if the cost of diesel comes down as a result of the tax package getting through unchanged. It is ironic that this program will highlight the considerable increase in pollution which will arise from cutting the price of this toxic fossil fuel. I also note with dismay that funding for environment groups will be conditional on those groups complying with government policy. This government's determination to muzzle policy debate in the community sector is just breathtaking. Environment groups and individuals in them play an important role in exposing the full horrors of government decisions that have a profound impact upon the environment.The Democrats welcome the government's new commitment to regulate biotechnology, but we are concerned that the `integrated strategy' announced in the budget could amount to little more than an attempt to muzzle community opposition through one of the government's legendary `education' campaigns.As I indicated, the Democrats are disappointed at the lack of action on employment. While we welcome additional funding for indigenous employment initiatives, we question the merit of extending the Work for the Dole scheme. The government's own analysis shows that only 32 per cent of participants get jobs as a result. I would suggest to the government that just allowing the unemployed to do however much voluntary work they wanted to do would get about the same outcome.But let us compare Work for the Dole with the success rates of some other programs. It does not stand up very well. Jobstart had a 50 per cent success rate, traineeships had an 80 per cent success rate and the New Enterprise Incentive Scheme had a 90 per cent success rate. These schemes were either not continued or not expanded by this government.Yet again there is more slashing of public sector jobs. Now we see another 2,000 going. This is in addition to the 28,000 Public Service jobs abolished in the first three years of Costello budgets. Centrelink, incredibly, is the big loser with 900 more jobs to go. That is on top of the 8,000 slashed already from this agency in previous years. Slashing jobs will do nothing for the already appalling levels of service available to Centrelink clients.The major social security initiative in this budget was the great youth allowance concession, granting the 41,000 families who lost up to $80 a week just $19 a week in extra family payments. But this miserly concession will be made available only if this chamber passes the government's tax reform package.HX5WOODLEYSenator Woodley—More blackmail.8U4Lees, Sen MegSenator LEES—You are quite right, Senator Woodley. Senator Harradine described the measure as too little, too late and as improperly tied to the tax debate, and I have to agree with him. We can now add the youth allowance to the list of $1.8 billion worth of broken promises, all under the umbrella of Mr Howard's ironclad guarantee in 1995 that he would not undermine the social safety net.This government seems to pride itself on the hundreds of thousands of people it throws out of the social security system—around 161,000 in 1997-98 alone. Five of the 13 budget press releases that we have seen come across our desks so far are from the Minister for Family and Community Services announ cing new crackdowns to get even more people out of the social security net. One would have thought they had dreamt up every possible means of getting people off social security, but we see they have found some more.Given its failure to keep promises to maintain the safety net, I cannot see how anyone can trust this government to compensate people fully for the impact of a GST. Mr Costello has already said that he will not accept anything that costs in the billions, yet the cost of making sure that no-one is worse off under a GST will be upwards of $5 billion. Mr Costello clearly will not meet that, so it follows that 4.9 million Australians will still be worse off under the GST unless food is exempt. This is why we do not trust the government's compensation approach. This is why we will not be backing down on our insistence that food stay out of the GST net. Keeping food out eliminates three-quarters of the price effect of the GST and therefore three-quarters of the need for compensation.The Treasurer continues to misrepresent the Democrats' approach to tax reform. He accuses us of wanting to destroy the tax plan, of wanting to plunder his precious surplus. Simply, he is wrong. Our approach is fully funded and, if adopted, would not draw one extra cent from that precious surplus.Keeping food out of the GST net would cost $3.6 billion in 2000-01. We propose that this be paid for by paring back the tax cuts to high income earners by $3.6 billion. Other Democrat amendments to the GST would cost $700 million. We propose that these be paid for by a combination of paring back the off-road diesel tax credits and the lower inflation and higher employment flowing from a food free GST. We propose that the $500 million needed to eliminate poverty traps be paid for by closing the FBT concessional treatment of motor vehicles. Our changes to the road transport diesel excise are fully self-funded as we reallocate the savings from road transport to rail and also to gas vehicles.These are the facts. With the Democrats' proposed changes to improve the tax package, the surplus is unaffected. The tax system is fairer as low income earners will pay less tax and high income earners will pay more tax, and the worst effects of the GST are minimised. All this is done without compromising the economic benefits of tax reform or the budget's bottom line. I must say that it would be much easier to negotiate with the Treasurer if he actually took the time to read our proposals before making ill-informed statements. He might even be a bit more relaxed once he understood our position and realised that we will not touch that precious surplus.The looming tax debate has already overshadowed what is essentially a do-nothing, tunnel vision budget. After all the pain endured by ordinary Australians during the last four years of economic reform, they have a right to expect more from the government than this. They have a right to expect that those who bore the pain of economic reform will be the first to share the gains. That has not happened and people are disappointed—but I do not think that they are surprised.Mr Costello's nouvelle cuisine budget is long on style and short on content. It fails the very people who most need a helping hand from government and, like nouvelle cuisine, it fails to satisfy.20:20:005037Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—This budget says a lot about what makes up this government's picture of reality. The government's reality is one that favours a free market economy over an economy that supports all elements of the community. It is a reality that prioritises financial statements over more comprehensive indicators of wellbeing in a society; it is a reality that prioritises profits over people; and it is a reality that favours the private over the public.It is a reality that favours those who do well in the free market economy, such as those in the big end of town, over those who do not do so well in the free market economy, such as the unemployed, low income earners, rural and regional communities, non-profit community groups, immigrants and small business. It is a reality of social conservatism and economic liberalism that the Prime Minister has branded `the Australian way'. Presumably, those who do not fit into this reality are unAustralian.So, in fact, the government's reality goes further than just privatising and favouring the free market economy, the private sector and those who prosper in it. The government's reality actually demonises those who do not do so well—indicating that they are unAustralian, saying that they should pull themselves up by their bootstraps and be self-reliant. This demonising process is evident in the mutual obligation philosophy, the obsession with cracking down on so-called welfare cheats.In speaking in response to this year's budget, I would like to highlight the aspects of the budget that reflect the government's reality, and also stress where the government's reality diverges from what is really happening in the Australian community. In doing so, I would firstly like to address whether the economic and financial aspects of the budget reflect reality. Secondly, I would like to focus on whether specific budget measures are adequate for what is really happening. I would finally like to focus on the push towards privatisation and the private sector that is evident in this budget.What is really happening in the Australian community? This budget shows a fiscal balance of $5.4 billion. It forecasts low inflation, growth at around 3 per cent, export volume growth, a slight reduction in imports and a current account deficit of $32 billion. Do these figures really reflect what is happening on the ground? Clearly, no. When you look at the comprehensive indicators rather than at the narrow financial and economic indicators, the deficiencies of the government's priorities are manifest. It is clear that we are in deficit.Let us look at accrual budgeting, which we believe is a lost opportunity. The changes in this budget to accrual budgeting and to an outcome-outputs framework are a lost opportunity to expand the available indicators. While it is a positive step to incorporate some range of costs, such as superannuation, other employee entitlements, capital depreciation of assets and the cost of replacing assets, this does not accurately reflect the full costs of transactions. If the principles behind accrual budgeting had been properly implemented, then there would have been a proper costing of social capital, human capital and environmental capital. If these elements had been incorporated and costed properly, we would have seen a budget in deficit, and it would have been in accord with the reality of what communities are feeling on the ground.While comprehensive statistics may be difficult to gather, it is really a matter of priorities and political will. The government is already appropriating money to the Australian Bureau of Statistics—as well they should—to produce comprehensive environmental accounts. Many of them have already been published and would provide a useful basis for incorporation. But it is fairly easy to see why the government would be reluctant to include these kinds of figures. There have been a number of studies which indicate that the incorporation of these statistics would decimate the nice bottom line and the handsome $5.4 billion surplus.For instance, in 1996 the Department of the Environment, Sport and Territories produced a report entitled Subsidies for the use of natural resources in which it was estimated that the government was underpricing its annual environmental capital depletion to the tune of between $7.746 billion and $8.866 billion per annum. This was in addition to the $5.732 billion in financial subsidies to use natural resources. These are reasonably conservative estimates; the study did not even include subsidies for mining. That was obviously too much of a hot potato. In addition, if the reduction in human and social capital had been accounted for, the nice bottom line would have looked even more miserly. Remember that this is annual depletion.Social capital relates to the possession of sound and stable political, legal and commercial institutions, and cohesive, supportive and trusting communities. Human capital represents the accumulation of health, skills, knowledge and experience in humans. Again, some of these issues are difficult to quantify, but there have been some real advances made in attempts to quantify these intangibles. For instance, there has been an attempt to develop genuine progress indicators around the world that more accurately reflect the reality of national well-being.Some elements of the genuine progress indicator for Australia developed by the Australia Institute include income distribution, which can show whether the hailed gains are being shared evenly among the community; value of household and community work; costs of unemployment, including loss of output; loss of human capital because of a decline in skills, declining levels of health and increased levels of suicide; increased levels of crime; increased rates of family breakdown, psychological impacts on the families of the unemployed, trauma, stress and loss of self-esteem; and the costs of overwork.In 1997 Australian research by Buchanan and Bearfield indicated that there were 1.7 million people who worked unpaid overtime and 900,000 people who worked paid overtime. There are often health implications associated with overwork. A recent example, in a 1998 survey conducted by the ACTU on stress at work, discovered that more than 60 per cent of people reported a range of health effects from stress at work, such as headaches, continual tiredness, anger and sleeplessness. These examples highlight the fact that the government's textbook budget analysis is reductionist and that it does not reflect the reality of environmental destruction and social dislocation in Australia. It should be obvious to this government because similar things are happening where similar policies are being implemented in other countries.The Greens (WA) have always taken a keen interest in the budget process and have attempted to broaden the agenda around the budget to emphasise community participation and the interconnectedness of the economy, the community and the environment. The Greens (WA) believe that it is important to reduce the mystique surrounding the budget and economic policy in general. This still remains a serious obstacle to the community's ability to understand and to play an active role in the formulation of spending priorities in the budget. Developing a more realistic set of measures that the community can relate to is a step in the right direction—or it would be if the government thought more carefully about what they were doing. It could also provide a comprehensive basis for transparent and informed policy making. Wouldn't that be a nice surprise?Let us look at the budget measures themselves and whether they are adequate for the community. Let us look at what is notable and what is missing rather than at any of the specific positive measures. There was a deafening silence on the issue of the environment this year. The word was not muttered in the Treasurer's second reading speech, nor at all in the media coverage. But the figures speak for themselves. Department of the Environment and Heritage funding will be reduced in the out-years from $393.4 million this year to $344 million in 2002-03. The budget documents highlight the fact that, after 2002, we will only have funds allocated to environment protection if the parliament agrees to sell off more of the family silver. The money for Natural Heritage Trust programs will drop from $390 million to $8 million in less than four years.Do the Prime Minister and the Treasurer really believe that this is an appropriate method of funding environmental protection in this country? Would it be acceptable, for example, if the purchase of new defence equipment or social security payments were contingent on further asset sales? How about cake stalls and raffles for the next frigate? And what happens to the environment when we run out of family silver?Another travesty for the environment is the cuts in funding to voluntary environment and heritage organisations such as the Australian Conservation Foundation and a range of state conservation councils. Perhaps worse than the cuts per se is the commentary in the portfolio budget statement—this has been mentioned also by Senator Lees, but it is worth mentioning again—that funding is dependent on whether their activities contribute to government environment and heritage priorities. The Minister for the Environment and Heritage thought this was a cute statement because at some stage that statement had been made by a previous minister—but it had not been put as a budget output. That is the problem. It means funding is contingent on people being gagged. It doesn't take Einstein to work out that this is code for, `If you do what the government wants, if you agree with the government and toe the line, then you will be a winner.'Who does that leave us with? How could environment groups possibly meet this criterion? We have a government which is planning on spending $3.5 billion to $4 billion on pure environmental destruction if the tax package goes through with its cuts to the diesel excise. That is apart from the other elements in the package which are detrimental to other elements of the environment. We have a government which prefers to support uranium mining rather than protect world heritage property. We have a government which is supporting the logging of old-growth forests over their conservation. How could environment groups possibly contribute to the government's environment and heritage priorities? Who will be left?It is also important to realise that these most recent cuts and warnings are the continuation of a comprehensive process of defunding any groups that criticise government priorities. Indeed, just two weeks ago the Australian Youth Policy and Action Coalition was forced to close, after struggling for nearly 12 months after their $350,000 funding was slashed to nothing. AYPAC branded the slashing as `politically motivated and bloody-minded'. And the situation continues for all of those groups in our community who dare to speak out and criticise government policy. They cannot comment on it unless they praise it. Then they get credits for that.Unemployment was another area where the budget was poignantly silent. While groups such as ACOSS and the ACTU argue that unemployment should be at the centre of the budget, the Treasurer has refused to set any targets for the level of unemployment. The budget provides no extra funding for proper labour market programs and training, and the unemployment rate is set to stay at 7.5 per cent officially, though that is a figure which disguises considerable underemployment and, of course, the working poor.Labour market services were slashed by $1.8 billion in the government's first term and essentially were replaced by the famous Work for the Dole scheme. Now, despite an equivocal evaluation, the program has been expanded so that 25- to 34-year-olds will be given the privilege of being conscripted for forced labour at the expense of real training and job prospects. The government also short-changed rural apprenticeships by underfunding them to the tune of $40 million. In addition, funding to Centrelink has been decreased by $1 billion over the next six years, despite the fact that it has been plagued with problems and has overworked staff.Expanding programs such as Work for the Dole is a tactical and ideological manoeuvre by the government to shift the parameters of the problem from unemployment as a social and economic phenomenon to the unemployed as individuals. It plays on and promotes the imagery of the `dole bludger' in a deeply insidious way. Where is the corresponding concept of corporate mutual obligation? On this ground, the government is going the other way and giving corporations a range of rights with no responsibilities in supporting international treaties such as the Multilateral Agreement on Investment, which foundered only because other countries, not Australia, spoke up. In addition, the government is still cruelly targeting social security recipients by cracking down on their receiving rent assistance. In stark contrast, there are no measures to crack down on multinational corporate tax evaders.The budget measures in the area of health again provide a clear reflection of the government's priorities. We have seen private health insurers receive a $4 billion windfall with the 30 per cent private health insurance rebate, and now they are being given the green light to erode the principle of community rating. Contrast this with the glaring hole in public health funding and the funding cuts to the Australian Quarantine Inspection Service of $91 million over four years, and to the Australia New Zealand Food Authority, ANZFA, of $2.5 million in 2000-01, which could severely impact on community health standards, with increased risk of disease. At a time when the government is also set to introduce more genetically modified food, you would think we would need more resources and not less. This is further evidence of the government's commitment to self-regulation for industry and the decimation of the public sector.Another area of deafening silence was the area of overseas aid. The Australian Council for Overseas Aid has expressed concern that the current funding is at an all-time low as a percentage of gross domestic product. But I am sure Australia will be looking at what we can do to help solve the problems when many of these local economies implode when other stresses cause internal ructions which end up being a so-called defence and foreign affairs issue. It is very short-sighted on behalf of this government.Any reasonable policies in relation to our current account deficit or initiatives that address the current level of our current account deficit are also completely absent. The government's answer is greater savings and keeping the budget in surplus. The Greens have often spoken out about the `twin deficit theory' myth. International evidence shows up the government's cries that the current account deficit has a strong relationship to savings or to the budget. Thailand is a perfect example. Thailand was a casualty of the Asian crisis despite good savings and a budget surplus. All through the 1990s Thailand ran its budget at a two per cent surplus, which would be a surplus of around $11 billion a year if Australia were to run a surplus at the same level. In addition, Thailand had one of the highest national savings as a proportion of gross domestic product, at about 40 per cent in 1999. The issues are about structure, about the way we operate our economy and about our priorities, and the government is blind to the structural problems that it has ignored over the last few years.The final issue I would like to raise is the clear theme in the budget which is the push to the private sector. I have already commented on the windfall for private health insurance funds. There is also increased funding for non-government schools by $561 million over four years and for Catholic schools by $553 million, which totally swamps the comparatively minor amount of $131 million for public students' literacy and numeracy. In addition, we have the further sell-off of assets including Telstra, the commercialisation of the Department of Finance and Administration's property portfolio and an extension of the information technology outsourcing program for all public departments. There are also savings from competitive tendering and contracting principles.In light of this Government's clear preference for the private sector, the Greens (WA) are sceptical of how the government will use its newly found transparency with accrual budgeting. I am waiting for the time—in fact we have had elements of it—when the minister will come to this chamber and say, `I can't tell you the answer to the way public money has been spent in my portfolio because it is subject to commercial-in-confidence.'In the budget documents, the government emphasised that one of the major benefits of the moves to accrual accounting was that the public sector would be operating more like a business. There is a danger that the government will use the greater transparency in relation to the capital assets of agencies to pressure agencies to sell off assets and outsource services requiring significant assets. Outsourcing has massive negative implications for transparency as service providers use the `commercial-in-confidence' term that I mentioned as a banner to undermine public accountability.They are putting in a 12 per cent capital use charge as a further pressure on agencies to take this route. It is amazing how you can have a 12 per cent capital use charge when you relate it to the current interest rates, but that is what they are charging. The government has also indicated that agencies will have to get down on their hands and knees to beg for further assets. In one of the `fact sheets'—loosely named—produced by the Department of Finance and Administration called Accrual appropriation framework it is stated that:. . . new capital provided by Government . . . will be appropriated separately as an equity injection or loan. They are not generally expected to occur frequently.This means that government services and programs will have to act as if they are a business on a profit basis. What does that mean for the expectation of people in the community that the government be able to do those things which are not provided generally by the private sector? Indeed, some of the `fact sheets' issued by DOFA specifically comment that the new framework will support competitive pricing and facilitate choice. This obviously relates to increasingly pushing for government departments to outsource and to aim for `competitive neutrality' with business.HX5WOODLEYSenator Woodley—Perhaps they will tender out their grandmother soon.HX5Margetts, Sen DeeSenator MARGETTS—Probably. I have mentioned the government's reality and I would like to conclude with a vision that reflects the Greens' reality.The Greens' vision is of a happier and more balanced society where work and incomes are more equitably distributed and there is less emphasis on consumption in favour of increased leisure. That should be the vision. In this vision people feel a greater sense of belonging to a local community; culture and diversity are respected and celebrated; work is a satisfying expression of self and an opportunity to cooperate with others; opportunities are open to all; and poverty and environmental degradation are minimised. This is what we mean by a sustainable economy.Debate (on motion by Senator Kemp) adjourned.20:43:005041Senate adjourned at 8.43 p.m.Documents50415041The following documents were tabled by the Clerk:Home and Community Care Act—Amending agreement in relation to the provision of financial assistance by the Commonwealth of Australia for Home and Community Care Program to South Australia, dated 6 May 1999.Product Rulings PR 1999/20-PR 1999/24.Sydney Airport Curfew Act—Dispensation granted under section 20—Dispensation No. 7/99.Taxation Determinations 1999/8-1999/26.Workplace Relations Act—Rules of the Commission—Statutory Rules 1999 No. 71.Answers to Questions on Notice5043The following answers to questions were circulated:5043(Question No. 409)4095043Lundy, Sen KateSenator Lundy7G6ACTALP00 asked the Minister representing the Minister for Health and Aged Care, upon notice, on 18 February 1999:(1) What monies have been set aside by the Commonwealth to pursue strategies related to amongst young people in 1999.(2) What component of total Commonwealth funding for suicide prevention in Australia is directly tied to youth suicide prevention.(3) (a) How much money was each state and territory allocated; and (b) what formula was used in determining this allocation.(4) Was the funding allocated to each state and territory targeted at specific sectors, for example, the work of health services, community groups and youth services.(5) What percentage of the total funds allocated to youth suicide prevention was designated to the work of: (a) health services; (b) community organisation; and (c) youth services.(6) To what youth suicide programs are these funds directed.(7) What is the time line attached to the implementation of programs funded under this strategy.(8) (a) Is there an evaluation requirement attached to the programs funded under this strategy; and (b) what is the time line for these evaluations in relation to the program implementation period.(9) (a) What are the reporting requirements required by the Commonwealth attached to this funding; and (b) what is the time line attached to the reporting requirements.5043Herron, Sen JohnSenator HerronVW4QLDLPAboriginal and Torres Strait Islander Affairs10—The Minister for Health and Aged Care has provided the following answer to the honourable senator's question:In framing these answers it has been presumed that the honourable senator is referring to the 1998-99 financial year.(1) The total allocation under the National Youth Suicide Prevention Strategy for the 1998-99 financial year was $13,407,909. (2) All funding under the National Youth Suicide Prevention Strategy was directly tied to youth suicide prevention.(3) (a) Funding was made available to States and Territories through three programs under the Strategy: a national stocktake of suicide prevention programs, education and training for professionals, and rural and regional counselling services.The remainder of the funds available under the National Youth Suicide Prevention Strategy for 1998-99 are being used to support a range of national projects and pilot programs.(b) Funds for the National Stocktake and Education and Training projects were allocated on the basis of progress with grant agreements made in previous years with each State and Territory. Progress payments are made on receipt of reports indicating that milestones with projects have been reached.Funds for the rural youth counselling program were calculated using a formula based on the rural, remote or indigenous youth population of that State or Territory.(4) All funding allocated to State and Territory Governments was negotiated with that State or Territory's Health Department. In some cases State and Territory Governments provided these funds to health services, community groups and youth services.In addition, national project funds provided under the strategy were allocated to a range of health services, community groups and youth services.(5) Funds allocated under the National Youth Suicide Prevention Strategy were allocated to a range of organisations. The totals given below are approximations for the 1998-1999 financial year:Health Services: $1,734,000Community Organisations: $4,019,000Youth Services: $1,802,000(6) Examples of programs funded under the National Youth Suicide Prevention Strategy include:National coordination, policy and planning, including the appointment of a National Advisory Council on Youth Suicide Prevention to coordinate prevention activities; Research and consultation, evaluation of the Strategy and identification of good practice and clinical initiatives around Australia;Crisis Intervention including support for telephone counselling and promoting better service by hospitals and health services following suicide attempts;More treatment and support services in the community including rural counselling services especially for young people at high risk of suicide, provision of early intervention with young people with mental illness, and linking drug and alcohol services, youth health and mental health services; andSupport for community controlled approaches to prevent and respond to suicide in rural and indigenous communities.(7) Most projects will be completed this financial year.(8) (a) Yes.(b) Project evaluation reports are required on completion of projects and prior to the final payment.(9) (a) Projects are required to report to the Department on progress with the project in order to receive progress payments.(b)In most cases, projects report on a quarterly basis.5044(Question No. 419)4195044O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 25 February 1999:(1) Did the former minister, Mr Sharp, establish a shipping reform group to advise the government on strategies to further reform Australian Shipping.(2) (a) What was the membership of that group and (b) what were its terms of reference.(3) When did the group report to the Minister and what were its recommendations.(4) (a) How many of those recommendations have been implemented; (b) when were they implemented; and (c) what has been the impact on the shipping industry of those changes.(5) (a) Which recommendations have not been implemented; and (b) why have they not been implemented.(6) Did the current Minister, establish a working group to progress shipping reform in December 1998.(7) (a) Who was on that working group; and (b) what were its terms of reference. (8) Were the terms of reference provided to the industry and all relevant government departments and agencies prior to their finalisation; if so, which industry organisations and government departments and agencies were consulted.(9) Were the final terms of reference for the working group endorsed by the shipping industry and all government departments and agencies; if not: (a) who opposed the terms of reference; and (b) what was the basis of their opposition.(10) What reporting date was given to that working group and will that deadline be met.(11) Has the working group provided any interim recommendations to the Minister or his office; if so: (a) what were those interim recommendations; and (b) has the Minister or his office responded.(12) Have those interim recommendations been considered by the Department of the Treasury or any other department or agency; if so: (a) when were they considered; and (b) if the Minister or his office have been provided with any advice from Treasury or any other department or agency, what advice was received.(13) Has the Minister or his office had any discussions with the industry about interim findings of the working group or the general nature of the working group's findings; if so: (a) when did those discussions take place; and (b) who participated in those discussions.5044Macdonald, 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) Yes.(2) (a) The members of the Shipping Reform Group (SRG) were: Mr Julian Manser (Chair); Captain Andy Brooking; Mr Lance Hockridge; Mr John Hurlstone; Mr Bob Hutchinson; Ms Sara Lunam; Dr Ken Moss; Captain Alan Tait.(b) The terms of reference of the SRG were:"ObjectiveThe SRG is a consultative body, which will advise the Minister for Transport and Regional development on options:* to increase the competitiveness of Australian Shipping through the introduction, if appropriate, of a second register-type structure; and* for the windback and removal of cabotage restrictions.ConductIn considering these issues, the SRG should be mindful of community standards with respect to ship and personnel safety and protection of the environment; and policies and practices applying to other modes of transport. Members of the SRG will also need to recognise that while the SRG may provide advice on fiscal measures, it should do so within the context of the Government's overall fiscal strategy for which the Treasurer and the Minister for Finance have primary responsibility.The SRG is to commence in August 1996 and preferably conclude by December 1996."(3) The SRG reported to the Minister in March 1997. Its recommendations were:1. A comprehensive reform program should be implemented, comprising:* significant labour market reform;* exposure to competitive pressures via the wind back and ultimate removal of the current cabotage regime; and* equity with our foreign competition through the establishment of an Australian Second Register.2. A system of company employment should be established and the current seafarers' engagement system terminated.3. The leave entitlements of seafarers' on Australian trading or merchant vessels should be reduced to a level consistent with community standards and based on OECD practice, resulting in a crew to berth ratio for Australian vessels of 1.7 (or cost equivalent).4. The separate seafarers' workers compensation scheme should be abolished and all seafarers should be covered by a relevant State or Territory-based scheme.5. Ship operators (including those in the offshore sector) should agree on a common approach to implementing the new labour arrangements and to the issue of redundancies, the cost of which will be borne by the operators in the industry.6. Part VI of the Navigation Act 1912, dealing with the Coasting Trade, should be repealed, after a transition period to establish a coastal shipping regime as set out in Attachment D. Christmas Island should be exempted immediately from the Coasting Trade under the provisions of the Navigation Act.7. The Government and AMSA should continue to take action to improve the safety levels of all vessels in Australian waters and AMSA be resourced accordingly. In any discussions on the impact of the removal of cabotage it should be emphasised that the effect on the number of foreign vessels operating in Australian waters after the removal of cabotage will be minimal.8. The clarification, harmonisation and implementation of Commonwealth/State and Territory jurisdiction and safety regulations be given top priority by the Australian Transport Council. 9. The discretion of Customs Collectors should be tightened to ensure that vessels are deemed to be imported if they remain on the Australian coast for more than 30 days. This time limit should be kept under review.10. The complete removal of cabotage should be contemporaneous with implementation of the full labour reform requirements under the second register and there should be a transition period during which access to CVPs is liberalised and CVP fees are reduced.11. The transition period should be 18 months from the introduction of legislation or 12 months from the date of effect of legislation whichever is earlier.12. The current fuel excise exemption arrangements for vessels on coastal voyages should be replaced with an equitable graduated system.13. The Government should establish an Australian second register to be called the Australian Second Register (ASR) with the characteristics set out in Attachment E. The current shipping register will continue to exist.14. The Government should provide the limited range of Reform-Linked Equity Measures set out in Attachment F for operators that embrace the reform measures and that are subject to international competition. Achievement of reforms should be subject to annual monitoring.15. The Government should negotiate with interested State and Territory Governments on the location of the second register, taking into account the practicalities of running a shipping operation.16. The shipping industry should continue to be consulted on specific measures to ensure that any new regulations to implement shipping reform are practical and efficient.(4) (a) Recommendations 2 and 5, and the second part of recommendations 6,7, 8, 10 and 16 have been implemented and recommendation 12 will be overtaken by the implementation of the Government's New Taxation System.(b) Recs 2 & 5. The shipping industry commenced introduction of company employment in the second half of 1998 and an associated program of redundancies has been funded by the industry.Rec 6. Christmas Island was exempted from the Coasting Trade on 19 March 1998.Rec 7. AMSA's inspection program is focus`ed on improving the safety levels of vessels in Australian waters. This is an ongoing program which is resourced by the Government.Rec 8. In 1997 the Australian Transport Council established the National Marine Safety Committee to develop a national marine safety strategy and to harmonise safety regulations across all jurisdictions. At its next meeting the ATC will consider a recommendation for jurisdiction between the Commonwealth and the States to be revised, based on vessel size. This revision would remove unnecessary and costly duplication of regulation for small vessels (under 500 tons) trading interstate and would also provide for uniform Commonwealth regulation of the safety of large vessels (over 500 tons), particularly to ensure coverage of foreign vessels on intrastate voyages.Rec 10. Access to CVPs was liberalised on 24 June 1998 and all permit fees were reduced on 19 March 1998.Rec 12. This recommendation has been overtaken by the Government's decision to introduce A New Taxation System. This will abolish the fuel excise applying to vessels engaged in the coastal trade.Rec 16. The shipping industry is currently being consulted on options for the further reform of shipping.(c) Anecdotal information indicates that the impact of introducing company employment has been greater efficiency and reductions in manning on-costs for some vessels/operators. The impact of exempting the Christmas Island trade has been to remove constraints on the provision of the most efficient shipping services to the Island. AMSA has maintained a high level of port State control inspections. During the 1997-98 financial year, AMSA inspected 2947 foreign ships, detaining 175 until serious safety deficiencies were rectified to their satisfaction. This represents an inspection rate of 63% of eligible vessels trading into Australian ports. This is ahead of the IMO target of 50% inspection rates by the year. AMSA is continually monitoring and improving the effectiveness and efficiency of its PSC program. Liberalised access to CVPs has resulted in 19 permits being issued since July 1998. The implementation of Recommendation 8 is still in train.(5) (a) Recommendations 1, 3, 4, first part of 6, 9, first part of 10, 11, 13, 14, and 15 have not been implemented.(b) The Government has established the SRWG to provide further advice on how best to pursue the remaining recommendations.(6) Yes.(7) (a) The Shipping Reform Working Group (SRWG) is chaired by Dr Gregory Feeney (First Assistant Secretary of the Maritime Division of the Department of Transport and Regional Services). Its members are Mr Lachlan Payne (representing the Australian Shipowners Association, representing ship operators), Mr Ross Brewer (from the Australian Mines and Metals Association, representing the offshore services sector) and Mr Barry Vellnagel (from the Minerals Council of Australia, representing shippers). (b) The terms of reference of the SRWG are:"The Working Group will:Consider the recommendations of the Shipping Reform Group (SRG) aimed at creation of an internationally competitive Australian shipping industry, taking account of:- The benefits of tax reform and the parameters set in relation to business tax reform;- The benefits of previous financial assistance to the industry and the long term gains achieved; and- The unique nature of the Australian coastal shipping trade and wether there are genuine threats to the long terms sustainability of an Australian industry;Review international practice in OECD countries in terms of fiscal support for the shipping industry and review the types of fiscal support provided to other Australian industry. Develop options in relation to measures which would be most efficacious in achieving productivity gains and other policy outcomes, in the current circumstances of the Australian shipping industry;Develop methodologies for establishing that enterprise employment has been implemented and for comparing benchmark crew-cost figures;Consider the scope for increasing the efficiency of the Australian shipping industry through improved workplace arrangements via more effective use of the provisions in the Workplace Relations Act 1996;Define the application of the "second register" concept to Australian shipping;Assess the impact of the competitiveness of Australian shipping of issues such as 23AG of the Income Assessment Act 1936 relating to the employment of Australian seafarers;Assess the net benefit to the economy of the Australian shipping industry, including associated industries such as ship broking and chartering, insurance, survey, etc; andIdentify any relevant defence issues relating to the national shipping industry."(8) Only the Prime Minister, Treasurer and Minister for Finance and Administration were provided advance copies of the terms of reference.(9) (a) and (b) Not applicable, see answer to Question 8.(10) The Working Group was asked to report to the Minister at the end of March 1999. The Minister for Transport and Regional Services has extended the deadline to 23 April 1999.(11) No. There have been no interim recommendations.(12) Not applicable. See answer to Question 11.(13) No. ATTACHMENT EREQUIREMENTS FOR REGISTRATION ON AUSTRALIAN SECOND REGISTEROwnershipShip characteristicsSafety StandardsCrew nationalityCrew TrainingWages/Con ditionsConventionsRegistration FeesOtherAustralian or foreign owned, leased or chartered vessel. Foreign companies must have an Australian resident ship manager."Trading or merchant ships" (excludes warships, fishing vessels, pleasure craft, floating docks).Same as first register.Australian Master and Chief Engineer mandatory.Must hold STCW certificates, where appropriate, and Australian Certificate of Recognition.To be negotiated between shipowners/operator s and seamen/unions. Minimum ILO standards (as recognised by ITF) for foreign ratings.Vessels will be required to comply with conventions with Australia has ratified and are in force including:Set at full cost recovery level.Company employment mandatory after transition period and Seafarers Engagement System to be terminated.Cruise vessels.Subject to relevant parts of the Navigation Act relating to safety and crew welfare.Australian junior officers and ratings mandatory in general.All seafarers must be issued with a seafarer's record of service/identity document.ITF reference is to internationally determined levels.IMO Conventions dealing with Safety of Life at Sea, Maritime Search and Rescue, Pollution.After transition period all Australian seafarers on second register vessels covered by State/territor y-based workers' compensation scheme.Service vessels, including tugs and dredges.Subject to State Government and Port Authority requirements.Foreign junior officers and ratings optional if:Introduction of company-sponsored superannuation.ILO Conventions dealing with minimum standards on merchant shipping, seafarers' documents and leave.Foreign seafarers provided medical and hospital entitlements and sick pay benefits no less than minimum of ILO 55 and statutory minimum occupational disability and death benefit scheme.Offshore vessels.Need for all requirements to be harmonised.* vessel spends more than 75% of its time of operation on international voyages;All seafarers subject to standard medical requirements.or* if ship owners are unable to qualify for reform-linked equity measures using full Australian crew."Australian" in this context means permitted to work on permanent basis in Australia.Note: Ships on the second register will not be automatically deemed to be imported under the Customs Act 1901.ATTACHMENT FREFORM-LINKED EQUITY MEASURESEligibilityPAYEAccelerated DepreciationRollover reliefCompany TaxationPayroll TaxComment1. Second Register vessel.Exempt from PAYE payments (or grant equivalent) in respect of Australian resident seafarers on eligible second register vessels.Same as for Ships Capital Grant vessels under Section 57AM of the Income Tax Assessment Act (ie 20% beginning in the year prior to delivery).Proceeds from sale of second register vessels exempted from tax if used to purchase replacement capacity within 3 years of sale.International shipping companies that choose to register vessels on the ASR through an Australian management agency should be liable for taxation on their international freight earnings in the country of incorporation.Seafarers on second register vessels and employed through offices in the same State or Territory in which the second register is located exempt from Payroll Tax.2. Vessel spends more than 25% of operational time on international voyages;Mechanism must be vessel based rather than individual because eligibility is linked to vessel.Subject to negotiation with State or Territory in context of decision on location of second register.Additional productivity improvements are expected but it would not be feasible to impose these as conditions.ORFuture redundancy arrangements will remain the responsibility of industry taking into account relevant community and company provisions.3. Vessel operates primarily on coastal route where scheduled service (at least weekly) is provided by foreign vessels or second register vessels qualifying under 2.Preference is for employee deductions to be held by employer subject to annual reconciliation and subject to taxation as income earned.The threat of foreign competition as a result of the abolition of Cabotage should provide sufficient pressure for industry to achieve these improvements. After Transition Period:Delivery mechanism is responsibility of Treasury.The transitional arrangements for the removal of Cabotage will place early pressure on the unions to progress reform at a quick pace.Vessel subject to labour arrangements which provide:. Co employment;. Crew to berth ratio of no more than 1.7 or cost equivalent arrangement;During Transition Period:Vessel subject to labour arrangements which provide:. flexibility for ship management in selecting and assigning of ratings;. Crew to berth ratio of no more than 2.0 or cost equivalent arrangement (adjusted as appropriate for other sectors of the industry).Eligibility certificate would be issued annually by DoTRD.Transition period: 18 months from introduction of legislation or 12 months from date of effect of legislation, whichever is earlier5049(Question No. 531)5315049Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Attorney-General, upon notice, on 10 March 1999:What was the total cost during the 1997-98 financial year of the provision of newspapers, magazines and other periodicals to the minister's: (a) Parliament House office; (b) home/state ministerial office; and (c) private home.5049Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The Attorney-General has provided the following answer to the honourable senator's question:(a) $5100.00(b) $613.44 (c) Nil5049(Question No. 534)5345049Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister for Justice and Customs, upon notice, on 10 March 1999:What was the total cost during the 1997-98 financial year of the provision of newspapers, magazines and other periodicals to the minister's (a) Parliament House office; (b) home/state ministerial office; and (c) private home.5049Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The answer to the honourable senator's question is as follows:(a) $2325.65 (b) $601.30(c) Nil5050(Question No. 560)5605050Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Attorney-General, upon notice, on 10 March 1999:(1) What was the total expenditure on preparing the department for the move to accrual accounting for the 1997-98 financial year.(2) What was the department's forecast for expenditure in this area.(3) (a) In which instances were firms or individuals engaged to provide consultancy services associated with the shift to accrual accounting by the department; and (b) which firms or individuals were engaged.(4) (a) What was the total number of days that consultants were engaged to provide this advice or services; (b) at what cost per day in each instance; and (c) what was the total cost of each consultancy in each instance.(5) (a) What is the estimated expenditure on outside consultants to advise on accrual accounting for the 1998-99 financial year; and (b) how much as been spent to date.(6) What is the estimated total departmental expenditure on preparing for accural accounting for the 1998-99 financial year.5050Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The Attorney-General has provided the following answer to the honourable senator's question:(1) to (6) The Attorney-General's Department did not incur any additional costs in preparing for the move to accrual accounting. The Department has a number of qualified accountants on staff and had been preparing its annual statements on an accrual basis since 1992-93. As a consequence of the professional qualifications and experience of its staff, the Department was able to implement accrual accounting without any additional resources.5050(Question No. 568)5685050Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister for the Environment and Heritage, upon notice, on 9 March 1999:(1) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained from the Attorney-General's Department. (2) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained by the department from other sources.5050Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:(1) $875,784(2) Nil. (Salary costs for legal units operating within the Department have not been included).5050(Question No. 578)5785050Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Attorney-General, upon notice, on 10 March 1999:(1) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained from the Attorney-General's Department.(2) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained by the department from other sources.5050Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The Attorney-General has provided the following answer to the honourable senator's question:(1) This question does not apply to the Attorney-General's Department.(2) The Attorney-General's Department incurred an amount of $4 973 623 on legal advice and other costs. This amount includes the cost of solicitors and barristers, transcripts, court filing fees, the provision of expert witness statements and, in particular, judgements awarded against the Commonwealth. The Department's records are not maintained in a way that enables it to separately identify the costs incurred in obtaining legal advice from other costs which are incurred as part of the legal process.5050(Question No. 587)5875050O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Treasurer in the Senate, upon notice, on 11 March 1999:(1) How many employers participated in the superannuation guarantee, by state, in the 1996, 1997 and 1998 calendar years.(2) Of those employers who participated in the superannuation guarantee, by state, how many: (a) complied correctly with their obligations; (b) were advised they had to pay a superannuation guarantee charge; and (c) paid a superannuation guarantee charge. (3) How many of those employers, who participated in the superannuation guarantee, by state, in the 1996, 1997 and 1998 calendar years, that paid a superannuation guarantee charge, lodged a statement and payment to the Australian Taxation Office (ATO) by the due date, under the self-assessment basis.(4) Of those employers who participated in the superannuation guarantee, by state, in the 1996, 1997 and 1998 calendar years, that paid a superannuation guarantee charge, how many arose from a default assessment by the ATO.(5) Of those employers who participated in the superannuation guarantee, by state, in the 1996, 1997 and 1998 calendar years, that paid a superannuation guarantee charge, how many had investigations commenced due to the lodging, by the employee, of an `insufficient contributions' form.(6) In the 1996, 1997 and 1998 calendar years, by state: (a) what, in dollar terms, was the value of the amount underpaid by the employers who participated in the guarantee; (b) how many employees had their superannuation funds underpaid by employers; (c) how many employers did the Commissioner of Taxation sue for the recovery of unpaid superannuation guarantee funds and charges; and (d) what was the total value of unpaid superannuation guarantee funds that the Commissioner sued for the recovery.(7) Of those unpaid superannuation guarantee funds and charges that the Commissioner sued for the recovery of, what percentage of owed funds were recovered.(8) What was the value of unpaid superannuation guarantee funds that were not recovered, by state, in the 1996, 1997 and 1998 calendar years, due to the employer declaring bankruptcy before the funds could be recovered.(9) What is the section of the ATO that administers the recovery of unpaid superannuation guarantee funds and charges.(10) From which regional offices is the recovery of the unpaid superannuation guarantee fund administered for each state.(11) What was the cost, in dollar terms, of the resources that the Government used to recover unpaid superannuation guarantee funds, by state, in the 1996, 1997 and 1998 calendar years.(12) How many ATO officers were employed to recover unpaid superannuation guarantee funds, by state, in the 1996, 1997 and 1998 calendar years.5051Kemp, Sen RodSenator KempWW4VICLPAssistant Treasurer10—The answer to the honourable senator's question is as follows:NB: Figures supplied are for financial, rather than calendar years. Calendar year figures are not available in most cases.(1) All employers of `eligible employees' have obligations under the Superannuation Guarantee (Administration) Act. Failure to make correct payments to a complying fund means the employer is then obligated to pay the Superannuation Guarantee Charge (SGC) to the Australian Taxation Office (ATO).Approximately 530,000 employers have an obligation to pay superannuation for their employees.Of these the total number of employers who failed to make sufficient superannuation payments for their employees and paid the SGC in the 1997/98 financial year was 6873. For the 1996/97 financial year 12281 employers paid the charge and for the 1995/96 financial year 14608 paid the charge. State by State figures are available in the table below.The breakdown by State of all employers who have an SGC obligation:ACTNSWQLDSA/NTTASVICWATotal95/96221445430531268495339617211460896/97199373024181126260292016281228197/98871820138181413516829546873A state by state breakdown of employers obliged to participate in the Superannuation Guarantee is shown in the following table (these figures are derived from income tax statistics).ACTNSWQLDSATASVICWATotal95/96111801717059711242054109531493545127553363396/97114771725309777942600108611503895239953803597/9881801242257212431318735210778438050389033** The 1997/98 figures are not yet complete due to extended lodgment programs. (2) (a) A recent audit of selected employers indicates full compliance rates for the 1997/98 financial year are 71% in capital cities and 59% in regional areas. A further 29% in capital cities and 41% in regional areas are partially compliant. In more than half of the partial compliance cases, the shortfall was 1% or less. Figures are not available by state.(b) The SGC in many cases is self—assessed. The ATO conducts a range of activities to inform employers of their obligations, for example through: project audits such as the audit mentioned in (2)(a); reminder notices to previous SGC payers; the Superannuation helpline; and education programs.The ATO raises default assessments where employers fail to meet their SGC obligations. Default assessments occur in less than 30% of SGC cases. The following number of default assessments were raised:ACTNSWNTQLDSATASVICWATotal95/96691426596902171091039328393796/976412735446617091921366340597/982448636153127444651291464(c) The following is the number of those employers (as per part (b)) issued with Default Assessments who then paid SGC in full.ACTNSWNTQLDSATASVICWATotal95/9624517142485437481144151996/9721381171214026355109107097/984914251489424264(3) The following number of employers lodged and paid by the due date where no further action was required by the ATO.ACTNSWNTQLDSATASVICWATotal95/96884746783715335096/97040634746885230097/98294726072378(4) The default assessment numbers are shown at question (2)(b).(5) The following number of employee notification of insufficient contributions were received and enforcement action taken:Total No.96/97851197/989458Enforcement action involved either writing to the employer, a desk or a field audit.Figures are not available by state, nor for the 95/96 year.(6) (a)SG Raised $Vouchers Issued95/9639,098,000143,49496/9759,538,000121,45397/9864,465,000135,387(b) The recent audit mentioned above found 8% of employees in capital cities and 12% in regional areas did not receive full SG contributions. The average shortfall was $274 in capital cities and $150 in regional areas.(c) While the Commissioner does not `sue' for recovery of SG debt, a range of legal action is undertaken depending on the circumstances of the case. For example, the Commissioner of Taxation may issue a summons to obtain judgement or winding up action. The following figures are the number of cases where legal action was the last recorded action. Figures for cases where subsequent non-legal action was taken are not available.NSWVICQLDSA/NTWA TAS96 433610616497118505532276981053593785312NB: these figures are by calendar year(d) This information is not available.(7) The ATO undertakes debt recovery action in respect of all superannuation debts. Debt Management reporting currently provides information on overall $ value collected/reduced through all avenues of collection, for example arrangements, legal action etc. In many cases the amounts collected may be a result of several different actions by the ATO and can not be attributed to any one action alone.Total debt management cases finalised are as follows:96/9797/98No. of cases19454307Value$8.99m$18.21mThe number of cases where legal action was the last recorded action are as follows. Figures for cases where subsequent non-legal action was taken are not available.96/9797/98No. of cases149316Value$1.57m$1.87mFigures are not available by state, nor for the 95/96 financial year.Of the 1,945 cases finalised in the 96/97 financial year 7.6% were shown to have had their last action recorded as legal action. In the 97/98 financial year this percentage was 7.3%.Legal action is just one form of action taken to recover debt. In many instances it is not the last action taken when undertaking recovery action. It is therefore not possible to directly attribute a percentage of debt recovered exclusively to legal action.(8) This information is not available. The numbers of bankruptcy cases, where SG ranks with other unsecured debts, is relatively low compared to other forms of insolvency cases. It should be noted, for example, that in the case of liquidations SG has the same priority as salary or wages, and a significant level of SG funds are recovered in these cases. (9) The Debt Collection team in the Superannuation Business Line (SPR) administers the recovery of unpaid SGC. This team predominantly actions the pre-legal activities on all SG cases and undertakes insolvency work. Cases requiring legal action are undertaken by the Legal Collection Team in the Small Business Line (SB). This legal action work is managed under a Service Agreement between the business lines.(10) The Debt Collection team is based in the Moonee Ponds office with outposted team members in Cannington, Pulteney, Bankstown and Upper Mount Gravatt.The legal collection action work referred to SB may be undertaken from any ATO office.(11) Prior to December 1997 Superannuation did not have a dedicated Debt Collection team. SG recovery action was undertaken by staff as part of a range of duties. In December 1997 a Debt Collection team (mentioned in question 10) was established.As an estimate, in 1996 and 1997 SPR utilised the equivalent of 10 staff for debt collection work. In addition SPR provided funding to the Withholding Tax Business Line (now part of SB) for the equivalent of two staff for related activities.For the 97/98 financial year, costs (salary, administration and other business line service costs) were approximately $719,000. Figures per state are not available.(12) Figures are unavailable prior to December 1997. Since December 1997 a dedicated Debt Collection team has existed in the Superannuation Business Line. Average staffing levels since that time are:StateASLVic6.8NSW&ACT1.8Qld 2SA& NT2WA1.6Total14.2For the 1997/98 financial year, the Service Agreement between the ATO's Small Business Line (SB) and SPR (see question (9)) resulted in an additional two staff in SB actioning SG debt cases.5054(Question No. 588)5885054Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 11 March 1999:(1) How many requests were received for desktop variety Australian national flags from Victorian senators and members in the 1996-97 and 1997-98 financial years.(2) In each instance: (a) how many flags were requested; (b) what is the cost to the Commonwealth of each unit; and (c) which member or senator made the request.(3) In the 1998-99 financial year how many requests have been received so far from Victorian senators and members for desktop variety Australian national flags.(4) In each instance: (a) how many flags were requested; (b) what is the cost to the Common wealth of each unit; and (c) which member or senator made the request.(5) Have any requests been withdrawn.(6) In each instance of a withdrawn request: (a) how many flags were requested; (b) what would have been the cost to the Commonwealth of each unit; and (c) which member or senator made the request.5054Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The Minister for Finance and Administration has provided the following answer to the honourable senator's question:(1) 22 in 1996-97 and 29 in 1997-98(2) (a) & (c) See following table(b) The cost of each desktop flag is $8.80Australian Desk Flags requested for 1996-97Number of flags requestedVictorian Senator/MemberRequest 1Request 2Request 3Request 4Request 5Broadbent, R92204025050Charles, B10Halverson, B 12Hawker, D105Jenkins, H232Macklin, J2080Australian Desk Flags requested for 1996-97Number of flags requestedVictorian Senator/MemberRequest 1Request 2Request 3Request 4Request 5McArthur, S20McGauran, P20Nugent, P3010O'Keefe, N3Reith, P10Sercombe, P150Stone, S40100Wooldridge, M30Australian Desk Flags requested for 1997-98Number of flags requestedVictorian Senator/MemberRequest 1Request 2Request 3Request 4Bailey, F1405002002000Barresi, P2524Billson, B50Broadbent, R5025025012Charles, B10Crean, S1010Georgiou, P143Halverson, B 20Hawker, D2010Jones, B2Kemp, D12Macklin, J2McGauran, J18McGauran, P20Nugent, P12100O'Connor, G10O'Keefe, N45Patterson, K2Reith, P150Theophanous, A10Wooldridge, M3025 in 1998-99(a) & (c) See following table(b) The cost of each desktop flag is $8.80.Australian Desk Flags requested for 1998-99Number of flags requestedVictorian Senator/MemberRequest 1Request 2Bailey, F2000Barresi, P40Billson, B60 Broadbent, R262Burke, A12Charles, B20Costello, P25Crean, S10Danby, M9Gibbons, S50Kemp, D6Lieberman, L12McArthur, S10McGauran, P20O'Keefe, N2030Reith, P100Stone, S4040Synon, K5Troeth, J100Wooldridge, M40Zahra, C2020No requests have been withdrawn.Not applicable.5056(Question No. 591)5915056O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 12 March 1999:(1) How many officers were employed by the Civil Aviation Safety Authority (CASA) in the setting and maintaining of aviation standards as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.(2) (a) How many regional offices were operated by CASA; and (b) how many staff were employed in those offices, as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.(3) (a) How many officers were employed by CASA; and (b) where were they located, in regulatory enforcement activities as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.(4) How many officers were employed by CASA to undertake safety checks and inspections of aircraft as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.(5) How many officers were employed by CASA to provide education and training services for the aviation industry as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.(6) How many officers were employed by CASA to monitor safety performance and identify safety trends and risks for the aviation industry as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.(7) How many officers were employed by CASA to communicate with both the aviation industry and the travelling public on aviation safety issues as at 30 June 1995, 1996, 1997, 1998 and as at 1 March 1999.5056Macdonald, 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:The Civil Aviation Safety Authority (CASA) has provided the following information:(1) The number of officers employed by the Civil Aviation Safety Authority (CASA) in the setting and maintaining of aviation standards was:30 June 199530 June 199630 June 199730 June 19981 March 1999130143165172151These figures include administrative staff supporting the technical specialists. (2) (a) CASA operated from 16 District Offices and 3 Regional Support Units (RSU) prior to the current restructure, as shown in the answer to part (b) of this question.(b) Note that, as at 30 June 1995, the Melbourne High Capacity and Moorabbin/Melbourne General Aviation offices were combined. Subsequently, these offices were separated.OFFICE30 June 199530 June 199630 June 199730 June 19981 March 1999South-East Region RSU1316181716Sydney2126232529Bankstown3837444238Melbourne High Capacity}36353426Moorabbin/Melbourne General Aviation} 6432303642Tamworth69878Wagga Wagga810101110Coffs Harbour56554North-East Region RSU131415-61212Brisbane1820181816Townsville1213111110Archerfield1615141716Cairns1113121212West Region RSU1110101112Perth1317151310Jandakot1010101010Darwin1516171917Adelaide1517191815Parafield109898TOTAL299326324327311(3) (a) and (b) The number and location of officers performing regulatory enforcement activities was:OFFICE30 June 199530 June 199630 June 199730 June 19981 March 1999South-East Region RSU23443Moorabbin22222North-East Region RSU22333Townsville11111West Region RSU11332Darwin11111Adelaide11111TOTAL1011151513(4) The number of officers undertaking safety checks and inspections of aircraft was:30 June 199530 June 199630 June 199730 June 19981 March 1999183185193201186(5) The number of officers providing education and training services for the aviation industry was:30 June 199530 June 199630 June 199730 June 19981 March 19991315162020(6) The number of officers employed to monitor safety performance and identify safety trends and risks for the aviation industry was:30 June 199530 June 199630 June 199730 June 19981 March 1999201194201211199(7) The number of officers employed to communicate with both the aviation industry and the travelling public on aviation issues was:30 June 199530 June 199630 June 199730 June 19981 March 199912161823275058(Question No. 609)6095058O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 24 March 1999:(1) Did Airservices Australia engage the Bureau of Meteorology to conduct an analysis of wind data for Kingsford Smith Airport (Sydney) to provide an indication as to long-term runway usage.(2) Did that consultancy go to tender; if so, who lodged bids for the contract(3) (a) Did the consultancy commence in March 1996; and (b) was it completed in February 1997.(4) (a) What period of time did the data analysed by the bureau cover; and (b) who collected the data.(5) Did the report from the bureau provide data of the frequency of cross winds and tail winds affecting runway 25.(6) How frequently did crosswinds affecting runway 25 exceed: (a) 15 knots; (b) 20 knots; and (c) 25 knots.(7) Can a copy of the report be provided.5058Macdonald, 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) Yes.(2) No. Airservices advises that the project was undertaken as a collaboration between Airservices and the Bureau of Meteorology with a substantial part of the professional costs absorbed within the Bureau's Aviation Weather Services Program budget.(3) Airservices advises that the work commenced in March 1996 and was reported in October 1996.(4) (a) Airservices advises that the data analysed included three-hour synoptic wind observations for the period January 1940 to December 1995 and half-hourly observations for the period December 1994 to March 1996(b) The data was collected by the Bureau of Meteorology. (5) Airservices advises that the report analysed runway availability at KSA (Sydney) with 25 knots of crosswind and 5 knots of downwind using the half hourly wind observations for periods December 1994 to March 1996.(6) The report predicted that runway 25 would be available for 68% of the time on the basis of the above criteria and wind data. In 1998 there was a further report prepared by the Bureau of Meteorology which also addressed the frequency of crosswinds affecting Runway 25. This report shows annual average runway availability under mode 13 (Runway 25 arrivals and departures) to be:(a) 53% (15 knot crosswind and zero knots downwind)(b) 57% (20 knot crosswind and zero knots downwind); and(c) 59% (25 knot crosswind and zero knots downwind).This report used three-hour synoptic wind observations for the period 1940 to 1997.(7) A copy of the report has been provided to the Table Office.5058(Question No. 630)6305058O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 26 March 1999:How long are audio and radar tapes kept for:(a) Australian Advanced Air Traffic Systems aerodromes such as Cairns and Brisbane; and(b) other centres and aerodromes.5058Macdonald, 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:Airservices Australia has advised that, in accordance with ICAO requirements, routinely, audio tapes are kept for 30 days and radar tapes are kept for 14 days. There is no difference between requirements at TAAATS or other facilities. In the event of an incident investigation or a formal complaint being registered, audio and radar tapes are kept until the completion of the investigation. 5059(Question No. 631)6315059Margetts, Sen DeeSenator MargettsDX5WAG(WA)00 asked the Minister for the Environment and Heritage, upon notice, on 26 March 1999:Was Dr Frank Podger engaged by Environment Australia (EA) to prepare a threat abatement plan for dieback in Western Australia; if so:(a) was he working for or acting as a consultant for the Western Australia Department of Conservation and Land Management at the time he undertook the consultancy;(b) how was he chosen;(c) has he submitted a report; if so, is EA satisfied with the report;(d) will a copy of the report be tabled; and(e) has Dr Podger been paid in full; if not, why not and how much, if anything, has been paid.5059Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:No. The Western Australian Department of Conservation and Land Management (CALM) was contracted by Environment Australia to prepare a draft national threat abatement plan for dieback caused by the root-rot fungus Phytophthora cinnamomi in early 1996. Dr Frank Podger acted as a consultant for CALM for the purposes of this contract.(a) Environment Australia's contract in relation to this work is with CALM not Dr Podger. Dr Podger acted as a consultant for the Western Australia Department of Conservation and Land Management.(b) The contract was awarded to CALM on the basis of its considerable expertise in identifying and managing Phytophthora; in particular its effects on threatened native flora. Dr Podger was engaged on the basis of having over 30 years' research experience in relation to Phytophthora, together with extensive technical expertise in identifying and managing the fungus and its affects on vegetation.(c) CALM submitted the text of a preliminary draft threat abatement plan on 14 January 1999. At that time, it was noted the draft was incomplete and required input from the States on proposed regional threat abatement actions.(d) Sections 38-42 of the Endangered Species Protection Act 1992 set out the processes for the preparation, approval and release of threat abatement plans.Under the provisions of the Act, once a plan has been approved by the Minister for the Environment and Heritage, the Director of National Parks and Wildlife must take reasonable steps to ensure that copies of the plan are available for purchase. The Director must also give notice in the Gazette and a daily newspaper circulating in each State in which the key threatening process occurs, that the plan has been approved and must specify where the plan may be purchased. The Act does not require that plans be tabled in Parliament.In accordance with S 39 of the Act, Environment Australia will shortly release a draft threat abatement plan for dieback caused by the root-rot fungus (Phytophthora cinnamomi) for a 3-month period of public comment.(e) On 10 June 1996, an initial amount of $100,000 was paid to CALM for this consultancy. The remaining balance for the project of $20,000 was due to be paid on receipt of the completed plan and report. As at 13 April 1999 this final payment has not been made.5059(Question No. 632)6325059Margetts, Sen DeeSenator MargettsDX5WAG(WA)00 asked the Minister for the Environment and Heritage, upon notice, on 26 March 1999:What areas of forest that are in places listed or interim listed on the Register of the National Estate have been approved for woodchip exports since the Western Australian Regional Forest Agreement process started in July 1996.5059Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:As part of the Deferred Forest Agreement of Western Australia and by the voluntary agreement of the Western Australian government, most national estate places in the southern forests were deferred from timber harvesting until the conclusion of the RFA. However, several forest places listed, or interim listed, on the Register of the National Estate remained available for timber harvesting and any woodchip exports from these areas would be permitted under the terms of the Deferred Forest Agreement.Details on the actual areas where export woodchips were derived since July 1996 would need to obtained from the WA Department of Conservation and Land Management.5059(Question No. 647)6475059Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister for the Environment and Heritage, upon notice, on 31 March 1999:(1) Is the Minister aware that: (a) the forest-dependent snail Anoglypta launcestonensis is listed in the Tasmanian Regional Forest Agreement (RFA) as a priority species and is listed as vulnerable under the Tasmanian Threatened Species Protection Act 1995; (b) the forest-dependent beetle Hoplogonus simsoni (Simsons stag beetle) is also listed under the RFA as a priority species requiring recovery action; (c) the Forest Practices Board's manual for threatened fauna in Tasmania says that the Anoglypta launcestonensis and Simons stag beetle are in or in close proximity to the logging coupe CC 158D; (d) Forestry Tasmania's Timber Harvesting Plan (THP) for coupe CC 158D says that there are species of high conservation value known or likely to be present in the coupe; (e) CC 158D is scheduled for clear-felling, burning and replacement with softwood plantation this year and that the THP provides no protection for class-4 streams within the coupe; and (f) the above treatment will completely destroy all habitat for the simsons stag beetle and Anoglypta launcestonensis within coupe CC 158D.(2) What steps will be taken to ensure that ; (a) the habitat of the Simsons stag beetle and Anoglypta launcestonensis is protected; (b) a recovery plan for the simsons stag beetle will be prepared; and (c) relevant research into Anoglypta launcestonensis is carried out.(3) Does the Minister agree that logging of coupe CC 158D is a violation of the RFA.(4) What steps will be taken to ensure that this violation does not occur.5060Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:(1) (a) Yes(b) Yes(c) The content of the Forest Practices Manual is a matter for the Tasmanian Government. The relevant information may be obtained from Forestry Tasmania.(d) Contents of Timber Harvesting Plans in Tasmania are the responsibility of the Tasmanian Forest Practices Board.(e) The answer to this question may be obtained from the Tasmanian Forest Practices Board.(f) This information may also be obtained form the Tasmanian Forest Practices Board.(2) The specific measures to protect these species are operational matters for which the Tasmanian Government is responsible. Neither species is listed under the Commonwealth Endangered Species Protection Act 1992.(3) The logging of CC 158D is in accord with the Tasmanian Regional Forest Agreement. (4) The logging of CC 158D is not a violation of the Tasmanian Regional Forest Agreement.5060(Question No. 656)6565060O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 13 April 1999:(1) When did the consultative process for the development of the Long Term Operating Plan for Sydney Airport commence.(2) (a) What was the nature of the consultative process;(b) when was it completed; and(c) who participated in that process.(3) How many public meetings were held as part of the consultative process.(4) Was the plan endorsed by all participants in the consultative process; if so, when was the plan endorsed; if not: (a) who opposed the plan and what was the basis for that opposition.5060Macdonald, 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) 10 May 1996.(2) (a) The initial consultative process involved advertising in Sydney newspapers in May and June 1996 inviting public comments on matters to be considered in the development of the Plan. Approximately 1500 submissions were received.A number of working groups which included community representatives were established under the Sydney Air Traffic Management Taskforce which drew up the draft Plan between July and December 1996. The community was represented by an umbrella group—the Coalition of Airport Action Groups.There was a series of briefings of the Sydney Airport Community Forum during the period in which the Plan was being developed and public meetings were held in November 1996 which were attended by approximately 2,500 people.The draft Plan was submitted to the Minister for Transport and Regional Development in December 1996 and subsequently released for further public comment in February 1997. Approximately 7,500 submissions were received.(b) The deadline for public comments on the draft Plan was 7 March 1997. Late submissions were accepted for some weeks after this deadline.(c) See (a). (3) Six.(4) Many of the public submissions raised concerns about various aspects of the proposals for the Long Term Operating Plan, in particular the proposed location of flight paths in the vicinity of suburbs from which the submissions originated.5061(Question No. 664)6645061O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 13 April 1999:(1) Since January 1998, on how many occasions have aircraft failed to comply with `duty runway' instructions from air traffic control (ATC) at Sydney Airport.(2) When did these breaches occur.(3) On each occasion, what justification was given by the pilot of the offending aircraft for failing to comply with ATC instructions to use the duty runway.(4) Has Airservices Australia (ASA) introduced a system of financial penalties for airlines that deliberately use non-duty runways.(5) Have these penalties been imposed as a result of a ministerial direction to ASA from the Minister or were they introduced following a decision of the ASA Board.(6) (a) What are the penalties for non-compliance; (b) when were these penalties initiated; and (c) how many aircraft have been fined under these arrangements since their introduction.5061Macdonald, 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) and (2) Airservices Australia advises that comprehensive records are not available of the number of times and the circumstances in which pilots have indicated that they have an operational requirement for a runway other than the nominated runway. For safety reasons the pilot in command of an aircraft always has the right to require a runway other than the duty runway. This does not involve a breach of instructions.(3) Airservices Australia is close to finalising a system which will require operators to give the reasons why pilots have had an operational requirement for a runway other than the nominated runway.It is anticipated that the first information from this new system will be available in June 1999.(4) No. See (1) and (2).(5) Not applicable.(6) Not applicable.